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FINALRESEARCH PROJECT
“EMPLOYEE RETENTION STRATEGIES AND ITS IMPACT ON EMPLOYEE TURNOVER IN HDFC STANDARD LIFE
INSURANCE.”
Submitted to SVBS in partial fulfillment of the requirement
SUBMITTED BY: SUBMITTED TO: PRIYANKA VERMA MRS.DIPTI MBA(SVBS) LECTURER
SWAMI VIVEKANAND SCHOOL OF MANAGEMENTRAMNAGAR, BANUR (PATIALA)
1
2010
CERTIFICATE FROM FAUCTLY GUIDE This is to certify that the final research report entitled “EMPLOYEE RETENTION
STRATEGIES AND ITS IMPACT ON EMPLOYEE TURNOVER In HDFC
STANDARD LIFE INSURANCE.” is a bonafide record of work done by mrs.Dipti and
submitted in partial fulfillment of MASTERS DEGREE IN MANAGEMENT from
Swami Vivekanand School of Management, Ramnagar Banur, Patiala (Punjab).
GUIDE:
MRS. DIPTI
LECTURER
2
DECLARATION
I, MANSI MAHESHWARI hereby declare that the study entitled “EMPLOYEE
RETENTION STRATEGIES AND ITS IMPACT ON EMPLOYEE TURNOVER IN
HDFC STANDARD LIFE INSURANCE.” MOHALI, being submitted by me in the
partial fulfillment of the requirement for the award of MBA by the Department of SVBS. It
is a record of my own work. The study was conducted in HDFC STANDARD LIFE
INSURANCE,MOHALI
The matter incorporated in this project report has not been submitted to any other university
for the award of degree.
PRIYANKA VERMA
3
PREFACE
The conceptual knowledge acquired by management students is best manifested in the
projects and training they undergo. The present project gave a perfect vent to my
understanding of the Human Resource subject specially the important concept of
EMPLOYEE RETENTION STRATEGIES.
The Project Report entitled “EMPLOYEE RETENTION STRATEGIES AND ITS
IMPACT ON EMPLOYEE TURNOVER IN HDFC STANDARD LIFE
INSURANCE .” is intent to study thoroughly all the strategies that have impact on the
retention and turnover of employees and I would try to find that what makes an employee
retain in an organization.
4
ACKNOWLEDGEMENT
This project report is an outcome bearing imprints of many persons who directly and
indirectly encouraged and inspired its completion. I would like to acknowledge their
precious co-operation and express my sincere gratitude to them.
A very special thanks goes to Mrs. SHASHI JAIN (Principal of S.V.B.S.) for all his
support and guidance throughout my training period especially in completion of my project
and research work. I am also grateful to MRS .MONIKA SAINI (H.O.D of S.V.B.S)
I am indebted to my faculty guide MRS.DIPTI. She has been a great mentor throughout the
period, constantly encouraging me in refining my work by providing valuable suggestions
and inputs during all stages of the project.
I am extremely grateful to Mr. VINAY KUMAR RANA (Trainer), HDFC STANDARD
LIFE INSURANCE,MOHALI had been an excellent guide and adviser; sharing his
knowledge and valuable experience to enhance my learning. He formed a vital part of this
project, constantly encouraging and supportive during the course of this project. His steady
guidance had been of crucial importance and had helped open many doors to various issues
which at the onset of the project were vague and unclear.
Appreciation also goes to all those employees of HDFC STANDARD LIFE INSURANCE,
who made my study including research work possible and an enjoyable experience for me.
I would like to thank my family, friends and all those who have always been a constant
source of inspiration to me.
PRIYANKA VERMA
5
EXECUTIVE SUMMARY
A Project means some task assigned by the company. My project topic is “Employee
Retention Strategies and Its Impact on Employee Turnover in HDFC STANDARD
LIFE INSURANCE.” in the company. To study the concept of Employee Retention in the
organization I took this project.
The objective of my research is to identify the various factors of voluntary leaving of
the employees from the organization. These factors includes job and person mismatch, no
growth opportunities, lack of appreciation, new job offers, lack of trust and support in co-
workers, work/ life imbalance etc. The main objective is to identify the retention strategies
and the strategies for reducing employee turnover and improving retention. It may include
strategies like performance appraisal, career development, training programs,
acknowledgement, recognition, induction programs, motivation, rewards, promotional
opportunities etc.
The efficiency of the organization depends upon the efficiency of its employees. The
efficiency of employees is directly influenced by their own satisfaction. In the present
scenario it is required for each organization to have satisfied employees and to keep
employees satisfied for accomplishing the objectives and for retaining them for long period.
The employee retention is directly linked to employee satisfaction and which in turn directly
linked to the productivity, performance, customer satisfaction of the organization. The
proper recognition, periodical appraisal, motivation to employees, salary increase etc effects
the employee in the positive manner.
By personally interviewing the employees of HDFC STANDARD LIFE INSURANCE, I
get whole relevant data according to the need of my project. My research is based on
Primary data which was collected by questionnaire methods. So in the period of my study I
had prepared questionnaire for employees and done survey by personally interviewing some
of the employees of HDFC.
7
TABLE OF CONTENTS
8
S.No. Title
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Introduction
Study Of Retention and employee turnover
Objective Of Study
Review Of Literature
Research Methodology
Data Analysis And Interpretations
Conclusion
Limitations
Suggestions
Bibliography
Annexure
INTRODUCTION
ITC is one of India's foremost private sector companies with a market capitalization of
nearly US$ 19 billion and a turnover of over US$ 5 billion. ITC has been rated among the
World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by
Forbes magazine and among India's Most Valuable Companies by Business Today.
ITC has a diversified presence in FMCG, Hotels, Paperboards & Packaging, Agri Business
and Information Technology. It is ITC’s strategic intent to create multiple drivers of business
growth by leveraging its diverse competencies in agri sourcing, world-class manufacturing,
branding, packaging, hospitality, trade marketing and distribution. By blending internal
competencies to meet the emerging business opportunities of a growing economy, ITC has
forayed into Lifestyle Retailing, Branded Packaged Foods, Personal Care products,
Education & Stationery products, Incense Sticks and Safety Matches, apart from
consolidating its traditional businesses of Cigarettes and Leaf Tobacco, Hotels, Paperboards
& Packaging and Agri Business.
9
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of
the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The
Company's “e-Choupal” initiative is enabling Indian agriculture significantly enhance its
competitiveness by empowering Indian farmers through the power of the Internet. This
transformational strategy, which has already become the subject matter of a case study at
Harvard Business School, is expected to progressively create for ITC a huge rural
distribution infrastructure, significantly enhancing the Company's marketing reach.
ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is
aggressively pursuing emerging opportunities in providing end-to-end IT solutions,
including e-enabled services and business process outsourcing.
ITC's production facilities and hotels have won numerous national and international awards
for quality, productivity, safety and environment management systems. ITC was the first
company in India to voluntarily seek a corporate governance rating.
ITC employs over 25,000 people at more than 60 locations across India. The Company
continuously endeavors to enhance its wealth generating capabilities in a globalizing
environment to consistently reward more than 3, 64,000 shareholders, fulfill the aspirations
of its stakeholders and meet societal expectations. This over-arching vision of the company
is expressively captured in its corporate positioning statement: "Enduring Value. For the
nation. For the Shareholder."
FMCG Products
Foods
ITC made its entry into the branded & packaged Foods business in August 2001 with the
launch of the Kitchens of India brand. A more broad-based entry has been made since June
2002 with brand launches in the Confectionery, Staples and Snack Foods segments.
