Relationship of Employee Involvement to Employee Retention Essay

Introduction

Purpose

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The most important purpose for writing this paper is to establish a relationship among employee involvement to employee retention. This paper is based upon research work and the other intention for writing this paper is to give awareness to the employers concerning the significance of involvement of a member of staff intended for the retention of fine employees having good skills and experience and to give an idea of an approach as to how the productivity could be increased. In addition to this, it has also been discussed that what difficulty a business or employer may face in retaining an employee if he does not give importance to the suggestions and involvement of employees.

The major part which has been covered is that how we can establish a vigorous and healthy relationship between the employer and an employee. The major program which may perhaps be helpful for retaining employees as well as to create involvement of staff members has also been discussed.

By acknowledging the importance of retaining employees, any employer can become capable of growing his business rapidly. At times, it has also been said that employees are the image of an asset of a company. The amount of time spent in training a specific employee could be saved if an employer gives importance to the involvement of an employee in the activities of an organization to a certain extent.

But unfortunately, only few firms are aware of the significance of employee participation plus their retention. Mostly a job which is assigned to a manager of human resource department is to recruit suitable and best employee for the company but once the employee has been selected then it’s the duty of human resource management department to get proper and regular feedback from that employee about his experience with the company and its environment and also seek for the suggestions of the staff members.

According to a business dictionary, employee involvement is “a variety of management practices centered on empowerment and trust that are designed to increase employee commitment to organizational objectives and performance improvement. The term employee involvement is often used interchangeably with employee participation, but employee involvement practices tend to take place at individual or workgroup level, rather than at higher decision making levels.” (Banas 1984)

Hence, employee involvement is a process to give power to employees of a firm to participate in the decision making process according to their level within the organization.

Summary

Some businesses are facing downfall and their productivity has been decreasing day by day but unfortunately they do not know the reason for this downfall. The reason is that they give least importance to the views of their employees and mind involving employees in organizational activities and as a result their employees leave their organization.

Employee satisfaction holds the same importance for running successful business as the customer satisfaction is important for running successful business. Therefore, the employees should never be ignored and if they are turning over then the human resource managers should be consulted and if necessary, teams should be hired who can serve the company in this regard. Once the employer has reached to the core of the problem then he could take suitable measures to satisfy its workers.

There are many tools which an organization may use to retain their employees but above all, the most important tool is the involvement of staff members. First of all the employers should try to establish communication with their employees and if they are unsuccessful in doing so then another option maybe considered which is hiring experts who can perform this responsibility.

            The other tool which could be used to retain the employees is to provide them with a good manager. The manager should be given proper training and guidance so that he should be able to communicate with the employees effectively.

There is a three step process which could be used to encourage employee involvement to retain the employees. This three step process has been devised by Anthony. In the first step, the manager is supposed to pay attention to whatever the employee wants to say. When he has conveyed all that he wanted to say, the manager should give him a feedback. After analyzing the needs of employee, the next step should be the counseling of employees and in the last step, they must be rewarded for achieving their goals. Consequently, this has proved to be a very effective process in decreasing the employee turnover rate.

Each employee must be assigned a task according to his interest which he could enjoy and produce maximum output. For this purpose, it is necessary to find out about the interests, abilities and talents of an employee and then assign certain responsibilities. This will motivate them to produce better results. An employee must never be over loaded by assigning him different tasks. This can cause frustration and dissatisfaction from his job moreover he will resign from the job in the end.

After that the consequences that could be faced by an employer for not retaining employee have been discussed. It is harmful for an employer or a business if its trained employee leaves their firm. The productivity is affected badly and the labor force would also be deceased. As a result, the overall impact of employee turnover is negative so it’s better to spend fewer amounts on the retention of an employee rather then to lose him. Once he is gone then you may not be able to bring him back and it is certainly not necessary that the person replacing the previous employee will also bring same results as he did.

