DISSERTATION REPORT

ON
EMPLOYEE RETENTION STRATEGY

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE POST GRADUATE DIPLOMA IN MANAGEMENT

UNDER SUPERVISION OF: PRESENTED BY:

DR. Alok Kumar Aditi Tiwari

Professor & Dean PG/21/04

(Research and Development) PGDM 4th Sem

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 DECLARATION

I Aditi Tiwari of PGDM 4th semester declare that the dissertation

report on entitled Employee Retention strategy is the result of my
own efforts and is based on the information collected by me.

Furthermore, the information presented in this report is correct to the

best of my knowledge and as per norms and guidelines provided for
report writing.

Aditi Tiwari
PG/21/04
PGDM 4th semester

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 ACKNOWLEDGEMENT

I feel great pleasure in presenting this dissertation report in the hands of

Dr. Alok Kumar. It is a really great opportunity given by him to me. I
would like to convey my sincere gratitude to my project guide Dr Alok
Kumar (Professor & Dean) for his valuable guidance and inputs to
structure this report. Without his help of valuable inputs, the completion
of this project would not have been possible.

I would specially wish to thank all my respondents and friends without

whom this report would not have been completed.

Aditi Tiwari
PG/21/04
PGDM 4th semester

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 CONTENTS

1. Introduction 5

2. Objective of Study 8

3. Research Methodology 9

4. Importance 10

5. Limitation 14

6. Employee Retention Strategy 15

7. Case Study 25

8. Feedback 30

9. Implement Retention Strategy 33

10.Rational of the study 43

11.Finding 48

12.Suggestion 51

13.Conclusion 52

14.Recommendation 53

15.Bibliography 56

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 INTRODUCTION

Employee turnover is one of the largest though widely unknown costs an

organization faces. While companies routinely keep track of various costs such as
supplies and payroll, few take into consideration how much employee turnover
will cost them: Ernst & Young estimates it costs approximately $120,000 to replace
10 professionals. According to research done by Sibson & Company, to recoup the
cost of losing just one employee a fast food restaurant must sell 7,613 combo
meals at $2.50 each. Employee turnover costs companies 30 to 50% of the annual
salary of entry-level employees, 150% of middle-level employees, and up to 400%
for upper level, specialized employees. Now that so much is being done by
organizations to retain its employees.
Why is retention so important? Is it just to reduce the turn over costs ?
Well, the answer is a definite no. Its not only the cost incurred by a company that
emphasizes the need of retaining employees but also the need to retain talented
employees from getting poached.

Retention involves five major things:

Compensation
Environment
Growth
Relationship
Support

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 Compensation:
Compensation constitutes the largest part of the employee retention process. The
employees always have high expectations regarding their compensation packages.

Compensation packages vary from industry to industry. So an attractive

compensation package plays a critical role in retaining the employees.
Compensation includes salary and wages, bonuses, benefits, prerequisites, stock
options, bonuses, vacations, etc. While setting up the packages, the following
components should be kept in mind:
Salary and monthly wage: It is the biggest component of the
compensation package. It is also the most common factor of comparison
among employees. It includes
Basic wage
House rent allowance
Dearness allowance
City compensatory allowance

Salary and wages represent the level of skill and experience an individual has.
Time to time increase in the salaries and wages of employees should be done. And
this increase should be based on the employees performance and his contribution
to the organization. Bonus: Bonuses are usually given to the employees at the end
of the year or on a festival. Economic benefits: It includes paid holidays, leave
travel concession, etc. Long-term incentives: Long term incentives include stock
options or stock grants. These incentives help retain employees in the
organization's start up stage.

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 Health insurance: Health insurance is a great benefit to the employees. It
saves employees money as well as gives them a peace of mind that they have
somebody to take care of them in bad times. It also shows the employee that the
organization cares about the employee and its family.

After retirement: It includes payments that an Employee gets after he

retires like EPF (Employee Provident Fund) etc.

Miscellaneous compensation: It may include employee assistance

programs (like psychological counselling, legal assistance etc), discounts on
company products, use of a company cars, etc.

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 OBJECTIVE OF STUDY

To study the strategy importance retention.

To explore what retention strategy are being applied by

corporate house.

How these strategy help in organisation excellence

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 RESEARCH METHODOLOGY

Type of Research - Descriptive Research

Type of Data : Secondary Data

Source of Data : journal, Books, Online available material, magazine

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 IMPORTANCE

The employee retention technique helps us to know the various

dimension on which improvisations can be done.
Also, it tells us the various factors on which the employee should
focus

The process of employee retention will benefit an organization in the following

ways:
1. The Cost of Turnover: The cost of employee turnover adds hundreds of
thousands of money to a company's expenses. While it is difficult to fully calculate
the cost of turnover (including hiring costs, training costs and productivity loss),
industry experts often quote 25% of the average employee salary as a conservative
estimate.

Loss of Company Knowledge: When an employee leaves, he takes with him

valuable knowledge about the company, customers, current projects and past
history (sometimes to competitors). Often much time and money has been spent on
the employee in expectation of a future return. When the employee leaves, the
investment is not realized.

Interruption of Customer Service: Customers and clients do business with a

company in part because of the people. Relationships are developed that encourage
continued sponsorship of the business. When an employee leaves, the relationships
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that employee built for the company are severed, which could lead to potential
customer loss.

Turnover leads to more turnovers: When an employee terminates, the effect is

felt throughout the organization. Co-workers are often required to pick up the
slack. The unspoken negativity often intensifies for the remaining staff.
Goodwill of the company: The goodwill of a company is maintained when the
attrition rates are low. Higher retention rates motivate potential employees to join
the organization.

Regaining efficiency: If an employee resigns, then good amount of time is lost in

hiring a new employee and then training him/her and this goes to the loss of the
company directly which many a times goes unnoticed. And even after this you
cannot assure us of the same efficiency from the new employee
What Makes Employee Leave? Employees do not leave an organization without
any significant reason. There are certain circumstances that lead to their leaving the
organization. The most common reasons can be:

Job is not what the employee expected to be: Sometimes the job responsibilities
dont come out to be same as expected by the candidates. Unexpected job
responsibilities lead to job dissatisfaction.

