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Employee retention strategy for optimized organizational effectiveness A Research Paper Submitted in Partial Fulfilment of the Degree of BACHELOR OF TECHNOLOGY In the Department of Quality and Operations Management At the FACULTY OF ENGINEERING AND THE BUILT ENVIRONMENT Of the UNIVERSITY OF JOHANNESBURG Lizeka Mangciphu 20158750 22 May 2018 Supervisor

Employee retention strategy for optimized organizational effectiveness
A Research Paper Submitted in Partial Fulfilment of the Degree of
In the
Department of Quality and Operations Management
At the
Of the

Lizeka Mangciphu
22 May 2018
Supervisor: Mr Ndala Yves Mulongo
Table of Contents
TOC o “1-3” h z u Abstract PAGEREF _Toc467606398 h 2The research question is: PAGEREF _Toc467606399 h 3Objectives of the Research: PAGEREF _Toc467606400 h 3Introduction PAGEREF _Toc467606401 h 4Literature Review PAGEREF _Toc467606402 h 5Retention against Organizational Effectiveness PAGEREF _Toc467606403 h 5Effects of failing to retain skilled employees PAGEREF _Toc467606404 h 6Knowledge Management on retention PAGEREF _Toc467606405 h 6Motivational Theories to Retention PAGEREF _Toc467606406 h 7Performance Appraisals PAGEREF _Toc467606407 h 8Traditional Ways of retention PAGEREF _Toc467606408 h 8Methodology PAGEREF _Toc467606409 h 9Measures PAGEREF _Toc467606410 h 10Recommendations PAGEREF _Toc467606411 h 10Results PAGEREF _Toc467606412 h 12Sample characteristics PAGEREF _Toc467606413 h 14Conclusion PAGEREF _Toc467606414 h 15Reference PAGEREF _Toc467606415 h 16Annexure PAGEREF _Toc467606416 h 18
The article provides an overview of relevant employee retention strategies that companies have implemented in the past contrasting them against what they could adopt going forward to tighten retention of crucial employees. Business functions throughout the globe have been integrated to work as a unit to achieving the main business objectives hence strategies and competencies have all been align to the business strategy to holistically achieve these goals.
The purpose of this particular study takes into account the a holistic view to retention strategies that have been implemented in the past against traditional methods that have proven a success factor to companies as well as taking a step further and understanding new trends that can be implemented to achieve a working retention strategy that talks to the current advances to the world. The research design for this particular study is a functional survey research that was analyzed through use quantitative methods, data was collected using an open closed ended questionnaire approach. The findings are compared before drawing conclusions. The findings from the study depicts a significant picture as to how influential employee retention strategic in leveraging the main assists of any organisation which is the human capital. The main limitation to the study is the infiltration to other functional areas or departments due to the number of sign of in the chain of command of the organisation the study was extracted from namely capital Investments which is a pseudonym given to the company by the author. The research acknowledges questions and opinions held by other scholars on retention as a strategy. As a conclusion a trend the study found popular is looked at as a future competitive tool in the human resource space
The research question is:
What are the relevant strategies companies can adopt to increase employee retention while decreasing the level of turnover?
What suitable practices can the organization implement to retain critical employees, hence increasing profitability?Objectives of the Research:
To find strategies that companies can adopt to increase employee retention?
To establish practices that can be adopted by organizations to retain crucial employees and increasing profitability?
Retention of critical employees has been an ongoing conversation that companies are contently engage with business partners across the globe. Increasingly the demand for highly skilled individuals has greatly influenced companies to work on the employer brand noting the growing global competition and desperate need to survive in cooperate industry. According to (Cascio, 2003) who defined employee retention as initiative taken by management to keep employees from leaving the organisation, using means such as rewarding employees for performing their jobs effectively, encouraging good working relations between employees and managers and maintaining a healthy working environment. In light of the above, recently businesses compete virtually on everything thus retaining skilled employees has become the differentiating factor for more organizations. Chained supports the concept and further warns against globalization as he stated that, (Chained, 2007) the main purpose of retention is to prevent the loss of competent employees from the organisation as this could have adverse effect on productivity and service delivery. However, retention of high performing employees has become more challenging for managers as this category of employees frequently move from one job to another as they are being attracted by more than one organisation at a time. In contrary (Toracco, 2000) stated that although knowledge is now recognized as one of an organization’s valuable assets most organizations lack the supportive systems required to retain and leverage the value of knowledge.
From an employee perspective there has been shift in how dynamic employees view employment and how do they respond to the market needs, (Saunders, 2000) The concept of lifetime employment has reduced with individuals potentially experiencing several jobs and striving to maximize their value in terms of salary and employment conditions. The focus is not only on what the employer wants for employees rather it’s an intertwined process between employer and employee hence (Hendricks, 2006) notes that employees with scarce skills are in great demand by the South African government and becoming difficult to source. When these categories of employees are eventually sourced, they become even more difficult for government to retain. It is not only government that is finding it difficult retaining highly skilled employees. The private sector managers also admit that one of the most difficult aspects of their jobs is the retention of key employees in their organizations.