Thus, the conclusion for this is that the employer should take all required steps to retain his employee, assign certain tasks to him to utilize his capabilities for better production and if he is feeling uncomfortable or frustrated because of something then suitable measures should be taken to eliminate such factors from his surrounding which is creating discomfort for the him or any other employee. The process is not that complicated to put into practice and any company can afford to hire a team which can monitor each employee’s performance.

Literature Review

Introduction

Several researchers worked on how the retention of employees is possible if they are set free to show their concern and participate in activities of an organization. Another essential aspect of employee retention is that it helps to increase the productivity of a firm. Ford Motor Company was a very well known autocratic organization which faced financial trouble for the duration of years in late 1970’s. They researched and found that the financial crises were due to the rapid rate of employee turnover and for this reason the productivity of the organization was decreasing.

Literature Survey

Ford Motor Company had very strict employee policies but they changed their culture about the employee policies and introduced employee involvement system. They formed a management – union called National Joint Committee on Employee Involvement. The main responsibilities of this union committee were to analyze and evaluate the existing policies and strategies, and to improve the working environment. The other duty was to design such projects which could attract and motivate the employees to participate in those projects and also to get feedback from them. (Savoie, 1986)

In this regard, Ford and the union committee designed two programs called the Mutual Growth Forum (MGF) and Employee Development and Training Program (EDTP).The MGF is a program which develops communications between the management and the employees and the EDTP is an employee training and employee education program which includes job finding skills, family planning and allocation of loans etc. (Savoie, 1986).

After the positive results of these two programs in retaining the employees by encouraging their participation in the organizational activities, Ford and NJCEI introduced a guideline of eight steps which could be followed one by one to improve the involvement process of the employees effectively. Ford Motor Company followed all these steps one by one and felt that employee’s involvement in the organizational activities resulted in the overall success of the company. Then, they changed their decision making process and started asking for their employees’ suggestion before making any decision. That is the fact behind their success (Banas, 1984)

Contributors

Remarkable contributors who studied in depth the relationship of employee involvement to employee retention are Taylor, Frank and Finnegan and they also discussed the importance of employee retention and employee enlargement. They suggested that what changes should be brought to the employee policies and how HR manager could prove himself a good leader by applying these changes to increase the productivity and to retain the experienced employees (Frank, 2004).

Waldman and Arora also emphasized on the importance of the retention of an employee.  Rushton (2005) wrote an article ‘Staff Retention: How to Keep Your Stars’ in which he has thrown light on the importance of retention of an employee for running a successful business. Michelle said “As the football season has come to a close, football managers will find themselves facing the same problem as many other big business bosses – how to hang on to their star players” (Frank ,2004).

Another researcher, Apolustolus (2000), in his report discussed the importance of involvement of an employee in an organization. He said that if an employee is encouraged to put suggestions and to make decisions for the betterment of the firm then he would feel the sense of responsibility. Such employees view their companies and jobs from a different perspective, as if they are the owner of the company. The most appropriate way to involve an employee in a project is to set him free and allow him to work the way he like. This will attract him and he would be more dedicated towards his work which may lead in being able to give positive results (Apolustolus, 2000).

Involvement of an employee can be considered as one of the most important tools of a human resource management. A lot of research work is carried to spread awareness about the importance and advantages of employee involvement practices (Kochan & Osterman, 1994; Lawler, 1992; Levine, 1995; Pfeffer, 1998). Further, recent studies have observed relationship between the employee involvement, employee retention and firm performance (e.g., Arthur 1994; Huselid, 1995; Koch & McGrath, 1996; MacDuffie, 1995).

There is a remarkable work from few other researchers  including Shaw, Delery, Jenkins and Gupta (1998) , they observed the relation of employee involvement and turnover and found that where there is low employee involvement there is high turnover rate and vice versa. Arthur (1994) and Huselid (1995), the studied the relationship between the high involvement work practices (HIWPs) retention and efficiency of an employee.

