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Impact of high employee turnover on organisational performance; what

strategies & tools can help Employee retention? A case study of

CAPITA:

MBA

University ID: 0911867092096

LONDON COLLEGE OF BUSINESS(University of Wales)

Impact of high employee turnover on organisational performance; what strategies & tools

can help Employee retention? A case study of CAPITA:

SUBMITTED

By

FAROOQ AHMAD

University ID: 0911867092096

Supervised by Ola shittu

A dissertation submitted in partial fulfilments of the requirements for the degree of

Masters of Business Administration

Department of Business - London College of Business (University of Wales - September 2009 – September 2010)

Date of Submission: 20th September 2010

Farooq Ahmad ID # 0911867092096 Page 2

DECLARATION

This work has not previously been accepted in substance for any degree and is not being concurrently submitted in candidature for any degree.

Signed(Candidate

)

Date

STATEMENT 1

This thesis is the result of my own investigations, except where otherwise stated, where correction services have been used, the extent and nature of the correction is clearly marked in a footnote(s).

Other sources are acknowledged by footnotes giving explicit references. A bibliography is appended.

Signed(Candidate

)

Date

STATEMENT 2

I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loan, and for the title and summary to be made available to outside organisations.

Signed(Candidate

)

Date


I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loans after expiry of a bar on access approved by the University of Wales on the special recommendation of the Member Institution concerned.

Signed(Candidate

)

Date


Student Details

Title ............................. Mr.

Surname .................... Ahmad

Forename(s) ........ Farooq

Institution ...... London College of business

Degree Taught .... MBA (Human Resource Management)

Title of Dissertation : Impact of high employee turnover on

Organisational performance; what

Strategies & tools can help Employee

Retention:

A case study of CAPITA


ABSTRACT:

This research is an effort to measure the impact of employee turnover on an

organisations ability to perform according to its goals and standards or up to the

expectations of the stake holders including shareholders, suppliers and customers

etc. the big question laid down in this research is how draw an effective policy line

and its implementation to tackle employee turnover. To achieve this it will require an

extensive scrutiny into the tools and strategies in use and an analysis of the

emerging trends, the need of innovative thinking to develop effective HR strategies

by the organisation for retention.

Employee turnover/retention is not something new for business organisations.

However, it has not been actively discussed or even understood by employers.

Researchers and business experts has done a lot of work on this subject but yet

ever evolving business environment makes it more demanding issue. Individual

attitude towards job satisfaction is the most important and sensitive variable in

determining employee turnover. The fundamentals of employee retention may

include competitive salary, benefits, recognition, on job training, growth opportunities

etc but retention of the high performing or best ones required even more.

In this research I will try to explore every possible avenue that could affect employee

retention in one way or the other. Employee retention can be seen as employers own

choice strategy and retention techniques. Employee retention is strongly linked with

the work environment in which employees undertake their responsibilities or duties.

Helpful and liberated environment is no doubt is first step towards effective employee

retention. Creating a culture where people can express themselves and can

associate themselves with the organisation would make quitting a difficult decision

for them.

Effective retention polices needs to be updated as often as possible because it has

to be adequately equipped to respond to ever changing labour market. It very

important for an organisation particularly in today’s competitive business world to

retain its highly skilled and top performing employees. High employee turnover can


be very expensive or may result in waste of precious resources of the organisation

but also undermines organisation performance in achieving its goals and targets.

Finally, in this research I will try to devise an effective and successful implementation

process to ensure that no crucial component of policy guide line is overlooked.

Hence, keeping employee turnover within acceptable limits but also improving

organisational performance in terms of productivity and customer satisfaction.


TABLE OF CONTENTS:

CHAPTER 1

1.1 Introduction:

1.2 INTRODUCTION &

COMPANY PROFILE (CAPITA):

1.3 Aims and Objectives:

1.4 DISSERTATION FORMATION

CHAPTER 2

LITERATURE REVIEW

2.1 INTRODUCTION

2.2 Employee turnover:

2.3 Retention:

2.4 Definition of Employee Retention:

2.5 Environments that Bred Turnover:

2.6 Why do people choose to leave or stay?

2.7 The Care Model for motivating and retaining the employees:

2.8 Motivation and retaining high performers:

2.9 HR Strategies:

2.9.1 Performance Appraisal:

2.9.2 Performance Appraisal Methods:

2.9.3 Financial impact of high turnover:

2.10 Strategies & tools for Retention:

2.10.1 Job Clarity:

2.10.2 Training:


2.10.3 Fair and competitive rewards:

2.10.4 The link between Motivation and Retention:

2.11 Human Capital Management (HCM):

2.12 The link between HCM and Business Strategy:

2.12.1 Race/Ethnicity and employee turnover:

SCHAPTER 3

RESEARCH METHODOLGY

3.1 INTRODUCTION:

3.2 The Purpose of Literature Review:

3.3 Structure of Literature Review:

3.4 Literature Sources:

3.5 Research Approach

3.6 Research Paradigm:

3.7 Research Design:

3.8.1 Quantitative Method:

3.8.2 Limitations of Quantitative Method:

3.8.3 Qualitative Method:

3.8.4 Limitations of Qualitative Method:

3.9 Interviews:

3.9.1 Limitations of Interviews:

3.10 Questionnaire:

3.10.1 Limitations of Questionnaire:

3.11 Sample:

3.11.1 Sample Size:

3.12 Limitation of the study:

CHAPTER 4Farooq Ahmad ID # 0911867092096 Page 9

4.1 INTRODUCTION:

4.2 PILOT STUDY:

4.3 GENDER:

4.4 EMPLOYMENT STATUS:

4.5 AGE GROUP:

OBJECTIVE 1

OBJECTIVE 2

OBJECTIVE 3

OBJECTIVE 4

OBJECTIVE 5

OBJECTIVE 6

OBJECTIVE 7

CHAPTER 5

5.1 INTRODUCTION:

5.2 CONCLUSION:

5.3 Findings for CAPITA:

5.4 RECOMMENDATIONS:

5.5 IMPLICATIONs OF THIS RESEARCH (STUDY):

RREFERENCESEFERENCES……………………………………………………………………………………

Appendices………………………………………..



1.1Introduction:

Employee turnover is no doubt a serious issue particularly if not controlled

effectively. Employers need to understand that it could not only affect organisational

performance but could also result in waste of resources or even incur high cost of

production or services. Hence, it requires a comprehensive policy and effective

implementation process. HR managers need to consider retention from recruitment

and should extend as a coordinated effort to every single department.

Employee turnover is an alarming issue in all sectors of economy. It not only affects

organisational performance but cost of replacing workers would be huge on the top

finding suitable skilled employee would be even more difficult as a result investment

in training would be less secure.

Employee turnover/retention is not something new for business organisations.

However, it has not been actively discussed or even understood by employers.

Researchers and business experts has done a lot of work on this subject but yet

ever evolving business environment makes it more demanding issue. Individual

attitude towards job satisfaction is the most important and sensitive variable in

determining employee turnover. The fundamentals of employee retention may

include competitive salary, benefits, recognition, on job training, growth opportunities

etc but retention of the high performing or best ones required even more.

The upshot, from an organization’s perspective, is greater staff turnover or, in some

cases, the development of an ‘employee retention problem’. It has always been hard

and expensive to find a suitable replacement in a short span of time when people

leave, leading to inefficiencies and lost business opportunities. Moreover, when

employees who do more highly skilled jobs, greater potential damage may cause to

the organization when people leave. Precious knowledge and experience leaves

through the front door as they leave the organization.

It is strange that employee retention is not really understood by the employers even

in difficult times for business it would be least important thing on their mind. It is very

likely that employees lose interest in their jobs or faith in their organisation and

become de-motivated. It is important to note that employer can get best out of their


employees when they are motivated and they are more likely to stay with the

company. Employees who are motivated, committed and engaged are more likely to

stay with organisation than the bored, dejected ones. So what can be done?

The answer for this question lies in understanding of the employee needs starting

from their job itself, the work environment in which they undertake their job

motivators e.g. communication, teamwork and growth opportunities.

Job evaluation may require what sort of attitude or behaviour would be suitable to

perform a specific role and changes can be made accordingly by redeployment or by

re-distributing responsibilities or entirely jobs swapped. If it is done through proper

assessment it can bring right person to the right position.

Every individual has their own set of preferences, likes or dislikes attitudes and traits.

Hence, they have different motivators. It is a complex problem need to be dealt with

great care so it can provide every individual what he/she crave for e.g. money,

recognition, job security etc. motivation has probably most talked about subject in

business but yet has its unique importance in every aspect of employee retention.

Communication has a vital role in our lives it can make things happen particularly,

effective communication is crucial in business. It provides the basis for

understanding of what need to be done and how it should be done. Better

communication can help in building good team work even under intense pressure.

Winning team combination can help individuals to perform up to their optimum. It will

give them sense of achievement and higher job satisfaction. Continuous professional

development, on job training etc help employee to update their skills and knowledge

resulting lower redundancies but higher growth opportunities. It will increase

employee commitment with their organisation. More innovative channels of

communication within organisation will help in improving flow of information up and

down in the organisation.

POINT: An organisation which is trapped in some sort of internal malfunctioning, it’s

bound to be known as unreliable or less credible in the market. Suppliers and

customers would be reluctant to do business with such an organisation and

employees will lose interest in their jobs. It would be unavoidable for such an


organisation to retain its employees. It has been discussed earlier that people

respond to different motivators or different combinations of motivators. Money alone

cannot provide all the answers for motivation or retention but it has to be a

comprehensive plan starting from physiological need to more sophisticated aesthetic

needs. It can be done by creating an index and frequent measurement of most likely

factors of motivation or de motivation.

In this research I have tried to investigate every possible issue or factor

that can cause employee turnover. While setting up my aims and

objective for this research my focus was to highlight emerging issues

causing employee turnover along with more conventional and talked

about issues. Further, all the identified issues discussed separately and

collective e.g. impact of work environment and fair compensation or

reward system on turnover. My end objective for this research is to

devise policy guide lines to tackle employee turnover in today’s business

organisations. There are seven objectives or points set for this research

exhaustively covering employee turnover. Hence, all the objectives

collectively will try to provide an answer for my research question i.e.

How to draw policy guideline to tackle employee turnover?

One of the objectives of this research is to provide real time information and

assistance to pragmatic organisations and their managers to understand the

importance of employee retention and then to tackle it in a creative and effective

way. The organisation chosen for a case study is THE CAPITA GROUP Plc. Capita

is well known business organisation for its enormous growth particularly in the last 7-

8 years. It is also known as a specialist in outsourcing business operations. It has

successfully expanded its operations in emerging economies such as India as

outsourcing partner of business services. CAPITA is very much aware of the

importance of retaining reliable and talented employees as apparently doing

everything to keep employee turnover within limits.


The rate/amount of change in work force and the workplace has been very swift

requiring more quick and complete response, Organization need to act proactively

and even preemptively. Retention should start from recruitment may be an example

where to start when it comes to policy formulation and implementation.

Organizations may need to act more cautiously while dealing with highly skilled or

high performers because these are the people who keep such organizations in

business.

Coexisting with these trends, the budding work force is developing very complex

attitudes about their conduct at their workplaces. Family orientation, Quality of life

issues and Autonomy are high priority issues for emerging business environment:

Employers need to understand what their employees want from them, a smart

employer include it in strategic planning to address retention issue in totality.

Organisations with high employee turnover need to kick start a comprehensive and

integrated effort keeping in view their specific needs and environment. It may require

flexible approach in using established practices, tools and strategies along with more

contemporary or innovative ways to retain employees. Stakeholders such as

customers, creditors, investors and employees are always keen to know about

sustainability, strength and capacity of the workforce. It can greatly influence the

perception of these stakeholders about that organisation. Clients need to have un-

shattered confidence in the ability to perform in situations that call for specialized

knowledge, fast response or appreciation of the customers’ history with the

company. It will strengthen customer confidence and improved business relationship.

