Course Title: Human Resource Management

Course Code: MBA 501

Assignment
Topic: How to Retain Your Best Employees

Submitted to:
Kazi Mamunur Rahman
School of Business
University of Liberal Arts Bangladesh

Submitted by:
Peerzada Ahmed Saqeb An-Noor ID No. 172051069
Hira Mohammad Abdullah ID No. 172051017
Maisha Monira Zannat ID No. 172051088
Mayukh Islam ID No. 172054009
Amartya Tarafdar ID No. 172054003
Ismat Ara ID No. 161051006
MBA 501: Section 1
Spring 2018
University of Liberal Arts Bangladesh
April 27, 2018
Letter of Transmittal
Date: April 27, 2018

Kazi Mamunur Rahman

Adjunct Faculty

School of Business

University of Liberal Arts Bangladesh

Subject: Submission of assignment on How to Retain Your Best Employees.

Dear Sir,

With high reverence we want to state that we have finished our assignment on Employee
Retention. The assignment helped us to gain knowledge on Importance of Employee Retention
and how an organization can keep their best employee. We got the opportunity to do research on
many available sources on organization policies and to keep their valuable employees. This
report is valuable and a necessity to complete our course MBA 501-Human Resource
Management.

In this report, all the team members contributed with the best they could do. We faced some
challenges in working as a team but due to everyone's collective efforts we overcame them and
tried to produce this report for you. It was a great opportunity given to us to experience the vibe
of the competitive world market, and we will like to take this platform to thank you. To end, we
would like you to kindly accept our report and to acknowledge our devotion and efforts.

Yours Sincerely,

Peerzada Ahmed Saqeb An-Noor ID No. 172051069

Hira Mohammad Abdullah ID No. 172051017
Maisha Monira Zannat ID No. 172051088
Mayukh Islam ID No. 172054009
Amartya Tarafdar ID No. 172054003
Ismat Ara ID No. 161051006

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Executive Summary
Employee retention is ability of an organization to retain its employee. Hiring employee is the
base of to start a strong work and second is to keep them. But retaining employee is way tougher
than hiring them. There are tons of employees you can find now a days but the one you want is
difficult to find and keeping them is more difficult.

Hiring a good employee is important for any organization. A good employee is an asset for a
company. Employee recruitment and retention is a major fact for an organization. Only an
eligible employee can bring the best out of your company. It’s the duty of HR professionals of a
company to know if the employees are satisfied with the job or not.

An eligible employee will always find a better place to perform so it’s important to provide them
such facilities to make them believe it’s the best place for them. In this study we tried to show
why employee retention is important for an organization, what the objectives of employee
retention are and how an organization can retain its best employee.

To build a successful organization the first important element is employee. A company cannot
sustain longer if employees keeps come and go rapidly. The longer an employee stays at a
company the much more skillful s/he will be. This employee retention study will pretty much
help to clear the confusion about why and how an organization can retain their best employee.

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Table of Content
Contents Page No.
Letter of Transmittal ii
Executive Summary iii
Introduction 1
The Importance of Employee Retention 2-4
Consistency of Performance and Productivity 2
Cost Effectiveness 3
Ex-Employees May Join Competitors 3
Increase Morale 3
Clients and Job Seekers Notice 4
Time Consuming 4
Employee Retention objectives 5-6
Employee Engagement 5
Reducing Turnover Cost 5
Knowledge Retention 5
Diversity 6
How To Retain Your Best Employees? 7-13
Performance Review 7
The Three Rs of Employee Retention 8
Compensation 8
Good Organization Culture 9
Work-Life Balance 9
Comfortable and Ergonomic Working Conditions 10
A Clear Advancement Path 10
Flexibility 11
Managing Workload and Stress Level 12
Relationship with Co-workers and Supervisors 12
Investing in Employees’ Career Development 12
Conclusion 14
References 14

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Introduction
In the competitive world of business today, human resource with the desired skills are often
scarce and expensive to recruit. Since organization goals are achieved through employees,
employee retention has become increasingly important in current world. Great businesses
understand the importance of keeping their employees for a long time and in doing so, they don’t
have to regularly spend the time and money necessary to replace employees.

