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Employee Rewards and Recognition
challenges in employee retention
Employee Rewards and Recognition
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Retention: Employee retention is a practice in which the employees are convinced to stay in the organization for the most period of time or until the accomplishment of the plan. There is no scarcity of opportunities for a capable person. There are countless organizations, which are looking for such employees. If individuals are not satisfied by the job they are doing, they might switch over to some other more appropriate job. In today’s upbringing it turns out to be very imperative for organizations to retain their employees (Dibble, 2000). Employee retention is supportive for the organization with that of the employee. Employees today are diverse. They are not the ones who don’t have first-rate opportunities in hand. As soon as they dissatisfy with the current organization or the job, they switch over to the next job. It is the duty of the organization to keep their paramount employees (Phillips and Connell, 2003). Employee retention concerns taking measures to convince employees to remain with the organization for the most period of time. Today employees’ retention has become the major issue for organizations. Hiring knowledgeable workers for the job is essential for an organization. However retention is even more crucial than hiring (Inkson, 2007). (Huselid, 1995) found that investments in HR activities such as incentive compensation, selective staffing techniques and employee participation resulted in lower turnover, greater output, and improved organizational performance through their impact on skills advancement and motivation. The prioritization of employees is important to competitive advantage and therefore business success has understood that specific notice has been given to the retention of highly skilled or except... ... middle of paper ... ...o Denisi and Arup Varma,2000 • Phillips and Connell, A. O. (2003), Managing Employee Retention: a strategic accountability approach. Amsterdam; Boston, MA; Alexandria, Va.: Butterworth-Heinemann. • Patricia K. Zingheim, Jay R. Schuster, and Marvin G. Dertien(2009) Compensation, Reward and Retention Practices in Fast-Growth Companies, Article published in WorldatWork Journal, Volume 18 No.2, pages 22-39 • PERFORMANCE MANAGEMENT BY ROBERT BACAL 1999 • Schuster, F. 1986. The Schuster Report. New York: John Wiley and Sons. • Schein, E.H. (1990). Organizational culture. American Psychologist, 45, 109-119. • Singh, K., 2005. The effect of human resource practices on firm performance in India, Human Resources Development International, 6 (1): 101-116. • Wimbush, J. C., 2005. Spotlight on human resources management, Business Horizons, 48: 463-467.
The second implication for the Boston Market was unable to retain skillful employee, lost of key employees, lost of skills and knowledge, turnover cost. The implication is the observation that comes out from Sash, AJ and April. These three people are very talented in their jobs. They are fast learner, very energetic in their work, and have a positive thinking. Boston Market needs to retain their talented employee in order to keep the important source of competitive advantage from others competitor. Therefore, employers must take good care of their employee in order to retain the employee and give them trust and loyalty because it is the foundation of relationships in the organization to achieve the organization’s goal (Aguenza & Som, 2012).
After reviewing Holland’s organizational strategy and exit interviews from the last seven years it is certain that through the new and effective compensation and benefits program created for Holland Enterprises, it will decrease the turnover rate, increase employee satisfaction and engagement and benefit the organization’s overall profits. Through careful consideration of pay structures, incentive awards, internal and external equities and the organizations benefits package Holland Enterprises new compensation benefits package will provide an effective and competitive compensation program. Henderson (2010) writes, “To survive and be successful in a global economy, an organization must be competitive. A major factor underlying organizational competitiveness is labor costs. Not only must an organization pay its workforce a competitive wage within its geographic region, but it also must vary the kinds and amounts of rewards offered, recognizing differences in individual contributions.” (p. 13)
All organizations want to see an increase in productivity and a positive impact on the bottom line. Successful organizations realize employee retention and talent management is integral to sustaining their leadership and growth in the market place. The focus of this group project is on worker retention strategies. Worker retention strategies are programs designed to preserve existing quality workers by providing benefits and incentives. These benefits and incentives are provided to employees in various ways. Our group chose to explore six organizations in three different industries. These industries include Retail, Package shipping, and Airlines. Through research and investigation of three major industries we were able to develop a comparison of how these major organizations retain quality workers. First, we explore and learn how to keep people motivate to stop turnover within an organization. Secondly, we investigate employer’s benefits and incentive programs to keep quality employees. Finally, we examine workforce motivation and the engagement to commitment as organizations continually change initiatives and strategic planning.
In the past, Irontown Inc. has gone through the process of developing a short-term staffing plan and redeveloping their candidate assessment and selection procedures to better fill their customer service representative (CSR) positions. Now, they are wanting to develop a retention plan that will support their overall staffing strategy for their company. The new retention plan is vital because they have decided to retain their customer service department (CSD) internal, hopefully reducing their turnover rate by 20% per year over the next three years. If Irontown’s new retention program meets their objectives by the end of the first year, they are going to invest in a new CRM software program. Irontown’s HR department has requested the last 120 employees who left voluntarily to participate in an exit interview. They will collect data from these interviews, form focus groups, determine what the issues are, and then use this information to develop a retention plan that supports the overall staffing strategy of the company. While evaluating this case study, this author will take a look at the key and underlying issues, the facts that affect these issues, recommend a solution and a plan implementation, and conduct follow-ups.
Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (2007). Managing Human Resources (5th
A continued globalization of markets, hostile takeovers and rapidly advancing technology has made it very difficult for the organization to achieve competitive advantage. Employees are one of the most important determinants and leading factors that determine the success of an organization in this competitive environment. Every organization must address its employee needs in order to maintain a productive work force. In today’s fast paced society turnover rate of the employees is quite high and employees keep switching among different jobs. One of the reason behind this that employee may not feel any sense of association with the organization and that they may not feel a sense of shared goals with the organization (Ackoff, 1999). Managers are interested in maximizing their workers’ level of commitment, as the costs of hiring and training new employees are high. Generally, it is expected that employees are more likely to stay with their organization and be highly committed when they can see a strong linkage between the organization and their work. One crucial reason of high turnover of the employees may be that the employee may not feel committed to the organization. When employees are dissatisfied at work, they are less committed and will look for other opportunities to quit. If opportunities are unavailable, they may emotionally or mentally withdraw from the organization. Thus, organizational commitment is an important attitude in assessing employees’ intention to quit and the overall contribution of the employee to the organization (Naser Shirbagi, 2007).
Corporations are looking for new ways to improve employee performance as well as remain competitive. Pay for performance is one method some businesses are utilizing to improve employee performance. Performance-based compensation exists when compensation is tied directly to that portion of an individual’s performance that can be effectively measured. There are a number of ways in which this may be accomplished and a number of examples as well how it is applied. One of the oldest examples is taken from the ancient Egyptians, where slaves working in the pyramids were given bread for superior performance. Payment of commission for sales production is one of the methods used today.
Employees desire compensation systems that they perceive as being fair and commensurate with their skills and expecta¬tions. Pay, therefore, is a major consideration in HRM because it provides employees with a tangible reward for their services. A significant interaction occurs between compensation management and the other functions of the HR program. For instance, in the recruitment of new em¬ployees, the rate of pay for jobs can increase or limit the supply of applicants. Compensation objectives should facilitate the effective utilization and manage¬ment of an organization’s human resources, while also contributing to the overall objectives of the organization (www.indiana.edu/~busx420/Book.../chap09.doc). Providing a first-rate benefits package for employees can be an important part of the recruitment and retention puzzle (studymode.com).
Employee compensation and reward systems have undergone a couple of paradigm shifts since inception. Reward systems were traditionally compensation based and focused on the individual or the position (Beam 1995). After a recession in the early 1980's, employers turned to performance based models in an attempt to save money while still rewarding top performers (Applebaum & Shapiro, 1992). Today, the most successful organizations are using a total reward model, a hybrid of the performance based model combined with strategic human resource management planning to create reward systems that both benefit the employee and help organizations realize their operational goals (Chen & Hsieh, 2006).
Almost thirty years ago more and more companies started looking at pay for performance to increase their bottom line and gain productivity. Slowly these general pay increases gave way to merit pay and other forms of monetary incentives. These types of monetary rewards can be grouped into two categories: individual and group incentive plans (Appelbaum and Shapiro, 1992). The literature suggests that merit raises are used the most as an individual incentive and profit sharing is widely used by organizations as a group incentive. Other individual and group incentives that are also commonly used are commissioned pay, bonuses, and stock options. The goal of most companies is to use these financial incentives to motivate workers and thereby boost productivity (Hassink and Koning, 2009). Monetary rewards definitely matter to most people. This is evident when a company reduces or even eliminates the financial incentives that they had in place because of the state of the economy. The consequences of this action are often very unpleasant, resulting in decreased employee motivation, increased turnover, and lessened productivity (Martin, 2010). However; the use of monetary rewards has both its advantages and disadvantages.
The purpose of this report is to brief the management on the importance of employee satisfaction in achieving the competitive goals of the organization through increasing the retention of the employees.
Bersin, J. (2013, August 16). Employee Retention Now a Big Issue: Why the Tide has Turned | LinkedIn. Retrieved March 20, 2014, from
673), retention management must be based on three types of turnover, voluntary, discharged, and downsizing. Not all businesses are freighted by turnovers, for some it is the way of life and cost is built into the budget. However, for others any type of high turnover can be detrimental for company profit, employee wage and benefits offered. First, let’s take a look at voluntary and involuntary turnover that affects retention. Voluntary turnovers are caused by many different reasons. Turnover may result from topics such as job dissatisfaction, job mismatching, knowing that job opportunities are plentiful. Two reasons that I will discuss more are micromanagement and employee loyalty. Like stated before in the introduction, when employees are dissatisfied, possibly due to being placed in an area that doesn’t fit with their skill set, one is more likely to seek new employment. Another part of turnover is discharging and downsizing. Discharge is just that, members being discharged due to discipline and job performance. While downsizing turnover is a result of business being overstaffed (Heneman III, Judge, Kammeyer-Mueller, 2015, pg. 675). There are also other reasons for voluntarily employee turnover, such as generation differences when it relates to employment. The current generations are more likely to see a job as one piece in their life puzzle rather than as the first, indispensable anchor piece without
Attracting and retaining the most talented employees is essential for long-term organizational success. An important component to attracting and retaining such employees is the design and implementation of an effective compensation and benefit system. Assuming the role of a highly regarded human resource consultant hired to review, analyze, and revise the compensation and benefit system utilized by my city’s largest employer, Holland Enterprises, this paper presents a revised compensation and benefit strategy that suits the firm. This proposal describes how an effective compensation and benefit system could contribute to organizational effectiveness in the firm, the principle components of the revised compensation and benefit system for the
Noe, Raymond A., John R. Hollenbeck, Barry Gerhart, and Patrick M. Wright. Human Resource Management: Gaining a Competitive Advantage. 7th ed. Boston: McGraw-Hill Irwin, 2010. Print.