Motivating and Retaining Employees - Essay Example

 Motivating and Retaining Employees Introduction: The employees of McKinsey and Co are drawn from different backgrounds and different disciplines. The factors that motivate individual employees are different; for example, Laura is motivated by the diversity of the firm and the opportunity to work with people from different backgrounds. Rebecca is motivated by the opportunities available for innovation, while Scott is motivated by the facility the job provides him to spend time with his family. Chinta appreciates the recognition for his ideas, despite his being a relatively new employee. This suggests that the Company is doing a good job thus far in motivating its employees. One problem that may be identified with the Company is the need for the human resource department to design and implement measures to promote retention of these valuable employees. Since the Company attracts highly skilled and capable employees, the same employees will also be valued by rival, competitor firms and McKinsey and Company must take steps to ensure that employees feel valued and appreciated, so that the Company is able to retain them rather than losing them to competitor firms. This Paper will identify measures that have been found to be successful in attracting and retaining good employees, so that the Company can retain a good competitive advantage in the market. It will assess the relative benefits of monetary rewards as compared to intrinsic rewards such as recognition and which policy may better serve the company in promoting retention of the best employees. Motivating and Retaining employees. Several companies have successfully achieved a competitive advantage through the restructuring of their human resource management systems to provide financial benefits to employees, as pointed out by Schuler and Macmillan (1984). In the Bairnco Corporation, bonuses were linked to performance for top level executives and the company was able to almost double its sales from $270 million to $442 million in the short span of two years. In the case of Lincoln Electric, workers receive a share in the profits, which imbues workers with a high motivation to produce. When employees are offered profit sharing and incentives, it may help to enhance their performance and increase retention. Oller (2002) discusses how employees at various design and printing firms are rewarded for jobs well done with monetary benefits, such as gift cash vouchers, free lunches or contributions for educational purposes. Such reward and recognition for work done well functions as a strong motivation for employees and helps them to continue to perform well. Providing effective motivation for employees will also help to retain them with the firm. As pointed out by O’Brien (2002), research in Washington suggests that incentives function as a powerful aid to performance; individual incentive options enhanced performance 27% which team incentive options enhanced performance 45%, while 92% of employees indicate that they achieved their goal because of incentives. The method used by employers to attract the best candidates to their firm is to offer good monetary rewards, such as high salaries, signing bonuses and attractive benefits (Pfeffer, 1998). This may be especially effective in the case of the employees at McKinsey and Company, where there is a need to attract and retain the best qualified candidates to the firm. Apart from the examples of Lincoln Electric and Bairnco cited earlier, where workers were provided performance bonuses and a share in profits, Hewlett Packard has included compensation benefits such as banquets, stock options and personal computers for project leaders who demonstrate entrepreneurial behavior (Schuler and Macmillan, 1984: 249). Such benefits and incentives provided to the employees of McKinsey may aid in retaining them and ensuring that they continue to provide the benefit of their talent and skill in the Company’s service. At the American Productivity Center, generalist managers are hired and allowed to apply their skills in other areas with opportunities for innovation. They can function effectively in different specialty areas, because their “appreciation system and skills span both the qualitative and quantitative aspects of productivity and organizational effectiveness.”(Schuler and Macmillan, 1984:247). According to Fuller (2004), it is the way that an organization functions which can influence employee decisions on whether or not to remain with it. If employees feel like outsiders, or inferior and unworthy, then it is likely to have a negative impact upon the employees’ physical, psychological and spiritual well being and they are more likely to leave the organization. However, if employees are treated well, they function as ambassadors for the Company, helping to attract the best individuals to work for it.(Hall, 2002). This suggests that over and above monetary rewards and incentives, intrinsic motivation is more important. Maxwell suggests that a four quadrant matrix with two axes be used, as a way to measure all staff members on profitability and performance. Employee ranking along these quadrants should produce 10% in the quadrant of low-performer-low-potential, and 20% of employees in the high-performer-high-potential quadrant with the rest of the 70% employees ranking along the other two quadrants.(Maxwell, 2004). This matrix can be used to identify the high achievers that need to be rewarded generously and provided with opportunities for advancement. Herzberg argues that employees are more likely to be motivated by factors such as achievement and the work itself rather than simply money” (Herzberg 1968) and providing more opportunities for employee recognition and promotion can retain them more effectively. CPA Consultant Steve Erickson recommends (a) creating a culture of success and helping employees to feel successful due to being associated with such a firm and (b) defining success for every employee by ensuring that each employee knows where the firm is going and (c) setting up a reverse mentoring program, whereby the leader/manager takes the initiative to gather feedback from the employees, thus allowing them to provide their input (Annonymous, 2007). Conclusion: In the case of McKinsey, the caliber of employees is of a high skill level and there is a great deal of competition among businesses for the services of such employees. Based upon the literature review offered above, it would appear that monetary benefits and incentives may best serve the Company’s needs in ensuring that the best employees are retained and not lost to other firms. References: * Annonymous, 2007. “Ideas that really work to recruit and retain staff”, Journal of Accountancy, 204(2):19 * Hall, John R, 2002. “Motivating employees begins with key people”, Air Conditioning, heating an Refrigeration News,” 217(16): 10 * Herzberg, F. (1968) One More Time: How Do You Motivate Employees, pp 85-95 in Harvard Business Review: Breakthrough Ideas: 15 Articles That Define Business Practice Today: Harvard Business School Publishing, Boston USA * Maxwell, Mary, 2004. “Putting success into succession planning”, Nursing Economics, 22(5) : 285-287 * Oller, Samantha, 2002. “Motivating employees”, American Printer, 230(1): 33-36 * O’Brien, Katherine, 2002. “A boot in the pants or a pat on the back?” American Printer, 229(4): 8 * Pffeffer, J, 1994. “Competitive Advantage through people.” MA: Harvard Business School Press * Schuler, Randall S and Macmillan, Ian C, 1984. “Gaining competitive advantage through Human resource Management Practices”, Human resource Management, 3: 241-155 Read More