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INTRODUCTION
The purpose of the research is to test the applicability of three strategies which could solve the problem of employee retention in the companies, especially in Small and medium scale industry in Bangalore. To find out this the researcher has approached managers of Small and Medium Scale Software companies and collected the data in a questionnaire. Three categories of employees have been identified. 1. Satisfied employees (showing the tendency to stay the company or retention). 2. Indifferent employees (Neither satisfied nor dissatisfied or indifferent). 3. Dissatisfied (showing the tendency to quit the company or attrition) To find out the applicability of the first retention strategy, the researcher has classified number of employees comes under the above three categories in to two other categories; the employees who prefer position titles when they change the company and employees who prefer all other benefits except position titles. To find out the applicability of the second retention strategy, the same three categories have been classified under the employees who prefer variable benefit structure and employees who do not prefer variable benefit structure. A questionnaire survey has been conducted and classified the respondents in to respective categories. Chi square tests (test for independence) has been conducted to find out the relation ship between satisfaction, dissatisfaction and Indifference to the perception of benefits of the employees.

Applicability of the third retention strategy has been tested by using an opinion survey conducted by the researcher and verified the result using sign test ( a non parametric test). This report is not exhaustive, one can innovate many new strategies to retain employees. These are just the basics and if implemented in a proper way can give good results. 1.1. THE FACTORS AFFECTING EMPLOYEE ATTRITION 1. Intra organizational Factors. Factors which affect the job satisfaction of the employee inside the organization for example; strained superior subordinate relationship. 1. Personal reasons; These reasons are specific to each employee such as family responsibilities, personal preference for location of job etc. 2. Extra organizational factors When an employee compares his/her position with that of same position in another company, this may lead to an inequity in the mind of employees, this will result in employee attrition, for e.g. An employee comparing his salary, position, work environment, and benefits with that of same position in another company may lead to preference for the other company. The study concentrates only on extra organizational (3rd reason) reason which is conventionally perceived to be uncontrollable. The researcher has formulated three new strategies to control this perceptional gap. The strategies are based on Adams Equity theory.

1.2. RETENTION - A BIG CHALLENGE Fundamental changes are taking place in the work force and the workplace that

promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets. The fierce competition for qualified workers results from a number of workplace trends, including:

A robust economy Shift in how people view their careers Changes in the unspoken "contract" between employer and employee Corporate cocooning A new generation of workers Changes in social mores Life balance

Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following:

Family orientation Quality of life issues Autonomy Social status of the job

To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them.

division of the organization but it directly affects the Human Resource division as well. The organizations are competing each other to acquire the scarce talent pool. Internal advertisement simply meant to tell the employee that the organization which they are working is good and a company favorable comparison should be given to employees to solve the inequity they perceive. The major difference with internal advertisement is that the communication channel is different from that of marketing channels. Here the communication

1.3. RETENTION STRATEGIES In this study the researcher is particularly interested in three retention strategies and its applicability in the industry. This is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs are different, and his emotions, his problems are different. There are many employee retention strategies are available in the industry. I have classified retention strategies according to the solution offered by the strategies into three: 1. Unique organizational structure strategy 2. Variable benefit strategy 3. Internal advertisement strategy

1.3.1. Unique organizational structure strategy

Creating a company-specific organization structure and position title is the crux of this theory. This will reduce the employees tendency to compare

his position title and benefits with that of same in other companies. Rather than force the employee to confine his talents to structured jobs, set job titles according to the knowledge, skill and ability of the employee. If an organization possess a unique structure with position titles and its responsibilities will keep the employee concentrated in the same company rather than choosing the job in other companies. following important factors must be present in the Unique organizational structure. a. Set Clear Expectations When people enter in a company for the first time as an employee, he/she may have many expectation regarding the salary, work environment etc. the primary need for the employee is to yearn a decent salary to live, when this objective is fulfilled the employee will look for social status such as attractive position titles and benefits structure which satisfy the egoistic needs of human being. So the company must manage this expectation by understanding the employees perception.
o

What is the employees attitude to other organization and its benefit structure for the same position? What are the employees expectations from employers/teammembers? What are the parameters to measure their performance?

o o

A good communication channel present in the organization. What will be the rewards, if the employees exceed the expected level?

