Recycle, Reuse, Retain

Understanding Employee Retention

Intro: Your Workers Are Not
Mules
 http://www.youtube.com/watch?v
=gSaDQHI_5Q0
What’s Retention?
 Keeping employees committed within the
company for a long period of time

 High priority within HR departments today

 Key to retention is maintaining employee

satisfaction
EMPLOYEE TURNOVER

 The total number of voluntary and

involuntary separations from the
organization divided by the total numbers
of employees
Turnover
 There is three types of turnover.
 voluntary turnover, in which the employee
makes the decision to leave.
 involuntary turnover, in which the organization
terminates the employment relationship.
 dysfunctional turnover occurs when an
employee whose performance is at least
adequate voluntarily quits.
Employee turnover rates
Annual turnover rate = # of terminations * 100
Average # of employees

= 75/25 *100
= 300%

Adjusted turnover rate = {# of terminations - # of desired termination} *100

Average # of employees

= (75 - 10)/25 *100

= 260%
Types of Employee Turnover and
Retention.
Why Do Employees Leave?
PAY?

 Myth or Fact?
 People most often leave a company for more pay.

---- Myth!

 Reality
 Most commonly people will leave because of work conditions,
dissatisfaction with policies, and relationships with coworkers and
supervisors.

 Solution
 Work to improve employee involvement, recognition and growth
INCENTIVES?

 Myth or Fact?
 Incentive programs produce long-term profits
and improve productivity and morale.
---- Myth!
 Reality
 Incentives can have a negative effect when they are over-
used and people focus on quantity rather than quality.

 Solution
 Keep incentives spontaneous and surprising
WORKLOAD?
 Myth or Fact?
 People don’t want more responsibility.
---- Myth!

 Reality!
 Employees don’t want more work if they already have too much on
their plate, but they want more opportunities to expand their
knowledge within their job.

 Solution
 Don’t overload employees with too much work and give
opportunities to expand their knowledge within their job.
DEVELOPMENT

 Loyalty is dead
---- Myth!
REALITY!
People are changing jobs and careers more often,but if
employees are getting the training to expand their career within
the company, then they will stay loyal to them.

 Solution
 Offering opportunities to expand within their job and career for the
company.
WORKPLACE COMPONENTS
V/S EMPLOYEE’S ATTITUDE

 Characteristics of the Employer

 Management
 Job security
 Culture and values
 Employee Relationships
 Co-worker relationships
 Supervisor support
 Job Design and Work
 Job matching
 Time flexibility
 Work/life balancing
WORKPLACE COMPONENTS
V/S EMPLOYEE’S ATTITUDE
 Career Opportunities
 Training and development
 Career advancement

 Rewards
 Competitive pay and benefits
 Recognition
How Job Satisfaction Leads to
Quitting.
 RETENTION
STRATEGIES

Measure it! If you don’t measure it, you can’t manage it. If you
can’t manage it, you can’t improve it.
If you don’t improve it, you will lose.
Compensation Administration
Consideration (money paid) for services rendered
through the employment relationship
A. Direct Compensation
 Includes pay and financial incentives
as consideration for work that is performed through
the employment relationship

B. Indirect compensation
 Not paid directly in monetary terms , but provide
to the worker in return for being employed by the
company
A. Direct (pay) Compensation
 Wages
 based on time worked (e.g., hourly wage)
 Salary
 consistent rate
 Piece Rate
 payment based on units of production
 stratified unit production payment is referred to as modified
piece rate
 Incentive Pay
 commissions and bonuses based on levels of performance
B. Indirect Compensation
Perks: Employee benefits and perquisites
 Perks
 luxury items intended to reward employees for
organizational membership
 Company cars
 Country club memberships
 Access to recreational facilities.
 Benefits (insurance, time off)
 reward employees for membership in the organization
RECOGNITION FOR A JOB WELL
DONE

• Examples

• Hand-written card

• Publish accomplishment in newsletter

• Publicly announce accomplishment

USE NON-CASH ITEMS TO REWARD
EMPLOYEES
 Examples

 Movie tickets

 Paid vacation day

 Gift cards
OFFER FLEXIBLE WORK
SCHEDULES

 Provide Flex-time

 Facility To Telecommute

 Offer Compressed workweeks

CREATE TRADITIONS

 Holiday dinners

 Charity drives

 Fun Days
PROVIDE SENSE OF
BELONGINGNESS

 Post new employee pictures and biographies in

community area with current employees
 Give chance to find someone with similar interests
BE PROMPT WITH REWARDS

 Having too much lag time between performance

and recognition can have a negative effect.
GROWTH AND DEVELOPMENT

 Give satisfactory opportunities for

development and advancement.
 Keep them updated with latest work practices
and technological skills.
CONVENIENT
COMMUNICATION CHANNEL
 Install a proper feedback system.

 Keep your employees well informed.

CONDUCT EXIT INTERVIEW

 Conducting exit interviews can help determine

why the employee left and what the employer can
do better next time.