ITC’s foray into the Foods business is based on strong foundations that leverage ITC's
proven strengths in the areas of branded cuisine, competitive sourcing of agricultural
11
commodities, contemporary packaging as well as large distribution infrastructure. The Foods
business of ITC is a unique example of the synergy that different businesses of ITC bring to
create new competencies and a superior market standing.
The Foods business is today represented in 4 categories in the market. These are:
Ready to Eat Foods
Staples
Snack Foods
Confectionery
The unwavering commitment to internationally benchmarked quality standards enabled ITC
to rapidly gain market standing in all its 6 brands:
Kitchens of India
Aashirvaad
Sunfeast
Mint-o
Candy man
Bingo!
The Branded Packaged Foods business continued to expand rapidly with sales growing by
57% over the previous year. The unwavering commitment to benchmarked high quality
standards has enabled ‘Aashirvaad’ and ‘Sunfeast’ to command annual consumer spends of
nearly Rs 1,000 crore each in a short span of time.
12
CIGRETTES
ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it
has a leadership position in every segment of the market. It's highly popular portfolio of
brands includes INSIGNIA, INDIA KINGS, CLASSIC, GOLD FLAKE, SILK CUTS,
NAVY CUTS, SCISSORS, CAPSTAN, BERKELEY, BRISTOL AND FLAKE.
Cigarette units at Kolkata (West Bengal), Bengaluru (Karnataka), Munger (Bihar) &
Saharanpur (Uttar Pradesh)
LIFESTYLE RETAILING
13
ITC’s Lifestyle Retailing Business Division has established a nationwide retailing presence
through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion
destination, offers following tempting choices:
WILLS CLASSIC WORK WEAR
WILLS SPORT RELEXED WEAR
WILLS CLUBLIFE EVENING WEAR
WILLS SIGNATURE DESINGNER WEAR
With a distinctive presence across segments at the premium end, ITC has also established
John Players as a brand that offers a complete fashion wardrobe to the male youth of today.
The recent launch of Miss Players with its range of trendy fashion wear for young women
has been a successful addition to the youthful offering.
14
INTRODUCTION TO “RETENTION”
“High performers are like frogs in a wheelbarrow- They can jump out at any
time”-Mc Kinsey & Company Study.
“Genius begins and labor finishes” is an old saying that would be profoundly significant if
interpreted in the context of corporate and large employers. Concepts, visions and decisions
do take shape within the four walls of corporate boardrooms. However, it is only the
employees that implement and give tangibility to the corporate’s mission. In other words if it
is the highest rung in the corporate hierarchy that has ideas, it is the employees’ rung that
has the chisel to bring the vision to life.
In the best of worlds, employees would love their jobs. Like their co-workers, work hard for
their employers; get paid well for their work, ample chances of advancement and flexible
schedules so they could attend to personal or family needs when necessary. And never leave.
But then there’s the real world. And in the real world, employees, do, leave, either because
they want more money, hate the working conditions, hate their co-workers, want a change,
or because their spouse gets a dream job in another state. Unlike inanimate products and
systems that subject themselves to fine tuning without any reaction, employees would not
subject themselves to any measure taken without reaction and analysis. Hence managing
human resources, particularly retaining them, is an art that calls for special skills and
strategies.
EMPLOYEE RETENTION
Employee Retention involves taking measures to encourage employees to remain in the
organization for the maximum period of time. Corporate is facing a lot of problems in
employee retention these days. Hiring knowledgeable people for the job is essential for an
employer. But retention is even more important than hiring. There is no dearth of
opportunities for a talented person. There are many organizations which are looking for such
employees. If a person is not satisfied by the job he’s doing, he may switch over to some
17
other more suitable job. In today’s environment it becomes very important for organizations
to retain their employees.
The top organizations are on the top because they value their employees and they know how
to keep them glued to the organization. Employees stay and leave organizations for some
reasons.
Employee retention is a process in which the employees are encouraged to remain with
the organization for the maximum period of time or until the completion of the project.
Employee retention is beneficial for the organization as well as the employee.
The picture states the latest statement that corporate believes in “Love them or lose them”
The reason may be personal or professional. These reasons should be understood by the
employer and should be taken care of. The organizations are becoming aware of these
reasons and adopting many strategies for employee retention.
Employees today are different. They are not the ones who don’t have good opportunities in
hand. As soon as they feel dissatisfied with the current employer or the job, they switch over
to the next job. It is the responsibility of the employer to retain their best employees. If they
don’t, they would be left with no good employees. A good employer should know how to
attract and retain its employees.
18
Retention involves five major things:
1) COMPENSATION 2) ENVIRONMENT 3) GROWTH
4) RELATIONSHIP 5) SUPPORT
Employee retention would require a lot of efforts, energy, and resources but the results are
worth it.
19
IMPORTANCE OF EMPLOYEE RETENTION
Now that so much is being done by organizations to retain its employees, why is retention so
important? Is it just to reduce the turnover costs? Well, the answer is a definite no. It’s not
only the cost incurred by a company that emphasizes the need of retaining employees but
also the need to retain talented employees from getting poached.
The process of employee retention will benefit an organization in the following ways:
1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands
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.
2. 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.
3. 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.
4. 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.
20
5. 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.
6. 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.
WHAT MAKES EMPLOYEE LEAVES?
Employees do not leave an organization without any significant reason. There are certain
circumstances that lead to their leaving the organization. The most common reasons can be:
Job is not what the employee expected to be: Sometimes the job responsibilities don’t come
out to be same as expected by the candidates. Unexpected job responsibilities lead to job
dissatisfaction.
1. Job and person mismatch: A candidate may be fit to do a certain type of job which
matches his personality. If he is given a job which mismatches his personality, then
he won’t be able to perform it well and will try to find out reasons to leave the job.
2. No growth opportunities: No or less learning and growth opportunities in the
current job will make candidate’s job and career stagnant.
3. Lack of appreciation: If the work is not appreciated by the supervisor, the
employee feels de-motivated and loses interest in job.
4. Lack of trust and support in co-workers, seniors and management: Trust is the
most important factor that is required for an individual to stay in the job. Non-
supportive co-workers, seniors and management can make office environment
unfriendly and difficult to work in.
21
5. Stress from overwork and work life imbalance: Job stress can lead to work life
imbalance which ultimately many times lead to employee leaving the organization.
6. Compensation: Better compensation packages being offered by other companies
may attract employees towards themselves.
7. New job offer: An attractive job offer which an employee thinks is good for him
with respect to job responsibility, compensation, growth and learning etc. can lead an
employee to leave the organization.
EMPLOYEE RETENTION STRATEGIES
The basic practices which should be kept in mind in the employee retention strategies are:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the authority to get things done.
3. Make employees realize that they are the most valuable asset of the organization.
4. Have faith in them, trust them and respect them.
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.
7. Recognize and appreciate their achievements.
8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.
22
These practices can be categorized in 3 levels: Low, medium and high level.
<Low> <Medium > <High>
23
RETENTION DETERMINANTS
It has been recognized by both employers and employees that some common areas affect
employee retention. If certain organizational components are being provided, than other
factors may affect retention. Surveys of employees consistently show that better
compensation package and better career opportunity are the two most important
determinates of retention. Finally, job design and fair and supportive employee relationship
with others inside the organization contribute to retention. Following are the components
that affect employee retention: -
24
Organizational ComponentsValues and Culture.Strategies & Opportunities.Well managed & results-oriented.Job continuity & security.
