Staff Retention Strategy - Term Paper Example

 Staff retention strategy Introduction Meeting the demands of today's changing business environment requires building and retaining a loyal and motivated staff. But finding and keeping quality employees can pose a challenge. Today's workers are no longer inclined to stay at one company for the duration of their careers. The most talented professionals often are courted by other businesses, and the effects of turnover can be costly. The time and money it takes to recruit, rehire and retain can quickly cut into a firm's bottom line. In the twenty-first century employment world managers must look at the foundations of retention through the eyes of potential employees. They are the customers for jobs. If managers do not prepare a good foundation, they cannot expect them to stay. Employees will no longer endure what they do not like in their employment situation. They have power in the knowledge of their abilities and confidence in their value in the marketplace. With greater loyalty to their career and their skills than to their employer, they move on. Current paper provides discussion of proper strategies that should be applied for keeping employees who are the greatest assets of any organization. Using the case of London Housing Association, I will emphasize strategies of retention employees in this organization while basically examining job descriptions, recruitment, selection, and orientation, looking at the employees' perspectives on the issue. Keeping good help productive and on the job is the keystone of management. It is an everyday, continual process. It represents not one single problem with one single solution but rather a maze of simple and complex problems each with several possible solutions. Successful management deals with each problem and chooses among the alternative solutions. Management is, perhaps, problem solving and decision making. In dealing with problems the manager would do well to keep in mind an old rule "If you are not part of the solution, then you must be part of problem... If you are part of the solution, you are probably part of the next problem.” (Campbell, Campbell, & Chia, 132) The problem of high turnover seems more evident in some businesses than in others. The manager who faces this problem should be aware that there is no simple solution, only intelligent choices. In making these choices the manager needs a basic understanding of people and why they do what they do or why they don't do what you would like them to do. The choices management makes in these decisions should be predicated upon the goals of the organization. The results of such decisions may actually be a test of the validity of organizational goals. Realistic goals which have been developed and accepted by all segments of the organization will prove to be a much sounder base for management decisions than goals developed from a narrow perspective of any one segment of the organization. Both the organization and the employee are beginning a relationship that will not last if there is a mismatch between the position requirements and the new hire's skills. It makes no difference if the mismatch is due to managers’ unawareness of what they need, not having the right person in candidate pool, not selecting the person who can do the work, or not launching the person hired on the right track. The results are, on either side, unfruitful. For the organization: loss of productivity because work is not getting done or not getting done right; burnout of overworked employees; the often hidden cost of management time to fix the problem. For the employee: frustration due to not being able to use one's skills; investment of time and energy to find another position. In London Housing Association retention is interrelated with recruitment and employee relations. Each impacts the other, and all three are related. London Housing Association begins its retention efforts by centralizing its recruitment efforts. Through its recruitment centers it provides better-quality applicants for managers to interview. All screening of applicants is handled by the recruitment centers, which work under the direction of regional personnel offices. At each of these centers a peer recruiter program was introduced to help professional recruiters process and screen applicants. As the name implies, these peer recruiters have actual experience with the type of work that recruits will perform. Not only do these peer recruiters help select recruits, but job applicants receive a more realistic insight about what is expected of them and their positions. London Housing Association takes managerial theory and effectively translate it into action through a philosophy defined as people, service, profits. The company points out that it is no accident that people are listed first in the phrase. London Housing Association says placing people first makes good business sense. Everything good that occurs is based on your ability to involve your people. Implementing the people, service, profits philosophy comes by answering several basic questions. The first is, What is expected of me, and what do you want me to do? London Housing Association tries to spend a lot of time trying answer that question for its personnel by having an extensive orientation program that explains its values. Trunick emphasizes that the second question that needs to be answered is, What is in it for me? (Trunick, 12 ). London Housing Association provides tangible evidence of what is in it for employees. It strictly adheres to a policy of promotion from within a career progression. There is an extensive job posting system that keeps employees informed of opportunities. When a position is open, notices are posted throughout the company for all employees to see. Only when no qualified applicants are found inside the company does it begin its search on the outside. Thus there is ample opportunity for all employees to advance within the company. One popular career advancement tool it uses is a tuition refund program, in which it pays tuition of those employed. As would be expected, it employs a lot of students in its main hub and other locations. Career advancement is not the only incentive it uses to increase the odds of being able to retain