1.

INTRODUCTION

The purpose of the research is to test the applicability of three strategies which
could solve the problem of employee retention in the companies, especially in
Small and medium scale industry in Bangalore. To find out this the researcher
has approached managers of Small and Medium Scale Software companies and
collected the data in a questionnaire. Three categories of employees have been
identified.

1. Satisfied employees (showing the tendency to stay the company or retention).

2. Indifferent employees (Neither satisfied nor dissatisfied or indifferent).
3. Dissatisfied (showing the tendency to quit the company or attrition)

To find out the applicability of the first retention strategy, the researcher has
classified number of employees comes under the above three categories in to
two other categories; the employees who prefer position titles when they change
the company and employees who prefer all other benefits except position titles.

To find out the applicability of the second retention strategy, the same three
categories have been classified under the employees who prefer variable benefit
structure and employees who do not prefer variable benefit structure.
A questionnaire survey has been conducted and classified the respondents in to
respective categories. Chi – square tests (test for independence) has been
conducted to find out the relation ship between satisfaction, dissatisfaction and
Indifference to the perception of benefits of the employees.

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Applicability of the third retention strategy has been tested by using an opinion
survey conducted by the researcher and verified the result using sign test ( a non
parametric test). This report is not exhaustive, one can innovate many new
strategies to retain employees. These are just the basics and if implemented in a
proper way can give good results.

1.1. THE FACTORS AFFECTING EMPLOYEE ATTRITION

1. Intra organizational Factors. Factors which affect the job satisfaction of

the employee inside the organization for example; strained superior
subordinate relationship.
1. Personal reasons; These reasons are specific to each employee such as
family responsibilities, personal preference for location of job etc.

2. Extra organizational factors

When an employee compares his/her position with that of same position in
another company, this may lead to an inequity in the mind of employees,
this will result in employee attrition, for e.g. An employee comparing his
salary, position, work environment, and benefits with that of same position
in another company may lead to preference for the other company.
The study concentrates only on extra organizational (3rd reason) reason which is
conventionally perceived to be uncontrollable. The researcher has formulated
three new strategies to control this perceptional gap. The strategies are based on
Adam’s Equity theory.

1.2. RETENTION - A BIG CHALLENGE

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Fundamental changes are taking place in the work force and the workplace that
promise to radically alter the way companies relate to their employees. Hiring
and retaining good employees have become the chief concerns of nearly every
company in every industry. Companies that understand what their employees
want and need in the workplace and make a strategic decision to proactively
fulfill those needs will become the dominant players in their respective markets.

The fierce competition for qualified workers results from a number of workplace
trends, including:

• A robust economy
• Shift in how people view their careers
• Changes in the unspoken "contract" between employer and employee
• Corporate cocooning
• A new generation of workers
• Changes in social mores
• Life balance

Concurrent with these trends, the emerging work force is developing very
different attitudes about their role the workplace. Today's employees place a high
priority on the following:

• Family orientation
• Quality of life issues
• Autonomy
• Social status of the job

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To hold onto your people, you have to work counter to prevailing trends causing
the job churning. Smart employers make it a strategic initiative to understand
what their people want and need -- then give it to them.

division of the organization but it directly affects the Human Resource

division as well. The organizations are competing each other to acquire
the scarce talent pool.
Internal advertisement simply meant to tell the employee that the
organization which they are working is good and a company favorable
comparison should be given to employees to solve the inequity they
perceive. The major difference with internal advertisement is that the
communication channel is different from that of marketing channels. Here
the communication

1.3. RETENTION STRATEGIES

In this study the researcher is particularly interested in three retention strategies

and its applicability in the industry. This is not an exhaustive list, one can add or
delete any of the below mentioned strategies. Secondly, the need of the hour is
to have "right basics". Every individual is different, his needs are different, and
his emotions, his problems are different. There are many employee retention
strategies are available in the industry.
I have classified retention strategies according to the solution offered by the
strategies into three:

1. Unique organizational structure strategy

2. Variable benefit strategy
3. Internal advertisement strategy

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1.3.1. Unique organizational structure strategy
Creating a company-specific organization structure and position title is the
crux of this theory. This will reduce the employee’s tendency to compare
his position title and benefits with that of same in other companies. Rather
than force the employee to confine his talents to structured jobs, set job
titles according to the knowledge, skill and ability of the employee.
If an organization possess a unique structure with position titles and its
responsibilities will keep the employee concentrated in the same company rather
than choosing the job in other companies. following important factors must be
present in the Unique organizational structure.

a. Set Clear Expectations

When people enter in a company for the first time as an employee, he/she may
have many expectation regarding the salary, work environment etc. the primary
need for the employee is to yearn a decent salary to live, when this objective is
fulfilled the employee will look for social status such as attractive position titles
and benefits structure which satisfy the egoistic needs of human being. So the
company must manage this expectation by understanding the employee’s
perception.

o What is the employee’s attitude to other organization and its benefit

structure for the same position?
o What are the employee’s expectations from employers/team-
members? What are the parameters to measure their
performance?
o A good communication channel present in the organization.
o What will be the rewards, if the employees exceed the expected
level?

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 If the employees are not having any expectations, how an employer is
going to appraise, the employees? This must be based on some standard.

The employee must have the feeling that his role is important for the company.
Also his position title must be socially acceptable. It should fulfill the egoistic
needs of the employee.

Setting expectations initiates the process. Managers need to sit down with
each employee and clearly define what's expected of them. When
expectations are not clear, employees may not be in sync with their job's
current demands and priorities. Setting expectations is not a once and
done activity. Jobs change. Priorities change. Resources change.
Managers need to revise and set new expectations throughout the year.
Setting expectations revolves around the following three areas:

o Key job responsibilities

o Performance factors and standards
o Goals

Why is a setting expectation important? Quite simply, this process can

be the cornerstone of improving the motivational climate within your
sphere of responsibility. If your employees know what is expected of
them, it allows them to focus on results and to monitor themselves
against the set standards. Environments in which expectations are not

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 clear, or change from week to week, seldom create high-performing
work groups.

The three principles that should drive expectations are clarity,

relevance, and simplicity.

b. Clarity. Expectations should focus on outcomes, not activities. In other words,

employee achieves clarity when the employer identifies the expected results
rather than the method for achieving them. Managers often make the mistake of
attempting to direct the process that an employee will use rather than being clear
about results..

Defining the objective often requires some thought on the part of the manager
because it is easy to fall into the "activities trap." While developing a strategic
plan for a department or division is a worthy activity, it does not represent an
outcome. In the activities trap, developing a plan is the goal, rather than
increasing your market share.

c. Relevance. The principle of relevance helps define the "why" of the

assignment. If your employees have a full understanding of the project's
importance, they can make adjustments as unanticipated factors crop up within
the process. They probably also will be more committed to the result because
they can see more easily how it fits into the big picture and how their efforts
impact the company.

This understanding typically is accomplished through dialogue between the

manager and subordinate, which allows for a more thorough review of the

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situation and for feedback and discussion. This process builds good will with the
employee and sets the stage for additional responsibilities.

d. Simplicity. Simplicity creates a sense of grounding for employees as they

endeavor to carry out assignments. If managers identify the work in simple,
straightforward terms, employees will find it much easier to follow through on
managers' wishes. To accomplish this, a manager must identify the key message
in a fashion that the employee can embrace.

e. Talent and skill utilization

Talent and skill utilization is another environmental factor your key employees
seek in your workplace. A motivated employee wants to contribute to work areas
outside of his specific job description. How many people could contribute far
more than they currently do? You just need to know their skills, talent and
experience, and take the time to tap into it. As an example, in a small company, a
manager pursued a new marketing plan and logo with the help of external
consultants. An internal sales rep, with seven years of ad agency and logo
development experience, repeatedly offered to help. His offer was ignored and
he cited this as one reason why he quit his job. In fact, the recognition that the
company didn't want to take advantage of his knowledge and capabilities helped
precipitate his job search. In this case the manager can easily change the
position title of the employee and include the relevant job description in the
position title.

f. Fairness and equitable treatment

The perception of fairness and equitable treatment is important in employee

retention. In one company, a new sales rep was given the most potentially
successful, commission-producing accounts. Current staff viewed these

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decisions as taking food off their tables. The employer can bet a number of them
are looking for their next opportunity. In another instance, a staff person, just a
year or two out of college, was given 20,000 in raises over a six month time
period. Information of this type never stays secret in companies so the employer
must know, beyond any shadow of a doubt; the morale of several other
employees will be affected.

g. Career growth

The best employees, whom you want to retain, seek frequent opportunities to
learn and grow in their careers, knowledge and skill. Without the opportunity to
try new opportunities, sit on challenging committees, attend seminars and read
and discuss books, they feel they will stagnate. A career-oriented, valued
employee must experience growth opportunities within your organization.

