FACTORS AFFECTING EMPLOYEE RETENTION

FACTORS AFFECTING EMPLOYEE RETENTION

Today’s competitive business environment, it is vital for organizations to recruit competent employees and retain them to gain competitive advantage. Unfortunately, retaining talented employees has become a challenge. If an employee is motivated and satisfied, he/she will create a strong bond with the organization and retain for a long.

According to Chew and Chan (2008), there are various ways a company should embrace to maximize employee retention. Providing equitable remuneration to high performers, identifying and appreciating hard work and contributions made by the employees, making the work of employees’ sufficiently challenging and interesting, and providing opportunities for training and bright career.

Factors affecting employee retention

Roberts and Outlay (2002) say that an effective retention strategy must contain training for the employees. Training programs help employees to develop their skills, competencies and groom them as professionals and experts in their fields. The satisfied employees remain loyal and increase employee commitment. Barringer, Jones and Neubaum (2005) found out from their study, that growing firms widely use training programs for their employees.

According to Roberts, Coulson and Chonko (1999) remuneration is the underpinning factor on an employee-employer relationship and decides employees’ commitment and intention to stay in the company.  According to Zingheim, Schuster and Dertien  (2009) a competitive pay and benefits package is a key element to influence employee retention. Apart from monthly pay, organizations are providing benefits such as; security plans, free education to children, special pay premiums and bonuses, house allowance, vehicle allowance, and stock options, etc. Moreover, some leading organizations exercise the practices like profit sharing and group-based incentive plans (Chew and Chen, 2008). Therefore organizations are bond to introduce attractive remunerations to retain employees.

Schein (1990) says that the organizational culture has a great impact on employee retention, strong and positive culture lower the intention to leave the organization. A research conducted on retention of employees stated that culture cannot be static rather it’s dynamic which should be reframed and reformed as per the business environment. New ideas, new theories and new believe can be implemented. The organizational culture is a vital factor to retain employee so the organization always strive for the betterment of the working culture. New policies and practices can be implemented there.

Leaders play a crucial role in the success of an organization. The managers’ leadership styles have a direct impact on the level of retention as it straightly influences the cognitive state of employees. (Khan, 1992). Transformational leaders motivate subordinates, involve employees’ decision making and treat them respect, therefore employees retain for a long time.

 In conclusion, by amending the strategies to satisfy and motivate the employees, organizations can retain the employees forever.

REFERENCES

Barringer, B., Jones, F. and Neubaum, D. (2005). A quantitative content analysis of the characteristics of rapid-growth firms and their founders. Journal of Business Venturing, 20(5), pp.663-687.

Chew, J. and Chan, C. (2008). Human resource practices, organizational commitment and intention to stay. International Journal of Manpower, [online] 29(6), pp.503-522. Available at: https://www.emeraldinsight.com/doi/abs/10.1108/01437720810904194 [Accessed 5 Jun. 2018].

Kahn, W. (1992). To Be Fully There: Psychological Presence at Work. Human Relations, 45(4), pp.321-349.

Roberts, J., Coulson, K. and Chonko, L. (1999). Salesperson Perceptions of Equity and Justice and Their Impact on Organizational Commitment and Intent to Turnover. Journal of Marketing Theory and Practice, [online] 7(1), pp.1-16. Available at: https://www.tandfonline.com/doi/abs/10.1080/10696679.1999.11501815 [Accessed 18 Jun. 2018].

Schein, E. (1990). Organizational culture. American Psychologist, [online] 45(2), pp.109-119. Available at: http://ciow.org/docsB/Schein(1990)OrganizationalCulture.pdf [Accessed 18 Jun. 2018].

Zingheim, P., Schuster, J. and Dertien, M. (2009). Compensation, reward and retention practices in fast-growth companies. World at Work Journal, 18(2), pp.22-39.