Job and person mismatch: A candidate may be fit to do a certain type of job
which matches his personality. If he is given a job which mismatches his
personality, then he wont be able to perform it well and will try to find out reasons
to leave the job.
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No growth opportunities: No or less learning and growth opportunities in the
current job will make candidates job and career stagnant.

Lack of appreciation: If the work is not appreciated by the supervisor, the

employee feels de-motivated and loses interest in job.

Lack of trust and support in co workers, seniors and management: Trust is the
most important factor that is required for an individual to stay in the job. Non-
supportive co workers, seniors and management can make office environment
unfriendly and difficult to work in.

Stress from overwork and work life imbalance: Job stress can lead to work life
imbalance which ultimately many times lead to employee leaving the organization.

Compensation: Better compensation packages being offered by other companies

may attract employees towards themselves.

New job offer: An attractive job offer which an employee thinks is good for him
with respect to job responsibility, compensation, growth and learning etc. can lead
an employee to leave the organization.
Managing Employee Retention:

The task of managing employees can be understood as a three stage process:

1. Identify cost of employee turnover.
2.Understand why employee leave.
3.Implement retention strategies
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The organizations should start with identifying the employee turnover rates within
a particular time period and benchmark it with the competitor organizations. This
will help in assessing the whether the employee retention rates are healthy in the
company. Secondly, the cost of employee turnover can be calculated. According to
a survey, on an average, attrition costs companies 18 months salary for each
manager or professional who leaves, and 6 months pay for each hourly employee
who leaves. This amounts to major organizational and financial stress, considering
that one out of every three employees plans to leave his or her job in the next two
years.

Understand why employees leave :

Why employees leave often puzzles top management. Exit interviews are an ideal
way of recording and analyzing the factors that have led employees to leave the
organization. They allow an organization to understand the reasons for leaving and
underlying issues. However employees never provide appropriate response to the
asked questions. So an impartial person should be appointed with whom the
employees feel comfortable in expressing their opinions.

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 LIMITATIONS

1. The findings of the study are subjected to bias and prejudice of the respondents.
2. Area of the study is confined to the employees in Chennai only.
3. Time factor can be considered as a main limitation.
4. The findings of the study are solely based on the information provided by the
respondents.
5. The accuracy of findings is limited by the accuracy of statistical tools used for
analysis.
6. Findings of the research may change due to area, demography, age condition of
economy etc.

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EMPLOYEE RETENTION STRATEGIES

The basic practices which should be kept in mind in the employee retention
strategies are:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the authority to get things done.
3. Make employees realize that they are the most valuable asset of the
organization.
4. Have faith in them, trust and respect them
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.
7. Recognize and appreciate their achievements.
8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.

These practices can be categorized in 3 levels:

Low,
medium and
high level.
Low Level Employee Retention Strategies:

Appreciating and recognizing a well done job

Personalized well done and thank-you cards from supervisors
Congratulations e-cards or cards sent to spouses/families
Voicemails or messages from top management
Periodic days off for good performance
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 Rewards ( gift, certificates, monetary and non monetary rewards)
Recognizing professional as well as personal significant events
Wedding gifts
Anniversary gifts
New born baby gifts
Scholarships for employees children
Get well cards/flowers
Birthday cards, celebrations and gifts
Providing benefits
Home insurance plans
Legal insurance
Travel insurance
Disability programs
Providing perks: It includes coupons, discounts, rebates, etc
Discounts in cinema halls, museums, restaurants, etc.
Retail store discounts
Computer peripherals purchase discounts
Providing workplace conveniences
On-site ATM
On-site facilities for which cost is paid by employees
laundry facility for bachelors
Shipping services
Assistance with tax calculations and submission of forms
Financial planning assistance

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 Casual dress policies
Facilities for expectant mothers
Parking
Parenting guide
Lactation rooms
Flexi timings
Fun at work
Celebrate birthdays, anniversaries, retirements, promotions, etc
Holiday parties and holiday gift certificates
Occasional parties like diwali, holi, dushera, etc
Organize get together for watching football, hockey, cricket matches
Organize picnics and trips for movies etc
Sports outings like cricket match etc
Indoor games
Occasional stress relievers
Casual dress day
Green is the color day
Handwriting analysis
Tatoo, mehandi, hair braiding stalls on weekends
Mini cricket in office
Ice cream Fridays
Holi-Day breakfast
Employee support in tough time or personal crisis
Personal loans for emergencies

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 Childcare and eldercare services
Employee Assistance Programs ( Counseling sessions etc)
Emergency childcare services
Medium Level Strategies for Employee Retention
Appreciating and recognizing a well done job
Special bonus for successfully completing firm-sponsored certifications
Benefit programs for family support
Child adoption benefits
Flexible benefits
Dependents care assistance
Medical care reimbursement
Providing conveniences at workplace
Gymnasiums
Athletic membership program
Providing training and development and personal growth opportunities
Sabbatical programs
Professional skills development
Individualized career guidance
High Level Strategies
Promoting Work/Life Effectiveness
Develop flexible schedules
Part-time schedules
Extended leaves of absence
Develop Support Services

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 On-site day care facility etc.

Understand employee needs: This can be done through proper management
style and culture
Listen to the employee and show interest in ideas
Appreciate new ideas and reward risk-taking
Show support for individual initiative
Encourage creativity
Encouraging professional training and development and/or personal
growth opportunities: It can be done through:
Mentoring programs
Performance feedback programs
Provide necessary tools to the employees to achieve their professional and
personal goals
Getting the most out of employee interests and talents
Higher study opportunities for employees
Vocational counselling
Offer personalized career guidance to employees
Provide an environment of trust: Communication is the most important
and effective way to develop trust.
Suggestion committees can be created
Open door communication policy can be followed

Regular feedbacks on organizations goals and activities should be taken

from the employees by:
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 Management communications
Intranet and internet can be used as they provide 24X7 access to the
information Newsletters, notice boards, etc.
Hire the right people from the beginning: employee retention is not a
process that begins at the end. The process of retention begins right from the
start of the recruitment process.

The new joinees should fit with the organizations culture. The personality,
leadership characteristics of the candidate should be in sync with the culture of the
hiring organization.
Referral bonus should be given to the employees for successful hires. They are the
best source of networking. Proper training should be given to the managers on
interview and management techniques. An internship program can be followed to
recruit the fresh graduates.