Employees have been important resources to any organization. Based on their critical character,
they can be termed the life-blood of an organization. Advancement in technology has caused
most organizations to be more and more technology driven. However, this situation does not
reduce the value of employees in an organization because technology requires human resources
to operate. With issues such as globalization, competition is becoming keener and keener in most
industries. This situation also affects the job market the sense that organization demand in human
resources to remain competition in their respective industries is higher. To remain more
competitive, organizations need therefore not to only attract the best talents but also to retain
them on the job for a long term. The toughest challenge that organizations encounter nowadays is
not only how to manage the people but also how to keep them on the job as long as possible and
how to maintain them vigorous and ambitious.

Many business owners choose employee retention as a key factor for long term success. When an
organization loses employees, they are not only losing skilled individuals but also individuals
who possess institutional knowledge and the training given to them. Constantly recruiting and
training is expensive and very time consuming.
This is why organizations follow policies and plans that reduce employee turnover and attrition
and ensure employees are engaged and productive long-term. These are collectively called the
retention strategies of a company.

As such, this report has been prepared to better understand the importance of employee retention
and the factors that help an organization to retain its best employees.

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The Importance of Employee Retention
Employee retention is incredibly important, especially in tough times. Companies need to be
constantly looking for ways to improve their retention rates.

There are massive costs to employee turnover, which we discuss in this assignment, both
emotional and financial, that can have major effects on employee engagement. This is why it’s
important to take retention so seriously.

If you go through all of the trouble of on boarding an employee, integrating them into the team,
training them, assuming that they’re a good fit, then it’s in your best interest to keep them in the
company.

It’s also important for managers to understand that employees are what are known as an
“appreciating asset”, meaning that they appreciate in value over time. The longer someone stays
at a company, the more productive and valuable they are.

Consistency of Performance and Productivity

It is difficult to build a successful company if your employees are coming and going at a rapid
pace. Instead of focusing on the larger goals, managers are forced to retrain new employees
constantly, as well as keep their other workers engaged.The longer employees stay at the job, on
the other hand, the more skills they acquire.

The employees working for a longer period of time are more familiar with the company’s
policies, guidelines and thus they adjust better: They perform better than individuals who change
jobs frequently. Employees who spend a considerable time in an organization know the
organization in and out and thus are in a position to contribute effectively.

Once a new employee is hired, it takes significant time and energy from HR and management to
help the new hire learn and adapt to the organization. Time spent on training and orientation is
time taken away from focusing on clients and the overall goal of the organization.

This is why it is a complete wastage of time and money when an individual leaves an
organization all of a sudden. This constant hiring and training of employees means that the

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consistency of productivity suffers for the company. Since employee retention practices help
support an organization’s productivity and performance, it is vital to take the necessary steps to
keep current workers satisfied with their roles to ensure productivity is not interrupted..

Cost Effectiveness
A company can significantly benefit from employee retention programs because of a direct effect
on a company’s profits. High turnover can be very expensive, that is why strategies geared
towards retaining good workers helps offset employee replacement costs and reduces the indirect
costs such as decreased productivity and lost clients.

One website claimed that the real cost of turnover has been estimated to be 2 times an existing
employee’s salary, while another claimed employee replacement costs can reach as high as 50 to
60 percent of an employee’s annual salary. With the rise in recruitment and training costs, plus
the loss of productivity while a role isn’t filled with a skilled employee, it’s not hard to see why
an organization wouldn’t want to lose their employees. Every employee should be considered a
company investment.

Ex-Employees May Join Competitors

Due to the increased competition in the market, there are less skilled workers to choose from and
organizations are looking to not only get the best, but keep the best. In many cases, ex-
employees of a company may begin to work for a competitor and apply knowledge from their
previous employment to their new one. Skilled workers are valuable and are especially essential
for the success of competing firms.

Not only that but individuals may even take all the important data, information and statistics to
their new organization and in some cases even leak the secrets of the previous organization. This
is why it is a very important to retain employees.

Increases Morale
Employees that enjoy what they do and the atmosphere in which they work are more likely to
remain employed with their company. Retention strategies are important because they help
create a positive work environment and strengthen an employee’s commitment to the

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organization. Strategies that target employee engagement, such as team-builders and community
involvement, increase company morale and give employees a sense of pride in what they do.

Clients and Job Seekers notice

When the people your clients are used to dealing with leave, it can have a negative effect and
may leave your future working relationship with that organization in doubt. On the other hand,
job seekers my find out about a company’s high turnover from word of mouth and may construct
negative assumptions about the company. This could quickly create a bad reputation and may
prevent people from seeking a job in that company.

Time Consuming
A high turnover of employees for a company will mean that the company is constantly going
through the different steps of the recruitment process and then providing the training needed.
This can be very consuming for the company and if the employee shortly leaves the job after he
is finally well trained and has adjusted to the job, then it is huge waste of time for the company.