Literature ReviewRetention against Organizational EffectivenessBusiness environments are categorized by growing attractiveness in the global markets, with an increasing demand for technology advances furthermore enhancing organizational effectiveness stated (Lin and Jacobs, (2008). The business sphere has become a very competitive work space that demands change in strategy, therefore exploring the realities of retention on effectiveness are crucial to differentiation of the organisation to the next. Despite organizations having to invest resources in retention interventions, it did not have a tangible hold on employees (Herzberg, 1959) highlighted dissatisfies satisfies namely calling them hygiene factors. Consequently dissatisfies being company policies, salary, co-worker relationships, and supervisory styles etc. that cause a drift in the gap between retention and return on investment for the company
Furthermore (Kerr and Slocum, 1987) emphasized that an organization’s culture and values were the main influences to driving human resource strategies, namely including selection and placement policies, promotion and development procedures, and reward systems. Contrasting views were also pointed out by (Kuvaas and Dysvik, (2009) stated that businesses had to provide training opportunities to suite the culture they wanted to attract and retain, which considering the benefit as employees become pro socially motivated and prepared to expand their efforts on behalf of the organization. Hence organization have diversified, (Kuvaas, 2009) supporting the diversification, considering that employees are key stakeholders therefore their overall well-being was important to note fostering a productive work environment. Which reflected that the main values of the company play a significant role in defining the needs essential in driving a motivated workforce as employees have to be incorporated.

Different strategies result in psychological climates that foster varying levels of commitment and retention among employees working in different organizations.
(Allen et al, 2010) stated that the costs associated with recruiting, selecting and training new employees is one hundred percent of the yearly salary for that particular position being filled and the direct costs, work disruptions and losses of organizational memory and seasoned mentors associated with turnover. This situation has rather caused inconsiderate disruptions with regards to the development of the employee’s further escalating costs to the incurred within the course of the year.
Effects of failing to retain skilled employees
As mentioned above highly skilled employees are being poached and even some are head hunted by companies abroad (Samuel, 2009) conveys, that Organizations – both public and private – rely on the expertise of their employees in order to compete favorably and indeed gain competitive advantage in the international market. However, recent studies have shown that retention of highly skilled employees has become a difficult task for managers as this category of employees are being attracted by more than one organisation at a time with various kinds of incentives. Furthermore, skilled employees in South Africa are daily migrating abroad for better job conditions
(Gillingham, 2008). This phenomenon is having adverse effect on investment as emigrating employees moved client’s investments offshore. The effect on the locally based employee sector is immense in the sense that investments are moved as per migrating employee therefore customer investments are moved offshore leaving domestic institution losing on market competitiveness.

