EMPLOYEE RETENTION
Once a set of employees are recruited to an organisation,
it needs to take necessary steps to prevent competent employees from leaving
the organisation. Failure to retain the employees will result in an adverse
effect on productivity and profitability. Retention is ‘a voluntary move by an
organisation to create an environment which engages employees for a long term’
(Chiboiwa, Samuel & Chipunza, 2010, p.2104)
Employees can be retained through many ways. James &
Mathew(2012) states that rewards and Recognition, Training and Development,
Mentoring/Coaching Sessions, Career Planning, Flexible Working Time, Employee
Suggestion Plans, Stock Investment Opportunities, Annual Performance Appraisal,
Financial Support, Contract Agreements, On-site Day Care Facilities are few
which was identified by. A well-compensated and engaging culture will make
employees more likely to stay in their jobs long term, Employee appreciation is
also an important part in employee retention strategy. All these aspects boil
down to motivating & satisfying employees so that they could be retained
within the organisation.
As per Roopavathi & Kishore (2020), employee motivation is one of the key factors for employee retention. Job satisfaction is essential for motivation. ‘Job satisfaction is something that working people seek and a key element of employee retention which is possible only by making the employee feel comfortable physically and psychologically’ (Sandhya & Pradeep Kumar, 2011). This blog will analyses how the motivational theory of Maslow’s hierarchy of needs can be applies in employee retention
APPLICATION OF MASLOW'S HIERARCHY OF NEEDS IN
EMPLOYEE RETENTION
A company being unable to satisfying the bottom level in
Maslow's Hierarchy of Needs which is basic needs of a human will make the
employees leave the company. Sandhya & Pradeep Kumar (2011) states that
man’s basic needs are more powerful & will influence the behavior of the
person. Hence, companies pay a monthly salary which enables employees to afford
acceptable living conditions. It was seen in many orgainisations in Sri Lanka
gave a subsistence allowance to their employee’s in lieu of the increasing
prices in goods. As a result, employees moving out from companies in
search of higher wages were discouraged.
Companies take different actions to satisfy personal
security, health and well-being of employees, financial security & job
security needs. Offering a company sponsored insurance policy was a massive
motivation factor during the past COVID 19 pandemic, as the cost of being
quarantined in a private hospital was reimbursed. Company reimbursing medical
bills, & the critical illness insurance covers health needs of the
employees. Having these perks will make the employee think twice before looking
for a new company to move into. McLeod (2018) states that safe and secure job
is also critical. Employees
won’t be able to work in their full capacity if they feel unsafe for their jobs
& will always look for opportunities to move out of the company.
Love & belonging or social needs is when the people
wanting to connect with coworkers and fellow members of the same organisation.
Organisations can make the employees feel loved & cared. feeling loved helps to reduce
stress and anxiety. Knowing that someone cares about us and wants to be with us
can help to calm our nerves and ease our worries.(Drew ,2022) As stated in my
previous blog, social needs can be satisfied through company get to gathers,
annual trips, staff bonding sessions etc.
The best example for Love & belonging could be described through the employee motivational program carried out by Kapruka Plc. Kapruka is Sri Lanka’s largest e-commerce destination. In December 2021, kapruka launched a campaign named “This Christmas, keep it real...” where the company took effort to identify the most important requirement of their employees & made their dreams come true. This approach would definitely strengthen the bond between the company & its employees. This approach enables to retain the employees
Esteem needs arise with a
person’s sense of belonging is met. An employee’s self-esteem becomes the next
primary motivating factor. In absence of esteem needs being met by the company,
employees tend to move to another organization where they will be able to
acquire them. Hence, reviewing the performance of the employees & promoting
the employees will be critical for the organization. Companies recruiting the
best candidates with high level of skill & knowledge, if they are not given
proper recognition, finding another place for a better remuneration package
& perks will not be much difficult. In order to retain the company’s
qualified staff, keeping the employees motivated through esteem needs is
critical.
There were incidents in
the organization I worked for where employees left the company & joined
competitors mainly due to not getting the desired recognition & value for
the work they do. This resulted in a significant impact on the company’s
turnover.
A self-actualization
need is the desire ‘to become everything one is capable of becoming’
(Maslow, 1987, p. 64).Companies with employees at this level should encourage
employees to pursue outside educational opportunities.
Grudistova, EG .et al (2019) states few characteristics
of a
self-actualizing person;
01. Accepting
oneself and others
02. Focus
on external problems and tasks’ solving
03. Do
not feel discomfort in solitude
04. Makes
independent decisions & acts independently
05. Freshness
of perception and gratitude to fate
06. Respects
others
07. Creative
It is realized that by
providing the need of Maslow's hierarchy, companies will be able to
minimize the employee turnover & retain their most valuable asset “Human
Capital”.