2. Variable benefit strategy

Periodical change in the benefit structure leads to increased awareness
and satisfaction with the benefits. One of the purpose of benefit structure
is to motivating the employee. Unfortunately continues enjoyment of the
benefits leads to reduced satisfaction and motivation. This can be solved
by periodical change in benefit structure, i.e. periodically introduce new
benefits and remove the old benefits.
Following are the important factors present in the variable benefit structure.

a. Proper Rewarding

Proper rewarding is important for the employee to be motivated during the job.
A research reports says that in today's scenario,

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 o 70% of the employees are less motivated today than they used to
be.
o 80% of the employees could perform significantly better if they
wanted to.
o 50% of the employees only put enough effort into their work to keep
their job.
Employee Reward covers how people are rewarded in accordance
with their value to an organization. It is about both financial and
non-financial rewards and embraces the strategies, policies,
structures and processes used to develop and maintain reward
systems. The ways in which people are valued can make a
considerable impact on the effectiveness of the organization, and is
at the heart of the employment relationship.

b. Attracting the employees

The aim of employee reward policies and practices, if any in your organization is
to help attract, retain and motivate high-quality people. Getting it wrong can have
a significant negative effect on the motivation, commitment and morale of
employees. Personnel and development professionals will be involved frequently
in reward issues, whether they are generalists or specialize in learning and
development or employee relations. Keep following parameters in mind, while
designing a reward policy:

c. Recognition of the work

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Recognition is the most cost-effective motivator. While the high cost of other
rewards forces us to give them sparingly, recognition can be given any time, at
very little cost.

Some very ordinary items and events can be imbued with extraordinary
motivational significance, far in excess of their monetary value, motivation of a
pizza or movie tickets can be high if it is given with sufficient appreciation. A
sincere thank you can be delivered at any place and at any time, costs absolutely
nothing and can be more motivationally powerful than a substantial monetary
bonus. Organizations can provide innovative recognition in an infinite number of
ways.

For example, (A Hypothetical Incident) a small manufacturing company made its

employees feel like heroes when they attained a major safety milestone - 100
days without a single accident. On the morning of day 100, it was announced that
a catered lunch would be served the next day, if they made it to the 5:30 shift
without an accident. At 5:15 anticipating was building. Managers took confetti
and streamers to the balcony overlooking the shop floor. When the 5:30 whistle
blew, there were congratulations all around, confetti flew through the air and
banners were unfurled. It was a great moment for everyone - and one that was
not soon forgotten. The recognition value of this celebration was extremely high,
while the monetary cost was relatively low.

Highly motivating organizations even celebrate small successes. A health-

conscious company distributes fruit bowls to employees' work areas when key
personal milestones are attained. Another company uses a more fattening
approach: fresh-baked chocolate-chip cookies to say thank you.

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Clearly the traditional "pay for loyalty" systems in most organizations need to be
changed. Don't let attendance be your major criterion for rewards. Most
employees resent those who only put in their time and yet receive the same
reward as those who go the extra mile. Today's employees have higher
expectations for what work can and should be, and they want to receive rewards
that reflect their personal efforts and contributions.

This is why so many companies are moving toward performance-based rewards,

including performance bonuses, gain-sharing and non-monetary recognition.
Although not a panacea, companies are finding that these new reward systems
do allow them to give substantial rewards to those who really deserve them.
Smart organizations are looking for opportunities to reduce across-the-board
entitlements, and thereby find more resources for discretionary performance-
based rewards, without increasing the total cost of rewards.

The Law of Rewards - "What you reward is what you get" - Is extremely powerful.
No matter what your orientation materials or job description might say, it is the
rewards your organization gives that communicate the real expectations. The
most important question to ask in evaluating the reward system in your
organization is, do the rewards we are giving elicit the performance we want?
Start with the results you want to achieve and then pinpoint the types of
behaviors needed to achieve them. For example: Also, don't confuse employees
with too many rewards. It is better to focus rewards on the critical few behaviors
and results, rather than diluting them by rewarding the trivial many.

d. Timely action

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Rewards should be given as soon as possible after the performance has taken
place. This is why the most successful gain-sharing programs pay employees
monthly, rather than quarterly or annually as in the past.

There is a well-accepted law of behavioral psychology, that if you want someone

to repeat a behavior, you should positively recognize it immediately. From this
law, smart supervisors and managers can learn a vital lesson: Look for any
employee doing something right, right now, and recognizes it.

e. Type of reward

Rewards are as different as the people who receive them and it doesn't make
sense to give rewards that recipients don't find rewarding. For example, some
people prefer more pay, while others prefer more time off. A promotion might be
more rewarding to one person, while a job-sharing arrangement might be more
rewarding for another. Some people are excited about sports events, others
about movies. Some employees would love a dinner in a romantic restaurant,
others a book by their favorite author. Food, fun, education, improved work
environment, gifts, travel, family-oriented activities - the options are endless.

How do you know what will be rewarding to employees? Ask them. Smart
organizations are also letting employees choose their own rewards from reward
menus and catalogs. Personalizing rewards shows that a company cares enough
to discover what "interests" each employee, rather than just distributing generic
items. It also reduces the following danger: In one organization I was visiting, an
employee opened a big drawer in his desk and disdainfully showed me all the
"worthless trinkets" he had collected over the years.

f. Longevity of the reward

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Increase the longevity of rewards can be done in a number of ways: One of the
keys to reward longevity is symbolism. The more symbolic an item is of the
accomplishment, the more likely it is to continue reminding the employee of why
it was given. For instance, a T-shirt of coffee mug with a meaningful inscription
will continue rewarding those who wear it, or use it, long after its initial receipt.
There are many tokens of appreciation I still keep on or near my desk that remind
me of the joy of past accomplishments, while the monetary rewards I have
received are long spent and long forgotten.

Another way to increase the longevity of rewards in your organization is by using

some kind of point system. Rather than rewarding each individual behavior or
accomplishment, points can be awarded, which employees can accumulate and
eventually trade for items from a reward menu or gift catalog. This keeps the
anticipation of rewards fresh for longer periods of time. It also addresses the
need for reward individualization.

One company that designs motivational systems offers an electronic debit-card

system to help larger clients cope with the complexity of distributing, tracking and
redeeming employees' points.

Employees can use their points to purchase virtually anything they want, from
sports equipment and clothing to automobiles and overseas vacations. They only
caveat for such programs is to make sure that the recognition value of the
rewards isn't lost because of the impersonal nature of the technology.

g. Decrease the de-motivators

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Interestingly, when researchers have investigated the motivational dynamics of
these workplace games, they have found that the major motivator is the playing,
not the prize.

Most de-motivators can be dramatically reduced by soliciting employee

involvement in identifying highest-priority de-motivators and by enlisting top-
management commitment to support their reduction.

It is probably self-evident that considerable sensitivity is needed in the

administration of any reward system. One de-motivator that is probably endemic
in any reward system modification (especially as an organization moves from
entitlements to more performance-based rewards) is a sense that something is
being taken away. Employees need to be educated about the reasons that this is
being done, understand the ultimate benefits to them and the organization, and
should probably have some input into the change process.

h. Avoid perception errors

To avoid the perception of unfairness, it is important, first and foremost, that the
process for allocating rewards is viewed by employees as being impartial. This
requires an objective measurement system that few organizations have. Without
such objective measurement, any reward system is probably destined to failure.

1.3.3. Internal advertisement strategy

It communicates the advantages and benefits an employee received from
the company. The theory holds that an organization must extend its
marketing strategies to inside the organization. Competition is not just
confined to marketing division of the organization but it directly affects the
Human Resource division as well. The organizations are competing each
other to acquire the scarce talent pool.

15
 Internal advertisement simply meant to tell the employee that the
organization which they are working is good and a company favorable
comparison should be given to employees to solve the inequity they
perceive. The major difference with internal advertisement is that the
communication channel is different from that of marketing channels. Here
the communication

Communications

Communication is the first step toward creating the kind of environment that
people care about, and if they care, they just may stay. Keep the employees
in the loop about what's happening with the company. At any time, all of your
employees should have a pretty good idea of how business has been, and
they should be aware of what issues the company is attempting to address.

Regularly keep the employees up to date with important events affecting the
company. If November was good, let them know, and while you're at it, tell
them what you expect to happen in December. Share good news, as well as
points of concern.

