Employee Retention

SUBMITTED TO: Dr. RAMZAN SUBMITTED BY: FAHAD KHALID (MSBA) MUHAMMA ASAD KHAN (MSBA) ADEEL JAVED (MBA) ZAIN SOHAIL (MBA) SUPERIOR UNIVERSITY LAHORE How the employee retention in educational institutions affects Organizational effectiveness Abstract: Purpose – The purpose of this paper is to put forward a framework of employee retention in the educational institutions which enables them to work for longer time periods and less chance of leaving the place.It also discusses the factors that how the retention of employee affects the organizational effectiveness. Three different levels of schools have been chosen to collect the information from the employees to analyze the organizational effectiveness. The close-ended questionnaire has been established for this purpose. The sample size of 214 will be taken. The SPSS is used to analyze the data and findings of that are given in the context. The limitation of the study is time constraint. The data collection procedure becomes very muc h difficult.This study is only for the education sector in developing countries like Pakistan. Key words: Leadership style, Recognition, Motivation, educational institutions. Introduction This study is about producing and retaining human resource. Hence the research is about the study for the retention of employees in the educational sector. The educational sector is the source of producing human capital for the country which leads to economic development. The employees in that sector should be retained so that the organizational effectiveness is increased.The problem of academic staff retention is a global one which affects both developing and industrialized countries (wisdom 2006 p-11). The most critical for all; is the human resource factor. Without strengthening human resources and retaining critical skills and competencies with in any organization, other components stand to suffer. In academic institutions, the critical human capital includes academic, administrative and techni cal staff resources. The institutional governance, management and financial reforms undertaken as seen above will be more sustainable if there is stability in the area of human resource. Paschal B. Mihyo 2008 p-10) The issue of academic staff attrition and retention in developing countries has been less well documented in the literature. This is because the issue tends to be subsumed under the general category of ‘brain drain’, without particular attention being devoted to it. This subsumption reflects the close relationship between the brain drain and staff retention in many countries. (wisdom 2006 p-12). The employees who are not satisfied with the organizational retention policy they tend to leave the organization.Many research shows that the employees with the higher age are less tends to leave but the lower rank employees are more tends to leave the organization. There is always a certain amount of employee turnover due retirements, promotions and career developmen t; however specific industries and occupations experience attrition rates far greater than others. One business expert author identified ten primary reasons of the employee resigns (MacCann). * Basic financial needs not met. * Lack of competitive salary * Poor benefits * Poor communication * Negative work environment Lack of recognition * Unfair treatment * Lack of challenge in job * Lack of job security * Life conflicts (Gary S. Trulson p-12) There is a vast literature on the causes of voluntary employee turnover dating back to the 1950s. By developing multivariate models that combine a number of factors contributing to turnover and empirically testing the models researchers have sought to predict why individuals leave organizations. Many studies are based on only a small number of variables which often only explain a small amount of variability in turnover.Another criticism of turnover studies is that they do not adequately capture the complex psychological processes involved in i ndividual turnover decisions. Literature Review â€Å"An effective Employee Retention Program is a systematic effort to create and foster an environment that encourages employees to remain employed by having policies and practices in place that address their diverse needs. † (George C. Sinnott, Commissioner & George H. Madison, Director September 2002 p-2) Employee retention is perhaps the most frequently studied phenomenon in the organizational effectiveness.Most organizations find it difficult to measure and improve employee attitudes related to work. Most of the organizations are working on their retention plans for improving employee`s performance and employee`s satisfaction which leads to organizational effectiveness. Increasing employee satisfaction and thereby reducing employee turnover is critical. Long-tenured employees develop personal associations with customers. These relationships are the Groundwork for a reinforcing cycle of positive links between employees and customers. Employees who recognize relationships with customers provide better service.Customers who receive better service express fewer complaints and thereby create fewer problems for employees. Employees in turn react more constructively to tackle with customers. These reactions result in better service which again leads to privileged organizational revenues. Ultimately it is of importance in the educational institutions where teachers have develop direct relation with the students, if turnover of the teachers increases it will also decrease the satisfaction level of the students as well. So the organizations with the long term teachers have ultimately gain the good success in the market.Teaching staff: In the academia the teaching staff is main factor for improving the organizations effectiveness. The institutions with the satisfied and retained staff work more effectively than other. If teaching staff works for the longer period of time then