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“EFFECT OF DOWNSIZING ON EMPLOYEES’ MORALE”
SUBMITTED TO: PROF. SUMANTA SHARMA PROF………………. IIPM, NEW DELHI
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..IIPM. supervision and help to me by number of people. for completion of my thesis.ACKNOWLEDGEMENT The present work is an effort to throw some light On “Effect of Downsizing on Employees’ Morale” The work would not have been possible to come to the present shape without the able guidance. New Delhi. Prof. I also convey my heartfelt affection to Mr…………. . Sumanta Sharma Associate Dean . Who helped and supported me during the course. With deep sense of gratitude I acknowledged the encouragement and guidance received by my Mr.
THESIS APPROVAL LETTER .
THESIS SYNOPSIS .
CHAPTER4. INTRODUCTION LITERATURE REVIEW Conceptual approach to employee downsizing Downsizing and employee attitude Employee morale during downsizing Employee retention strategy into high gear Organizational climate also affects employee retention rate and positively affects employee downsizing rate Tips for creating an effective organizational climate for What do you mean by organization Contents of organizational climate Organizational vital signs-a leading indicator of satisfaction measuring Of employees Organizational climate-employee satisfaction survey Employee down sizing & employee motivation are closely knitted Employee down-sizing & employee engagement Diagnostic tool minimum employee down sizing CHAPTER3.TABLE OF CONTENTS CHAPTER1 CHAPTER2. RESEARCH OBJECTIVES RESEARCH METHODOLOGY Methodology .
Research design Nature of data Data collection Sample size: Sampling technique Sampling procedure actually employed: Analytical tools: CHAPTER5. DATA ANALYSIS CONCLUSION & IMPLICATIONS RECOMMENDATIONS BIBLIOGRAPHY APPENDIX . CHAPTER7. CHAPTER6.
⇒ Restructuring or even reducing the activities of industrial units. ⇒ Modernizing. In management parlance. They are able to derive maximum advantage due to these possibilities. they lead to frequent changes at the organizational. ⇒ Shift in the organizational requirements. nowadays. ⇒ Outsourcing. and individual levels.Chapter-1 INTRODUCTION What Is employee Down Sizing Employee downsizing is a nightmare feared by most of the employees working in the corporate world. Employees. will have to reconcile with the ugly realities of the corporate world and they may have to be prepared for alternative employment as the axe may fall on anyone at any time. functional. and ⇒ Redesigning the job in an organization. technology. While the larger goals appear justifiable and in the interest of most stakeholders. the term downsizing refers to pruning (including layoffs and retrenchments) of the size of workforce for a variety of reasons: ⇒ Obsolescence of skills consequent upon up gradation of technology. organizations are able to develop a number of approaches by which to employ human resources. Due to the globalization of business. and capital to implement innovative projects in different parts of the world. .
The pain is not limited to the individual alone but affects a number of others.At the organizational level. which companies tend to overlook in pursuit of short-term gains. Aside from the financial implications of a job loss. For the affected employee. a number of associated hidden costs. The fundamental reason to resize the organization is to improve organizational performance and to reduce costs of operation. the emotional trauma of losing a job is very difficult to cope with. they have to reconcile with the loss of self-esteem. The challenge is to manage employee exit without disrupting the organization's functioning. . or let go within a very short span. Along with the individual. nature of employer-employee relationships and the associated social costs. it can imply changes in the availability of resources. etc. outsourcing. People who contribute to the organizational goals are the organization's assets. rendered redundant. and a breach of trust between the employer and the employee. restructuring. without adequate preparation for these changes. his/her family also gets deeply affected with the involuntary job loss of a family member. an analysis of corporate experiences of downsizing shows that such measures are not always implemented with careful consideration of all the implications. in its wake. employees can be redeployed. changes in the scope of activities. While these changes are expected to fetch significant gains for the companies in the long run. such changes can lead to closure of businesses. off-shoring. transferred. The effect is also felt by other employees who remain in the organization as they suffer from the guilt and are also faced with the fear of job insecurity. Those individuals who lose jobs are the hardest hit. As a sequel to these developments. Such changes take their toll in terms of organizational productivity. Downsizing also brings. etc. At the functional level. These assets are turned into liabilities due to reasons mentioned earlier. merging with another organization. self-confidence.
Over two-thirds (70%) of HR managers state that employee retention is a primary business concern. Studies consistently show that even though employees may say they are leaving for more money. the money factor is about 5th or 6th on the list. But more and more companies are investing time and effort in making better hiring decisions and doing more to keep the employees they do hire. regardless of size. it should be preceded by a careful consideration of the consequences of such a drastic action. A number of alternative approaches can be implemented to achieve the overriding goal of enhancing business performance. knowledge. are struggling with how to keep employees from leaving for more money or better opportunities. At the same time. How Down-Sizing affects employees’ morale Every year companies spend millions in recruitment due to employee turnover. Employee retention is now a buzz word in today’s business world. All companies. Turnover and its associated costs are a burden that used to be just the cost of doing business. However. disagreement with the culture or direction of the company. If the axe has to fall. HR managers currently find employee retention a business challenge. it is true that downsizing in many cases is an inevitable option. such as the retiring Baby Boomer population have the potential to aggravate this issue. long-term demographic changes. experience and valuable relationships. skills. which walk out of the door every time somebody leaves.The flip side of downsizing is that the organizations lose expertise. downsizing should be considered not as the first but the last option. when those same employees are asked several months later why they really left. poor treatment by . The first few reasons include lack of recognition.
their boss. Communicate company • progress. Recognize positive contributions to the company. the cost to replace that person will be approximately $75. . Be as flexible as possible as to when and where the work gets done. ? How much? When you add the costs of finding an employee. lack of excitement about their growth prospects. This money comes out of your hard-earned profits.000.000. So. • • Be as flexible as possible about how the work gets done. the cost can easily equal 150% of the base salary of the person who left. financial news. training the new employee. if you are paying someone $50. Some of the steps taken by companies to retain their work force are: • • Ensure you offer competitive compensation. major customer or sales activities on a regular basis. This is one of the key reasons that companies are focusing so much effort on keeping their current employees. Consider adding lifestyle benefits that are cost effective (read easy on the cash flow). Ensure you offer basic health care benefits at reasonable rates. Can it be OK for an employee to take a few hours off to attend to a family or personal matter if they can accomplish the job at their home in the evening? • Take a real and genuine interest in people’s career aspirations and personal lives. • Find out what employees want from their career and do what you can to provide for their needs. lost productivity and filling in for the employee who leaves. and poor relationships with co-workers. Follow up on your commitments to provide information or answers.
they still have a valid perspective. such as ownership in the company or 50% per year salary increases. If you can respond to their needs before they become real issues. . Even if they left six months ago. Set boundaries if necessary as to what items are not negotiable. they won’t begin looking for greener grass. • Ask former employees why they resigned. • Routinely ask employees what you can do to make the company a better place to work. company progress.• Have regular (bi-weekly or monthly) meetings with all employees where they can ask you questions about your plans. Be accessible to them so you can learn their needs. etc. new developments to look for.
or whose organizational culture is characterized by domination and autocracy are likely to have dissatisfied employees no matter how good the incentives to stay may be Or. where life-time employment and high employee loyalty are the norms. Frequent job changes are no longer a stigma. at the very least. Even survival will become questionable. “ employee retention ” poses a distinct challenge to any company. but they are becoming norm. economic prosperity also means increased jobhopping among the job seekers.PRACTICES TO REDUCE EMPLOYEE DOWN-SIZING Many companies face the challenge of employee turnover. and incur heavy losses. that even in Japan. However. and better prospects for growth in all sectors. With the increasing mobility among the workers. The employers provide several attractive packages in order to retain the employee. the tenure of their employees is likely to be highly sensitive to changes in specific (usually monetary) incentives: small changes in compensation may lead to numerous departures. There are however other aspects of the work environment or particular jobs that can act as strong ‘de-motivators’ that can cause people to leave their employment. Companies that are inflexible. These include Lack of control over one’s work • • • • Feeling bored or unchallenged by repetitive tasks Lack of job security Lack of learning opportunities More generous compensation or benefits package offered elsewhere . increased productivity. The issue of employee turnover is so pronounced in today’s world. Good economic time’s means lowered unemployment. Reasons for employee turnover constitute several controllable and non-controllable factors. if the company witnesses higher turnover among the top performer. workers are becoming increasingly mobile. Opportunities abound everywhere with increasing competition for talent among companies.
Why do people choose to leave or stay? Setting aside list of retention policies and programs. • Opportunities for learning and skills development and consequent advancements in job responsibilities. These features • A stimulating work environment that makes effective use of people’s skills and knowledge. sufficient to ensure strong employee commitment. two-way communication. . the business literature dealing with employee participation. Most of these are directly related to creating a satisfactory work environment for employees and thus. indicating a strong interest in and recognition of how other aspects of working life influence people’s decisions to stay with or leave a company. it is important to note that the current HR literature treats them as only one potential area for retention. and allows them to see how their own contribution influence the company’s well-being. Over the past 10 or 15 years. • Good compensation and adequate. it is clear that there is broad agreement in the HR literature about the general features of any potential HR program that contributes to good retention. employee participation in decisions that affect them. • Effective communications. and not always in and of themselves. flexible benefit plans. provides an avenue for them to contribute ideas.• Concerns about the future of the firm It’s Not Just the Pay … While remuneration and other types of benefits continue to be an important factor in the retention equation. including channels for open. to good retention. in turn. workplace wellness. an understanding of what is happening in the organization and an understanding of the employer’s main business concerns. allows them a degree of autonomy on the job. work-life balance and other topics has mushroomed.
• Recognition on the part of the employer that employees need to strike a good balance between their lives at work and outside of work. . • Respect and support from peers and supervisors.
Against this backdrop. after India opened up its economy. which enables companies to offer a range of smarter options to employees. the author analyses the performance of the Indian Public Sector Undertakings (PSUs). However. However. in 1980s and 1990s many companies resorted to downsizing their human resources in order to cope with economic pressures. explains the economic situation of India since Independence (post-1947) and in the aftermath of the economic liberalization (post-1991). The article explains the significance of this new concept and provides examples of companies in the US and UK which have adopted the strategy. Kalyan Chakravarti in the article. It also explains that while companies in the US are at a greater liberty to downsize. "Downsizing and Outsourcing: An Indian Perspective". On the contrary. the UK business environment is not amenable to such measures. But what most of these companies do not realize is that downsizing does not always lead to savings in reality or increase in the market worth of the company. He outlines the causes that resulted in surplus manpower among PSUs. they can adopt alternative approaches to cope with economic uncertainties. One of the major steps taken to achieve this goal was to shed . most PSUs were compelled to streamline their operations to increase their efficiency. It usually leads to repetitive downsizing and results in the loss of employee morale and loyalty and thereby affects overall productivity levels. Wayne Cascio had proposed a new strategy termed as "reflective restructuring". the downsizing companies may be branded anti-people.Chapter-2 LITERATURE REVIEW Conceptual approach to employee downsizing "Reflective Restructuring According to Theo Blackwell of The Work Foundation.
The article also illustrates a few alternatives to downsizing and highlights new workforce concepts.. The article explains the need for tying rightsizing efforts with the overall strategy. In certain cases. Barbara L Davison explains. sidesizing. rightsizing. identifying critical growth areas as well as those needing consolidation. i. to cope with fluctuations in business cycles.e. resizing. upsizing. In this connection. The author illustrates how to carry out a rightsizing exercise with the help of a process example. Agilent Technologies. evaluating the financial implications. and Schwab. The other major step was to outsource non-core activities and focus on their core competencies. and ensuring that each department and employee adds measurable value.e.." by floating Voluntary Retirement Schemes (VRS) and Compulsory Retirement Scheme (CRS). analyzing the effects of rightsizing on all functional areas. such as Ernst & Young. Rick Maurer of Maurer & Associates. In addition. which describes the most important steps. and wrongsizing. which have implemented rightsizing. Cisco. emphasizes the need for organizations to act swiftly to cope with changing business conditions and on their requirement of human resources. The author clarifies that rightsizing need not imply reduction of personnel. The article provides a snapshot of the Indian experience of downsizing and also discusses the social implications of these drastic measures. i. Business leaders need to continuously assess the mix of skills required as well as the number of employees required for the present and the future. "Just-in-time" workforce and the "Portfolio" workforce.the excess staff on their payrolls through the "golden handshake. it cites the examples of a few companies. it can also mean increase in the numbers. in "The Difference Between Rightsizing and Wrongsizing". the differences among the terms used in conjunction with downsizing. they .