Capita claims that “Capita is a people business” and our workforce are an asset of

the organisation their services are invaluable for Capita. It is our prime objective to

retain our employee. We are will to do everything to keep our employee motivated

and happy to keep them with us for longest possible time. We are very much on

target and enjoys higher rate of retention than the industry average.


1.2 INTRODUCTION &

COMPANY PROFILE (CAPITA):

Capita is a renowned and leading business organisation in United Kingdom. The

clients and services of capita include central government, local governments,

education, life and pension, insurance, health, transport, financial services and

Business Process Outsourcing (BPO) in UK. Capita has developed great expertise in

redefining and transforming services to public.

(www.capita.co.uk)

If you look at the market and its growth in the last twenty years, you would not miss

Capita as emerging business organisation and leading from the front in different

areas of business. Capita started its operations back in 1984 with just a couple of

people. Capita started to gain size and shape in the year 1991 when its turnover

reached to £25 million. Capita joined FTSE 100 companies in the same year.

Capita started to gain the real momentum in 1999 till today. Capita’s turnover

reached £327 million and a net profit of £36.3 million in the same year. In year

2008 turnover jumped to £2,441 and profit before tax was £277.2 million. Total

number of employees exceeds 60,000. These figures show fantastic and

consistent growth of Capita.

(www.capita.co.uk)

Capita has a huge portfolio of clients and nearly providing services to 33 million

people per year for its clients. Capita has it presence at around 60 business centres.


http://www.capita.co.uk/about-us/pages/our-history.aspx

http://www.capita.co.uk/about-us/pages/our-company

Such a huge number of people being served require huge commitment and expertise

from its employees. It also highlights the importance of highly motivated staff, state

of the art work environment, competitive and fair rewards and growth opportunities

for ambitious and professional employees. It will ensure employee satisfaction and

hence result in increased employee retention. It is important to note that capita has

82% retention rate generally and 88% for senior management. The breakup for full

time and part time employees is 84.5% and 15.5% respectively. Gender breakup of

employees is 52% male and 48% female which shows that equal opportunity policy

for all is successfully implemented.

(www.capita.co.uk)

Capita’s business operations are dominated by service industry operations for

customers of its clients. Providing these services extensively involve dealing with

personal and organisational data makes the job more sensitive and complex but also

requires reliable and committed workforce to carry out such operations successfully

at every level of the management. Once again it shows the significance of a useful

and bona fide retention strategy to put in place. CAPITA has taken over employees

from mergers and acquisitions. They make up 70% of the total work force of

CAPITA.

The purpose of this case study is to examine the relationship between work

environment, employee motivation and retention in CAPITA.


http://www.capita.co.uk/markets/Pages/markets.aspx

1.3 Aims and Objectives:

To analyse the impact of organisational work environment, ethics and values

and behaviour on employee retention.

To determine the consequences of high employee turnover on an

organisations performance, profitability and customer satisfaction.

To analyse and evaluate the influence of available tools and strategies on

employee satisfaction/motivation and employee retention.

To determine the importance of keeping highly skilled and high performing

employees and complexities involve in retaining them.

To analyse the role of strategic HR in devising policy framework for employee

retention.

To determine the role of managers and immediate bosses in implementation

and execution of the company policy through pragmatic and innovative

thinking.

To determine the impact of recession or financial crises on employee

retention.


1.4 DISSERTATION FORMATION

Chapter 1: This chapter gives a synopsis about the selected subject for dissertation

and also background of the topic. The focus is on the concept of Employee

Retention and the strategies and efforts made by managers. Also discussed the

introduction of the organization (CAPITA) and different objectives of research has

been discussed.

Chapter 2: In this chapter, the literature review of the current study will be discussed

and this will tell us about the other researches and the view of different authors. It

also provides the theoretical framework which describes different theories and

research about the concept of Employee Retention Process. The discussion

provides detailed introduction to the literature of different theories of different

authors.

Chapter 3: deals with data collection and analyzing methods in order to explore

answers to our research questions, and thus satisfying the purpose of the research.

Chapter begins with the introduction of research methods, discusses different

research philosophies and research approaches and strategies. It’s progressing by

describing suitable research design and how data gathering was carried out.

Chapter 4: This chapter deals with the explanation of aims and objectives and the

relationship of those aims and objectives with the research work and the literature

review.

Chapter 5: Finally, a few limitations of the data are highlights. This chapter examine

the conclusion of this study; explain conclusion based on the manager and employee

interviews answer and ends with advices to the management of the organization


(CAPITA). Lastly the list of references of different books and websites and

bibliography is given to support the research and the literature review.


2.1 INTRODUCTION:

Literature review is the important part of any study as it enables you to find the key

aspects of the study which is taking place. Because during the study it is good to

know what different people think about the subject so that it enables you to develop

a summary of the sources, it usually has an organizational pattern and combines

both summary and synthesis. A summary is a reiterate of the key information of the

whole, but an amalgamation is a restructuring of source or subject matter. It can

give a new understanding of the historical perspective or blend new with old

account. Or it might draw the intellectual evolution of the field, including major

theories or phenomena. Sometimes depending on the circumstances; the literature

review may evaluate the sources and direct the reader on the most significant or

relevant.

I have attempted the same pattern while conducting literature review for this study

which enables me to understand the subject i.e. impact of Employee turnover on

organisational performance. Most importantly it also helped me to formulate aims &

objectives to define the research question(s) of this study.

2.2 Employee turnover:

Employee turnover is the number of employees that a company might have to

replace in a year or any other specified period as an average of the total number of

employees that organisation has. The main concern of the companies is high cost

associated with employee turnover particularly lower level of jobs and these jobs

has highest turnover. There are numerous factors in an organisation which can

affect employee turnover, and these can stem from both employer and employees.


Generally these are wages or salaries, benefits or perks, employee attendance and

work environment etc.

2.3 Retention:

As it has been mentioned above that employee turnover incur huge cost and is

very expensive. But it is also very important to note that employee turnover is

different for different organisations it means that what is acceptable or normal rate

of turnover depends on the nature of business that it does. It is not only the high

turnover that is dangerous but too low rate can also have a negative impact on the

organisation by creating an inactive workforce. Employee turnover in a real time

situation depends on a number of internal and external factors. For example a food

chain might have a high staff turnover (KFC) due to high number of casual workers

such as students that it employs on the other hand a high Tec. Company with

various roles for its employees may have very high rate of employee retention.

(Rigby,R.2003)

it is also important to note that forced retention such as a trust worthy employee or

a winning team that a employer may not allow to go or even promote may result in

stagnation or de-motivation of employees.

2.4 Definition(s) of Employee Retention:

According to Phillips and Connell (2003), employee retention is the fraction of

employees staying in an organization in a given period of time. It also states that

the retention rate must be adequate in all important of the job categories. (Page-2)

and According to Jennifer A. Carsen (2005), employee retention is the number of

existing employees keep or stay with their jobs over a fix period of time is known as

employee retention. It further suggests that the retention policy should also focus

on retaining the high performers and talented employees or losing the losers and

keeping the keepers. (Page-2)

There are several definitions of employee retention highlighting different aspects of

employee retention.


http://books.google.co.uk/books?q=+inauthor:%22Jennifer+A+Carsen%22&source=gbs_metadata_r&cad=8

http://books.google.co.uk/books?q=+inauthor:%22Adele+O.+Connell%22&source=gbs_metadata_r&cad=10

http://books.google.co.uk/books?q=+inauthor:%22Jack+J.+Phillips%22&source=gbs_metadata_r&cad=10

According to Branham, F. Leigh (2000), the markets or business environment has

witnessed unprecedented Change at a rapid pace in the last couple of decades in

business environment and practices e.g. management, production processes,

marketing, consumer relationship, human resource, employee motivation and

retention. It has made the role of the managers becoming more demanding in their

dealings with customers and motivating employees. It is inexorable for managers to

be more pragmatic and innovative while executing their duties particularly developing

a sense of association or loyalty in their employees with the company. As it has been

discussed that the change has taken place at an unprecedented rate particularly in

the context of information technology, it has transformed the way business used to

be conducted. It has strongly influence the basic requirements for any managerial

positions and computer literacy for other jobs. It would require fundamental changes

in job description, induction and even on job training, automation in data processing

has reduced the time to make a transaction many times with advent of internet in

early nineties, it has grown into a huge online industry. All this has also changed the

concept of customer service, buying and selling etc. Now let’s have a look how to

incorporate this change into employee motivation and retention, use of the

technology has made doing things easy and improved the quality. It can help

mangers to in better implementation and assessment of the policies related to

employee motivation/retention. Another challenging aspect of employee retention is

related to highly skilled, or talented employee because retain them requires more

sophisticated approach. Companies involve in high Tec. Business should be able to

retain their key employee otherwise it will become a nightmare situation for them. It

could affect or delay their projects or may cause serious disruption in R&D projects

as result cost will increase to complete such project or even commercial value may

reduced significantly. Hence, it is very important for these companies to do every

possible effort it may require to retain high performers and talented employees.

Now let’s see what general statistic say about all the efforts undertaken by

companies to retain their employee. According to sources quoted below it appears to

a daunting job to keep up consistent turnover rate the statistics reveal that in year

2000 every month, around 13% of people quit their jobs to take other positions. It

means more than one in seven people compared to one in ten in 1995. According to


statistics estimated time required to fill a job opening has increased to 51days from

41days. Companies are spending between 10,000 dollars (£ 7,000) to 50,000 dollars

(£ 35,000) as a replacement cost as a result of a departing employees, it may show

only the real/tangible cost.

(Page: 15-19)

According to Pepitone and Bruce (1998), Motivation is one of the important

determinants how an individual may respond when it comes decide whether he/she

will to quit or stick with the job. If he/she is happy and satisfied according his/her

preferences it is very likely that he/she will stick with his present job. As it is an

established fact that every individual has its own set of preferences or motivator

that’s why it would be a fundamental requirement that while developing employee

retention strategies that every aspect is considered and included to make it viable for

all sort of needs to encounter any unexpected situations. Motivation is most talked

about issue and there is plenty of research material available in various forms. There

are numerous theories from classical to more contemporary style theories. They

extensively states about physiological needs or basic needs range from food, shelter

and security or safety needs. Then comes next level of needs e.g. social needs,

love/affectionate and belongingness needs on the basis of ethnic origin etc. more

developed ones, e.g. ego, self-esteem, status, prestige and recognition etc. these

needs are variable and may change with the change in circumstances or changes Farooq Ahmad ID # 0911867092096 Page 24

with the passage of time; hence it requires the understanding of the ladder of the

needs as a guide through focusing on what drives people and how/what can satisfy

their needs. Once, basic needs are fulfilled the person will automatically moves to

next level of the needs it goes until all the needs are satisfied so the individual to feel

motivated at the end of each level and will likely stay with that work activity which

satisfy his/her needs at most for that level to which he/she relates, the greater the

motivation, higher would be the performance to carry out that activity. (Page 15-20)

