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S.P. MANDALI’S

R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS

(AUTONOMOUS)

MATUNGA, MUMBAI-400 019.

(Retention Management in service sector)

A Project Submitted

For partial completion of the degree of Master in Commerce

Under the Faculty of Commerce

By

(Prerna Gogri)

Under the Guidance of

(Miss Kavita Jajoo)

October 2019
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S.P. MANDALI’S

R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS

(AUTONOMOUS)

MATUNGA, MUMBAI -400 019.

CERTIFICATE

This is to certify that Mr./Ms. Prerna Gogri of M.Com part II (Business Management)
Semester III (2019-2020) has successfully completed the project on Retention Management
in Service Sector under the guidance of Prof.

Project Guide/Internal Examiner External Examiner

Prof. Prof.

Dr. (Mrs) Vinita Pimpale Dr. (Mrs) Shobana Vasudevan

Course Co-ordinator Principal

Date of Submission Seal of the College

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S.P. MANDALI’S

R. A. PODAR COLLEGE OF COMMERCE AND ECONOMICS

(AUTONOMOUS)

MATUNGA, MUMBAI-400 019.

Declaration by learner

I, the undersigned Mr. _ declare that the work embodied in this

project work hereby, titled “ ”, forms my own
contribution to the research work carried out under the guidance of
is a result of my own research work and has not been
previously submitted to any other University for any other Degree/ Diploma to this or any
other University. Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography. I, here by further declare that all
information of this document has been obtained and presented in accordance with academic
rules and ethical conduct.

Name of the learner:

Signature:

Certified by

Name of the Guiding Teacher:

Signature:
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Acknowledgment
To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. Mrs. Shobana Vasudevan for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Dr. Mrs. Vinita Pimpale, for her moral
support and guidance.

I would also like to express my sincere gratitude towards my project guide

whose guidance and care made
the project successful.

I would like to thank my College Library, for having provided various reference books and
magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me throughout
my project.

Signature of the Student

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Executive Summary

The topic Retention Management in Service sector gives an in depth understanding about the
causes of retention and solutions for the managing the retention. Through this project one can
understand what can motivate an employee to retain in an organization and what can lead to
attrition. This project will also help the organization to lower the attrition rate by taking the
precaution measures. Employee is the main asset of the organization and business needs to
understand that in order to have a satisfied customer first one must have a satisfied employee.

Loyal Employee’s make the organization run a long way and to have such efficient
manpower, management should look up to the employee as a partner in the organization.

The concepts covered in this project are the most common topics or barriers faced by the
management of an organization and the HR managers can contribute their best in retaining an
valuable employee. Human Resource manager plays an important role in Retention
management of an organization as they are the responsible department for keeping quality
workforce in the company. Further the details mention in the following project will provide a
whole and soul knowledge on Retention Management.
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INDEX

Sr. No. Topic

1 Introduction

2 Human resource Management

3 Role of HR in Retention

4 Attrition

5 Retention Management

6 Objectives and Principles

7 Importance of Employee Retention

8 Factors Affecting Employee Retention

9 Employee Retention Strategies

10 3 R’s of Retention

11 Customer Retention

12 Customer Retention Strategies

13 Ways to improve Customer Retention

15 Case Study on LG

16 Suggestions and Recommendations

17 Conclusion

18 Bibliography

19 Questionnaire
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INTRODUCTION

Talented men leave, dead wood doesn’t!

Philosophically, retention management is important; in almost all cases, it is senseless to

allow good people to leave the organization. When they leave, they take with them
intellectual property, relationships, investments (in time and money) and a chunk of the
organization’s future growth. Employee retention strategies helps organizations provide
effective employee communication to improve commitment and enhance workforce support
for key corporate initiatives.

It is a fact that a very high turnover rate affects companies in a negative way and retention
strategies should therefore be high on the agenda. When looking at this problem area we find
that there may be actions and tools that companies could use to come to terms with this
problem. Research tells us that leadership, remuneration and elements like participation,
feedback, autonomy, fairness, responsibility, development and work-atmosphere is important
for job satisfaction and retention. Hiring knowledgeable people for the job is essential for an
employer. But retention is even more important than hiring. There is dearth of opportunities
for a talented person. There are many organizations that are looking for such employees. If a
person is not satisfied by the job he’s doing, he may switch over to some other more suitable
job. In today’s environment it becomes very important for organizations to retain their
employees.
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HUMAN RESOURCE MANAGEMENT

Human resource management is concerned with the manpower employed in the organization.
It is the part of the management concerned with people at work and their relationship with the
organization. HRM is one important branch of management as it touches all other aspects of
business management.

The Human Resources Management (HRM) function includes a variety of activities, and key
among them is deciding what staffing needs you have and whether to use independent
contractors or hire employees to fill these needs, recruiting and training the best employees,
ensuring they are high performers, dealing with performance issues, and ensuring your
personnel and management practices conform to various regulations.

Activities also include managing your approach to employee benefits and compensation,
employee records and personnel policies. Usually small businesses (for-profit or nonprofit)
have to carry out these activities themselves because they can't yet afford part- or full-time
help. However, they should always ensure that employees have -- and are aware of --
personnel policies, which conform to current regulations. These policies are often in the form
of employee manuals, which all employees have.

Practitioners in the field see HRM as a more innovative view of workplace management than
the traditional approach. Its techniques force the managers of an enterprise to express their
goals with specificity so that they can be understood and undertaken by the workforce and to
provide the resources needed for them to successfully accomplish their assignments. As such,
HRM techniques, when properly practiced, are expressive of the goals and operating
practices of the enterprise overall. HRM is also seen by many to have a key role in risk
reduction within organizations.