Retention Success Mantra

Transparent Work Culture

In todays fast paced business environments where employees are constantly

striving to achieve business goals under time restrictions; open minded and
transparent work culture plays a vital role in employee retention. Companies invest
very many hours and monies in training and educating employees. These
companies are severely affected when employees check out, especially in the
middle of some big company project or venture. Although employees most often
prefer to stay with the same company and use their time and experience for

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personal growth and development, they leave mainly because of work related
stress and dissatisfactions .More and more companies have now realized the
importance of a healthy work culture and have a gamut of people management
good practices for employees to have that ideal fresh work-life. Closed doors work
culture can serve as a deterrent to communication and trust within employees
which are potential causes for work- Related apathy and frenzy.

A transparent work environment can serve as one of the primary triggers to

facilitate accountability, trust, communication, responsibility, pride and so on. It is
believed that in a transparent work culture employees rigorously communicate
with their peers and exchange ideas and thoughts before they are finally matured in
to full-blown concepts. It induces responsibility among employees and
accountability towards other peers, which gradually builds up trust and pride. More
importantly, transparency in work environment discourages work-politics which
often hinders company goals as employees start to advance their personal
objectives at the expense of development of
The company as a single entity.
.
Quality Of Work

The success of any organization depends on how it attracts, recruits, motivates, and
retains its workforce. Organizations need to be more flexible so that they develop
their talented workforce and gain their commitment. Thus, organizations are
required to retain employees by addressing their work life issues. The elements that
are relevant to an individuals quality of work life include the task, the physical
work environment, social environment within the organization, administrative
system and relationship between life on and off the job. The basic objectives of a
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QWL program are improved working conditions for the Employee and increase
organizational effectiveness.

Providing quality work life involves taking care of the following aspects:

Occupational health care: The safe work environment provides the basis for the
person to enjoy working. The work should not pose a health hazard for the person.
The employer and employee, aware of their risks and rights, could achieve a lot in
Their mutually beneficial dialogue.

Suitable working time: Organizations are offering flexible work options to their
employees wherein employees enjoy flexi-timings for dedicating their efforts at
work.

Appropriate salary: The appropriate as well as attractive salary has always been
an important factor in retaining employees. Providing employees salary at par with
the other counterparts of above that what competitors are paying motivates them to
stick With the company for long. QWL consists of opportunities for active
involvement in group working arrangements or problem solving that are of mutual
benefit to employees or employers, based on labor management cooperation.

People also conceive of QWL as a set of methods, such as autonomous work

groups, job enrichment, and high-involvement aimed at boosting the satisfaction
and productivity of workers. It requires employee commitment to the organization
and an environment in which this commitment can flourish. Providing quality at
work not only reduces attrition but also helps in reduced absenteeism and
improved job satisfaction. Not only does QWL contribute to a company's ability to
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recruit quality people, but also it enhances a company's competitiveness. Common
beliefs support the contention that QWL will positively nurture a more flexible,
loyal, and motivated workforce, which are essential in determining the company's
competitiveness. Supporting Employees
Organizations these days want to protect their biggest and most valuable asset and
they want to do this in a way that best suits their organizational culture. Retaining
employees is a difficult task. Providing support to the employees acts as a mantra
for retraining them. Employers can also support their employees by creating an
environment of trust and inculcating the organizational values into employees.

The management can support employees directly or indirectly. Directly, they

provide support in terms of personal crises, managing stress and personal
development. Management can support employees, indirectly, in a number of ways
as follows:

Manage employee turnover: Employee turnover affects the whole organization in

terms of productivity. Managing the turnover, hence, becomes an important task. A
proactive approach can be adopted to reduce attrition. Strategies should be framed
in advance and implemented when the times arrives. Turnover costs should also be
taken into consideration while framing these strategies.

Become employer of choice: What makes a company an employer of choice? Is

the benefit it offers or the compensation packages it gives away to its employees?
Or is it measured in terms of how they value their employees or in terms of
customer satisfaction? Becoming an employer of choice involves following a road
map which tells where to go as a brand.
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Engage the new recruits: The newly hired employees are said to be least engaged
in the organization. Keeping them engaged is an important task. The fresh talent
should be utilized to maximum before they start feeling bored in the organization.

Optimize employee engagement: An organizations productivity is measured not

in terms of employee satisfaction but by employee engagement. Employees are
said to be engaged when they show a positive attitude toward the organization and
express a commitment to remain with the organization. Employee satisfaction also
comes with high engagement levels. So, organizations should aim to maximize the
engagement among employees.
Coaching and mentoring: Employees whose work performance suffers due to poor
interpersonal relationships or because of lack of interpersonal skills should be
provided proper coaching by their superiors. Planed coaching sessions help an
individual to work through issues, maximize his potential and return to peak
performance.

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CASE STUDIES

1.Employee Retention Best Practices in Keeping and Motivating Employees

By LisBeth Claus Ask any CEO of an organization, What keeps you awake
at night? and you will get a response that relates to people management
issues. a main concern for any organization (whether small or large; private,
public or nonprofit) is its capacity to attract, engage, and retain the right
people. The problem of retention is compounded by the predicted talent
shortage resulting from the upcoming retirement of the baby boomers, the
scarcity of talent with relevant work skills for todays jobs, the changing
values about work and the high cost of turnover. Research and human
resource practices provide us with a number of recommendations to increase
employee retention.

2.How Auditing Company X Works with Retaining Valuable Employees :

Swedish Case study University essay from Hogskolan i Jonkoping/IHH,
EMM (Entrepreneurskap, Marknadsforing, Management) Author: Josip
Bogic; Elina Armanto; Maja Cassel; [2008]
Abstract: Today, neither employees nor employers seem to take for granted
that a person will stay with the same firm until retirement. Yet, keeping
employees for longer periods is an imp-ortant challenge for firms. One
industry where retention is interesting is the auditing industry in Sweden,
this because certain requirements are needed to become an auditor. Firstly,
the employee needs to have a Swedish university degree, including specific
courses within au-diting/accounting. Furthermore, the person needs practical
experience for a specific period of time. Due to these statements the

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 challenge of retaining and motivating valuable employees is crucial for the
auditing firms, which is why we have chosen to do a case study at Auditing
Company X to see how they work with employee retention. We have
compared the findings to our chosen theory, which consist of four
categories:

the hiring process, in-ternal labor market and career, motivation and performance,
and finally culture and leader-ship. These four categories are initially based on
Leigh Branham?s book: ?Keeping the people who keep you in business: 24 ways
to hang on to your most valuable talent? (Bran-ham, 2001).