According to Harris and Brannick (1999), workforce of an organization is the life

blood for that organisation as they are ones who will carry out all the functions

regardless how small or big in value. It is extremely important that employee feel

some sort of association with their organisations may be in terms of loyalty, pride or

any other affiliation it would only be possible if they feel satisfied for their individual

needs again it means that it should be the primary objective of any organisation to

ensure that its employees are well catered for according to the level of their services

because it is very likely that every individuals needs are on the same level for which

he suppose to perform. Hence, it is clear that having a committed, enthusiastic,

innovative and forward looking human resource is the most precious asset for a

company. However, it requires an intensive effort achieve real time it should start

from recruitment, every individual should be assessed thoroughly for his/her abilities

in according their job designation. It will provide valuable information about his/her

traits and the level of needs to which he/she can be associated. Next step would be

to asses his/her potential for growth so he/she can be provided with any available

opportunities to excel. On job training will get them familiar to the company goals and

objectives and what company expects from them. It is called job clarity. It is a long

and expensive process however, once done it will get motivated and self driven staff

for the organisation automatically creating a given take situation for both employee

and employer. Such an environment provides everything that it takes to high

employee retention. Failure to do so will result into low production, poor customer

satisfaction and de-motivated employee base and customers. (Page 155-157)

Organisation are increasingly aware of the fact that their operational efficiency and

survival in cutting edge competition will largely depend on the level of satisfaction


and motivation and as result how strongly they are associated with their

organisation.

http://www.info-village.info/wp-content/uploads/2009/09/HRM.jpg

Accessed on 11 th December, 2009 at 14.00p.m

According to Klaff and Churn (2001), how/what will provide the ingredients for a

successful and viable retention policy, quality of information used will also determine

the success or failure of the policy, the ability of the middle management to execute

any proposed policy matter will also be important because even if there is an ideal

policy but poorly implemented will diminish the chances of success. Managers need

to develop integrated implementation process for retention throughout the

organisation to have better chances of success. Let’s have a look at Industry

averages for retention it can give us a better understanding of industry trends and

comparison of statistics may help us why retention rate varies industry to industry. In

United States the average employee turnover rate is around 15 % per year, for

manufacturing sector it is around 15-20 % per year and for public sector, it is around

6-8 % per year. Klaff, L.G.Churn Costs

There is another important source of information to formulate a viable and successful

retention policy is the feedback obtained from the retained employees. By carefully



collected and analysed feedback data can also help to identify the strengths and

weaknesses in the current practices for retention and the room for any potential

changes for future trends.

It is common that employers are always interested to have the most suitable and

competent employees, same is the case with the employees they also want to have

or willing to switch to best employers.

Information obtained through exit interviews may also provide some information as to

why people quit their jobs. But such information may not be always reliable because

employees, who quit their jobs, sometimes, give misleading information in such

interviews e.g. reasons given for quitting e.g. better job opportunity, other personal

reasons as ground for leaving and intentionally omitting discussion of unpleasant

aspects of their current job.

http://www.jstor.org

According to Harrison, D., Virick M. Employers need to have a prudent retention

policy realistically addressing every aspect of employee satisfaction particularly,

when it comes to highly skilled and talented staff. These are the people with more

complex needs and hence required to deal exclusively. A poorly perceived policy

focusing employee motivation and retention related problems in seclusion, such as

monetary incentives might actually lead to an increased retention of low performers.

Work environment is the most important place where everything supposes to happen

from both the employer and the employee. Whatever policies and strategies

developed will eventually be tested or implemented on other hand employee has to

perform according to some level of expectation of his employer as result both the

parties will be testified. A state of equilibrium would be an ideal on the graph for both

the parties. Employer will get the motivated staff performing up to the mark and more

likely to stay for longer time with organisation. Employee will feel satisfies with

his/her job. Editor 2000, Employers need to focus in creating and encouraging

creating an environment which can provide employees everything which may

enhance their ability to perform and feel motivated. A secure, safe and completive

environment will facilitate the employees to make excellent progress and

contribution. Farooq Ahmad ID # 0911867092096 Page 27

http://www.jstor.org/stable/4165849%20accessed%2015/01/2010

According to reasons stated in different research papers, what makes employees to

stay with an organization? It is an established fact that a large number of people i.e.

about 90 % stay with their jobs related to motivational issues that mainly include

these most important factors of motivation i.e., learning and development, career

development, stimulating work environment, appreciation and sovereignty etc. Kaye,

Beverly and Jordan-Evans, Sharon (2002)

Business outcome such as growth and production depends how effective worker

engagement. Properly engaged work force will provide their optimum. It will require

job clarity, safe environment, immediate recognition etc. further, a de centralised

approach may provide better result i.e. by addressing needs of each department

instead of the entire organisation as an entity. It will help to identify local issues in

each department. Baxter international has conducted a study completed in one and

a half year about what their employees’ value most on different geographical

locations. Editor 1998, “work/life study=respect” The common finding was that

employee wants to be respected as human being with a life further than work.

Managers are usually required to focus on the productivity and profitability and less

for their ability to improve their inter-personal skills. It is important that supervisors

and immediate bosses should be required to help their employees while carrying out

their jobs. An outcome of this would be better relationship between immediate

bosses and their staff.

2.5 Environments that Bred Turnover:

Mostly organizations who struggle with high employee turnover pointed out that it

does not exist in every department. Instead it occurs in pockets and each pocket

has its own intensity. Generally it is common in areas such as customer service

centres, clerical or lower admin positions and inventory management Positions.

Banking, insurance, Health care and communications industry, are more likely to

have high turnover statistics than other industries for various reasons but commonly

it the circumstances and the environment which causes any specific outcome of

employee turnover.

The industry sectors producing such employee patterns can be seen extensively in

healthcare, retail, and factory work (Bureau of Labour Statistics, 2004). The Farooq Ahmad ID # 0911867092096 Page 28

commonalities in these environments include, low to moderate employee

compensation, lack of upward mobility, high-turnover due to hiring characteristics

and competitive job markets, complex training processes, and a wide range of

customer issues to be earned (EPF, 2004). As can be seen, a combination of factors

may exist, decreasing employee job satisfaction and thereby increasing turnover.

2.6 Reasons to leave or stay?

Apart from what should be the retention policies and programs, it is an established

fact and a general consensus in the HR literature about the common trends found in

any prospective HR program that adds to good retention. Most of these are directly

related to creating a satisfactory work environment for employees and thus, in turn,

to good retention. Prominent trait includes:

Beauregard and Fitzgerald, (2000)

• work environment is an important factor, a stimulating work environment that allows

people to give their best by effective use of their skills and knowledge, given a

degree of autonomy on the job, allow them to contribute ideas, so they can assess

their own contribution to influence the company’s well-being.

• Professional growth by providing opportunities for learning and skills and

subsequent progression in job responsibilities.

• Useful or meaningful communications by creating provision or channels for open

two-way communication, effective communication means employees should be

given opportunity of being heard, incorporating their views in the decisions that will

affect them.

• Competitive and fair compensation, flexible benefit/ perks plans.

• Employer should understand employee needs in terms of keeping a balance in their

work and personal life.

• Managers or supervisors treat their subordinates with dignity and honour.

Companies having a rigid approach, or having an organizational culture that is

branded by domination and autocracy are likely to have dissatisfied employees no


matter how good the incentives to stay may be (Ashby and Pell, 2001). 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.

Beauregard & Fitzgerald, (2001)

2.7 Motivation, retention and employees (Care Model):

According to Glanz (2002), the acronym CARE is probably the best defined on that

I have come across during literature review, care itself means giving attention, time

and consideration in English language. As an acronym it also defines every vital

issue related to employee motivation and retention. C stands for the importance of

creative communication, A stands for atmosphere i.e. work environment and also

appreciation for good work, R means respect and the reason for being and finally E

stands for empathy plus enthusiasm.

The need and importance of communication in our lives has a fundamental place, it

is the communication that connects us with each other and make us understand

what/how we feel for each other. Communication provides the meaning for our

personal, social or work life. Organization with an open and two way communication

approach can help its employees to make them understand what their job requires

from them in terms of job clarity and also to understand the concerns of the

employees about the job or any other aspects of the job. Communication has to be

clear and accurate; otherwise it will lose its purpose. It is important that whatever has

been communicated has some meaning and the receiver has understood that

meaning. To assess the effectiveness of the communication take regular feedback, it

will ensure the message send is relieved and understood and the action required will

be taken accordingly and accurately. Dauten, Dale (2000),

A thoroughly professional work environment that allows every individual to contribute

in a creative and meaningful way would help the organisation to get best out of its

workforce. It would be such an environment where people can give their professional

views and may disagree in their professional opinion without being personal it will not


only help professional to do their job more professionally but also create a healthy

competition which will encourage people to excel in their profession.

Better ways communication needs to develop keeping in view the specific

organisational culture, work environment and job sensitivity it will provide the means

to make things occur on the right course. Useful and frequent communication is vital

for understanding and solving problems.

The fundamentals of a triumphant team permutation also include the ability to

communicate effectively in all directions. No team can become a winning

combination unless realistic and effective communication. Real test for such a

winning combination comes in crisis or difficult times.

It in the best interest of the company to provide opportunities for Professional

development, either by on job training courses or higher education from universities

as part and parcel of their professional growth programme. It will ensure that the

staffs are will equipped to cater the ever changing market practices. It will enhance

the degree of pledge of the employees with their job. Providing training and growth

opportunities internally may help to keep the employees engaged and inducement

for top performers. Littman, Margaret (2000),

Recognition for the good work will give motivation to those who deserve it.

Particularly to those whose basic needs are less important and they belong to the

group of more sophisticated needs. Recognition does not cost anything and easy to

dispense that there is simply no reason for failing to do so.

Companies should treat their employees with goodness, admiration and equality.

Particularly, multinational organisations operating in assorted cultural environments,

need to understand the importance of respect for other cultures and norms and if not

handled carefully, can create antipathy and counterproductive. Littman, Margaret

(2000),

It is a natural thing for all of us as humans to seek some sort of meaning for our

existence and for everything we do. “Every one of us has a dire feeling to belong to

something beyond ourselves; living or working in where you feel you belong”. Stern,

Gary M. (1996)


Every organization tries doing whatever possible to satisfy the employee needs so to

motivate the work force and engage them fully professionally and employees

emotionally with the goals of the organization.

Enthusiasm in our lives provides the energy for any cause, faith or purpose.

Whatever that human race has achieved in form of civilisation is because of this

invisible force called enthusiasm. It only comes when somebody is absolutely

convinced that whatever he is been told is true and correct. Organisations trying to

create a feeling of passion will find reliability and productivity flourishing.

Theories and models used for employee turnover can provide key information of the

factors decisive in the decisions to leave may provide a reliable source of information

for managers in quest to understand turnover problem and striving to devise

strategies to control it. There have been quite a few models presented and

implemented in last couple of decades. Some of them have been quite successful in

specific industries or areas but with passage of time and rapid change in the market

conditions they lost their effectiveness. New trends and changed life style forced

generation gap and more mechanised or materialistic approach in our lives.

Growing consumerism has changed our lives drastically and pushed us as

consumers to commit more and more even if you do not have enough cash at

present, you can spend or commit on the basis of your potential earnings etc.

whereas nobody has any control on the future events hence it causes a growing

anxiety among the people.

These sorts of things making peoples attitude or behaviour unpredictable because of

continuous pressures to meet the payments etc. anyhow it is important to encourage

more socialising within organisation and hence better relationship at people to

people level providing opportunities to better understand and console eachother in

the time of need. Barletta C. 2001.

2.8 Motivation and retaining high performers:

Motivation is word but when you want to achieve it in your organisation it will become

a complete system which has its own inputs and outputs. How to motivate the

workforce? It of course is fundamental question for every organisation and part of the


answer lies within the organisation. It has been discussed in earlier paragraphs that

motivation is all about fulfilment of needs, starting from basic needs to more

sophisticated ones. It is important to understand the employee needs their priorities

of the needs. Managers should consider employees on individual basis and on the

basis of small groups made of individuals who possess similar characteristics. It

would make difficult job relatively easy but more importantly increasing the chances

of success to maximum. These individuals or small groups of individuals if highly

motivated can increase quality and value to the organizational operational capability

productivity and profitability.

