Retention Management

Dr. S. David, I.M.S

Staffing Organizations Model

Organization
Vision and Mission Goals and Objectives

Organization Strategy

HR and Staffing Strategy

Staffing Policies and Programs Support Activities Core Staffing Activities

Legal compliance Planning
Job analysis

Recruitment: Selection:

External, internal

Measurement, external, internal

Employment:

Decision making, final match

Staffing System and Retention Management

Dr. S. David, I.M.S
2

Types of Employee Turnover - Voluntary Employee Initiated

Avoidable (could prevent) Unavoidable (could not prevent)

Try to Prevent: High-Value Employees High performance Strong KSAOs Valued intellectual capital High promotion potential High training investment High experience Difficult to find replacement

Do not Prevent: Low-Value Employees Low performance Weak KSAOs Little intellectual capital Low promotion potential Low training investment Low experience Easy to find replacement

No attempt to Prevent: Regardless of Value Retirement Dual career New career Health Child care or pregnancy Elder care Return to school Leave country Take a break
3

Dr. S. David, I.M.S

Types of Employee Turnover Involuntary -- Organization Initiated

Discharge Downsizing

Discipline Poor performance

Permanent layoff Temporary layoff Site or plant closing, relocation Redundancy due to merger or acquisition

Dr. S. David, I.M.S

Causes of Voluntary Turnover

Desirability of Leaving
Low job satisfaction Shocks to employee Personal (nonjob) reasons

+ +
Intention to Quit

Ease of Leaving
Favorable labor market conditions General, transferable KSAOs Low cost of leaving

Quit

Alternatives
Internal: New job possibilities
External: Job offers

+
Dr. S. David, I.M.S
5

Guidelines for Increasing Job Satisfaction and Retention

Extrinsic rewards
Rewards must be

Intrinsic rewards
Assign employees to jobs

meaningful and unique Rewards must match individual preferences Link rewards to retention behaviors Link rewards to performance

that meet their needs for work characteristics Provide clear communication with employees Design fair reward allocation systems Ensure supervisors provide a positive environment
Dr. S. David, I.M.S

Ease of Leaving
Two points of attack
Provide organization-specific training Should organization invest in training to provide general or organization-specific KSAOs? Combine training strategy with a selection strategy focused on assessing and selecting general KSAOs Increase cost of leaving by providing Above-market pay and benefits Deferred compensation Retention bonuses Desirable location of companys facilities
Dr. S. David, I.M.S

Alternatives
Approaches to make internal alternatives more desirable than outside alternatives
Internal staffing Encourage employees to seek internal job opportunities Provide attractive internal options outside of traditional internal staffing system Responding to external job offers entails developing

appropriate policies
Decide whether to provide counteroffers or not Determine types of employees to provide counteroffers Decide who will develop counteroffer and nature of approval process
Dr. S. David, I.M.S

Retention Initiatives: Discharge

Performance management
Performance Management Process

Manager training and rewards

Progressive discipline
Five requirements of a progressive discipline system
Notice Consequence Equal Treatment Full Investigation Right of Appeal
Dr. S. David, I.M.S

Performance Management Process

Organization Strategy Work-Unit Plans (1) Performance Planning
Goals Competencies

(4) Decisions
Pay Training/career plans Performance problems Retention

(2) Performance Execution

Resources Coaching Feedback

(3) Performance Appraisal

Goal attainment Competency ratings Written comments Feedback
Dr. S. David, I.M.S
10

Employee Benefits viewpoint

Employee Benefits
Insurance Accident Mediclaim Life Retirement Leave Encashment Superannuation

Gratuity

Defined Benefit Dr. S. David, I.M.S

Defined Contribution 11

Leave Encashment Defined benefit

For whom?
If company offers encashment of leave, all employees

What benefit?
Will be based on the company policy. Normally x days salary for each accumulated day of leave

How Funded?
Institute of Chartered Accountants of India require that a

provision be made for the liability. No special tax benefits for self-funding through a trust Insurance plans available to manage the funds

Dr. S. David, I.M.S

12

Gratuity Defined Benefit

For whom?
Engaged in Factories, Mines, Plantations, Railways, Shops

and establishments notified by Government In service for 5 successive years What benefit? 15 days wages for each year of service Maximum limit Rs 3,50,000/ to 5,00,000/ 7 days wages per season for seasonal occupation How Funded? Can be funded our unfunded. Special tax concessions if funded through a trust or insurance company
Dr. S. David, I.M.S

13

Superannuation Defined Contribution/ benefit

For whom?
Non-mandatory, defined by company policy

What benefit?
Can be defined benefit(certain formula of last drawn salary)

/defined contribution(certain %age of salary every month contributed to a fund) Can be different for different grades How Funded? Can be funded our unfunded. Special tax concessions if funded through a trust or insurance company
Dr. S. David, I.M.S