In our conducted case study, at Auditing Company X, we have been able to

conclude that the firms retention practices are to a great extend in line with the
theoretical framework. There are some areas that need further attention from the
company, such as an individualized reward system and communication between
managers and employees. Even though there are some parts to work on the most
important aspects of retention, such as having a holistic and long-term orientation,
Auditing Company X seems to have incorporated this into their practices
successfully.

3.Retention: An explanatory study of Swedish employees in the financial sector

regarding leadership style, remuneration and elements towards job satisfaction
University essay from Vaxjo universitet/Ekonomihogskolan Author: Sanna
Paulsson; Linda Lindgren; [2008]

Abstract: Introduction: Companies today are forced to function in a world full of

change and complexity, and it is more important than ever to have the right
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employees in order to survive the surrounding competition. It is a fact that a too
high turnover rate affects companies in a negative way and retention strategies
should therefore be high on the agenda. When looking at this problem area we
found that there may be actions and tools that companies could use to come to
terms with this problem. Research told us that leadership, remuneration and
elements like participation, feedback, autonomy, fairness, responsibility,
development and work-atmosphere is important for job satisfaction and retention.

Object: The main objective is to increase the understanding regarding employees

retention in relation to leadership style, remuneration and elements such as
participation, feedback, autonomy, fairness, responsibility, development and work
atmosphere in the Swedish financial

Sector Method: We wanted to investigate how employee of the Swedish financial

sector prefers to be retained, and how they consider and react to the chosen areas.

The survey has a quantitative approach with a web based questionnaire and
includes 129 respondents from banks, insurance and finance companies. The
theoretical framework includes leadership and leadership style, financial as well as
non-financial remuneration and research done in later years regarding
participation, feedback, autonomy, fairness, responsibility, development and work-
atmosphere connected to retention.

Conclusion: The result shows that regarding leadership the respondents prefer
leadership based on relations were they feel appreciation. Both appreciations from
the closest manager as well as the company management influences employee job
satisfaction in a positive way. More money was the most common reason for
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wanting to change jobs, and when asking how the remuneration system should be
designed, base pay with additional bonus and benefits were preferred. But also non
financial factors such as participation, feedback, autonomy, fairness, responsibility,
development and work-atmosphere must be taken in consideration to satisfy since
they seem to increase employees? Willingness to stay in the company.

Abstract: Background: retention management is a highly topical subject and an

important dilemma many organizations might face in the future, if not facing it
already. We believe that the leader plays a key role in employee retention and
retention management. The concept of retention management can both have a
narrow, and a broader significance. Both parts of its significance are generally
included in this thesis. The background of the thesis present a few articles that
discuss issues that makes it important for the organization, and the leaders, to work
hard with retention management. The research is based on the leaders in the
Finnish case company Tradeka.

Following key questions are intended to be answered: What are the consequences
between leaders actions and employees retention? Which is the leaders role when
it comes to retaining employees? Purpose statement: The purpose of the thesis is to
investigate and analyze how company leaders today can retain their key
employees. How can the provision of key human resources develop a long-term
relationship that makes top employees stay in the company? The study aims to
establish the procedure leaders apply to retain employees. The purpose is to
compare the qualitative study, made at the case company, with findings from the
thesis theoretical framework.

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Research method:
The study is a qualitative, as well as a theoretical study where empirical findings
and theories has been compared. The intention of investigating and using the
Finnish company Tradeka Limited as a case company, is to make the information
from the theories more valid, and also the interest in how retention management
works in practice. Eleven qualitative interviews were conducted at Tradeka?
financial department, both with supervisors and employees to get a broader view at
the phenomenon retention management. Result: Leaders and their skill in creating
a culture of retention, has becoming a key in why people stay and what usually
drives them away from a company. The leader has become the main factor in what
motivates peoples decision to stay or
leave. For organizations to keep its key employees their number one priority
should be to look at their management, because people leave managers and not
companies. Characteristics in a leader that are of importance, as the leader plays a
key role in retention management is: trust builder, esteem builder, communicator,
talent developer and coach, and talent finder. The leaders relation to the
employees plays a central role in retaining employees, because employees need to
feel involvement, and that their presence count. When retention is a core value,
good things happen for customers, employees, and the company. because
employees need to feel involvement, and that their presence count. When retention
is a core value, good things happen for customers, employees, and the company.
Feedback

Feedback acts as a channel of communication between the employee and his

manager. The amount of information employees receive about how well or how

29
poorly they have performed is what we call feedback. It is a dialog between a
manager and an employee which acts as a way of sharing information about the
performance. It suggests where the employee performance is effective and where
performance has to improve. Managers can provide either positive feedback or
negative feedback to employees. This feedback helps the employee assess his
performance and identify the improvement areas. Positive feedback communicates
managerial satisfaction. Positive recognition for good performance boosts up
morale of employees and results in performance improvement to a higher
productivity level. It is believed that positive feedback is the only type of feedback
that generates performance above the minimum acceptable level. Negative
feedback obviously communicates managers dissatisfaction. However, negative
feedback sometimes make employee to put more efforts to improve his
performance. But such times are very rare. Moreover this improvement is short
term. Some managers do not provide any kind of feedback to their employees. Due
to no feedback, employees may assume that they are performing productively or
they may feel that the manager is satisfied with their performance. Studies reveal
the performance tends be same or even decreases if no feedback is provided. Thus,
feedback is necessary because:

It builds trust and enhances communication between manager and employee.

It gives managers and employees a way to identify and discuss skills and
strengths.
Positive feedback leads to employee retention and Retention.

It helps in identifying performance areas that need improvement and specific

ways to improve them. It acts as an opportunity to enhance performance by

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 identifying resources for skill development. It is an opportunity for
managers and employees to assess and identify career and advancement
opportunities. It helps employees to understand the effectiveness of their
performance and contributes to their overall knowledge about the work
Managers have tendency to ignore good performances of their employees.
Providing no feedback may demotivate employees and may lead to
employee absenteeism. Input from managers side is necessary as it help
employees to improve their performance and increase productivity.