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Employee Retention objectives
The Society for Human Resource Management defines employee retention as the rate at which
organizations maintain employees in positions. Employee retention is the opposite of turnover,
which can have extreme costs, both financial and non-monetary, for the organization. Businesses
that conduct effective employee retention strategies are better able to protect organizational
resources than those that experience high turnover rates. These are the some possible objectives
businesses want to achieve through employee retention strategies.

Employee Engagement
Increasing employee engagement is a common objective of employee retention. Without proper
management, employee retention issues can have an extremely negative effect on employee
morale. Howard Adamsky, author of “Employee Retention: Notes from the Underground,” says,
“Poor retention creates a “revolving door” culture within the organization, lowering morale and
confidence.” Low morale, as well as low levels of confidence in the organization, can affect
employee job satisfaction and productivity, which in turn affects the organization’s bottom line.

Reducing Turnover Cost

The reduction of the costs associated with high turnover is also a typical objective of employee
retention. Turnover costs the organization time, money and a variety of other resources that are
not always easily accounted for. For example, according to the Employee Retention Strategies
website, high turnover also increases “job stress when remaining employees are burdened with
the distribution of the departed employee’s workload.”

Knowledge Retention
The retention of knowledge and skills is a common objective of employee retention and is
essential to the long-term success of the organization. High turnover rates result in what is
referred to in human resources as “brain drain.” This occurs when an organization is unable to
maintain employees who are knowledgeable about the organization. Without access to such
knowledgeable employees, organizations lose knowledge that is typically passed on from
employee to employee rather than imparted in formal training programs.

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Diversity
Maintaining a diverse work force is another common objective of employee retention strategies.
Diversity includes workers of varying sexes, ages and races as well as educational and workplace
experiences. This is difficult to maintain within an organization that experiences high turnover.
According to the Society for Human Resource Management website, organizations that maintain
high retention levels, “typically have strong, sustainable corporate cultures that can act as key
differentiators in the marketplace.”

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How to Retain Your Best Employees?
Succeeding in your employee retention efforts requires you to think about things from the
team's point of view. All employees are different, of course, and each has unique desires and
goals. But it's a safe bet to assume that all of them want to know they are being paid at or above
market rates and have good benefits. They want to feel that they are appreciated by their
employer and treated fairly. They want to be challenged and excited by the job they're asked to
do.

Retention of key employees is critical to the long-term health and success of any organization. It
is a known fact that retaining your best employees ensures customer satisfaction, increased
product sales, satisfied colleagues and reporting staff, effective succession planning and deeply
imbedded organizational knowledge and learning.

Every area of the employer-employee relationship in your organization deserves your attention.
Embrace these key strategies to improve your organization's employee retention and boost
employee  satisfaction:

Performance Reviews:
The best performance reviews let managers and employees communicate -- share ideas,
opinions, and information.

➢ Peer Reviews – Helping peers to understand each others' work and by airing grievances
in a non-threatening manner, peer reviews may also help people to get along better.
➢ Self Reviews - Employees rate themselves on a number of criteria, usually with a formal
survey form, and suggest improvements. Involving the employee as an equal in the
review process is more likely to increase commitment to action plans.
➢ Upward Assessment - Upward assessments can help managers to keep their words and
actions consistent, while showing areas where managers can improve their performance.
➢ 360 Degree Review - 360 degree feedback is the most comprehensive type of appraisal.
It includes self ratings, peer review, and upward assessments; feedback is sought from
everyone. Use 360 feedbacks for key employees, managers and yourself.

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The Three R’s of Employee Retention:
The three main pillars of retaining an employee are the three R’s; namely Respect, Recognition
and Reward. All three of them hold paramount importance in retaining an employee.

➢ Respect: Self-esteem is an attribute possessed by almost every human being. People hold
self-esteem in a higher regard. If someone’s self-esteem is hurt then he/she might not be
able to work properly or with all heart. Giving respect to the employees is as important as
giving water to a plant. If they feel respected they will have a good reason to work.
➢ Recognition: Special attention is very important for motivation and morale boost. If the
employees do not get recognition for their work, they feel demotivated. The job would
mean nothing else than just a responsibility that they need to fulfill in order to earn
money. The minute they get another job offer they go for it since it gives them more
motivation. Giving special attention to the opinions and the work of employees makes
them feel valued. They consider themselves an important part of the firm.
➢ Reward: The extra perks and incentives directly related to the organizational outputs
make employees work for the firm with happiness. If they feel content, they will do their
job more sincerely and more passionately. Setting up small bonuses, as a part of the
policy and procedure manual of the company, plays a pivotal role in retaining the
employees.