14

Superannuation Defined Contribution/ benefit

For whom?
Non-mandatory, defined by company policy

What benefit?
Can be defined benefit(certain formula of last drawn salary)

/defined contribution(certain %age of salary every month contributed to a fund) Can be different for different grades How Funded? Can be funded our unfunded. Special tax concessions if funded through a trust or insurance company
Dr. S. David, I.M.S

15

Grievance Management

Dr. S. David, I.M.S

16

Grievance A grievance can be any discontent or According to Michael Jucius,

A grievance means any discontentment or dissatisfaction in an employee arising out of anything related to the enterprise where he is working. It may not be expressed and even may not be valid. It arises when an employee feels that something has happened or is going to happen which is unfair, unjust or inequitable. Thus, a grievance represents a situation in which an employee feels that something unfavorable to him has happened or is going to happen. In an industrial enterprise, an employee may have grievance because of long hours of work, nonfulfillment of terms of service by the management, unfair treatment in promotion, poor working facilities, etc.

dissatisfaction, whether expressed or not, whether valid or not, and arising out of anything connected with the company that an employee thinks, believes, or even feels as unfair, unjust, or inequitable.

Dr. S. David, I.M.S

17

Grievances are symptoms of conflicts in the enterprise. Just like smoke could mean fire, similarly grievances could lead to serious problem if it is not addressed immediately! So they should be handled very promptly and efficiently. While dealing with grievances of subordinates, it is necessary to keep in mind the following points:
A grievance may or may not be real. Grievance may arise out of not one cause but multifarious causes. Every individual does not give expression to his grievances.

Nature of Grievance

Dr. S. David, I.M.S

18

Forms of Grievances
A grievance may take any of the following forms:

Factual: When an employee is dissatisfied with his job, for genuine or factual reasons like a breach of terms of employment or any other reasons that are clearly attributed to the management, he is said to have a factual grievance. Thus, factual grievances arise when the legitimate needs are unfulfilled. The problem that he has is real and not virtual Imaginary: When an employees grievance or dissatisfaction is not because of any factual or valid reason but because of wrong perception, wrong attitude or wrong information he has. Such a grievance is called an imaginary grievance. Though it is not the fault of management, the responsibility of dealing with it still rests with the management. So the problem is not real. It is in the mind or just a feeling towards someone or something. So be careful your grievances could be very much imaginary! Disguised: An employee may have dissatisfaction for reasons that are unknown to himself. This may be because of pressures and frustrations that an employee is feeling from other sources like his personal life. I am sure you will agree that if you have fought at home and come to the institute, you cannot concentrate in the class. Similarly if you have had a bad day in the institute, that will reflect in the mood at home. We are all humans and are sensitive to the environment that we operate in!

Dr. S. David, I.M.S

19

Identifying Grievances

Exit interview: Employees usually quit organizations due to dissatisfaction or better prospects elsewhere. Exit interviews, if conducted carefully, can provide important information about employees grievances. This can help the management to gather feedback and to genuinely incorporate feedback. The management should carefully act upon the information drawn from such employees .It should be careful that the discontentment is reduced so that no more employees quit the organization because of similar reasons. Gripe Boxes: These are boxes in which the employees can drop their anonymous complaints. They are different from the suggestion boxes in which employees drop their named suggestion with an intention to receive rewards It is normally said that if you want to progress in life, you should be close to critics. These gripe boxes can perform the role of critics for the organisation. The management should carefully act upon the information thus gathered. Now I dont want to sound repetitive by saying that the internal customers of an organisation should be satisfied if the external customers are to be kept happy. Opinion Survey: The management can be proactive by conducting group meetings, periodical interviews with employees, collective bargaining sessions etc. through which one can get information about employees dissatisfaction before it turns into a grievance. Open-door Policy. Some organisation extend a general invitation to their employees to informally drop in the managers room any time and talk over their grievances. This can be very effective because it ca n nip the evil in the bud. That is it can take care of the problem before it gets out of hand. In fact the management should hold formal and informal get together with the employees. The management should also remember that the employees might just need a patient hearing at times. They need blow off the steam as we hear it more commonly.

Dr. S. David, I.M.S

20

Grievances Classification
(1) Grievances resulting from working conditions
Improper matching of the worker with the job. Changes in schedules or procedures. Non-availability of proper tools, machines and equipment for doing the job. Unreasonably high production standards. Poor working conditions. Bad employer employee relationship, etc.

(2) Grievances resulting from management policy

Wage payment and job rates. Leave. Overtime. Seniority and Promotional. Transfer. Disciplinary action. Lack of employee development plan. Lack of role clarity.