Knowledge Management on retention
Knowledge management was an important concept to consider with an increase on departing of essential team members, these caused strains on organization producing at optimal level hence affecting their overall performance mainly rated in revenue at the end of the financial year and customer service.(Fitz-enz, 1997) also indicated that the was a significant economic impact on the organization losing any of its crucial employees, especially given the knowledge that was lost with the employee’s departure. This was the knowledge base that was used to meet the needs and expectations of the customer hence knowledge management of every company incredibly was essential in maintaining and controlling how operations, strategies and producers were conducted within the specific organization, furthermore the reason intellectual aspects of the organization, valuable information was to be retained for purposes of capital gains and upholding the culture of the organization.
(Toracco, 2000) stated that although knowledge was recently recognized as one of the organization’s valuable assists most organizations lack the supportive systems required to retain and leverage the value of knowledge. (Stovel, 2002) considered employee turnover in isolation while organizations were seeking to sustain competitive advantage they supposedly had to have moved quickly to develop systems that would ensure leveraging the value of knowledge for this purpose. This was essentially reflected mostly on the mission of the organization not being fulfilled in the specific time frames stipulated.

Motivational Theories to Retention(Saul W. and Gellerman, 1992) highlighted that motivation was the act of creating conditions that allow every one, to get work done at own peak level of efficiency. Also further emphasized by (Mitchell, 1982, p.81) that it was a psychological process that caused the arousal, direction and persistence of voluntary actions that were goal oriented. Consequently motivation has been driven by factors that help employees respond to their individual felt need (given organizational need) to satisfy namely being needs of, reinforcement, cognition, job characteristic and feelings/emotions. It’s been of imperative importance that mangers understood and created a proper climate in which employees would be exposed to these situational areas furthermore unleashing their potential, failure to provide such an environment rather meant an increase in employee frustrations and as a result in poor performance, lower satisfaction and increased withdrawal from the organization was noticed. (Steers and Porter, 1983, p.32) stated. Motivation had to be driven mainly by the need at a specific time, hence theories that influential included equity theory, Maslow needs theory, Expectancy theory and exploration on the design of the job. These have played a significant role towards the performance of employees in organization as they have managed over the years to highlight critical psychological aspects and needs experienced by individuals towards achieving particular goals with the organisation.
Performance Appraisals(Cohen, 1997) defined the as process of subjectively evaluating the quality of an employee’s work. Organization typically use appraisals to give off feedback to employees who can then recognize and build on their strengths and work as to improve their weakness. Through determining training needs, allocating compensations and rewards, identifying the best and the worst performers. Corporate culture is effectively shifted from time to time with these appraisals (James R Evens, 2016, p181). These were the most effective intervention, when they focus on the objectives that support the strategic directions of the organization, best practices and continuous improvements.

Individuals were motivated both intrinsically and extrinsically. The basic part of all rewards and recognition programs were meant to evoke automatic motion to unleash Involvement. Supported by suggestion by (Michael C. and Fine, 2001).Programs rewarded employees for different actions, including identifying when inventory went missing, participating in wellness events and even picking up extra shifts”.
Traditional Ways of retentionTraditional ways of recognition programs were one-dimensional and too isolated, simply having to acknowledge management and occasional employees, furthermore presented in a secret place people not enjoying the courtesy to celebrate the recognition of which the structure was no sustainable going forward. Authors like (Pohlman, 2001) highlighted that. Nobody else in the workplace knew that this recognition took place. There was no opportunity to celebrate it.” Therefore it’s was of great importance that recognition of good initiatives at the workplace be used to motivate and encourage employees to achieve beyond their immediate responsibility. The programs are better evolved now that technological aspects have also contributed towards providing alternatives to managers on some of the expected or rather things that can motivate an employee in the 21st century and also making it a bit easier measure and evaluate the process of selection.

An alternation between intrinsic and extrinsic rewards was vital to maintain commitment as (Tracy, (2014) stated that salary plays a critical role in employees, supporting views on career development opportunities as another means to develop such interests in the work environment. Intrinsic as well were extrinsic issues need to be considered in making tacit decision that influenced the operations as well as corporate strategy of the organization. The inability of managers to comprehend these factors, however, compromises these factors retention results therefore proper knowledge has to been circulated down managers for proper implementation (Tracy, 2014) continues.
Turnover withheld out progression of the firm to achieve their goals hence the effects of recruitment, placements and retention should be priority in every organization seeking to maintain its value to clients over the market segmentation. Costs associated with the development of these employees were huge hence companies to really realize there return on investment, strategies must be put in place as to keep employees within.