Advice by Human Resource Manager

Vince Housecroft is a human resource advisor who believes that by taking certain steps a company can have confidence that their star player won’t go anywhere and they can look forward to better performance from him. Vince said that staff retention is a very big issue and more or less all businesses are facing this problem (Rushton, 2005)

Vince said that if a company want to retain its employees then it is essential to be flexible with the working arrangements like working hours and also provide the employees with the opportunity to work from home. If there are more female workers in the workforce then it is easy to retain them and to motivate them by providing necessary facilities. He said that giving career breaks and sabbaticals to an employee will help them to achieve their aims and then return back to their place of work.

Vince has also given few tips regarding retaining of employees. Such as try to give your employees due respect which they deserve and give extra rewards so that they would be satisfied and will stick to your firm. Vince advised to be careful while recruiting employees and always select a capable employee and never think that first impression is the last impression.

Whenever employees are assigned a new task, they must always be supported and monitored so that they may be corrected if they are not working the way they must do their work. Youngsters are always conscious about their career so provide them with full guidance about how their career can grow by sticking to your business. Provide them friendly environment and social aspect is also important so physical environment is important for working with a fresh mind.

Most important of all is the employee involvement to retain employee. If an employee give suggestions and also contribute in the betterment of an organization by taking part in the decision making process then he would naturally feel valued and empowered. And will always remain busy in finding the strategies for the growth and success of an organization.  According to Vince, these were few tips which should be kept in mind if an organization wants to retain their employees. (Rushton, 2005)

Relationship of Employee Involvement to Employee Retention

Discussion

There is a direct relationship between employee involvement and employee retention. If an importance is given to employee’s suggestions then he will feel valued and would not think of leaving the firm.  The question is that how a firm can perform this task as it is not easy to involve the employees in the decision making process. There are many ways to encourage employee’s involvement in the firm to retain the employees:

Duty of the Management

Management should be kind towards its employees and it is the duty of management to offer or assign jobs to its employees according to their abilities and avoid assignment of tasks that they will be unable to do. First the employee should be asked whether he would be able to complete the task or not and then the specific task should be assign to him so that the employee would know what is expected from him and will try to go beyond the expectations of the management.

Management should always motivate its employees. This builds up energy in the employees and they would know that our management have confidence in our abilities and we should work even more hard. This will obviously boost up their energy level and they will perform to their fullest. So, it is the management’s foremost duty to motivate all its employees as much as possible and let them know that how much organization expects from him. Manager is the person who mostly communicates with his employees to inform them that why they have been chosen by the management to perform certain task and the company expects a lot from them. He must also explain that the whole management has much confidence in him that he can perform that task effectively.

Need of Good Supervisor

The other important aspect in the retention of an employee is to provide them with a good supervisor. In most cases, employees leave their job for the reason that they are unsuccessful to develop communication with their supervisor and this communication gap forces them to find a new place of work. If the supervisor will make an employee feel unvalued then due to lack of importance within the company the employee will leave the organization.

Freedom of Thoughts

The other factor is that if an employee would not feel freedom of sharing his views and to speak whatever comes in his mind would also not feel working in such environment and will leave the organization. Encouraging all employees to give their feedback about the organization whether it’s positive or negative and to give possible suggestions that how could the organization manage to bring about the required changes is a key to success. The employee will feel personal attachment with the organization and will never think to leave it.

Give Priority to Current Employees:

Never give priority to the outsiders if you think that the same skills and abilities are present in the existing employees. This will increase the confidence in employees of the company and they will serve even better then before. For example, if an employer wants to design a marketing logo of his company and an employee offers you to successfully complete this task as he has relevant experience in this field, then he must be given a chance to prove his capability. After all he is serving in your company which means that he is capable enough to perform his duties that is the reason that he is a part of the company in the first place.