The HRM function and HRD profession have undergone tremendous change over the past
20-30 years. Many years ago, large organizations looked to the "Personnel Department,"
mostly to manage the paperwork around hiring and paying people. More recently,
organizations consider the "HR Department" as playing a major role in staffing, training and
helping to manage people so that people and the organization are performing at maximum
capability in a highly fulfilling manner.

"You must treat your employees with respect and dignity because in the most automated
factory in the world, you need the power of human mind. That is what brings in innovation. If
you want high quality minds to work for you, then you must protect the respect and dignity. "
-Mr. N.R. Narayana Murthy, Chairman, Infosys Ltd.
 ROLE OF HR IN RETENTION

An organization can’t survive if the top performers quit. It needs employees who are loyal
and work hard with full dedication to achieve the organization’s objective. It is essential for
the management to retain its valuable employees who think in favour of the organization and
contribute their level best. An employee who spends a longer duration at any particular
organization is familiar with the rules, guidelines and policies of the organization and thus
can adjust better.

The Human Resource team plays an important role in employee retention. Let us find
out their role in the same:

▪ Whenever an employee resigns from his current assignments, it is the

responsibility of the HR to intervene immediately to find out the reasons which
prompted the employee to resign. No one leaves an organization without a reason.
There has to be one and the human resource team must probe into it. There can be
innumerable reasons for an employee to leave his current job. The major ones being
conflict with the superiors, lesser salary, lack of growth, negative ambience and so on.

▪ It is the duty of the HR to sit with the employee and discuss the various issues
face to face. Understand his problems and listen to his side of the story as well.
Remember the HR should not focus on conducting exit interviews, rather more
emphasis should be laid on retaining the employees.

▪ Try to provide a solution to his problem. Hiring is a tedious process and it is really
very difficult to recruit the right candidate and train him once again. Do check the
track record of the employee who wishes to move on. It is really essential for the
management to retain those employees who have the potential and are really
indispensable for the organization. If they leave and join the competitors; the
organization would be at loss. If one feels that the employee is not very happy with
his team leader, try to shift him to a new team. If the employee feels his salary is not
justified, try to give him a hike but make sure he is worth it and you don’t end up
upsetting others.

▪ The HR person must ensure that he is recruiting the right employee who actually
fits into the role. A right person doing the wrong job would never find his job
interesting and certainly look for a change. Make sure every individual has been
assigned responsibilities according to his specialization and interest. The employees
must be clear with their KRAs from the very beginning. Every individual works for
money and the HR must quote a justified salary acceptable to the other person. Don’t
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compel anyone to join at a lesser salary. He might join at that moment but would most
likely quit after sometime. The hike should be on the present salary and must match
the market trends and the expectations of the individual.

▪ The human resource department must conduct motivational activities at the

workplace. Organize various internal as well as external trainings which help the
employees to learn something extra apart from their routine work. Make them
participate in extracurricular activities important for their overall development.
Encourage them to interact with each other so that the comfort level increases.

▪ The HR must launch various incentive schemes for the top performers to
motivate them. This way the employees feel important for the organization and strive
hard to perform even better the next time. The employees who show promise should
be awarded with cash prizes, lucrative perks and certificates to make the individual
stand apart from the crowd. Send a mail wishing the employees on their birthdays or
congratulating them when they perform exceptionally well or come out with
something innovative. Arrange a small bouquet for them as a gift from the
organization’s side. This way the employees feel attached to the organization and are
reluctant to look for a change. A friendly atmosphere is essential for the employees to
feel safe and secure. Make them participate in various management decision-makings.

▪ Performance reviews are a must. The HR along with the respective team leaders
must monitor their team member’s performance to ensure whether they are
enjoying the work or not. The employees look for a change only when their job
becomes monotonous and does not offer any growth or learning. Job rotation can be
one of the effective ways to retain employees.
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ATTRITION

Attrition word is very dangerous now a day for any organization those are working like
BPO’s, because staff attrition (or turnover) and absenteeism represents significant costs to
most organizations. It is odd, therefore, that many organizations neither measure such costs
nor have targets or plans to reduce them. However, it seems to be one of the areas in which
HR can make a difference - and one that can be measured in quantifiable, financial terms
against targets.

The study is focused on recruitment and retention challenges that the IT/BPO industry
currently faces and to examine ways to reduce high turnover rates among first year
Employees in the leading Domestic Call Center based in Indore. According to the
Department of Human Resources (MSource BPO, Indore), turnover rates for permanent
Agents/Executives were 15.6% in 2009 and 35% in 2012.

Department of Human Resources, which also tracks attrition of temporary employees,

measured the turnover rate for temporary employees to be 77% in 2012. The monetary cost
of such high turnover is enormous.

Definition

1. The unpredictable and uncontrollable, but normal, reduction of work force due to
resignations, retirement, sickness, or death.

2. Loss of a material or resource due to obsolescence or spoilage.

Meaning of Attrition

These days, very often we come across the word `ATTRITION'. This word is being used in
place of Employees turnover in an organization, used earlier. " the wearing down of an
adversary, making him weaker by repeatedly attacking them or wearing down of resources
i.e. the process of reducing the number of people who are employed by an organization by
not replacing people who leave the job."

Building on its growth over the last few years, the Indian IT-BPO sector has emerged among
the leading employment providers of the country with nearly 4 million people being directly
employed in the IT-BPO industry. Growth has given rise to predictable challenges of
managing people, who owing to the nature of the sector form one of the most critical assets
of the IT delivery chain. It is universally recognized that the sustained availability of skilled
manpower at the right cost will be the make- or-break factor as India attempts to rise up the
IT value chain.

