HUMAN RESOURCE MANAGEMENT
Human resource management (HRM) is the strategic and coherent approach to the of management an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms “human resource management” and “human resources” (HR) have largely replaced the term “personnel management” as a description of the processes involved in managing people in organizations. Human Resource management is evolving rapidly. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce. The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can’t yet afford part- or full-time help. However, they should always ensure that employees have — and are aware of — personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.
Effective employee retention is a systematic effort by employers to create and foster an environment that encourages current employees to remain employed by having policies and practices in place that address their diverse needs. A strong retention strategy becomes a powerful recruitment tool. Retention of key employees is critical to the long-term health and success of any organization. It is a known fact that retaining your best
employees ensures customer satisfaction, increased product sales, satisfied colleagues and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. Employee retention matters as organizational issues such as training time and investment; lost knowledge; insecure employees and a costly candidate search are involved. Hence failing to retain a key employee is a costly proposition for an organization. Various estimates suggest that losing a middle manager in most organizations costs up to five times of his salary. Intelligent employers always realise the importance of retaining the best talent. Retaining talent has never been so important in the Indian scenario; however, things have changed in recent years. In prominent Indian metros at least, there is no dearth of opportunities for the best in the business, or even for the second or the third best. Retention of key employees and treating attrition troubles has never been so important to companies.
The Importance of Retaining Employee
The challenge of keeping employees: Its changing face has stumped managers and business owners alike. How do you manage this challenge? How do you build a workplace that employees want to remain with … and outsiders want to be hired into?
Successful managers and business owners ask themselves these and other questions because—simply put—employee retention matters: High turnover often leaves customers and employees in the lurch; departing employees take a great deal of knowledge with them. This lack of continuity makes it hard to meet your organization’s goals and serve customers well.
Replacing employees costs money. The cost of replacing an employee is estimated as up to twice the individual’s annual salary (or higher for some positions, such as middle management), and this doesn’t even include the cost of lost knowledge.
Recruiting employees consumes a great deal of time and effort, much of it futile. You’re not the only one out there vying for qualified employees, and
job searchers make decisions based on more than the sum of salary and benefits.
Bringing employees up to speed takes even more time. And when you’re short-staffed, you often need to put in extra time to get the work done.
A steadfast philosophy that sets Employee Retention Strategies apart:
• Uses only research-based, theory-supported approaches to improving employee engagement. Avoided are gimmicks such as employee of the month, suggestion boxes, prizes or other “carrots.” While commonly used, these short-term fixes fail to produce genuine employee loyalty (more than 60 years’ of research tells us so!). • Employs an easy-to-understand systems approach to ensure the root causes of turnover are addressed and the potential for lasting change unleashed. • Customizes all activities to your organization’s unique history, current practices and strategic objectives. Also considered are challenges unique to your industry sector, competitive marketplace issues and talent shortages. • Involves those responsible for implementing change in actually creating the change, ensuring input and improved shared understanding and support of all initiatives. • Integrates hands-on, action-oriented approaches that enable organizations to move forward quickly and effectively • Recognizes the research-proven role of no-cost strategies in developing the “glue” that builds employee loyalty and commitment. • Brings to your organization leading-edge organization-development best practices to effectively and quickly build a retention-rich culture.
KEi’s EMPLOYEE RETENTION WHEEL
The first step to improving your employee retention is to understand why employees stay with their current employer. Many “experts” dwell on the reasons employees leave, which is not as important or revealing as the reasons they stay. Companies have tried many different programs and perks to hold onto good employees. However, studies show that these efforts are not enough to retain good employees when the support that is needed to achieve job success is not adequate. Don’t Waste Your Money on Things That Don’t
Make a Difference… Among the countless inducements offered, only those identified in the center of KEi’s Employee Retention Wheel™ are truly what give employees a consistent reason for saying “no thank you” when tempted with a “sweeter offer.” After years of study and experience, KEi has determined, and presented in the Retention Wheel, what factors do have the greatest impact on keeping employees. KEi has used this information to give employers the tools to meet the core needs that keep employees successful at their jobs, thus reducing the high costs associated with unwanted employee turnover.