At this point if the management says no and seeks advice from any foreign consultant then it means that it may loose that employee who offered his services. He would resign from the firm thinking that they do not know what my abilities are and that the firm has always underestimated his abilities so it is better to leave and find some new place of work.

Surveys Conducted By Human Resource Management and Career Journal

According to 2004 US Job Recovery and Retention survey which was conducted by Society for Human Resource Management (SHRM) and Career Journal.com, seventy six percent of employees are looking for new jobs and according to the survey of the Human Resource managers the turnover rate has been increased during 2004. So they found that there is a need for any program which may result in retaining their employees (Heathfield, 2009)

Survey also indicated that there were three main reasons behind searching for new jobs. Approximately 43% of the employees were not satisfied from the compensation plans and 32% of employees were looking for better career opportunities and 22% of employees were dissatisfied from the opportunities which were offered at the current job (Heathfield, 2009).

Conclusion Drawn From the Surveys

Heathfield said “HR professionals understand that it is far more expensive to recruit new employees than it is to retain them. Their efforts to create a positive work environment where employees are engaged feel appreciated and see opportunities for career growth will help to decrease turnover rates.” (Heathfield, 2009)  Surveys showed that why the turnover rate of employees was increasing day by day. Then the programs were designed for the retention of the employees. Many organizations implemented these programs to retain their productive employees. Organizations brought changes in the compensation plans and also formed career counseling teams to educate their employees.

According to the SHRM the best employee retention programs include promotion of qualified employees, career development and learning opportunities and offering extra rewards and bonuses to employees. And the most important tool for retaining employee is his involvement and participation in decision making process. If an organization is providing all the above programs and not involving an employee in the activities of the organization then they may lose their employee. So keeping an employee is not an easy task employers has to work very hard if they what to retain their productive employees.

Tools for Retaining Employees and Employee Involvement

Employee’s turnover leaves bad impact on a company. It reflects the weakness in the human resource department of a company. Whenever an employee leaves any organization he also takes away his experience and knowledge with him and the cost which was spend on polishing his abilities also become worthless (Banks, 2009).  Therefore, it is an extremely important responsibility of the human resource department to retain employees by allowing them to participate in the activities of the organization and to give them value and make them realize that how important they are for the organization.

Managers can also help in retaining employees. They should be trained so that they know how to appreciate their workers. Their way of communication and their attitude toward each worker plays a vital role in the retention of an employee. They should know as to what extent the employee involvement in decision making process is important and how they can engage their employees in such practices effectively.

Training of managers

The mangers which have the ability to retain their employees are the leaders. So polishing this ability is necessary as the manager is also responsible to some extent to decrease the turnover rate. The core area which needs to be polished and training program should be conducted by the top level of management in following area. (Hearthfield, 2009)

Train the manager to be polite with his employees
Always seek for the feedback
Tell the employees what is expected from their work
Monitor and support them.
How to give value to employees
Ask for employees suggestions for the betterment of an organization.
It is the duty of top level managers to arrange meetings to have discussion about performance of the employees and to discuss what suggestion should be given for the betterment of the organization. By doing so the managers will also feel sense of responsibility and they will perform their duty honestly. Provide funds to the managers so that they can attend the conferences and can educate themselves by attending different workshops.

It is very important to develop trustful relationship with the employees once a manager has won the trust of employees, he will not have to put much efforts to retain any worker. Working in a friendly and sociable environment would result in more productivity. Trust could be developed easily if the managers treat all the employees in a similar way and it is the duty of the manager to behave the same with all of his staff members. If he will distinguish between employees then a situation of discontentment would force the employee to leave the existing workplace and to search for a new job where he would be able to enjoy healthy environment.

Three Step Process

Employees are more concerned about their self-respect rather then a paycheck and allowances. They want to be heard and want to make an important place within an organizational structure. So they prefer to join such organizations in which they would be able to participate and will get the opportunities to show their abilities and skills. Consequently, involvement in the activities of an organization is something more important to the employees rather then a paycheck.

