The effects of human resource management                     practices on employee retention

 

 

“A process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the objectives” (Singh & Dixit, 2011, p. 442).

Employee retention refers to the ability of an organization to retain its employees and also it is considered the heart of an organization's success. Employee retention can be represented by a simple statistic. The effective implementation of HR practices within the organization is the symbol of employee retention. It has become a critical issue in present, as companies complete for target in a tight economy. It is most important to keep track of employee retention because disengaged employees and turnover costs are wildly expensive. The payoff for organizations that focus on this issue is well worth the time and investment. As a result of that increased performance, better productivity, higher employee morale improved quality of work, not to mention a reduction in turnover, are all organizational benefits.

The basic aim of employee retention strategies and practices is twofold within the organizations. One is to reduce employee turnover and, second, to considerably reduce the associated expenses of hiring and training, and orientation of the new employees (Iqbal & Hashmi, 2015).

As per Iqbal and Hashmi, the bottom line is that by focusing on employee retention, organizations will retain talented and motivated employees who truly want to be a part of the company and who are focused on contributing to the organization's overall success.

ü  How to retain more employees?

ü  What motivates people to engage, care, and want to stick around and stay a part of the team? 

Salary is a big issue for leaving the job for most of the employees, to which companies increase the pay scale to retain the employee. However, seeing this as the only option is a knee-jerk reaction that can cost your business more than it can afford. Salary and benefits are important and should be considered especially if you are paying below industry standards but there are other methods to retain employees than costly raises and benefits.

1.   Why employee retention is most important?

Mainly there are four reasons which are most important to employee retention. They are

Ø  Employee motivation

Ø  Healthy culture

Ø  Align Goals

Ø  Grievance management

1.1. Employee motivation

It is key to an organization's success and level of commitment, drive, and energy that a company's workers bring to the role every day. Without this, companies experience reduced productivity, lower levels of output and it's likely that the company will fall short of reaching important goals too.

1.2. Healthy culture

Maintaining a healthy workplace culture can be a major factor in staff development and retention. A negative or toxic culture can lead to unhappy or unengaged staff members, substandard work, unhappy clients, and high staff turnover. Bad workplace culture will likely push away the best people in your organization.

 

1.3. Align Goals

Increase Employee Engagement and the Bottom Line. Increases employee morale and improves retention. Creates ownership in the organization's success, resulting in more engaged employees and increased retention rates.

1.4. Grievance management

It prevents minor disagreements developing into more serious disputes, it saves employers time and money as solutions are found for workplace, Problems and it helps to build an organizational climate based on openness and trust.

 

How to retain employees?

 

It is most important to keep the relationship between employee participation and employee retention. And also employee compensation significantly moderated the relationship between types of employee participation and employee retention.  Concludes that organizations of both manufacturing and service sectors should develop such practices, which help employee engagement and voice within their task-related decisions. These participation practices would in turn enhance employee retention and would give organizations its aligned benefits.

 

References

Addison, J. T., Schnabel, C. (2011). Worker directors: A German product that did not export? Industrial Relations: A Journal of Economy and Society, 50, 354-374.

 

Agarwala, T. (2003). Innovative human resource practices and organizational commitment: An empirical investigation. International Journal of Human Resource Management, 14, 175-197

Agustine, A. A., Ssemugenyi, F. (2014). The influence of human resource management practices on employees retention in Kenya Power Company Ltd. Global Journal of Commerce & Management Perspectives, 3(4), 74-78.