Amity School of Business

Amity School of Business

BBA, 5th Semester HUMAN RESOURCE MANAGEMENT

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MODULE 5: RETENTION AND SEPARATION

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CHAPTER CONTENT
Concept of Separation. Procedure of Separations : Discharge, Retrenchment, Retirement, VRS, Layoff. Promotion & Transfers. Exit Interview Attrition and Retention: Concept, Significance, Determinants and strategies.

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Attrition/ TURNOVER
Employee turnover is the movement of employees across the boundary of an organization. Defining Attrition rate: "the rate of shrinkage in size or number". Turnover = (Number of staff leaving per year X 100) / Average number of staff.

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CLASSIFICATION OF TURNOVER
Functional Vs. Dysfunctional turnover. Avoidable Vs. Unavoidable turnover. Voluntary Vs. Non- voluntary turnover.

Causes of Voluntary Turnover

Desirability of Leaving
Low job satisfaction Shocks to employee Personal reasons

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+ +
Intention to Quit +

Ease of Leaving
Favorable labor market conditions Low cost of living

Quit

Alternatives
Internal: New job possibilities External: Job offers

+
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CONSEQUENCES OF EMPLOYEE TURNOVER

NEGATIVE CONSEQUENCES Recruitment & Selection costs. Training & Development costs. Organizational Disruption. Demoralization of organizational membership.
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CONSEQUENCES OF EMPLOYEE TURNOVER

POSITIVE CONSEQUENCES Increased performance. Reduction of entrenched conflict. Increased mobility & morale. Innovation & adaptation.
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REASONS FOR ATTRITION

Monetary factors. Lack of good working condition. No flexible work schedule. Lack of support & respect. Increase in favoritism. Lack of appreciation. Lack of challenge Mismatch between job and person. Lack of feedback. Stress from work & work-life imbalance.
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Organizational Practices That Reduce Turnover

1) Frequently measure job satisfaction through surveys such as the Job Descriptive Index.
 One problem with job satisfaction surveys is that the least satisfied employees are not likely to respond to the survey.  Because they have already started to withdraw from the organization, so they see little personal benefit in completing the survey.

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2) Another method for retaining employees is through socialization, this is the process of acquiring the knowledge and behaviors needed to be a member of an organization.

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 Effective socialization occurs when employees are given critical information that helps them understand the organization. Such as the new employee orientation session.  As employees acquire information during the socialization process, their feelings of fit with the organization increase & thereby they are more likely to stay with an organization.

3) Perceived organizational support is another factor that influences employee turnover.

 This is the beliefs, by the employees, that the organization values their contribution and cares about their well-being.  Employees who perceive greater support are more committed to sticking with the organization and feel a stronger desire to help the organization succeed.

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Employee Retention
 Employee Retention involves taking measures to encourage employees to remain in the organization for the maximum period of time.  Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring.  Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project.  Employee retention is beneficial for the organization as well as the employee
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EMPLOYEE RETENTION
Employee retention involves 5 major things:
 Compensation  Environment  Growth  Relationship  Support
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IMPORTANCE OF EMPLOYEE RETENTION

          

The cost of turnover. Loss of company knowledge. Loss of company knowledge. Interruption of customer services. Interruption of customer services. Turnover leads to more turnovers. Turnover leads to more turnovers. Goodwill of Company. Goodwill of Company. Regaining efficiency. Regaining efficiency.
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Retention tools
           

Employee reward program Career Development Program Performance based Bonus Employee Referral Plan Loyalty Bonus Giving a voice to the Knowledge Banks Employee Recreation Gifts at some Occasions Making the managers effective and easily accessible Increasing the organizations level of professionalism Ensuring a match between authority and accountability Designing a competitive compensation package
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Diversity Training

Flexible work arrangements

Employee Referral program

Employee Reward programs Career Development program

Appraisal Objective & Succession planning Loyalty bonus

Retention Strategy

Performance Based bonus

Accountability Employee Recreation

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Various Retention strategies followed by MNCs

 Procter and Gamble India -Early responsibilities in career Flexible and transparent organizational culture Global opportunities through a variety of exposure and diverse experiences Performance Recognition  American Express (India)- Strong global brand Value-based environment Pioneer in many people practices NTPC Learning and growth opportunities Competitive rewards Opportunity to grow, learn and implement Strong social security and employee welfare performance- oriented culture
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 Johnson & Johnson -Strong values of trust, caring fairness, and respect within the organization Freedom to operate at work Early responsibility in career Training and learning opportunities Visible, transparent and accessible leaders Competitive rewards Innovative Human Resource programs and practices  Glaxo Smith Kline Consumer Healthcare -Performancedriven Rewards Its belief in Growing our own timber Comprehensive development and learning programs Flat organization, where performance could lead to very quick progression Challenging work context Competitive rewards Exhaustive induction and orientation program

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