The percentage of employees that leave a company in a given period of time due to attrition
is sometimes referred to as the churn rate, though that term can also include personnel who
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are fired. A high churn rate can adversely affect a company due to the costs of training new
workers, though higher rates are often more acceptable for unskilled laborers than more
highly skilled or trained workers.

Churn rate is often lower in industries that employ highly skilled workers, and companies
often use lucrative employment contracts and other tactics to prevent some forms of attrition.

There are also circumstances where employee attrition can be used to benefit a company. In
some circumstances, it becomes necessary for a company to cut labor costs to remain
profitable. One method of dealing with this type of issue is to lay off a number of workers,
though this can present morale problems for the remaining employees.

If the attrition rate is known, then simply not hiring new employees can present a long-term
method of dealing with the same problem. Since some employees will retire or resign over
time through attrition, a hiring freeze can eventually result in fewer employees and a similar
savings in labor costs.

Employee attrition refers to the loss of employees through a number of circumstances, such
as resignation and retirement. The cause of attrition may be either voluntary or involuntary,
though employer-initiated events such as layoffs are not typically included in the definition.

Each industry has its own standards for acceptable attrition rates, and these rates can also
differ between skilled and unskilled positions. Due to the expenses associated with training
new employees, any type of employee attrition is typically seen to have a monetary cost. It is
also possible for a company to use employee attrition to its benefit in some circumstances,
such as relying on it to control labor costs without issuing mass layoffs.

There are many different ways for a company to lose employees, most of which are typically
taken into account to ensure that the organization is able to operate efficiently.

Attrition refers to the loss of employees due to reasons other than firing and other employer-
initiated events. This means that an employer has no direct control over how many personnel
are lost to employee attrition. Retirement is one major cause of employee attrition, and since
people tend to retire around a specific age this is a factor that can be accounted and planned
for. Other causes of employee attrition, such as personnel who quit due to prolonged illness,
dissatisfaction with the company, or other reasons, can be more difficult to estimate.
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RETENTION MANAGEMENT

Effective Retention Management is a systematic effort by employers to create and foster an

environment that encourages current employees to remain employed by having policies and
practices in place that address their diverse needs. A strong retention strategy becomes a
powerful recruitment tool.

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.

Employee retention matters as organizational issues such as training time and investment;
lost knowledge; insecure employees and a costly candidate search are involved. Hence failing
to retain a key employee is a costly proposition for an organization.

Various estimates suggest that losing a middle manager in most organizations costs up to five
times of his salary, translates to a loss of up to five times his salary. This might be worse for
BPO companies where fresh talent is intensively trained and inducted and then further
groomed to the successive stages.

Intelligent employers always realize the importance of retaining the best talent. Retaining
talent has never been so important in the Indian scenario; however, things have changed in
recent years. In prominent Indian metros at least, there is number dearth of opportunities for
the best in the business, or even for the second or the third best. Retention of key employees
and treating attrition troubles has never been so important to companies.

In an intensely competitive environment, where HR managers are poaching from each other,
organizations can either hold on to their employees tight or lose them to competition. For
gone are the days, when employees would stick to an employer for years for want of a better
choice. Now, opportunities abound.

In fact, some reports suggest that attrition levels in IT companies are as high as 40 per cent.
The only way out is to develop appropriate retention strategies.

Though BPO industry shoots ahead at 40 to 50 per cent a year, it is now losing 35 to 40 per
cent of its 350,000-odd employees as well.

In India, there are few sectors where the attrition level is much larger compared to other
sectors. For example: IT sector and BPO. Whereas there are organizations like Air India,
HAL, DRDO, BARC where the attrition is nearly 5% or less than that.
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OBJECTIVES AND PRINCIPLES OF RETENTION MANAGEMENT

Retention management focuses on measures that lead to retention of employees. It includes

activities that systematically influence the binding, performance and degree of loyalty of
staff. David J. Forrest (1999) defines 5 basic principles of retention management that lead to
employee performance and satisfaction, and therefore to their retention.

1) Employees need to feel they are appreciated, valued and trusted.

It is about respecting people and their contributions to the company effort.

2) Development:-Employees who participate in their own growth and development

plans are going to stay with the company because they know their company wants
more for them.
3) Growth in responsibility:-Most people want to grow and to feel more competent and
more responsible, at any level. A good company helps people manage themselves by
consistently focusing on performance and results. The manager teaches the employee
what they are good at, what else they need to know and how to get it. As they grow
they receive higher levels of responsibility and accountability. This attitude also
encourages innovation and creativity.
4) Good relationship with the manager:-The supervisor represents the personal
experience of a corporation of employees and therefore reflects, for better or for
worse, its underlying attitudes toward them.
5) Success:-The valued and successful employee stays. This implies, of course, that the
work is meaningful to the corporate enterprise. The strong employer rewards
employees for helping to make others successful as well.
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IMPORTANCE OF EMPLOYEE RETENTION

a) The Cost of Turnover Is High

The cost of employee turnover amounts to lakhs of money to a company's expenses. While it
is difficult to fully calculate the cost of turnover (including hiring costs, training costs and
productivity loss), industry experts often quote 25% of the average employee salary as a
conservative estimate.

b) Loss of Company Knowledge

When an employee leaves, he takes with him valuable knowledge about the company,
customers, current projects and past history (sometimes to competitors). Often much time and
money has been spent on the employee in expectation of a future return. When the employee
leaves, the investment is not realized.

c) Interruption of Customer Service

Customers and clients do business with a company in part because of the people.
Relationships are developed that encourage continued sponsorship of the business. When an
employee leaves, the relationships that employee built for the company are severed, which
could lead to potential customer loss.