Listen to the employee’s when they have ideas for improvement. Again, the
benefits extend beyond just making people feel appreciated for their
contributions. These are, after all, the people who do the work every day.
They may have some ideas to improve productivity, and when the employees
do come up with one, let everybody know where it came from. Post a "brag
board" in your break room, or circulate an internal newsletter that touts these

16
 contributions. The pay-off is a contagious feeling of pride and, perhaps, some
new efficiency that saves the company money.

Speak freely

The ability of the employee to speak his or her mind freely within the
organization is another key factor in employee retention. Does the
organization solicit ideas and provide an environment in which people are
comfortable providing feedback? If so, employees offer ideas, feel free to
criticize and commit to continuous improvement. If not, they bite their tongues
or find themselves constantly "in trouble" - until they leave.

1.4. THE CONCEPTS

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1.4.1. Applicability of Unique organizational structure strategy
Chart No 1.1

Employees who believe positional benefits

will give job satisfaction (A)

(A) Dissatisfied employees (B)

(B)
© Satisfied employees ©

(D)
Employees who believe various benefits will
give job satisfaction (d)

Indifferent to satisfaction level

The outer circle shows the number of employees who believe that various
benefits provided by the company will give job satisfaction and this satisfaction
will result in employee retention

The top inner circle shows the number of employees who believe positional
benefits will give job satisfaction. The position title shows the authorities and
responsibilities in the organization structure. Employees feel that more authority
and more responsibility mean more recognition from the society. This attitude
triggers the employee to look for position title which represents more authority
and responsibility.

The small inner left and right circles represent number of dissatisfied and
satisfied employees in the organization respectively. If the ratios between
satisfied and dissatisfied employees inside and outside the top inner circle are

18
different, it shows that job satisfaction level is depends on the employee belief on
position title

The exhibit No1.1 also shows to what extent the organizational structure
contribute to the employee inequity. The unique organizational structure strategy
can solve employee attrition in the shaded area. Larger shaded area in exhibit
No1.1 shows greater percentage of applicability of the strategy.

1.4.2. Applicability of Variable benefit structure strategy

Chart No 1.2

Periodic change in existing benefit

structure will give job satisfaction (A)

Dissatisfied employees (B)

(A)

(B)
Satisfied employees (C)
©
Various benefit structures will give job
(D)
satisfaction (D)

Indifferent to satisfaction level(E)

Indifferent to satisfaction

The outer circle shows the number of employees who believe that various benefit
structures provided by the company will give job satisfaction and this satisfaction
will result in employee retention

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The top inner circle shows the number of employees who believe Periodic
change in existing type of benefits will improve the job satisfaction and motivation
to continue the job in the same company.

The small inner left and right circles represent number of dissatisfied and
satisfied employees in the organization respectively. If the ratios between
satisfied and dissatisfied employees inside and outside the top inner circle are
different, it shows that job satisfaction level is depends on the employee’s belief
on periodic change in existing type of benefits.

The exhibit No1.2 also shows to what extent the organizational structure
contribute to the employee inequity. The variable benefit structure strategy can
solve employee attrition in the shaded area. Larger shaded area in exhibit No1.2
shows greater percentage of applicability of the strategy.

1.4.3. Applicability of Internal advertisement strategy

The Important factors to retain the employees in an organization are; conducive

organizational culture, emotional bond with organization and awareness of
benefits receiving from the organization. These factors can be improved by
effective communication. The important factors for implementing such an
advertisement strategy are:

1. Presence of internal communication channels.

2. Frequency of internal communication
3. Accessibility to internal communication channels

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 2. RESEARCH DESIGN

2.1 STATEMENT OF THE PROBLEM

A significant problem faced by the small and medium scale software enterprises
is retaining employees in the organization. In the wake of globalization, Small
and medium scale enterprises (SMEs) are losing their 80% of the valuable
managerial talent pool to big multinational companies. Often aspiring managers
view these firms as tavern or just a stepping stone to climb to prestigious MNCs.

2.2. MANAGEMENT QUESTION

Applicability of advanced employee retention strategies for middle management
level in small and medium scale software enterprises in Bangalore.

2.3 RESEARCH OBJECTIVES

Validity of Unique organizational structure strategy

1 To find out whether the unique organization structure increase retention
2. To what extent the unique organizational structure strategy can solve the
problem of employee attrition.

Validity of Variable benefit strategy

3. To find out whether the variable benefit strategy increases retention

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4. To what extent variable benefit structure strategy can solve the problem of
Employee attrition

Validity of Internal advertisement strategy

5. To what extent an internal advertisement strategy can be implemented in the
companies.

2.4. RESEARCH QUESTIONS

Validity of Unique organizational structure strategy

1. To find out whether Organizational structure is related to employee

preference for staying the company.
2. What is the percentage of employee attrition can be solved by implementing
unique organizational strategy.

Validity of Variable benefit strategy

3. To find out whether employee’s belief on variable benefit is related to

employee preference for staying the company.
4. What percentage of employee attrition can be solved by implementing
Variable benefit strategy.

Validity of Internal advertisement strategy

5. What is the opinion of employees on the success of implementation of

internal advertisement strategy in small and medium scale software industry
in Bangalore?

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2.5. HYPOTHESIS

a) Applicability of Unique organizational structure strategy

Research question No1 To find out whether unique Organizational structure is

related to employee preference for staying the company.

In this research the main factor in the unique organizational structure is position
titles. The hypothesis will test whether the position title and Employees
preference for staying the company are associated or Independent.

Variables in the chi square test

Position title
1. Employees who believe Position title is important
2. Employees who believe Position title is not important

Preference for staying the company

3. Retention
4. Attrition
5. Indifference
The first question in the questionnaire will decide whether the respondent will
prefer position title or other benefits other than position titles while planning to
quit the company.
The combined scores of 3, 4, 5 in the questionnaire will show the employee’s
preference for, retention, attrition or Indifference (neither retention nor attrition)
H0a: The positional benefit is not associated with employee preference for
staying the company.

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χ2 ≤ χ 2 (critical)

H1a: The positional benefit is associated with employee preference for staying
the company.
χ2> χ 2 (critical)
b) Applicability of Variable benefit strategy
Research question No. 3 To find out whether employee’s belief on variable
benefit is related to employee preference for staying the company.
The second question in the questionnaire will decide whether the respondent will
prefer variable benefit structure.

Variables in the chi square test

Variable benefit structure
1. Employees who believe variable benefit structure is important
2. Employees who believe variable benefit structure is not important
Preference for staying the company
6. Retention
7. Attrition
8. Indifference
H0b: The employee’s belief on periodic change in benefit structure is not
associated with employee preference for staying the company.
χ2≤ χ 2 (critical)
H1b: The employee’s belief on periodic change in benefit structure is
associated with employee preference for staying the company.
χ2> χ 2 (critical)

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c) Applicability of Internal advertisement strategy
Research question No 5 What is the opinion of employees on the success of
implementation of internal advertisement strategy in small and medium scale
software industry in Bangalore?

H0c: Combined percentage score is 50 and above (Internal advertisement

strategy is accepted)
µ≥µ0, µ0=50%
H1c: Combined percentage score is below 50 (Internal advertisement strategy is
rejected)
µ<µ0, µ0=50%

2.6. POPULATION SIZE AND AREA OF STUDY

The study encompasses small and medium scale software enterprises in
Bangalore. Total population size of lower and/or middle level managers (in all
organizational divisions) in small and medium scale software enterprises in
Bangalore.