Career opportunities1. Training
Continuity.2. Development &
Rewards1. Competitive pay & benefits.2. Performance reward
differentiation.3. Recognition.4. Special benefit & perks.
Job design & work1. Job responsibility &
autonomy.2. Work flexibility.3. Working conditions.4. Work/Life balancing.
Employee Relationship1. Fair/nondiscriminatory
treatment.2. Supervisory/management
support.
These were the determinants of retention. An affective leadership assumed by the top
management would be a very important feature that keeps the work force intact and loyal. In
fact, the approach to the task of formulation of strategies for employee retention should be
comprehensive and the honest intention of the employer to implement every stipulation in
the package of appointment should be evident. However, there would, in each employing
corporate, be a section of so-called ‘good employees’, whom it would be unwise to loose.
Special strategies and special kind of efforts are required in the task of retaining them.
Probably it would be the hardest task for the employer to retain them as persons and rivals
would be making relentless bids to woo this section of employees. To counter these
onslaughts from peers, special efforts are called for.
25
MANAGER’S ROLE IN RETENTION
When asked about why employees leave, low salary comes out to be a common excuse.
However, research has shown that people join companies, but leave because of what their
managers’ do or don’t do. It is seen that managers who respect and value employees’
competency, pay attention to their aspirations, assure challenging work, value the quality of
work life and provided chances for learning have loyal and engaged employees. Therefore,
managers and team leaders play an active and vital role in employee retention by creating a
motivating team culture and improving the relationships with team members. This can be
done in a following way:
1. Creating a Motivating Environment: Team leaders who create motivating
environments are likely to keep their team members together for a longer period of
time. Motivation does not necessarily have to come through fun events such as
parties, celebrations, team outings etc. They can also come through serious events
e.g. arranging a talk by the VP of Quality on career opportunities in the field of
quality. Employees who look forward to these events and are likely to remain more
engaged.
2. Standing up for the Team: Team leaders are closest to their team members. While
they need to ensure smooth functioning of their teams by implementing management
decisions, they also need to educate their managers about the realities on the ground.
When agents see the team leader standing up for them, they will have one more
reason to stay in the team.
26
3. Providing coaching: Everyone wants to be successful in his or her current job.
However, not everyone knows how. Therefore, one of the key responsibilities will be
providing coaching that is intended to improve the performance of employees.
Managers often tend to escape this role by just coaching their employees. However,
coaching is followed by monitoring performance and providing feedback on the
same.
4. Delegation: Many team leaders and managers feel that they are the only people who
can do a particular task or job. Therefore, they do not delegate their jobs as much as
they should. Delegation is a great way to develop competencies.
5. Extra Responsibility: Giving extra responsibility to employees is another way to get
them engaged with the company. However, just giving the extra responsibility does
not help. The manager must spend good time teaching the employees of how to
manage responsibilities given to them so that they don’t feel over burdened.
6. Focus on future career: Employees are always concerned about their future career.
A manager should focus on showing employees his career ladder. If an employee
sees that his current job offers a path towards their future career aspirations, then
they are likely to stay longer in the company. Therefore, managers should play the
role of career counselors as well.
RETENTION MYTHS
The process of retention is not as easy at it seems. There are so many tactics and strategies
used in retention of employees by the organizations. The basic purpose of these strategies
should be to increase employee satisfaction, boost employee morale hence achieve retention.
But some times these strategies are not used properly or even worse, wrong strategies are
used. Because of which these strategies fail to achieve the desired results. There are many
myths related to the employee retention process. These myths exist because the strategies
being used are either wrong or are being used from a long time. These myths prevent the
27
employer from successfully implementing the retention strategies. Let us have a look on
some of these myths:
1. Employees leave an organization for more pay: Money may be the motivating
factor for some but for many people it is not the most important factor. Money
matters more to the low-income-employees for whom it’s a survival issue. Money
can make an employee stay in an organization but not for long. The factors more
important than money are job satisfaction, job responsibilities, and individual’s skill
development. The employers should understand this and work out some other ways
to make employees feel satisfied. When employees leave, management tries to retain
them by offering more money. But instead they should try to figure out the main
reason behind it. Issues that are mainly the cause of dissatisfaction are organization’s
policies and procedures, working conditions, relationship with the supervisor and
salary, etc. For such employees, achievement, growth, respect, recognition, is the
main concern.
2. Incentives can increase productivity: Incentives can surely increase productivity
but not for long term. Cash incentives, volume work targets and speed awards are old
management beliefs. They can generate work speedily and in volumes but can’t
boost employee commitment. Rather speed can hamper the quality of work
produced. What really glues employees to their work and organization is quality
work, meaningful responsibilities, recognition, respect, growth opportunities and
friendly supervisors.
3. Employees run away from responsibilities: It is a myth that employees run from
responsibilities. In-fact employees feel more responsible if they are given extra
responsibilities apart from their regular job. Employees look for variety, greater
control on the processes and authority to take decisions in their present job. They
want opportunities to learn and grow. Management can assign extra responsibilities
to their employees and appreciate them on the completion of these tasks. This will
28
induce a sense of pride in the employee and will improve the relationship between
the management and the employee.
4. Loyalty is a thing of the past: Employees can be loyal but what they need is an
employer for whom they can be loyal. There is no reason for the employee to hop
jobs if he’s satisfied with the employer.
5. Taking measures to increase employee satisfaction will be expensive for the
organizations: The things actually required improving employee satisfaction like
respect, career growth and development, appreciation, etc. can’t be bought. They are
free of cost. An employer or management that reacts well to the employee’s ideas
and suggestions is enough for the employees to be retained.
29
BENEFITS OF ATTRITION
Attrition is not bad always if it happens in a controlled manner. Some attrition is always
desirable and necessary for organizational growth and development. The only concern is
how organizations differentiate “good attrition” from “bad attrition”. The term “healthy
attrition” or “good attrition” signifies the importance of less productive employees
voluntarily leaving the organization. This means if the ones who have left fall in the
category of low performers, the attrition in considered being healthy.
Attrition rates are considered to be beneficial in some ways:
1. If all employees stay in the same organization for a very long time, most of them will
be at the top of their pay scale which will result in excessive manpower costs.
2. When certain employees leave, whose continuation of service would have negatively
impacted productivity and profitability of the company, the company is benefited.
3. New employees bring new ideas, approaches, abilities & attitudes which can keep
the organization from becoming stagnant.
4. There are also some people in the organization who have a negative and
demoralizing influence on the work culture and team spirit. This, in the long-term, is
detrimental to organizational health.
30
5. Desirable attrition also includes termination of employees with whom the
organization does not want to continue a relationship. It benefits the organization in
the following ways:
It removes bottleneck in the progress of the company
It creates space for the entry of new talents
It assists in evolving high performance teams
6. There are people who are not able to balance their performance as per expectations,
lack potential for future or need disciplinary action. Furthermore, as the rewards are
limited, business pressures do not allow the management to over-reward the
performers, but when undesirable employees leave the company, the good
employees can be given the share that they deserve.
Some companies believe attrition in any form is bad for an organization for it means that a
wrong choice was made at the beginning while recruiting. Even good attrition indicates loss
as recruitment is a time consuming and costly affair. The only positive point is that the
realization has initiated action that will lead to cutting loss.
RETENTION SUCCESS MANTRAS
1) Transparent Work Culture
In today’s fast paced business environments where employees are constantly striving to
achieve business goals under time restrictions; open minded and transparent work culture
plays a vital role in employee retention.