Nurturing talent requires change in management thinking, policy making and

implementation. It must seriously include the importance of innovation required to

cater the change element. It also include employee participation in decision making

process especially those directly affect them or their interests. Kaye Throne and

Andy Pellant (2007)

2.9 HR Strategies:

What HR strategies should be? How do such strategies can be formulated? What

are important elements of a successful HR strategy? The answer for these clear cut

questions will provide solutions for both employee motivation and retention. A

successful HR strategy should include both the quantitative and qualitative factors,

May linked with employee retention issues. Managers need to assess thoroughly

current practices implementation strategy before attempting to implement the new

set of policies it will help them to identify gaps needs to be filled in new

implementation process.


It is a process to determine how employees, performing as compare to their job

expectations and also to assess a fair and competitive reward are being provided to

make sure employees are motivated and continue their good work. Performance

appraisal is frequently used as tool in administrative decision making e.g. decision

related to top promotions, sacking, layoffs and increases in monetary rewards such


as wages/salaries. There several methods or techniques used in performance

appraisal. It is a useful tool in the hands of management to get valuable information

about the needs for more training, employee strengths and weaknesses etc. it is

suggested that performance appraisal must be used on a regular basis e.g. twice or

thrice a year. Kressler and Herwig (2003)


There are quite a few methods available and are used to conduct performance

appraisal e.g. Goal setting or management by objective (MBO) and Multi rater

assessment or (360-degree feedback). Byars and Rue (2000),

Management by objective (MBO) is a frequently applied method for professional and

managerial positions. It is really a systematic way or method to assess employees it

uses plainly and specifically defined statements of purpose/goals to be achieved by

the employee, it also provides probable course of actions or actions plans, how to

achieve these objectives. It also allows them to assess or measuring achievement

made and taking corrective actions if necessary. There is a provision for regular

session or meetings to update each other about the progress made. MBO is also

known as performance management, management by outcome and work planning

and review program.

Other prevalent methods used for performance appraisal to take feedback from other

concerned parties e.g. immediate managers/ supervisors, team leaders, customers

and suppliers are ask to complete a questionnaire about how they feel about that

particular person being assessed because they are the most relevant and suitable

people to comment about his/her performance. If the answers were provided on a

professional basis then it would serve the best interest of all the parties. It will also

give an opportunity to have a say those who normally are neglected but are one of

the important stakeholders. This sort of evaluation must be done with openness,

fairness, and responsibly.

Lloyd L.Byars and Leslie W. Rue (2000),

2.9.3 Financial impact of high turnover:Farooq Ahmad ID # 0911867092096 Page 34

High employee turnover cost huge sums of money to company it can waste precious

resources of the company. The cost of replacing an employee exceeds the amount

of a whole year salary and benefits of that employee. You have to start from scratch

i.e. advertising, recruiting, training, induction etc. plus the probable loss of profits that

may result from low production or reduced services. The situation is even worse

when you lose some highly professional or talented staff. Ramlal.S (2004)

organisations can afford to wait until the damage is done but they have strike pre-

emptively.

It can done if HR plan for long and short term strategies in such a way that all

Human Resource needs of the organisation are fulfilled including employee

retention. It may require an exclusive appointment of an HR manager to Board.

Beardewell Etal (2004)

Retention should be considered as a part of recruitment or every effort should be

made at the time of recruitment that the vacancy is being filled with someone whose

needs are most compatible with nature of the job and the salary or wages offered for

that job. His/her abilities are concurrent to the job designation etc. Risher, H and

Stopper, W (2002)

Organisations are increasingly under pressure to recruit rite people for the job to

avoid unnecessary costs associated with turnover problem. It is strongly

recommended a change of the priorities in should be brought in such a way that

retention is sorted with recruitment. Armstrong, M (2001),

According to Hacker, CA (1996), in case of certain jobs or group of jobs recruitment

itself is an expensive process because of the required qualification, experience or

unique nature of expertise rare to find then it is highly recommended that it should

done by eliminating any reasons and causes to replace such a position.

2.10 Strategies & tools for Retention:

It is important to note that strategies and tools for retention do not mean that they are

applied mathematics formulae that once numerical values are put in you will get the

straight forward results. These strategies are however does have some generalise Farooq Ahmad ID # 0911867092096 Page 35

features or benchmarks features. But every organisation has developed its own

environment specific adjustments.

It is the basic responsibility of the company strategic management to identify their

retention needs in accordance with their operational needs. The best combination of

incentives and motivators should be used in best available combinations to suit their

needs.

2.10.1 Job description & clarity:

Adkerson (2000), Managers should be aware of the fact that their work force has

been given every smallest detail of their jobs. It means that they all the procedures,

process and routines involve in carrying out their jobs. They should be informed to

on the outcomes and not the activities. To do that manager must explain everything

in plain words by using simple language and should avoid using any jargons. To

assess their understanding they may ask questions related to different situation that

may occur while carrying out their jobs.

2.10.2 On Job Training:

Training can be the best tool to develop and change attitudes, knowledge, skills and

behaviour in accordance with goals and objectives of an organisation. It has to be

linked with needs of the organization. Provision for Training may include specific job

training, workshops, seminars, and professional courses. Breadwell (2004)

2.10.3 Fair and competitive rewards:

According to Bowen (2000), a vast majority of the people work for money, which

means it is their main source of motivation. They always strive to enhance their skills

to obtain higher positions mainly because to get higher monetary rewards. Every

individual wants to be compensated equal to his contribution. Fair and completive

reward system should be in place to avoid employee turnover.

DE-motivators:


It is important to know the possible causes of de motivation of the work force, and

provides ground for employee turnover. Few are listed here, Lack of growth

opportunities, Disparity in work pattern and salary/wages etc., as it has been mention

earlier that on job training is a vital tool in the hands of management as it would

serve dual purpose of the company; it will provide skilled workforce with better

expertise to carry out their jobs and on the other hand it will give employees better

understanding of their jobs. Ultimately it will give employee better understanding of

the organisational goals and objectives. From employees perspective it give them

opportunities for professional growth.

According to Sigler, K (1999), it is the primary responsibility of the management to

identify talented and high performing individuals in the first place and then should be

recognised on merit in every aspect including monetary rewards.

2.10.4 Motivation a source of Retention:

Organisations focusing on motivation are more likely to have higher retention rate.

Motivated work force show more commitment with their job and organisation.

Motivation provides the driving force for anything that we want to achieve in our

personal or professional lives. There is no shortage of research on motivation and

related issues. It has been most talked about issue in business circles, managers

and experts. Motivation theories discuss about the needs of individuals, hierarchy of

such needs etc. needs are defined as primary, secondary and tertiary needs. It is

important to understand that these needs are to be fulfilled or satisfied in the same

order. Once primary needs are fulfilled ones moves to next level of needs. Once

physiological needs are fulfilled you switch to more complex aesthetic, psychological

needs. Motivation is the measure of tendency towards engagement in an endeavour

Mulleys (2005)

According to Blyton, P and Tumbull, P (2004), emerging trends has shifted

employees’ perception about how he/she should be treated at work by the employer.

People want to be cared as humans instead of as a resource; they want to be a part

of the organisations and not just a tool in the hands of the management.


According to Linda (2000), satisfaction gives motivation and motivation gives

commitment. Highly motivated work force will perform up to the expectations of the

employer.

2.11 Human Capital Management (HCM) :

Human capital management (HCM) has been illustrated as the strategic policy or

approach toward employee management or human resource in connection with

issues related the specific needs for an organization’s success. It is can also be

defined as management of all the resources or the assets those can be attributed to

people of the organization e.g. knowledge and skills, expertise, indigenous

technology or formulae of an organization, customer relationship to attain a

competitive edge in the market. Human capital is a constituent part of the intellectual

capital of a company. It is different from the management of the conventional

physical assets. . Nalbantian Et al (2004),

It may be defined as HCM as, the total development intellectual capital articulated

as organizational value. Kearns (2005)

2.12 The link between HCM and Business Strategy:

According to Scarborough and Elias (2002), HCM and business strategy go hand

in hand, human capital management is about human attributed capital which is

contributing to an organisational value significantly better HCM will also help to

improve business strategy. These can defined as two distinct streams of

management and strategy i.e. HCM and business strategy.

The people of a company are the life blood of that organisation and key for every

business endeavour. All business strategic plans for innovation, growth and

price/cost leadership depend on people an organisation. If not treated appropriately

then organizations will lose track and become a heap of debris.

2.12.1 Employee Turnover & Race/Ethnicity:


Hypothetical views in organizational behaviour (OB), emphasize that because of

prejudice, either genuine or alleged members of minority groups are more likely to

quit their jobs. It also creates an unhealthy trend where minority people will feel

insecure and less motivated which will result in idle production. This may also lead to

some sort discrimination amongst staff. Roger Griffeth, R.W.Griffeth, Peter

W.Whom (2004)

Source: adopted from P.Hom and R. Griffith (1996)

Model of potential causes of turnover among minorities

It is a general perception that in recession there is lower number of jobs as

compared to people looking for jobs and hence it would be very unlikely that people

will tend to leave their jobs. But in reality it is just opposite according to data the

number of people who quit their jobs dropped in the first of the this recession,

surprisingly just by 11% it shows that the chances are still high i.e. 89% in 2008 as

sturdy as it was in 2007.

BLS 10 year projections are from Eric.B. November, 2007.


Supervisory Bios

Pool Leader – Member Exchange

Pay Inequity

Impoverished Job Duties

Performance Pressure

Blocked Careers

Unsupportive Colleagues

Tokenism

Race Turnover

Recession is the time when usually the best time for talented and high performing

professionals to quit their jobs. The reason behind this may be their ability to work as

freelance and still make good money. However, it is also true that more people lose

their jobs and hence proportionately more applicants for any vacancy created.


3.1 INTRODUCTION:

Chapter-3 is all about the research methodologies adopted for this study. it give a

include brief account of general methodologies available to conduct different types

research. Selection of a methodology depends what type of research is being

conducted. In this research a combination of descriptive and analytical approach

has been used as it involves exploring huge number of theories, strategies and

tools related to main research theme i.e. employee turnover. It involves both

quantitative and qualitative date to analyse. The main sources of primary data are

the questionnaire and interviews conducted from CAPITA (proposed organisation

for case study) employees and management respectively. Other sources related to

CAPITA also used whenever and where ever found to be relevant and reliable e.g.

CAPITA website and other printed material. It helps me to assess the policies and

strategies of CAPITA in terms of employee retention and to measure how

successfully these policies are implemented etc...

A questionnaire was designed exclusively for CAPITA’s employees. The main

objective of this questionnaire is determined how its employee feels about their

organisation, work environment and job satisfaction etc. It will also serve as source

of primary data collection for analysis of the tendencies and reason why and how

people want to stay or quit their jobs.

The results acquire processing of data used to do a critical evaluation of the

research question in connection with set aims and objectives for this research and

for the organization under consideration as case study i.e. CAPITA.

The methodology plays an important role in the success of any research,

particularly in critical evaluation and forming a conclusion. There are two types of

approaches being used in collection of data: Qualitative and Quantitative Method.


Set your reassert

Question.

Through study to buildThe literature review

Develop approach and plan

Collect Research Data

Analyses and Interpret Data

Draft research

.

Figure 11: The Research Process

Source: Mark Saunders, Philip Lewis and Adrian. Thorn hill, Research Methods for Business Students, 2003, p.7

3.2 The Purpose and Utility of Literature Review:

The main purpose of literature review is to help you to develop a knowledge base

on the subject matter, understanding an insight into relevant previous research. It

will also help to identify the areas given less attention and need to be explored.

