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Challenges in retaining employees

Discuss About The Organizations From Heavy Engineering Industry?

Employees or the human resources of any organization form the backbone of the business. Without them it would impossible to carry out numerous operations that run in the business. Despite the improved technology and enhanced usage of that technology, the human resources of any business still remain crucial (James & Mathew, 2012). This report throws light on how and why is it getting extremely challenging to retain employees in the organization and what are the steps that can be put to fight the same. The organization in reference is Samsung.

Samsung is a leading player in the electronic goods industry. Samsung pays its employees in two components, first being a fixed salary and second is the variable bonus. This bonus is ideally capped at 50% of the employees’ salary. Samsung’s mobile division’s performance in the year 2015 was below average and largely away from the desired target. However, as an organization, Samsung still continued to give bonuses to all the employees of the mobile division despite poor performance. Although, the move taken by Samsung to motivate their employees and appreciate their efforts was a brilliant gesture, it adversely impacted the morale of other employees who didn’t fare so well. This especially includes the battery division, whose employees were paid a 3% bonus the same year. This report will lay emphasis on strategies adopted by Samsung to retain employees as well as recommendations to better the same.

In the competitive market world that surrounds us, there are increasing challenges that an organization is faced with while attempting to retain its employees. A few of these challenges are as below:

The job market that exists today is highly competitive. The increasing globalization has created jobs across the world and every employer is fighting to get the best candidate work for their firm. This competition in the job market has led to employees leaving their jobs and looking out for better opportunities at the slightest discomfort (Hong & Hao, 2012). It is very easy for employees to get attracted by other lucrative offers and leave their current job. This makes it difficult for employees to work with the same organization for longer periods.

Employee poaching is the process of a competent employee of an organization being lured or poached by a competing firm by offering better compensations for his or her work. This employee poaching has come into existence due to a dearth of competent employees and the increasing ability of businesses to pay better. Industry competition also plays an important role in employee poaching (Das & Baruah, 2013). In order to remain competitive in the business, organizations try to get employees of their competitors with an agenda of gaining a deeper insight about the working of the latter’s business

Importance of retaining employees

Very often, employees leaving the organization is because the working environment offered by their current employer is not sustainable. Longer working hours, insufficient pay, workplace inequality or an environment for demotivation are all reasons why employees leave their current workplace and look for better opportunities (Sinha & Sinha, 2012). Professional relationships across the business also directly impact the employee’s attitude and feeling towards his workplace. Excessive interference, lack of freedom to work, slower growth of career, reduced learning or unfriendly attitude of employers often makes employees largely dissatisfied with their workplace and forces them to look out for better options.

Through the process of any recruitment process, both the employees as well as the employers often tend to overpromise each other. Which leads to unsatisfied employees and employers. When employees or candidates overpromise in an interview and are unable to deliver the same, employers tend to replace that employee. Similarly, when employers overpromise to lure a competent employee and are unable to deliver, then the employee starts looking for better job opportunities.

With the increasing competition in the world, it is largely important that employees build long term relationships with their workplaces. This leads to the growth of the employee as well as the organization (Terera & Ngirande, 2014). There are numerous advantages of employees working with the same employer for long. The efforts of the employers to retain employees has the following advantages:

Retaining employees in the workplace for longer periods builds long term relationships between the employer and employee. This productiveness of the relationship leads to better and improved workplace environment. The employee is familiar with the policies and procedures followed at the organization and has adjusted to the same. Therefore the work environment becomes very comfortable and productive. This also transpires open communication and hence better understanding between the employer and employee.

Once an employee spends a certain amount of time at the workplace, the employee begins to feel an enhanced sense of ownership towards the organization. This increases employee’s loyalty towards the firm but also the employee begins to align personal goals to the goals of the business (Kwenin, Muathe & Nzulwa, 2013). Eventually, this leads to improved performance and better efforts from employees towards the growth of the organization.

It is imperative that organizations put sufficient efforts to retain employees. Most often, employees are able to understand those efforts and respect them. Such efforts make the employees feel valued and respected (Akila, 2012). This makes the employees inclined towards staying with the same organization and doing something for the business in return. There are various ways in which employers can put efforts to retain employees. Few of the strategies the help improve the business environment and encourage employees to remain loyal are as below:

Recommendations to retain employees

Rewards and recognition are ways of accepting, encouraging and appreciating employee’s efforts in the business. Rewards are given to motive employees and bring them to work even harder. They are a token of appreciation (Bryant & Allen, 2013). Rewards distributed and recognizing employee’s efforts also makes them aware that their efforts are being noticed. In large firms, it is often difficult for the CEO to notice the efforts of all the employees, therefore, in such a scenario, various managers are appointed at different hierarchical levels. It is the duty of these managers and leaders to make sure that the employees working under them are rewarded and their efforts are recognized by the top management of the firm.

Very often it is noticed that employees face certain kinds of discrimination or unfair treatment. This leads to frustration among employees and leads them to look for other jobs. Such an unfair treatment also hampers the work environment and creates negativity in the business. In the case of Samsung as well, it was noticed that a certain department’s employees got a high bonus while at the same time, another department’s employees received a low bonus. This unfair treatment leads to employees being unsatisfied and this is when they start looking for other opportunities. Therefore, as a policy organizations must create a fair environment for all their employees (Kocher, & Strasser, 2012). They must also ensure that employees are not selected or promoted in the organization on the basis of nepotism of favoritism.