Companies invest very many hours and monies in training and educating employees. These
companies are severely affected when employees check out, especially in the middle of
31
some big company project or venture. Although employees most often prefer to stay with
the same company and use their time and experience for personal growth and development,
they leave mainly because of work related stress and dissatisfactions.
More and more companies have now realized the importance of a healthy work culture and
have a gamut of people management good practices for employees to have that ideal fresh
work-life. Closed doors work culture can serve as a deterrent to communication and trust
within employees which are potential causes for work-related apathy and frenzy.
A transparent work environment can serve as one of the primary triggers to facilitate
accountability, trust, communication, responsibility, pride and so on. It is believed that in a
transparent work culture employees rigorously communicate with their peers and exchange
ideas and thoughts before they are finally matured in to full-blown concepts. It induces
responsibility among employees and accountability towards other peers, which gradually
builds up trust and pride. More importantly, transparency in work environment discourages
work-politics which often hinders company goals as employees start to advance their
personal objectives at the expense of development of the company as a single entity.
Employees comprise the most vital assets of the company. In a work place where employees
are not able to use their full potential and not heard and valued, they are likely to leave
because of stress and frustration. In a transparent environment while employees get a sense
of achievement and belongingness from a healthy work environment, the company is
benefited with a stronger, reliable work-force harboring bright new ideas for its growth.
2) Quality of Work
The success of any organization depends on how it attracts recruits, motivates, and retains
its workforce. Organizations need to be more flexible so that they develop their talented
workforce and gain their commitment. Thus, organizations are required to retain employees
by addressing their work life issues.
32
The elements that are relevant to an individual’s quality of work life include the task, the
physical work environment, social environment within the organization, administrative
system and relationship between life on and off the job.
The basic objectives of a QWL program are improved working conditions for the employee
and increase organizational effectiveness.
Providing quality work life involves taking care of the following aspects:
1. Occupational health care: The safe work environment provides the basis for the
person to enjoy working. The work should not pose a health hazard for the person.
The employer and employee, aware of their risks and rights, could achieve a lot in
their mutually beneficial dialogue.
2. Suitable working time: Organizations are offering flexible work options to their
employees wherein employees enjoy flexi-timings for dedicating their efforts at
work.
3. Appropriate salary: The appropriate as well as attractive salary has always been an
important factor in retaining employees. Providing employees salary at par with the
other counterparts of above that what competitors are paying motivates them to stick
with the company for long.
QWL consists of opportunities for active involvement in group working arrangements or
problem solving that are of mutual benefit to employees or employers, based on labor
management cooperation. People also conceive of QWL as a set of methods, such as
autonomous work groups, job enrichment, and high-involvement aimed at boosting the
satisfaction and productivity of workers. It requires employee commitment to the
organization and an environment in which this commitment can flourish.
Providing quality at work not only reduces attrition but also helps in reduced absenteeism
and improved job satisfaction. Not only does QWL contribute to a company's ability to
recruit quality people, but also it enhances a company's competitiveness. Common beliefs
33
support the contention that QWL will positively nurture amore flexible, loyal, and motivated
workforce, which are essential in determining the company's competitiveness.
3) Supporting Employees
Organizations these days want to protect their biggest and most valuable asset and they want
to do this in a way that best suits their organizational culture. Retaining employees is a
difficult task. Providing support to the employees acts as a mantra for retraining them.
Employers can also support their employees by creating an environment of trust and
inculcating the organizational values into employees.
The management can support employees directly or indirectly. Directly, they provide
support in terms of personal crises, managing stress and personal development. Management
can support employees, indirectly, in a number of ways as follows:
1. Manage employee turnover: Employee turnover affects the whole organization in
terms of productivity. Managing the turnover, hence, becomes an important task. A
proactive approach can be adopted to reduce attrition. Strategies should be framed in
advance and implemented when the times arrives. Turnover costs should also be
taken into consideration while framing these strategies.
2. Become employer of choice: What makes a company an employer of choice? Is the
benefit it offers or the compensation packages it gives away to its employees? Or is it
measured in terms of how they value their employees or in terms of customer
satisfaction? Becoming an employer of choice involves following a road map which
tells where to go as a brand.
3. Engage the new recruits: The newly hired employees are said to be least engaged in
the organization. Keeping them engaged is an important task. The fresh talent should
be utilized to maximum before they start feeling bored in the organization.
34
4. Optimize employee engagement: An organization’s productivity is measured not in
terms of employee satisfaction but by employee engagement. Employees are said to
be engaged when they show a positive attitude toward the organization and express a
commitment to remain with the organization. Employee satisfaction also comes with
high engagement levels. So, organizations should aim to maximize the engagement
among employees.
5. Coaching and mentoring: Employees whose work performance suffers due to poor
interpersonal relationships or because of lack of interpersonal skills should be
provided proper coaching by their superiors. Planed coaching sessions help an
individual to work through issues, maximize his potential and return to peak
performance.
4) Feedback
Feedback acts as a channel of communication between the employee and his manager. The
amount of information employees receive about how well or how poorly they have
performed is what we call feedback. It is a dialog between a manager and an employee
which acts as a way of sharing information about the performance. It suggests where the
employee performance is effective and where performance has to improve.
Managers can provide either positive feedback or negative feedback to employees.
This feedback helps the employee assess his performance and identify the improvement
areas.
Positive feedback communicates managerial satisfaction. Positive recognition for good
performance boosts up morale of employees and results in performance improvement to a
higher productivity level. It is believed that positive feedback is the only type of feedback
that generates performance above the minimum acceptable level.
Negative feedback obviously communicates manager’s dissatisfaction. However,
negative feedback sometimes make employee to put more efforts to improve his
performance. But such times are very rare. Moreover this improvement is short term.
Some managers do not provide any kind of feedback to their employees. Due to no
feedback, employees may assume that they are performing productively or they may feel
35
that the manager is satisfied with their performance. Studies reveal the performance tends be
same or even decreases if no feedback is provided.
Thus, feedback is necessary because:
1. It builds trust and enhances communication between manager and employee.
2. It gives managers and employees a way to identify and discuss skills and strengths.
3. Positive feedback leads to employee retention and motivation.
4. It helps in identifying performance areas that need improvement and specific ways to
improve them.
5. It acts as an opportunity to enhance performance by identifying resources for skill
development.
6. It is an opportunity for managers and employees to assess and identify career and
advancement opportunities.
7. It helps employees to understand the effectiveness of their performance and
contributes to their overall knowledge about the work
Managers have tendency to ignore good performances of their employees.
Providing no feedback may de-motivate employees and may lead to employee absenteeism.
Input from manager’s side is necessary as it help employees to improve their performance
and increase productivity.
5) Communication between Employee and Employer
Communication is the solution to almost everything in this world. Same applies to employee
retention also. Straight-from-the-shoulder communication is what the employees need from
their employers. Employees look for organizations where communication and process are
transparent. Nothing is hidden and shared with the employees. Communication is also the
way to win the employees trust in the organization. Employees trust the employers who are
friendly and open to them. This trust leads to employee loyalty and finally retention.
Employers also feel that the immediate supervisors are the most authenticated and trusted
source of information for them. So the organizations should hire managers who are active
communicators.
Communication mediums
36
1. Open door policy: Organizations should support open door policies so that the
employees feel comfortable and are able to express their doubts and feeling to their
employers.