2.7. SAMPLING METHOD AND SAMPLE SIZE

Sampling method is convenient sampling; the study was designed to be

descriptive in nature..
Sample size
Calculating the sample based on critical investigative questions
The formula for determining sample size is:
n = S²/ σ x²
σ x = Standard error of the mean or the standard deviation of all possible x s
At 95% (0.5) confidence level z=1.96

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σ x 2 =(0.5/1.96)2 = 0.065
S = Standard deviation of the pilot study sample.
n = Sample size required
The required number of samples can be calculated by conducting a sample
questionnaire survey. Here “n” is the minimum required sample size for each
question in the questionnaire.
Q3 SD
xi fi d=x-2 fd fd2
0 4 -2 -8 16
1 5 -1 -5 5
2 6 0 0 0
3 7 1 7 7
4 8 2 16 32
30 10 60
S² 1.888889
σ x² = 0.065 n= S²/ σ x² 29.05983

Q4 SD
xi fi d=x-2 fd fd2
0 2 -2 -4 8
1 4 -1 -4 4
2 10 0 0 0
3 8 1 8 8
4 6 2 12 24
30 12 44
S² 1.306667
σ ˉx² = 0.065 n= S²/ σ ˉx² 20.10256

Q5 SD
xi fi d=x-2 fd fd2
0 2 -2 -4 8
1 6 -1 -6 6
2 2 0 0 0
3 9 1 9 9
4 11 2 22 44
30 21 67
S² 1.743333
σ ˉx² = 0.065 n= S²/ σ ˉx² 26.82051

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Q6 SD
xi fi d=x-2 fd fd2
0 0 -2 0 0
1 3 -1 -3 3
2 12 0 0 0
3 8 1 8 8
4 7 2 14 28
30 19 39
S² 0.898889
σ ˉx² = 0.065 n= S²/ σ ˉx² 13.82906

Q7 SD
xi fi d=x-2 fd fd2
0 0 -2 0 0
1 3 -1 -3 3
2 10 0 0 0
3 10 1 10 10
4 7 2 14 28
30 21 41
S² 0.876667
σˉ x² = 0.065 n= S²/ σˉ x² 13.48718

Q8 SD
xi fi d=x-2 fd fd2
0 1 -2 -2 4
1 9 -1 -9 9
2 7 0 0 0
3 10 1 10 10
4 3 2 6 12
30 5 35
S² 1.138889
σˉ x² = 0.065 n= S²/ σ ˉx² 17.52137

Q9 SD
xi fi d=x-2 fd fd2
0 5 -2 -10 20
1 6 -1 -6 6
2 3 0 0 0
3 3 1 3 3
4 13 2 26 52
30 13 81
S² 2.512222
σ ˉx² = 0.065 n= S²/ σ ˉx² 38.64957

27
From the analysis table it is clear that maximum sample size is required for
Question number 9 (38.64, i.e. 39 samples)
To get an accurate sample and to increase the number of frequencies in the Chi2
table the sample size is 50.

2.8. DATA COLLECTION DESIGN

The questionnaire for research included a combination of the following kinds of
question

 Close-ended
 Direct question
Responses from middle level managers of Small and medium scale software
companies for each question in the questionnaire will be collected. A single
questionnaire will contain 8-9 questions.

Primary data will be collected through questionnaire survey of lower and/or

middle level managers (in all organizational divisions) from small and medium
scale software enterprises in Bangalore. In this method questionnaire was
prepared and given to the sample population to fill.

2.9. METHOD OF ANALYSIS

The data collected through questionnaire and the records available was
examined in detail. It was further classified and tabulated with the help of
Microsoft excel software.

Statistical tools
Chi-square test and Sign test are used for testing the hypothesis

28
The non-parametric tests used for the testing the hypothesis is “Chi-square test”
(m*n tables) and Sign test It is suitable for the test for independence of attributes.

Chi-square test
χ2 = ∑ [(O-Ej)2 ∕Ej]
O = Observed number of frequencies categorized in the category
E = Expected number of frequencies in the ith category under Ho

One sample Sign Test

Total number of Plus signs (+)

Total Number of signs (+&-) p – z. σ
z= value In the normal distribution table for normal curve

σ = √p.q/n

p=1/2, (probability of getting sample value less than mean)

q=1/2, (probability of getting sample value higher than mean)
n= Number of Signs

2.10. SCOPE OF THE STUDY

Through this study the researcher is trying to probe the applicability of three new
HR strategies in Small and medium scale software enterprises.
This will help the SMEs to retain the talent pool.

29
2.11. LIMITATION OF THE STUDY

1. The study only concentrates on urban industrial area in Bangalore.

Employees in other urban and rural areas may have different behavior
pattern in terms of job preferences. So the applicability of the research is
confined to Bangalore city only.
2. The findings and conclusions drawn out of the study will reflect only
existing trends in the organization.

30
 3. PROFILE

3.1. BACK GROUND OF THE STUDY

A general idea of the retention measures present in the industry is important to

understand the research environment.
Apart from the legal and mandatory benefits such as provident-fund and gratuity,
below is a list of other benefits IT professionals are entitled to the following:

1. Group Medi-claim Insurance Scheme: This insurance scheme is to

provide adequate insurance coverage of employees for expenses related
to hospitalization due to illness, disease or injury or pregnancy in case of
female employees or spouse of male employees. All employees and their
dependent family members are eligible. Dependent family members
include spouse, non-earning parents and children above three months

2. Personal Accident Insurance Scheme: This scheme is to provide

adequate insurance coverage for Hospitalization expenses arising out of
injuries sustained in an accident. This covers total / partial disablement /
death due to accident and due to accidents.

3. Subsidized Food and Transportation: The organizations provide

transportation facility to all the employees from home till office at
subsidized rates. The lunch provided is also subsidized.

4. Company Leased Accommodation: Some of the companies provides

shared accommodation for all the out station employees, in fact some of

31
 the IT companies also undertakes to pay electricity/water bills as well as
the Society charges for the shared accommodation. The purpose is to
provide to the employees to lead a more comfortable work life balance.

5. Recreation, Cafeteria, ATM and Concierge facilities: The recreation

facilities include pool tables, chess tables and coffee bars. Companies
also have well equipped gyms, personal trainers and showers at facilities.

6. Corporate Credit Card: The main purpose of the corporate credit card is
enable the timely and efficient payment of official expenses which the
employees undertake for purposes such as travel related expenses like
Hotel bills, Air tickets etc

7. Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to

the employees on the basis of business need. The employee is
responsible for the maintenance and safeguarding of the asset.

8. Personal Health Care (Regular medical check-ups): Some of the IT

company’s provides the facility for extensive health check-up. For
employees with above 40 years of age, the medical check-up can be done
once a year.

9. Loans: Many IT companies provide loan facility on three different

occasions: Employees are provided with financial assistance in case of a
medical emergency. Employees are also provided with financial
assistance at the time of their wedding. And, the new recruits are provided
with interest free loans to assist them in their initial settlement at the work
location.

10. Educational Benefits: Many IT companies have this policy to develop the
personality and knowledge level of their employees and hence reimburses

32
 the expenses incurred towards tuition fees, examination fees, and
purchase of books

11. Performance based incentives: In many IT companies they have plans

for, performance based incentive scheme. The parameters for calculation
are process performance i.e. speed, accuracy and productivity of each
process. The Pay for Performance can be as much as 22% of the salary.

12. Flexi-time: The main objective of the flextime policy is to provide

opportunity to employees to work with flexible work schedules and set out
conditions for availing this provision. Flexible work schedules are initiated
by employees and approved by management to meet business
commitments while supporting employee personal life needs .The factors
on which Flexi time is allowed to an employee include: Child or Parent
care, Health situation, Maternity, Formal education program

13. Flexible Salary Benefits: Its main objective is to provide flexibility to the
employees to plan a tax-effective compensation structure by balancing the
monthly net income, yearly benefits and income tax payable. It is
applicable of all the employees of the organization. The Salary consists of
Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists
of: House Rent Allowance, Leave Travel Assistance, Medical
Reimbursement, Special Allowance

14. Regular Get together and other cultural programs: The companies
organizes cultural program as and when possible but most of the times,
once in a quarter, in which all the employees are given an opportunity to
display their talents in dramatics, singing, acting, dancing etc. Apart from
that the organizations also conduct various sports programs such as

33
 Cricket, football, etc and regularly play matches with the teams of other
organizations and colleges.

15. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs.
7000/- based on their level in the organization.

16. Employee Referral Scheme: In several companies employee referral

scheme is implemented to encourage employees to refer friends and
relatives for employment in the organization.

17. Employee Stock Option Plan. Employees will be entitled to get the
shares of the company. This will make employee directly related to the
profit.

Now, the actual question, why people are leaving? What types of retention
strategies are required? What is expected from HR Professional and how they
can address this issue?