d) Turnover leads to more turnovers

When an employee terminates, the effect is felt throughout the organization. Co-workers are
often required to pick up the slack. The unspoken negativity often intensifies for the
remaining staff.

e) Goodwill of the company

The goodwill of a company is maintained when the attrition rates are low. Higher retention
rates motivate potential employees to join the organization.

f) Regaining efficiency
if an employee resigns, then good amount of time is lost in hiring a new employee and then
training him/her and this goes to the loss of the company directly which many a times goes
unnoticed. And even after this you cannot assure us of the same efficiency from the new
employee would be left with no good employees. A good employer should know how to
attract and retain its employees. Retention involves five major things:

 Compensation
 Environment
 Growth
 Relationship
 Support
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FACTORS AFFECTING EMPLOYEE RETENTION

Most managers understand the importance of employee retention and its impact on the
overall health and vitality of an organization. The importance of retaining top organizational
talent will only increase over the coming years as the massive cohort of baby boomers begin
to reach retirement age making it easy for younger employees to find work.

1) Shorten the feedback loop

Do not wait for an annual performance evaluation to come due to give feedback on how an
employee is performing. Most team members enjoy frequent feedback about how they are
performing. Shortening the feedback loop will help to keep performance levels high and will
reinforce positive behavior. Feedback does not necessarily need to be scheduled or highly
structured; simply stopping by a team member's desk and letting them know they are doing a
good job on a current project can do wonders for morale and help to increase retention.

2) Offer a competitive compensation package

Any team member wants to feel that he or she is being paid appropriately and fairly for the
work he or she does. Be sure to research what other companies and organizations are offering
in terms of salary and benefits. It is also important to research what the regional and national
compensation averages are for that particular position. You can be sure that if your
compensation package is not competitive, team members will find this out and look for
employers who are willing to offer more competitive compensation packages.

3) Balance work and personal life

Family is incredibly important to team members. When work begins to put a significant strain
on one's family no amount of money will keep an employee around. Stress the importance of
balancing work and one's personal life. Small gestures such as allowing a team member to
take an extended lunch once a week to watch his son's baseball game will likely be repaid
with loyalty and extended employment with an organization.

4) Beware of burnout
Staff adequately to reduce the amount of unwanted overtime a team member must work.
Some employees enjoy the extra money that accompanies overtime hours, while others would
rather spend their time with their families or doing other activities they enjoy. Burnout can be
a leading cause of turnover. Recognize the warning signs and give employees a break when
they need it.

5) Provide opportunities for growth and development

Offer opportunities for team members to acquire new skills and knowledge useful to the
organization. If an employee appears to be bored or burned out in a current position offer to
train this individual in another facet of the organization where he or she would be a good fit.
Nobody wants to feel stuck in their position will no possibility for advancement or new
opportunities.
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6) The ability to provide input and be taken seriously

Everybody has opinions and ideas some are better than others. However, every team member
wants to feel that their input is welcome and will be taken seriously without ridicule or
condescension. Some of the greatest ideas can come from the most unlikely of places and
people. Creating a culture where input is welcome from all level of the organizational chart
will help your organization grow and encourage employee retention.

7) Management must take the time to get to know team members

It's not a big surprise that one of the greatest complaints that employees express in exit
interviews is a feeling that management didn't know they existed. Nobody wants to feel like
just another spoke in a big wheel. Managers are very busy - everybody is busy, but it is
crucial that managers and supervisors take the time get to know the team members who work
under them. Learn and remember a team member's name, what skills and talents they bring to
the table, and what their business interests are. The time spent by management getting to
know team members is well invested and can eliminate the headaches caused by having to
continually hire and re-train new employees.

8) Provide the tools and training an employee needs to succeed

Nothing can be more frustrating to an employee than a lack of training or the proper tools to
successfully complete his or her duties. You wouldn't try to build a house without a hammer,
so why should an office job be any different? Providing a team member with the tools and
training she needs to be successful shows a commitment and investment in that employee and
will encourage the team member to stay with the organization.

9) Make use of a team member's talents, skills, and abilities

All team members have knowledge, skills, and abilities that aren't directly related to their job
description, but are still useful to an organization. Utilizing a team member's talents in areas
other than their current position will indicate to an employee that management appreciates
and recognizes all that an employee has to offer to the organization. This can also provide
work variety and helps to break up the everyday grind of work.

10) Never threaten a team member's job or income

While threatening an employee with termination or demotion might seem like a surefire way
to get the results needed from him or her, doing so will likely cause the employee to leave the
organization. Put yourself in the employee's shoes, what is the first thing you would do if
your job was threatened? Odds are you would probably update your resume and start
checking for open job postings expecting the worst. If a team member's performance is not
what you had hoped it would be, work with that team member on ways to improve his
performance, saving termination only as a last reso

Study Suggests Employees Leave Bosses, Not Jobs.

Careful selection of employees and managers can have a huge impact on your employee
retention efforts and employee turnover costs at your organization.
 EMPLOYEE RETENTION STRATEGIES

I. Communications- Getting Your People to Care

Communication is the first step toward creating the kind of environment that people care
about, and if they care, they just may stay. I'm not talking about a lot of New Age stroking
designed to bring out the inner person or false praise that creates a misplaced sense of
security. Instead, keep your people in the loop about what's happening with the company. At
any time, all of your employees should have a pretty good idea of how business has been, and
they should be aware of what issues the company is attempting to address.

That means that you regularly keep your people up to date with important events affecting the
company. If November was good, let them know, and while you're at it, tell them what you
expect to happen in December. Share good news, as well as points of concern. If you've got
"issues," talk about them before they start making you crazy. And if they don't get resolved,
figure out whether the problem stems from a couple of individuals or from your system.