people. One thing it uses that works well is an awards program. It is designed to reinforce desired behavior, such as quality work and a focus on the customer. London Housing Association also believes its incentive program helps it deliver high-quality service and keeps its people motivated. Acknowledging efforts is essential for a motivated and satisfied work force. In turn, this acknowledgment stimulates new ideas and encourages better performance and team spirit. One example of incentive is its Bravo Zulu Voucher Program. It recognizes employees' performances that go above and beyond their normal job responsibilities. Recognition for these acts can range from nonfinancial Bravo Zulu letters of appreciation to cash or noncash awards presented by management personnel. (Herman, 23) Another incentive is called Suggestion Awards Program, which encourages employees to submit ideas that will improve operations of the company. These ideas must lower cost, increase productivity, increase revenues, or promote safer working conditions. To aid the understanding of retention strategies, we will further take a look at several important processes in human behaviour and human resource management that might. Selection Strategy Selection process of employees is an important part of human resource management when trying to keep employees. As managers prepare for selection, they need to determine the skills which are most important to successful job performance. The job description identifies the technical, management, and physical skills desired. Which are most critical? What is the best way to learn about potential employees' skills in those areas? We also want someone who has the right attitude and is reliable and honest. How do we evaluate that? In addition, we want the perfect person, someone who “can hit the ground running” and “walks on water.” (Herman, 33) And, by the way, we need this person tomorrow. That is a lot to ask. Since we cannot get everything we have to decide what is important and what we will accept. Whatever managers decide to answer those questions, they can test its effect on on the two most widely used tests: screening resumes and interviewing. Resumes This is the start of selection as it is the time when managers know about potential employees before they begin to work. Managers’ first step is to check and to see if potential employees claim to be what is expected them to be. The traditional way to screen resumes is to compare the work experience and education with job requirements. The assumption is that if employee had the work experience and education then he or she could fulfil the vacancy. Besides these seemingly easy requirements, current employer demands much more as using work experience and education without looking at skills is too narrow an approach. It eliminates potential employees The most important skill requirements are: Administrative skills—setting priorities for own work. Analysis—understanding underlying assumptions, not jumping to conclusions. Attention to detail—following up after handling problems and providing services. Communication—providing clear direction to others. Computer skills—maintaining data. Qualified potential employees may include: Early retirees looking for a new career. Parents returning to the workforce once their children are in school. Graduates of two-year colleges looking for entry into a career that does not require technical knowledge. Graduates of retraining programs. Interviews In order to carry out effective interview, managers should avoid asking for skills, work experience or job history. It is rather advisable to interview about gained experience and what he or she has done in past, how he or she demonstrated skills in situations similar to the ones characteristic of the new position. Questions should begin with, “Give me an example of a time when….” To follow up with probes to get a complete picture of that past experience, it is advisable to follow the following short form: • What the person did. • The circumstances surrounding the action. • What happened as a result. This method is described as behavioral, situational, or experiential interviewing. The interview questions are based on the skills in the job description; the behaviors in the job description virtually write interview questions. Changing industries and careers is part of the modern work environment. Employees tend not to narrow their choices about the type of organizations they wish to work in. They look for the place that fits with their career interests. We want employees who have the skills to do the work we need to have done. Artificial barriers can cause us to overlook people who can do that for us. Communication Communication is a variable taken for granted so that much of what employees do each workday may not seem to depend on their ability to communicate but rather on their performance of work tasks, such as operating machines, making architectural designs, selling hamburgers, or creating and storing information. However, even when people do not overtly and intentionally engage in communication, what they do--such as operate a machine--and how they do it serves as information and has impact on other people, internal and external to each organization. Actions are meaningful and speak loudly; communication occurs when the actions of one person affect another. A communication-oriented approach to understanding human thought and behavior in organizations must analyze dynamic interaction processes and feature language and meaning as the materials about which people think and with which they make judgments and know which enactments to make. This point is brought into focus by realizing that enactments cannot be random or without meaning if they are to allow people to engage in the activity of organizing. On a day-by-day basis, as people interact, they gain insight into what is going on in each organization--its priorities and expectations often expressed in reward systems. This information is presented in countless conversations, memos, meetings, and corporate communication vehicles, such as employee newsletters. Each organization comes alive and becomes meaningful through communication. Technological advances have changed the availability of information and the nature of