If the employees are not having any expectations, how an employer is going to appraise, the employees? This must be based on some standard.

The employee must have the feeling that his role is important for the company. Also his position title must be socially acceptable. It should fulfill the egoistic needs of the employee.

Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what's expected of them. When expectations are not clear, employees may not be in sync with their job's current demands and priorities. Setting expectations is not a once and done activity. Jobs change. Priorities change. Resources change. Managers need to revise and set new expectations throughout the year. Setting expectations revolves around the following three areas:
o o o

Key job responsibilities Performance factors and standards Goals

Why is a setting expectation important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. If your employees know what is expected of them, it allows them to focus on results and to monitor themselves against the set standards. Environments in which expectations are not

clear, or change from week to week, seldom create high-performing work groups.

The three principles that should drive expectations are clarity, relevance, and simplicity. b. Clarity. Expectations should focus on outcomes, not activities. In other words, employee achieves clarity when the employer identifies the expected results rather than the method for achieving them. Managers often make the mistake of attempting to direct the process that an employee will use rather than being clear about results.. Defining the objective often requires some thought on the part of the manager because it is easy to fall into the "activities trap." While developing a strategic plan for a department or division is a worthy activity, it does not represent an outcome. In the activities trap, developing a plan is the goal, rather than increasing your market share.

c. Relevance. The principle of relevance helps define the "why" of the

assignment. If your employees have a full understanding of the project's importance, they can make adjustments as unanticipated factors crop up within the process. They probably also will be more committed to the result because they can see more easily how it fits into the big picture and how their efforts impact the company.

This understanding typically is accomplished through dialogue between the manager and subordinate, which allows for a more thorough review of the

situation and for feedback and discussion. This process builds good will with the employee and sets the stage for additional responsibilities. d. Simplicity. Simplicity creates a sense of grounding for employees as they endeavor to carry out assignments. If managers identify the work in simple, straightforward terms, employees will find it much easier to follow through on managers' wishes. To accomplish this, a manager must identify the key message in a fashion that the employee can embrace. e. Talent and skill utilization Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search. In this case the manager can easily change the position title of the employee and include the relevant job description in the position title. f. Fairness and equitable treatment The perception of fairness and equitable treatment is important in employee retention. In one company, a new sales rep was given the most potentially successful, commission-producing accounts. Current staff viewed these

decisions as taking food off their tables. The employer can bet a number of them are looking for their next opportunity. In another instance, a staff person, just a year or two out of college, was given 20,000 in raises over a six month time period. Information of this type never stays secret in companies so the employer must know, beyond any shadow of a doubt; the morale of several other employees will be affected. g. Career growth The best employees, whom you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will stagnate. A career-oriented, valued employee must experience growth opportunities within your organization.

2. Variable benefit strategy

Periodical change in the benefit structure leads to increased awareness and satisfaction with the benefits. One of the purpose of benefit structure is to motivating the employee. Unfortunately continues enjoyment of the benefits leads to reduced satisfaction and motivation. This can be solved by periodical change in benefit structure, i.e. periodically introduce new benefits and remove the old benefits. Following are the important factors present in the variable benefit structure. a. Proper Rewarding Proper rewarding is important for the employee to be motivated during the job. A research reports says that in today's scenario,

70% of the employees are less motivated today than they used to be. 80% of the employees could perform significantly better if they wanted to. 50% of the employees only put enough effort into their work to keep their job. Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship.