There are two approaches commonly used to conduct a research and are:

Deductive Approach, in which you develop a theory and hypotheses and design a

research strategy to test the hypotheses, or


Inductive Approach, in which you collect data and develop theory as a result of

your data analysis.

Deduction approach owes more to positivism and induction to interpretiveism.

These steps will be followed to elaborate the set Aims & Objectives:

Review the literature on all related subjects those can impact directly or indirectly employee turnover e.g. motivation and job satisfaction.

Continue to explore present and historical aspects of employee turnover, its reasons and causes, tools and strategies available to control it. In the light of the information acquired from the review of literature, identify areas which would require linkage with a questionnaire to collect data. It may include employee perceptions about job satisfaction and employee retention.

The population sample was taken from various departments of the organisation, with the exception of management positions.

The questionnaire developed for use in this study will be provided to the target segment of the employees by selecting people from the organisation chosen for case study but it would not be distributed to management positions, Prior to finalization of the questionnaire, appropriate revisions will be made.

The information collected by questionnaire will be sorted and analyzed, branded and appropriate inferential statistics will be generated.

Recommendation for practice will be derived from the analysis of the data collected.

3.3 Structure of Literature Review:

Started with a more general approach before narrowing down.

Make a provision of a brief overview of the key ideas.

Link the ideas.

Narrowing down further, highlighting the work which is more relevant to the

research.

3.4 Literature Sources:

These sources are categorised into three streams.


Primary Secondary Tertiary

Reports.

Thesis.

E mails.

Conference proceedings.

Company reports.

Unpublished Manu Script

resources.

Some Govt.

Publications.

Books.

Journals.

Newspapers.

Some Govt.

Publications.

Indexes.

Abstracts.

Catalogues.

Encyclopaedias.

Dictionaries.

Bibliographies’.

Citation Indexes.

Source Page 64:

3.5 Research Approach

It has discussed in earlier paragraphs that there are several methods a research

can be approached Opung (2002) depending on what is appropriate in accordance

with the research type it can be either deductive and quantitative or inductive and

qualitative. There is and other approach called applied or basic approach it would

be best when the purpose of the research is to improve general knowledge or

knowledge Base about a particular subject matter. (McGee P, 2005).

According to Bryman and Bell (2003) qualitative research focuses on the

characteristics of data e.g. taste, colour, odour etc whereas, quantitative research

is more about figures and facts, or simply numbers.

In such a research qualitative factors allowed more weight because of the

qualitative topic of the research itself. The topic was aimed at measuring something


which cannot be expressed as a percentage. However quantitative factors were

not left un-touched and may be used for the final outcome.

3.6 Research Paradigm:

Research paradigm describes the basis of assumption that would suggest specific

set of philosophic beliefs about the topic or theme of the research that provides

principal and direction in which research is be carried out (Robert and Richard,

2008). There are two main streams philosophical tactics often influence the

research analysis. Known as Positivist (means scientific) and Interpretivism (means

anti-positivist) (Saunders,et al 2007). First one is the most commonly used

approach in natural sciences. It talks about general explanation such as patterns

and regularities in events. According to David Carson, (2001) positivist research is

all about rationalization and depiction of thoughts and views dominated by

unambiguously stated hypothesis and theories. Positivist methodology based on a

conviction that research should be carry out in the way as conducted in natural

sciences (Collis and Hussey, 2003).it is recommended that the researcher and

participant should be detached from research resulting in the research findings to

be more objective.

According to Saunders, et al, (2007), On the other hand the Interpretivism is just

an epistemological position that deals with the nature of knowledge or its origin and

validity. It also focuses on understanding on the difference between humans as

characters and consequences of their actions and perceptions

It is an approach that gave more emphasis on reasoning to study the situation and

its details to comprehend authenticity working behind these phenomena.

Interpretivism philosophy can help in achieving the research goals and effectively

address the issues raised by the research question. It may also help to explore the


facts relating to complex and unique human behavior and business environments.

(Remeny et al, 1998)

Some may squabble that an interpretive is highly appropriate in the case of

business and management research, particularly in fields such as organizational

behavior, marketing and human resource management, (Saunders et al. 2007).

3.7 Research Design:

Research design is the master plan of the research and the architecture that helps

in collecting and analysing data (Zikmund, 2000). According to Sanders et al.

(2003) research design is divided into;

Exploratory: This design is used when deep understanding of the subject is

required (Malhotra, 2004). According to the Proctor (2005) this design requires

formulating question in a different way. It also facilitate when it is difficult to make

quantitative assessment.

Descriptive: According to the Proctor (2005), as it clear from its title that involves

detailed scrutiny into the profile of people and situations. It also helps. It would be

more suitable when there is need of organised and accurate description of the

events under study.

Casual: It helps in getting the cause and affect evidence. Casual research helps

us to come across the affect of variable on another variable. It helps us to

determine how the step which is taken today will affect the business later in the

future.

3.8.1 QUANTITATIVE METHOD:

The quantitative’ method deals with figure, numbers, measurement and amounts

etc these facts and figure collected in raw form from different sources and

processed by using statistical techniques or mathematics formulae. After being

processed data can provide valuable information in the form trends, averages, and

other more advance features e.g. regression and correlation etc. Robert Murray

Thomas (2003)


The use of quantitative method will help to make predictions, make comparisons,

sampling, and other experimental measurements aimed to produce the generalize

result. This sort of data analysis helps to conclude study that is commercially viable

and help to improve things within the framework of the subject under study. Data

collected and used should not be contaminated, biased or influenced in any way.

To avoid such limitation in data every possible effort should be taken while

collected such data. (Page 1 & 2)

3.8.2 DISADVANTAGES OF QUANTITATIVE METHOD:

Like any other method quantitative method also has its limitation or disadvantages

associated with it. Ronald A. Nykiel (2007)

Time factor is an apparent problem with this method as it requires or take time

in every stage i.e. collection, processing and evaluating.

Sample size is important to obtain reliable information from the data processed.

It requires due diligence while selecting a sample size it can undermine the

reliability of the data if the sample size is either too big or small. The information

obtained may be misleading.

Limitation of the formulae used can also effect the credibility of the information

obtained. (Page 56)

3.8.3 QUALITATIVE METHOD:

Qualitative data is of diverse form and nature. It includes virtually any form of data

or information that is of qualitative nature and can only be classified as non

numerical in nature. It may include interviews, observations and content analysis of

any document. This refers to purpose of qualitative research either explicitly or

implicitly. There are four major qualitative approaches: Deborah Padgett (1998),

Ethnography comes largely from the field of anthropology i.e. studying cultures.

The most common ethnographic approach is participant observation as a part

of field research.

Phenomenology is sometimes considered as a philosophical perspective as

well as an approach to qualitative methodology.


Ground Theory is a multifaceted course of action. It starts with raising generic

queries which help to guide the research. For example core theoretical

concepts are identified then a linkage is developed between the theoretical

concepts and generative question evolved during the research.

Field Research is typically about intensive field work and study which

subsequently coded and analyzed in a variety of ways.

3.8.4 LIMITATIONS OF QUALITATIVE METHOD :

Again there are few disadvantages or limitations associated with qualitative

methods: Rosalyn Benjamin Darling (2000)

Interviews provide significant amount of such data but the circumstances in

which these interviews were conducted may affect the quality and credibility of the

information obtained e.g. Busy hours and tight schedule, timing and quality of the

question asked etc.

Respondent may feel reluctant to disclose all the relevant information may

be due to company policy or the sensitivity/privacy involved.

Misunderstood answers may give misleading or out of context information.

(Page 125 & 126)

Let’s start with the following two important sources of qualitative data also used in

this research.

Questionnaires.

Interviews.

3.9 INTERVIEWS:

In this research interviews has been used to obtain useful information from different

levels of management. These interviews were conducted face to face in small

sessions mainly because of managers’ busy schedules. However, it was the most Farooq Ahmad ID # 0911867092096 Page 48

difficult and delicate issue to get reliable and relevant people for interviews. It is

important to note that it has always been my first preference to get hold on HR

managers but I have also reached other managers to find out departmental work

environment impact etc. on retention. Once the interviews were completed the

information obtained, processed and analysed in such a way that core aspects of

the subject matter are addressed and hence provided a clear picture of CAPITA

regarding its policies, strategies to control employee turnover within acceptable

limits. I would like mention that these interviews has been the main source of

information about CAPITA apart from other relevant printed material provided by

different managers including the CAPITA website references.

Interviews are considered a source of primary data. According to the nature how an

interview is designed and conducted they can be classified in to three categories

Interviews may be conducted face to face on the phone or by using the internet.

J. Amos Hatch (2006) (Page 236 & 237)

Informal interviews.

Formal or structure interviews and

standardise

3.9.1 DISADVANTAGES OF INTERVIEWS:

There are certain built in limitations attached with interviews. David E. McNabb

(2004)

It is a difficult job to catch relevant people because they are sitting on

responsible position hence, always busy. It requires prior appointments which may

result in prolong delays. Such appointments may be cancelled on short notice or

get squeezed. Page (152 & 153)

3.10 QUESTIONNAIRE:

For this research a questionnaire was also design for the general employees of the

CAPITA. This questionnaire provides an opportunity to interact directly with the

employees of capita to obtain primary data for analysis with other sources of

secondary data. It has 10 questions ranging from gender to age etc. employee


need to choose from predefined options (as multiple choice) given for each

question. Nearly 100 employees were approached and provided with this

questionnaire out of which 35 people participated and completed the questionnaire.

These questionnaires were designed carefully keeping in view that no relevant

issue is missed or ignored. Questionnaires provide very useful first hand

information of the CAPITA employees as they were free to choose their answers

resulting in a more realistic view of the said organisation.

According to Zoltán Dörnyei (2002), it is a structured form of data collection

method. Generally, a questionnaire has close ended questions giving pre-defined

options as multiple choices; respondents need to select the most appropriate

according to them. It important that before starting to compile a questionnaire one

has to developed a thorough understanding of every aspect of the subject and the

lucidity of anticipated aims and objectives in mind. (Page 11)

3.10.1 LIMITATION OF THE QUESTIONNARE (S) :

Because these questionnaires are given to respondents to complete in their

own time hence, it is very likely that they may forgot or event lost them altogether.

Even if they are asked to fill in on the spot they might feel reluctant to spare few

moments to complete them.

In some cases the respondents may find it difficult to understand the contents of

a questionnaire consequently giving misleading information. Stephen Moore,

(Page 27)

A questionnaire may be a reliable source and good source of primary data

collection. The difficulties with this process can be overcome through coordinated

efforts with the interviewees. These reasons why there are two methods are being

used for data collection. On one side we have the process of collection of data in

the rapid speed an also we also have the in-depth knowledge about this research.

This could be achieved by this process not by any other process. Also all these

processes are easily to manage as well.


3.11 SAMPLE:

A sample is a random selection of events or outcomes taken from a large

population. A sample is normally small in size. Sample should be collected or taken

with great care otherwise it might lead to nowhere.

3.11.1 SAMPLE SIZE:

It is very important to determine what would be the most suitable size of a sample.

It should reflect the size of the population. The sample size cannot be big instead I

would be more than happy if I can manage interview a couple of relevant

managers. A total of 100 people were given the questionnaire out of which 35

people returned completed questionnaire. Hence, responses received were only 35

% of the total number of respondents contacted through different mediums.

3.12 Limitations of the study:

The research has some limitations in connection with analytical issues and

scrutinizing the existing studies. These can be defined as methodological:

It is recommended to verifying the data sources in case any contradiction or

seems inaccurate; source of the data can always be checked.

Data may be taken from a source/company whose reliability or reputation may be questioned.

My financial resources were minimal and time constraints am also be considered as a limitation of this research.



