Employee Retention Strategies in Biscuit Manufacturing Company

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    INTERDISCIPLINARYJOURNAL OF CONTEMPORARYRESEARCH IN BUSINESS

    AUGUST 2011VOL 3,NO 4

    An Empirical Study on Employee Retention Strategies in a Biscuit

    Manufacturing Company in India

    S. R. Kavitha

    Assistant Professor, Depatment of Management StudiesSaranathan College of Engineering,

    Tiruchirappalli, Tamilnadu, South India

    S. R. Geetha

    Depatment of Management Studies

    Final year Student, Bharathidasan University,Tiruchirappalli, Tamilnadu, South India,

    V.Arunachalam

    Manager, Indian Overseas Bank, Madurapuri, Tamilnadu, South India,

    Abstract

    This paper aims at developing insight on how employee retention is relevant in present

    business context. Retention is more important than hiring. There is no dearth ofopportunities for talented person. There are many organizations which are looking for

    such employees. This study reveals that, treating employees with respect and dignity is

    critical to retaining good workers, especially in a better job market. A managementsfailure to demonstrate respect to employees is the main reason for them to leave their

    jobs, and hence recognition of employees achievements, encouraging innovation,handling their complaints fairly rewarding them for jobs well done is some of the ways

    for employers to show workers respect and retain them. The researcher carried out the

    study with the objectives of finding out various factors influencing the employee

    towards retention in a biscuit manufacturing company in India. Primary data wascollected by the researcher with the help of structured questionnaire. Random samplingmethod(lottery method) was absorbed by the researcher and the sample size was 102

    middle level employees of that company has been taken for the study. To test the

    reliability of the data collected, the researcher used cronbachs Alpha test and the valueis 0.930 which shows that the data has satisfactory reliability and validity. Using

    Statistical Package for Social Science (SPSS) some of the relevant tests were carried outlike factor analysis and multiple regression. Based on these analysis some of the

    relevant findings were derived, that will be useful, relevant and significant to the present

    Indian scenario.Keywords: Employee retention, strategies, career development

    IntroductionWith the labour market at its tightest in recent memory, the talk of the town seems to be

    attracting top talent to a company. But what a company does to retain that talent, and

    the talent it already employs, is arguably more important than attraction. In recent times,employees retention has become one of the leading challenges for organization. Given

    today's weak company loyalty, employees are increasingly "jumping ship" for better jobopportunities elsewhere. The issue isn't simply losing a key member of your team; there

    is also the hassle-and cost-of replacement. It is obvious that employees retention is oneof the most pressing issues that Human Resource Professionals face today.

    Organizations have come to realize the critical strategic implications of losing their bestpeople. Employees turnover is assuming crisis proportions for many employers who

    struggle to retain people in the tightest labour markets in recent memory. "Employeeretention is the conscious and deliberate effort to retain quality individuals on the

    ll St t d th i it i th ti th d tili d b f l

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    INTERDISCIPLINARYJOURNAL OF CONTEMPORARYRESEARCH IN BUSINESS

    AUGUST 2011VOL 3,NO 4

    organizations to stop the drain of company profits caused by excessive employee

    turnover".Among the many reasons organization care about retention, retention are the

    direct and indirect costs linked to the loss of talented employees. In a number of studies

    human resources managers have estimated the cost of turnover to vary between 50%and 500% of the departing employees annual salary, depending on job level, industry

    and geography potentially one of the largest costs of turnover, and perhaps the mostover looked, is the lost future potential of the brightest and best who often are the ones

    to leave. Another, more insidious costs of turnover involves the sharing of a companys

    method, technology and clients with competitors who may have hired the employeesaway. As a companys success becomes increasingly dependent on the knowledge

    skills, abilities, and relationships of its employees. The financial impact of losingtalented employees will continue to rise.

    Literature Review

    The literature clearly indicated that there are six keys to retaining personnel. They are

    recruiting, communications, training, job satisfaction, pay, and benefits.The effort to retain the best personnel begins with recruiting. Attracting and retaining thebest People are not two different things, but is the same thing. Both require creating and

    maintaining a positive reputation, internally as well as externally. Employers must be

    honest with the recruit about the beliefs, expectations, organizational culture, demands,and opportunities within the organization. By representing the organization realistically,

    a department will attract those who will be content working within the culture (Marx,1995). Denton (1992, p.47) follows this up by stating that, the better the match

    between recruits and the organization the more likely you are to retain them. Lynn

    (1997) believes that you must take time during the hiring process to make wise decisions.The employer must be candid about the working conditions, responsibilities,

    opportunities and other details to reduce the chances of making hiring mistakes. Taylorand Cosenza (1997) strengthen this thought by noting that it is imperative that companies

    give prospective employees a true picture of the organization, if they hope to match the

    personality type with the climate and culture of the organization.Carney (1998) believes that the key to employee retention is quit e simple: communicate,

    communicate, and communicate. Communication with the employees must begin earlyon in the relationship. He believes that the imprinting period of a new employee is

    probably less than two weeks. Employers must engage the employee early on by sharing

    how important the job they do is. Lynn (1997) follows this up by stating that early on anatmosphere of fairness and openness must be created by clearly laying out company

    policies. Taylor and Consenza (1997) indicate that it is important to communicate the

    values of the organization to its employees in order to increase their level of consent,participation, and motivation. Lynn (1997) echoes this thought by pointing out that the

    vision of the organization must be shared with the employee as well as the importancethe employees play in helping fulfil it. Lack of communication may result gaps between

    managements perceptions of quality employment and the employees desired andperceived quality of employment (Taylor & Consenza, 1997). There must be a common

    purpose and trust among employees. People want to feel as if they are a vital piece ofsomething larger (Carney, 1998). As Denton (1992) points out, managers must make

    sure employees know what they should do and why it is important. Lynn (1997) notesthat communications must be a two way street to be effective. Employers must listen to

    what employees have to say. An atmosphere must be created in which employees feel

    comfortable making suggestions and trying our new ideas..As was noted earlier it is important that the employee feel like a valued member of the

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    INTERDISCIPLINARYJOURNAL OF CONTEMPORARYRESEARCH IN BUSINESS

    AUGUST 2011VOL 3,NO 4

    show you respect them and want them to grow. The department is making an investment

    in the employee by offering training (Marx, 1995). Good training can de- emphasizessalaries and benefits, in part by building a positive work environment and by giving

    employees advancement opportunities (Lynn, 1997). Lynn goes on to say that training

    helps strengthen employee loyalty. Training can help revitalize personnel. For anincreasing number of people, the chance to learn new skills is a significant personal goal

    for both the career opportunities education can provide and for the chance to dosomething a little different (Mendonsa, 1998).Training emphasizes to the employee that

    they are valued and respected. This in turn to increased loyalty and retention.

    While an organization must be competitive in terms of compensation and benefits, it isthe relationship with the supervisor that is often a crucial factor in determining whether a

    person stays orgoes (Mendonsa, 1998). Employees want more interaction withmanagement, more self-satisfaction on the job, more responsibility and more control

    over decisions affecting them. They want their work to make a difference and want to be

    part of something that matters (Taylor, 1997).Departments should encourage innovation

    by soliciting the advice and input of their staff members, followed by responses to ideas,complaints or questions (Taylor, 1997). It is difficult to keep people on the job if theyhave no say in how to do it (Spragins, 1992).People need to be recognized for their

    accomplishments in the workplace. In most organizations the feeling of under-

    recognition is the most pervasive feeling in the workpl