Effective Retention Policies and Motivation in Low Management: Why Employees Leave Organizations

Introduction

In today’s competitive world, the success of any organization depends on both the customers and the organization. To maximize customer retention, it is imperative for organizations to retain the best employees. Organizations that keep on losing their employees are always on a downward trend productively. This is because of the fact that employees are in possession of every minuscule detail of the organization (Grant Thornton International, 2004). Employees take with them a wealth of experience, knowledge, and contacts once they decide to leave. It is therefore the work of the senior management of organizations to formulate effective employee retention policies and motivation programs so that they can retain the best employees. Managers in the low cadre need to be specifically motivated as they relate directly with the employees.

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It is the prerogative of the managers especially in the senior cadre to understand how their employees work and also understand their goals and aspirations if they are to win the battle of retaining their best employees. That is a standard practice of management. According to Healthfield (2008), organizations that help employees achieve their career aspirations and goals have fewer worries with retention.

But why do employees leave their well-paying jobs? A recent survey conducted by the Gallop organization surveying a million employees and 80,000 managers revealed that the “immediate boss” is the major reason why employees either decide to stay or leave an organization (Premji, n.d.). Of course there are other numerous reasons that make employees leave or stay ranging from motivational factors and company policies to salary issues and quality of interpersonal relations as Hertzberg argues in his two-factor theory (Hollway, 1991).

Background of the study

According to Healthfield (2008), failure by management to retain a key employee is often very costly for any organization. Available estimates according to the Health field suggest that losing a middle-level manager may cost an organization up to 100 percent of that manager’s salary. That notwithstanding, employees continue to leave their places of work in droves either because of personal dissatisfaction or in search of greener pastures. According to Leign (2005), the real reasons why employees continue to leave their places of work may never be told. Accordingly, Leigh says that 80 % of the leaving employees may actually not be looking for greener pastures elsewhere but actually escaping the negative factors in their current workstation.

In XYZ organization, the company under study, employees continue to flee in droves while others are threatening to flee. Questions have been raised at board-level meetings at the organization as to why this is so. According to Premji (n.d.), some employees are leaving top-of-the-range salaries to go to less deserving jobs. All stakeholders and especially employers must sit down and try to find a lasting solution to this heart-breaking problem.

Most managers blame poor employee retention policies for the loss of employees. But who really is in charge of drafting the company policies? Most probably, the managers themselves cannot escape the dragnet since they are partly or in some cases wholly responsible for drafting all the company policies. According to Healthfield (2009), retaining the best employees is very vital to the long-term success and health of any organization. Among other things, managers are always in agreement that key employee retention will always guarantee product sales, customer satisfaction, and satisfied co-workers.

Problem Statement

All over the world, managers continue to formulate employee retention policies and motivational programs for their employees with the sole objective of increasing productivity and financial independence for their organizations. But it remains to be seen if this has really scaled down the massive exodus of employees from one organization to another.

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Purpose of the study

This study aims at understanding the reasons why employees are leaving XYZ Organization. In this perspective, the study will give us a broader understanding of why individuals are always leaving organizations even after getting the best from those organizations. Some organizations have indeed closed down after undergoing a massive financial meltdown occasioned by the loss of their prime employees.

Research Questions

The following are the research questions for this study

  1. Why do the employees leave the organization?
  2. Do the organization’s employee retention policies have a role to play in facilitating the trend?
  3. What, in between poor pay and poor managerial skills is the most likely trigger of this trend?

The introduction to this study will be followed by Theoretical Framework, Study Methodology, Study results, Conclusions, and Recommendations, in that sequence.

Theoretical Framework

Various studies have been conducted over time to explain the reasons why employees leave organizations. In the same vein, numerous studies have also been conducted to come up with effective retention policies that managers could use to curtail the spillage. According to IAAP (2005), there are numerous reasons why employees decide to leave. But the most commonly mentioned are motivational-related and include poor management, lack of career growth and advancement opportunities, and poor communications either between them and the managers or between the various departments. Other reasons include pay issues, lack of recognition (Malachowski, 2005), poor managerial leadership, lack of training opportunities, excessive workload, lack of tools and resources, and lack of teamwork in the organization.