Compensation:
Although monetary compensation is not the only motivation factor but typically it employees
still consider it as the primary factor. Salary is important in the most basic sense, not only that
but fair salary for the particular work required is also important.

It is said that someone at an advanced stage of his career will want more status and esteem than
pay but from another perspective you can also say that a high salary can serve a stronger sense of
self-worth and accomplishment. Other forms of compensation like bonuses, increments and other
non-monetary compensation are all motivators for employees to remain and grow within the
company. Number of paid leaves, sick days, health insurance, gratuity, lunch subsidies and other
benefits all help to make a compensation package more competitive. Generally, more
competitive pay attracts better talent, keeps them motivated and helps in retaining them.

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Good Organization Culture:
To provide the biggest competitive advantage, an organization’s culture must be strong, widely
communicated and reinforced. Everyone must share its values and beliefs. In a strong culture,
employees feel valued. They enjoy at least some control over their jobs, instead of feeling
powerless. Whether it’s by working from home, choosing their projects or trying out a new role,
employees that feel valued and can make decisions achieve a higher level of performance. Strong
company cultures also give employees opportunities to grow. Offering promotions, career
development programs or extra training can keep employees motivated – which in turn, improves
performance. When everyone is in it together, they will all put forth the extra effort to achieve
organizational goals.

However, a positive company culture can ensure that employees remain satisfied with their jobs
and loyal to the organization. This can be extremely beneficial in a competitive hiring
environment. People are much more interested in signing on (and staying) with a company
culture that promotes flexibility, supports employee development and offers work-life balance.

Improving employee satisfaction through a strong and supportive company culture can reduce
recruiting, hiring and training expenses, while improving morale and increasing profits.

Work-Life Balance:
Employees these days look forward for the opportunities that would help them balance a healthy
lifestyle between their workplace and social life. The organizations that don’t restrict the
employees to attend the workplace every day or don’t have long working hours have more
chances to save talented team of employees with them and thus retain them for a long time. For
example, in many organizations the norm is to stay well after the scheduled time, this means less
time for the employees to live their personal life.

Also some organizations provide services like split shifts and flexible working hours or better
telecommunication facility makes it convenient for the employees to work from anywhere and
deliver the quality service to the organization without compromising with the deadline. The
professional employees these days look forward for the opportunities that would help them
balance a healthy lifestyle between their workplace and social life.

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Comfortable and Ergonomic Working Conditions:
Working in an environment where you feel comfortable during your working hours is extremely
important. Not only can you feel much better in such an environment, but you can also be more
productive and have plenty of room for improvement. That is why ergonomics is crucial for an
effective and successful workplace.

Designing your office to meet the needs and capabilities of your employees is one of the most
important things you can do for both them and your company. Poor office ergonomics can lead
to stressed and fatigued employees, which can only lead to lowered levels of productivity. In
order to avoid that and to ensure that your employees are satisfied and, more importantly,
healthy, you need to design your office to meet their needs.

When you implement ergonomics into your workplace and provide better working environment
for your employees, you will influence better employee engagement. When people feel better at
work, they feel free to form more constructive relationships with each other, which can very
positively reflect on the whole company’s work performance. Each and every employee
represents an important link in the company’s chain and their collaboration is always great for
business. They can help each other with completing different tasks, which, again, helps increase
productivity. Employee engagement is extremely important for every company’s success and
ergonomics in the workplace can very easily lead to that, since it helps employees feel more
comfortable and relaxed.

A Clear Advancement Path:

One of the biggest factors for improving employee retention is presenting a clear and present
career path. People within your organization need to not only understand there is room to grow,
but that efforts will be made from the top down to facilitate that career growth. Creating loyalty
is about thinking beyond salary and figuring out how to get your employees to genuinely care
about the business.

Having a career development plan in place shows employees that you value them for the work
they are able to do now as well as what they might be able to offer your organization long-term.

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Also, having a well defined career path empowers employees and provides logical steps to
pursue advancement.

In order to have a successful career path in place for your employees, you must understand your
employees’ point of view; you need to see things as they do. What makes your top talent feel
successful? Once you know this key insight, you can figure out how to help them achieve their
career goals. Employees must be offered a culture within your organization that is inclusive and
provides multiple avenues and opportunities for growth. Consider putting into place a mentoring
program which will demonstrate your commitment to their advancement while providing the
guidance and knowledge needed to achieve that growth.