Equal Employment Opportunity (EEO) guidelines. It . paying attention to the aftereffects of downsizing. The article explains that downsizing may prove to be a risky strategy that may not always bring about much improvement in terms of the productivity or revenues to the organizations. The article also suggests the use of objective data to formulate the downsizing plan. Hyderabad. etc. rightsizing the right way. Further. In conclusion. organizations must pay due attention to the rationale for downsizing. companies should consider a number of different alternatives to downsizing. Implementation of employee down sizing Sumati Reddy of the ICFAI University. involvement of employees in designing the program. especially during the initial stages of rightsizing. If downsizing is inevitable. considering scientific alternatives to downsizing. formulation of a fair and equitable policy. it is of the utmost importance to plan workforce requirements keeping in view the turbulent business environment. legal counsel. The author points out that mass layoffs should be viewed as a change process to be implemented by adopting a systems approach. India outlines ways in which employers can implement a well-considered downsizing program.should engage in a process of benchmarking with companies in the same industry. These lessons largely pertain to the need to remain lean and mean in a fast-changing global business environment. and being aware of the legal implications of downsizing. it points to a few indicators to assess the effectiveness of a downsizing program. to cope with changing requirements of staff. Carlton Becker of ORC enumerates a number of lessons from the collective experience of layoffs by companies across the globe. Hence. It explains the strategic role of HR executives during the whole process.
managing the rumor mill. and managing the results. DaimlerChrysler AG's US unit Motorola. Such organizations give due attention to each of the three phases of downsizing. Ann E Feyerherm of Graziado School of Business and Management. CA. they had to face the inevitable reality of the downsizing spectre. its implementation. Robert M Tomasko. Canada. The author adds a few essential aspects to be considered while downsizing. . USA. Pepperdine University. Since the axe had to fall. Also. employee morale. Many organizations are beginning to realize the adverse effects of employee downsizing and are looking for ways to do so in a more humane manner.e. These suggestions pertain to the importance of adopting participative downsizing. and Lucent Technologies. provides guidelines to be adopted while implementing a downsizing strategy.. her team of management consultants explored several alternatives to avoid downsizing. also provides guidelines based on the first-hand experience of a manager involved in a downsizing effort in a company in South California. i. the best approach adopted was to downsize with dignity and to ensure that those who were let to go were equipped with new skills to enhance their career prospects.further explains the step-by-step guidelines that HR executives can adopt in the downsizing process. Lessons can be learnt from those organizations that have been able to maintain. the author describes specific measures undertaken to achieve these twin goals and enumerates the lessons learnt through these difficult times. She concludes that during these difficult times. and sometimes even enhance. planning. she had no other principle to live by other than the one she had within. Although. The article shares the experiences of a few companies such as MacMillan Bloedel. Hallmark Cards.
Managers are always confronted with the challenge of capturing and codifying explicit and tacit knowledge and then converting it into innovative products and services. which have been active in managing the human side of downsizing would find that they have laid the groundwork for new and stronger relationships with their employees. The effectiveness of these parties are analysed vis-à-vis the nature of support gained by laid-off workers in . if managed on an ongoing basis. Coping with Downsizing Neela Radhika of the ICFAI University.Pink Slip Parties. The article concludes by saying that those organizations. Pink Slip Parties offer a number of benefits to both job seekers. In an era of downsizing. Hyderabad. can offset the loss that can occur as a result of downsizing. describes a new phenomenon observed in the aftermath of downsizing . It describes how Pink Slip Parties came into practice and the reason for using the term `Pink Slip'.providing continual and frequent communication. The article describes a number of organizational practices. The article elucidates the special features of these parties with respect to attendees. It also discusses a number of steps to manage knowledge assets. message boards. organizations need to pay special attention to the fact that with downsizing. who had lost jobs on account of downsizing. the kind of music played during these parties. and paying special attention to the results. organizations also stand to lose on the vital and tacit knowledge inherent in the outgoing employees. the colour of wristbands or badges. as well as the recruiters. India. Seymour Siegel focuses on the need for organizations to take care of two things in order to gain competitive advantage in the 21st century. and activities. which. The first pertains to the management of knowledge workers and the second to the appropriate management of knowledge itself.
110 municipal staff in Raisio. job insecurity. such as Layoff Lounges. It encompasses the period prior to downsizing. on earnings. during downsizing. and sickness absence. and letting go the temporary employees. between 1990 and 1995. downsizing was associated with negative changes in work. This model can also be used to examine the impact of downsizing on the duration of jobless spells. Jaana Pentti. The downsizing exercise was a reactive one. Finland. Mika Kivimäki. which is rarely feasible. and when downsizing had slowed down. Jussi Vahtera. sickness absence increases twofold in a major downsizing as compared with sickness absence during a minor downsizing. increased prevalence of smoking. impaired support from spouse. continuity or change in occupation. and Jane E Ferrie reports the results of a study conducted to investigate the effect of the psychosocial work environment on employee health. and on job satisfaction among workers who obtain employment. Jonathan Kelley explains that the significance of downsizing depends on its long-term impact on workers. social relationships. and health-related behaviours that lead to increase in certificated sickness due to increases in physical demands. The model combines three factors: . The article also points to new developments in this area. conducted through retirement and hiring freezes. Some of the significant findings of the study are: downsizing results in changes in work.restarting their careers. and reduction in job control. It has been found that this study was unique in the area of employee downsizing and employee health as it studied a natural experiment. It presents a model to study the probability of re-employment among workers shed by downsizing firms as compared with those departing from stable or growing firms. This study was conducted among 1.
and most of them do so quickly. It also provides guidelines for employers. gender. and many do not receive any advance warning). William M Rodgers III. ages. It delineates the differences in approaches by small and large firms. employees and policymakers to deal with the consequences of job dislocation. and it happens at very short notice (usually one week or less. The experience of downsizing employees during the last few years points to the need for employees to be prepared for a job loss at any point of time in their career. education levels. the most significant being emotional distress and financial hardship. workless spells between jobs are short or non-existent. 75% of the downsized employees find jobs.re-employment by age. occupations and industries. offers glimpses of the consequences of involuntary job loss for workers and their employers. It describes the evident patterns of worker dislocation: it affects both blue-collar and white-collar employees. and education. This report also includes examples of effective practices of a few companies to bring succour to the displaced workers. workers of all races. Carl Van Horn. such as older workers and women. Some of the significant findings of the study are: downsizing is not a disaster for most of the workers. Neil Ridley. and the most serious grounds for concern relate to groups of vulnerable workers. Large firms offer more assistance and better severance pay as compared with smaller firms. and Laurie M Harrington of Rutgers. . The report describes the impact of job loss on individuals and their families.
DOWNSIZING AND EMPLOYEE ATTITUDE In today's competitive market. The decision to downsize is made for strategic and financial reasons. It is important to remember that this event affects not only the "downsized. employers often underestimate the need to provide support to employees. Why Is this Important? Downsizing has become a common occurrence in today's business world. Because of this. The expectation is that the expense reduction will lead to a positive impact on the bottom line and will ultimately be reflected in improved profitability and productivity. In fact. both those who are being released and the 'survivors. this everyday event in the business world is a unique (hopefully) event for you and your employees. Effects on Work Effort In an attempt to determine the impact of downsizing. the problems it was designed to correct may be intensified due to the impact on the loyalty and attitudes of the survivors. many organizations neglect to factor in the psychological impact of downsizing on those who remain. However. In this study. the effects of job insecurity and economic need to work on employee attitudes was examined by Brockner and his colleagues in 1992." but also those who remain. Brockner decided to use work effort as a measure of job . many companies have found that staying in business means downsizing. many employers and employees no longer believe in the concept of lifetime employment. However. if downsizing is handled improperly.' Many employers feel that the only support they can provide is expensive outplacement services. As a result. and many other factors.
losing their jobs). From this perspective. of more interest was the finding that variables moderated this observed relationship. Specifically. "When survivors perceived that those laid off had been dismissed with little or no compensation. coupled with low need to work resulted in no change in the level of work effort. layoff survivors can be expected to exhibit the most negative reactions when they identify with the layoff victims.. The study found that high job insecurity coupled with high need to work.e. as Brockner's study reported. as would be expected during downsizing. and feel the victims have not been well compensated. resulted in increased work effort following a layoff. Brockner found that the remaining employees' perception of the fairness of the lay-off process and their attachment to the lay-off victims colored their views. The Justice Theory Theories of organizational justice propose that people attend to the processes used to determine outcomes as well as to the end result in determining "fairness. the remaining employees considered the way in which their co-workers were treated during the downsizing process as well as the outcome (i. While this result is interesting. This seems to indicate that when there are high levels of job insecurity. High job insecurity.attitudes. employees with a high need to work will increase their work effort." For example. This issue of fairness has been found to be related to a number of other work-related variables and has its roots in theories of organizational justice. they reacted more negatively (from an organizational perspective) to the . while those with a low need to work will have no change in work effort.
that is. 1987). 1987). there are eight factors affecting employee loyalty. The next section describes some steps that can be taken to minimize the negative effects of downsizing.. in descending order: .)—even as they are in the process of becoming uncommitted to them by laying them off--the more committed to the organization are survivors apt to be" (Brockner et al. if organizations show commitment to their dismissed workers (through caretaking activities of providing severance pay and outplacement counseling. Strategies for Maintaining Positive Employee Attitudes According to survey results from a study on employee loyalty conducted by Industry Week.. The post-layoff setting provides organizations with a rather unique..situation in which to express their commitment to employees. They are." (Brockner et al. Conversely. Brockner's study indicates organizations can proactively affect surviving employees' attitudes during periods of downsizing. Brockner found that negative attitudinal changes were reflected in survivors' reduced work performance and lowered commitment to the organization.extent that they felt some prior sense of psychological kinship with the laid-off parties.. the study showed that employee commitment can actually increase during a layoff process when the company shows some commitment to displaced workers. What Brockner's study would indicate is that employees are affected by more than just the fact of layoffs. They are affected by how the layoffs are managed and by what is done for the individuals in those positions.
and working to restore loyalty. the losses due to decreased employee loyalty. come out and say that. By communicating with employees. security. in terms of lost productivity and employee loyalty. may be significant. Ensure that communications cover the following topics: .equity. Communication will help to curb the worry and redirect employee energies to the job at hand (Fisher. however. The most preferred method of communication is personal appearances from upper management. or intensifies. benefits and personal support (McKenna. any communication at all will be helpful. Communicate During downsizing. 1988). the associated costs. Downsizing is a stressful time for employees. good communications. empowerment. it is possible to avoid some of the most dangerous pitfalls of downsizing. 1991). Unfortunately. many managers in the position of being "in the know" are guided by a policy in which they are to avoid talking about rumors with employees. morale and lost productivity are compounded by the complexity of the layoff process. For example. and is a time in which they will question each of the eight factors mentioned in the above quote by McKenna. Silence is the worst policy" (Fisher. integrity. good management. "If you don't know something. the rumor mill that develops. While this policy may seem appropriate. 1988). making them feel part of the organization. or you do know but SEC rules or other legal constraints have momentarily sealed your lips. during the preliminary planning stages results in employees spending significant amounts of time gossiping and worrying about what may happen.