34
 4. DATA ANALYSIS AND INTERPRETATION

4.1. SAMPLE QUESTIONS AND ITS VALUATION

1. If you look for a new Job, (in a new company) what will be your
preference?

(1) Position title is important

(0) Position title is not important

2. What is your opinion about replacing the old benefits with new
benefits on a monthly basis in your organization?

(1) Improve the job satisfaction

(0) No improvement in the job satisfaction

3. Are you satisfied with the current job

(0) Not at all
1
(1) Very less
(2) Moderately satisfied
(3)Farley satisfied
(4)Very highly satisfied
4. To what extend do you feel that quitting the present job will give you
a satisfied job.
(0) Not at all
(1) Very less
(2) Moderately
(3) Farley
(4) Very highly

35
 5. To what extend you are emotionally attached to your company.
(0) Not at all
(1) Very less
(2) Moderate
(3) Farley enough
(4) Very high
The total score 0f question Numbers 3, 4, 5 will be calculated and the region will
be specified by the researcher on the scale given below.
Result 0………………………….4………………………..8…………………….12
Retention Indifference Attrition

Reference table

Common internal communication channels in the

organization
Channels 1. E-mail/printed circulars
2. Employee meetings and celebration of special occasions
of the
3. employee
4. others

6. Is there any internal communication channel in your organization?

(0) No channel
(1) Any one channel
(2) Any two channels
(3) Any three channels

36
 (4) Four channels and above
7. What is the frequency of the internal communication in your
organization?
(0) Nil
(1) Very less
(2) Moderate
(3) High
(4) Very high frequency
8. Do you have accessibility to the communication channels present in
your organization?
(0) No accessibility
(1) Very less
(2) Moderate
(3) High
(4) Very high

9. What is your opinion about creating awareness on company values

and Employee benefits to its own employees to retain them?
(0) Not useful
(1) Very less
(2) Moderate
(3) Good
(4) Very high
Result
Total

37
4.1.1. Sample analysis of applicability of unique organizational
structure

OBJECTIVE NO: 1To find out whether the unique organization structure increase
retention

Step 1
Finding employees position in the row of the Chi-square test table
The first question in the questionnaire will decide whether the employee belongs
to employees who believe Improvement in Positional benefit gives Job
satisfaction (1st row) or employees who believe increase in other benefits give
job satisfaction ( 2nd row)

Step 2
Finding employees position in the column of the Chi-square test table
Combined score of Question numbers 3, 4, 5, in the questioner will decide the
employee’s position in the column (I.e. Satisfied (1st column), Indifferent (2nd
column), dissatisfied (3rd column). If the total response value of question number
3, 4, 5, is equal &/or larger than 0 and less than 4 (0≤ Value >4) indicate a
dissatisfied employee and if the value is between 4 and 8 (4≤ Value >8) indicates
an indifferent employee, but if the value is between 8 and 12 (8≤ Value >12)
indicates a satisfied employee.

38
Example:
Table No 4.1
Sample Chi-squire test table
Employee Retention Indifferent Attrition) Total
choice of
staying the
company C1 C2 C3 C4
Preference
for benefits
(when looking for
a new job)
Improvement in 5 (frequency) 10 20 35
Position
(Q1) (Number of “1s”)
R1 See Exhibit No.7.2.
Page No:76
Not 2 3 10 15
Improvement in
position (Number of “0s”)
(Q1)
R2
Total ∑ 7 13 30 50
R3

Assumptions
1. There must be employees who believe positional benefits give job
satisfaction (1st row)

39
 2. There must be dissatisfied people among employees who believe
positional benefits give job satisfaction (1st row, 3rd column, exhibit No 4.1)

Step3
Hypothesis testing
Test statistics
Chi2 = ∑ [(O-Ej)2 ∕Ej]
O = Observed number of cases categorized in the category
E (Expected number of cases in the ith category under Ho)

Possible findings
Unique organizational structure strategy will solve the dissatisfaction in the
shaded area (exhibit No1.1). This in turn will improve the retention of the
employee in the organization.
Unique organization structure increase retention if:
1. The chi-square table must meet all the Minimum Conditions for applying
the theory in Industry
2. The number of employees in the 1st row, 4th column must be higher than
that of 2nd row, 4th column.
3. Number of dissatisfied in the 1st row must be higher than satisfied and
indifferent employees in the same row.
4. The hypothesis test must reject the H0: i.e. it should prove that preference
for positional benefits and employee choice of staying the company are
dependent.

40
 OBJECTIVE 2. To what extent the unique organizational structure can contribute
to the employee retention.
The exhibit No1.1 also shows to what extent the organizational structure
contribute to the employee inequity. The unique organizational structure strategy
can solve employee attrition in the shaded area. Larger shaded area in exhibit
No1.1 shows greater percentage of applicability of the strategy.

INTERPRETATIONS
1. Number of employees in the 1st row, 3rd column (dissatisfied employees)
as a percentage of 3rd row, 4th column (sample size) in exhibit No 4.1 will
give exact size of applicability of the strategy.

Graphical representation of the findings

Example;

Chart No 4.2
The number of solvable attrition by unique org.
structure in SMSI as a percentage of total
employees in SMSI

40%

60%

Attrition among employees who prefer positional improvement

Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

41
Interpretation of the graph
1. 40% of the employees in the small and medium scale software industry
are dissatisfied with their current position and benefits, when they
compare their position and benefits with that of other organizations.

4.1.2. Sample analysis of applicability of variable benefit strategy

OBJECTIVE NO3 To find out whether the variable benefit strategy increases
retention.

Step 1
Finding employees position in the row of the Chi-square test table
The second question in the questionnaire will decide whether the respondent
belongs to employees who believe Periodic change in existing type of benefits
will Improve the job satisfaction (1st row ,exhibit No 4.3) or employees who
believe other benefit structures will Improve the job satisfaction ( 2nd row)

Step 2
Finding employees position in the column of the Chi-square test table
Combined score of question numbers 3, 4, 5, in the questioner will decide the
respondent’s position in the column (I.e. Satisfied (1st column), Indifferent (2nd
column), dissatisfied (3rd column). If the total response value of question number
3, 4, 5, is equal &/or larger than 0 and less than 4 (0≤ Value >4) indicate a
dissatisfied employee and if the value is between 4 and 8 (4≤ Value >8) indicates

42
 an indifferent employee, but if the value is between 8 and 12 (8≤ Value >12)
indicates a satisfied employee.

Sample Chi-square test table for Variable benefit structure strategy

Table No 4.3
Employee choice Retention Indifferent Attrition Total
of
staying the
company

employee’s
belief on periodic
change in
existing type
of benefits
(Improve the job 4 6 10 19
satisfaction) (Number of “1s”)
(Q2) See Exhibit No.7.2.
Page No:76
(No 3 7 20 31
Improvement in
the job (Number of “0s”)
satisfaction
(Q2)
Total 7 13 30 50

43
Assumptions
1. There must be employees who believe periodic change in existing type of
benefits will Improve the job satisfaction (1st row exhibit No 4.3)
2. There must be dissatisfied people among employees who believe Periodic
change in existing type of benefits will Improve the job satisfaction (1 st row,
3rd column, exhibit No 4.3)

Step3
Hypothesis testing

Test statistics
Chi2 = ∑ [(O-Ej)2 ∕Ej]
O = Observed frequencies categorized in the category
E (Expected frequencies in the ith category under Ho)

INTERPRETATIONS
Variable benefit structure strategy will solve the dissatisfaction in the shaded
area (exhibit No1.2). This in turn will improve the retention of the employee in the
organization.
Variable benefit structure will increase retention if:
1. The chi-square table must meet all the Minimum Conditions for applying
the theory in Industry
2. The number of employees in the 1st row, 4th column must be higher than
that of 2nd row, 4th column (exhibit No 4.3).
3. Number of dissatisfied in the 1st row (exhibit No 4.3). must be higher than
satisfied and indifferent employees in the same row.

44
 4. The hypothesis test must reject the H0: i.e. it should prove that employee
choice of staying the company and employee’s belief on periodic change
in existing type benefits are dependent

OBJECTIVE 4. To what extent variable benefit structure strategy can solve the
problem of Employee attrition.
The exhibit No1.2 also shows to what extent the benefit structure contribute to
the employee inequity. The variable benefit structure strategy can solve
employee attrition in the shaded area. Larger shaded area (exhibit No2) shows
greater percentage of applicability of the strategy.

INTERPRETATIONS
1. Number of employees in the 1st row, 3rd column (dissatisfied employees)
as a percentage of 3rd row, 4th column (sample size) in exhibit No 4.3 will
give exact size of applicability of the strategy.

Graphical representation of the findings

Chart No 4.4 The number of solvable attrition by variable

benefit structure In SMSI as a percentage of total
employees in SMSI

17%

83%

Attrition among employees who prefer variable benefit structure

Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

45
 Interpretation of the graph
1. 17% of the employees in the small and medium scale software industry
are dissatisfied with their current benefit structure.

4.1.3. Sample analysis of applicability of internal advertisement

strategy

OBJECTIVE NO 5 To what extent an internal advertisement strategy can be

implemented in the companies.

Average of the total values of question numbers 6,7,8,9 from all respondents will
give the industry opinion of applicability of internal advertisement strategy.