MethodologyA functional survey was used to gather information and a quantitative research approach was used for this study, specifically a descriptive research (Snell, 1998). A survey method was used with a questionnaire as a research mechanism. (Samuel, 2009) highlights that Based on the bulkiness of the research material exposed uses the quantitative method for analysis of information, support evidence they all have suggest a likelihood of the importance to compare variables using a statistical analysis
The questionnaire (what is a questionnaire). Two techniques were used for answering the questions. The Likert scale scoring from strongly disagree to strongly agree was used, together with the three open ended question approach that was subject to the respondent to offer the respondent an opportunity to categorize their particular industry. It was divided into several sections consequently taking into account the following, do employees identify with the mission of the company (Question 1-2), the particular industry and compensation (Question 3-4), leadership effect on their performance (Question 5-7), opportunities in the workplace and development issues (Question 8-10) what employees consider to be a benefit in the workplace, attributes that enhance their livelihood. Major themes to take note of are attributes to livelihood, Learning and Development opportunities, Rewards, Leadership and Recognition.
The population of the study was a portion of employees that have been with the company for more three years centered under a focus group set up drawing professionals in entry level employment within different job segments to bring about diversity in the responses and perspectives. Sampling technique used in the study was probabilistic based.
Data analysis of the study was a deductive, specifically a descriptive statistics method that is also inferential in nature (frequencies and proportions) were used to describe the data. The data required reinforcement of statistical theories Shapiro-Wilk’s to test validity hence certain areas maybe of subjective in nature.

Employee retention, often measured by employee turnover and employee attrition stated (hausknecht and Kar, (2011). Hence the circulation of questions the study that was to measure favorable outcomes from the respondents in relation to the amount of turnover had occurred and main characteristics contributing to the lapse ratio. A developed questionnaire was applied furthermore measured through the use of the Likert scale to collect information from respondents.

1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
RecommendationsThe market has significantly taken a turn to a more modernized and technologically based global village rather depending on the latest advances to respond to the world hence also employees that were being procured had to respond to organization needs to multi-dimensional skills that than the traditional.
Employer branding as the solution moving forward. Employee value proposition an initiative that employees and potential employees identify with the brand consequently advocated by (Minchington, 2005) defined employee value proposition as a set of associations and offerings provided by an organization in return for the skills, capabilities and experiences an employee brings to the organization. The EVP is an employee-centered approach that is aligned to existing, integrated workforce planning strategies because it has been informed by existing employees and the external target audience. An EVP must be unique, relevant and compelling if it is to act as a key driver of talent attraction, engagement and retention. Which is the attractive means of connecting to talent all over the world as people nowadays have responded to globalization in different ways and displacement is no longer a barrier to achieving a career in different geographical locations
Knowledge management also has newly identified mechanism to have been present but organization across sectors did not pay attention to its influence to achieving the throughput of the organization, lately it has been adopted to multi-disciplinary companies as a strategy that preserves the information base and encourages companies to go an extra mile in keeping their most skilled human capital. According to (Snell and Dean, (1992) the concept of human capital and knowledge management is that people possess skills, experience and knowledge, and therefore have economic value to the organization. These skills, knowledge and experience represent capital because they enhance productivity.

The organization should Install working procedure in an organization has multiple factors to consider. Creating an environment that eliminates uncertainty, fear and whistle blowers offers a more stability that now forms or rather fosters trust, safety and a healthy work place for employees, hence in more ways are motivated and feel conformed to an organization that takes proper care of their wellbeing.

One effective way to create more satisfied employees is to engage in their work and make them part of a unique environment of the organization. The theology being the extent to which the work team commitment, both emotional and intellectual, to accomplishing the work, mission and vision of the organization. Fostering such an environment encourages employees to find meaning in their work and keeps the motivation running through organizational performance, this strong emotional bond towards the company is of essential need as employees feel actively involved, know that their opinions and have ideas have value often than not reflected in employees going beyond their immediate job responsibilities for the well-being of the company.