2. Frequent meetings and Social gatherings
3. Emails, Newsletters, Intranet and many more.
So there should be effective communication across the organization & this communication
should be two-way. Communication alone can lead to unimaginable heights of employee
retention.
EMPLOYEES TURNOVER
Employee’s turnover has always been a sensitive issue for all organizations. Calculating
employee turnover rate is not that simple as it seems to be. No common formula can be used
by all the organizations. A formula had to be devised keeping in view the nature of the
business and different job functions. Moreover, calculating attrition rate is not only about
devising a mathematical formula. It also has to take into account the root of the problem by
going back to the hiring stage.
Employees Turnover rate or Attrition rate means:
In terms of numbers:
Total number of resigns per month (whether voluntary or forced) divided by (Total Number
of employees at the beginning or the month plus total number of new joiners minus total
number of resignations) multiplied by 100.
If calculating in monetary terms, it includes the following:
37
Costs Due to a Person Leaving
1. Calculate the cost of the person(s) who fills in while the position is vacant. Calculate
the cost of lost productivity at a minimum of 50% of the person’s compensation and
benefits cost for each week the position is vacant, even if there are people
performing the work. Calculate the lost productivity at 100% if the position is
completely vacant for any period of time.
2. Calculate the cost of conducting the exit interview to include the time of the person
conducting the interview, the time of the person leaving, the administrative costs of
stopping payroll, benefit deductions, benefit enrollments.
3. Calculate the cost of the manager who has to understand what work remains, and
how to cover that work until a replacement is found.
4. Calculate the cost of training your company has invested in this employee who is
leaving.
5. Calculate the impact of departmental productivity because the person is leaving.
Who will pick up the work, whose work will suffer, what departmental deadlines
will not be met or delivered late.
6. Calculate the cost of lost knowledge, skills and contacts that the person who is
leaving is taking with them out of your door. Use a formula 50& of the person’s
annual salary for one year of service, increasing each year of service by 10%.
7. Subtract the cost of the person who is leaving for the amount of time the position is
vacant.
Recruitment costs
1. The cost of advertisements; agency costs; employee costs; Internet posting costs.
38
2. The cost of internal recruiter’s time to understand the position requirements, develop
and implement a sourcing strategy, review candidates backgrounds, prepare for
interviews, conduct interviews, prepare candidate assessments, conduct reference
checks, make the employment offer and notify unsuccessful candidates. This can
range from a minimum of 30 hours to over 100 hours per position.
3. Calculate the cost of the various candidate pre-employment tests to help assess
candidates’ skills, abilities, aptitude, attitude, values and behaviors.
Training costs
1. Calculate the cost of orientation in terms of the new persons’ salary and the cost of
the person who conducts the orientation. Also include the cost of orientation
materials.
2. Calculate the cost of departmental training as the actual development and delivery
cost plus the cost of the salary of the new employee. Note that the cost will be
significantly higher for some positions such as sales representatives and call center
agents who require 4-6 weeks or more of classroom training.
3. Calculate the cost of the person(s) who conduct the training.
4. Calculate the cost of various training materials needed including company or product
manuals, computer or other technology equipment used in the delivery of training.
Lost productivity costs
39
As the new employee is learning the new job, the company policies and practices, etc. they
are not fully productive. Use the following guidelines to calculate the cost of this lost
productivity:
1. Upon completion of whatever training is provided, the employee is contributing at a
25% productivity level for the first 2-4 weeks. The cost therefore is 75% of the new
employees’ full salary during that time period.
2. During weeks 5-12, the employee is contributing at a 50% productivity level. The
cost is therefore 50% of full salary during that time period.
3. During weeks 13-20, the employee is contributing at a 75% productivity level. The
cost is therefore 25% of full salary during that time period.
4. Calculate the cost of mistakes the new employee makes during this elongated
indoctrination period.
New Hire Costs
1. Calculate the cost of bring the new person on board including the cost to put the
person on the payroll, establish computer and security passwords and identification
cards, telephone hookups, cost of establishing email accounts, or leasing other
equipment such as cell phones, automobiles.
2. Calculate the cost of a manager’s time spent developing trust and building
confidence in the new employee’s work.
Lost Sales Costs
1. Calculate the revenue per employee by dividing total company revenue by the
average number of employees in a given year. Whether an employee contributes
directly or indirectly to the generation of revenue, their purpose is to provide some
40
defines set of responsibilities that are necessary to the generation of revenue.
Calculate the lost revenue by multiplying the number of weeks the position is vacant
by the average weekly revenue per employee.
The cost of employee’s turnover or attrition is:
(Total staff * employee’s turnover rate/attrition rate %) * (annual salary *
80%)
The ‘rule of thumb’ appears to be very inaccurate indeed and, while it depends upon the
category of staff, it is probably better to estimate around 80% of salary as a truer rule of
thumb- and this will be on the conservative side.
What kind of strategies would be effective in producing the desired results of maximum
‘Employee Retention’ and minimum ‘Employee Turnover’? The answer is obvious. It
should be the aim of each employee to keep his work force fully satisfied with no room for
disgruntlement.
Retention of employees has become a primary concern in many organizations foe several
reasons. As a practical matter, with lower turnover, every individual who is retained means
one less person to have to recruit, selects, and trains. Also, the continuity employees who
know their job, co-workers, organizational services and products and firm’s customers
enhance organizational and individual performance. One survey of supervisor and workers
found that losing high performance made it more difficult for organizations to reach their
business goals. Additional continuity of employees provides better “Employee image” for
attracting and retaining other individuals.
WAYS TO REDUCE EMPLOYEE TURNOVER
Following are some of the ideas to reduce employee turnover:
1. Hire the best candidate.
41
2. Welcome new employees. Customize your induction program for new employees
according to the requirements. Same induction program can not be applied to all the
candidates. Make them feel welcomed.
3. Produce quality managers who can really manage employees well.
4. Provide employees with work schedules that are flexible enough to suit their needs.
5. Don’t be too demanding. You re hiring human beings who have their own life and
family commitments. Respect them.
6. Provide career counseling and development.
7. Discuss your future plans regarding the candidate with the candidate. Let them know
that the management is interested in retaining them and cares for them.
8. Take proper feedback from employees regarding their grievances.
9. Remember your former employees. They can be helpful to you in future. It is also a
part of employee retention.
FACTS ABOUT EMPLOYEE TURNOVER
It is difficult to accept when organizations say they have zero attrition rates. Companies may
have healthier turnover rates, however, there is no such thing as zero attrition. There are
other such facts about turnover, about which most of us are not aware. Some of such facts
have been highlighted below:
1. Turnover always happens: Companies who believe in zero attrition rates only fool
themselves. This happens because employees keep on moving due to reasons like
42
marriage or further education. Nothing can stop these employees from moving on.
So, rather than achieving zero attrition companies should focus on identifying whom
they want to keep so that they have healthy attrition rate.
2. Some Turnover is Desirable: Zero attrition is not desirable mainly because of two
reasons. Firstly, if all employees continue to stay in the same organization, most of
them will be at the top of their pay scale which will result in excessive manpower
costs. Secondly, new employees bring new ideas, approaches, abilities & attitudes
which can keep the organization from becoming stagnant.
3. Turnover includes costs: Turnover always includes some costs. Consider the costs
of replacing the key employee who falls in to the category of high performers. This
includes the costs of recruitment advertisement, referral bonuses, selection testing,
training costs, etc. Moreover, turnover results in loss of time & efforts, low
productivity, loss of morale, loss of knowledge and so on.