Step NO1
Find the total value of question number 6, 7, 8, 9 of each respondent

Example
Questionnaire analysis for Internal advertisement strategy
Table No 4.5
Question Values
1. Is there any internal communication channel in your 2
organization?
2. What is the frequency of the internal communication 3
channels

3. Do you have access to the communication channels 4

present in your organization?

46
 4. What is your opinion about creating awareness on 1
company values and Employee benefits to its own
employees to retain them?
Total 10

Step NO:2
Hypothesis testing
H0c: Combined percentage score is equal or above 50% (Internal advertisement
strategy is accepted)
µ≥µ0, µ0=8 (50%)
H1c: Combined percentage score is below 50% (Internal advertisement strategy
is rejected)
µ<µ0, µ0=8 (50%)

One sample Sign Test

The one sample sign test is a very simple non parametric test applicable when
we sample a continuous symmetrical population in which case the probability of
getting a sample value less than mean in .5 and the probability of getting sample
value higher than mean is also .5. To test the null hypothesis µ= µ0 against an
appropriate alternative on the basis of a random size n we replace the value of
each and every item of the sample with plus sign if it is greater than µ0 and with
a minus sign if it is less than µ0.

TEST STATISTICS
Hypothesis will be acceptable if

47
 Total number of Plus signs (+)

Total Number of signs (+&-) > p – z. σ

z= value In the normal distribution table for normal curve
σ = √p.q/n
p=1/2, (probability of getting sample value less than mean)
q=1/2, (probability of getting sample value higher than mean)
n= Number of Signs

Step2
Horizontal analysis of each of the questions 6, 7, 8, 9. This will give more insight in to the
problems or barriers to implement internal advertisement strategy.

Example
Table No 4.6
Horizontal analysis of each of the questions for internal advertisement
Questionnaire Is there any What is the Do you have What is your
No internal frequency of the access to the opinion about
communication internal communication creating
channel in your communication channels present awareness on
organization? channels in your company values
organization? and Employee
benefits to its
own employees
C1 C2 to retain them?
C3 C4
1 2 3 4 1
2 … … … …
3
Total 120 …

INTERPRETATIONS
1. Accepting the H0c (hypothesis) indicate that the small and medium scale
software industry can implement internal advertisement strategy.

48
 2. Horizontal analysis of the questions in the questionnaire will give the exact
percentage of availability of each of the factors such as Presence,
awareness, accessibility of communication channel and the opinion of the
employees on the effective ness of internal advertisement strategy.

Sample Graphical representation

Example:
Chart No 4.7

Opinion about implimentation of Internal

advertisement strategy

Not useful
10%
very high
very less
35%
20%

Good
5% Moderate
30%

Interpretation of the graph

The opinion of 35 %( vey high ) of the employees in the small and medium scale
software industry is the implementation of internal advertisement strategy will be
useful.

49
4.2. ANALYSIS OF ACTUAL DATA

4.2.1. Validity of Unique organizational structure strategy

OBJECTIVE No 1 :To find out whether the unique organization structure increases
retention.

Research question No 1
To find out whether positional benefit is related to employee preference for
staying the company.

Hypothesis testing

Step 1
H0a: The positional benefit is not associated with employee preference for
staying the company.
χ2 ≤ χ 2 (critical)

H1a: The positional benefit is associated with employee preference for staying
the company.
χ2 >χ 2 (critical)

Step 2

50
The level of significance is 5%

Step 3
Test statistics
Table No 4.8
Chi-squire test table for unique organizational structure
Employee Retention Indifferent Attrition Total
choice of
staying the
company
Preference
for benefits
(when looking for
a new job)
Improvement in 4 9 19 32
Position

Not 9 4 5 18
Improvement in
Position

Total ∑ 13 13 24 50

Chi2 = ∑ [(Oij-Eij)2 ∕Eij]

O = Observed number of cases categorized in the category
E (Expected number of cases in the ith category under Ho)

With Yates’ correction factor

51
The correction factor is being used because some of the values in the chi squire
table are below 5

Chi2 = ∑ [(|Oij-Eij|-.5)2 ∕Eij]

Table No 4.9
Calculation table for chi square test (Unique organizational structure)
Observed Expected
frequency frequency
Oij Eij (Oij-Eij) |Oij-Eij| |Oij-Eij|-.5 [|Oij-Eij|-.5] 2 [|Oij-Eij|-.5]2 /Eij

4 8.32 -4.32 4.32 3.82 14.5924 1.753894

9 8.32 0.68 0.68 0.18 0.0324 0.003894
19 15.36 3.64 3.64 3.14 9.8596 0.641901
9 4.68 4.32 4.32 3.82 14.5924 3.118034
4 4.68 -0.68 0.68 0.18 0.0324 0.006923
5 8.64 -3.64 3.64 3.14 9.8596 1.141157
Total 6.665804

Step 4
Degrees of freedom = (r-1). (c-1), here r= number of rows and c = number of
columns
(2-1). (3-1) = 2
Critical value = Chi2 (Probability under Ho, Degrees of freedom)

Chi2 (.05,2) = 5.99

Step 5
Since Chi2 value calculated is higher than the critical value, the hypothesis has
been rejected. And H1 is being accepted.
Chi2 (calculated) > Chi2 (Critical value)

52
 6.665804 > 5.99
Conclusion
From the above test we can conclude that the unique organizational structure is
associated to retention of the employee.

OBJECTIVE 2. To what extent the unique organizational structure can contribute

to the employee retention.

Research question No.2

What is the percentage of employee attrition can be solved by implementing
unique organizational strategy.

ANSWER From the Chi2 table it is clear that total observed attrition in the Small
and medium scale industry is 24 and in that 24 respondents 19 respondents are
employees who prefer positional benefit. So 19 as a percentage of total sample
population (50) is 38%.
Since the Unique organization structure strategy can be applied to 38% of
the population, this will increase the retention of the employees in small
and medium scale software industries.

4.2.2. Validity of Variable benefit strategy

OBJECTIVE 3. To find out whether the variable benefit strategy increases
retention
Research question No.3
To find out whether employee’s belief on variable benefit is related to employee
preference for staying the company.

53
Hypothesis testing
Step 1
H0b: The employee’s belief on periodic change in benefit structure is not
associated with employee preference for staying the company.
.
χ2≤ χ 2 (critical)
H1b: The employee’s belief on periodic change in benefit structure is
associated with employee preference for staying the company.
χ2> χ 2 (critical)

Step 2
The level of significance is 5%
Step 3
Test statistics
Table No 4.10
Chi-square table (Variable benefit)
Employee Retention Indifferent Attrition Total
choice of
staying the
company
employee’s
belief on
periodic change
in existing type
of benefits
(Improve the job 9 5 4 18
satisfaction)

(No 4 8 20 32
Improvement in
the job
satisfaction
Total ∑ 13 13 24 50

54
Chi2 = ∑ [(Oij-Eij)2 ∕Eij]
O = Observed number of cases categorized in the category
E (Expected number of cases in the ith category under Ho)

With Yates correction factor

The correction factor is being used because some of the values in the chi square
table are below 5

Chi2 = ∑ [(|Oij-Eij|-.5)2 ∕Eij]

Table No 4.11
Calculation table for chi square table (Variable benefit)
Observed Expected
frequency frequency
Oij Eij (Oij-Eij) |Oij-Eij| |Oij-Eij|-.5 [|Oij-Eij|-.5] 2 [|Oij-Eij|-.5]2 /Eij
9 4.68 4.32 4.32 3.82 14.5924 3.118034
5 4.68 0.32 0.32 -0.18 0.0324 0.006923
4 8.64 -4.64 4.64 4.14 17.1396 1.98375
4 8.32 -4.32 4.32 3.82 14.5924 1.753894
8 8.32 -0.32 0.32 -0.18 0.0324 0.003894
20 15.36 4.64 4.64 4.14 17.1396 1.115859
Total 7.982355

Step 4
Degrees of freedom = (r-1). (c-1), here r= number of rows and c = number of
columns
(2-1). (3-1) = 2
Critical value = Chi2 (Probability under Ho, Degrees of freedom)

Chi2 (.05,2) = 5.99

Step 5

55
Since Chi2 value calculated is higher than the critical value, the hypothesis has
been rejected. And alternative hypothesis H1 is being accepted.
Chi2 (calculated) > Chi2 (Critical value)
7.982355 > 5.99

Conclusion
From the above test we can conclude that Variable benefit structure is
associated to retention of the employee.

OBJECTIVE No.4
To what extent variable benefit structure strategy can solve the problem of
employee attrition.
Research question 4
What is the percentage of employee attrition can be solved by implementing
Variable benefit strategy.