With regards to recent developments in the organizational effectiveness space companies have resorted to building a solid employee brand that attracts talent with the competencies that conform to the needs of the business.

Results in tally from the questionnaire responses
Questions Attributes
Strongly Disagree Disagree Neutral Agree Strongly Agree
1 11 1111111 11111
2 1111 1111 11111
3 11 1111111 111
4 1111 11 1111 11
5 11 11111 1111
6 1 1 1 1111 1111
7 1 11 11 111111 1
8 111 1111 11111
9 1 1111111 1111
10 1 11 111 111 111
Attribute relationship graph

What people respondent mostly too, the question what makes you stay at your current organisation?

Sample characteristicsThe research population comprised around 50 respondents within the organization’s employees in the. The author adopted the above respondents due to forcing on a specific department for the sample size to remain contained and not alert the business. The forces group was comprised of different levels in the company. Results showed a significant increase of employees that admit the company’s commitment towards their development of the organization as the reason they stay with an interval of 3.0 in the regression scale and remuneration scoring the least showing that’s where employees require a significant change. Other attributes score considerably moderate within the ranges of 2.44 to 2.70 which is mainly the middle part. Literally within this range it’s what all employees require as needs and benefits before they get attracted or stay with the organization.

It is evident from the chart that employees throughout industries require virtually the same attributes that lead them to staying with a certain organization. More than 50 percent of the respondents pointed similar attributes namely commitement of the organization,
Apart from the losses the individual incur with regards to skilled personal leaving, scrutiny should be implemented from the recruitment to exist of each employee. Exit Interviews these are essential in the sense that they give the organization firsthand information as to why or the main contributors to employees leaving the organization or why valuable assets keep moving away from the organization.
Retention of skilled personnel’s plays an essential role in the productivity of the any organization especially in service sectors where its labor intensively dependent to meet customer specifications and requirements. Retention of human capital is the greatest asset a company can leverage regardless of industry and geographical location, hence there’s a constant need to keep employees engaged in the organization to tap into the their competencies to achieve an innovative and forward thinking organizational goals. The relevant strategy companies can adopt to increase employee retention while decreasing the level of turnover would be the adaptation of a strong employer brand, Employee Value Proposition as a strategy that most prevalent in the industry as employees have also moved an inch forward in knowing their benefits and satisfiers more conservative of the work place that supports their growth and personal growth. In the study above more than 50 percent of employees highlighted that they prefer an environment where the employer’s commitment is visible alongside a clear leadership pattern that fosters clear communication and recognition to all employees of the organization.
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HAUSKNECHT, J.P., J.M. RODDA and M.J. HOWARD (2008) Targeted employee retention: performance-based and job-related differences in reported reasons for staying. Working Paper Series, Cornell University, School of Industrial and Labour Relations, Centre for Advanced Human Resource Studies, Working Paper 08 – 06.

Leena James and lissy Mathew(2012), Employee Retention strategies: I.T Industry, SCMS journals of Indian Management, Quarterly Issue
Saul W. Gellerman, Motivation in the world( Dutton, 1992)
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Ramlall S (2003). Managing employee retention as a strategy for increasing organizational competitiveness. App. H.R.M Res. 8(2):63- 72.
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AnnexureQuestionnaireDo you identify yourself with the mission and values of the company?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree

Does the working hours support a flexible and balanced lifestyle?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Are the working conditions conducive?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Is the compensation fair and/or Rewarding?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Is your line management efficient and effective?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Is the working environment team oriented and inclusive to everyone?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Does the working environment display equal opportunities to both male and female?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree

In the next 3(Three) years do you see yourself with the organization?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Would you recommend a friend/ relative to work for the organization?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
Do you think the company is doing enough in retaining its employees?
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
What more do you think the company can do to retain its employees?
What do you feel the company is doing towards retaining its skill base?
What assistance do you need from your line managers to aid you in performing your duties to your utmost best?
What remedial action do you think the company should undertake to balance the systems of keeping employees?