importance of employee retention2

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Importance of Employee Retention inDialog PLC

Telecommunication Company.

A Project Report

Prepared by

Dilantha Jude Suranga Perera.

09WE/03/05

Course: Certificate Course in Human Resource Management

December 2009.


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A WORD OF APPRECIATION!

This study benefited from the contributions, guidance & encouragement of many people.

Firstly I would like to extend my gratitude towards the HR team of the Dialog company, for

allowing me study the materials related to the study and make them selves available for the

interviews.

A special thanks goes to Mr. Pabath Liyanage for making himself, available for most

important editing process, besides her busy schedule.

Finally I would like to thank my parents, my sisters, my brother & ma friend Mario for their

encouragement and prayers through out.

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Preface

This study is done as a partial fulfillment of the requirement for the Certificate Course in

Human Resources Management at IPM. The main purpose of this study is to identify

the importance of Retaining Employees. The researcher also wanted to find out the

Characteristics of the Target Group, of the Labour Turn Over & The reasons for them

to leave the company, some of the recommendations has been proposed to minimize the

high labour turn over. The statistical analysis was done in order to analyse, the data is

presented in graphs using Microsoft 2000.

The research is based on an Telecommunication Company, which is operating in Sri Lanka

over 10 years, more information about the company and its human resources practices are

summarized in chapter II.

The company, according to its privacy policy wishes to remain anonymous.

accordingly the researcher has edited the attached exit interview form.

The list of the references is attached at the back of the thesis.

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Table Of Contents

Chapter I - Introduction

1.1 Introduction

1.2 Importance of Employee Retention

1.3 Objectives of the Study

1.4 Data Collection

1.5 Data Presentation

1.6 Limitations of the Study

1.7 Organization of the Study

Chapter II Literature Review

2.1 Changing Scenario of Sri Lankan Labour Market

2.2 New Trends of telecommunication Industry of Sri Lanka

2.3 Introduction to the Company

2.4 Summarized Human Resources Practices of the Company

2.4.1 Recruitment & Selection

2.4.2 Company Structure

2.4.3 Compensation & Benefits

2.4.4 Training & Development

2.4.5 Increments and Promotions

2.4.6 Financial Incentives

2.4.7 Bonus2.4.8 Technology Use

2.5 Impact of High Labour Turn over to the Company

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Chapter III Data Analysis

3.1 Data Analysis

3.1.1 Section A Analyze the Data of Labour Turn Over of last six

years to find out the characteristics of the Target Group

3.1.1.1 Analyse Labour Turn over Rates of last six years

3.1.1.2 Analyse Labour Turn over during the last six years

according

Voluntarily Resigned/Retired Employees3.1.1.3 Analyse Labour Turn over Rate according to Gender

Distribution

3.1.1.4 Annals Labour Turn over Rate according to level wise

3.1.1.5 Analyse Labour Turn over according to working

experience with

in the company

3.1.1.6 Analyse Labour Turn over according to Age

3.1.1.7 Analyse Labour Turn over according to Education

Qualifications of

employees

3.1.1.8 Observations of Analysis Section A

3.1.2 Section B Analyse the data of Exit Interview of last six years

to find

out the reason behind the Employee Turn Over.

3.1.2.1 Observations of Analysis B

3.2 Conclusion of the Analysis

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Chapter IV Recommendations

4.1 The Company Structure

4.2 Remuneration & Benefits

4.3 Performance Appraisal

4.4 Promotions & Increments

4.5 Job Design & Work Teams

4.6 Job Rotation

4.7 Recognition and Rewards

4.8 Training, Professional Development, And Career Planning

4.9 Recruitment & Orientation

4.10 Works-Life Balance

4.11 Employee Participation & Communication

4.12 Knowledge Transfer Cross Training, Coaching and Mentoring,Phased In Retirement

Appendix

References

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INTRODUCTION

1. Introduction

This study is based on The Importance of Retaining Best Performers for an organization.

In a competitive business environment it is the quality of people that makes a difference and

provides competitive advantage to organizations. If any business to succeed it has to attract

most talented people and should retain them.

Technology, finance and systems are available today more easily than at any time, toanybody and anywhere. In such a condition requiting and retaining talented people seems to

have become a bigger challenge.