communication within contemporary organizations. Compared to more traditional means, electronic communication and information technologies can carry more information faster, at a lower cost, and to more people while also offering increased data communality, processing, and powerful recombinant capabilities (Fulk, Boyd, 410). Advanced communication and information technologies extend the number and variety of people involved in organizational decisions, diminish temporal and physical interaction constraints, and increase horizontal and vertical communication. Moreover, the use of advanced communication and information technologies in organizations is widespread and commonplace. Decreasing technology costs and, often, a critical mass of users have facilitated substantial use of electronic mail, corporate Intranets, Web pages, videoconferencing, and group support systems. In light of research indicating that individuals often perceive that information is difficult to access during periods of organizational socialization, the benefits of communication technologies relative to information dissemination have important implications for socialization. According to the audit clients surveyed, the ten most serious communication barriers with auditors by mean rank are: distortion or omission of information, lack of credibility, lack of trust, hostile attitude, inadequate common accounting knowledge, tendency not to listen, failure to give feedback, lack of understanding of technical accounting terms, personality conflicts, and "either-or" thinking. Except for hostile attitude and personality conflicts, the communication barriers are "passively hidden". (Luthans& Stajkovic, 50) Eight barriers are passive in the sense that they are not publicly displayed, as are hostility and personality conflicts. The subtlety of this passivity might delay the exchange of information between clients and their auditors. To reduce potential barriers to effective communication, practitioner and university educational programs should emphasize the development of interpersonal skills. Communication barriers should be addressed in all forms of instruction including case studies, seminars, workshops, and class discussion. Role-playing exercises can alert students and practicing accountants to the importance of communication skills in client relations and audit efficiency. Since auditing procedures rely extensively on client communications, auditors must ensure that the most serious and frequent communication barriers are prevented. London Housing Association 's success with employee relations and retention depends on candid communication. It recognizes the importance of referencing to the question of where do they go to resolve a problem. The core of the strategy that the association is devoted to is an open-door procedure where employees are encouraged to find answers to situations they find disagreeable, controversial, and/or contrary to existing policy. This open-door policy has no time limit for employees, but it does for management. If an employee expresses concern, management must respond in a certain quantity of days. Motivation There are primarily two forces which cause people to act or react in certain ways. These forces can come from within the individual--- they did it because they wanted to; or from some other source---they did it because someone or something made them do it. These forces can be tagged "Motivation" and "Incentive." A primary activity of any type of manager involves motivating and reinforcing others to encourage superior performance and to retain valuable assets of an organization (Whetten & Cameron, 130). Put in another way, theories of motivation encourage managers to tie important outcomes to desired behaviors. Thus, whether managers endorse some variant of expectancy theory or reinforcement theory, the message is clear: To sustain motivation, managers must demonstrate to employees a close link between performance and rewards. The relative importance of motivating and reinforcing others was reflected in the "Real Managers" study (Luthans, Hodgetts, & Rosenkrantz, 50). In this extensive study conducted over a four-year period, the researchers examined what types of management activities were typically associated with successful versus effective managers. The successful manager was defined in terms of the speed of promotion within an organization. The effective manager was defined as (Boyle 75) getting the job done through high quality standards and (Campbell, Campbell, Chia 142) getting the job done through people, requiring their satisfaction and commitment. Interestingly, the successful manager was found to spend a majority of their time networking with others than did their less successful counterparts. However, the effective managers - the one's who delivered quality results through satisfied and committed employees, were found to spend a majority of their time actively managing human resources through motivating and reinforcing their value-enhancing behaviors and communicating with them on a regular basis. In general, there are two basic types of rewards that managers can utilize to positively reinforce performance -enhancing behaviors. The first is money. Certainly pay plays an integral part in rewarding employees and reinforcing positive behaviors. This is especially true of pay-for- performance systems which seek to reward individuals or teams in a direct relation to their contribution to organizational success. Research has consistently noted that when implemented correctly, pay-for- performance programs can be a strong motivator and have a significant impact on the bottom line performance of an organization. For example, Kaufman (1992) noted that the implementation of IMPROSHARE (a type of group gain sharing plan) had a positive impact on manufacturing productivity. Specifically, it was found that firms that implemented IMPROSHARE had, on average, decreased defect and downtime rates while productivity increased by 15% over a three year period. A comprehensive survey sponsored by the American Compensation Association (ACA) placed a dollar value on the positive impact of pay-for- performance techniques. It found a 134 percent net return; i.e., for every $1 of payout, a gain of $2.34 was attained (Luthans, Hodgetts, & Rosenkrantz, 18). Thus, the effectiveness of monetary incentives, especially when linked with performance outcomes, seems apparent. However, often overlooked is the importance of providing employees with non-financial rewards such as recognition and attention. This second type of reward can be very effective and efficient because it doesn't cost anything, is available for everyone to use, and no one gets too much of it. Some representative quotes from Nelson's (1994) best-selling book, 1001 Ways to Reward Employees, help to highlight the importance of non-financial rewards as an effective managership technique. "Recognition is so easy to do and so inexpensive to distribute that there is simply no excuse for not doing it." - Rosabeth Moss Kanter, Author and Management Consultant. "We all like to be recognized and appreciated. Just by giving an award or recognition certificate, formally recognizing someone in front of a group or even buying a cup of coffee, we're telling the employee that their work is appreciated." - Harvey Stein, President, Stein & Read Incentives. The importance of recognizing individuals for their contributions is clearly reflected in these quotes. In any type of situation, effective managership depends on reinforcing, motivating, and rewarding value enhancing behaviors in order to spur superior performance. As such, a closer look at the positive impact that recognizing people can have on organizational performance will be taken. In addition, some specific examples of effective recognition programs which have been implemented successfully will be reviewed. Employee Recognition Programs Surveys through the years have supported the importance of non-financials as an effective leadership tool. For example, a survey conducted by the Society of Inventive Travel Executives Foundation found that 63% of respondents ranked "a pat on the back" as a meaningful incentive (Nelson 30). In another survey examining the value of 65 potential incentives, four out of the top five rewards ranked by employees as the most motivating were initiated by their manager, based upon performance, and required little or no money. Although the surveys all define non-financial rewards a little differently, the common theme is that they do not cost anything. According to Graham and Unruh (1990), these powerful non-financial incentives can be operationalized as follows: 1. A manager personally congratulating an employee for a job well done. 2. A manager writing a personal note for good performance. 3. A manager publicly recognizing an employee for good performance. 4. A manager holds morale-building meetings to celebrate successes. Other examples of non-financial reward systems can be found in both the academic and practitioner literature. For example, Kerr and Slocum (101) noted that organizations which recognize and respect their employees tend to retain their workers for longer periods of time because of increased loyalty and commitment. In actual practice, Nelson (42) cites the effectiveness of Travel Related Services (TRS) "Great Performers" employee recognition program. TRS began by displaying life-sized posters of famous people performing their greatest feats throughout the company for many weeks. The company then began to picture TRS employees on posters, with a statement of a major accomplishment by each employee. The effects of this employee recognition program were very positive. According to TRS, the "Great Performers" program has helped to increase the company's net income by 500% over an 11 year period. In addition, the company's ROE since the program began has been 28%. Another recent real-world example concerning the effectiveness of employee recognition is provided by Yaeger (7). In this case, Dierbergs Markets were concerned with the exceedingly high turnover rates of their employees. To combat this problem, Dierbergs implemented a formal recognition and feedback program. As a result, turnover has almost been cut in half over a six year period - from 50% to 28% currently. According to Verespej (18), Chevron Chemical's recognition program has also been very effective. At Chevron, the "Bringing Out the Best" program has been implemented to recognize employees immediately for a job well done. Employees report that they are pleased with their on-the-spot recognition. In fact, a recent survey noted that 90% of Chevron's employees ranked the new system as very successful or good. A final representative example is provided by Boyle (1996) who noted the value-added contribution of the "100 club" employee recognition program implemented by the Diamond International Corporation. Since formalizing their employee recognition system, the company has experienced a 16.5% increase in productivity, a 48% decrease in absenteeism, and a 41% drop in industrial accidents. The benefits of well executed recognition programs such as described above seem clear. Nelson (1995) provides a good review of some characteristics which distinguish an effective employee recognition program as follows. 1. Recognition should be immediate. Recognition should be given as soon as possible after a desired behavior has occurred. Increasing the time between the target behavior and reward devalues the reward and diminishes the reinforcement value. 2. Recognition should be delivered personally. The power of social rewards derives from the way they are delivered. The fact that a manager is taking time to recognize or praise an employee underscores the importance of the activity to the employee. In addition, time taken by peers or subordinates to recognize a job well done can also be very effective. In fact, these types of upward recognition can serve as even greater rewards because they are unexpected and not required of the colleague. 