INTRODUCTION:

Chapter 4 is the core part of this research. It includes analysis and interpretations

of the data collected through the questionnaires and interviews in the light of the

stated research question. Then it will extend to the integral peripherals parts of the

research question derived as aims and objectives of the research. It will also

provide a meticulous assessment of the results of the questionnaires and the

interviews conducted. A comparative analysis of the different perspectives obtained

through surveys and literature review in 2nd chapter of this study. It will help to

develop a conclusion and recommendations or suggestions in the upcoming

chapter. It will also focus as to how CAPITA is operating its policy for employee

retention; an attempt will also be make to determine the strengths and weaknesses

in the policy.

PILOT STUDY:

In order to explore in depth the research objectives of the research and appropriate

answer for the research question and the surveys and interviews conducted. It

includes designing a questionnaire which can provide clear cut picture of the

subject matter. It was designed to collect data for the objectives of the study. It

includes 10 questions related to the different aspects of the research given to 100

people, out of whom 35 completed questionnaires could be obtained from

employees of the CAPITA GROUP PLC, from various departments and roles.

Every possible effort has been made that all the ethical issues which may possibly

arise are accounted for in detail so that they do not affect the quality of the data

obtained in the survey. Apart from surveys, an interview was also design (set of

questions) asked from the key managers from the CAPITA. These interviews were

conducted face to face. However, it has been a daunting task to get appointments

from relevant managers due to their busy schedule. These interviews were aimed

to obtain an insight of the approach, course of action adopted in their execution,

and to assess their viability, strengths and weaknesses etc. it may include a

scrutiny of the CAPITA’s internal data about employee retention.


In this part of the study a detailed scrutiny of the data and its analysis is included. It

has been critically analysed and compared with other available data where

possible.

GENDER BREAK UP OF CAPITA WORK FORCE:

During this survey it is taken in the account that all the people get the same chance

to express and on the other hand that we should have the view point of both male

and female. Survey revealed the gender break up of CAPITA employees, it shows

that 57% are the male and about 43% are the female of the total employees.

57%43% MALE

FEMALE

CHART FOR GENDER PERCENTAGE

EMPLOYMENT STATUS:

The main reason for conducting this to find out how the work force is built up in the

organization this part may not affect the study significantly yet it would be important

to note that female employees may have different motivators from their male

counterparts. It has been accounted for in latter part of the research. Apart from

this it also gives the readers a clue as to how CAPITA providing opportunities on

an equal basis for all without any discrimination what so ever.


Age

18-2514%

26-3535%

36-4524%

46-5516%

56-658%

Over 653%

18-25

26-35

36-45

46-55

56-65

Over 65

Survey also shows that there are about 26 % part timer and about 74 % are full

time employees in CAPITA.

26%

74%

Chart Title

Part Time

Full Time

CHART SHOWING TYPE OF CONTRACT

As percentage

AGE GROUP PERCENTAGE:

Objective 1:

To analyse the impact of organisational work environment,

organisational ethics and values and organisational behaviour on

employee retention.


when thinking of a problem and looking for a solution it would be critical to accept

that problem in totality no solution can be sought unless the problem is recognised

as a problem once accepted its existence next would be to develop an attitude to

counter that problem by developing policies, procedure and tools to stop it in the

place and from reoccurrence. Employee retention is a huge task in front of the

company managers and it requires real and continuous efforts. Retaining employee

means keeping them satisfied and happy with every aspect of their jobs. In

organisational literature employee motivation has given great importance as it would

be the rout to success or fiasco. Motivation is one word but it includes everything that

it takes to make an employee happy or satisfied in a point in time that he/she would

serve the best interest of the organisation. Employee retention cannot be achieved

unless the organisation has included motivation of its work force on top of the

company agenda. It is a fundamental issue in resolving any problem that the root

causes of that problem should be addressed, no cosmetic solution will work for long

term or sustainable cure. Dealing with human beings requires dealing humanely.

When aimed to bring a change in humans one has to change himself to some

degree, and the required change may include a change in values, conduct and

attitude in such a way that it would facilitate the change process. Employers may

also need to change some if not whole to make the employees feel like accepting or

adopting the required change.

40%

35%

18%

7%

SupervisorOrganisationUnfair CompensationNone


Let’s discuss its details such as work environment, whatever is the job of an

employee he/she has carry out that job in the environment prevailing in the

organisation. So, it means that there is no escape from that environment. Hence, if

the environment is harsh and uncaring it will put more exertion on the employees

apart from what would be a natural outcome of their physical or mental work done on

the job. A helpful, secure and creative environment will make them relax and easy on

the job inevitably improving quality of their work.

Survey result reveals for this question that a 40% of the people believe that the most

prominent reasons for quitting a job may be there supervisors/immediate bosses,

which is highest among other reasons stated in the question. It is in accordance with

the generals statistics given in other research material. Employees who think that

their organization (as an entity) can be the reason for quitting jobs were only 35%,

which shows that Organizational environment does have strong influence on

employee turnover more precisely it is their departmental environment in which they

work and mingle every day, again pointing at the immediate bosses etc. 18% People

think that disparity in monetary rewards e.g. wages and salaries etc. may also be the

reason to quit a job, and 7 % people responded none of them can be a reason to quit

a job. Probably they are the people who think that quitting a job is more associated

with personal grounds for example, change in surroundings or errands.

The response obtained from the management people or managers of CAPITA in the

interviews is that CAPITA they are well aware of all the potential reasons may cause

employee turnover. Capita is committed to do every possible effort may require to

keep its employees at the highest possible level of motivation. Policy to tackle any

possible reason that may cause de-motivation or dissatisfaction is exclusively and

collectively to make sure no stone is left unturned. At CAPITA we are trying to

provide a healthy, competitive and creative culture which helps professional share

ideas and to express their professional views. CAPITA group pursuing a policy which

ensures opportunities for professional growth are there for everyone without any

discrimination.


It is clear from the outcome of this study that creative, helpful managers in an open

environment can play an important role for employee retention. Organizations

focusing on these issues are more likely to have high retention rate.

Objective 2:

To determine the consequences of high employee turnover on an organisations performance, profitability and customer satisfaction.

It is somehow a natural instinct that people attach to each other around them. It

gives people an opportunity to understand each other and may result in some level

of comfort among people who share some personality traits. The same is true for

business relationship. People working in the same company may also develop

personal relationship apart from their work relationship. Clients and customers may

develop bit informal relations particularly if they are dealing over the period of time. It

would be frustrating for them if somebody quit his/her job with whom they used to

deal normally. It might take some time before they get use to with the new person

because they have to start it all over again with an absolute unknown value. If this is

every day phenomenon then it would be less about comfort or personal

understanding but more about scepticism about the credibility of the organisation or

company they are dealing with. It is also harmful for the Organization in terms of low

productivity or poor services rendered will also incur huge cost of replacement both

in terms of money and time i.e. the turnover cost. Consistency is barometer that will

determine the success or failure of any business policy, consistency may be required

in both; in policy and people. Reasonable length of time should be given prior to any

fundamental changes may be introduced. Frequent manipulation with core policy

lines will create misunderstandings and lack of trust among employees. It would

have negative impact on organisation performance and customer satisfaction.


It is critically important that employers should be vigilant and always ready to take

some sort of pre-emptive action if they foresee any potential problems may lead to

dissatisfaction of the employees. Consistency is essential in policy formulation and

implementation to avoid any outburst situations.

26%

37%

34%

3%

Unfair Compensation

Poor Working Conditions

Immediate Boss

Better Job Opt.

Now let’s explore that what survey has obtained of the related questions. It states

that 37 % people think that if the work environment is counterproductive than it can

force people to switch and hence may result in high turnover. A 34% of the

respondents think that if the supervisor or immediate bosses are uncooperative or

autocratic it may cause resentment in their lower staff that can cause them to quit

their jobs. Again one can predict a significant correlation between choices made for

two different questions with one similar option i.e. supervisors or immediate bosses if

not helpful may cause employee turnover. Unfair compensation chosen by 26 %

reveals trends for money as motivator has strong connection with retention.

97%

3%

Strongly Affect

Do not Know


One directly asked question about employee turnover revealed clear cut option as

9% people responded positively that if an organisation has high employee turnover it

will strongly affect its ability to operate profitably because of poor customer

satisfaction and confidence.

Objective 3:

To analyse and evaluate the influence of available tools and strategies

on employee satisfaction/motivation and employee retention.

Every business leader knows the impertinence of motivation or to have motivated

people in their organisation. There is no excuse for the management not to develop

highly motivated work force. It is highly unlikely that an organisation can achieve any

success if their work force is not happy and satisfied with its policies related to

employee welfare and betterment. So, it is the primary responsibility of the

management to understand employees’ material, sentimental or aesthetic needs.

Best way to start from finding the every possible answer for the question why do

people choose to leave or remain with an organisation? It has to be done in the

context of the unique environment of every organisation. It will help the management

to identify areas and direction in which action may be required. Managers should

always try maintaining a balance in between employee performance and rewards

paid. It is a established phenomena that motivated employee will show loyalty and

likely to stay with their job and company for longer periods.

17%

80%

3%

Agree

Strongly Agree

Disagree


As far as the survey result is concerned nearly 80% respondents strongly agree that

no organisation can flourish without having motivated and consequently committed

workforce. Such a workforce is most likely to look after their organisation interests

and will strive to give their best. Better quality products or services may be provided

with motivated employees and hence improved customer satisfaction may be

achieved.

Coming back to the interview response Manager clearly attributed CAPIT’s growth to

the intensive efforts of the company’s strategic management and the policies

developed and implemented to cater the needs for employee motivation by

improving quality of the work environment, excellent pay rates, attractive and

benefits, and excellent growth opportunities for all.

Organisations focusing on motivation are more likely to have higher retention rate.

Motivated work force show more commitment with their job and organisation.

Motivation provides the driving force for anything that we want to achieve in our

personal or professional lives.

Objective 4:

To determine the importance of keeping highly skilled and high

performing employees and complexities involve in retaining them.

It is an age of intense competition business has to compete on every front e.g.

providing best quality products or services at competitive prices, environment issues;

innovation and sustainability etc are the emerging challenges for the businesses.

Organisations are increasingly under pressure to meet these demands. To achieve a

competitive edge it is paramount that organisation has the right people, who can

provide vibrant leadership and perform up to highest standards. Acquiring such

talented people is a hard job on one hand and keeping or retaining them with the

organisation for reasonable length of time is a challenge. It may require huge efforts

on the part of organisations. Retaining talent is a process (intellectual capital

management) which requires serious efforts and insight. Talent is volatile in nature

such people may not like to work or stay in stagnant environment, because they

knows it will deteriorate their creative skills.


Professionals or high skilled people are always in demand and there is no dearth of

opportunities for them as they are people who keep organisation in business. Talent

need nurturing like plants, they need daily watering and clean environment to grow, if

they are to flourish.

Managers need to participate actively in talent management. They should be given a

task to Develop an environment facilitating, and couching talent.

Managers can help individuals attain their optimum by providing a coaching style

environment. It is entirely different from of management or managing people, coach

means who gives direction rather than instruction. Catering for individual needs

using coaching techniques may provide better results than by conventional

management approach.

Manager responded when asked about talent management that CAPITA is one of

the best and attractive employers in the industry. It is not just claim by the CAPITA

but also awarded a state of the art standard with a score of 85% in an employee

satisfaction survey done by a leading UK assessment company. Due to CAPITA’s

financial and institutional strength it can provide sustainable work environment and

hence, successfully retain our employees. It will ensure that our employees feel

associated with the company and remain loyal by bringing their best at work.

CAPITA aims to provide employees with a creative and healthy work environment to

help them excel up their potential, especially for talented professionals and with

specific expertise. CAPITA is well aware of the fact that keeping high performers

motivated and focused, is essential for our operational growth.