Dr. S. David, I.M.S

21

Grievances Classification
(3) Grievances resulting from personal

maladjustment
(i) Over ambition. (ii) Excessive self-esteem or what we better know as ego. (iii) Impractical attitude to life etc.

Dr. S. David, I.M.S

22

Effects of Grievances:

Frustration
Alienation De-motivation Slackness Low Productivity Increase in Wastage & Costs Absenteeism In discipline Labour unrest

Dr. S. David, I.M.S

23

Establishing a Grievance Procedure

A grievance should be dealt with in the first instance at the lowest level: that is, an employee should raise his grievance with his immediate superior. It may be simple to settle it on the spot and that will be the end of it. Even if it cannot be settled at that level, the mans superior will know what is happening. This is necessary not only to maintain his authority, but also to prevent him from being aggrieved, as he will certainly be, if he is by-passed and hears of the complaint from his own superior. It must be made clear to the employee what line of appeal is available. If he cannot get satisfaction from his immediate superior, he should know the next higher authority to which he can go. Since delay causes frustration and tempers may rise and rumors spread around the work, it is essential that grievances should be dealt with speedily. As it is said that a stitch in time saves nine, similarly the problems of the employees should be taken care of by the management least it should become a major for the management. The grievance procedure should be set up with the participation of the employees and it should be applicable to all in the organisation. The policies and rules regarding grievances should be laid down after taking inputs from the employees and it should be uniformly applicable to all in the organisation. It should be agreed that there would be no recourse to the official machinery of conciliation unless the procedure has been carried out and there is still dissatisfaction, and moreover, there must be no direct action on either side, which might prejudice the case or raise tempers while the grievance is being investigated.

Dr. S. David, I.M.S

24

Dr. S. David, I.M.S

25

Guidelines for Effective Grievance Handling

The complaint should be given a patient hearing by his superior. He should be allowed to express himself completely. The management should be empathetic.

The superior should try to get at the root of the problem. It should be remembered that symptoms are not the problems. It should also be noted that if there are symptoms, there would be a problem as well.
The management must show it anxiety to remove the grievances of the workers. The workers should feel that the management is genuinely interested in solving its problems. If the grievances are real and their causes located, attempts should be made to remove the causes. If the grievances are imaginary or unfounded, attempts should be made to convince the workers. Every grievance must be handled within the reasonable time limit. I am sure you will agree with this. Imagine you have a genuine problem and you share it with the authorities. You will also expect immediate action taken to take care of your problem.
Dr. S. David, I.M.S

26

Guidelines for Effective Grievance Handling

All grievances should be put into writing. Some proofs required

as well.

Relevant facts about the grievance must be gathered. The

management should not haste!

Decision taken to redress the grievance of the worker must be

communicated to him.

Follow up action should be taken to know the response of the

forced employee. This is to make sure that he is happy or not! At the end of the day the satisfaction of the aggrieved party is necessary.
Dr. S. David, I.M.S

27

ESSENTIALS OF A GRIEVANCE PROCEDURE

A grievance procedure should incorporate the following features: 1. Conformity with existing legislation: The procedure should be designed in conformity with the existing statutory provisions. Where practicable, the procedure can make use of such machinery as the law might have already provided for. 2. Acceptability: Everybody must accept the grievance procedure. In order to be generally acceptable, it must ensure the following:
A sense of fair-play and justice to the worker, Reasonable exercise of authority to the manager, and Adequate participation of the union.

3. Simplicity: The following points should be noted in this regard:

The procedure should be simple enough to be understood.

The steps should be as few as possible. Channels for handling grievances should be carefully developed. Employees must know the authorities to be contacted at various levels. Information about the procedure should be thoroughly disseminated among all employees through pictures, charts, diagrams, etc.
Dr. S. David, I.M.S

28

ESSENTIALS OF A GRIEVANCE PROCEDURE

4. Promptness: Speedy settlement of a grievance is the cornerstone of a sound personnel policy. It should be remembered that justice delayed is justice denied. The procedure should aim at a rapid disposal of the grievance. This can be achieved by incorporating the following feature in the procedure:

As far as possible, grievances should be settled at the lowest level No matter should ordinarily be taken up at more than two levels, i.e. normally there should be only one appeal. Different types of grievances may be referred to appropriate authorities. Time limit should be placed at each step and it should be rigidly followed at each level.

5. Training: In order to ensure effective working of the grievance procedure, it is necessary that supervisors and the union representatives should be given training in working of the grievance procedure. All the policies should be conveyed to the concerned parties. 6. Follow-up: The personnel department should review the working of the grievance procedure periodically and necessary changes should be introduced to make it more effective. This is generally ignored by the organizations. A regular follow up of the system increase the faith of the people in the system. Therefore it is necessary that the grievance procedure should be reviewed whenever it is so required.

Dr. S. David, I.M.S

29