4. High salary doesn’t work: Most managers assume that a high salary package is
enough to keep employees loyal to their organization. Employees may face other
problems like low job satisfaction, low engagement levels, no recognition, poor
working conditions, less support from superiors and so on. Salaries are not always
the solution to attrition. Managers should try to identify the roots of the problem and
then find a feasible solution.
5. The manager can reduce attrition: Managers should take primary responsibility
for retaining their employees. Much of the employee’s perception of job satisfaction
stems from the relationship they share with their immediate supervisor. Managers
should try to support their subordinates and give proper feedback on performance.
HR managers should work in collaboration to make the key employees last in their
organization.
43
6. Reducing Turnover takes Commitment: Reducing turnover takes an investment in
coaching, developing, motivating, mentoring & listening to people. There should be
universal acceptance of the goal of reducing turnover along with top management
commitment and dedication.
44
OBJECTIVES OF THE STUDY
OBJECTIVES OF THE STUDY
1. To study the common reasons of employee voluntarily leaving from the organization.
2. To suggest the strategies and steps for reducing turnover and improving retention.
3. To study efforts made by organization to retain employee.
4. To study various career development programs offered by the organization.
5. To study the impact of induction & training programs on retention of employees.
45
OF
LITREATURE
REVIEW OF LITERATURE
Most researchers (Bluedorn, 1982; Kalliath and Beck,2001; Kramer et al., 1995; Peters et
al., 1981; Saks,1996) have attempted to answer the question of what determines people's
intention to quit by investigating possible antecedents of employees’ intentions to quit. To
date, there has been little consistency in findings, which is partly due to the diversity of
employed included by theresearchers and the lack of consistency in their findings.
Therefore, there are several reasons why people quit from one organisation to another or
why people leave organisation. The experience of job related stress(job stress), the range
factors that lead to job related stress(stressors), lack of commitment in the organisation; and
job dissatisfaction make employees to quit Firth et al.(2004). This clearly indicates that these
47
are individual decisions which make one to quit. They are other factors like personal agency
refers to concepts such as a sense of powerlessness, locus of control and personal control.
Locus control refers to the extent to which people believe that the external factors such as
chance and powerful others are in control of the events which influence their lives Firth et
al. (2004). Manu et al. (2004) argue that employees quit from organization due economic
reasons.Using economic model they showed that people quit from organization due to
economic reasons and these can be used to predict the labour turnover in the market. Good
local labour market conditions improve organizational stability Schervish (1983). Large
organizations can provide employees with better chances for advancement and higher wages
and hence ensure organizational attachment (Idson and Feaster 1990). Trevor (2001) argues
that local unemployment rates interact with job satisfaction to predict turnover in the market.
Role stressors also lead to employees’ turnover. Role ambiguity refers to the difference
between what people expect of us on the job and what we feel we should do. This causes
uncertainty about what our role should be. It can be a result of misunderstanding what is
expected, how to meet the expectations, or the employee thinking the job should be different
Kahn et al. Muchinsky, 1990. Insufficient information on how to perform the job
adequately, unclear expectations of peers and supervisors, ambiguity of performance
evaluation methods, extensive job pressures, and lack of consensus on job functions or
duties may cause employees to feel less involved and less satisfied with their jobs and
careers, less committed to their organizations, and eventually display a propensity to leave
the organisation (Tor et al., 1997). If roles of employees are not clearly spelled out by
management/ supervisors, this would accelerate the degree of employees quitting their jobs
due to lack of role clarity.
Organisational instability has been shown to have a high degree of high turnover.
Indications are that employees are more likely to stay when there is a predictable work
environment and vice versa (Zuber, 2001). In organizations where there was a high level of
inefficiency there was also a high level of staff turnover (Alexander et al.,1994). Therefore,
in situations where organizations are not stable employees tend to quit and look for stable
organisations because with stable organisations they
would be able to predict their career advancement.The imposition of a quantitative approach
to managing the employees led to disenchantment of staff and hence it leads to labour
48
turnover. Therefore management should not use quantitative approach in managing its
employees.
When high performers are insufficiently rewarded, they quit. If jobs provide adequate
financial incentives the more likely employees remain with organisation and vice versa.
There are also other factors which make employees to quit from organisations and these are
poor hiring practices, managerial style, lack of recognition, lack of competitive
compensation system in the organisation and toxic workplace environment Abassi et al.
(2000).
Employee engagement, the organization’s capacity to engage, retain, and optimize the value
of its employees hinges on how well jobs are designed, how employees' time is used, and the
commitment and support that is shown to employees by the management would motivate
employees to stay in organization’s..Knowledge accessibility, the extent of the
organisation’s “collaborativeness” and its capacity for making knowledge and ideas widely
available to employees, would make employees to stay in the organisation. Sharing of
information should be made at all levels of management. This accessibility of information
would lead to strong performance from the employees and creating strong corporate culture
Meaghan et al. (2002). Therefore; information accessibility would make employees feel 052
Afr. J. Bus. Manage.that they are appreciated for their effort and chances of leaving the
organisation are minimal. Workforce optimization, the organisation’s success in optimizing
the performance of the employees by establishing essential processes for getting work done,
providing good working conditions, establishing accountability and making good hiring
choices would retain employees in their organisation. The importance of gaining better
understanding of the factors related to recruitment, motivation and retention of employees is
further underscored by rising personnel costs and high rates of employee turnover (Badawy,
1988; Basta and Johnson, 1989; Garden,1989; Parden, 1981; Sherman, 1986). With
increased competitiveness on globalizations, managers in many organizations are
experiencing greater pressure from top management to improve recruitment, selection,
training, and retention of good employees and in the long run would encourage employees to
stay in organisations. Job involvement describes an individual’s ego involvement with work
and indicates the extent to which an individual identifies psychologically with his/her job
(Kanungo,1982). Involvement in terms of internalizing values about the goodness or the
49
importance of work made employees not to quit their jobs and these involvements are
related to task characteristics. Workers who have a greater variety of tasks tend stay in the
job. Task characteristics have been found to be potential determinants of turnover among
employees (Couger, 1988; Couger and Kawasaki, 1980; Garden, 1989; Goldstein and
Rockart, 1984). These include the five core job characteristics identified by Hackman and
Oldham (1975, 1980): skill variety, which refers to the opportunity to utilize a variety of
valued skills and talents on the job; task identity, or the extent to which a job requires
completion of a whole and identifiable piece of work - that is, doing a job from beginning to
end, with visible results; task significance, which reflects the extent to which the job has a
substantial impact on the lives or work of other people, whether within or outside the
organisation; job autonomy, or the extent to which the job provides freedom, independence,
and discretion in scheduling work and determining procedures that the job provides; and job
feedback, which refers to the extent to which the job provides information about the
effectiveness of one’s performance (Tor et al., 1997). Involvement would influence job
satisfaction and increase organizational commitment of the employees. Employees who are
more involved in their jobs are more satisfied with their jobs and more committed to their
organization (Blau and Boal, 1989; Brooke and Price, 1989; Brooke et al., 1988; Kanungo,
1982). Job involvement has also been found to be negatively related to turnover intentions
(Blat and Boal, 1989). Job satisfaction, career satisfaction, and organisational commitment
reflect a positive attitude towards the organization, thus having a direct influence on
employee turnover intentions. Job satisfaction, job involvement and organisational
commitment are considered to be related but distinguishable attitudes (Brooke and Price,
1989). Satisfaction represents an affective response to specific aspects of the job or career
and denotes the pleasurable or positive emotional state resulting from an appraisal of one’s
job or career (Locke, 1976; Porter et al., 1974; Williams and Hazer, 1986).Organisational
commitment is an affective response to the whole organisation and the degree of attachment
or loyalty employees feel towards the organisation. Job involvement represents the extent to
which employees are absorbed in or preoccupied with their jobs and the extent to which an
individual identifies with his/her job (Brooke et al., 1988).The degree of commitment and
loyalty can be achieved if management they enrich the
50
jobs, empower and compensate employees properly.Empowerment of employees could help
to enhance the continuity of employees in organisations. Empowered employees where
managers supervise more people than in a traditional hierarchy and delegate more decisions
to their subordinates (Malone, 1997). Managers act like coaches and help employees solve
problems. Employees, he concludes, have increased responsibility. Superiors empowering
subordinates by delegating responsibilities to them leads to subordinates who are more
satisfied with their leaders and consider them to be fair and in turn to perform up to the
superior’s expectations (Keller and Dansereau, 1995). All these makes employees to be
committed to the organization and chances of quitting are minimal.