II. Set Clear Expectations

o How often do you appraise your employees/team-members?
o What are your expectations from your employees/team-members? What are
the parameters to measure their performance? Have you communicated to
them?
o What will be the consequences, if they fail?
o What will be the rewards, if they exceed the expected level?
If you are not having any expectations, how you are going to appraise, your employees? Yes,
you are going to be biased, because you don't have set standards.

The role of a CEO, HR Manager is like a director of a movie; choreographer of a stage show,
where there is a defined role for each character, each participant.

Setting expectations initiates the process. Managers need to sit down with each employee and
clearly define what's expected of them. Management consultant, Kenneth Philips, states that
when expectations are not clear, employees may not be in sync with their job's current
demands and priorities. Setting expectations is not a once and done activity. Jobs change.
Priorities change. Resources change. Managers need to revise and set new expectations
throughout the year. Setting expectations revolves around the following three areas:

o Key job responsibilities

o Performance factors and standards
o Goals
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Why is a setting expectation important? Quite simply, this process can be the cornerstone of
improving the motivational climate within your sphere of responsibility. If your employees
know what is expected of them, it allows them to focus on results and to monitor themselves
against the set standards. Environments in which expectations are not clear, or change from
week to week, seldom create high-performing work groups.

The three principles that should drive expectations are clarity, relevance, and simplicity.

 Clarity: Expectations should focus on outcomes, not activities. In other

words, you achieve clarity when you identify the expected results rather than
the method for achieving them. Managers often make the mistake of
attempting to direct the process that an employee will use rather than being
clear about results. The advantage of identifying the outcome is that you, the
manager, focus only on the goal; after all, the employee will develop the
method for achieving the desired results.
 Relevance: The principle of relevance helps define the "why" of the
assignment. If your employees have a full understanding of the project's
importance, they can make adjustments as unanticipated factors crop up within
the process. They probably also will be more committed to the result because
they can see more easily how it fits into the big picture and how their efforts
impact the company.
 Simplicity: Simplicity creates a sense of grounding for employees as they
endeavor to carry out assignments. If managers identify the work in simple,
straightforward terms, employees will find it much easier to follow through on
managers' wishes. To accomplish this, a manager must identify the key
message in a fashion that the employee can embrace.

III. Proper Rewarding

A research reports says that in today's scenario,

o 70% of your employees are less motivated today than they used to be.
o 80% of your employees could perform significantly better if they wanted to.
o 50% of your employees only put enough effort into their work to keep their
job.
As you might be aware of Employee Reward covers how people are rewarded in accordance
with their value to an organization. It is about both financial and non-financial rewards and
embraces the strategies, policies, structures and processes used to develop and maintain
reward systems. The ways in which people are valued can make a considerable impact on the
effectiveness of the organization, and is at the heart of the employment relationship.

The aim of employee reward policies and practices, if any in your organization is to help
attract, retain and motivate high-quality people. Getting it wrong can have a significant
negative effect on the motivation, commitment and morale of employees. Personnel and
development professionals will be involved frequently in reward issues, whether they are
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generalists or specialize in people resourcing, learning and development or employee

relations. Keep following parameters in mind, while designing a reward policy:

 Build a high degree of recognition value into every reward you offer.:
Recognition is the most cost-effective motivator there is. While the high cost of other rewards
forces us to give them sparingly, recognition can be given any time, at very little cost.

Some very ordinary items and events can be imbued with extraordinary motivational
significance, far in excess of their monetary value. I am constantly amazed at how motivating
a pizza or movie tickets can be if is given with sufficient appreciation. A sincere thank you
can be delivered at any place and at any time, costs absolutely nothing and can be more
motivationally powerful than a substantial monetary bonus. Organizations can provide
innovative recognition in an infinite number of ways.

 Reduce entitlements and link as many rewards as possible to

performance:
Clearly the traditional "pay for loyalty" systems in most organizations need to be changed.
Don't let attendance be your major criterion for rewards. Most employees resent those who
only put in their time and yet receive the same reward as those who go the extra mile.
Today's employees have higher expectations for what work can and should be, and they want
to receive rewards that reflect their personal efforts and contributions.

This is why so many companies are moving toward performance-based rewards, including
performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea,
companies are finding that these new reward systems do allow them to give substantial
rewards to those who really deserve them. Smart organizations are looking for opportunities
to reduce across-the-board entitlements, and thereby find more resources for discretionary
performance-based rewards, without increasing the total cost of rewards.

 Troubleshoot your reward system to make sure that what it is rewarding

is what you really want to happen:
The Law of Rewards - "What you reward is what you get" - Is extremely powerful. No matter
what your orientation materials or job description might say, it is the rewards your
organization gives that communicate the real expectations. The most important question to
ask in evaluating the reward system in your organization is, do the rewards we are giving
elicit the performance we want? Start with the results you want to achieve and then pinpoint
the types of behaviors needed to achieve them.

 Reward promptly: Rewards should be given as soon as possible after the

performance has taken place. This is why the most successful gain-sharing
programs pay employees monthly, rather than quarterly or annually as in the
past.
There is a well-accepted law of behavioral psychology, that if you want someone to repeat a
behavior, you should positively recognize it immediately. From this law, smart supervisors
and managers can learn a vital lesson: Look for any employee doing something right, right
now, and recognizes it.
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 Give employees a choice of rewards: Rewards are as different as the people

who receive them and it doesn't make sense to give rewards that recipients
don't find rewarding. For example, some people prefer more pay, while others
prefer more time off. A promotion might be more rewarding to one person,
while a job-sharing arrangement might be more rewarding for another. Some
people are excited about sports events, others about movies. Some employees
would love a dinner in a romantic restaurant, others a book by their favorite
author. Food, fun, education, improved work environment, gifts, travel, and
family-oriented activities - the options are endless.
How do you know what will be rewarding to employees? Ask them. Smart organizations are
also letting employees choose their own rewards from reward menus and catalogs.
Personalizing rewards shows that a company cares enough to discover what "interests" each
employee, rather than just distributing generic items. It also reduces the following danger: In
one organization I was visiting, an employee opened a big drawer in his desk and disdainfully
showed me all the "worthless trinkets" he had collected over the years.