In order to ensure that employees sustain in any organization in the longer run, organizations must work towards ensuring the growth and development of employees. If employees will be able to see themselves growing in the business and in their professional lives, they will be able to see a long term career in the business. In order to achieve the same, organizations must work towards giving employees a transparent and 360 degree feedback (Ajala, 2012). Constructive feedbacks will help employees grow and improve their performance. HR managers must also make sure that employee is able to align his or her goals to the goals of the organization. This will help employees remain motivated in the business and put consistent efforts in improving their performance as well.

Work place environment is the factor that affects employees to the largest extent. The business environment within which employees function either enables them to either work hard or it demotivates them and adversely impacts their performance. It is hence, the responsibility of the organization to provide their employees with a motivating, positive and encouraging environment to work in that fosters a healthy competition. A positive workplace environment will enable organizations to retain their employees in the longer run. This will also make it plausible for employees to build a long term relationship with the organization as well as its colleagues. A positive work place environment is established by open communication, mutual respect, trust, healthy competition and efficient leadership. To make sure that employees remain associated with the business, organizations must work upon creating a healthy environment.

It has often been noticed that employees face various issues in the workplace but are unable to express their concern over the same. This is why organizations must create an environment of open communication. This communication should be transparent throughout the firm. Open communication leads to effective addressing of employee grievances. When employee grievances are addressed effectively, then employee retention becomes much easier (Rajhans, 2012). Organizations must adopt an open door policy. Open door policy is adopted by various leading organizations where the top management of the firm leave their office doors open to signify that they are always available for communication. Such an open communication helps in retention of employees by providing them a better workplace environment and by ensuring that if any employee faces any kind of problem, then it can be addressed by the organization. A 360 degree feedback system must be adopted where every employee of the company will be provided a feedback by all the people related to them in the business including their juniors. Such a feedback system leads to open communication, growth of the employee in the business, better relationships and eventually higher retention of employees.

Conclusion

Employee retention is one of the most important aspects of any business. A lower attrition and a higher retention rate also reflect positively on the organization. Businesses must put consistent efforts to ensure that the employees of their organization build long term relationships with the business and see a successful future in the firm. Employee retention leads to aligning of employee goals with the goals of the organization. When employees spend a considerable amount of time in the business, they become familiar with the procedures, policies and functionalities of the business. At the same point of time, a long term association with the business also enhances the sense of ownership that employees feel towards the firm.

It is therefore largely important that organizations put efforts in retaining their employees for a long term. This leads to beneficial and productive relationships between the employee and the employer. In order to ensure achievement of the same, businesses must promote open communication so that employee grievances are immediately addressed and they remain satisfied with the organization. Organizations must also work towards aligning personal and professional goals of individual employees with the goals of the organization to make sure that employees can grow, develop and improve themselves. Lastly, organizations must ensure that all employees are fairly treated and all the employee’s efforts are rewarded and recognized. Motivated employees have a tendency to remain associated with the firm in the longer run. On the other hand, if the employee remains unsatisfied in the business, then they look out for other opportunities.

References

Ajala, E. M. (2012, June). The influence of workplace environment on workers’ welfare, performance and productivity. In The African Symposium (Vol. 12, No. 1, pp. 141-149).

Akila, R. (2012). A study on Employee Retention among Executives at BGR energy systems Ltd, Chennai. International Journal of marketing, financial services & management research, 1(9), 18-32.

Bryant, P. C., & Allen, D. G. (2013). Compensation, benefits and employee turnover: HR strategies for retaining top talent. Compensation & Benefits Review, 45(3), 171-175.

Das, B. L., & Baruah, M. (2013). Employee retention: A review of literature. Journal of Business and Management, 14(2), 8-16.

Hong, E.N.C., Hao, L.Z., 2012. An effectiveness of human resource management practices on employee retention in institute of higher learning: A regression analysis. International journal of business research and management, 3(2), pp.60-79.

James, L., & Mathew, L. (2012). Employee retention strategies: IT industry. SCMS Journal of Indian Management, 9(3), 79.

Kocher, M. G., & Strasser, S. (2012). The fair employment hypothesis: Reciprocity in unstable environments. Mimeo.

Kwenin, D. O., Muathe, S., & Nzulwa, R. (2013). The influence of employee rewards, human resource policies and job satisfaction on the retention of employees in Vodafone Ghana Limited. European Journal of Business and Management, 5(12), 13-20.

Rajhans, K. (2012). Effective organizational communication: A key to employee motivation and performance. Interscience Management Review, 2(2), 81-85.

Sinha, C. and Sinha, R., (2012). Factors affecting employee retention: A comparative analysis of two organizations from heavy engineering industry. European journal of business and management, 4(3), pp.145-162.

Terera, S. R., & Ngirande, H. (2014). The impact of rewards on job satisfaction and employee retention. Mediterranean Journal of Social Sciences, 5(1), 481.

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