51
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
RESEARCH DESIGN: The exploratory research design is adopted for this
project.
52
RESEARCH APPROACH: Research worker contacted the respondents
personally with well-prepared sequentially arranged questions. The questionnaire is
prepared on the basis of objectives of the study. Direct contact is used for survey,
i.e., contacting employees directly in order to collect data.
SAMPLE SIZE: The study sample constitutes 50 respondents constituting in the
research area.
SAMPLING AREA: Hardwar.
SAMPLING DESIGN: Stratified random sampling is used.
RESEARCH INSTRUMENT: The researcher has used a structured
questionnaire as a research instrument tool which consists of open ended questions,
multiple choice and dichotomous questions in order to get data. All the questions in
the questionnaire are organized in such a way that elicits all the relevant information
that is needed for the study.
STATISTICAL TOOLS: The statistical tools used for analyzing the data
collected are percentage method, bar diagrams and pie diagrams.
ANALYSIS OF DATA: The data are collected through survey and books,
reports, newspapers and internet etc. The data collected by the researcher are
tabulated and analyzed in such a way to make interpretations. Various steps, which
are required to fulfill the purpose, i.e., editing, coding, and tabulating. The collected
data are analyzed and interpreted using statistical tools and techniques.
53
DATA ANALYSIS & INTERPRETATION
1.1 Are you satisfied with your current job?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Highly satisfied 17 34
2 Satisfied 28 56
3 Neutral 3 6
4 Dissatisfied 1 2
5 Highly Dissatisfied 1 2
Total 50 100
56
INTERPRETATION
The table shows that 34% of the respondents are highly satisfied with their present
job.
56% are satisfied with the job and 2% are highly dissatisfied with the present job.
57
1.2 According to you what are the major reasons for voluntary leaving of
employees from organization?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Job and person mismatch 4 8
2 No growth opportunities 13 26
3 Lack of appreciation 6 12
4 New job offers 14 28
5 Lack of trust and support in
co-workers, seniors and
management
11 22
6 Work/ life imbalance 2 4
Total 50 100
INTERPRETATION
The table shows that common reasons for voluntary leaving of an employee are new job
offers(28%), no growth opportunities(26%), lack of trust and support(22%).
58
1.3 Do you agree that organization takes initiative in retaining employees?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly agree 25 50
2 Agree 15 30
3 Neutral 5 10
4 Disagree 3 6
5 Strongly disagree 2 4
Total 50 100
INTERPRETATION
The table shows that 50% of the respondents are strongly agree that the organization takes
initiatives for retaining employees.
59
1.4 What efforts organization makes for retaining the employees?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Offer salary hike 15 30
2 Offer T and D program 3 6
3 Offer promotions 10 20
4 Provide flexible work hours 1 2
5 Provide assistance for personal
problems
3 6
6 Proper feedback 5 10
7 Recognition and appreciation 5 10
8 Empowerment 8 16
Total 50 100
60
INTERPRETATION
The table shows 30% of the respondents agree that the organization gives salary hike for
retaining and 20% says that organization uses training as retention strategy.
61
1.5 Do you agree that motivation is important for retaining the employees?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 25 50
2 Agree 18 36
3 Neutral 4 8
4 Disagree 2 4
5 Strongly Disagree 1 2
Total 50 100
INTERPRETATION
The table shows that 50% of the respondents are strongly agreeing that the motivation is
important for retaining.
62
1.6 Do you agree that recognizing and acknowledging employee’s work is
helpful in retaining employees or improving retention?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 20 40
2 Agree 22 44
3 Neutral 4 8
4 Disagree 3 6
5 Strongly Disagree 1 2
Total 50 100
INTERPRETATION
From the study, 44% of employees agreed that recognizing and acknowledging their work
helps in improving retention, 40% strongly agreed and only 8% showed neutral response in
the same context.
1.7 Do you think there is an effective performance appraisal system for providing feedback?
63
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 10 20
2 Agree 23 46
3 Neutral 8 16
4 Disagree 6 12
5 Strongly Disagree 3 6
Total 50 100
INTERPRETATION
The table shows 46% of the respondents agree to effective performance appraisal system
exist in the company.
1.8 How frequently you are been rewarded by your boss?
SL NO NUMBER OF
64
PARTICULAR RESPONDENTS PERCENTAGE
1 Once in a month 5 10
2 Once in a 2-3 months 5 10
3 More than 3 months 8 16
4 Never/rare 15 30
5 On achieving targets 17 34
Total 50 100
INTERPRETATION
The table shows 34% of the respondents agree that they are rewarded on achieving the
targets and 30% said that never/rare they get rewards.
65
1.9 Is job security exists in the company?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 15 30
2 Agree 18 36
3 Neutral 11 22
4 Disagree 3 6
5 Strongly Disagree 3 6
Total 50 100
INTERPRETATION
The table shows 36% of employees agree with good job security exist in the company.
66
1.10 Do you have good relations with the co-workers?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 14 28
2 Agree 24 48
3 Neutral 7 14
4 Disagree 4 8
5 Strongly Disagree 1 2
Total 50 100
INTERPRETATION
The table shows 48% of the respondents agree that they have good relations with co-worker.
67
1.11 Do you have effective promotional opportunities in present job?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 9 18
2 Agree 26 52
3 Neutral 9 18
4 Disagree 3 6
5 Strongly Disagree 3 6
Total 50 100
INTERPRETATION
The table shows 52% of the respondents agree with effective promotional opportunities in
their present job.
68
1.12 Is Management involves you in decision making which are related to
your department?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Yes 45 90
2 No 2 4
3 Occasionally 3 6
Total 50 100
INTERPRETATION
The table shows 90% of the respondents agree that the Management involve them in
decision making.
69
1.13 Do you find opportunity for direct communication with the employer/superior?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Yes 45 90
2 No 5 10
Total 50 100
INTERPRETATION
The table shows 90% of the respondents agreed that they can do direct communication with
supervisor.
70
1.14 Which of the following is according to you is more effective in
reducing employee turnover?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Effective Induction program 17 34
2 Career development 13 26
3 Flexible work schedule 3 6
4 Proper feedback 7 14
5 Hiring of best candidate 5 10
6 Discussion of future plans 5 10
Total 50 100
INTERPRETATIONThe table shows that the 34% of the respondent agrees that induction programs are more effective in reducing employee turnover and 26% believes that career development opportunities are also effective.