For many employers, employee retention is the piece of the management puzzle that never

seems to fall into place. Because of rapid change over the past decade, finding and keeping

employees has become more difficult than ever.

Retaining top talent was less of an issue in the past; employees were employees for life,

aiming to get higher gratuity payment on retirement. They believed that the company would

take good care of them if they did a good job. That mindset has changed. Layoffs,

disappearance of pension schemes, reductions in workforce, out sourcing, and

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terminations have eroded loyalty on the part of workers, even those employees not directly

affected.

Todays employees especially younger employees think more likely free agents selling

their services to the highest bidder.

Finding employees is more difficult in certain parts of the county and in high-demand

markets, such as high technology. Furthermore, finding employees is just a start. Other

employees and recruiters know where to find good employees and are aggressively recruiting

them, even if they are already working for your company. Head-hunters are behind the

good employees.

In many organizations, losing employees has a domino effect. When one employee leaves,

others often wonder about opportunities elsewhere. Those other opportunities start to look

better as employees pick up the slack for those who have moved on.

The new employee retention picture is not necessarily a hard thing, it forces business to treat

employees well and find more innovative ways to keep them. However, this scenario is a sea

change from what business owners and managers faced in previous decades, and it requires

adjustments and new ideas, by getting out in front of the curve, your business can become a

hard to leave workplace for years to come.

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1.2 IMPORTANCE OF EMPLOYEE RETENTION

When a business loses employees, it loses skills, experience and corporate memory. The

magnitude and nature of these losses is a critical management issue, affecting productivity,

profitability, and product and service quality. For employees, high turnover can negatively

affect employment relationships, morale and workplace safety. The cost of replacing workers

can be high, the problems associated with finding and training new employees can be

considerable, and the specific workplace-acquired skills and knowledge people walk away

with can take years to replace.

The problem of turnover can be addressed through a variety of pro-active retention strategies:

workplace policies and practices, which increase employee commitment and loyalty.

Knowledge transfer initiatives on the other hand, ensure that knowledge and expertise of a

companys employees its corporate memory are systematically and effectively shared

among employees. They can offset the negative impact of turnover, but can also work

proactively to reduce turnover by providing learning and skills development opportunities to

employees factors known to reduce turnover.

Employee retention and knowledge transfer are two elements of more general concern that

might be best termed skills management. That is everything that has to do with recruiting,

maintaining and developing the necessary mix and levels of skill required to achieve

organizational and business objectives.

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1.3 OBJECTIVES OF THE STUDY

1. To identify the reason behind increasing labour turnover of the company.

2. To measure the impact of high labour turnover to the company.

3. To measure the degree of Effectiveness of the employee retention plan of the company.

4. To suggest recommendations in order to retain best performers.

1.4 DATA COLLECTION

The data was collected through internal information sources such as Company HR Reports

for the period, Company Annual Report, Exit Interview Details, Company Magazine,

newspaper articles and Internet articles.

1.5 DATA PRESENTATION

Data is classified and tabulated for presentation purposes after the analysis. Data is presented

through relevant pie charts, diagrams and tables to depict the data for much easier reference

and for the purpose of easy understanding. Data can be understood at a glance at the graphs,

as they would be placed having common characteristics together. Tables have been utilized

for the purpose of considering the data into a smaller set of manageable numbers.

1.6 LIMITATIONS OF THE STUDY

This study has been carried out analyzing the labour turnover rate of last six year, i.e.

2000 to 2005.

The organization has not carried out exit interviews for all the employees resigned

during the period.

It was noticeable that some of the employees not disclose the exact reason for resigning.

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1.7 ORGANIZATON OF THE STUDY

This Study Consists Of Four Chapters

The First Chapter has been devoted to the introduction, which has given a

comprehensive coverage of the introductory information regarding the study.

The Second Chapter will give details of changing of labour market of Sri Lanka, new

trends of the telecommunication industry of Sri Lanka, Introduction to The Company

summarized Human Resources Practices of the company.

The Third Chapter analyses the data from the research finding and present the

conclusions.

The Fourth Chapter will recommendations reached through substantive evidence in the

previous chapter.

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LITERATURE REVIEW

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2.1 Changing Scenario Of Sri Lankan Labour Market

Changers of the government policies and economy of past few years, especially in the past

decade has changed the labour market in Sri Lanka completely.