Communication Between Employee and Employer

Communication is a process in which a message is conveyed to the receiver by the

sender. The message may be or may not be in a common format or language that
both the sender and receiver understand. So there is a need to encode and decode
the message in the process. Encoding and decoding also helps in the security of the
message. The process of communication is incomplete without the feedback.
Communication is the solution to almost everything in this world. Same applies to
employee retention also.
Straight-from-the-shoulder communication is what the employees need from their
employers. Employees look for organizations where communication and process
are transparent. Nothing is hidden and shared with the employees.
There are 3 categories of employees:

A: Who will leave their current employer in 3 years of their employment

B: Who have a probability of leaving their current employer in next 3 years
C: Who will stay with their current employer in the next 3 years

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Category A: These are the employees who lack communication with their
employers.

Category C: These are the employees who have proper, well structured
communication with their employers. Communication is also the way to win the
employees trust in the organization. Employees trust the employers who are
friendly and open to them. This trust leads to employee loyalty and finally
retention.
Employers also feel that the immediate supervisors are the most authenticated and
trusted source of information for them. So the organizations should hire managers
who are active communicators. Communication mediums.

Open door policy: Organizations should support open door policies so that the
employees feel comfortable and are able to express their doubts and feeling to their
employers. Frequent meetings and Social gatherings Emails, Newsletters, Intranet
and many more. So there should be effective communication across the
organization and this communication should be two-way. Communication alone
can lead to unimaginable heights of employee retention.

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IMPLEMENT RETENTION STRATEGY :
Once the causes of attrition are found, a strategy is to be implemented so as to
reduce employee turnover. The most effective strategy is to adopt a holistic
approach to dealing with attrition.

An effective retention strategy will seek to ensure:

Attraction and recruitment strategies enable selection of the right candidate for
each role/organization New employees initial experiences of the organization are
positive Appropriate development opportunities are available to employees, and
that they are kept aware of their likely career path with the organization
The organizations reward strategy reflects the employee drivers
How To Increase Employee Retention Companies have now realized the
importance of retaining their quality workforce. Retaining quality performers
contributes to productivity of the organization and increases morale among
employees/ Four basic factors that play an important role in increasing employee
retention include salary and remuneration, providing recognition, benefits and
opportunities for individual growth. But are they really positively contributing to
the retention rates of a company? Basic salary, these days, hardly reduces turnover.
Today, employees look beyond the money factor.
Retention Bonus

Higher attrition rates within a particular industry have forced companies to use
some innovative strategies to retain employees. Retention Bonus is one of the
important tools that are being used to retain employees. Retention bonus is an
incentive paid to an employee to retain them through a critical business cycle.
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Retention bonuses are becoming more common in the corporate world because
companies are going through more transitions like mergers and acquisitions. They
need to give key people an attractive incentive to stay on through these transitions
to ensure productivity. Retention bonuses have proven to be a useful tool in
persuading employees to stay. A retention bonus plan is not a panacea. According
to a survey, non management employees generally receive about 10 percent of their
annual salaries in bonuses, while management and top-level supervisors earn an
additional 50 percent of their annual salaries. While bonuses based on salary
percentages are the generally used, some companies choose to pay a flat figure. In
some companies, bonuses range from 25 percent to 50 percent of annual salary,
depending on position, tenure and other factors. Employees are chosen for
retention bonuses based on their contributions to management and the generation
of revenue. Retention bonuses are generally vary from position to position and are
paid in one lump sum at the time of termination. However, some companies pay in
instalments as on when the business cycle completes. A retention period can run
somewhere between six months to three years. It can also run for a particular
project. A project
has its own life span. As long as the project gets completed, the employees who
have worked hard on it are entitled to receive the retention bonus. For example, the
implementation of a system may take 18 months, so a retention bonus will be
offered after 20 months. Although retention bonuses are becoming more common
everywhere, some industries are more likely than others to offer them.
Retail/wholesale companies are the most appropriate to implement stay-pay
bonuses, followed by financial service providers and manufacturing firms.
Companies of all sizes use retention bonus plans to keep knowledge employees
retained in the company. To retain its key senior employees post merger with EDS
Corporation, Mphasis is providing cash component based retention bonus plan for
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its employees. This is mainly to retain good employees and provide them a cash
incentive to keep them motivated.

Hire Right Talent

employee retention starts with recruitment. Early departures arise from the wrong
recruitment process. Here are a few ways to ensure how to hire the right talent for a
particular job. Hire appropriate candidates. Hire candidates who are actually
suitable for the job. For this the employer should understand the job requirements
clearly. Dont hire under qualified or clearly overqualified candidates.

Provide realistic job preview at the time of hiring: Mostly employees leave an
organization because they are given the real picture of their job responsibilities at
the time of joining. Attrition rate can be reduced if a right person is hired for a right
job. Realistic preview of the job responsibilities can be given to the employment
seekers by various methods like discussions, trial periods, internships etc.

Clearly discuss what is expected from the employee: Before joining the
organization, tell the candidate what is expected from him. Setting wrong
expectations or hiding expectations will result in early leaving of employees.

Discuss what the expectations of the employees are: Ask employees what they
expect from the organization. Be realistic. If their requirements can be fulfilled
only then promise them. Or tell them beforehand that their requirements cannot be
fulfilled.

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Dont show them an unrealistic picture Culture fit: Try to judge individuals
capability to adapt to the organizations culture. A drastic change in the culture may
give a culture shock to the candidate.

Referrals: According to the research, referred candidates stay longer with the
organization. There is a fear of hampering the image and reputation of the person
who referred the candidate.

