The Importance of Employee Retention for Organizational Performance

Discuss about the Commitment Is Critical To Organizational Performance.

For an organization to gain employee commitment, it must provide good incentives, rewards and training. “Commitment is critical to organizational performance, but it is not in a panacea. In achieving organizational ends, there are other ingredients that need to be added to the mix and when blended in the right complements, motivation is the result,” according to O’Malley (2000). Most of the time, individuals are left for some of the reasons unconnected with their work and it is necessary for companies to research on the source of turnover for efficient employee retention (Mitchell et al. 2001). There are many approaches to the study of employee retention each addressing different facets of intentional employee retention activity. The theories that support this piece of study include;

According to the theory by Abraham Maslow at 1943, individuals tend to satisfy their preliminary fundamental requirements before targeting to fulfill higher level of growth needs (Stephens, 2000). According to his theory, it is the nature of the human beings to achieve self-actualization and view the potential of the human as extremely underrated and incomprehensible.

The hierarchy of needs stated that individuals have five interdependent range of fundamental human requirements or needs that should be satisfied in an order starting from the lowest platform. These are physiological needs, safety or security needs, social needs, self-esteem needs and self-actualization needs.

Physiological need -It is the preliminary or the first stage of the Maslow’s model. It is the basic requirement for staying alive and to reproduce. This stage consists of some of the basic necessities like water, food, air, shelter and adequate clothing.

Safety/security need- The second stage of the hierarchical model includes protection and safety from risk and danger. It furthermore includes emotional, physical and environmental protection. Employment security and protection from risks and danger are some of the basic factors of this stage of the model.

Social needs: This stage includes the need for affection, love and belongingness.

The self-esteem needs: This stage includes the requirement for acknowledgment, respect and appreciation from others.

Self-actualization needs- This stage is categorized as a growth necessity. It is known as one’s optimum human potential. According to Stephens, this stage represents or highlights the challenges of effective leadership traits since it is a major issue for any organization to provide these phases in an environment.

According to Maslow, the higher stages of needs such as the social needs or the self-esteem needs should only be addressed and tend to be fulfilled after meeting the minor necessities. The progress of satisfaction for this empirical evidence is minimum. Throughout the experiences of employment, the workers thus wonder around the pyramid of Maslow’s hierarchy of needs. According to this theory, the manager of the organizations should develop agendas or terms for satisfying the emergent and unfulfilled necessities for motivating the employees of the organization since many of their requirements remains unfulfilled most of the time and they are felt throughout. It is the responsibility of the managers of the organization to organize a workplace environment where each and every employee in the organization gets the opportunity to show their potentials and talents, when the concept of the necessity hierarchy is considered. In case of failure to provide such an environment in an organization, it would hypothetically result in reduction of gratification among employees, below average performance of the employees and higher rate of withdrawal of employees from organization (Steers & Porter, 1983).

Key Factors Influencing Employee Retention: Training and Development, Performance Appraisal, Welfare Benefits, Corrective Procedures, and Career Development

Herzberg, a psychologist brought forth this theory at 1959. The theory is most often also referred to as the ‘Herzberg’s motivation-hygiene theory’ and ‘The Dual-Factor Theory’. Brings the concept of there being specific factors within a work place that bring about job satisfaction and on the other hand specific factors that bring about job dissatisfaction. The fundamental to this theory which is attitudes and its correlation with industrial psychological health is almost same to ‘Maslow’s Theory of Motivation’. Herzberg derived aspects of hygiene that is related to the environments where actions or work is undertaken relative to the internal and external environment. Some of the dimensions of employment responsibilities and autonomy includes benefits, salary, supervisor, policies of the company, working conditions and factors of motivations.

One of the major example of satisfiers is the motivators. This is because these encourage the development and growth of the employees that result in fulfillment. On the other hand, hygiene is one of the examples of dissatisfies which tends to prevent job dissatisfaction but do hardly contributes to the fulfillment of job. His discoveries resulted in a significant hypothetical also practical influence on attitudes concerning administration.

From Herzberg, (1959), the concept that employees earning low income are often not satisfied or pleasing. Individuals rather search for accomplishment, acknowledgement, accountability, progression, and the working type or the category. Consequently, this correspond to the Maslow’s hierarchical theory on the necessity. In the same, Herzberg made an additional angle by suggesting that the two-factor model of motivation that is developed on the existence of a single type of feature of the work generally results to the satisfaction of the worker, on the other hand, another separate type of work features lead to frustration in work. Thus, it can be said that the concept of satisfaction and the concept of dissatisfaction are not the constant increasing or diminishing but are independent singularities.

According to the theory both types of characteristics must be attended to since decrease in dissatisfaction does not mean considerable increase in satisfaction. With that taken care of there will be improvement of attitude and productivity.

Conclusion.