Before 1990s the biggest job provider of Sri Lanka was the government of Sri Lanka and

most of Sri Lankans wanted to joined government department or government banks,

especially for job security and pension benefits.

But this scenario has changed in the last few years private sector organizations have become

the leading job provider in Sri Lanka.

This shift has changed the labour market behavior drastically; the main objective of any

private sector employer is to maximize the profit. The private sector employers have realized,

the profit maximization is not possible without the organization operates in an effective and

efficient ground, invest in latest technology and infrastructure but any employer can invest in

these if the capital is available, but most of the forward thinking private sector employers,

today have realized that having valued talented employees is what differentiates them from

their competitors. Even though the unemployment rate still high, it can be notice that there is

a big demand for qualified Individuals who has necessary qualifications and experience tofulfill the job requirement.

It can be noted that some of the well-reputed European companies have opened their Data

Processing Centers and Centers for their back office functions in Sri Lanka, as a result lots of

new jobs have introduced to the Sri Lankan labour market.

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These multi-national companies are willing to pay highest salary in the market for the

qualified people that fulfill their requirement. Due to the dearth for talent the compensation

structures for competent people have gone up in some industries as many as a twenty fold in

a mutter of a decade. In other words, they have realized that, their organizations are reliant

upon their human assets to survive or thrive.

2.2 New Trends of Telecommunication Industry of Sri Lanka

The telecommunication industry has been one of the fastest growing sectors of the Sri

Lankan economy. During the last six years three new companies enter in to the market, one

of these a multinational company.

These changers affect the operational activities of telecommunication industry. Most of all

the telecommunication companies try to maximize their market share.

In this circumstance, star performers are highlighted, and all the companies are try to attract

these star performers and it can be observed that some identified performers are being offered

more than three times of the market average.

It can be observed that in this circumstance telecommunication companies are finding it

difficult to keep their best performs.

2.3 Introduction To the Company

Vision.

To be the undisputed leader in the provision of multi-sensory connectivity

resulting always, in the empowerment of Sri Lankan lives and enterprises.

Mission.

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To lead the provision of technology-enabled connectivity touching multiple

human sensors and faculties, through committed adherence to customer-

driven, responsive and flexible business processes, and through the delivery of

quality service and leading edge technology unparalleled by any other,

spurred by an empowered set of dedicated individuals who are driven by an

irrepressible desire to work as one towards a common goal in the truest sense

of team spirit.

Introduction.

This study is based on one of the well-established leading telecommunication company in Sri

Lanka, which is operating more than 10 years in the market. The total workforce of the

company exceeds 3000 (Three thousand) employees, the company have diversified its

operations in to branches situated in main cities around the country.

The company still running at profit, if review companys financial statements of last 10

years.

But during the last six financial years the situation of the telecommunication company began

to change. The company is facing two major problems. Firstly the company is loosing its

major clients and secondly the company loosing its employees.

Finding solutions for both problems are equally important for the company, as there is a

major link between both problems.

This study is mainly focuses on the second problem and tries to suggest solution for both the

problems by finding the reason behind high labour turn over and importance of retaining best

performers for an organization.

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2.4 Summarized Human Resources Practices of the Company

2.4.1 Recruitment & Selection

According to the company human resources policy the company is focusing on attracting

school leavers from the market, with computer knowledge and communication knowledge.

Such as speaking & writing. And then develop them up to managerial level. The company

always gives priority for the candidates who comes through personal contacts and

recommended by the employees. ERS (Employee referral scheme)

According to the company recruitment & selection policy the company always try to keep a

gender balance of 55% to 45% that is 55% of males to 45% females staff.

2.4.2 Company Structure

The company has a very tall organization structure with 7 grades/levels in the AssistantLevel, Officer Level, Executive Level, Manager Level, Senior Manager Level, Assistant

General Manager Level and General Manager Level.

2.4.3 Compensation & Benefits

The management of the company does feel it can offer higher salaries than the market

average, and the company feels that the benefits it provides are very comprehensive and

competitive. The benefits package includes uniforms, , medical outdoor

reimbursement.

2.4.4 Training & Development

The company has a special policy on training & development for its employees, as

mentioned in the recruitment & selection section the company try to attract school leavers

and develop them to professionals. For this purpose the company has a specially designed

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study assistance policy, where the company grant a special loan for employees to carryout

their studies related to their work.