Reference: http://seminarprojects.com/Thread-a-project-report-on-employee-retention#ixzz2jOiDaUH3 INTRODUCTION
“Talented men leave. Dead wood doesn’t”.
Philosophically, employee retention is important; in almost all cases, it is senseless to allow good people to leave your organization. When they leave, they take with them intellectual property, relationships, investments (in both time and money), an occasional employee or two, and a chunk of your future. Employee Retention Strategies helps organizations provide effective employee communication to improve commitment and enhance workforce support for key corporate initiatives. We also provide full support for your marketing-communication efforts by helping you build customer loyalty by distinguishing and positioning your organization’s unique products and services in today’s crowded marketplace
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. Employees today are different. They are not the ones who don’t have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best
employees. If they don’t, they would be left with no good employees. A good employer should know how to attract and retain its employees. Most employees feel that they are worth more than they are actually paid. There is a natural disparity between what people think they should be paid and what organizations spend in compensation. When the difference becomes too great and another opportunity occurs, turnover can result. Pay is defined as the wages, salary or compensation given to an employee in exchange for services the employee performs for the organization. Pay is more than “dollars and cents;” it also acknowledges the worth and value of the human contribution. What people are paid has been shown to have a clear, reliable impact on turnover in numerous studies .Employees comprise the most vital assets of the company. In a work place where employees are not able to use their full potential and not heard and valued, they are likely to leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with a stronger, reliable work-force harboring bright new ideas for its growth Money.
WAYS TO RETAIN YOUR EMPLOYEE
Retaining key personnel is critical to long term success of an organization. A Retention Strategy has become essential if your organization is to be productive over time and can become an important part of your hiring strategy by attracting the best candidates who know of your track record for caring for employees. In fact, some companies do not have to recruit because they receive so many qualified unsolicited submissions due to their history of excellence in employee retention.
NEED AND SCOPE
Employers have a need to keep employees from leaving and going to work for other companies. This is true because of the great costs associated with hiring and retraining new employees. The best way to retain employees is by providing them with job satisfaction and opportunities for advancement in their careers. It’s 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.
The research design indicates the type of research methodology under taken to collect the information for the study. The researcher used both descriptive and analytical type of research design for his research study. The main objective of using descriptive research is to describe the state of affairs as it exits at present. It mainly involves surveys and fact finding enquiries of different kinds. The researcher used descriptive research to discover the characteristics of customers. Descriptive research also includes demography characteristic of consumer who use the product. The researcher also used analytical research design to analyze the existing facts from the data collected from the customer.
Increasing Turnover Rates
Employee turnover rates have, within the last several years, become a nationwide epidemic. Employees no longer feel the sense of company loyalty that once existed. Increasing numbers of corporate mergers and acquisitions have left employees feeling detached from the companies that they serve and haunted by concerns of overall job security. As a result, workers are now making strategic career moves to ensure employment that meets their need for security. This fact is clearly represented by growing employee turnover rates. In a recent article, the Employment Policy Foundation (EPF) (2004) highlights that “for the twelve months ending August 2004, average employee turnover costs reached $13, 355, up 6.8 percent from its December 2002 level” (p. 2). The voluntary employee turnover rates released by the U. S. Department of Labor in November, 2004 paint a similar picture. According to the Bureau of Labor Statistics, there was an overall average increase in employee turnover in the U. S. from 19.2% in 2003 to 20.2% in 2004. Weinberg (1997) reports that “too many service companies face employee turnover rates of 50 percent to 100 percent per year or even higher” (p. 4).
Employee Turnover is Expensive
In addition to elevated employee turnover rates being a frustration for employers, they can become a financial concern as well. The EPF believes average turnover costs to be 25 percent of an employee’s annual salary (2004). Other studies have proposed that the cost of replacing lost talent is even higher, as much as 70 to 200 percent of that employee’s annual salary (Kaye, 2000). Expanding on these thoughts, the EPF (2004) stated that “for a firm with 40,000 full-time employees, the difference between a 15-percent turnover rate and a 25-percent turnover rate is over $50 million annually.