To conclude employee retention in organizations is governed by training and development, performance evaluation, welfare benefits, disciplinary processes and of potential for career development. One of the main contributor to the retention of the employees are the institutional support for development and staff training. The employees appreciate the significance of the training in career development. For training and development and to impose a positive impact on retention of the employees, the programs must be fair, and promotions should be based on the training acquired.

Improving Employee Retention through Training and Development

It is also noted that performance appraisal enhances retention of employment to employees in an organization. Performance evaluation factors such as the precision of performance targets, fairness in the rankings of performance and the use of performance results for career development greatly affect employee retention. The main setback to enhanced employee retention through performance appraisal at the organization level is lack of comprehensive when performance targets are set.

Welfare benefits provided by organizations greatly influence employee retention. Employees can be enthusiastic to hold their work post if they receive benefits such as medical scheme, leave administration policy, education policy and the care provided on their general welfare.

The potential for career growth in organizations serves as a major factor in employee retention. Employees perceive the support for staff career growth and development provided by the organization as a motivator for employees’ retention. The employees also attribute their retention to career growth features such as organizational support career development, merit-based employee promotions, descriptive career track of the employee, Training and coaching agendas for the staffs and practices of succession planning

This piece of study thus recommends that organizations can improve retention of the employees by inspiring integrity in the provision of training & development prospects to their employees.

It is recommended that the duration taken to evaluate employee performance should be long enough to allow comprehensive assessment and the process of evaluation should involve wide consultations especially in setting performance targets. This ensures employees feel that they are incorporated in the organization and they tend to retain their work for longer periods.

The study recommends that organizations can improve employee’s retention by providing welfare benefits that meet the need of employee in their places of work. For employees to understand the importance of welfare benefits, organizations should provide the employees with sufficient information that will enable them to appreciate the benefits and enhance their loyalty to the organization.

The study recommends that organizations should make disciplinary rules and regulations clear to their employees. Make sure those employees understand disciplinary procedures enable them to appreciate any disciplinary decision related to them. This contributes to understanding between employers and employees in the event of disciplinary action thus improving employee retention.

The study proposes additional research on the efficiency of strategies used by other organizations of higher rank to retain employees to benefit the organizations and employees.

Retention of employees is fundamental for companies should concentrate on recognizing and prompting factors that move purposefully refining and executing essential policies in areas resourcefully to hold their employees. The main objective of this piece of study was to note the effective techniques of retaining employees in organizations and influence of five factors namely training and development, performance appraisal, welfare benefits, corrective procedure, and career development on employee retention.

Employees are enthusiastic to hold their work while they get access to benefits such as medical cover, a good leave administration policy, education policy and the care the organizations offer on employees’ general welfare. The retention of employees in organizations can be realized by humane handling from the supervisors and accessibility of opportunity for appeals on disciplinary verdicts. The employees attribute employee retention to the aspects of career development such as staff career growth by institutional backing, merit-based employee raises, defined career track of employee, mentorship and coaching for the staff members, practices of programs and planning of succession.

References

Armstrong M.A. (2009). Handbook of Human Resource Management Practice. London: Kogan Page Limited.

Beck, S. (2001). ‘Why Associates leave, and strategies to keep them.’ American Lawyer Media LP, V5,i2, pp. 23-27.

Bell, E. and Bryman, A., ‘The ethics of management research: an exploratory content analysis’, British Journal of Management, 18, 2007, pp. 63-77.

Boxall, P., & Steenveld, M. (1999). Human Resource Strategy and competitive advantage: A longitudinal study of engineering consultancies. Journal of Management Studies, 36(4), 443-63.

Branham, L. (2005). 7 Hidden Reasons Employees Leave: How to recognize the subtle signs and act before it’s too late. New York: AMACOM.

Chaminade, B. (2007). A retention checklist: How do you rate? (As cited in  www.humanresourcesmagazine.co.au)

Chew, J., & Entrekin, L. (2004). Retention management of critical (core) employees: A challenging issue confronting organizations in the 21st Century. International Business and Economic Research Journal, pp. 46-50.

Chew, J.C.L. (2004). The influence of Human Resource Management Practices on the Retention of Core employees of Australian Organizations: An empirical study. A published Masters Thesis, Murdoch University.

Clarke, K.F. (2001). ‘What businesses are doing to attract and retain employees –becoming an employer of choice.’ Employee Benefits Journal, March, pp. 34-37.

Coff, R.W. (1997). Human Assets and Management Dilemmas: Coping with Hazards on the Road to Resource-Based Theory. The Academy of Management Review, pp. 374-402.

David, C. & Robert W. C. (2007). Designing and Constructing Instruments for Social Research and Evaluation. USA: Jersey –Bass.

Deckop, J.R., Konrad, A.M., Perlmutter, F.D., & Freely, A.J. (2006). The effect of Human Resource Management Practices on the job retention of former welfare clients. Human Resource Management, 45(4), 539-559.