Manager Role in Retention

When asked about why employees leave, low salary comes out to be a common
excuse. However, research has shown that people join companies, but leave
because of what their managers do or dont do. It is seen that managers who
respect and value employees competency, pay attention to their aspirations,
assure challenging work, value the quality of work life and provided chances for
learning have loyal and engaged employees. Therefore, managers and team leaders
play an active and vital role in employee retention.
Managers and team leaders can reduce the attrition levels considerably by creating
a motivating team culture and improving the relationships with team members.
This can be done in a following way:

Creating a Motivating Environment: Team leaders who create motivating

environments are likely to keep their team members together for a longer period of
time. Retention does not necessarily have to come through fun events such as
parties, celebrations, team outings etc. They can also come through serious events.
e.g. arranging a talk by the VP of Quality on career opportunities in the field of

36
quality. Employees who look forward to these events and are likely to remain more
engaged.
Standing up for the Team: Team leaders are closest to their team members. While
they need to ensure smooth functioning of their teams by implementing
management decisions, they also need to educate their managers about the
realities on the ground. When agents see the team leader standing up for them,
they will have one more reason to stay in the team.

Providing coaching: Everyone wants to be successful in his or her current job.

However, not everyone knows how. Therefore, one of the key responsibilities will
be providing coaching that is intended to improve the performance of employees.
Managers often tend to escape this role by just coaching their employees.
However, coaching is followed by monitoring performance and providing feedback
on the same.

Delegation: Many team leaders and managers feel that they are the only people
who can do a particular task or job. Therefore, they do not delegate their jobs as
much as they should. Delegation is a great way to develop competencies.
Extra Responsibility: Giving extra responsibility to employees is another way to
get them engaged with the company. However, just giving the extra responsibility
does not help. The manager must spend good time teaching the employees of how
to manage responsibilities given to them so that they dont feel over burdened.

Focus on future career: Employees are always concerned about their future
career. A manager should focus on showing employees his career ladder. If an
employee sees that his current job offers a path towards their future career

37
aspirations, then they are likely to stay longer in the company. Therefore, managers
should play the role of career counsellors as well.

How to Improve Employee Retention?

People want to enjoy their work so make work fun and enjoyable.
Understand that employees need to balance life and work so offer flexible starting
times and core hours. Provide 360 feedback surveys and other questionnaires to
foster open communication. Consider allowing anonymous surveys occasionally so
employees will be more honest and candid with their opinions. Provide
opportunities within the company for career progression and cross-training. Offer
attractive, competitive benefits .

Organizations should target job applications for employees who have

characteristics that fit well with the organizational culture. Upon conducting an
interview, seek out traits, such as loyalty. Also, ask the potential employee what
motivates them on the job. Having more information about the potential
employees expectations can help retain them, should they get hired into the
company.

Rewards and Recognition

Employees want to be recognized for a job well done. Rewards and recognition
respond to this need by validating performance and motivating employees toward
continuous improvement. Rewarding and recognizing people for performance not
only affects the person being recognized, but others in the organization as well.
Through a rewards program, the entire organization can experience the
commitment to excellence. When the reward system is credible, rewards are
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meaningful; however, if the reward system is broken, the opposite effect will occur.
Employees may feel that their performance is unrecognized and not valued, or that
others in the organization are rewarded for the wrong behaviours. Unrecognized
and no valued performance can contribute to turnover. Recognition for a job well
done fills the employees' need to receive positive, honest feedback for their efforts.

Need for Rewards and Recognition

Recognition should be part of the organization's culture because it contributes to

both employee satisfaction and retention. Organizations can avoid employee
turnover by rewarding top performers. Rewards are one of the keys to avoiding
turnover, especially if they are immediate, appropriate, and personal. A Harvard
University study concluded that organizations can avoid the disruption caused by
employee turnover by avoiding hiring mistakes and selecting and retaining top
performers.

One of the keys to avoiding turnover is to make rewards count. Rewards are to be
immediate, appropriate, and personal. Organizations may want to evaluate whether
getting a bonus at the end of the year is more or less rewarding than getting
smaller, more frequent payouts. Additionally, a personal note may mean more than
a generic company award. Employees should be asked for input on their most
desirable form of recognition. Use what employees say when it comes time to
reward for performance.

Designing a Rewards and and Recognition Solution

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In designing a rewards and recognition program, the following guidelines should
be considered.
Rewards should be visible to all members of the organization.
Rewards should be based on well-defined, credible standards that have been
developed using observable achievements.
Rewards should have meaning and value for the recipient.
Rewards can be based on an event (achieving a designated goal) or based on
a time frame (performing well over a specific time period).
Rewards that are spontaneous (sometimes called on-the-spot awards) are
also highly motivating and should also use a set criteria and standard to
maintain credibility and meaning.
Rewards should be achievable and not out of reach by employees.
Nonmonetary rewards, if used, should be valued by the individual. For
example, an avid camper might be given a 10-day pass to a campsite, or, if
an individual enjoys physical activity, that employee might be given a spa
membership. The nonmonetary rewards are best received when they are
thoughtfully prepared and of highest quality. Professionalism in presenting
the reward is also interpreted as worthwhile recognition.

Rewards should be appropriate to the level of accomplishment received. A cash

award of $50 would be inappropriate for someone who just recommended a
process that saved the organization a million dollars. Determining the amount of
money given is a delicate matter of organizational debate in which organizational
history, financial parameters, and desired results are all factors. Recognition for a
job well done can be just as valued and appreciated as monetary awards. Formal
recognition program can be used with success. First Data Resources, a data
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processing services company that employees more than 6,000 individuals in
Omaha, Nebraska, uses a formal recognition program (Adams, Mahaffey, and
Rick,2002). Rewards are given on a monthly, quarterly, and yearly basis, and range
from Nebraska football tickets, gift certificates, pens, plaques, mugs, and other
items.

One of the most popular awards at First Data is called the "Fat Cat Award" that
consists of: $500 gift check Professional portrait of the employee
Appreciation letter from the CEO and senior management
E-mails, phone calls, and notes from peers

In addition to nonmonetary rewards, employees can be rewarded using money in

numerous ways. Cash is a welcome motivator and reward for improving
performance, whether at formal meetings or on the spot. Variable bonuses linked to
performance are another popular reward strategy. Profit sharing and pay-for-skills
are monetary bonus plans that both motivate individuals and improve goal
achievement. Small acts of recognition are valuable for employee daily Retention.
Sometimes a personal note may mean more than a generic company award.