71
1.15 DO YOU AGREE THAT CAREER DEVELOPMENT
OPPORTUNITIES HAVE AN IMPACT ON RETENTION OF
EMPLOYEES?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly Agree 10 20
2 Agree 26 52
3 Neutral 2 4
4 Disagree 4 8
5 Strongly Disagree 8 16
Total 50 100
INTERPRETATION
The table shows 52% of the respondents agree that the career development opportunities are
effective.
72
1.16 Do you agree that the training programs are effective in retaining?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Strongly agree 21 42
2 Agree 15 30
3 Neutral 3 6
4 Disagree 5 10
5 Strongly disagree 6 12
Total 50 100
INTERPRETATIONThe table shows that the 42% of the respondents are strongly agree that training programs are effective in retaining.
73
1.17 Do you find yourself comfortable with organization culture?
SL NOPARTICULAR
NUMBER OF
RESPONDENTS PERCENTAGE
1 Yes 40 80
2 No 10 20
Total 50 100
INTERPRETATION
The table shows 80% of the respondents are comfortable with the organization culture.
74
1.18 Which of the following attributes does your organizational climate has?
S.NO PARTICULARS NUMBER OF RESPONDENTS
PERCENTAGE
1 Openness 10 20%
2 Confrontation 7 14%
3 Trust 2 4%
4 Autonomy 3 6%
5 Proactive 15 30%
6 Authentication 3 6%
7 Collaboration 2 4%
8 Experimentation 8 16%
TOTAL 50 100
INTERPRETATION:
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The table shows that the 30% respondents agree that the organization have proactive climate and 20% says that openness exist in the climate.
FINDINGS
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FINDINGS
1. According to analysis the main reasons for voluntarily leaving the job are: Lucrative opportunities from other companies Bad employment practices Lack of social life
2. The main cause for reduction in number of employees is not providing healthy environment, delegation, not providing incentives, job and person mismatch, lack of appreciation, stress from overwork etc.
3. Efforts made by organization to retain its employees are: Offer salary hike. Offer training &development programs to employees.
4. Provides career development programs to retain as well as to motivate employees to work efficiently in the organization.
5. There are lots of strategies made out for retention in ITC LTD. such as:a) Hire the right person in the first place.b) Empower the employee.c) Make employee realize that they are the most valuable assets of the organization
6. Maximum no. of workers are satisfied from the culture of the organization.
7. The main factors of organization’s climate are proactive, openness and experimentation.
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CONCLUSION
As employees are the bases for company so retention of employees is a major focus for HR department. The management should identify the important factors that affect retention and should take necessary measures to improve these. Also, the management should take appropriate measure to identify the reasons of employee voluntarily leave.
It is only the employees that implement and give tangibility to the corporate’s mission. In other words if it is the highest rung in the corporate hierarchy that has ideas, it is the employees’ rung that has the chisel to bring the vision to life. In the best of worlds, employees would love their jobs. Like their co-workers, work hard for their employers, get paid well for their work, have ample chances of advancement and flexible schedules so they could attend to personal or family needs when necessary. And never leave.
But then there’s the real world. And in the real world, employees, do, leave, either because they want more money, hate the working conditions, hate their co-workers, want a change, or because their spouse gets a dream job in another state. Unlike inanimate products and systems that subject themselves to fine tuning without any reaction, employees would not subject themselves to any measure taken without reaction and analysis. Hence managing human resources, particularly retaining them, is an art that calls for special skills and strategies.
Employee survey and exit interviews can be used for assessing the reasons of employee voluntarily leave. HR interventions such as improving selection process, effective orientation and training, better employee relation, better career development programs and planning etc should be used to improve employee retention.
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SUGGESTION
The suggestions for the findings from the study are follows
Most of the employees agree that the performance appraisal activities are helpful to
retain employees, so the company should try to improve performance appraisal
system, so that they can retain employees and improve their performance.
The trust and support is lacking in the co-workers so the organization should try to
focus on it.
In the organization climate collaboration is lacking so the organization has to make
efforts in this direction so that employees can work collaboratively.
Organization can reduce employee turnover by providing flexible work schedules.
The organization must consider about providing more growth opportunities for
employees.
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LIMITATIONS
1. Time constraint- the duration of training was short, due to which it was difficult to collect data.
2. One constraint has been regarding the cost, as study involves the collection of primary and secondary data. Therefore, the cost incurred was much more.
3. Another constraint has been geographical area, which is confined only to Hardwar.
4. Normally employees hesitate to disclose the information.
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BIBLIOGRAPHY(A) BOOKS
1) Gupta Shashi K. & Joshi Rosy, Human Resource Management, Tata McGraw
Hill, Fourth Revised & Enlarged Edition, 2007. (Page 20.9-20.14)
2) KOTHARI C.R., Research methodology, New Age Publishing House, Second Edition.
(B) LINKS
1) http://epa.sagepub.com/cgi/content/abstract/27/4/309
2) http://erx.sagepub.com/cgi/content/abstract/21/6/423
(C) WEBSITES1) www.google.com2) www.yahoo.com3) www.jomsagepub.com
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QUESTIONNAIRE
1) Are you satisfied with your current job? a) Highly satisfied b) Satisfied c) Neutral d) Dissatisfiede) Highly dissatisfied
2) According to you what are the major reasons for voluntary leaving of the employees from the organization?a) Job and person mismatch b) No growth opportunitiesc) Lack of appreciation d) New job offerse) Lack of trust and support in co-workers, f) Work/life imbalance seniors and management
3) Do you agree that organization takes initiative in retaining employees? a) Strongly agree b) Agree c) Neutral d) Disagree e) Strongly disagree
4) What efforts organization make for retaining employees? a) Offer salary hike b) Offer training and development programs. c) Offer a promotion d) Provides flexible work hours e) Provides assistance for personal problems f) Proper feedback g) Recognition and appreciation h) Empowerment
5) Do you agree that motivation is important for retaining employees? a) Strongly agree b) Agree c) Neutral d) Disagree e) Strongly disagree
6) Do you agree that recognizing and acknowledging the employees work’s work is helpful in retaining employees or improving retention?a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree
7) Do you think there is effective performance appraisal system for providing feedback?a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree 8) How frequently you are been rewarded by your boss? a) Once in a month b) Once in 2-3 months c) More than 3 months d) Never/Rare e) On achieving the targets
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9) Is job security exist in the company? a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree
10) Do you have good relation with the co-workers?a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree
11) Do you have effective promotional opportunities in the present job? a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree
12) Is Management involves you in decision making which are related to your department?
a) Yes b) No
c) Occasionally
13) Do you find opportunity for direct communication with the employer/superior?
a) Yes b) No
14) Which of the following is according to you is more effective in reducing employee
turnover?
a) Effective Induction program b) Career development
c) Flexible work schedule d) Proper feedback
e) Hiring of best candidate f) Discussion of future plans
15) Do you agree that career development opportunities have an impact on retention of employees? a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree
16) Do you agree that the training programs are effective in retaining?
a) Strongly agree b) Agreec) Neutral d) Disagreee) Strongly disagree
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17) Do you find yourself comfortable with the organizational culture? a) Yes b) No
18) Which of the following attributes does your organizational climate has? a) Openness b) Confrontation c) Trust d) Autonomy e) Proactive f) Authentication g) Collaboration h) Experimentation
Comments, if any ________________________________________________________________________________________________________________________________________________
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