Finally, one of the most important changes you can make is in the yearly review process. This is
an opportunity to make your team members feel their opinions matter. These reviews should not
only be used as a way to offer employees feedback, but as a way of gathering feedback from
them which can ultimately help your organization be successful.

In today’s job market your company needs every advantage over the competition. Obviously this
means retaining the amazing talent you have collected over the last several years. If you want to
retain this top talent, don’t just think about compensation and benefits. You need to offer a true
career path, a comfortable environment and a means for each and every employee to reach their
professional goals.

Flexibility:
In many organizations, HR believes that if the work environment is flexible for the employees
then it motivates employees to a larger extent. For example, technology companies or companies
in the creative field are likely to have flexible dress codes and office hours. Such companies can
motivate and appeal to their employees by not having many strict rules and regulation. Also, if
other competing organizations are offering such flexibility, then job seekers will have
expectations about it. If being flexible means that the workers are productive then this can be a
potent retention tool.

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Managing Workload and Stress Level:
If your staff is feeling continually stressed in workplace it is important you take action. There are
many workplace stress management strategies that leaders and managers can take to help reduce
stress levels within the team.

Ask yourself whether your organization is doing everything it can to set realistic workloads and
work schedules. An important risk control measure for work-related stress is to factor work-life
balance into resourcing. Your staff is only human – they likely have a life outside of work that
can compete for their attention during the week, and the need to rest on the weekend. Failure to
quickly spot and implement effective workplace stress management can have long-term effects
on their health and your business.

Relationship with Co-workers and Supervisors:

Many full-time employees spend more of their waking hours with co-workers than they do with
their spouses and families. As such, it is important to allow employees the opportunity to build
quality relationships with their co-workers. This can be accomplished through the organization
of informal get-togethers away from work, as well as by encouraging employee interaction.
There are many benefits that can be reaped by organization who allow and foster good
relationships in the workplace.

If an employee doesn't trust their supervisor, the company suffers. Sure, ruling through fear
works, but the employee will do the bare minimum amount of work needed to keep their job.
Smart leaders know that engaged workers bring creativity and passion to their work, which
means more minds seeking more solutions to problems or streamlining processes.

All of this is deeply important to beating out the competition, not to mention employee retention:
Good employees won't stay at a dissatisfactory job unless they feel like they lack options.

Investing in Employees Career Development:

To enhance employees’ performance to meet global challenge managerial learning frame work is
required. The more knowledge the employee acquire, the more will be their performance. The
necessity of increased skills and efficiencies of employees had been felt by organization and they

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are investing on training programmes. Provision of training and development opportunities to
make employees feel that their organization value them and this increases their attachment
towards organization. The researchers Newman, examined the impact of employee’s perception
of training on organizational commitment and they predicted the importance of training as a tool
to enhance the affective commitment of employees. Skills of workforce is a credential factor for
organization to compete favorably their business rivals and provision of training and
development opportunities are positively related to the commitment of employees towards their
organization.

"Investing in your employees’ education can help retain talent and intellectual property at a time
when there's stiff competition for both. The need for new skill sets and evolving roles are in
demand at rapidly growing rate. By helping employees gain skills they can both apply in their
current role, or build on to work towards getting a promotion, you're keeping them engaged,
excited and invested in your company — you're making them want to stay.

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Conclusion
It’s clear that having proper retention strategies is key in order to retain employees. According to
Mike Foster, founder and CEO of the Foster Institute, in order to foster an environment that
motivates and stimulates employees, managers need to incorporate motivation-building practices
into their corporate culture. These practices include listening to employees and respecting their
opinions, basing rewards on performance, and being available to them for everything from
listening to their ideas and concerns to assisting them with their career advancement.

Employees need to feel valued and appreciated, be given feedback, provided with growth
opportunities, be given work-life balance options, and have trust and confidence in their leaders
(Branham). All of these retention strategies are beneficial when an employer wants to keep
employees within an organization and keep costs of turnover low.

References:

1. Employee retention - Wikipedia

2. Effective Employee Retention Strategies | Robert Half

3. How to keep your best Employees – insynsurveys

4. Why Are Employee Retention Strategies Important? | Chron.com

5. https://www.managementstudyguide.com/importance-of-employee-retention.htm

6. Objectives of Employee Retention | Bizfluent

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