2.4.5 Increments and Promotions

The increments and promotion are based on both sonority and performance.

Assistant Level Employees

75% of the assistant level employees would get a grade up after the year-end appraisal.

Higher Level Employees

Performance appraisal is done twice a year. Under Bi annually (July) & annually basis (Dec).

Promotions are based on performance as well as availability of vacancies at the higher levels.

2.4.6 Financial Incentives

The company does pay financial incentives for its regular staff, other than salary.

2.4.7 Bonus

The company pays annual bonus of 1.5 months basic salary every December and based on

the overall performance of the company.

2.4.8 Technology Use

The whole operation of the company is fully computerized. The company has invested

thousands of US dollars for the system and it is claimed to be the most efficient and effective

system that any telecommunication company of Sri Lanka uses.

2.5 Impact Of High Labour Turn Over To The Company

The high labour turn over has affected the company in many ways. The company has been

spending lot of money in finding suitable replacements. The company has to spend money on

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advertising in newspapers and also to head hunters to find them suitable replacements. The

company has exceeded the advertising budget continuously, during the past few years.

If the company had to hire a service of a recruiting company the cost would be even higher.

It is estimated that the replacement cost of an assistant level employee is more than six

months salary of the employee, for executive grade this cost would exceed even more.

The lost of productivity and the intellectual capital to the company, is difficult to calculate

but studies have shown that well trained qualified employees productivity is up to four times

more than an average new employee.

At present approximately 20% of the work force of the company have less than Six years of

work experience this affects the performance standard of the workforce, and would directlyhit the performance of the company.

The company has lost some of its long-term customers during last few years. It can not be

observed that the customer complains are increasing than ever before. The company carries

out independent surveys every quarter of the year to find out the service standards of the

company, some of those are lead-time to underwrite a policy, lead-time to realize a clam, etc.

and the survey results approve the customer complaints, service standards have declined.

The main reason for this is inadequate training of the employees. The total operation process

of the company is based on systems. When this systems were implemented, all the staff were

given adequate training. But most of the trained employees have left the company and the

organization has not been able to retain the expert system knowledge.

The studies have proven that the customers like to deal with people they know and trust, this

is an important theory applicable for telecommunication industry. This theory has been

proven once again as some of the clients that the company lost during past few years have

gone to competitor organizations to which the person who has handled the account of the

client has joined.

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High labour turn over has an effect on the organization culture as well, especially when the

heroes, the standard bearers of the companys culture walk out of the door.

The management team has complained that it is extremely difficult for them to achieve

targets as their team members are consistently changed.

Most importantly the company is loosing its well trained qualified experienced employees to

its competitors, there fore the company is facing another serious problem of secured the

confidentiality of its operational activities and its future corporate business plan.

2.6 Measuring Labour Turn Over

Labour turnover often not measured in a sophisticated enough manner to enable

discrimination between cases where employees have chosen to leave and cases where they

have had to leave for reasons out of their control. Often organizations use a reality crude

measure of turn over mentioned below.

(Marchington and Wilkinson 1997: 97)

This does not distinguish the cases where people left because they were dissatisfied, from

cases where people left because of ill health or where they retired, or where they were made

redundant.

It is also useful to calculate a separate figure for voluntary labour turn over. This Can Be

Calculate As Below

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Number of Leavers in Year *100

Average Number of staff in post

During the year


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Both ratios have been taken in to account when calculating labour turn over rate for

Analyzing purposes.

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Leavers in Year - (No. Retired Staff + Redundant Staff) *100

Average Number of staff in post

During the year


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DATA ANALYSIS

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3.1 Analysis

The main objective of this chapter is to find out the reasons behind the increasing labour

turnover of past few years, for this purpose the labour turnover rate of last six years has been

analyzed.

The analysis has been focused mainly into two different areas

Section A Analyse the data of labour turn over of last six years to find out the

Characteristics of the target group Section B Analyse the data to find out the reason behind the labour turn over.

3.1.1 Section A Analyse the data of labour turn over of last six years to find out the

Characteristics of the target group

The analysis has been carried out using six different indicators to find out the characteristics

of the labour turn over, the six indicators of the characteristics listed below.