 Increase the longevity of your rewards: This can be done in a number of

ways: One of the keys to reward longevity is symbolism. The more symbolic
an item is of the accomplishment, the more likely it is to continue reminding
the employee of why it was given. For instance, a T-shirt of coffee mug with a
meaningful inscription will continue rewarding those who wear it, or use it,
long after its initial receipt. There are many tokens of appreciation I still keep
on or near my desk that remind me of the joy of past accomplishments, while
the monetary rewards I have received are long spent and long forgotten.
Another way to increase the longevity of rewards in your organization is by using some kind
of point system. Rather than rewarding each individual behavior or accomplishment, points
can be awarded, which employees can accumulate and eventually trade for items from a
reward menu or gift catalog. This keeps the anticipation of rewards fresh for longer periods
of time. It also addresses the need for reward individualization.

One company uses a game it Call Safety Bingo. All employees receive a weekly bingo card.
When an employee is observed working safely, a number is presented (immediate
recognition). When they get "bingo", they receive a safety jacket (along with appropriate
verbal reinforcement). The rewards escalate for subsequent wins. This type of program keeps
employees interested for long periods of time, even though there might be weeks or months
between rewards, and makes routine work more fun overall.

Interestingly, when researchers have investigated the motivational dynamics of these

workplace games, they have found that the major motivator is the playing, not the prize.
 P a g e | 21

THE 3 R’S OF RETENTION

To keep employees and keep satisfaction high, you need to implement each of the

Three R’s of employee retention.

Respect is esteem, special regard, or particular consideration given to people. As

The pyramid shows, respect is the foundation of keeping your employees.

Recognition and rewards will have little effect if you don’t respect employees.

Recognition is defined as “special notice or attention” and “the act of perceiving clearly.”
Many problems with retention and morale occur because management is not paying attention
to people’s needs and reactions.

Rewards are the extra perks you offer beyond the basics of respect and recognition that make
it worth people’s while to work hard, to care, to go beyond the call of duty. While rewards
represent the smallest portion of the retention equation, they are still an important one.

You determine the precise methods you choose to implement the three R’s, but in general,
respect should be the largest component of your efforts. Without it, recognition and rewards
seem hollow and have little effect or they have negative effects. The magic truly is in the mix
of the three.

When you implement the “three R’s” approach, you will reduce turnover and enjoy the
following:

➣ Increased productivity

➣ Reduced absenteeism

➣ a more pleasant work environment (for both employees and you)

➣ Improved profits
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CUSTOMER RETENTION STRATEGIES

The easiest way to grow your customers is not to lose them

The average business loses around 20 percent of its customers annually simply by failing to
attend to customer relationships. In some industries this leakage is as high as 80 percent. The
cost, in either case, is staggering, but few businesses truly understand the implications.

The consequences of customer retention also compound over time, and in sometimes-
unexpected ways. Even a tiny change in customer retention can cascade through a business
system and multiply over time. The resulting effect on long-term profit and growth shouldn’t
be underestimated.

1. Reducing Attrition

Virtually every business loses some customers, but few ever measure or recognise how many
of their customers become inactive. Most businesses, ironically, invest an enormous amount
of time, effort and expense building that initial customer relationship. Then they let that
relationship go unattended, in some cases even losing interest as soon as the sale had been
made, or even worse, they abandon the customer as soon as an easily remedied problem
occurs, only to have to spend another small fortune to replace that customer. The easiest way
to grow your business is not to lose your customers. Once you stop the leakage, it’s often
possible to double or triple your growth rate because you’re no longer forced to make up lost
ground just to stand still.

2. Sell and then sell again

So many people do an excellent job of making the initial sale, then drop the ball and get
complacent, ignoring the customer, while they chase more business. Your selling has actually
only just begun when someone makes that initial purchase decision because virtually
everyone is susceptible to buyer’s remorse. To lock in that sale, and all of the referrals and
repeat business that will flow from it, you need to strike while the iron is hot to allay your
customers’ fears and demonstrate by your actions that you really care. You should thank
them and remind them again why they’ve made the right decision to deal with you … and put
a system in place to sell to them again, and again, constantly proving that they made the right
decision.

3. Bring back the “lost sheep”

There’s little point in dedicating massive resources to generating new customers when 25-
60% of your dormant customers will be receptive to your attempts to regenerate their
business if you approach them the right way, with the right offer. Reactivating customers
who already know you and your product is one of the easiest, quickest ways to increase your
revenues. Re-contacting and reminding them of your existence, finding out why they’re no
longer buying, overcoming their objections and demonstrating that you still value and respect
them will usually result in a tremendous bounty of sales and drastically increased revenues in
a matter of days … and will lead to some of your best and most loyal customers.
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4. Frequent Communications Calendar

Avoid losing your customers by building relationships and keeping in touch using a rolling
calendar of communications. This is a programmed sequence of letters, events, phone calls,
“thank you”, special offers, follow-ups, magic moments, and cards or notes with a personal
touch etc. that occur constantly and automatically at defined points in the pre-sales, sales and
post-sales process. People not only respond to this positively, they really appreciate it
because they feel valued and important. It acknowledges them, keeps them informed, offsets
post-purchase doubts, reinforces the reason they’re doing business with you and makes them
feel part of your business so that they want to come back again and again.