A more radical view held by Field (2008) seems to suggest that employees are their own worst enemies as they leave employment after been caught stealing at the workplace. Welch (2009) on his part feels that employees are to blame for leaving their workplaces as they “fail to connect with their bosses as leaders and as people.” Accordingly, the employees are seldom open about the reasons that make them quit. This is a shocking revelation as Welch argues that the basic reason why employees walk away is that they fail to establish a personal emotional relationship with their bosses.

To have a glimpse about the real reasons, it is imperative that we look at two theoretical models; Maslow’s Hierarchy and Hertzberg’s Two-Factor Theory.

Maslow Hierarchy of Needs

According to Maslow, individuals must first be satisfied with all the needs at the current lower level before they ascend to the other higher level. An individual will seek to satisfy the most basic needs like food and shelter first before going to the physiological needs, which for an employee may include hunger and thirst. The other level is the safety needs, which may include such physical needs as protection against employment, injury, or loss of income through sickness. The social needs level comes up next, which for an employee may include such needs as communication, teamwork, and working with employees who love and support them. Higher up the ladder are the esteem needs which for an employee may include being recognized for a job well done and job promotions. The highest on the ladder is self-actualization, often measured by the successes and challenges that an employee faces at the workplace (Tutor2U, 2009).

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Herzberg’s Two-Factor Theory

Herzberg analyzed the job perceptions and attitudes of 200 engineers and accountants and asked them if they could last recall when they had felt motivated or demotivated at their places of work and the reasons they felt that way (Tutor2U, 2009). From the findings, he came up with the hygiene factors and the motivators. He argued that satisfaction and dissatisfaction are not opposite ends of the same thing (Riley, n.d.). The hygiene factors he came up with include company policy and administration, quality of supervision, Quality of interpersonal relations, wages and salaries, working conditions, and job security. The motivator factors included status, the opportunity for advancement, gaining recognition, responsibility, challenging and stimulating work, and a sense of personal achievement. These are factors that are based on the employee’s need for personal growth.

Methodology

Research design

This research focuses on trying to understand why employees leave their workplaces. To this end, a qualitative research design was viewed as the most ideal methodology that would assist in the interpretation of the research questionnaires. Ereaut (2002) suggests that the qualitative approach is the most applicable in studies focused on “people’s attitudes, behaviors, value systems, concerns, motivations, aspirations, cultures, and lifestyles”.

Method of data collection

Data for this study was mostly collected through primary research. Secondary research was only collected to give the study validation and credibility through the review of related literature. In marketing, primary research entails getting the original data concerning the market and product. It is a set of data that was non-existent before the commencement of the study and is actually designed to answer particular questions of interest to the organization (Tutor2U, 2008). According to Girolami (2008), secondary research is where a researcher uses information that has been collected by other individuals through primary research.

Consequently, the researcher prepared some well structured open-ended questionnaires to be administered to the respondents. A sample size of 15 respondents was selected from individuals seeking employment in the organization and also from the employees themselves. The questionnaires were personally administered to capture all the relevant data that the researcher was interested in. According to Milne (1999), questionnaires have an obvious advantage over other data collection methods in that responses are gathered and filled in a standardized manner thereby giving the data more objectivity. According to Creswell (2008), the best method to minimise the measurement error is to “use a good [research] instrument” (p. 394). Therefore, one of the research instrument used in this study was an open ended questionnaire. Basically, what the researcher was looking for was the motivating and de-motivating factors of individual respondents towards working for that organization. The researcher was also interested in looking for the attitudes of junior staff towards work in the organization and towards the senior management team, and if they could be responsible for the trend that was increasingly taking shape.

Sampling technique

Simple random sampling was employed to sample the respondents. This kind of sampling has an obvious advantage of being simple and easy to use when small populations of respondents are involved (ABS, 2004; Hunt & Tyrrell, 2001).

Data analysis

Once data was collected, analysis was carried out by way of the “layering themes” method, which has been found to be effective towards arriving at pertinent research findings. Creswell (2008) state that themes are generated from the descriptions of individuals – the same way it is done in the coding. This is to “describe the central phenomenon of the study” (Creswell, 2008, p. 57).

Study Findings

This study aimed at finding out why employees were leaving the XYZ organization. The organization had undergone untold suffering during the past year alone due to massive exodus of the best employees, something that had shocked even the top leadership of the organisation. Below, I present the findings while focussing on the study question and the research questions.