ANSWER From the Chi2 table it is clear that total observed attrition in the Small
and medium scale industry is 24 and in that 24 respondents only 4 respondents
prefer periodic change in benefits. So 4 as a percentage of total sample
population (50) is 8%.
Since the Variable benefit strategy can be applied to 8% of the population,
this will increase the retention of the employees in small and medium
scale software industries. This strategy will not be able to solve the
remaining (as 33.3% of 24) 2/3 of the attrition tendency.

56
4.2.3. Validity of Internal advertisement strategy
OBJECTIVE 5. To what extent an internal advertisement strategy can be
implemented in the companies.

Research question 5.
What is the opinion of employees on the success of implementation of internal
advertisement strategy in small and medium scale software industry in
Bangalore?

Step 1
H0c: Combined percentage score is 50 and above (Internal advertisement
strategy is accepted)
µ≥µ0, µ0=8 (50%)
H1c: Combined percentage score is below 50 (Internal advertisement strategy is
rejected)
µ<µ0, µ0=8 (50%)

Step 2
The level of significance is 5%

Step 3
Test statistics
Total number of Plus signs (+)

57
 Total Number of signs (+&-) > p – z. σ (prop)
z= value In the normal distribution table for normal curve
σ (prop) = √p.q/n

p=1/2, (probability of getting sample value less than mean)

q=1/2, (probability of getting sample value higher than mean)
n= Number of Signs

Table No 4. 12
Questionnaire analysis table for internal advertisement strategy
Total Q1+ Values
RESPONDNT Question Question Question Question Q2+ Q3+ not equal Plus/minus
NO No Q1 No Q2 No Q3 No Q4 Q4 to 8 sign
1 4 4 4 4 16 16 +
2 3 3 3 1 10 10 +
3 3 4 2 4 13 13 +
4 4 3 4 4 15 15 +
5 3 2 3 3 11 11 +
6 2 4 3 4 13 13 +
7 2 2 3 4 11 11 +
8 4 3 0 4 11 11 +
9 4 3 3 4 14 14 +
10 3 3 2 4 12 12 +
11 4 4 4 4 16 16 +
12 2 3 3 4 12 12 +
13 2 3 3 4 12 12 +
14 2 3 3 2 10 10 +
15 2 4 3 4 13 13 +
16 2 2 2 4 10 10 +
17 4 2 3 1 10 10 +
18 3 4 1 0 8 Total 17
19 2 2 1 3 8 6 -
20 2 3 1 0 6 5 -
21 1 1 1 2 5 7 -
22 1 2 2 2 7 7 -
23 3 2 1 1 7 7 -
24 4 1 1 1 7 6 -
25 3 2 1 0 6 5 -

58
 26 2 1 2 0 5 7 -
27 2 4 1 0 7 9 -
28 1 3 2 3 9 7 -
29 2 2 2 1 7 7 -
30 3 2 1 1 7 6 -
31 4 1 1 0 6 4 -
32 1 1 1 1 4 5 -
33 0 0 1 4 5 7 -
34 2 3 1 1 7 7 -
35 3 1 1 2 7 7 -
36 2 2 2 2 8 6 -
37 1 2 2 3 8 6 -
38 2 2 2 1 7 7 -
39 2 4 1 1 8 6 -
40 3 2 1 0 6 7 -
41 2 2 2 2 8 4 -
42 3 1 1 1 6 5 -
43 2 3 2 0 7 6 -
44 2 2 1 1 6 1 -
45 2 2 3 0 7 Total 26
46 1 1 1 1 4 N= 43
47 3 1 1 0 5
48 3 2 1 2 8
49 2 3 1 0 6
50 0 1 0 0 1
Totals 119 117 91 95

Table No 4.13
Calculation table for sign test

Number Number n p q σ (Prop) Z p – z. σ No. of+

of + of - √p.q/n (prop) values/n
values values
17 26 43 0.5 0.5 0.005814 1.64 0.490465 0.395349

59
Step 4
Critical value = 0.490465

Step 5
Since probability of values greater than 8 calculated is lower than the critical
value, the hypothesis has been rejected. And alternative hypothesis H1 is being
accepted.
Critical value > Calculated value
0.490465 > 0.395349 (17/43)

Conclusion
From the above test we can conclude that the opinion of Small and medium
scale software industry employees are not favorable for the implementation of
Internal advertisement strategy

60
 5. FINDINGS RECOMMENDATIONS
AND CONCLUSION

5.1 FINDINGS AND RECOMMENDATIONS

Chart No 5.1

Employee preference for staying the company In

SMSI

26%

48%

26%

Employees prefering retention Indifferent employees

Employees prefering Attrition

 The above graph shows that 48% of the employees prefer to leave
the job to improve their current status. This 48% is not satisfied with
their current status. 26% of the employees are indifferent to retention
or attrition. Another 26 percentage are satisfied with their current job
and they prefer to stay the job and the company.

61
5.1.1 Findings from the research on Unique organizational
structure strategy
Chart No 5.2

Reasons for attrition in SMSI as a

percentage of total Attrition in SMSI

21%

79%

Attrition among employees who prefer positional improvement

Attrition due to other reasons

 The small and medium scale software industry (SMSI) in Bangalore

shows 48% attrition and in that 48 percentage 79% (above graph) is
quitting the company to improve their position. All other reasons are
only 21%.

 The chi2 test analysis confirmed that there is a relationship between

position titles and employee retention. So the organizational
structure is related to employee preference for staying the company.

62
  To retain the talent in the organization companies can give position
titles which convey high social status and responsibility.

 Another benefit of applying the unique organizational structure

strategy is to minimize the comparison tendency of the employee
with his benefit structure with that of other employees in other
companies.
Chart No 5.3

The number of solvable attrition by unique org.

structure in SMSI as a percentage of total
employees in SMSI

38%

62%

Attrition among employees who prefer positional improvement

Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

 This graph shows that in the total population the unique

organizational structure strategy can be applied to 38% of the total
Small and medium scale software industry. So the extent to which
the unique organizational strategy can be applied is 38% of the total
employees in the SMSI.

63
  Since the Unique organization structure strategy can be applied to
38% of the population, this will increase the retention of the
employees in small and medium scale software industries.

5.1.2. Findings from the research on Variable benefit structure

strategy

Chart No 5.4

Attrition among employees who prefer different

benefit structures

17%

83%

Attrition among employees who prefer variable benefit structure

Attrition among employees who prefer existing benefit structure

 The chi2 test analysis confirmed that there is a relationship between

employee’s preferences for benefit structure is related to employee
preference for staying the company.

64
  The small and medium scale software industry in Bangalore shows
48% attrition and in that 48 percentage 17% (above graph) prefers
periodic change in benefit structure, i.e. they prefer variable benefit
structure strategy.

Chart No 5.5

The number of solvable attrition by variable

benefit structure In SMSI as a percentage of total
employees in SMSI

8%

92%

Attrition among employees who prefer variable benefit structure

Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)


But the employee’s attrition problem solvable by variable benefit
structure strategy is only 8% when comparing it to the total
employees in the SMSI. So the extent to which this strategy can be
applied is only 8%.

 Applying this strategy is not economical as only 8% of the total

employees can be stopped from attrition by implementing Variable
benefit strategy.

65
5.1.3. Findings from the research on internal advertisement
strategy

 From the sign test we can conclude that the opinion of Small and
medium scale soft ware industry employees is not favorable for the
implementation of Internal advertisement strategy
The main hurdles are:
Chart No 5.6

Access to the communication channels present in

the SMSI

No accesibility
very high
4%
6%
Farley Enough
22% very less
44%

Moderate
24%

66
 1. Very less accessibility to the communication channels. In
small and medium scale software industry. 48% of the
employees have either very less or no access to the
communication channels present in the organization.

Chart No 5.7

Opinion about implimentation of Internal

advertisement strategy

Not useful
very high
24%
28%

Good
8% very less
Moderate 26%
14%

2. Second reason is the general opinion about the

implementation of internal advertisement strategy is negative.
Around 50% of the employees don’t agree with the
implementation of the strategy.

67
5.2 CONCLUSIONS

The research shows that there is a relationship between Positional benefits and
employee retention in the organization. It also concluded that internal
advertisement cannot be used in the small and medium scale software
enterprises. Though there is an association between benefit structure and
employee preference for staying the company, the research revels that this
relationship is not conducive for implementing the variable benefit structure
strategy.
My dissertation for retention strategies in the software industry was highly
informative and supportive to my future it has helped me to gain knowledge of
conducting study of human resource function in an organization.
Many HR professionals feel that work performance is a contemplation of how
employees feel about themselves and their work, If an employee experience a
sense of pride in the job then the work quality, efficiency, and retention increases
significantly. Employees who suffer from low self esteem and display lack of
enthusiasm exhibits negative feelings at the work place. Protecting the self
esteem of the employee will be top agenda for future organization. One of the

68
best ways to achieve that is by providing socially acceptable positions titles to the
employees.