Employees are the primary demand of any organization. They are the building blocks of an organization so they should be retained at any cost. Once a company has succeeded to satisfy its workers then it would be very easy for the organization to gain the customer satisfaction. It is a two way process, for example, if the team working on any project is happy with the manager and is fully satisfied then it will work with more enthusiasm. Each worker will try to put extra effort and would enjoy working in a team. Vultaggio (2008) has also realized the importance of the retaining employee.

Vultaggio (2008) devised a three step process called ‘Eliminate Employee Turnover with Three Simple Steps’. This three step process has been designed for retaining an employee by giving them an opportunity to participate for the successful growth of an organization and is fully allowed to give suggestions regarding no matter what change they would like to bring in environment of their working place. Due to this reason, if an employer wants to retain his employee, he would have to allow him to participate in the decision making process.

First Step:

As a manger, one should be a good listener who is always ready to pay attention and take notice of the problems of his employees. If an employee is giving some suggestion then always encourage his views and do not show rude attitude towards him by any means. Make him feel like his suggestions are very important for the organization. Give him appropriate time and listen to him properly. After that, at the end give him feedback so that he will come to know that you have listened to him and have understood his views.

Second Step:

The second step is the coaching of an employee. In the previous step when the manager gives feedback to his employee, it means that he will use the ideas which were given to him by the employee and will find the common ground and interests for achieving specific goals. The coaching session will increase the confidence level of the worker and he would try to put maximum efforts as to make certain to the manger that his ideas were worth applying. This will be beneficial for the company as at the end it is the business which take benefits from the efforts of the employees.

Third Step:

            Third step is about rewarding your employees for achieving their goals. Employee worked hard and achieved the desired goal, than its better to reward him for his achievement. This action would motivate them and keep their morale high and they will feel valued. The whole procedure has been designed to make your employee feel valued and to motivate them to work with the company and not to leave such rewarding organization. Always remember that employees are not always looking for financial reward, they usually prefer non financial rewards like a huge loud of applause from his co-workers for achieving his goal. Once a manager has won the faith and trust of his employee, then he will not have to put efforts for retaining them.

One of the other important tools which could be retain the employees is that at the time of recruitment the human resource management should recruit only those employees who are serious towards their career and are talented and skilled enough to perform tasks for which he is being hired for. His experience should match his qualifications.

For example, while recruiting the marketing manager for the company the human resource manager should check his qualifications regarding the position. Employees with experience should be preferred, but those with no experience must also be given a chance to prove themselves by gaining experience from the company. However, by doing so their may be a possibility that the employee without any experience would find it difficult to give the required out put and ultimately he would be dissatisfied from his job.

First check the ability of the employee then assign him any certain task. Never burden any employee; this will also drive him towards the job dissatisfaction and he will leave your organization. Monitor his abilities first and then select him for certain project. Find the areas of interest of your employee and then give him chance to show what he actually is capable of. This will motivate him more and he will be much satisfied from his job.

So, these were some tools which could be helpful for the firm to encourage its employees to participate in the organizational decision making process and as the result of this involvement companies could surely be able to retain their productive employees.

Positive and negative aspect of employee involvement

There are some positive and negative aspects of involving employees in the decision making process. However, the positive points are more then the negative ones. Involvement of employees can distract the employer from his main area of focus and can make a decision making process difficult for him. But this possibility could be eliminated if only fewer employees who are experienced in certain task should be invited to participate. This practice would bring only relevant and fewer ideas.

It is a time consuming practice and requires training of employees before allowing them to participate. This will result in the increased expenses of the company. Only skilled employees can produce valuable suggestions.