5. Extraordinary Customer Service

The never-ending pursuit of excellence to keep customers so satisfied that they tell others
how well they were treated when doing business with you. Moving the product or service you
deliver into the realm of the extraordinary by delivering higher than expected levels of
service to each and every customer. Key facets include: dedication to customer satisfaction
by every employee; providing immediate response; no buck passing; going above and beyond
the call of duty; consistent on-time delivery; delivering what you promise before AND after
the sale; a zero-defects and error-free-delivery process and recruiting outstanding people to
deliver your customer service. Extraordinary service builds fortunes in repeat customers,
whereas poor service will drive your customers to your competition.

6. Courtesy system

It is a powerful system; which improves the interpersonal skills of your team and also
changes the spirit of your organization. It involves speaking to colleagues politely and
pleasantly, without sarcasm or parody, and treating them at least as well as you would want
them to treat your customers. This will help your team to feel worthwhile and important,
which makes for pleasant social contacts at work. It also motivates them to provide
extraordinary service, encourages them to be consistently pleasant in all of their dealings and
to relate to customers in a warm, human and natural manner. This results in better, warmer,
stronger, more trusting relationships and long-term bonds with your customers.

7. Product/service integrity

Long-term success and customer retention belongs to those who do not take ethical shortcuts.
There must always be total consistency between what you say and do and what your
customers’ experience. The design, build quality, reliability and serviceability of your
product or service must be of the standard your customers want, need and expect. Service
integrity is also demonstrated by the way you handle the small things, as well as the large.
Customers will be attracted to you if you are open and honest with them, care for them, take a
genuine interest in them, don’t let them down and practice what you preach … and they will
avoid you if you don’t.
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WAYS TO IMPROVE CUSTOMER RETENTION

 Ensure consistent customer service across all platforms and channels.

Brands still adjusting to the digital and social space might be less than well equipped to
handle customer complaints that come in via their customer service outlets. To ease frustrated
customers and improve your customer service in general, ensure your presence across all of
your customer service outlets is as consistent as possible. If there are standard answers that
reps are supposed to be giving for common problems, make sure that reps working across all
platforms have that information. Also, make sure that reps across all platforms are courteous,
polite and know the chain of command, should larger concerns crop up.

 Look and ask for feedback.

It’s hard to know how well you’re responding to customer’s concerns when you’re looking at
it from the perspective of an insider. To get a more accurate impression of what you can
improve on, look for feedback across all of your presences and take the time to create a
survey or a poll. Make sure, though, that the feedback you receive is feedback you act and
reflect on.

 Add customer service to your social media strategy.

If you haven’t already created a structure that allows customer reps to address customer
complaints in the social space, look into it. A whopping 88% of consumers are less likely to
buy from companies who leave complaints on social media unanswered. Even if you can’t
get a customer rep to monitor your social presences, create a workflow that enables your
community manager to direct complaints to the reps in a timely way.

 Add incentive for long-time loyal customers.

Reward those who have been with your brand for the long haul by showing that you care and
value their business. Giving them birthday or anniversary discounts or gift cards are both
great strategies that customers look forward every year. Having customers earn points for
each purchase they make is also a great way to help encourage repeat business, and reward
them for their loyalty.
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CASE STUDY ON LG

WHAT LG DOES TO RETAIN ITS EMPLOYEES?

To retain employees it is very important to give them a feeling of belongingness in the

company. For this they conduct many activities like:

1. There’s a weekly meeting of every dept where the employees are asked what their
expectations are from the company to make the atmosphere and climate joyful.

2. After every 15 days one day FUN TRIP is conducted (within 50-70 Kms) from the
company. Places like Essel world, Lonavala, Alibaug Beach, Matheran Hill Station,
etc. where the employee can have fun and relax from their regular work. The
employees themselves decide the destination of the fun trip. The company holds the
expense.

3. Every Employee is given a Laptop, Mobile (Rs. 500 card free every month) or
Landline Phone free.

4. “MY DAY”- Every week the employee can have 2 “my days”, i.e. for two days a
week they can have their own time away from office after 1.30 pm.
5. Annual Day – The annual day is on 24th December. Every employee gets a gift
voucher, Lunch at some good hotel and a fun tour to Essel world or water Kingdom
etc.

6. Annually they also have interdepartmental matches like Cricket Matches, Volleyball
Matches etc to improve team building and feeling of belongingness.

7. Culture: On every Indian festival there’s a big celebration.

 P a g e | 26

a. Ex: On Sank rant they have a “BHARTIYA JEVAN”. They fly colorful kites
and have competition between the employees.
b. Ex: On Diwali they enjoy sweets and crackers with traditional dresses.

8. Departmental Lunch: Everyday one department have lunch together. Each and every
member of that department eat and drink together. This helps in improving the team
spirit and the feeling of belongingness in the department.

9. Employee of the week- AWARD:

 Every week one worker is honoured based on the performance of the worker. This
improves their moral and encourages them to work hard for the coming week.
 Every month one employee is honoured as Employee of the Month
 Annually one employee is honoured as Employee of the year.
Their names are declared on the Notice board and company magazine, which encourages
others also to work better.

10. New employees joining the company are given a training of 8-10 days.
The training consists of induction and orientation program along with a 2 days trip. This is a
good ice breaking session and helps them to know their colleague. The lasts two days training
are conducted in the actual job site.

11. Higher education: If any employee wishes for higher education the company sends
the employee to South Korea for training and encourages them to study hard.