6. BIBLIOGRAPHY AND APPENDIXES

Bibliography
Books
1. C. R. Kothari, Research Methodology methods and techniques, Second
edition, Wishwa Prakashan year 1997

2. Donald R. Cooper, Pamela S. Schindler. Business Research methods,: Eight

editions Tata McGraw-Hill year 2004

3. K. Aswathappa, Organizational Behavior , Fifth editions, Himalaya Publishing

House year 1989

4. V.S.P Rao, The Human Resource management text and cases, second
editions , Excel Books year 1992

69
Journals
1. The ICFAIn Journal of management and research,Volume V No:2
Februvary 2007, ICFAI university press, Page no 65: Human resource
development climate in IT companies in India.

2. HRM review, Employer’s brand, ICFAI university press,June 2006

Websites
http://www.employeeretentionstrategies.com/bottomline.htm

http://www.ioma.com/audioconferences/471.html

http://www.bpoindia.org/research/retention-strategies-call-center-industry.shtml

70
Appendix No.1
6.2.1. Questionnaire

KRISTU JAYANTI COLLEGE OF MANAGEMENT &

TECHNOLOGY
Dear Sir,

We at Kristu Jayanti College of management and technology are conducting a

research study on the Applicability of advanced employee retention strategies for
middle management level in small and medium scale software enterprises in
Bangalore. Your help with the few questions on the attached pages will take only
few seconds and will make a real contribution to the accuracy and success of this
study. Your reply will be treated in strict confidence and will be available only to
my research guide and me. Any publication will be only of statistical totals and
inferences.

Sincerely,
Study Conducted by Under the Guidence of
Mathew Abraham Prof. A. M. Tatti
MBA IV SEM MBA coordinator
Kristu Jayanti College

71
Kristu Jayanti College

QUESTIONAIRE
Name of the employee…………………………………………………………………..
Designation…………………………………………………………………………. ….
Name of the company…………………………………………………………………...

1. If you look for a new Job, (in a new company) what will be your
preference?

(1)Improvement in Position

(0)Not improvement in position (Increase in other benefits)

2. What is your opinion about replacing the old benefits with new
benefits on a monthly basis in your organization?

(1) Improve satisfaction from the benefits

(0) No improvement in satisfaction from the benefits

3. Are you satisfied with the current job

(4) Not at all

(3) Very less
(2) Moderate
(1) Farley enough
(0) Very high

72
 4. To what extend do you feel that quitting the present job will give you
a satisfied job.
(0) Not at all
(1) Very less
(2) Moderate
(3) Farley enough
(4) Very high
5. To what extend you are emotionally attached to your company.

(4) Not at all

(3) Very less
(2) Moderate
(1) Farley enough
(0) Very high
Common Internal communication channels In the
organizations
1. E-mail/printed circulars
2. Employee meetings
3. celebration of special occasions of the employee
4. print media
5. others

6. Is there any internal communication channel in your organization?

(0) No channel
(1) Any one channel
(2) Any two channels
(3) Any Three channels
(4) Four channels and above
7. What is the frequency of the internal communication in your
organization?

73
 (0) Nil
(1) Very less
(2) Moderate
(3) Farley enough
(4) Very high frequency

8. Do you have accessibility to the communication channels present in

your organization?

(0) No accessibility
(1) Very less
(2) Moderate
(3) Farley enough
(4) Very high

9. What is your opinion about creating awareness on company values

and Employee benefits to its own employees to retain them?

(0) Not useful

(1) Very less
(2) Moderate
(3) Good
(4) Very high

Thank You
Mathew Abraham

74
Table No 7.1
6.2.2. PILOT STUDY TABLE FOR SAMPLE SIZE ANALYSIS (30
RESPONDENTS)
Q3 Q4 Q5 Q6 Q7 Q8 Q9
0 4 4 4 4 4 4
4 2 1 3 3 3 1
2 4 4 3 4 2 4
0 2 1 4 3 4 4
3 2 3 3 2 3 3
4 3 4 2 4 3 4
2 2 4 2 2 3 4
3 3 3 4 3 0 4
4 0 4 4 3 3 4
4 4 4 3 3 2 4
2 4 3 4 4 4 4
4 3 3 2 3 3 4
3 3 3 2 3 3 4
1 1 3 2 3 3 2
1 2 1 2 4 3 4
0 1 3 2 2 2 4
2 2 2 4 2 3 1
2 0 1 3 4 1 0
1 1 1 2 2 1 3
3 3 0 2 3 1 0
3 3 1 1 1 1 2
0 1 2 1 2 2 2
1 2 0 3 2 1 1
4 4 4 4 1 1 1
3 2 4 3 2 1 0
4 2 3 2 1 2 0
1 4 4 2 4 1 0

75
 2 3 4 1 3 2 3
3 2 4 2 2 2 1
4 3 3 3 2 1 1

Number
of ‘0s’ 4 2 2 0 0 1 5
Number
of ‘1s’ 5 4 6 3 3 9 6
Number
of ‘2s’ 6 10 2 12 10 7 3
Number
of ‘3s’ 7 8 9 8 10 10 3
Number
of ‘4s’ 8 6 11 7 7 3 13
Total 30 30 30 30 30 30 30
Table No 7.2
6.2.3 QUESTIONNAIRE DATA ANALYSIS TABLE FOR CHI-SQUIRE TESTS
Total
Q1 Q2 Q3 Q4 Q5 (Q3+Q4+Q5) RETENTION INDIFFERENT ATTRITION
1 0 0 4 4 8 1
1 1 4 2 1 7 1
1 0 2 4 4 10 1
1 1 0 2 1 3 1
1 0 3 2 3 8 1
1 0 4 3 4 11 1
1 0 2 2 4 8 1
1 0 3 3 3 9 1
1 0 4 0 4 8 1
1 0 4 4 4 12 1
1 0 2 4 3 9 1
1 0 4 3 3 10 1
1 0 3 3 3 9 1
1 0 1 1 3 5 1
1 0 1 2 1 4 1
1 0 0 1 3 4 1
1 0 2 2 2 6 1
1 0 2 0 1 3 1
1 0 1 1 1 3 1
1 0 3 3 0 6 1
1 0 3 3 1 7 1
1 1 0 1 2 3 1
0 1 1 2 0 3 1
1 1 4 4 4 12 1
1 1 3 2 4 9 1
1 1 4 2 3 9 1

76
 1 1 1 4 4 9 1
1 0 2 3 4 9 1
1 0 3 2 4 9 1
1 0 4 3 3 10 1
1 0 0 4 4 8 1
1 1 2 0 3 5 1
0 1 0 3 0 3 1
0 1 0 0 0 0 1
0 1 0 2 0 2 1
0 1 1 1 1 3 1
0 0 2 4 4 10 1
0 0 3 2 4 9 1
0 0 4 4 4 12 1
0 0 1 2 0 3 1
0 0 2 0 1 3 1
0 0 0 3 0 3 1
0 1 1 1 2 4 1
0 1 0 4 1 5 1
0 1 3 2 1 6 1
0 1 4 0 1 5 1
1 1 1 3 1 5 1
0 0 0 2 0 2 1
0 0 3 4 3 10 1
0 0 4 3 2 9 1
Total 13 13 24
Number Number
of “1s” of “1s”
=32 =18
Number Number
of “0s” of “0s”
=18 =32

Table No 7.3
6.2.4. Chi-square table for unique organizational structure
Employee Retention Indifferent Attrition Total
choice of
staying the
company
Preference
for benefits
(when looking for
a new job)

77
Improvement in 4 frequencies 9 19 32
Position (Number of
(Q1) “1s”)

Not 9 4 5 18 (Number
Improvement in of “0s”)
position
(Q1)
Total ∑ 13 13 24 50

Table No 7.4
6.2.5 Chi-square table for Variable benefit structure

Employee choice of Retention Indifferent Attrition Total

staying the company

employee’s
belief on periodic
change in existing
type of benefits
(Improve the job 9 5 4 18
satisfaction) (Number of
(Q2) “1s”)

(No Improvement in 4 8 20 32
the job satisfaction (Number of
(Q2) “0s”)

Total ∑ 13 13 24 50

78
79