Analyse Labour Turn Over During The Last Six Years According Voluntarily

Resigned/Retired Employees. (VRS)

Analyse Labour turn Over Rate according To Gender Distribution.

Annals Labour Turn Over Rate According To Level Wise.

Analyse Labour Turn Over According To Working Experience With In The

Company

Analyse Labour Turn Over According To Age.

Analyse Labour Turn Over According To Education Qualifications Of Employees.

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3.1.1 Section A

3.1.1.1 Analyse Labour Turn Over Rates of Last Six Years

Year Labour Turn Over Rate

2003 4%

2004 5%

2005 6%

2006 6%

2007 8%

2008 10%

Labour Turn over Rate

From

(Year 2003 to 2008)

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3.1.1.2 Analyze Labour Turn Over During the Last Six Years According

Voluntarily Resigned/Retired Employees

Year Resigned Employees Retired Employees

Percentage Percentage

2003 3% 1%

2004 4% 1%

2005 5% 1%

2006 4% 2%

2007 5% 3%

2008 8% 2%

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3.1.1.3 Analyze Labour turn Over Rate According To Gender

Distribution

Year Male Female

2003 3% 1%

2004 3% 2%

2005 5% 1%

2006 4% 2%

2007 5% 3%

2008 7% 3%

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3.1.1.6 Analyze Labour Turn Over According To Age

Year 20 to 29 30 to 39 40 to 49 50 years & Retired

Years Years Years above

2003 8 1 0 0 3

2004 9 4 0 0 3

2005 9 4 2 0 3

2006 14 6 1 0 4

2007 15 5 2 0 13

2008 25 8 3 0 16

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3.1.1.7 Analyze Labour Turn Over According To Education

Qualifications of Employees

Year Up to A/L Professional Professional Professional Professional First Masters

Degree Degree

Partly Fully Partly Fully

Qualified Qualified Qualified Qualified

2003 2 8 1 1

2004 3 7 1 5

2005 2 10 4 1 1

2006 3 17 1 4

2007 5 19 4 5 2 2

2008 9 28 1 12 2

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3.1.1.8 Observations of Analysis Section A

According to the analysis it can be notice that the labour turn over rate has been increasing

during the last six years, and in the year 2008 it has reached up to 10%.

The labour turnover has calculated using both the ratios to find out two different percentages

of labour turn over of the past six years and when analysis these percentages it can be notice

that, the retired employees percentage is always lesser than the voluntarily resigned

employees. But it can be notice that retired employees percentage also has increasedgradually during the last 3 years. The reason behind this is the company has now operated in

the market for more than 10 years and the employees who has joined the company at its

inspection and retain with in the company loyally during the last 10 years has now reaching

their retirement age.

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The analysis has been done according to the gender distribution and the observation is that

during the observed period more number of male employees has left the company and it

should be noted that according to the company human resources policy the company should

have a gender balance of 55% to 45% that is 55% of the workforce should comprise of male

employees.

It is interesting to analyze the education level of employees who left the organization, as

mentioned in the introduction to the company, the companys policy is to attract school

levers and gradually build their professional skills, for this purpose the company has

designed a well-planned study assistance scheme and also the company organizes different

types of workshops to upgrade the skills of employees.

But when analyze the education qualifications of the employees who let the company it can

be notice that most of the employees who has resigned are partly or fully professionally

qualified employees. When analyze labour turn over according to work experience it can be

notice that most of the employees who has resigned has worked in the company 2 to 6 years.

When analyze the age groups of labour turn over, it can be observed that most of the

employees has resigned with in the age groups of 20 to 29 and 30 to 39.

3.1.2 Section B - Analyze the data of exit interview of last six years to find out the reasonbehind the employee turn over. (Exit interview results of employees, who retired from the

service during the last six years not considered)

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3.2.3 Observations of Analysis B

Section B analysis has been carried out using the fist part of the exit interview questionnaire.

There are twelve reasons listed out in the exit interview questionnaire and the employee has

been asked to tick all the applicable reasons.

In the year 2003 many employees has resigned from the company, out of the 109 employees

55% of employees have said that they are leaving the company because of remuneration &

benefits, and 44% of the employees have said that they are leaving the company because of

lack of job satisfaction. 77% of employees have said that they leave the company, as there is

no career development.