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Management style

Most of the respondents expressed reservations about the management style of the organization which had blocked every attempt by employees for upward mobility and training opportunities. Those who wanted to leave cried of poor remuneration and harassment from senior-level managers and line supervisors. This reinforces what Hertzberg had argued in his two factor theory (Hollway, 1991; “How to Motivate”, 2009). There was no room for personal growth and advancement. As a result of low morale from employees, the organization had reported massive losses for the second year in a row. According to Healthfield (2009), key employee retention will always guarantee product sales, customer satisfaction, and satisfied co-workers. No cases of employee misconduct was ever reported by the respondents interviewed therefore downplaying Field (2008) assertion that employees were there own worst enemies due to theft. The only case of misconduct reported was perpetrated by the senior mangers themselves, who were soliciting for sexual favors from female colleagues. This perhaps can explain why the organization lost six key female members of staff late last year; a move that made the organization loose millions of money in recruiting new employees.

Some of the junior managers who wanted to leave cited frustration from the top echelon of the organization and shady deals perpetrated by these crops of leaders. There was no motivation offered to them to work according to one of them. In retrospect, the organization lacked a clear career growth and advancement opportunities for its junior managers thereby necessitating them to want to leave. For the junior staff, lack of proportionate pay, lack of recognition and excessive workload were some of the pertinent issues raised. This reinforces both the Maslow’s hierarchy of needs as well as Hertzberg Two Factor Theoretical models.

Employee retention policy

According to those interviewed, the organization had no employee retention policy as the last known policy became redundant a decade ago. This again was a good pointer as to why most employees wanted to call it quits. It is an openly held secret that an organization cannot be able to meet its operational objectives properly without a good employee retention policy which ensures that the plight of the workers is well taken care of. Going by the words of Health (2009), retaining the best employees is very crucial if the long-term success of the organization is to be achieved and sustained. Employee retention is crucial to maintaining a healthy customer base, guarantee product sales and also for the satisfaction of the co-workers.

Conclusions

Besides the organization lacking an upward mobility trend, it also lacked adequate training opportunities, remunerated its employees poorly and harassed its junior staff thus bringing a lot of bad blood between the employees and management. This has resulted in massive financial losses by the company especially during the past two years. There were no reported cases of misconduct by junior staff nor was there a clear career growth and advancement opportunities for its junior managers. Junior staff reported lack of proportionate pay, lack of recognition and excessive workload. The organization lacked no clear employee retention policy.

Recommendations

Going by the problems presented by the employees, it is clear that the company faces big motivational and retention challenges. The first recommendation that need to be taken is to induct all the senior personnel of the organization into motivational seminar so that they could learn the techniques of motivating their junior workers. Also, the organization needs to come up with a policy on sexual harassment to dissuade line managers from sexually molesting female workers as this has made them to loose interest in working for the company. All the issues ranging from low pay to lack of training opportunities to lack of upward mobility in the organization need to be addressed. Above all, the organization needs to move fast and develop an employee retention policy to cater for the needs of the employees. Infact, the company needs to open a permanent employee liaison office and post some permanent staff to take care of employee issues. When all this is said and done, issue of low motivation and low morale will be a thing of the past and the organization should be on its feet again.

References

  1. Australian Bureau of Statistics (ABS). Sampling Methods. 2004. Web.
  2. Braham, L. The Seven Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act before it’s too Late. 2005.
  3. Creswell, J.W. Educational Research: Planning, Conducting and Evaluating Quantitative and Qualitative Research. (3rded). New Jersey, Prenhall. 2008.
  4. Girolami, M. Secondary Research. 2008. R
  5. Grant Thornton International. Today’s Employee Retention Policies Move Beyond “Show Me the Money.” 2004.
  6. Ereaut, G. Qualitative Market Research: Principles and Practice. Sage Publications. 2002. ISBN: 0761972722
  7. Field, D. Workplace Theft: Employees Leave Work with Bulging Pockets. 2008.
  8. Hunt, N., & Tyrell, S. Simple Random Sampling. 2001.
  9. International Association of Administrative Professionals (IAAP). The Real Reasons Why Employees Leave. 2005.
  10. Malachowski, D. Top 10 Reasons to Leave Your Job. 2005.
  11. Premji, A. Why Employees Leave Organizations. (n.d.).
  12. Riley, S. Herzberg’s Two Factor Theory of Motivation applied to the Motivational Techniques Within Financial Institutions. (n.d.).
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