b. Attracting the employees The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in learning and development or employee relations. Keep following parameters in mind, while designing a reward policy:

c. Recognition of the work

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Recognition is the most cost-effective motivator. While the high cost of other rewards forces us to give them sparingly, recognition can be given any time, at very little cost. Some very ordinary items and events can be imbued with extraordinary motivational significance, far in excess of their monetary value, motivation of a pizza or movie tickets can be high if it is given with sufficient appreciation. A sincere thank you can be delivered at any place and at any time, costs absolutely nothing and can be more motivationally powerful than a substantial monetary bonus. Organizations can provide innovative recognition in an infinite number of ways. For example, (A Hypothetical Incident) a small manufacturing company made its employees feel like heroes when they attained a major safety milestone - 100 days without a single accident. On the morning of day 100, it was announced that a catered lunch would be served the next day, if they made it to the 5:30 shift without an accident. At 5:15 anticipating was building. Managers took confetti and streamers to the balcony overlooking the shop floor. When the 5:30 whistle blew, there were congratulations all around, confetti flew through the air and banners were unfurled. It was a great moment for everyone - and one that was not soon forgotten. The recognition value of this celebration was extremely high, while the monetary cost was relatively low. Highly motivating organizations even celebrate small successes. A healthconscious company distributes fruit bowls to employees' work areas when key personal milestones are attained. Another company uses a more fattening approach: fresh-baked chocolate-chip cookies to say thank you.

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Clearly the traditional "pay for loyalty" systems in most organizations need to be changed. Don't let attendance be your major criterion for rewards. Most employees resent those who only put in their time and yet receive the same reward as those who go the extra mile. Today's employees have higher expectations for what work can and should be, and they want to receive rewards that reflect their personal efforts and contributions. This is why so many companies are moving toward performance-based rewards, including performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea, companies are finding that these new reward systems do allow them to give substantial rewards to those who really deserve them. Smart organizations are looking for opportunities to reduce across-the-board entitlements, and thereby find more resources for discretionary performancebased rewards, without increasing the total cost of rewards. The Law of Rewards - "What you reward is what you get" - Is extremely powerful. No matter what your orientation materials or job description might say, it is the rewards your organization gives that communicate the real expectations. The most important question to ask in evaluating the reward system in your organization is, do the rewards we are giving elicit the performance we want? Start with the results you want to achieve and then pinpoint the types of behaviors needed to achieve them. For example: Also, don't confuse employees with too many rewards. It is better to focus rewards on the critical few behaviors and results, rather than diluting them by rewarding the trivial many. d. Timely action

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Rewards should be given as soon as possible after the performance has taken place. This is why the most successful gain-sharing programs pay employees monthly, rather than quarterly or annually as in the past. There is a well-accepted law of behavioral psychology, that if you want someone to repeat a behavior, you should positively recognize it immediately. From this law, smart supervisors and managers can learn a vital lesson: Look for any employee doing something right, right now, and recognizes it. e. Type of reward Rewards are as different as the people who receive them and it doesn't make sense to give rewards that recipients don't find rewarding. For example, some people prefer more pay, while others prefer more time off. A promotion might be more rewarding to one person, while a job-sharing arrangement might be more rewarding for another. Some people are excited about sports events, others about movies. Some employees would love a dinner in a romantic restaurant, others a book by their favorite author. Food, fun, education, improved work environment, gifts, travel, family-oriented activities - the options are endless. How do you know what will be rewarding to employees? Ask them. Smart organizations are also letting employees choose their own rewards from reward menus and catalogs. Personalizing rewards shows that a company cares enough to discover what "interests" each employee, rather than just distributing generic items. It also reduces the following danger: In one organization I was visiting, an employee opened a big drawer in his desk and disdainfully showed me all the "worthless trinkets" he had collected over the years.

f. Longevity of the reward

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Increase the longevity of rewards can be done in a number of ways: One of the keys to reward longevity is symbolism. The more symbolic an item is of the accomplishment, the more likely it is to continue reminding the employee of why it was given. For instance, a T-shirt of coffee mug with a meaningful inscription will continue rewarding those who wear it, or use it, long after its initial receipt. There are many tokens of appreciation I still keep on or near my desk that remind me of the joy of past accomplishments, while the monetary rewards I have received are long spent and long forgotten.