CAPITA has expended enormously both in size and operations. CAPITA has

acquired its competitors business through mergers and acquisition. CAPITA has

acquired thousands of employees from mongering companies. CAPITA has an 82%

employee retention rate where as industry statistics is 82.7% (in 2008) generally and

88 % for senior managers again higher than the industry average.

Objective 5:


To analyse the role of strategic HR in devising policy framework for

employee retention.

Strategic (HR) has an important place for devising policy framework for employee

retention but unfortunately it is misread and often spoiled in organizations. HR

directors and head of learning and development needs to identify building blocks of a

successful, effective and innovative policy that is capable of delivering for any

present and future needs for employee retention. It can be achieved by developing a

good comprehension of its overall aims and objectives, business approach and

successfully putting them together with employee retention needs.

HR and need for innovation for future demands:

Future role of strategic HR would shift from human resource management to human

resource development, human capital developer, strategic partner, functional expert,

employee advocate and HR leader. All these demanding and challenging role for

future strategic HR can be fulfilled only if new expertise are developed, more

innovative and futuristic approach is adopted. HR needs to develop partnership with

other departments to understand their specific needs. Any HR plan, strategy and

idea will only inspire if they are grown from within the business.

HR function has translated into a reformer of manpower. HR strategies should focus

on organizational mores, recruitment, and employee enlargementand employee

retention.


46%

11%

43%

Chart Title

Successfully

unsuccessfully

Don't Know

An empirical examination of the survey questions discloses that 46% of the people

think that CAPITA has successful retention strategies. Employees feel happy with

their jobs and satisfied with their employer. Only 11% believe that employee

retention policies are not so good or unsuccessful and rest 43% do not know or

unable to comment. CAPITAs own statistics reveals that it has an employee

retention rate of 82% generally and 88% for senior management.

In an interview I have been told about an internal survey done in 2009 by CAPITA

design specifically to assess its policies and how employee feels about them, nearly

68 % of people who has sent the survey returned the completed survey. Employees

were happy and satisfied the way CAPITA dealing its employees specifically

diversity issues, accommodating new employees, autonomy, fair and equal

treatment for all. Employees appreciated a lot health and safety issues. However, it

was identified that CAPITA need to focus more on the range of the employee

benefits and rewards and suggested regular reviews.

It seems CAPITA is more concerned about those employees who are joining in as a

result of mergers and acquisitions. They are provided with training opportunities so

they can improve their skills and understand their new work environment. So, new

employees get used to with the culture of CAPITA.

Objective 6:


To determine the role of managers and immediate bosses in

implementation and execution of the company policy through pragmatic

and innovative thinking.

Immediate bosses are of fundamental importance; these are the people who are

always in contact with a vast majority of employees under their supervision in

different departments. Most of the time they are in contact while on job. They are the

ones who translate company policies and strategies for a vast number of employees

working under their supervision, Success or failure of policies for employee retention

hugely dependents on managers and supervisors. Managers should be able to

pinpoint and use motivational variables in such way that every individual is

accounted for it motivational needs. These managers are also an important source of

feedback to higher level management while they are in a process of formulating or

updating employee related policies such as motivation and retention.

Everything is changing so quickly that it may cause frustration at times. One of the

biggest challenges now days, is to keep you updated with the changes occurring all

around you. Same applies for the managers as they also need to understand and

grasp the change or changes happing around them. What action may be required to

take it? It means that the room for improvement is always there. Retention starts

with recruitment it means the best time to fix retention problem is when you hire

people, make sure right person is chosen and no over commitment has been made

from either side.

14%

60%

26%

Chart Title

Yes No

Don't Know


The survey questions asked in connection with objective 7 of the study reveals a

clear cut picture about the role of managers/supervisors and their ability to influence

the success or failure of the policies of an organisation to help motivate and retain its

employees. 60% of the respondents think that employee do not give right causes for

quitting their jobs in their exit interviews. This is very much the same as found in

other research literature. It indicates that the data taken from exit interviews may not

be a reliable source for policy making. Whereas 26% people think that the reasons

given to quit job in exit interviews are genuine.

The interview extracts of the question asked in this context can be summarized as;

asked to attend regular meetings where they discuss plans and procedures to

implement policies and update their knowledge of company guide lines for their code

of conduct. So, they act like a carrier in implementation process and not as obstacle.

CAPITA has a formal grievance procedure for any unpleasant situations to deal with

e.g. If someone complaints that he feels that he/she have been discriminated

against, harass or bullied. He can follow simple and clear well published procedures

in place, such matter are treated with discretion, solemnity and investigated fully and

swiftly

Objective 7:

To determine the impact of recession or financial crises on employee

retention.

Employee retention in difficult economic time for one particular company or industry

or even for economy the need to retain employees does not change. In reality it may

be even more critical to retain employees to avoid additional cost of recruitment.

There is a general perception that in recession people tend to stick with their jobs it

may be a correct perception but only in the context of employees but it does not

eliminate the cost to replace for an employer in case people quit jobs. In recession

cost of turn will be even more and undesirable as it would consume precious and

scarce resources. Once economy starts to recover starts to recover company might

go into further malfunctioning if still facing turn over issues.


It is very likely that recession will slow down economic activity hence affect cash

flows. But at the same time the only way to minimise its impact to stimulate

economic activity that requires cutting down cost or staff but it has nothing to do with

employee motivation or retention, it is as important as in economic boom to keep

employees motivated, committed with their organisations.



5.1 INTRODUCTION:

In this chapter I will try to conclude the whole discussion, observations and findings

into a realistic and commercially viable matter. I will also try to correlate this

chapter with the results drawn from the analysis of primary & secondary data and

compare them with the literature review which is done in 2nd chapter. I will also try

to highlight areas need to improve by putting forward recommendation. Finally, a

conclusion reflecting industry trends etc.

5.2 CONCLUSION:

This research is composing of seven objectives which directly derived from the one

research question. In other words all of the seven meant to explore different

avenues related to the research question. Every objective has successfully

explored valuable information to enhance understanding of the subject matter. It

has been a deliberate effort to focus on real time issues and environment to

develop some sort of applied side of the subject instead of just theoretical aspects.

It is an effort to measure the impact of employee turnover on an organisations ability

to perform according to its goals and standards or up to the expectations of the stake

holders including shareholders, suppliers and customers etc. the big question laid

down in this research is how draw an effective policy line and its implementation to

tackle employee turnover. To achieve this it will require an extensive scrutiny into the

tools and strategies in use and an analysis of the emerging trends, the need of

innovative thinking to develop effective HR strategies by the organisation for

retention.

I have also tried to link employee retention with other employee related issues such

as motivation and loyalty etc. I strongly believe that employee retention cannot be

achieved unless the organisation has included motivation of its work force on top of

the company agenda. It is a fundamental issue in resolving any problem that the root

causes of that problem should be addressed, no cosmetic solution will work for long

term or sustainable cure. Dealing with human beings requires dealing humanely.

When aimed to bring a change in humans one has to change himself to some


degree, and the required change may include a change in values, conduct and

attitude in such a way that it would facilitate the change process.

It is critically important that employers should be vigilant and always ready to take

some sort of pre-emptive action if they foresee any potential problems may lead to

dissatisfaction of the employees. Consistency is essential in policy formulation and

implementation to avoid any outburst situations.

Professionals or high skilled people are always in demand and there is no dearth of

opportunities for them as they are people who keep organisation in business. Talent

need nurturing like plants, they need daily watering and clean environment to grow, if

they are to thrive. Managers need to participate actively in talent management. They

should be given a task to Develop an environment facilitating, and couching talent.

Kaye Throne and Andy Pellant (2007)

Immediate bosses are of fundamental importance; these are the people who are

always in contact with a vast majority of employees under their supervision in

different departments. Most of the time they are in contact while on job. They are the

ones who translate company policies and strategies for a vast number of employees

working under their supervision, Success or failure of policies for employee

motivation and retention hugely dependents on immediate bosses and supervisors. I

have pinpointed that motivation or satisfaction may be the root cause of all or most of

the employee related issue. Imagine that if the work force of an organisation is

struggling with their needs and feel that they are not treated fairly it will cause

frustration, any rational person can think that such a work force will show any signs

of loyalty or commitment with organisation or it goals etc. so, the first and for most

priority for the management should be to assess and understand the needs of their

employees. Then a series of actions should be taken to fulfil these needs. At this

point effective and open communication is very important it may help to fill any gaps

between the actions taken and unfulfilled needs of the employees. Here, they can be

given assured that any remaining demands will be met and company’s commitment

to continue its efforts in the right direction, a time frame may be given by the

management. Nalbantian Et al (2004)


It is clear from the outcome of this study that creative, helpful managers in an open

environment can play an important role for employee retention. Organizations

focusing on these issues are more likely to have high retention rate.

5.3 Findings for CAPITA:

Capita is a renowned and leading business organisation in United Kingdom. The

clients and services of capita include central government, local governments,

education, life and pension, insurance, health, transport, financial services and

Business Process Outsourcing (BPO) in UK. Capita has developed great expertise in

redefining and transforming services to public.

CAPITA has grown enormously in size both in terms of Business operations and

hence number of employees to carry out such operations. Diverse Business

operations to culturally diverse customers require state of art HR polices. However,

CAPITA has successfully managing the diversity issue within the organization and as

consequence to the customers. Recruiting and keeping high performers is our core

policy concern which results in 88% retention rate higher than the industry average.

CAPITA is aware of the importance of clear understanding of the employee

motivational issues e.g. their needs, expectations etc. that is why capita has

achieved an unprecedented success in the market and within the organisation.

It seems CAPITA is well aware of the Importance of the stakeholder groups

(customers, creditors, investors, employees) watch workforce stability and capacity

carefully. Workforce strength, capacity, and dependability influence the confidence of

all these constituents. In case of out sourcing activities CAPITA, involves providing

services to clients’ customers of leading brands. Such Customers are increasingly

concerned about the quality and service levels they get from them as it will directly

affect the business of those Brands.

CAPITA claims it is people organization and I found it to be true. CAPITA is

committed to provide conducive work environment to its employees by keeping them

continuously motivated through recognitions and competitive reward system for their

services


CAPITA aims to provide employees with a helpful and caring work environment to

help them to excel and grab growth opportunities. especially for high performers and

multi talented employees.

5.4 RECOMMENDATIONS:

Despite the fact that CAPITA is an exemplary organisation and has better average

employee retention rate than the industry yet there are certain areas need to be

improve particularly in the context of its sheer size and in the diversity in its business

operations.

Employee benefits and reward system need to be reviewed on an ongoing basis as

part of retention policy. It will ensure prompt recognition and reward for those who

has exceeded the bench mark standards. Bowen (2000),

Communication has a vital role in our lives it can make things happen particularly,

effective communication is crucial in business. It provides the basis for

understanding what need to be done and how it should be done. Better

communication can help in building good team work even under intense pressure.

Winning team combination can help individuals to perform up to their optimum. It will

give them sense of achievement and higher job satisfaction. Continuous professional

development, on job training etc help employee to update their skills and knowledge

resulting lower redundancies but higher growth opportunities. It will increase

employee commitment with their organisation. More innovative channels of

communication within organisation will help in improving flow of information up and

down in the organisation. Glanz (2002)

Work environment is an important factor, a stimulating work environment that allows

people to give their best by allowing them to contribute positively and productively,

by providing a degree of autonomy/open communication on the job, allow them to

contribute ideas, professional opinion which helps them to grow and give their best

to the organisation.

Every effort should be taken to ensure that opportunities of professional growth are

there for all. Every individual can avail such opportunities. Employ retention and


motivation can be increased by providing opportunities for learning and skills and

consequent advancements in job responsibilities.