or some processes to increase efficiency. but it will increase their trust level if they hear it from you. explain future plans including detailed plans for restructuring. justification for the layoffs is extremely important. this is important for managing and maintaining remaining employees' moral and company commitment. This must be done with sincerity and no sense of condescension. Employees need to understand that you sincerely need to make these cuts and it is not a whim or a mistake. upgraded technology. whenever possible." In addition. that though employee downsizing is necessary. • communicate. • • explain the purpose of the downsizing. Make Valuable Employees Part of a Progressive Organization To stay or not to stay? That is the question some remaining employees ask in the aftermath of their company's downsizing process—particularly those who have other employment opportunities outside the company. • emphasize that laid-off employees will be treated with respect and dignity. employees already know. • if possible. explain the need for growth and profitability (which can be perceived as legitimate reasons when presented in an appropriate manner). especially if times are good and the downsizing is a part of strategic growth and profitability. • Most importantly. When these employees see some top . such as "calming the mob. each employee who is let go will receive appropriate severance pay and (if you intend to offer it) job placement assistance. listen carefully to employee concerns and adequately address each concern to whatever degree possible.Talk about the fact that changes are coming.
and describe any plans for growth and prosperity. A former West Coast bank manager who left when he saw his manager leave made this comment for an article in Fortune: "If you let people get the idea that the company is not just cutting back but is sinking into mediocrity. Do not allow management to assume remaining employees are merely grateful to still have jobs. as the people who leave under these circumstances are generally those with valuable skills and training. they may question the long-term prospects for the company and consider an immediate job change. This is something to watch out for. Employees need to feel they are valued. This quotation highlights the importance of managing perceptions with "positive press" and communication from upper management. and that management believes that they are an important part of the success of the organization. . 1988). that they have a place in the company. To emphasize this point. Discuss the downsizing as a step towards a more efficient and profitable business with an attractive future. morale really goes to hell" (Fisher. continue communicating with employees to re-build security and trust. Rebuild Loyalty Long after downsizing is completed.managers leave voluntarily. talk about where the company is headed.
They obviously feel less secure.EMPLOYEE MORALE DURING DOWNSIZING Why morale matters Of course employees will feel unsettled during downsizing. Survivors of downsizing can become unduly risk averse and narrowly focused. and their future relationship with the company. They may also lose the belief that their contribution to the business will be rewarded in future. However. Downsizing can threaten employees’ sense of well being in several ways. just accepting loss of morale as an inevitable consequence may undermine the very productivity gains intended by the change. It consists of many facets and may be manifest in many outcomes. So employers should seek to minimise the unwanted impact of downsizing. They may see the company as having behaved unjustly or unfairly. . But ‘morale’ is not a simple concept. They also need to recognise the extent to which the manner of managing such change affects how employees feel about the change. These outcomes include: • • • • whether employees stay with the organization whether they achieve organisational or personal goals whether they are able to adopt new working practices and learn new skills how they respond to customers It is a useful start to identify specific outcomes of morale which the organisation wishes to address. and therefore less creative and open to change. These responses may easily threaten business performance.
Although it is often difficult to address interventions to particular workforce groups. Anticipating employee response A number of ‘risk factors’ were identified as indicating circumstances in which downsizing was most likely to hit morale. they can sometimes be tailored with varying needs in mind. or how they will acquire the new skills they may need • managers who are unwilling or unable to provide adequate time and support to individuals.The organisations involved in the study suggested three common strands to a strategy for influencing morale. Anticipating impact also means understanding that individuals in different job groups or career stages may respond differently to downsizing. They included: • • • • • failure to convince the workforce that job reductions were necessary apparent lack of clarity or unfairness in deciding on individual redundancies lack of care over redundant staff lack of alternative career development options if promotion becomes unlikely changes which leave survivors unclear of what is expected of them. . They were the ability to: • • • anticipate likely employee response identify interventions to impact morale monitor and evaluate morale and the impact of actions taken.
often through team building activities. They also need to be clear what is expected of them in the new organisation. So communication has to be honest in dealing with the negative feelings of employees. Employees need to understand the business reason for reducing headcount. and how the change will be managed.Interventions to build morale It is difficult to target interventions with any precision to influence morale. They may address such areas as Stress Management and Careers Counselling. Organisation Development initiatives may be used to try and improve the effectiveness of the emergent organisation. and lead to rumours. Enhanced access to training and work experience may be needed to help staff adjust to new job demands. Conveying the reasons for such a painful change is central. Breaks in communication are seen as sinister. Performance Management often needs attention to ensure that staff feel that the new demands are realistic in terms of the reduced staff resource. They may include work to rebuild relationships between and within groups and departments. However. Attempts to deny the reality of the painful aspects of the change are seen as insensitive. Giving direct support to the ‘survivors’ as well as the ‘victims’ of downsizing leads to other types of intervention. It is important to communicate throughout the period of change. Communicating with employees during downsizing is vital. Reward strategies may also need . the participating organisations identified several broad kinds of action which they saw as particularly relevant. not just at the beginning.
In spite of the difficulties of evaluating the impact of specific responses on morale. Ownership of the issue may be difficult to establish — senior management itself often being in a state of flux during periods of downsizing. but there is a lack of clarity at present about the link between alternative reward strategies and morale. Monitoring and evaluation Evaluating the success of attempts to influence morale during downsizing is not easy. and avoid them feeling isolated. Some companies use regular forums for managers to do this throughout the change period. staff turnover. For line managers to support staff effectively at a time of difficult change. and the variation in response over time. Also we know relatively little about cause and effect in the area of morale. There are indeed many limitations to controlling morale including the variation in individual response. the impact on individuals of what they see happening to other employees. Separating the impact of different interventions can be difficult. For example. organisations are using a range of measures to monitor some of the outcomes of morale. absence from work and performance indicators (eg customer service) are often monitored numerically. It can help for managers to share their concerns with their peers and discuss how to deal with staff issues. they in turn have to feel as though they know how to handle queries and problems. and downsizing is seldom the only organisational change going on. . Many managers believe — or like to believe — that the general level of staff morale is outside their control. There is a natural tendency not to want to ask people how they are feeling when you expect negative responses.realigning. The employee’s relationship with their line manager may have a significant effect on how well they cope with downsizing.
‘Softer’ measures of attitudes and perceptions of employees are obtained through the increasing use of employee attitude surveys. Managers need to understand how employees are feeling in their part of the organisation as well as in aggregate. . Upward feedback is another way of collecting information on employee morale and response to initiatives. and track changing perceptions over time. It can also be used as a starting point for improving relationships within teams in the wake of downsizing. These can be used both to identify variations in response within the workforce.
With a dynamically changing and volatile demand-supply equation. who are techno-savvy. Mutual understanding of job requirements is essential as many candidates eager for employment may overlook essential duties or prerequisites. The new age workforce comprises mostly of knowledge workers. Today HR is expected to comprehend. The first step in the process is to communicate all of your expectations and requirements before making an offer of employment. especially against erratic attrition trends and cutthroat competition no longer restricted to local or regional boundaries. Review the appropriate job descriptions and all its’ requirements with your candidate. aware of market realities. . are materially focussed and have higher propensity to switch jobs. in terms of its acquisition.EMPLOYEE RETENTION STRATEGY INTO HIGH GEAR The new age economy. They prefer to experiment and explore new opportunities. are high risk takers with higher aspirations and expectations and generally have a totally different mind-set about job and careers. with its attendant paradigm shifts in relation to the human capital. development and retention. utilization. implement and sustain relevant strategies and contribute effectively towards giving the corporation its winning edge. has placed a heavy demand on today's HR professional. This is a good time for any testing you may require as well as drug testing or background checks. conceptualize. a need for strategizing and putting in place a robust mechanism for attracting and retaining top talent becomes vital for the company's very survival and growth. innovate.
The other two segments comprise of the 'solid pro's' and the 'stars' who are at the higher end of the performance continuum. but contribute immensely to the company's overall performance. Retention strategies have to be viewed holistically against the total systemic framework of talent management that encompasses the 'talent'. We've got to protect this group from the pull of all non-retentive forces and that needs effective retention strategies that have to be kicked into high gear. . There are people who are woefully inadequate in both dimensions. We could call this as the 'talent' segment. This constitutes about one fifth of the total human capital at our disposal and these people obviously qualify to be the first candidates for the pink slip. which have an inverse relationship with each other. The former may be relatively lower in their potential as compared with the latter. would help. Recruitment and needs for downsizing must also be considered in conjunction. and potential compulsions. who we may call 'strugglers' and there are the 'under-performers'. This is the segment we do not want to lose. Attrition and retention should be seen as reciprocal phenomena. An understanding of the inherent considerations of an individual who wishes to join a company and continue to stay. which push him away. the 'corporation' and the 'environment'. whose performance falls below their potential. does supply really outstrip demand? Supply of what and demand of what? What kind of people get the pink slip and whom do the companies ring fence? In any organization the employees may be broadly classified into four broad categories in terms of their performance and potential.In the current scenario.
one-toone sessions. power politics. marginalization. broader. other important considerations being.related attributes that impact employee retention include high demand on performance. ex-employee interviews. contentment and commitment levels becomes a pre-requisite to designing and implementing any worthwhile retention strategy. the pay package and other pecuniary benefits. the opportunities for career growth and professional development and the kind of technology. the class and quality of people that work in the company. need for new competencies. goal & role clarity. informal social interactions. mission. policies & processes and organizational communication. need for re-skilling and re-deployment. change of tasks and responsibilities. change of boss.The company's brand image crowns the list of the priorities for the job seeker. to take up higher studies or certain private compulsions. movements. Anxieties and apprehensions arising from restructuring. grape vines. vision. the challenges of the job and attractiveness of the position & designation. Putting in place an effective sensing mechanism to gauge comfort. Other company. Whatever may be the instrument. mergers and acquisitions etc. the success . case studies and a multitude of trend analyses based on hard attrition data. organization climate audits. whether used singly or in combination. open forums. philosophy. career offerings and growth prospects. he would be exposed to. From the company's perspective. Dissatisfaction in any of these aspects causes severe cracks to appear in the bonding. culture. values and ecology have a direct bearing on talent attraction and retention. to start one's own venture. Other factors could be to explore better prospects elsewhere. deeper and diverse job expectations. Many such instruments have evolved over the years and include employee satisfaction surveys. its brand equity. exit interviews. could be instrumental in taking decisions to leave.
knee-jerk changes. personality and commitment. The retention strategies should be designed such that the retentive forces are maximized and the debilitating forces minimized. recognition etc would exert a positive influence on the subject talent. credibility. While on the one hand. unexciting and drab jobs. unrealistic deadlines. An effective selection process ensures the entry of the right kind of people into the organization. rigid power structure. on the other hand. . lure of lucre and poaching would be debilitating. transparency. staffing and development strategies in addition. responsiveness and creative policies on compensation. which in fact include sourcing. an enduring culture and an environment that is trusting. A robust sourcing strategy is crucial to the exercise since the type of people one selects should not only fit into the job in terms of skill set but should match the company culture in terms of attitude.depends on collection and collation of unbiased responses. their effective analysis and drawing sound inferences. a compelling brand image. control. caring and nurturing. empowerment. astute leadership within the organization. compliance. unjust discrimination. In order to appreciate the push and pull effect on the individual in the context of attrition and retention a qualitative force field listing may be helpful. cataloguing of direct and proximate clues. with the desired loyalty and sense of belonging that goes a long way in restricting attrition in the long run. Retention strategies should not be orchestrated in isolation but must form part of the overall strategies for strengthening the pull on the talent.