Lists of References
·
Chiboiwa,MW ,
Samuel,MO & Chipunza, C 2010, ‘An examination of employee retention
strategy in a private organisation in Zimbabwe’, African Journal of Business
Management, Vol. 4(10), pp. 2103-2109, Viewed 21 November 2022, http://www.academicjournals.org/AJBM
·
Grudistova, EG, Pastukhova,
D A, Slinkov, AM, Slinkova, OK & Melnikov, TN, 2019, Study of
self-actualization needs of Russian students as a factor of competitiveness in
the labor market, Vol. 40, Revista ESPACIOS, Viewed 26 November 2022, http://dspace.bsu.edu.ru/handle/123456789/31793
·
James,L &
Mathew,L 2012, Employee retention strategies: it industry, SCMS Journal of
Indian Management, Viewed 24 November 2022, https://d1wqtxts1xzle7.cloudfront.net/30315431/scms_journal_july-september_2012-with-cover-page-v2.pdf?Expires=1669284581&Signature=JR1~RhcbwTleY4A3t6oyXXVOcLoLidEWhjcS8PpcRoejIZOpEdPCNPiCzIzbJglRRjvoH6jsU87euyVKKyUerUdQULNoxLYeJB0JpTy8u7uofgJPEEKpTGVkI2DtZfruPnwXMRo4ywxgJNmm4zmeJEXVtA0fwd8SBQ8TEWsgCEIZpHOXshkPRr9hp~pagLeRrk7sPZp1wL6Xei1eIL-1NUjHSJKqWbgEvhh6a47iCgFj5OlQNJ79KVFsO0B72kOb3yjk4OrPjqke2TBpDkwRRYjjdU2dppf1kjUhRWOodSj9aXpr0VlBIDbKMm67d8vfeKPqBQKqkQ1srYguoh9cuQ__&Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA#page=81
·
Maslow, A H, 1943, Psychological
Review, APA PsycInfo database record, Vol 50(4), pp.370-396.
·
Roopavathi, S
& Kishore, K 2020, Motivational factors of employee retention and
engagement in organisation, Journal of Information and Computational Science,
Vol. 10, pp 1080-1085, Viewed 21 November 2022, https://www.researchgate.net/publication/344589777_Motivational_Factors_of_Employee_Retention_and_Engagement_in_Organisation
·
Sandhya, K &
Pradeep Kumar, D 2011, Employee retention by motivation, Indian Journal of
Science and Technology, Vol.4, PP. 1778-1782
Thank you for the comment Prabuddha, Another approach of employee retention is Employer branding. It is viewed that employer branding plays an important role especially in retaining top talent. By managing employer brand consistently brings value to their employees. Companies invested heavily in marketing and creation of strong brands in order to acquire and retain customers. Employer brand makes the employment experience unique. Literature clearly indicates that employer branding has a positive influences employee retention & on business as a whole (Suikkanen,2010)
ReplyDeleteAgreed. Any organization's long-term viability and profitability rests on its ability to hold onto its core personnel. The capacity to retain the best people in any firm has a significant impact on customer happiness, organizational performance in terms of higher sales, satisfied coworkers and reporting staff, successful succession planning, etc. Employee retention can be defined as encouraging employees to stay with the company for a long time (Das & Baruah, 2013)
ReplyDeleteThank you for the comment Zacky. As you said, motivation represents the synergistic effect of employee behavior in performing their duties. Therefore, managers have the responsibility to correlate the economic performance of the organization with the capacity. “As soon as their satisfaction is fulfilled, the employees will tend to outline an independent relationship between their involuntary wish of performing the professional activity and their mood. Considering this, the company will gain a major benefit from its employees` performances”( Achim et al, 2013)
DeleteTo add further to your content, most employers believe that employment practices designed to ensure the fair and ethical treatment of staff can boost recruitment and retention (Egan, 2006). What seems to be happening is that successful firms are able to meet people’s needs both for a good job and to work ‘in a great place’. They create good work and a conducive working environment. In this way, they become an ‘employer of choice’. People will want to work there because their individual needs are met – for a good job with prospects linked to training, appraisal and working with a good boss who listens and gives some autonomy but helps with coaching and guidance (Purcell, 2003).
ReplyDeleteThank you for the comment Derrick. Further to your comment, Studies have indicated that retention is driven by communication, organizational culture, pay and remuneration, strategy, flexible work schedule and career development systems are few a few key factors, which need to be managed congruently (Logan, 2000).