3. Recognition should be valuable. Social rewards should be valued and meaningful to the individuals who receive them. For example, some employees may value their autonomy and would prefer to be thanked in private. Other employees may be interested in having the recognition highly visible to increase their promotion opportunities. Finally, some may prefer rewards that recognize the team's or group's contributions. Whatever the case might be, tailoring the rewards to the needs of the recipients is a good idea. 4. Recognition should be a direct reinforcer of desired behavior. In other words, recognition should not be phony or given superficially. The key is to give rewards which positively reinforce desired behaviors. Employee training program Besides employee communication and incentives, it is important to provide regular training for employees. At Corning, the varied tasks a team member can perform are broken down into four levels of difficulty. Progressing through each level can bring one up to a $2.25-an-hour raise ( Fierman 1991). Corning's focus on specific product/process training is impressive, but for sheer size of one's training effort it is hard to surpass Motorola's efforts. The giant electronics company spends about $60 million a year training its 104,000 employees worldwide. Earlier in the 1980s much of its training money was spent on remedial education so its largely illiterate production work force could master seventh-grade reading and math. Today, employees are trained to do several tasks so they can handle more jobs, work faster, and make fewer mistakes. What has the company gained out of all this training? Motorola says it has saved over $1.5 billion in three years, mostly because of the improvements the training has made in its work force (Fulk & Boyd, 410). In some operations, Motorola gets $33 out of every dollar spent in training. On the average, Motorola provides 1 million hours of training per year for its employees. In 1987 its spending on training represented 2.4 percent of the corporate payroll. Of that amount today, about 40 percent goes to quality improvement processes, principles, technology, and objectives ( Smith). In addition to developing training programs, it also makes use of "course maps," which help employees and their managers select programs that meet an individual's needs. Training consists of three parts. The first is Motorola Training and Education Center (MTEC), which provides training at all levels with special emphasis on providing all employees with the knowledge and skills to achieve corporate goals. The other two types of training include product/process specific training and special management training. MTEC's main focus is on quality-related training since Motorola is recognized as a quality leader. These programs include training in statistical process control, design for manufacturability, and helping employees understand how the company plans a 100-fold improvement in its process. Courses provide employees with problem-solving strategies and tools so they can help achieve this goal. MTEC is also used as a framework around which more specific product/process training occurs. Part of its training efforts also involves its Motorola Management Institute (MMI), an intensive two-week program on design, manufacturing, and quality issues intended for manufacturing, design, and operational managers at senior and support positions. To object is to enhance leadership and decision-making skills. MMI subjects also include customer-centered culture and marketing for world-class manufacturing and quality, designing for manufacturability, cycle time management, and how to implement change. Leading experts are brought in to present the latest information. Like Motorola and Corning, London Housing Association retains employees, as well as improves their skills, by making sure its employees receive proper training in job performance skills. To help improve its training, it would be effective to implement an Interactive Video Instruction (IVI) that is used for new information training and test preparation. (Customer service employees are tested twice a year on job knowledge.) A big advantage of the IVI program is that it allows employees to take advantage of slack periods to train themselves at any time. Employees can proceed at their own pace, and training can be repeated as much as necessary. According to London Housing Association , IVI helps standardize information and reduce training time by 60 percent. IVI is even used for new hire orientation. Conclusion In order to maintain the strategy of effective employee retention, it is needed to follow the though of being proud of the job performed both by employers and employees. It is essential for managers to make sure employees know what they should do and why it is important. There must be some ulterior reason, some higher-level purpose for work rather than just earning a pay-check. They need a sense of purpose and rewards for a job well done. Equally important, they must have the power to influence what is done and how it is done. London Housing Association 's, Motorola's, and Corning's formulas for retaining employees are good ones, but certainly not the only ones. They may not be appropriate for an organization, but one point is universal: if managers hope to keep employees, then they must think more comprehensively how those people will fit in and how managers keep them involved so they do not want to leave. In the following chapters, we will look at other techniques and tools for improving retention and relations. Bibliography: . 1. Boyle, D.C. (1996). Divining the secrets of a successful employee recognition system. 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Cambridge, Mass: Ballinger. 18-20. 10. Nelson, B. (1994). 1001 ways to reward employees. New York: Workman. 11. Nelson, B. (1995). Motivating employees with informal awards. Management Accounting, 77(5): 30-45. 12. Stajkovic, A.D. & Luthans, F. (1997). A meta-analysis of the effects of organizational behavior modification on task performance, 1975-95. Academy of Management Journal, 40: 1122-1149. 13. Stum, D.L. (2003). Five ingredients for an employee retention formula. HRfocus, September: S9-S10. 14. Trunick Perry A. (2002). "Leadership and People Distinguish Housing Associations." Real managers. Cambridge, Mass: Ballinger, 22(1): 12-20. 15. Verespej, M.A. (2003). Bringing out the best. Industry Week, 247(12): 18. 16. Wallsten, K. 2003. Targeted rewards have greater value - and bigger impact. Workforce, November. 17. Whetten, D.A., & Cameron, K.S. (2001). Developing management skills. New York: Harper Collins. 130-131. 18. Yaeger, D. (2003). Dierbergs programs cut employee turnover. 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