Once we know what we are looking for. Some "outsource" by picking up people they believe are better trained elsewhere. But while each company will gravitate naturally toward a dominant sourcing method. Those who can attract the best college graduates and excel at early development. Fitting a talent to the job is traditional but there may be a need to design a job around the talent as the nucleus. While in the first case one gets ready -made talent and benefits from their instant utilization. A judicious mix of campus hires and lateral hires often works. "insource". Some strategies will be more effective for some companies than others. there are a number of routes we can take.The first step for individual companies is to develop detailed profiles of the kind of people they are after by analyzing the job profiles. Talent scouting in fact could be a constant sourcing activity. Talent winners recruit continuously rather than strictly on as required basis just to fill up vacancies. For example. background and experience of their current high performers. so they will tend to get talent in from the outside. have fewer opportunities to develop people through rotation. refresh the gene pool and calibrate the internal talent standard. no company should rely exclusively on one strategy. Although the dominant strategy could be to spot talent early and develop it within. in the latter instance. from business associates on contract or even through retainership of free-lancers. which is fine if acquisitions are an intrinsic part of corporate strategy. one can shape the raw talent in the mould of one's unique culture and work ethos. companies having a slower growth rate. Other sources could be from project trainees and interns. regular lateral hires is a good way to accommodate rapid growth especially at middle or senior level. career paths. Some get what they need largely through acquisitions. Similarly it is a conventional approach to . One should continuously scan the environment and bring in the talent whenever one finds it. instead.
suggests that 'creating a winning value proposition means tailoring a company's 'brand' and 'products'. it may be worthwhile to build and articulate one' business around the talent at one's disposal.articulated strategies in the context of sourcing and development augment the retention strategies in crafting a powerful employee value proposition that remains central to the problem of attraction and retention of top talent.to appeal to the specific people it wants to find and keep. It also means paying what it takes to attract and retain strong performers . Well . Looking at the retention problems against the perspective of enduring employee value propositions about these three dimensions. products and price helps to clarify our focus.view manpower needs as a derivative of the business needs.the jobs it has to offer . At the heart of the matter remains a basic question. Providing opportunities to the employee for both professional and career growth and giving the due priority to this important activity makes the company's position in the market for talent attractive and compelling. Aggressive development strategies complement the retention strategies in a big way. namely brand. A McKinsey study (1998) that studied 77 companies from a variety of industries to investigate talent problems.the 'price'. . But when it comes to rare talent. ' Why would a talented person want to work here?' Organizations with superior employee value propositions have a compelling answer to this question.
A rule of thumb: ' A great job is that which consists of at least 80 % of things that an employee would love doing. career advancement and growth and fit with the boss. the brand would automatically take care of itself because the top talents joining the company for the great jobs. that qualifies the company as a 'great company' several components contribute. Under the dimension of compensation and lifestyle. enjoyable work atmosphere and job security. since it is a continuous. to review their traditional image and perhaps shed it off in preference to a contemporary. which have not kept pace with time. we would have to ensure that our brand is tailored to that segment. No brand can be transformed over night. In order of priority these are values and culture. quality of management. exciting challenges. The objective should be to make it a compelling place for employees. But there may be a need for some companies that have deep rooted beliefs. exciting job challenge. money may not be the prime determinant but it does matter. talent of existing people. To the brand dimension. customers and investors.'great jobs' include freedom and autonomy. inspiring mission. evolutionary and slow process. strong performance. the . but it can break one. Money alone cannot make a great employee value proposition. more vibrant disposition.We are clear about the talent segment that we wish to attract and retain. This is intrinsically linked with its business and the products it offers: the jobs. With 'great jobs'. mind-sets and culture. would reinforce the values that the company is seeking to build. The attributes that were identified in the context of 'product' . development opportunities.' As for the 'price'. industry leadership.
For the sake of clarity we may envisage these strategies in three distinct yet overlapping domains: cultural. It guides how employees think. and it is never static. First of all let us dwell upon the cultural aspects as relevant to the issues under consideration. reward and even equity ownership has to be countered with a stronger proposition bolstered by the former's magnitude of impact (big fish in a big pool). All retention strategies must be built around a compelling. impact ( a big fish in a small pond ). symbols and celebrations. titles. as well as status symbols such as cars. Culture is somewhat like "the operating system" of the organization. transformational and transactional. develop and deliver a winning employee value proposition should be at the core of all retention strategies particularly for large companies facing challenges from a multitude of smaller companies as employers.determinants identified include differentiated compensation. the organizational processes and structures. distinctive and exciting employee value proposition. logos. depth (vast resources to take risks and to support big decisions ) and variety ( large spectrum of expertise and experience to be shared ). flexibility. and of course value statements and priorities. The lure of the latter in terms of excitement. geographic location. Some of the most visible expressions include the architecture and decor. An outsider can often spot these artifacts easily upon . respect for lifestyle and acceptable pace and stress. Other concrete manifestation of culture are found in commonly used language and jargon. and the rituals. the clothing people wear. company slogans. act and feel. Some aspects of culture are visible and tangible and others are intangible and unconscious. high total pay packages. window offices. It is dynamic and fluid. brochures. The ability to define. It drives the organization and its actions.
Transformational strategies that impact retention in good measure encompass mentoring. reward & recognition. however. Anti poaching measures may also find their place in this category. retraining. For insiders. The hard dimensions relate to the functional. technical and control aspects. settling down. dynamic and competitive compensation strategies. enthusiasm. these artifacts have often become part of the background. re-skilling. job enrichment and above all promotion of a knowledge building and knowledge sharing culture. redeployment & job rotation. the retention strategies have to be selectively and appropriately applied to the phase to which the employee belongs.entering an organization. coaching. Innovative. settling down and growth phases. while the soft aspects deal with inspiration. etc. energy. maturity and rise to top levels. etc. etc. training. competency & performance development programmes. fulfilling the higher order . nurturing. the real potent measures are inherent in enhanced job satisfaction and strengthened relationships within the organization. trusting. openness. contribution. growth. authentic as well as empowering tends to attract and retain top talent. starting from recruitment till superannuation through phases of induction. coaching. While transformational strategies like mentoring. are eminently suitable for people in induction. counseling. workload balancing. social & community activities. form the transactional strategies. various welfare initiatives. Essentially organizational culture is seen in two broad dimensions. A culture that is open. If one examines the entire life cycle of an employee within an organization. emotion. collaboration and camaraderie. challenging assignments. Although technology based defences against an aggressive e-recruiter like various e-security mechanisms work for some time. sense of belonging. establishment of good communication & feedback network. effective work-life integration.
are prone to more risk of poaching. In order to be able to orchestrate and implement effective retention strategies. . This would encompass building and sustaining a compelling brand image with an appealing culture and inspiring values. The target group. retention works best. It is a paradox that the companies which invest heavily in recruitment and development and make a good job at that. But most importantly. are over pervasive across all phases. related issues and timely intervention to address these issues.needs. the first step should be to understand the scope of the retention problem that is unique to one's organization. which is crucial to the company's operations and success. ego gratification. putting in place innovative compensation schemes. should be predominantly successful for senior positions. instituting effective reward and recognition programmes. however. could be effective. A sound sensing and tracking system to assess the volume and causes of attrition by performance level could be useful. Creating and delivering a great employee value proposition is clearly the best way to retain the people. The ability to identify good performers. offering great jobs and career opportunities. investing in work place infrastructure. etc. moving on poor performers. should be identified and the strategies are directed appropriately. when the organization is successfully able to convey the message that it cares for employees. tailored to the talent segment that one seeks to attract and retain. who are prone to leave for any job or management. building an effective learning framework. Cultural strategies.
STEPS TO EMPLOYEE RETENTION Employee retention is now a very crucial issue.’ or. Today’s employers prefer to have a stable. flexible always heavy competition among the employers to attract the best talents to enhance their competitive positions in the market. not just particular programs but rather how such programs fall into a company’s overall values. because in the 21st century. It is related rather to overall organizational culture. how it communicates with its employees about those values. in other words. employers must deliberately engage in retention activities. simply put. Authors in the HR field speak increasingly of the need to ensure retention by nurturing ‘affective commitment. To maintain a stable workforce. Because workplace culture depends a lot on how individual perceptions and feelings hold together. it can of course be difficult to say exactly what decisively makes up a . the only sustainable source of competitive advantage for any company is “Human Resource”. and how employees perceive their own role within the company and the value that the company attaches to their individual contribution. Becoming an employer of choice and using employer branding attract and retain the best talents available in the market. A ‘culture of commitment’ is more than just the sum of particular HR policies or retention initiatives. committed. These efforts range from offering attractive compensation packages to involving employees in every sphere of the functioning of the organization. There exists a keen interest in the concept of company or workplace ‘culture’ and its connection with an employee’s sense of ‘commitment’ to his or her employer. an employee’s desire to remain a member of a particular organization for motives beyond compensation or obligation .
particular company’s culture. Branham (2001) suggests that commitment-oriented corporate cultures depend on a number of objective and subjective elements. Cultures of commitment, he writes:
• • • • • • • • • • •
View employees as partners. Recognize the human needs of all employees. Invest in people as the primary source of competitive advantage. Communicate clear corporate mission, vision, strategy, goals, and objectives. Commit to long-term strategy and the people needed to carry it out. Reward system and management styles to support the mission and strategy. Focus on “managing the performance contract,” not controlling the people. Put a premium on employee involvement in new ideas and innovation. Focus on results, not on who gets credit. Trust employees enough to delegate. Tolerate “intelligent error” and experimentation.
Nevertheless, the literature strongly supports the notion that people stay with their employers if the culture of commitment is strong. Beyond this, however, it is also clear that people are more likely to stay if the perceived workplace culture—however this is communicated—is a good “fit” with the individual’s own interests, orientation and attitudes. Indeed, while compensation, personal and professional development
opportunities, and other incentives are important in attracting people and keeping them happy, their decision to stay with the company depends vitally on how well they fit in to the company’s way of doing business, how it treats employees, what it expects of them, and how people relate to one another in the workplace.
Howell, M.A., Brumback, G.B., Newman, H.S., and Rizzo, J.R., 1968,U.S. Public Health Service, Bethesda, Maryland. This study is concerned with the relationship between dimension of work satisfaction and behavioral indices of retention . Contention that the satisfier-dissatisfier dichotomy is supported by the fact that motivator factors are more often responded to as satisfiers than dissatisfier and hygiene factors more often responded to as dissatisfiers than satisfiers does not necessarily imply the unidimentionality of the motivator and hygiene factors like workplace and workforce. A Changing Work Force and Workplace 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
Baby boomers striking out on their own after hitting corporate ceilings 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 Sense of community Quality of life issues Volunteerism Autonomy Flexibility and nonconformity
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. Forrest, David J., December 1999, Keep Employees, is a consultant in leadership coaching, management development and employee retention in Fort Collins, Colorado. Suggest one of the foundation stones of companies which attract, retain and motivate high performing employee is a positive and valuing attitude toward them. In this era of
. September 2003. Compensation is the last reason most people leave. Review the appropriate job descriptions and all its’ requirements with your candidate. is a business futurist and an Hr and management consultant based in Greensboro. FIRST STEP The first step in the process is to communicate all of your expectations and requirements before making an offer of employment. it is all to easy for top management to see employees as expendable resources to be hired and fired at will according to the current short-term business plan. Remember that verbal recommendations should be followed up with letters. Suggests “You can improve your employee retention by being more sensitive to why people leave. Ongoing research reveals the following five principal reasons: It doesn’t feel good around here. Floral management.monster mergers and mega corporations. I don’t get the support I need to get my job done. Mutual understanding of job requirements is essential as many candidates eager for employment may overlook essential duties or prerequisites. It is a common . This is a good time for any testing you may require as well as drug testing or background checks. So the employer attitude is the foundation of employee retention. Herman. Roger E. There’s no opportunity for advancement. Carefully check the references of prospective employees. Wait until these letters are received and reviewed before making that final offer of employment.
the pressure on management to keep them mounts. dress codes. In the past. To avoid this follow phone calls with written inquires to all references. Vacation and sick time. The next step is to communicate all relevant personnel policies to new hires in the form of some type of employee manual. This only led to more employee turnover when deficiencies were discovered. only cursory phone calls were made and the result was that unqualified or unsuitable applicants were hired. But in the nature of a small business these . This does not mean sacrificing values. Many factors affect employee satisfaction and managers need to do all they can to maintain a level of morale and development strong enough to sustain employee satisfaction. training and development opportunities. If you don’t have an employee manual. principles. make a checklist of all important issues and get written documentation that these matters have been discussed with prospective employees. or policies. and disciplinary policies are just some of the topics that should be addressed. HR policies and training opportunities are formalized parts of their business. and a positive work environment.misconception among job seekers that references are not routinely checked and past practice is the root of this assumption. confidentiality agreements. It does mean having a sound Human Resource Policy. Once your candidate becomes an employee. Documentation can be essential if there is dispute about personnel matters that lead to subsequent termination. small employers and indeed many larger ones did not follow up on all references provided by applicants. an employee handbook might be a collection of memos and training opportunities are less frequent. Many times. For many companies. In some cases. Smaller companies need to focus on scaled down versions to cover their smaller workforces.