In one survey, employees cited the following as meaningful rewards (Moss, 2000):
Employee of the month awards Years of service awards
Bonus pay (above and beyond overtime) for weekend work
Invitations for technicians to technical shows and other industry events
Meaningful and Retention Rewards

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What gives meaning to rewards and recognition? What makes them effective?
First, rewards and recognition should be based on a clear set of standards, with
performance verifiable or observable. The standards for the reward should also be
achievable. If the reward is based on an unachievable result, such as a production
goal that is beyond employees' power, then those employees will not be motivated.
Meaningful rewards and recognition that are achievable have the greatest impact.

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 RATIONAL OF THE STUDY

It is not about managing retention. It is about managing people. If an organization

manages people well, employee retention will take care of itself. Organizations
should focus on managing the work environment to make better use of the
available human assets. People want to work for an organization which provides
Appreciation for the work done
Ample opportunities to grow
A friendly and cooperative environment
A feeling that the organization is second home to the employee
Organization environment includes
Culture
Values
Company reputation
Quality of people in the organization
Employee development and career growth
Risk taking
Leading technologies
Trust

Types of environment the employee needs in an organization

Learning environment: It includes continuous learning and improvement
of the individual, certifications and provision for higher studies, etc.
Support environment: Organization can provide support in the form of
work-life balance. Work life balance includes:
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 Flexible hours
Telecommuting
Dependent care
Alternate work schedules
Vacations
Wellness
Work environment: It includes efficient managers, supportive co-workers,
challenging work, involvement in decision-making, clarity of work and
responsibilities, and recognition. Lack or absence of such environment
pushes employees to look for new opportunities. The environment should be
such that the employee feels connected to the organization in every respect.
Growth and Career Growth and development are the integral part of every
individuals career. If an employee can not foresee his path of career
development in his current organization, there are chances that hell leave
the organization as soon as he gets an opportunity. The important factors in
employee growth that an employee looks
for himself are:
Work profile: The work profile on which the employee is working
should be in sync with his capabilities. The profile should not be too low or too
high.
Personal growth and dreams: Employees responsibilities in the
organization should help him achieve his personal goals also. Organizations
can not keep aside the individual goals of employees and foster
organizations goals. Employees priority is to work for themselves and later
on comes the organization. If hes not satisfied with his growth, hell not be
able to contribute in organization growth.
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 Training and development: Employees should be trained and given chance
to improve and enhance their skills. Many employers fear that if the
employees are well rained, theyll leave the organization for better jobs.
Organization should not limit the resources on which organizations success
depends. These trainings can be given toimprove many skills like:
Communications skills
Technical skills
In-house processes and procedures improvement related skills or customer
satisfaction related skills
Special project related skills
Need for such trainings can be recognized from individual performance reviews,
individual meetings, employee satisfaction surveys and by being in constant touch
with the employees.
Importance of Relationship in Employee Retention Program
Sometimes the relationship with the management and the peers becomes the
reason for an employee to leave the organization. The management is sometimes
not able to provide an employee a supportive work culture and environment in
terms of personal or professional relationships. There are times when an employee
starts feeling bitterness towards the management or peers.
This bitterness could be due to many reasons. This decreases employees interest
and he becomes demotivated. It leads to less satisfaction and eventually attrition. A
supportive work culture helps grow employee professionally and boosts employee
satisfaction. To enhance good professional relationships at work, the management
should keep the following points in mind.
Respect for the individual: Respect for the individual is the must in the
organization.

45
 Relationship with the immediate manager: A manger plays the role of a
mentor and a coach. He designs and plans work for each employee. It is his
duty to involve the employee in the processes of the organization. So an
organization should hire managers who can make and maintain good
relations with their subordinates.
Relationship with colleagues: Promote team work, not only among teams
but in different departments as well. This will induce competition as well as
improve the Relationship among colleagues.
Recruit whole heartedly: An employee should be recruited if there is a
proper place and duties for him to perform. Otherwise hell feel useless and
will be dissatisfied.
Employees should know what the organization expects from them and what their
expectation from the organization is. Deliver what is promised. Promote an
employee based culture: The employee should know that the organization is there
to support him at the time of need. Show them that the organization cares and hell
show the same for the organization. An employee based culture may include
decision making authority, availability of resources, open door policy, etc.
Individual development: Taking proper care of employees includes
acknowledgement to the employees dreams and personal goals. Create
opportunities for their career growth by providing mentorship programs,
certifications, educational courses, etc.
Induce loyalty: Organizations should be loyal as well as they should
promote loyalty in the employees too. Try to make the current employees
stay instead of recruiting new ones.
Support Lack of support from management can sometimes serve as a reason for
employee retention. Supervisor should support his subordinates in a way so that
each one of them is a success. Management should try to focus on its employees
46
and support them not only in their difficult times at work but also through the times
of personal crisis. Management can support employees by providing them
recognition and appreciation. Employers can also provide valuable feedback to
employees and make them feel valued to the organization.

The feedback from supervisor helps the employee to feel more responsible,
confident and empowered. Top management can also support its employees in their
personal crisis by providing personal loans during emergencies, childcare services,
employee assistance Programs, conseling services, etc
Employers can also support their employees by creating an environment of trust
and inculcating the organizational values into employees. Thus employers can
support their employees in a number of ways as follows:
By providing feedback
By giving recognition and rewards
By counseling them
By providing emotional support

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FINDINGS

It is found out that, 40% of respondents are aware of HR Policies and 60 % of

respondents are not aware of HR Policies.
It is found out that, 76% of respondents are getting right amount of accurate
information at right time and 24% of respondents are not getting right amount of
accurate information at right time.
It is found out that, 82% of respondents are able to meet superiors expectation
and 18% respondents are not able to meet superiors expectation.
It is found out that,57% of respondents feels that there pay is on par with
compare to employees handling similar responsibilities, and 39% of respondents
feels that there pay is less with compare to employees handling similar
responsibilities.
It is found out that, 70% of respondents are satisfied with hygiene and
cleanliness of company infrastructure and 30% of respondents are not satisfied
with hygiene and cleanliness of company infrastructure.
It is found out that, 40% of respondents are satisfied with Availability of system,
storage facilities of company and 60% of respondents are not satisfied with
Availability of system, storage facilities of company.
It is found out that, 78% of respondents skills are recognized by superiors and
22% of respondents skills are not recognized by superiors.
It is found out that, 74% of respondents feel that superiors are taking efforts to
motivate them and 26% of respondents feel that superiors are not taking efforts to
motivate them.
It is found out that, 83% of respondents feel that workload is manageable and
10% of respondents feel that workload is very hard to manage.