Another way to increase the longevity of rewards in your organization is by using some kind of point system. Rather than rewarding each individual behavior or accomplishment, points can be awarded, which employees can accumulate and eventually trade for items from a reward menu or gift catalog. This keeps the anticipation of rewards fresh for longer periods of time. It also addresses the need for reward individualization.

One company that designs motivational systems offers an electronic debit-card system to help larger clients cope with the complexity of distributing, tracking and redeeming employees' points. Employees can use their points to purchase virtually anything they want, from sports equipment and clothing to automobiles and overseas vacations. They only caveat for such programs is to make sure that the recognition value of the rewards isn't lost because of the impersonal nature of the technology.

g. Decrease the de-motivators

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Interestingly, when researchers have investigated the motivational dynamics of these workplace games, they have found that the major motivator is the playing, not the prize. Most de-motivators can be dramatically reduced by soliciting employee involvement in identifying highest-priority de-motivators and by enlisting topmanagement commitment to support their reduction. It is probably self-evident that considerable sensitivity is needed in the administration of any reward system. One de-motivator that is probably endemic in any reward system modification (especially as an organization moves from entitlements to more performance-based rewards) is a sense that something is being taken away. Employees need to be educated about the reasons that this is being done, understand the ultimate benefits to them and the organization, and should probably have some input into the change process. h. Avoid perception errors To avoid the perception of unfairness, it is important, first and foremost, that the process for allocating rewards is viewed by employees as being impartial. This requires an objective measurement system that few organizations have. Without such objective measurement, any reward system is probably destined to failure. 1.3.3. Internal advertisement strategy It communicates the advantages and benefits an employee received from the company. The theory holds that an organization must extend its marketing strategies to inside the organization. Competition is not just confined to marketing division of the organization but it directly affects the Human Resource division as well. The organizations are competing each other to acquire the scarce talent pool.

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Internal advertisement simply meant to tell the employee that the organization which they are working is good and a company favorable comparison should be given to employees to solve the inequity they perceive. The major difference with internal advertisement is that the communication channel is different from that of marketing channels. Here the communication

Communications Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. Keep the employees in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address. Regularly keep the employees up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern.

Listen to the employees when they have ideas for improvement. Again, the benefits extend beyond just making people feel appreciated for their contributions. These are, after all, the people who do the work every day. They may have some ideas to improve productivity, and when the employees do come up with one, let everybody know where it came from. Post a "brag board" in your break room, or circulate an internal newsletter that touts these

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contributions. The pay-off is a contagious feeling of pride and, perhaps, some new efficiency that saves the company money. Speak freely The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does the organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave.

1.4. THE CONCEPTS

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1.4.1. Applicability of Unique organizational structure strategy

Chart No 1.1

Employees who believe positional benefits will give job satisfaction (A)

(A) (B) (D)

Dissatisfied employees (B) Satisfied employees

Employees who believe various benefits will give job satisfaction (d)

Indifferent to satisfaction level The outer circle shows the number of employees who believe that various benefits provided by the company will give job satisfaction and this satisfaction will result in employee retention The top inner circle shows the number of employees who believe positional benefits will give job satisfaction. The position title shows the authorities and responsibilities in the organization structure. Employees feel that more authority and more responsibility mean more recognition from the society. This attitude triggers the employee to look for position title which represents more authority and responsibility. The small inner left and right circles represent number of dissatisfied and satisfied employees in the organization respectively. If the ratios between satisfied and dissatisfied employees inside and outside the top inner circle are

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different, it shows that job satisfaction level is depends on the employee belief on position title The exhibit No1.1 also shows to what extent the organizational structure contribute to the employee inequity. The unique organizational structure strategy can solve employee attrition in the shaded area. Larger shaded area in exhibit No1.1 shows greater percentage of applicability of the strategy.