Don’t be afraid to share the pressures and concerns with your employees. The companies with open lines of communication are much less likely to lose employees due to dissatisfaction. Most surveys show that money is not the first consideration employees make when choosing to stay in a job. ethics. Employee turnover is costly and disabling to every company but employers have more control over turnover than they may think. But smaller companies can enjoy comparable benefit by having a sensitive and caring manager or senior employee to provide an ear to troubled employees. in a competitive marketplace. Managers need to address them just as quickly. Many companies maintain employee assistance programs as part of their benefit packages and these prove invaluable in preventing turnover due to employee’s personal problems. But an ethical and invigorating workplace holds a special attraction to many workers. . The one thing that all employers need to focus on is maintaining a positive work environment. some turnover is inevitable as career paths change and better opportunities arise. Encourage them to share their pressures and concerns with you. People rarely suffer in silence and trouble areas usually surface quickly.things might not impact upon employee understanding and satisfaction. and environment are high on the list of assets that every company can offer. Keeping the office door open is the key to successful employee relations and companies that make it a priority reap the rewards. True. Managers need to keep a keen ear to the ground when it comes to employee satisfaction and morale. More intrinsic values such as appreciation.
By focusing on each individual employee. mangers and organizations can build lasting employee appreciation and loyalty. The key is knowing each employee well enough to ensure that motivational factors are taken into consideration. Flexible working hours to accommodate personal needs. With unemployment rates at an all-time low. Some good examples are: • • • • • • Additional time off to spend time with family or vacations. but are appreciated much more. Public or company recognition during a staff meeting. the growing challenge for employers continues to be retaining key employees.'RETENTION' Each employee’s background. Opportunities to participate in work focus groups or committees. Industry or job specific training. By finding out what really motivates each individual. not just traditional yearly compensation increases. motivation. and goals (both personal and professional) are different. Yet 95% of the time. . employers and mangers focus on the simplest common denominator for praise: money. The surprising thing is that many times these tailored rewards cost no more than traditional monetary raises. managers can tailor rewards to employee’s motivations. Spot rewards (such as cash or movie tickets) for immediate feedback.
Organizational climate research has had a long and active history. with much of its foundation drawn from psychology. reward.ORGANIZATIONAL CLIMATE ALSO AFFECTS EMPLOYEE RETENTION RATE AND POSITIVELY AFFECTS EMPLOYEE DOWNSIZING RATE Organizational Climate Litwin and Stringer define organizational climate as 'a set of measurable properties of the work environment. Litwi n and Stringer investigated how organizational climate affects individual motivation. standards. responsibility. Traditionally. support. which is a result of Lewin's work on experimentally-created social climates This work was advanced by several early key studies including Litwin and Stringer and Tagiuri and Litwin. warmth. organizational climate alms to capture a snapshot of an organization at one point in time. and identity. Other early studies were aimed at identifying the dimensions comprising organizational climate . Organizational climate is largely based on Lewinian field theory. perceived directly or indirectly by people who live and work in this environment and assumed to influence their motivation and behaviour'. Because of space constraints and the availability of excellent articles which review the extensive history of the organizational climate literature. risk. conflict. we will only briefly review the organizational climate literature here. Taguiri and Litwin's book was comprised of a series of essays that treated climate in ways ranging from a subjective interpretation of organizational characteristics to an objective set of organizational characteristics. They also suggested that organizational climate was comprised of nine dimensions: structure.
some fuzziness around the borders and differentiation of the organizational climate construct still remains. such as structure and individual satisfaction. objectivist. Research on organizational climate has continued more recently. Organizational climate is a fairly general term which refers to a class of dimensions which can be critiqued for being too diverse . the focus of the organizational climate field became more clearly defined. organizational climate researchers have begun to consider how organizational climates develop. Even more recently. Three schools of thought have developed: the subjectivist. Anderson and . Probably the most troubling issue that the organizational climate literature continues to face is defining the appropriate dimensions that comprise organizational climate. the multidimensional nature of organizational climate makes it more difficult to define sharp borders. and Koyes and DeCotis's work on measuring organizational climate. In addition. Denison's investigation of the relationship between organizational climate and performance. and interactionalist perspectives. Glick's discussion of the difficulties of measuring organizational climate. While these and other efforts have been helpful. and Griffin and Mathieu have looked at how perceptions of organizational climate vary with the hierarchical level in an organization. More recently. Denison has investigated the difference between organizational culture and organizational climate. Organizational climate scholars have responded by making empirical and theoretical arguments to distinguish organizational climate from various other const ructs. Joyce and Slocum's investigation of the extent to which organization members agree about their organizational climate.After the 1960s and early 1970s. including Joyce and Slocum's study of person and organizational fit.
Measuring Organizational Climate At its most basic level. while the phrase "I like my job" is a positive evaluation of one’s job. and employee participation is voluntary. there are a large number of organizational climate areas that exist. Although administration procedures used when conducting a survey can vary. Many of these characteristics can be classified into the following major . it can be difficult to identify the "right" survey to use. Generally. the phrase. The assessment of organizational climate typically occurs via an off-the-shelf or customized survey containing questions about he work environment.West contributed to the literature by exploring the link between organizational climate and innovation. As might be imagined. Although not a comprehensive list. For example. organizational climate is more than simply a summary of employee likes and dislikes. Selecting a Survey Once a decision is made to conduct an organizational survey. organizational climate refers to employee perceptions of their work environment. ideally employees are asked to report to a designated work site at a scheduled time to complete the survey. the following factors may be helpful in reducing the number of survey choices: Determine the scope of information included in the survey. "I have more work to do than I can possibly finish" is a description of a person’s workload. Recent research has identified more than 460 different types of work environment characteristics that have been measured. these perceptions are descriptively based rather than value based. Thus.
role. while others may want to see how the company scored compared to other companies throughout the nation. Factors such as employee demographics can be important. For example.areas: job. Some companies may require both an English and Spanish version of the survey to accommodate all of their employees. It can be extremely helpful to choose a survey that offers some flexibility in its administration capabilities. some companies may have an interest in only reviewing the average levels of item responses within the company. while others may prefer an intranet format. In many companies there are particular areas where employee feedback would be useful. it can go a long way in generating support from the company’s management team. leader. but it also can make the interpretation process more difficult. some companies may require the ability to administer the assessment using a paper-and-pencil format. Make sure the number of climate areas included is kept to a manageable level. . Finally. many users of organizational surveys find it useful to add a few customized items to the survey. Although adding items does not always add to the scientific value of a survey. also. For example. On a related issue. Not only will including too many areas on the survey increase the time and effort needed to administer the survey. a company concerned about the impact of recent managerial downsizing may want to ensure that leadership/supervisory components are included in the survey. For example. identify some general pieces of information you would like to see in a report once the survey responses have been analyzed. organization and work group.
Benefits Companies that conduct organizational climate surveys may experience one or more of the following benefits: • Employee involvement. • Communication forum. In addition. research has shown that factors in the work environment are related to outcomes such as employee motivation. • Positive work outcomes. miss fewer days of work. an emerging area of research has indicated that organizational climate can influence customer perceptions of the quality of goods or services delivered by a company. job satisfaction. some companies may want to have results broken down department-bydepartment or item-by-item while others may want one set of analyses based on the entire set of employee responses. job performance and even organizational productivity.In many companies it can be very difficult to communicate with the majority of employees. the publisher/director of an organizational survey should assist a company in selecting an instrument that will meet their specific reporting needs. stay with a company longer. In general. a significant amount of evidence has been accumulated documenting the importance of the work environment in relation to organizational performance. employees are given an opportunity to be involved in the company at a different level than is typically defined in their job descriptions.In addition.In the last 30 years. Recent trends such as organizational restructuring .By administering an organizational survey. intentions to quit. Research has shown that employees who are more involved in the company also may be more satisfied with their job. In any event. and perform better on the job.
organizational surveys can help pinpoint problem areas within the work environment before they grow into a crisis needing immediate attention. Many surveys offer a national normative database that can be used to facilitate comparisons across a variety of conditions and industries. Conversations regarding an employee’s work environment can fall to the wayside. A common question is "How do we compare to others?" One advantage of conducting an organizational survey is that it can provide an opportunity to compare the company’s work environment to that of other companies.Organizations often look to other companies when determining organizational policies and procedures. biannually. • Proactive management. annually. Problems that require a reactive posture interrupt the normal workflow. and in some instances.g. and typically cause delays in providing products or services to customers. salary or employee benefit policies. which increases the number of employees for which each manager is accountable.Administering organizational climate surveys allows managers to be much more proactive in managing their employees and work environments. never take place. marketing strategies.and/or merging of companies has resulted in "flat" organizational responsibility charts. etc.) can be a more efficient way for managers to gather important information. As a result. When used on a scheduled basis. etc. . Organizational surveys that occur on a scheduled basis (e. It is quite common for companies to "explore the market" or conduct benchmark studies when considering issues such as new product development.. • Industry comparisons. some managers only have limited amounts of time to talk to employees about day-to-day activities.
Validate the questions and thus improve the results. . Identify root causes for poor productivity (such as poor communication or poor process efficiency). Give employees an organized voice to assist leaders in taking actions. Gain a fresh perspective of the organization. Increase productivity. Facilitate candid and open feedback from employees who respond anonymously. or rapid growth). track and execute informed action steps in one system. relocation. • • • • • Inform leaders with the information needed to make the best decisions.TIPS FOR CREATING AN EFFECTIVE ORGANIZATIONAL CLIMATE FOR MINIMUM EMPLOYEE DOWN SIZING • • • • • • • Listen to the entire organization with ease. Facilitate. Reduce organizational bias. a change in ownership. • Reduce transition time during changes in the organization (such as reorganization. Identifying areas of inefficiency or performance gaps. Collect perceptions in real-time. new products/services.
According to management science. an organism. Something that has been organized or made into an ordered whole. 4. 2. (ii) The state or manner of being organized: a high degree of organization. most human organizations fall roughly into five types: • • • • • Pyramids or hierarchies Committees or juries Matrix organizations Ecologies Composite organizations .WHAT DO YOU MEAN BY ORGANIZATION 1. (ii) The administrative personnel of such a structure. Something made up of elements with varied functions that contribute to the whole and to collective functions. (i) The act or process of organizing. An organization is a formal group of people with one or more shared goals. 3. an association: a benevolent organization (i) A structure through which individuals cooperate systematically to conduct business. A group of persons organized for a particular purpose.