48
 It is found out that,55% of respondents feels that the field worker are able to get
updates on internal activities, and 45% of respondents feels that the field worker
are not able to get updates on internal activities.
It is found out that, 89% of respondents feel that the superiors are easily
accessible and 11% of respondents feel that the superiors are not easily accessible.
It is found out that, 51% of respondents feel that their complaints are resolved
quickly and 49% of respondents feel that their complaints are not resolved quickly.
From weighted Average analysis it is found that most of the respondents are
satisfied with the working hours of the organization
From weighted Average analysis it is found that roles & responsibilities are
clearly defined by the Reporting heads.
From weighted Average analysis it is found that employees feel that their
superior's commitment towards job is good.
From weighted Average analysis it is found that respondents feel that training
and orientation programs are neither good nor bad.
From weighted Average analysis it is found that most of the respondents are
satisfied with job.
From chi-square it is found that there is a significant relationship between Work
Culture of the Company and interpersonal relationship between employees.
From chi-square it is found that there is a no significant relationship between
overall satisfaction and Commitment towards Company.
From chi-square it is found that there is a significant relationship between
overall satisfaction and aspects of job.
From Kendalls coefficient of concordance it is found that there is a significant
difference in the rank assigned by respondents towards the attributes that gives
them satisfaction in the company.

49
 From One Run Test it is found that the samples are taken randomly.

50
SUGGESTIONS

Employee should be provided with proper training.

Employee should be appreciated for good work.
Employee should be motivated to welcome the change.
If any changes are brought in to software or any module is added then proper
training should be given.

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CONCLUSION

Retention is an important concept that has been receiving considerable attention

from academicians, researchers and practicing HR managers. In its essence,
Retention comprises important elements such as the need or content, search and
choice of strategies, goal-directed behaviour, social comparison of rewards
reinforcement, and performance-satisfaction. The increasing attention paid towards
Retention is justified because of several reasons. Motivated employees come out
with new ways of doing jobs. They are quality oriented. They are more productive.

Any technology needs motivated employees to adopt it successfully. Several

approaches to Retention are available. Early theories are too simplistic in their
approach towards Retention. For example, advocates of scientific Management
believe that money is the motivating factor. The Human Relations Movement
posits that social contacts will motivate workers. Mere knowledge about the
theories of Retention will not help manage their subordinates. They need to have
certain techniques that help them change the behavior of employees.One such
technique is reward. Reward, particularly money, is a motivator according to need-
based and process theories of Retention. For the behavioral scientists, however,
money is not important as a motivator. Whatever may be the arguments, it can be
stated that money can influence some people in certain circumstance. Being an
outgrowth of Herzbergs, two factor theory of Retention, job enrichment is
considered to be a powerful motivator. An enriched job has added responsibilities.
The makes the job interesting and rewarding. Job enlargement refers to adding a
few more task elements horizontally. Task variety helps motivate job holders. Job
rotation involves shifting an incumbent from one job to another.

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RECOMMENDATIONS

1. Develop an attractive employee value proposition.

An employee value proposition means that your company has something attractive
to offer that is perceived as valuable to an employee. as an employer, you must
understand what makes your organization attractive to potential recruits and
current employees. Branding yourself as an employer of choice is not just a slick
set of marketing tactics. The best advocates for an employers brand are its current
employees. What messages do they send to others about their employer? Are they
honestly saying and believing that, This is a great place to work.

2. Create a total reward structure that includes more than compensation.

Every company should have all the normal compensation mechanisms common to
their type of employment. yet, total rewards packages go far beyond money. While
money might temporarily retain employees, it does not always equate with
engagement. People want a chance to make a difference and realize themselves.
That self-realization is multi-dimensional and different for each employee. The
total reward structure should include, in addition to compensation, support for
employees to attain their personal objectives aligned with the goals of their
organization.

3. Give feedback on employee performance on a regular basis.

Most managers and employees are not enamored with the performance appraisal
process in their organization. yet, an effective performance management process
serves many purposes. Ongoing performance feedback allows employees to better
know where they stand, gives them a formal means to provide input, indicates that

53
their managers pay attention to them and that their performance matters. This
feedback contributes to employee engagement and retention.

4. Be flexible in terms of work-life balance. Workers more and more value a

balance between work and life. They want more flexible ways to engage with their
employer. To attract and retain workers with different work and career
expectations, organizations have to be more flexible in structuring work and
its expectations. It calls for a different managerial mindset and practices that
involve letting go of old ways of controlling workers time and attendance in favor
of result criteria such as output, productivity and quality.

5. Create a culture of engagement. Employees have become more connected with

others in the organization (and the broader supply-and-customer chain) through
project-based team work and process management activities. Employees are
shifting their loyalty to people, teams and projects and away from company
loyalty. It is organizations that create the culture and climate that allow people,
processes and projects to become fully connected and engaged with one another.
Engaged employees are more likely to stay with their employer.

6. Train managers to be effective. Exit interviews consistently show that poor and
bad management practices greatly contribute to an employees decision to leave a
company. It is imperative to provide supervisors and managers with adequate tools
to become effective managers since we cannot assume that these competencies are
innate. Professor Patrick Connor, recently retired after teaching 25 years at the
atkinson Graduate school of Management, is
famous among MBA students and alumni for his Connorisms.He told them,
your employees do not work for you, they work for themselves. When I teach
54
my students about managing organizations, I have them reflect on what really
matters to employees and what they are constantly asking of their managers and
their organizations. In the end, what employees expect of their managers is fairly
simple: Can I trust you? are you committed to excellence? Do you care about me?
What people constantly ask of their organization is: Do you tell the truth? Do you
keep promises? Do you act fairly? Do you respect me? Managers and organizations
that keep these questions in mind will have a competitive advantage over others in
retaining their employees.

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 BIBLIOGRAPHY

BOOKS
Human Resource Management C.B.Memoria
Journals, Newspaper and Internet

www.wikipedia.com
www.google.com
www.slideshare.com

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