1.4.2. Applicability of Variable benefit structure strategy

Chart No 1.2 Periodic change in existing benefit structure will give job satisfaction (A) (A) (B) (D) Dissatisfied employees (B) Satisfied employees (C)
Various benefit structures will give job satisfaction (D) Indifferent to satisfaction level(E)

Indifferent to satisfaction

The outer circle shows the number of employees who believe that various benefit structures provided by the company will give job satisfaction and this satisfaction will result in employee retention

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The top inner circle shows the number of employees who believe Periodic change in existing type of benefits will improve the job satisfaction and motivation to continue the job in the same company. The small inner left and right circles represent number of dissatisfied and satisfied employees in the organization respectively. If the ratios between satisfied and dissatisfied employees inside and outside the top inner circle are different, it shows that job satisfaction level is depends on the employees belief on periodic change in existing type of benefits. The exhibit No1.2 also shows to what extent the organizational structure contribute to the employee inequity. The variable benefit structure strategy can solve employee attrition in the shaded area. Larger shaded area in exhibit No1.2 shows greater percentage of applicability of the strategy.

1.4.3. Applicability of Internal advertisement strategy

The Important factors to retain the employees in an organization are; conducive organizational culture, emotional bond with organization and awareness of benefits receiving from the organization. advertisement strategy are: 1. Presence of internal communication channels. 2. Frequency of internal communication 3. Accessibility to internal communication channels These factors can be improved by effective communication. The important factors for implementing such an

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3. PROFILE

3.1. BACK GROUND OF THE STUDY A general idea of the retention measures present in the industry is important to understand the research environment. Apart from the legal and mandatory benefits such as provident-fund and gratuity, below is a list of other benefits IT professionals are entitled to the following: 1. Group Medi-claim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family members include spouse, non-earning parents and children above three months 2. Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. This covers total / partial disablement / death due to accident and due to accidents. 3. Subsidized Food and Transportation: The organizations provide transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized. 4. Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the IT companies also undertakes to pay electricity/water bills as well as

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the Society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance. 5. Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities. 6. Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc 7. Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset. 8. Personal Health Care (Regular medical check-ups): Some of the IT companys provides the facility for extensive health check-up. For employees with above 40 years of age, the medical check-up can be done once a year. 9. Loans: Many IT companies provide loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with financial assistance at the time of their wedding. And, the new recruits are provided with interest free loans to assist them in their initial settlement at the work location. 10. Educational Benefits: Many IT companies have this policy to develop the personality and knowledge level of their employees and hence reimburses

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the expenses incurred towards tuition fees, examination fees, and purchase of books 11. Performance based incentives: In many IT companies they have plans for, performance based incentive scheme. The parameters for calculation are process performance i.e. speed, accuracy and productivity of each process. The Pay for Performance can be as much as 22% of the salary. 12. Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program 13. Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical Reimbursement, Special Allowance 14. Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as

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Cricket, football, etc and regularly play matches with the teams of other organizations and colleges. 15. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization. 16. Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization. 17. Employee Stock Option Plan. Employees will be entitled to get the shares of the company. This will make employee directly related to the profit. ?

5.2 CONCLUSIONS
The research shows that there is a relationship between Positional benefits and employee retention in the organization. It also concluded that internal advertisement cannot be used in the small and medium scale software enterprises. Though there is an association between benefit structure and

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employee preference for staying the company, the research revels that this relationship is not conducive for implementing the variable benefit structure strategy. My dissertation for retention strategies in the software industry was highly informative and supportive to my future it has helped me to gain knowledge of conducting study of human resource function in an organization. Many HR professionals feel that work performance is a contemplation of how employees feel about themselves and their work, If an employee experience a sense of pride in the job then the work quality, efficiency, and retention increases significantly. Employees who suffer from low self esteem and display lack of enthusiasm exhibits negative feelings at the work place. Protecting the self esteem of the employee will be top agenda for future organization. One of the best ways to achieve that is by providing socially acceptable positions titles to the employees.

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