In the year 2004, 13 employees have left the company voluntarily out of these thirteen

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employees, 46% of the employees have given the reason for them to leave the company as

Remunerations & Benefits. 15% have given the reason for them to leave the company as

conflict with the supervisor, 69% of the employees have left the company for career

development. 61% of the employees have left the company due to lack of job satisfaction and

76% of the employees who left the company have given the reason for them to leave the

company as lack of prospects.

115 employees have left the company in the year 2005. 60% of the employees who left

the company have given the reason as Remuneration & Benefits for them to leave the

company. 6% of the employees have left the company due to conflict with supervisor. 66%

of the employees have left the company for career development, 73% of the employees have

left the company due to lack of job satisfaction and 66% of the employees have given the

reason as lack of prospects.

In the year 2006, 122 employees have resigned from the company, out of these 22

employees, 68% of the employees have given the reason for them to leave the company as

Remuneration and 77% of the employees have given the reason as benefits. 86% of the

employees have said that they are leaving the company because of lack of job satisfaction,

81% of the employees are given the reason as lack of prospects for them to leave the

24 organizations and it can be observed that all the employees who left the organization

during the year have mentioned career development as a reason for them to leave the

organization.

In the year 2007, 129 employees have left the organization, out of these 29 employees 75%

have given the reason for them to leave the company as remuneration, 82% of the employees

have left the company due to benefits, 6% have given the reason for them to leave the

company as family related issues. 86% have left the company due to lack of job satisfaction

and 93% have said that they leave the company as there is lack of prospects and career

development.

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In the year 2008 the company turn over rate was 10%, 139 employees have left the company

voluntary during year 2008 and out of 139 employees, 76% have given the reason for them to

leave the organization remuneration & benefits, 7% have said that they leave the organization

because they have a conflict with supervisor, 5% of the employees have not disclosed the

reason for them to leave the company. 87% of the employees have resigned due to lack of job

satisfaction and 94% of the employees have left the organization for career development and

as they felt there was lack of prospects for them with in the company.

3.3 Conclusion of the Analysis

During observed 6 years, employees have left the organization voluntarily. When

analyzing further to find out the reason for these employees to leave the company, three main

reasons can be highlighted.

Career Development

Lack of Job Satisfaction

Lack of Prospects

Employees have given the reason for them to leave the company as career development,

employees have given the reason for them to leave the company as lack of job satisfaction

and employees have given the reason for them to leave the company as lack of prospects.

Furthermore it can be notice that most of these employees are below 40 years of age and

have partly or fully qualified in professionally, they have gain 2 to 6 years of working

experienced with in the company, but most of these employees were in the assistant level.

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The company has a very tall structure, the assistant level has divided in to 7 sub grades and

the promotions are mainly based on the seniority, therefore for an employee to become an

officer it takes more than 7 years. The telecommunication industry of Sri Lanka fastly grew

during the last six years.

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RECOMMENDATIONS

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4. Recommendations

4.1 The company structure

The company has a very tall structure, when there is a tall structure the freedom and

responsibility of employees (subordinates) is restricted. Decision-making could be slowed

down, as approval may be needed by each of the layers of authority. Communication has to

take place through many layers of management. High management costs because managers

are generally paid more than subordinates. Each layer will tend to pay its managers more

money than the layer below it, the company has 7 sub grades in the assistance level, as a

result it takes more than 7 years for a assistant level employee to promote to the executive

level, during last six years many employees left the company as they felt there is no career

development for them, so it is strongly recommended to reconsider the company structure

especially at the assistant level.

4.2 Remuneration & Benefits

The company pays more than market average salary for its employees and to provide very

comprehensive and competitive benefits. But this theory also have to be reconsider as

employees have given the reason for them to leave the company as they have

offered higher salary and benefits package else where.

4.3 Performance Appraisal

Performance Appraisal practices that provide good feedback to employees and give them a

view of their longer-term progress within the company, particularly in terms of training and

career development opportunities are important ways of enhancing employee commitment.

In this company the performance appraisal is done under Bi annually an annually basis. Bi

annual in July and annual PA in December.

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to a workplace culture of respect and appreciation for employees and work well done, and

thereby reinforce employee commitment to the firm.

4.8 Training, Professional Development, and Career PlanningTraining, Professional Development, and Career Planning are effective ways to enhance

employee retention. Training constitutes a visible investment that the company makes in the

worker, providing him or her with new skills, and greater competencies and confidence.