Consequences of not retaining the employees

There is a direct impact on the progress of the company if the employer fails to retain their employees. In the fast moving business world there is always need of employees and employers are always in search of good and experienced people. Therefore, in this situation business has to retain its employees if it wants to get success in the long run. There are millions of companies which produce same product with different brand name. Companies in the same product line may have same characteristics but what make it different from other companies are employees. So if a company fails to retain its workers it would mean that they failed to make their place within a market.

So, this is the worst situation for an employer that his worker has turned over and serving other company with the experienced gained with his company. In other words, a company has failed to retain the knowledge and experience of the worker. Employees are the reflection of your organization. In the external environment the image of an organization is build through employees of that organization and employees can build up the image as well as destroy the image of the company. Hence keeping it in view the management should take appropriate measures to satisfy the employees of their firm.

Nowadays the priority of employees is totally different from those of early ages. Now they do not seek an organization which pays high but they seek an organizations which have employee based structures. The companies which offer career building opportunities, team work, social environment, career counseling etc are preferred more by the employees. They want to join such organizations which reward when the employees achieve their goals and they also prefer to handle challenging situations so that they would be able to polish their skills and abilities.

Organizations which do not pay attention to retain their employees may face lack of labor force tomorrow. At that time if there would be no labor force, the company will gradually shut down. This is why if a company is thinking to earn profit in a long run then it is very important to decrease the turnover rate of its employees.

The strategies and tricks of any organization are responsible for the success of the firm, so if a trained employee leaves it then he would definitely apply these tricks and strategies for the betterment of the organization which he has joined. It is just like telling your business tactics and secrets to the competitors.

Another consequence which a business may face if it has failed to retain its employee is that the company would need a replacement of its previous workers and for this purpose they will hire a human resource manager due to which the company will have to spend millions of dollars for recruiting new staff and there is a possibility that the new recruited employee wont be able to give you desired results.

One more important aspect for any organization is their good will in the market. What is the worth of an organization in the market place? if they have employed skilled employees and their staff consist of experienced professionals then their market worth would be more then the organization which has employed unprofessional and inexperienced staff. So, it is better to retain productive employees otherwise there would be no worth of your organization within the market.

The best way is to spend little on employees so that they develop a loyalty with your firm. By retaining an employee and by bearing little cost would be beneficial for a company in two ways i.e. they will not lose their productive employee and the amount which was spend on the training of the employee would also not be wasted.

            So it is better to take prevention and employers should always give importance to their employees after all the success of any business is the result of hard work of its employees.

Conclusion

Overall we can see that employee involvement is very important in reducing employee turnover rate. Retention of an employee directly affects the productivity of the firm so it is better to realize the importance of an employee before it’s too late. Involvement of an employee is positive practice as it brings new ideas and ways to grow the productivity of the firm and to maintain a stable internal environment. It is a misconception of some employers that if they give authority to their employees to participate and to make suggestions then one day they will claim that they are the owners of the firm.

Therefore, such employers fail to build healthy relationship with their employees and as a result employee leaves their firm. Involving employees is not a big issue as they always bring new ideas and even ready to take challenges for the betterment of the organization. The companies that involve their employees in decision making process and other activities are more successful and those which give limited authorities to their employees and maintain a distance from their employees are in loss.

Hence, we can say that there is a direct relationship between the employee involvements to retention of employee. If there is high level of employee involvement then there would be high rate of retention of an employee and if there is low involvement of an employee then there would be less chances of retention of an employee.

If we talk about the relationship between productivity and retention of an employee then it can be observed that there is a direct relationship between productivity and employee retention. If any organization fails to retain its employee then the productivity of an organization would decrease automatically and if a company succeeds to retain its employee then it would be able to increase its productivity day by day. So, these all factors are interrelated to each other i.e. Employee involvement, employee retention and the productivity of company.

If a business is looking forward to be successful in a long run then it’s very important for the business to take such measures to ensure the security of the employee and to ensure the participation of its employees. This is the ultimate solution to retain the employees and to get benefits from the efforts they put in different projects of the company.

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