Committees or Juries These consist of a group of peers who decide as a group.Pyramids or Hierarchies A hierarchy exemplifies an arrangement with a leader who leads leaders. liability and quantify damages. Usually one "rises" by seniority. This is the classic bureaucracy. not better! Staffing is crucial. juries are also used in athletic contests. or by acquiring authority over more people. whereas members of a jury come to a decision. Condorcet's jury theorem proved that if the average member votes better than a roll of dice. Sometimes a selection committee functions like a jury. . In common law countries legal juries render decisions of guilt. In the middle ages juries in continental Europe were used to determine the law according to consensus amongst local notables. Committees are often the most reliable way to make decisions. The problem is that if the average member is worse than a roll of dice. book awards and similar activities. They lack creativity because they have poor communications. Pyramids are an effective way to achieve repeatable results because they have the shortest path from the standard-setter to the worker. perhaps by voting. the committee's decisions grow worse. The difference between a jury and a committee is that the members of the committee are usually assigned to perform or lead further actions after the group comes to a decision. They suffer from communication and supervisory faults because the organization is only as good as its weakest link. then adding more members increases the number of majorities that can come to a correct vote (however correctness is defined).
To this end.converting the problem into a routine problem. and measured by a boss who is super-expert in the same field. this is the perfect organisation. he assigns it to a staff member. Getting approval to actually do anything often needs the approval of each type of expert. who is a sort of junior expert. Matrices are the only known organizations that can consistently create complex technical products like airplanes and engines. Staffs break down easily. and carry out assignments efficiently. If a problem is not routine. the chief of staff notices. The problem is that going through channels takes too long. usually from bad selection of people Matrix Organization On the face of it. The other direction is "executive" and tries to get projects completed using the experts. He passes it to the expert. The chief of staff schedules the routine problems. though less reliably than committees or matrices. a "chief of staff" decides whether an assignment is routine or not. and both of each expert's . who solves the problem. and educates the staff -. If it's routine.Staff Organization or Cross-functional Team A staff helps an expert get all his work done. Staffs make decisions quickly. One hierarchy is "functional" and assures that each type of expert in the organization is well trained. For this reason businesses often prefer to use this method. and checks that they are completed.
for a while. and runs a tiny business that has to show a profit. and simplify sign-offs. They're bitter. Good ones get more work. Engineers rent their designs out to manufacturing. This may reflect a rather one-sided view of what goes on in ecology. It is also the case that a natural ecosystem has a natural border . Success outgrows the ability of the genius. and if they make bad investments. Very occasionally. or they get canned. Reorganization follows. Bad parts of the organization starve. and are very hard to recycle. Ecologies This organization has intense competition. . Composite Organizations These try to use each of the above types of organization in the right places. but are very autonomous. there's no profit. There just get to be too many special cases.bosses! The trick is to speed approvals: make approval everybody's number one job. etc. This is a really effective organization. For example: upper managers invest. Don't bet on it in the long term.ecoregions do not in general compete with one another in any way. Facilities people rent space. But it's wasteful because all those dead pieces of organization have valuable training. a true organizational genius can make this work. Everybody is paid for what they actually do. and they will stop taking it after a while.
command-andcontrol models. standards. . Blending democracy. Climate characteristics that have been determined to significantly impact a company’s bottom line are: flexibility. complex system. comes out of the work of Dee Hock and the creation of the VISA financial network. co-operation and competition."Chaordic" Organizations An emerging model of organizing human endeavors. Climate The prevailing psychological state Organizational climate Organizational climate refers to a set of measurable properties of the work environment. based on a blending of chaos and order (hence "chaordic"). and that influence their motivation and behavior. the chaordic approach attempts to encourage organizations to evolve from the increasingly nonviable hierarchical. consensus decision making. clarity and team commitment. responsibility. that are perceived by the people who live and work in it. rewards.
Organizational clarity: the extent to which individuals understand the organization and how they fit into it Organizational commitment: the extent to which individuals feel loyal to the organization 3.CONTENTS OF ORGANIZATIONAL CLIMATE 1. Job clarity: the extent to which individuals understand what the organization expects of them Job commitment: the extent to which individuals are willing to do whatever is necessary to get the job done. Responsibility: the extent to which individuals feel accountable for their own job performance. 4. Assimilation: The extent to which individuals feel the organization treats them as integral parts of the organization. Efficiency: the extent to which the organization accomplishes work in an orderly and timely manner Practices: the extent to which systems and procedures facilitate effective job performance Operational support: the extent to which the organization accomplishes work without unnecessary effort and distractions. 2. Excellence: the extent to which individuals are committed to producing quality work Standards: the extent to which the organization clearly defines and emphasizes superior job performance Challenge: the extent to which individuals have to expand their abilities to obtain work objectives .
Recognition: the extent to which individuals feel that they make important contributions that the organization values Reinforcement: the extent to which the organization appropriately rewards exemplary job performance Esteem: the extent to which individuals feel successful in their jobs Team Spirit: the extent to which individuals feel that the people with whom they work support them personally and professionally Cooperation: the extent to which individuals work with and help one another to achieve common goals.5. 6. Innovation: the extent to which the organization is committed to maintaining stateof-the are technology and expertise. Change management: the extent to which changes within the organization are beneficial and occur effectively. Interpersonal relationships: the extent to which mutual good feeling exist between individuals who work together. . Progress: the extent to which the introduction of new ideas or equipment improves productivity.
and behaviors needed for success. and development. commitment for. • • helps build strategies for sustainable growth. . identifies the values.ORGANIZATIONAL VITAL SIGNS-A LEADING INDICATOR OF SATISFACTION MEASURING OF EMPLOYEES Organizational Vital Signs: • • • identifies the readiness for. measurable. is scalable. and skills for change. communication. alerts managers to needs and opportunities for training. and practical. emotional competencies.
This assessment is designed with the following assumptions in mind: . Every precaution should be taken to insure confidentiality in order that respondents will feel comfortable sharing their true opinions and perspectives The objective of performing an employee climate assessment is to identify the key areas which are hindering production. Each category has been designed to assess one of the key categories. This assessment should be administered anonymously company wide. The idea and approach is for the organization not to simply perform an academic exercise. simply because they ‘do it at this time every year’. Once identified. broken out by departments of 6 or more people to protect the identities of respondents. reducing effectiveness and which might generate unexpected costs in the near future. which are working well. but to critically examine themselves to see where the company and it’s employees might be finely tuned to generate higher levels of performance. should be aggressively pursued for the maximum benefit of everyone.ORGANIZATIONAL CLIMATE-EMPLOYEE SATISFACTION SURVEY The Organizational Climate Assessment is a powerful instrument. opportunities to strengthen existing approaches. which affect employee performance. especially when provided organization-wide with specific departmental demographic separation and analysis. as well as select appropriate interventions for addressing the weakest areas.
Full understanding of the realities of business This assessment is written with full realization of the realities of business. . Organizations.Fundamental care of the employee as an asset Organizations are successful because of the quality of work employees perform. and not an unrealistic utopian view of an idealized work environment. involvement as well as self-actualization. and these factors are given appropriate emphasis in this assessment because they represent an ever present dynamic with which every employee must deal. initiative and performance. When employees are cared for. affiliation and acceptance. continuous improvement and increasing levels of efficiency are a way of life. The extent to which these and other human needs are fulfilled lead to higher levels of commitment. who include an emphasis on fulfilling the needs of their employees to some extent. their true value to the organization can be fully realized. not just creating an environment where everyone feels better. will enjoy a more productive and stable workforce. Respect for the dignity of the employee and the sensitivities of human beings Humans have fundamental needs for safety and security. Embracing optimization and improvement An irrefutable trend in business today. The factors emphasized and measured in this assessment are the important levers to optimizing employee workplace performance. and the right environment is created where there are no barriers to performance.
. this assessment focuses on areas where human behavior can be leveraged more positively to create employees with higher levels of motivation and commitment.Keys to motivation and commitment Rather than only identifying potential problem areas to be avoided.
we have to attempt to identify the factors that influence particularly the ways in which people respond to the action of those behavior. effort and contribution. In post World War II ear. Personal history will always make its claim even though it operates silently and usually beyond the individual’s awareness. One of the earliest approaches to motivation was Frederick Taylor Theory that the employer essentially bought or exchanged the purchasing power of his wage dollars for the worker’s time. Today. commitment and motivation. did not by themselves buy interest. including the plethora of incentive wage and bonus plans. it become clear that monitory rewards. Especially . around them and to other stimuli in their environment. interest. As time passes. The powerful forces are making it more complex all the times. This was the first widely accepted motivation theory. Motivation is the desire within an individual that stimulates him or her to action. it seemed to accurately describe workers responses to existing environments. higher the moral of productive work force. For motivation.EMPLOYEE DOWN SIZING & EMPLOYEE MOTIVATION ARE CLOSELY KNITTED A manager’s job is to influence the people in the organization to accomplish the goals and objectives with optimal efficiency and effectiveness. At that time. we no longer have a socially simple world. Higher the motivation. One of the most critical and vexing concerns of management and supervisory personnel in any organization understands of motivation and its role in performance. People are products of experiences they have never relinquished. new motivation theories evolved by behavioral sciences in response to the changing environment of time.
Therefore. Abraham Maslow.noteworthy were the conceptual contributions of Douglas Mc Gregor. International relation. David Mc clelland. Recognition. using the term “hygiene” in the sense that they are considered maintenance factors that are necessary to avoid dissatisfaction but that by themselves do not provide satisfaction. the two feelings cannot simply be treated as opposites of one another. Johan Morse and Jay Lorsch. MOTIVATORS HYGIENE FACTORS • • • • • • Achievement Company Policy & Administration. welfare & salary. Herzbeg. Leadership. He called the satisfiers motivators and the dissatisfied hygiene factors. Responsibility and accomplishment. Herzberg reasoned that because the factors causing satisfaction are different from those causing dissatisfaction. managers who seek to eliminate factors that create job dissatisfaction can bring about peace but not necessary motivation. MOTIVATION – HYGINE THEORY The motivation – TWO FACTOR THEORY – proposed by Herzberg postulates that: The factors causing job satisfaction (and presumably motivation) were different from that causing job dissatisfaction. Challenge. Working condition status & security. . Motivation through job rotation and security. growth. He developed the motivation-Hygiene theory to explain these results.
people will not be dissatisfied. . in organization having tasks and people more appropriate to Mc Gregor’s Theory ‘Y’. In spite of limitations. When hygiene factors are adequate. Hertzberg’s concept can be viewed as special application of Maslow in a highly complex industrialized society. Hertzberg’s contribution to study of motivation cannot be ignored. Hertzberg’s theory is widely real and his recommendations followed by many managers.• • Satisfaction by communication. Appraisal & feedback. but neither will they be satisfied. To the question “HOW do you motivate employees? “ Hertzberg has but one answer “the only way to motive the capable employees is to give him challenging work for which he can assume responsibility” (and thus drive at least partial satisfaction of his higher need).
These needs vary from one employee to another. On the other side employer has no choice but to satisfy his employees by identifying and fulfilling his wants. WHAT DO WORKERS WANT? "Supervisors generally ranked good wages. working conditions as the things workers want from their jobs. economics. employees are aware of what services should they deliver for a particular return from their employer. in a society the same person who is an employee plays a role of a member of the family. the employer has to use the motivation theories as these provide a good idea of how and in what way they will get motivated and satisfied. For instance. technology or society. and sympathetic understandings of personal problems -all incentives that seem to be related to affiliation and recognition motives. workers needs are totally different from the managers and are rated as least important by Mana . While workers felt they want most is full appreciation for work done. felling "in" on things. job security. The above logic applies to every industry whether it is politics. Now the same question comes How to motivate them to study? Here the employee acts as an employer and the children act as his employees. which an employee wants to fulfill for being satisfied and committed towards the job. It’s not only good money but there is lot of other needs. promotion and good.EMPLOYEE DOWN-SIZING & EMPLOYEE ENGAGEMENT EMPLOYEES ENGAGEMENT In today’s technologically advanced World. His duties are to control his children so that they do not get into a bad company and they should concentrate on their studies.