Training often leads to work that is more intrinsically rewarding. Combined with effective

communication about how an employees efforts at developing skills will lead him or her to

more challenging and meaningful positions within the company, training encourages workers

to make longer term commitments to their workplace: it permits them to see a future with the

company. All of the companies we interviewed were very active in the area of skills training

and professional development. Many have put in place effective internal promotion programs

that allow even their unskilled and semi-skilled workforce to move towards positions of

greater responsibility and remuneration within the company.

4.9 Recruitment & Orientation

Recruitment & Orientation practices can be of crucial importance to keeping workers over

the longer term. Employee retention is enhanced by ensuring a good fit between a

companys workplace cultureits way of doing business and the qualities that it espouses as

valuableand the interests, character, and motivations of the individuals that exist within it.

Recruitment practices that emphasize not only formal qualifications (job-relevant technical

ability) but also more general types of qualifications and dispositions on the part of the

recruit can be part of an effective retention strategy. Our own case-based study revealed that

employees in some workplaces, particularly the smaller ones, do more than merely work

together: they often share similar interests and have a very strong inter-personal rapport, and

these in turn help to bind them together as a cohesive whole. Indeed, the quality of

interpersonal relations may contribute significantly to retention in its own right. Good initial

orientation to the newly-hired employee can not only help to effectively integrate that person

into the workplace but can also help to make the new person feel welcome and provide him

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or her information about how to cope with the demands of the workplace, and any possible

problems that may arise.

4.10 Work - Life Balance

Work-Life Balance programs recognize that employees have important family and

extra professional obligations that compete with their workplace commitments. Practices

such as dependent care leave, childcare subsidies, eldercare programs, counseling and

referral, and flexible working hours allow people to strike a more meaningful and potentially

less stressful balance between obligations at the workplace and obligations at home. Firms

that operate on the basis of shift work may have employees who find it particularly difficult

to balance family and work obligations. Flexibility and responsiveness on the part of

employers can go a long way in helping employees to resolve such conflicts and be more

productive at work. Policies that prove to be effective in helping employees to manage work-

life balance by introducing flexible working hours, providing lieu in leave for long hours of

work and most importantly, consulting with employees about their work-life balance needs

while planning the department business plan.

4.11 Employee Participation & Communication

An open, responsive, two-way communications are vital to good employee retention, and

should be considered as the basic building blocks of any effective retention practice. Most, if

not all, of the retention strategies and practices fundamentally depend on a sound approach to

communicating with employees. Without communications, many of these practices would be

impossible to implement in any effective way. The case studies we conducted revealed

considerable efforts to communicate with employees, through a variety of tools including

employee surveys, regularly scheduled committee meetings, formal postings and newsletters,

and personal discussions. Several companies keep their employees regularly up to date on the

companys financial performance, and maintain open-door communication policies.

4.12 Knowledge Transfer Cross training, coaching and mentoring,

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Phased in retirement

While employee retention practices seek to retain workers, knowledge transfer practices seek

to retain skills, through both formal and informal exercises in information sharing and the

building of collective knowledge. Mentoring and coaching, phased-in retirements, and cross

training and job rotation, are types of knowledge transfer that overlap with training.

Knowledge transfer also includes the use of technology-based tools, databases, and intranets,

aimed to support knowledge sharing among individuals, and to permanently document and

keep knowledge that is vital to business performance.

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APPENDIX

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REFEREANCES

REFERANCES

BOOKS

Dessler G., Human Resource Management, 7th Edition, Prentice Hall of India, 2000.

Brab Wingfield and Janice Berry Retaining Your Employee

Robbins, S.P., Organizational Behavior, 9th Edition, Prentice Hall of India, 2000.

RESERCHES

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Clarence Lochchead & Alex Stephens Employee Retention, Labour Turnover and

Knowledge Transfer April 2004

K Morrell, J Loan Clarke and A Wilkinson Unweaving Leaving: The use of Models in

the Management of Employee Turnover

Annual Reports

Annual Reports of the company where the study is based on 2008 2009.

INTERNET

Development Dimensions International Are You Retaining the Best Employees?

www.dialog.lk
http://www.dialog.lk/http://www.dialog.lk/

importance of employee retention2

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