12. Car is provided to the entire manager and above. The petrol expense are taken care by
the company.

13. Annually every employee gets a 5 days paid leave.

14. The company provides the facility of all indoor games along with a Swimming pool
for the refreshment of the employee.
For example: Table Tennis, Chess, Badminton, Snooker, etc.
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SUGGESTIONS AND RECOMMENDATION

 Communication, communication, communication - communication has become

so heavily stressed in the workplace that it almost seems cliché. However
communication couldn't be more important in the effort to retain employees. Be sure
that team members know their roles, job description, and responsibilities within the
organization. is on the same page.
 Include employees in decision-making - it is incredibly important to include team
members in the decision making process, especially when decisions will effect an
individual's department or work team.

 Allow team members to share their knowledge with

others - the highest percentage of information retention
occurs when one shares that information with others. Having
team members share what they have learned at a recent
conference or training workshop will not only increase the
amount of information they will retain.

 Shorten the feedback loop - do not wait for an annual

performance evaluation to come due to give feedback on
how an employee is performing. Most team members enjoy
frequent feedback about how they are performing.
Shortening the feedback loop will help to keep performance levels high and will
reinforce positive behavior.

 Offer a competitive compensation package - any team member wants to feel that
he or she is being paid appropriately and fairly for the work he or she does. Be sure
to research what other companies and organizations are offering in terms of salary
and benefits. It is also important to research what the regional and national
compensation averages are for that particular position.

 Balance work and personal life- family is incredibly important to team members.
When work begins to put a significant strain on one's family no amount of money will
keep an employee around. Stress the importance of balancing work and one's
personal life.
 Provide opportunities for growth and development - offer
opportunities for team members to acquire new skills and
knowledge useful to the organization. If an employee
appears to be bored or burned out in a current position offer
to train this individual in another facet of the organization
where he or she would be a good fit.

 Recognize team members for their hard work and let

them know they are appreciated - this can be one of the
single greatest factors affecting employee retention.
Everybody, in all levels of an organization, wants to know
 P a g e | 28

that their efforts are appreciated and recognized. This can be as simple or as
extravagant as a supervisor may desire. Often time a short e-mail or quickly stopping
by a team member's desk and saying "thanks" can do wonder for morale.
 Clearly define what is expected of team members - nothing can be more
frustrating or discouraging for an employee than the lack of a clear understanding of
what is expected of him on the job. In a performance driven workplace a lack of
clarity regarding job duties and expectations can cause fear and anxiety among
employees who are unclear of what is expected of them.

 The quality of supervision and mentorship - it has been said so often that it is
almost cliche, but people leave people, not their jobs. Supervisors play the largest
role in a team member's development and ultimate success within an organization.
All employees want to have supervisors who are respectful, courteous, and friendly -
that is a given.

 Fair and equitable treatment of all employees - one of the surest ways to create
animosity and resentment in an organization is to allow favoritism and preferential
treatment of individual team members. The so-called "good ole' boys club" can
create a noxious organization culture and foster resentment among team members..
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CONCLUSION

I want to conclude that employees are the capital of the every organization. So to retain
employee, organization has to satisfy its employee. By offering many facilities, events,
incentives, appraisal programs, transparent communication company can retain to employees.

Employee retention not only reduces the attrition rate but also increases the goodwill of
a company in a market. This shows a good culture of the organization

The study gave a clear picture about the employees and their areas of dissatisfaction. Most of
the employees are satisfied with their jobs and most of them are satisfied with the policies of
the organization and also towards the other aspects taken in to account for measuring the
level of job satisfaction among the employees in the organization and there are some of the
employees who are not satisfied with their jobs due to some of the aspects, also some of the
suggestions can be taken in to account to make those employees feel better about their jobs so
if the suggestions are taken in to account and done there is chance for making the unsatisfied
employees to change their attitude towards their respective.
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BIBLIOGRAPHY

I. BOOKS

i. HUMAN RESOURCE MANAGEMENT (KALE, AHMED)-VIPUL PRAKASHAN

ii. PERSONNEL MANAGEMENT (C.B.MAMORIA)

iii. HUMAN RESOURCE MANAGEMENT (DAVID .A. DECENZO,

STEPHEN.P.AOBBINS)

iv. PERSONNEL MANAGEMENT (MICHAEL ARMSTRONG)

II. WEBSITES

i. www.google.co.in

ii. www.managementparadise.com

iii. www.investopedia.com

iv. www.bmscampus.com

v. www.gsk.com

vi. www.retentionmanagement.com

III. COMPANY REFERENCES

i. LG
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QUESTIONNAIR

DATA ANALYSIS AND INTERPRETATION

Gender-92 Responses

Male
42%
58% Female

Age – 92 Responses

AGE
80
70
60
50
40
AGE
30
20
10
0
Below 18 18-30 30 Above
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What is your employment status?

15%

Student

26% Fresher - Working professional

59%
Experienced

According to you which sector has the highest attrition rate?

16%
30% Industrial sector
Education sector
Media sector
Corporate sector
32%
22%
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Do you feel valued at your workplace?

29%
Yes
47% No
Maybe

24%

What according to you is the major reason for attrition?

14%

33% No recognition
No employee consideration
22%
No time flexibility
Poor Management

31%
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Does your company take appropriate measures for retaining their

employees?

39% Yes
39%
No
Maybe

22%

Management should conduct performance appraisal on what basis?

27% MonthlyYearly
Quaterly
43%
Mid Yearly
Yearly
14%

16%
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Do you have proper work life balance?

30%
Yes
No
45% Maybe

25%

What are most motivational benefits for an employee?

35% 30% Monetary Benefits

Non-Monetary Benefits
Medical Benefits
Post Retirement Benefits
17%
18%