it will be able to produce the desi red results for the students, if students are satisfied who are the customers and it will increase the reputation of organization in the market. â€Å"Teaching bright students and seeing their students develop are the positive aspects of teaching.The negative aspects relate to assessment, both of the amounts required of the students and that of the staff themselves. Administrative tasks and organizational change tend to be viewed as negative aspects of the job by most academics. Hours of work spent on administration have a negative effect on satisfaction with almost all dimensions of academics’ job satisfaction. † (Hilary Metcalf et al. Research Report RR658 p-xvi). Retention: Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time.The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various mea sures taken so that an individual stays in an organization for the maximum period of time. The completely trained employees should be given more time to stay by contracting them for longer period. As the research shows, â€Å"About two-thirds of academics expected to remain in UK academia until retirement. This was higher in new universities. We would estimate that between three and six per cent would leave the sector in the year following interview.This comprised two to three per cent of those on permanent contracts and five to 11 per cent of those on fixed-term contracts. Forty-three per cent of those who thought they might leave the sector in the following year expected to move to another job; this was most commonly to a UK job outside research and teaching, to an academic job abroad or for fixed-term contracts staff, to a UK research job. Contract staff could be seen as being driven out of the sector due to insecurity: they tended to leave due to their contract ending, the desi re for a permanent job or pessimism about job opportunities in UK academia. (Hilary Metcalf et al. Research Report RR658 p- vii). Employee benefits: In the educational institutions employees are looking forward for monetary as well as non-monetary rewards. The organizations which develop the reward system for the employees are better able to reduce the employee turnover. These monetary and non-monetary rewards may include followings: according to (paschal B. Mihyo 2008 p-xiii) * Free or subsidized education facility provided to staff children. * Private pension fund and health insurance schemes should be developed. Reward and recognition system should be decentralized. * Loan guarantee schemes that can enable staff acquire respectable shelter and means of transport need to be developed. â€Å"Institutions should work towards a reasonable improvement in the working conditions (salary and non-salary) of staff, because this is likely to result in more than proportionate levels of job satisfaction. It is necessary to implement some system of differential rewards. This is inevitable, if certain academic fields are to attract and retain staff.Universities should maintain, or institute, non-salary benefits such as tuition waivers/remissions, preferential admission for staff and their families, and access to childcare and primary school facilities provided by their institutions. †(Wisdom J. Tettey 2006 p-4) Motivation of the staff: Employees who stay with a firm because of motivational reasons derive their satisfaction primarily from the work itself. An average of 75 percent of the respondents identified internal/motivational factors such as achievement, recognition, challenging work, and advancement prospects as the main reasons for staying. Matthew H. Sauber , Andrew G. Snyir & Mohsen Sharifi p-36). Motivation can increase the employee satisfaction and also its efficiency at work place. There is an old saying you can take a horse to the water but you cannot f orce it to drink; it will drink only if it's thirsty – so with people. They will do what they want to do or otherwise motivated to do. The motivation can also have an impact on the job performance of employees. The job performance depends upon the ability and ability in turn depends on experience, education and ; training. On the other hand motivation can be improved quickly.There are many options and an uninitiated manager may not even know where to start. As a guideline, there are broadly seven strategies for motivation. The Present Study The aim of this study to investigate some factors that have an influence on employee retention. Based on the previous research and literature, both employee retention and organizational factors are taken into account. On the organization side it has to focus on the leadership style, motivation and reward system. On the employee side the age, experience and level of job had not given a clear conclusion. So there is no source of expectation from these variables.But other variables are leadership style, motivation and recognition are considered. It has been shown that the employees with higher age are less satisfied with the leadership role of their boss in the educational institutions. It has also shown that the employees with more experience got more recognition in the organization. But due to ineffective reward system they are less satisfied. Following research questions are established. RQ1. To what extent can retention be predicted by the variable â€Å"organization effectiveness†? RQ2 What is the relationship between selected employee variables (age, experience and level of job) with retention?RQ3 Is there a difference between different groups of employees (groups differing n seniority, level of education and whether or not being seen as High Potential) regarding their retention? MODEL RETENTION OF EMPLOYEE LEADERSHIP STYLE MOTIVATION AT WORK PLACE RECOGNITION ORGANIZATION EFFECTIVENESS Methodology Data col lection Data were collected by means of a questionnaire that was distributed on a voluntary basis in educational institutions and among employees, in hard-copy, in the year 2011. The study sample consists of 214 employees which will be in the categories of high level, middle level and low level employees.The high level employees consist of directors, principal and vice-principal of the institutions. The middle level employees include teachers and instructors. The low level employees will be as clerks, cashier, and front desk representatives. The data collected from the secondary schools and higher secondary schools. The participant’s 87. 