FACTORS AFFECTING ER - MONITORY DISSATISFACTION

In the current scenario a major challenge for an organization is to retain its efficient and experts, the management can control the problems to a certain extent but cannot put a full stop to it.

Fitz-enz (1990) [19] recognized that employee retention is not influenced by a single factor, but there are many factors which are responsible for retaining employees in an organization. Management need to pay attention to factors such as compensation & rewards, job security, training & developments, supervisor support culture, work environment and organization justice etc.

Lets look at one by one the factors affecting employee retention.

MONITORY DISSATISFACTION

In this changing contemporary world money is everything, there are many competitors waiting in the market to grab the efficient and experts of another organization, every organizations tries their level best to provide all the benefits to their efficient  and experts to retain them but there are so many opportunities available for the skilled as well as talented employees that it is becoming very tough as well as difficult for the employers to satisfy and retain them.

Monitory benefit is the most critical factor effects retaining efficient employees of an organization. Gardner et al., (2004) [30] were of the view that pay is considered as a motivator as well as employee retention technique, Milkovich and Newman (2004) [31] have clearly stated that among all types of reward, monetary pay is considered one of the most important and significant factor in retention.

When employees are motivated and perform on the other hand, they expect to be treated well by the organization specially through monitory benefits.  But Every organization has a salary budget for every employee which can be raised to some extent but not beyond a certain limit. Retention becomes a problem when an employee performs well and expect an exceptionally high figure beyond the budget of the organization and is just not willing to compromise.  

The salaries of the individuals working at the same level should be more or less similar to avoid major disputes amongst employees, therefore meeting a talented employee’s expectation in term of monitory benefit sometime may be a challenge that the organization face, they will not be able to match with their competitors, which will lead to employee turnover.

References;

Fitz-enz, J. (1990).Getting and keeping good employees. In personnel. 67(8): 25-29. 

Gardner DG, Van Dyne L, Pierce JL (2004). The effects of pay level on organization-based self-esteem and performance: a field study. Journal of Occup. Organ. Psychology., 77(3): 307-322. 

Milkovich GM, Newman JM (2004). Compensation (8th ed.). Burr Ridge, IL: Irwin McGraw-Hill.

BENEFITS OF EMPLOYEE RETENTION STRATEGIES

Employee retention is an important activity to every organization. Various organizations uses various strategies to retain its efficient and experts. Employees should feel that they are treated with respect and equal. And they are fairly and highest paid for their job. Monetary and non-monetary benefits will add on in retaining them.

Now will see the benefits of implementing employee retention strategies.

Reduces Labour Turnover ratio:

Employee turnover is a natural aspect of any business, but high turnover can be a hassle to the organization. Every employee that leaves the organization takes a significant portion of the time and resources with them, from lost productivity, to the time the organization spends searching for their replacement and starting everything from new can be reduced and can focus on organization’s development when retention takes place.

Reduces Cost:

I as a HR person know how I waste my time due to labour turnover. First, it takes time to find new employees who are qualified and reliable. Then, it takes time to set up interview rounds and negotiations. After that, it takes even more time to on-board employees. Finally, it can take a significant amount of time to train new employees. Adding up all the hours, turnover is a human resource headache. By focusing on retaining employees, you can cut down on the time spent on those new-hire tasks and get back to the more profitable aspects of running a business.

Good will: 

Organizations with best employee retention strategies have good brand image in the market this help in attracting and retaining best employees also through the brand image the organization can make more profit and become a market leader.

Productivity: 

Efficient employee retention strategies will increase the productivity of employees which in turn increases the productivity of whole organisation. Not retaining efficient and experts’ drops down productivity, the time taken to replace the position and train the new employee altogether it takes 1 or 2 years for a new employee to perform and contribute to the organization’s productivity.

Creates Experts’:

Employees that have been in the organization for longer  have  tendency to develop time-saving and problem-solving practices. As they become more comfortable and familiar with the business and industry, employees naturally begin see ways to make things better and more efficient. If a business keeps the employee around long enough to notice these opportunities, they will quite often share that good idea or observation.

Culture of Organization:

Culture of an organization is built by the people in the organization. When there are employees who have been with the organization for long they bring with them a healthy working culture. This is negatively reflected on the culture when employees leave the organization. Building strong culture is one of the priorities of every organization and if retaining employees is beneficial for them then they should make efforts to ensure that a strong culture is built.

Loyalty:

Every organization needs loyal employees to ensure sustainability in long run. These loyal employees add to the company’s brand, satisfied customers and happy work place. There are many hidden benefits of loyal employees which can be seen on different platforms. Strong Employee Retention policies in an organization will ensure that these loyalty benefits are enjoyed by the organization and the employees.

Quality at work:

The work quality is adversely affected when employees who have been trained for a job leave the organization. Employees leave creating a gap in the process, this creates troubles in managing daily tasks which affects the quality of work. Other employees are over burdened and feel exploited.

Immediate replacement of these employees becomes impossible and thus employee retention becomes advantageous to ensure quality of work.

 
Workflow issues and problems

When the employees leave an organization, the work flow gets affected. Training would be required to ensure that a suitable employee takes over the task. Till the time, a replacement is found, the work does not go as planned and this might affect the relationship with clients too, therefore retaining the efficient and experts is an advantage for the organization.

Introduction to Employee Retention

Needs and wants of a Human being is unstoppable. People get attracted to many things to satisfy their needs and wants. When they fulfill their needs they will look for the other. Therefore people keep on moving from organizations to organisation when ones need is not fulfilled by the current organization.  Thus he/she will look for more opportunities in other companies.

Employee turnover is one of the largest challenge or costs that an organization faces. The cost of the training provided to employees, the knowledge given, the pay packages, the time spent on them, cost of replacing the same and start everything from the beginning and so on…

“Ernst & Young estimates it costs approximately $120,000 to replace 10 professionals. According to research done by Sibson & Company, to recoup the cost of losing just one employee a fast food restaurant must sell 7,613combo meals at $2.50 each. Employee turnover costs companies 30 to 50% of the annual salary of entry-level employees, 150% of middle-level employees, and up to 400% for upper level, specialized employees”.

The income and the profit is totally depends on the human resources of the organization. Therefore retaining efficient and experts of an organization is something essential while they focus on income and profit of the company.

What is Employee Retention?

According to Huang (2006), Employee-retention is generally ‘the intention of employees to stay loyal to their current-workplace’. Bidisha (2013) says it  is  when  employees  are  encouraged  to  remain  in  the organization for a long-period or until the ongoing-project is complete

Employee retention defines as the Organization’s ability to keep their employees with them for a longer period of time. Organizations use various policies and practices to retain their employees by motivating and encouraging them to stay for the sustainability of the organization, since they invest more on them.

The management can control employees quitting their jobs to certain extent but they cannot put a full stop to it. There are various strategies used by organization to retain their employees. The ultimate purpose of employee retention is to make both employee and the employer happy.

Employee retention cannot be just dealt with numbers and reports, it has to be dealt by understanding the employee in and out, listening to their concerns, solving their problems etc… (We will have a look at the strategies of employee retention in coming weeks)

References: 

Huang, I.C., Lin, H.V., Chuang, C.H. (2006) Constructing factors related to worker retention. International Journal of Manpower. 27(5). p.491-508.

Bidisha, L. D., Mukulesh, B. (2013) Employee retention: A review of literature. Journal of

Business and Management. 14(1). p.8-16