Employee engagement goes beyond the employees’ intent to leave. Why? It is merely because these companies have come to the realization that their organization’s long-term success relies on employee performance. there are definitely some more issues that need to be worked out. which is directly impacted by the level of employee engagement and commitment to an organization. This article throws light on the issues to be addressed by the organizations for creating an engaged workforce. most companies are of the opinion that they do have a few. It includes the employees’ commitment to the organization and motivation to contribute to the organization’s success. Well. By creating a workforce that is passionately involved with the company. the organization can create a sustainable competitive advantage for itself. some organizations think that simply making people happy and paying them handsome pay packets is the solution. . when it comes to engaging employees in their work. however. but they still want more. These are things which an organization need to consider to attract and retain the most qualified individuals. -Towers Perris Talking about the engagement and commitment of an employee to an organization. Engagement requires engaging not only the employees’ minds but their hearts as well and this is something that the organizations can neither force not buy in order to succeed in the marketplace. The evidence of a significant relationship between employee engagement and financial performance is undeniable. But it is not so.
reported that a shortage of skilled employees was an emerging trend and it was more so due to the fact that the organizations fail in their attempts to create a workforce that is not only cognitively vigilant but also emotionally connected to the organization. Such employees are attracted to. Engaged employees care about the future of the company and are willing to study entitled. The age old business dictum goes that “satisfied employees create satisfied customers” by constantly striving for the best. The engaged employees and the organizations go that extra mile for each other.What is employee engagement? An engaged employee is a person who is fully involved in and is enthusiastic about. committed and fascinated by their work. as is measured by three primary behaviors: Say. It is believed that an engaged employee always acts positively in the interest of the company and takes unconcealed pride in the success and prosperity of his employer. his or her work. thereby realizing the benefits that flow through an investment in such a relationship. a company’s health is determined through it’s energized workforce who not only realize the mission of the organization and have an understanding of how to achieve it. help the organization win in the long run. and inspired. Does Engagement Really Make a Difference? According to the former GE Chairman and CEO. contributing to the bottom line of the company success by their motivation and enhanced performance. The War for talent. stay and strive. it was found that engaged employees are not only intellectually committed to the organization but are also emotionally attached to it. In a recent research by Hewitt Associates. . Jack Welch.
profitability. How to measure employee engagement? To determine the level of employee engagement. survey of the Gallup Organization Identifies strong feelings of employee engagement in four key areas – customer satisfaction / loyalty. the organizations should make use of a comprehensive employee feedback and to improve levels of productivity and commitment by identifying the root causes of workplace attitudes. There are several standardized tests. They are capable of delivering sustained affecting the key results areas such as employee turnover. sales. They also help in developing an understanding of the extent to which employees are passionate about their work and emotionally committed to their company and to their co-workers.Research has proven that wholly engaged employees tend to be more self-motivated. Engaged employees are much more likely to feel secure and stable in their position and are in fact the ambassadors for the company. They share information with colleagues and pass on ideas that speak up for the organization. Results from the survey show a strong correlation between high scores and superior job performance and many organizations have found it to be a definitive measure of the engagement level of their employees. and have higher levels of organizational loyalty. productivity and employee turnover. introduced . reliable. and taking the best foot forward to deliver and over-deliver for customers and the colleagues alike. engaged employees in customer facing roles are more likely to treat customer is ways that positively influence customer satisfaction and are more than twice as likely to be company advocates. innovation and customer satisfaction. The questionnaire has been administered to a multitude of companies across the world. Standard Chartered. for example. singing its praises to everyone. toolkits and instruments available which can help determine the level of employee engagement in an organization.
Many organization use employee satisfaction survey to identify the root causes of job issues and create solutions for improvements with due consideration given to the viewpoints of employees. feelings. The surveys must also be integrated with the culture survey s and since the culture varies within the organization.. The other ways used to measure the employee engagement levels is through tracking changes in the attrition rate and growth in productivity and business. The data collected from these surveys can furnish information that can help the management in the following ways: • • • • • • • • • • Identifying cost-saving opportunities Improving productivity Reducing turnover Curbing absenteeism Strengthening supervison Evaluating customer – service issues Assessing training needs Streamlining communication Benchmarking the organization’s progress in relation to the industry Gauging employees understanding of and agreement with the company mission. Certain employee opinion survey are also in practice that offers accurate identification of employee behaviors. This focus has seen a continuous rise in both the number of engaged teams and extent to which the employees are engaged at Standard Chartered. and thoughts for improved organizational development.annual survey to measure improvement in the engagement of teams. the companies must aim at measuring the engagement at work . The results are used to develop action plan and continually monitor the follow-through of the teams.
The survey findings must aim at bbehavioral changes required to improve desired outcomes at the organizational.group level. the extent to which the change program can be successful is the responsibility of an organization’s leaders. thus leading to resentment and this poses a significant threat to engagement levels within the organization. . This makes the employees feeling unheard. team and individual levels. After evaluating the results from these surveys it is imperative for the management to work out the problem areas and take an appropriate action. whatever follows is of great importance. The organization also need to keep in mind that it is not just about the surveys. While HR plays an instrumental role in the survey process. Many a times it so happens that the good news is communicated expeditiously to all concerned but the key challenges tend to be avoided.
“Plant supervisors and managers indicated that many plant improvements were being made outside the suggestion .DIAGNOSTIC TOOL The diagnostic tool Current studies suggest that employee engagement will be influenced by: 1. negative emotions such as boredom or resentment may result.” 2. and the employee may then become focused on surviving more than thinking about how he can help the organization succeed. “If expectations are not clear and basic materials and equipment not provided. Employee perceptions of job importance. This study has found that “…an employees attitude toward the job [‘s importance] and the company had the greatest impact on loyalty and customer service then all other employee factors combined. Employee clarity of job expectations. Career advancement/improvement opportunities.” 3.
“…if employee’s relationship with their managers is fractured. but many organizations are remarkably bad at giving it. In fact.” 4. then no amount of perks will persuade the employees to perform at top levels. “Feedback is the key to giving employees a sense of where they’re going.system. Perceptions of the ethos and values of the organization. “‘Inspiration and values’ is the most important of the six drivers in our Engaged Performance model. [it] is unlikely to engage employees. where employees initiated changes in order to reap the bonuses generated by the subsequent cost savings.” 6. Most organization have a range of practices to improve the engagement level of their employees. Regular feedback and dialogue with superiors. Best practice recommends starting right at the selection or . There can be more than one way to improve the level of employee engagement in a company.” 5. there are many different things that companies not only can do. but also need to do. In its absence. Employee engagement is a direct reflection of how employees feel about their relationship with the boss.” Approaches suggested for creating an engaged workforce Employee engagement can occur when the organizations work on removing the blockades to work which necessitates having a clear understanding of the levers required to improve the key employee attitudes of satisfaction and engagement so as to create an optimally functioning system. superiors. Inspirational leadership is the ultimate perk. Quality of working relationships with peers. and subordinates.
. Employees who feel they are listened to are able to express dissatisfaction and work together to resolve their causes. for example encourages employees to bring forward their questions or concerns through such programs as Let’s talk It Over. They also help to create an environment of trust and openness within the organizations where they are able to talk openly. an ongoing dialog on the corporate goals and direction. He uses this to sustain an active. 3M. Besides giving the employees clarity on the vision and goals of the organization. a forum on Sun’s intranet. including team meetings and conferences. Once the employees become a part of the system. This includes giving emphasis on certain areas which go a long way in affecting the level of engagement of the employees and includes: • Communication: A proper communication system helps employees in finding out what is going on within the company outside their immediate team. The initiative must be taken by the leaders at the top as it happens at the Sum Microsystems where the CEO interacts with Sun employees through WSUN. without it affecting their performance. efforts have to be put into place to engage employees to their highest level. The organizations must work towards implementing the communication forums to provide regular feedback to all people. it is essential for organizations to put into place regular technical / soft – skill training and development programs and the certification programs to drive people towards excellent performance as it so happens at HCL infosystems. Between Us and various internal and external help lines.recruitment stage by having the right employees working in the right jobs and having a strong induction and orientation program in place.
• Developing the right culture: The organizations must have clear and humane HR policies and take initiatives to maintain the quality of work life of its employees. stock ownership and profit sharing plans and recognition programs. organizations must have flexible benefit schemes. Thus the role of reward schemes in boosting . Thus the roles of reward schemes in boosting employee engagement are? To remove barriers to satisfaction in the organization and provide a framework for rewarding everyone in the organization for their performance. At HCL Infosystems. Opportunities must be provided for social interaction such as family gathering barbeques. The company . including discussion boards by company personnel including the senior management. In fact. for which there must be performance based reward scheme in place. get-togethers @HCL. Studies have long shown that while money in itself is not a motivating factor the absence of financial reward can be a significant demotivator. and trips to the cinema or picnics. This may be achieved through right compensation and benefit programs. People want to know if their input matters and that they are contributing to the organization’s success in a meaningful way. as Hewitt Associates does. which provides employees with the freedom to choose how they receive their benefits tailoring a package to suit their lifestyle.Beside using the regular employee opinion and satisfaction surveys. • Reward Schemes: These form an important part of a company’s overall employee engagement program. to attract and retain their talent. a balance between personal / professional lives of employees is maintained through recreational activities like festivities @ HCL. an update on the various organizational issues can be tracked by the organizations through the usage of in-house magazines and online communications. sport@HCL.
. The organizations must demonstrate a commitment to employees’ well –being by providing opportunities for career advancement and be developing a safe.g. Ideas should be sought from all employees and the frontiline employees should be allowed to exercise a degree of discretion during service delivery E. allowing employees to spend up to a certain amount to correct a customers problem or handle a complaint.also encourages an open and transparent culture to empower its people and develop entrepreneurs. • Leadership: Effective leaders who help in setting the tone for creating an engaged workforce can really differentiate an organization from its competitors. stems in part from Bill gates’ belief that smart people anywhere in the company should have the4 power to drive an initiative. Initiatives such as Six Sigma are dependent. Everyone in the organization with leadership responsibility must have the emotional intelligence and leadership skills needed to switch and employees on they must act as role models. in part on the active participation of employees on the shop floor. Giving employees a feeling of belongingness is crucial in creating a thriving organization that people feel committed to and others want to join. . Good practices include effective performance management and a fair evaluation of performance. The success of Microsoft. Culture – building activities are great for generating a feeling of belongings. clean and inspiring work environment for their all-round growth. The leaders must act as coaches and mentors and must give an honest feedback and guidance to their employees. The employees must be provided with enough resources to solve their day-to-day problems or to do a job well. demonstrate and set high standards to which others can aspire. for example.
Employee engagement is something that is very difficult to accomplish but if efforts are made on an ongoing basis. . becomes. imperative for the organizations to identify the level of engagement in their organization.For great managements. it can shrivel with relative ease. Effective leaders don’t wait to get the resignation to know that an employee is dissatisfied. An organization can always gain a competitive advantage by creating an engaged workforce. strive to eliminate the reasons behind the disengaged workforce and implement strategies to make them fully engaged. the path towards engaging employees and keeping them engaged beings with asking them what they want and what is important in order to be effective in their roles. It therefore.
To study as to what cause this Employee Down-Sizing 3. To study the impact of Employee Down-Sizing on the employee’s morale 4. Employee Retention and employee commitment are inter related . To study as to how Employee Down-Sizing.Chapter-3 RESEARCH OBJECTIVES The objective of the study is:- 1. To make a conceptual study of Employee Down-Sizing 2.
the fieldwork and so on. The research design determines the direction of the study throughout and the procedures to be followed. The present study contemplated an exploratory research RESEARCH DESIGN The research design is the basic framework.Chapter-4 RESEARCH METHODOLOGY A Research Methodology defines the purpose of the research. The appropriate research design formulated is detailed below. it could be collected through Questionnaire Surveys. It studies the main area where the problem lies and also tries to evaluate some appropriate courses of action. Interviews. sampling method. Exploratory research: this kind of research has the primary objective of development of insights into the problem. It determines the data collection method. NATURE OF DATA PRIMARY DATA: Primary data is basically fresh data collected directly from the target respondents. Focus Group Discussions Etc. . which provides guidelines for the rest of the research process. how to measure progress and what constitute success with respect to the objectives determined for carrying out the research study. how it proceeds. The present research can be said to be exploratory. The research methodology for the present study has been adopted to reflect these realties and help reach the logical conclusion in an objective and scientific manner.