It is strongly recommended that employees should be given freedom to express their

professional/personal views, companies having a inflexible approach, or having an

organizational culture that is characterized by domination and autocracy are likely to

have dissatisfied employees no matter how good the incentives to stay may be

(Ashby and Pell, 2001).

Companies should deal their employees with nobility, admiration and equality

especially, multinational organisations operating in diverse ethnic environments,

need to understand the importance of respect for other cultures and norms and if not

taken seriously, it may cause antipathy and counterproductive environment.

5.5 IMPLICATIONs OF THIS RESEARCH (STUDY) :

This research is comprehensive effort done in an organized way to develop a

mechanism that can provide the fundamental basis on which a policy can be build to

get motivated, loyal workforce. One of the objectives of this research is to provide

real time information and assistance to pragmatic organisations and their managers

to understand the importance of employee retention and then to tackle it in a creative

and effective way

This research may help to explore every possible avenue that could affect employee

retention in one way or the other. Employee retention can be seen as employers own

choice strategy and retention techniques. Employee retention is strongly linked with

the work environment in which employees undertake their responsibilities or duties.

Helpful and liberated environment is no doubt is first step towards effective employee

retention. Creating a culture where people can express themselves and can

associate themselves with the organisation would make quitting a difficult decision

for them.


This study may bestow valuable information about the bearing of turnover on

organizational recital. Productivity, profitability and other stake holder’s

confidence.

This study provides an insight into employee satisfaction and motivation

needs and their relationship with employee retention.

This study highlights what makes people feel motivated, how motivated

people can help organisation to improve retention.

This study mainly focuses on the real time issues and applied side of the

policy instead of just theoretical aspects.

BOOK REFERENCES:

Literature Review:

Rigby, R. (2003) The churning curve Human Resources. London: Oct 2003

“Employee Retention”, Jennifer A Carsen , CCH Incorporated, 2005 (page-2)

“Managing employee retention”, by Jack J. Phillips and Adele O. Connell,

published by Butterworth-Heinemann, 2003 (page-2)

“Keeping the people who keep you in business: 24 ways to hang on to your

most valuable talent”: Branham F.leigh (author), 2000, (Page: 15-19)Farooq Ahmad ID # 0911867092096 Page 74

http://books.google.co.uk/books?q=+inauthor:%22Adele+O.+Connell%22&source=gbs_metadata_r&cad=10

http://books.google.co.uk/books?q=+inauthor:%22Jack+J.+Phillips%22&source=gbs_metadata_r&cad=10

http://books.google.co.uk/books?q=+inauthor:%22Jennifer+A+Carsen%22&source=gbs_metadata_r&cad=8

“Motivating Employees” by Pepitone , James S.(Author) Bruce Ann (author),

1998 (Page 15-20)

“Finding and keeping great employees” by Harris , James (author) Brannick,

Joan (author) in 1999, (page 155-157)

Klaff, L.G.Churn Costs: Productivity, morale fall when employees leave, the

Detroit Free Press, 26th January 2001, 1C, 8 C. accessed on 15.01/2010 at

19.07.

Harrison, D., Virick M., and William S. Journal of applied psychology, 81:

Page: 331-335, 2000.

Editor 2000, “new perks won’t solve all your retention problems.” HR

magazine, July. Page-10.

Kaye, Beverly and Jordan-Evans, Sharon (2002), “Love’Em or loose Em’:

getting good people to stay”. Page- 6 published by berrett-koeler

Editor 1998, “work/life study=respect”, employee service management (ES)

magazine, page- 6.

Glanz (2002), “Handle with care: motivating and retaining your employees”,

page- 31-45, published by McGraw-Hill publishers.

Dauten , Dale (2000), “Given workers freedom to be productive provides

incentives to stay”, section- 5, page- 8.

Littman , Margaret (2000), “best bosses tell all”, working women, page-55.

Littman, Margaret (2000), “best bosses tell all”, working women, page-51.

Stern, Gary M. (1996), “Soul at Work”, New age, Page- 73

Barlett C. 2001. Microsoft: Competing on talent (A). Boston MA: Harvard

Business School Publishing.

Kaye Throne and Andy Pellant (2007), “The essential guide to managing

talent”, published by Kogan Page, London. Page-128.

Kressler and Herwig (2003),


Lloyd L.Byars and Leslie W. Rue (2000), “Human Resource Management”,

pubished by Mcgraw hills. Page 275-278.

Ramlal, S (2004), “A review of employee motivation theory and their

implication for employee retention”: journal of American academy of

business, Cambridge.

Beardwell, I. et al. (2004) (4th Edition) Human Resource Management a

Contemporary Approach Prentice Hall, Harlow

Risher, H and Stopper, W (2002)

Armstrong, M. (2001) (8th Edition) The Handbook of Human Resource Management Practice, Kogan Page Limited London,

Hacker, C.A.. (1996) (2nd edition) The Costs of Bad Hiring Decisions &

How To Avoid Them St Lucie Press, Florida.

D.Mischelle Adkerson (2000), “The company you keep: Four key tools for

employee retention”, page: 22, published by M.lee smith publishers.

Beardwell, I. et al. (2004) (4th Edition) Human Resource Management a

Contemporary Approach Prentice Hall, Harlow

R.Brayton Bowen (2000), “Recognizing and awarding employee”, page-38,

published by McGraw Hill.

Sigler, K. (1999) Challenges of employee retention

Management Research News, Patrington: 1999.Vol.22, Iss. 10; pg. 1

Mullins, L (2005) (7th Edition) Management and Organisational Behaviour Prentice Hall, Pearson Education, Edinburgh

Blyton, P & Turnbull, P (2004) (3rd edition) The Dynamics of Employee

Relations Macmillan, Basingstoke

“Managing to motivate” by Evans & Linda (2000), Page: 10-12, published by

continuum international publishers.

Nalbantian, R, Guzzo, R, A, Kieffer, D and Doherty, J (2004), “Play to your

strengths: managing your internal labour markets for lasting competitive

advantage”, by McGraw Hill, Page:

Kearns, P (2005), “Human Capital Management” reed business information

Sutton, surrey.

Scarborough H and Elias J (2002),”Evaluating human capital”, by chartered

institute of personnel and development, London.


Roger Griffith, R.W.Griffeth, Peter W.Whom (2004), “Innovative theory and

imperatal research on employee turnover”, by information age publishing,

Page: 214

BLS 10 year projections are from Eric.B. Figueroa and Rose A Woods,

“industry output and employment projection to 2016”, monthly labour review

November, 2007.

WEBSITE REFERENCES:

Introduction

Employee Retention Figure, World Wide Web. Site visited accessed on 13th

December, 2009 at 14:20. http://www.checkbox.com/images/Survey_Software_Icons_Logos/newsolutions/employee connect. jpg

About CAPITA, World Wide Web. Site visited accessed on 29th October,

2009 at 17:35.


About CAPITA, World Wide Web. Site visited accessed on 13 th December,

2009 at 10:45.



http://www.checkbox.com/images/Survey_Software_Icons_Logos/newsolutions/employee%20connect.jpg

http://www.checkbox.com/images/Survey_Software_Icons_Logos/newsolutions/employee%20connect.jpg


About CAPITA History, World Wide Web. Site visited accessed on 14th

November, 2009 at 13:15.

http://www.capita.co.uk/about-us/pages/our-history.aspx

Employee Benefits Figure, World Wide Web. Site visited accessed on 18 th

November, 2009 at 12:35.

http://www.capita.co.uk/corporate-responsibility/Pages/report

centre.aspx?fullReport=true

Literature Review:

HRM Diagram taken from


Accessed on 11 th December, 2009 at 14.00p.m

http://www.jstor.org/stable/4165849 accessed 15/01/2010


http://www.jstor.org/stable/4165849%20accessed%2015/01/2010


http://www.capita.co.uk/corporate-responsibility/Pages/report%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20centre.aspx?fullReport=true

http://www.capita.co.uk/corporate-responsibility/Pages/report%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20centre.aspx?fullReport=true


BIBLIOGRAPHY

Taylor. S. (2002). The Employee Retention Handbook, CIPD Publishing.

Phillips.J.J., Connell.O.A. (2003). Managing Employee Retention, Botterworth-Heinemann.

Bruce. & Ann. (2002). How to motivate every employee, McGraw-Hill Trade.

Bratton, J. & Gold, J. (2001). Human Resource Management: Theory and Practice, 2nd ed. Routledge.

Armstrong. S. & Appelbaum. M. (2003). Stress-Free Performance Appraisals, Career Press.


APPENDICES:


INTERVIEWS:

1. In the context of CAPITA employee retention policy, how do you see the

impact of your policies and practices, are you satisfied with the results,

briefly explain the strengths and weakness?


Capita (Outsourcing Company)

Type Outsourcing

Founded 1984

Headquarters London (United Kingdom)

Key people

Paul Pindar (CEO Capita

Group)

James Parkhouse (Capita

offshore services)

Claire Neal (Capita Group

HR)

IndustryOutsourcing, Life and pension

services and Insurance services.

Revenue ▲ £2,441m

Net income ▲ £277.2m

Employees 60000 employees

Website www.capita.co.uk

http://www.capita.co.uk/

http://en.wikipedia.org/wiki/Website

http://en.wikipedia.org/wiki/Employment

http://en.wikipedia.org/wiki/Net_income

http://en.wikipedia.org/wiki/Revenue

http://en.wikipedia.org/wiki/Industry

http://en.wikipedia.org/wiki/Category:Types_of_companies

2. What do you think that through effective communication you can console

and convince employees with some level of frustration at work place?

3. What are the common issues related to employee motivation in your

organization in the context of work environment in CAPITA?

4. Would you like to share any real time issues you dealt with in the past and

successfully resolve the problem and if not what causes you to fail?

5. In the context of CAPITA, how do you see employee retention in case of

acquisition and mergers?

6. Briefly explain the mechanism available to keep the turnover level within

acceptable limits?

7. How do you see generally employee retention issue particularly in the

context of recession?

8. What are the most common reasons to quit in CAPITA stated by employees

in their exit interviews?

9. Do you think that CAPITA is successfully maintaining the employee

turnover within an acceptable limit?

10.How do you differentiate CAPITA in terms of creating employee motivation

and loyalty as compared to the industry (particularly competitors)?

QUESTIONNAIRE:

QUESTIONNAIRE

PARTICIPANT’S NAME:


PARTICIPANT’S JOB POSITION:

1. GENDER?

a. Male

b. Female

2. Employment Status?

a. Full Time

b. Part Time

3. Age Group?

a. from 18 to 25

b. from 26 to 35

c. from 36 to 45

d. from 46 to 45

e. from 56 to 65

f. Over 65

4. If you had quit a job was it because of?

a. Supervisor/immediate boss.

b. organization.


c. Unfair compensation.

d. None.

5. What do you think is the most common reason for high employee turnover?

a. Unfair compensation

b. Poor working conditions

c. Immediate boss

d. Better job option

6. Does high employee turnover impinge on productivity, profitability, and customer satisfaction?

a. It does.

b. It does not.

7. Do you think that undesirable turnover can impact on the credibility of a business organisation?

a. Improve credibility

b. Lower credibility

c. None

8. Do you recognise that motivated workforce will better demonstrate organisation’s proposition resulting improved customer loyalty?

a. Agree

b. Strongly agreeFarooq Ahmad ID # 0911867092096 Page 84

c. Disagree

d. None

9. Do you think employee retention policy is successfully implemented in your organisation?

a. Successfully

b. Unsuccessfully

c. Don’t know

10. Do you think people give true reason(s) to quit in their exit interviews?

a. Yes

b. No

c. Don’t know


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