DeleteGood post Layanjalee and like to adding further details, Employee retention is a complex concept that has gained prominence and importance among researchers and organisations. It is a multidimensional construct that has been defined in different ways (Mita et al., 2014; Bidisha and Mukulesh, 2013; Hausknecht, Rodda and Howard, 2009).
ReplyDeleteFurther to add on to you comment, Dutta & Banerjee (2014) sates that employee retention problems & Human resource management challenges are immerging every day. Reaches shown that organizations that will will the battle will be those which adapt their organizational behaviour to the realities of the current work environment where durability and success depend upon innovation, creativity and flexibility. Retention is a complex concept and there's no single formula for keeping employees with an organization
DeleteAgreed with the content Layanjalie. Retaining talented employees will not only boost the competitiveness of companies, but will also reduce the cost of companies alleviating costly recruiting-cycles; which counts for like two-thirds of organizational spending, and any interruptions on the ongoing-operations. (Kumar,2012). Therefore, since issues of employee retention are recorded to be emerging with the current and predicted increases in turnover rates, retaining employees is likely to be a major challenge for employers in the immediate-future, which needs much focus from organizations (Walsh and Taylor,2007).
ReplyDeleteThank you for your comment Sachini, Employee retention is considered as the heart of organizational success. It is defined as “A process which encourage employees to remain with the organisation for the maximum period of time or until the completion of the objectives” (Singh & Dixit, 2011, p. 442)
DeleteAgreed to content Layanjalie and furthermore an employee is considered as the fixed asset of a company. It is the duty of the employer to retain the experienced employees as there is a huge competition of getting knowledgeable and experienced persons among the companies. There are so many ways to retain employees such as training, appraisal, rewards/recognition, , good working atmosphere. All of these can motivate a person which will retain them in the same company
ReplyDeleteAgree on the content Uday. Reducing employee turnover and reducing the associated expenses of hiring and training and orientation of the new employees are the basic aim of employee retention strategies of an organisation (Iqbal & Hashmi, 2015).
DeleteRetaining employees benefits an organization's long-term growth as well as their goodwill. However, the most difficult task that an organization faces today is retaining and satisfying these resources while taking into account factors such as compensation practices, leadership and supervision, career planning and development, alternative work schedules, working conditions, flexible working hours, and so on. It goes without saying that these efforts should be led by HR professionals (Das & Baruah, 2013).
ReplyDeleteThank you for your comment Safia. Khalid & Nawab (2018) States that in every sector, employee retention is a major issue because high turnover cost results in failure for achieving organizational objectives
DeleteThank you for the comment Prabuddha, Another approach of employee retention is Employer branding. It is viewed that employer branding plays an important role especially in retaining top talent. By managing employer brand consistently brings value to their employees. Companies invested heavily in marketing and creation of strong brands in order to acquire and retain customers. Employer brand makes the employment experience unique. Literature clearly indicates that employer branding has a positive influences employee retention & on business as a whole (Suikkanen,2010)
ReplyDeleteGood Article Layanjalie, Furthermore, Hale (1998) stated that 86% of employers
ReplyDeletewere experiencing difficulty attracting new employees and 58% of organizations claim that they are experiencing difficulty retaining their employees. Even when unemployment is high, organizations are particularly concerned about retaining their best employees.
Very descriptive post and interesting.
ReplyDeleteEmployee retention is the ability of an organization to retain its employees and make sure the sustainability of employees. Employee retention can be represented by a simple statistic.
Hom and Griffeth (1995) described in a study that the process of encouraging employees to stay for a long period or till the project completion is termed as retention. Wysocki, B (1997) pointed out the view of “The Society of Human Resource Management” that retention of employee is the hottest topic in the current scenario.
Good approach Layanjalie, Fitz-enz (1990) [19] recognized that employee retention is not influenced by a single factor, but there are hosts of 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.
ReplyDeleteVery interesting blog post. Furthermore, In a globalized environment, retention and engagement of high prospective employees are a huge challenge to organizations especially in times of high turnover rates. In many cases, even engaged employees are sometimes dissatisfied with the outcomes of organizational performance which may lead them to look elsewhere. Due to these reasons, this theoretical paper investigates motivational factors that influence employee retention and examines their impacts on both organizations and employees. This paper argues the motivational factors that are crucial in influencing employee retention are financial rewards, job characteristics, career development, recognition, management and work-life balance. Thus, organizations should formulate appropriate retention strategies in a holistic manner to reduce turnover rates, and these require a commitment from employers, but it will be well worth the investment in the long term.
ReplyDelete