4% is male and 12. 6 % is female. The majority of the employees (81%) worked full time and other worked part time (19%). gender | Frequency| Percent| Valid Percent| Cumulative Percent| Valid| male| 187| 87. 4| 87. 4| 87. 4| | female| 27| 12. | 12. 6| 100. 0| | Total| 214| 100. 0| 100. 0| | Instruments The questionnaire used for the study to c ollect data is designed with the help of expert researcher. The questionnaire consists of 13 items which would be categorized into three different variables used for analysis. Results and Analysis The first issue for data analysis was the presence of missing figures in the form of NR answers. The most frequent case of missing data was the use of N/A for items related to ‘‘leaders in this organization are role models†7 respondents choose N/R for one or the other.The responses are categorized as it is â€Å"strongly agree† =1 , â€Å"Agree†=†2† , â€Å"Neutral†=3, â€Å"Disagree†=4, â€Å"Strongly Disagree†=5. The value of Cronbach’s alpha is . 724 (72. 4%) which shows reliability of data. The correlation which shows that participation will have negative weak relation with the experience of employees with r=0. 01;0. 05 (5%) and value of correlation is (-. 255). The results also shows that as the age of employee in creases the less satisfied with the leadership style and the value of correlation is -. 285 with significance level 0. 01;0. 05(5%). The reward system of the organization has also n impact on employees and result shows that as the age of employee’s increases they are more satisfied with the reward system. Is reward system of the organization is adequate? age| Strongly agree=1| Agree=2| Neutral=3| Disagree=4| Strongly Disagree=5| 20-2526-3031-3536-40| 863017| 442111076| 00000| 55204887| 2070027| Does your employer make effort for employee's awareness about their work? Cross tabulation | | Does your employer make effort for employee's awareness about their work? | Total| | Strongly agree=1| Agree=2| Neutral=3| Disagree=4| Strongly disagree=5| Strongly agree| age| 20-25| 32| 63| | 30| 6| 131| 26-30| 13| 30| | 11| 0| 54| | 31-35| 7| 11| | 0| 0| 18| | 36-40| 4| 4| | 0| 0| 8| Total| 56| 108| | 41| 6| 211| This result also shows that if employer make awareness for the employees abou t their tasks and assignments at work place. The organizations with who gives the employees clear vision about their job description, the employees in that organizations work with greater efficiency. The educational institutions are more concerned about retaining their employee’s b providing them with clear idea about their vision. Conclusion and FindingsThe study shows that retention of employee in the educational sector has an impact on the organizational effectiveness. The retention depends on the reward system of the organization, motivation and recognition of employee at work place. Another useful focus for further work is a comparison of conditions of services between academic staff and their counterparts, with similar qualifications and experience, who are employed outside of universities. This will help determine, with substantive evidence, whether the views expressed by respondents in this study are indeed supported by the facts.It has been shown that higher potentia l employees are less satisfied with the leadership style and they get less recognition in organization. The educational institutions are the source of developing human resource for the economic development of a country. So importance has been given to that sector for improving and retaining employees in that sector. The age has also has an impact on the retention the employees with higher age are not willing to leave organization because they are now being able to get retirement benefits.The employees with lower age try to get the more and more and they are always trying to get good jobs, and are less dependent. The retention of employee has an impact on the organizational effectiveness. If the employees retained in the organization than the organization effectiveness increases by increase in revenues, increase in competency. It can also get a competitive edge in the market. So the organizations with better motivated employee are able to work better in this competitive world. Refere nces * http://www. managementstudyguide. com/employee-retention. tm * http://www. accel-team. com/motivation/index. html * (George C. Sinnott, Commissioner ; George H. Madison, Director September 2002 p-2) * Employee retention in the Joplin,Missouri public safety communication center (Gary S . Trulson) * NYS Department of Civil ServiceGeorge C. Sinnott, Commissioner * NYS Governor’s Office of Employee RelationsGeorge H. Madison, Director * George E. Pataki, GovernorSeptember(2002) * Leadership style, organizational culture and performance: empirical evidencefrom UK companies Emmanuel Ogbonna and Lloyd C. Harris Int. J. f Human Resource Management 11:4 August 2000 766–788 * The International Journal of Human Resource Management * ISSN 0958-5192 print/ISSN 1466-4399 online  © 2000 Taylor ; Francis Ltd * http://www. tandf. co. uk/journals * Roland T. Rust and Greg L. Stewart Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee, USA, Heather Mi ller M/A/R/C Group, USA, and Debbie Pielack MBA Enterprise Corps, Lithuan * Natalie Govaerts and Eva Kyndt(Influence of learning and working Climate on the retention of alented employees) (-39_p-42) * www. emeraldinsight. com/1366-5626. htm