⇒ Journals.it could be internal and external source of data. newspapers and the Internet. these people were requested to fill in the questionnaires during the lunch intervals at the Nehru Place premises SECONDARY DATA: ⇒ Articles. SAMPLE SIZE: The survey is conducted among 100 respondents Sample Area: NCR Delhi Sample unit: Employees of many BIG companies in Nehru Place (Delhi). ⇒ Reports. journals. official reports etc. ⇒ Newspapers and Secondary data has been used which is collected through . publish broachers. DATA COLLECTION Primary data: Primary data was selected from the sample by a self-administrated questionnaire in presence of the interviewer. External source: This originates outside the field of study like books. Internal source: which originates from the specific field or area where research is carried out e. periodicals.g.SECONDARY DATA: Secondary data that is already available and published . ⇒ Magazines.
which item gets selected is just a matter of chance. the field methods and the analysis procedures SAMPLING PROCEDURE ACTUALLY EMPLOYED: The process employed to select the sample was simple random sampling. . the sampling procedure. the data collection methods. This includes the overall design.⇒ Internet SAMPLING TECHNIQUE Random sampling technique has been employed to extract the fruitful results. ANALYTICAL TOOLS: Simple statistical tools have been used in the present study to analyze and interpret the data collected from the field. In simple random sampling. The study has used percentiles method and the data are presented in the form of tables and diagrams. Simple random sampling refers to that sampling technique in which each and every unit of the population has an equal and same opportunity of being on the sample.
Commute 3. Family Reasons 10 Not Challenging 11 Personal Reasons 12. Conflict with Manager 4. Pay 6. Reallocation/Move 7. Working Condition . Conflict with Other Employees 9. Better Job Opportunity 8. Benefits 2. Job Expectation 5.Chapter-5 DATA ANALYSIS 1. What Is Your Primary Reason For Leaving The Company? 1.
25% 20% 15% 10% benefits commute conflict with manager job expectation pay reallocation/move better job opportunity conflict with other employees family reasons not challenging 5% 5% 5% 10% 15% 3% 20% 5% 5% 5% 2% 22% 5% 0% benef its commute conflict w ith manager job expectation pay reallocation/move better job opportunity conflict w ith other employees family reasons not challenging personal reasons w orking conditions personal reasons working conditions .
2. How Long Have You Been Thinking About Leaving The Company? 1. More Than 5 Months 2. One To 5 Months 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% one month or less one month to 5 month more than 5 months 10% 40% 50% one month or less one month to 5 month more than 5 months . One Month Or Less 3.
Neither Satisfied nor Dissatisfied 5. Very Satisfied 25% 20% 15% 10% 5% 0% extremely dissatisfied very dis satisfied neither satisfied nor dissatisfied very satisfied extremely satisfied 20% 25% 25% 15% 15% extremely dissatisfied very dis satisfied neither satisfied nor dissatisfied very satisfied extremely satisfied .Very Dissatisfied 4.3. Extremely Satisfied 2. How Satisfied Are You With The Company You Work For? 1. Extremely Dissatisfied 3.
More Positive than Negative 3. Much More Negative than Positive 30% 25% 20% 15% 10% 5% 0% much more positive than negative more positive than negative more negative than positive much more negative than positive 20% 30% 30% 20% much more positive than negative more positive than negative more negative than positive much more negative than positive . Much More Positive than Negative 2. More Negative than Positive 4.4. How Was Your Working Experience? 1.
1.Relocation 11. Change in Compensation Package 8. Company Savings Plan 9. Medical Benefits and Insurance 10.5. My Performance Evaluation and the Outcome 2. Responsibility and/ or Title 3. My Compensation 7. My Role. My Boss 5. What Factors Are Responsible? Select All That Apply. If Your Experiences Are More Negative Than Positive. My Co-Workers 6. Job Training 4.Vacation Time 12.Other .
responsibility and/or title job training 10% my boss my co-workers 5% my compensation change in compensation package company savings plan 25% 0% my performance evaluation and the outcome my role. responsibility and/or title job training my boss my co-workers my compensation change in compensation package company savings plan medical benefits and insurance medical benefits and insurance relocation vacation time 10% 5% 10% 10% 2% 8% other 5% 10% .25% 20% 15% my performance evaluation and the outcome my role.
Very Inflexible 3. Very Flexible 2. How Flexible Is The Company With Respect To Your Family Responsibilities? 1. Somewhat Inflexible 4. Somewhat Flexible 25% 20% 15% 10% 5% 0% very inflexible somew hat inflexible neither somew hat flexible very f lexible 25% 25% 10% 25% 15% very inflexible somewhat inflexible neither somewhat flexible very flexible . Neither 5.6.
Somewhat Agree 30% 25% 20% 15% 10% 5% 0% strongly disagree somew hat disagree neither agree or disagree somew hat agree strongly agree 25% 10% 10% 25% 30% strongly disagree somewhat disagree neither agree or disagree somewhat agree strongly agree . Somewhat Disagree 4. Neither Agree or Disagree 5. Strongly Disagree 3. Strongly Agree 2.7. Do You Have A Clear Path For Career Advancement? 1.
Not Satisfied nor Dissatisfied 5. Somewhat Satisfied 35% 30% 25% 20% 15% 10% 5% 0% very satisfied somew hat dissatisfied not satisfied nor dissatisfied somew hat satisfied very dissatisfied 20% 30% 10% 5% 35% very satisfied somewhat dissatisfied not satisfied nor dissatisfied somewhat satisfied very dissatisfied . Somewhat Dissatisfied 4.8. Very Satisfied 3. How Satisfied Are You With Your Position At This Company? 1. Very Satisfied 2.
60-80% 2. What Part Of Pay Play In Your Decision To Leave The Organization? 1. 40-60% 4. 20-40% 3. 80-100% 30% 25% 20% 15% 10% 5% 0% 20-40% 40-60% 60-80% 80-100% 20% 25% 30% 25% 20-40% 40-60% 60-80% 80-100% .9.
No 70% 60% 50% 40% 30% 20% 10% 0% yes no 65% 35% yes no . Yes 2. Does Working Conditions Affect You To Leave Your Job? 1.10.
Low 3.11. How Would You Rate The Morale In Your Company? 1. High 2. Very Low 4. Very High 35% 30% 25% 20% 15% 10% 5% 0% low very low high very high 35% 20% 25% 20% low very low high very high .
12. Could This Company Have Done Anything To Encourage You To Stay? 1. Yes 2. No
60% 50% 40% 30% 20% 10% 0%
yes no 40% 60%
Chapter-6 CONCLUSION & IMPLICATIONS
The present report indicates that the following features:1. Better job opportunities in outer market & pay are the main reasons for increasing attrition rate. 2. The employees do not feel valued by their employer. 3. The working environment in the company also make them to leave their job.
4. Performance Appraisals are not given at regular intervals so that the Employee feel motivated for its work. 5. The work schedule is very much inflexible & Stressful. However an effective retention policy could be followed to make the employees stay in the company starting form recruitment and selection of employees, providing an effective pay packages and compensation, outlining an efficient career development path for employees and most importantly catering to their emotional, mental and family needs. Also practices should be followed to bring the ex-employees back in the company.
Employees retention strategy should be adopted to bring back the ex employees in the organization as well as to retain the present employees. Compensation and salary should be matching with the employee’s contribution to the organization. Periodic reviews of the employees satisfaction level regarding to issues like salary, work position and environment etc The company should initiate the career development path of its employees along with the development of the organization
Grover. R. 27.. and survivors' work effort: evidence of an inverted-U relationship. Poirson P. & Montagno. Kogan Page. L. R. Human Resource Management – Strategies. Second Edition.V.. The downside of downsizing. Reed. 35. Charles R. Dewitt. S. J. pp. 3. & O'Malley. (1992). (1988). and Seferi. Pg. Downsizing: Practices in manufacturing firms. Lawrence.. (1987). S. Brockner.. pp.. "Winning the Retention Game". Issues and Cases.. Brockner. Administrative Science Quarterly. Reed.. 413-425. Survivors' reactions to layoffs: We get by with a little help for our friends. (1988. Khanewal Rohit (February 2002). T. Beatty.V. 7. Easing the pain of layoffs. pp. 10-12.. 1999. Person Education. R.T. 6874. M. 2004 2.L. 526-541. 145-161. pp. S. HR Magazine. .BIBLIOGRAPHY 1. Fisher. 8. Human Resource Management. Greer.. Grover. P. Joinson.. February). Manzolini. McCune. London. R. 42-51. Strategic Human Resource Management: A General Managerial Approach.. Barney Olmstead and Susanne Smith (2001): Creating a Flexible Workplace: How to Select and Manage Alternative Work Options 4. C. Industry Week. job insecurity. May 23).. & Dewitt. Human Capital. (1995. J. 32. J.B. 9.W. T. A. S. Layoffs. The Academy of Management Journal.. 5.L. Tyson. 6.
February). .10. pp. 50-51. McKenna (1991. What can restore fading loyalty? Industry Week.
Conflict with Manager 4. More Than 5 Months 3. Reallocation/Move 7. Pay 6. Extremely Dissatisfied 3.APPENDIX QUESTIONNAIRE NAME: JOB TITLE: - ORGANIZATION: CELL NO. Better Job Opportunity 8. How Long Have You Been Thinking About Leaving The Company? 1. Commute 3. One To 5 Months . Conflict with Other Employees 9. Job Expectation 5. What Is Your Primary Reason For Leaving The Company? 1. Very Satisfied 2. Working Condition 2. AGE GROUP: :- 1.Very Dissatisfied 4. Neither Satisfied nor Dissatisfied 2. Benefits 2. One Month Or Less 3. Family Reasons 10 Not Challenging 11 Personal Reasons 12. How Satisfied Are You With The Company You Work For? 1.
If Your Experiences Are More Negative Than Positive. Extremely Satisfied 4.Relocation 23. More Positive than Negative 3.Medical Benefits and Insurance 22.Job Training 16.5.My Role. What Factors Are Responsible? Select All That Apply.My Co-Workers 18. Much More Negative than Positive 5.Company Savings Plan 21.Other . 13.My Boss 17. More Negative than Positive 4.My Compensation 19.Vacation Time 24. Much More Positive than Negative 2.Change in Compensation Package 20. How Was Your Working Experience? 1. Responsibility and/ or Title 15.My Performance Evaluation and the Outcome 14.
80-100% 2. Very Flexible 7. Very Inflexible 3. Somewhat Dissatisfied 4. Yes 2. How Flexible Is The Company With Respect To Your Family Responsibilities? 1. Not Satisfied nor Dissatisfied 5. Somewhat Disagree 4. Somewhat Satisfied 2. Very Satisfied 9.6. Somewhat Inflexible 4. What Part Of Pay Play In Your Decision To Leave The Organization? 1. Somewhat Agree 2. Do You Have A Clear Path For Career Advancement? 1. No . 60-80% 2. Strongly Disagree 3. 20-40% 3. Neither 5. Somewhat Flexible 10. Strongly Agree 8.Does Working Conditions Affect You To Leave Your Job? 1. How Satisfied Are You With Your Position At This Company? 1. Very Satisfied 3. 40-60% 4. Neither Agree or Disagree 5.
Very Low 4. High 2. No . Very High 12.11. How Would You Rate The Morale In Your Company? 1. Yes 2. Could This Company Have Done Anything To Encourage You To Stay? 1. Low 3.
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