12.1 The history
A company's focus is to attract and retain staff and to provide staff with the skills they need to complete tasks quickly and effectively, adding to the productivity of the company as a whole. This situation has become rather complex, and in 2001, with the economic downturn, thousands of companies were forced to reduce their team sizes, downsizing considerably in order to just keep their doors open.
Over the past few years, millions of jobs in the UK have been cut out completely and this has left a wake of destruction in its path. It has lowered productivity considerably because employees no longer feel secure, and when they don't feel secure, they are less motivated and committed. With a lack of employee commitment and motivation comes a reduction in attendance, and even product quality is taking a serious knock. Customer satisfaction levels are dropping and companies are noticing a high turnover of quality team members.
As a human resources manager or team member, it is your responsibility to work with employees, creating a desired position and making employees feel comfortable in their jobs. It is your responsibility to boost motivation and commitment in the company, but before you can do this, you need to know how these two go hand in hand. Performance in each employee can be sped up if the employee's talents are matched to the company's goals and then the customers' requirements. When this is done across the board, a company can become strong. With many companies still operating on skeleton staff, it is your responsibility to ensure that you choose the right team players and that the right applicants are selected for the right teams to reduce the risk of them feeling unwelcome or making it harder for them to complete their jobs to the highest standard.
This is imperative to the success of the company. Today, companies are working with volatile and dynamic working environments which are set down by the turbulence within the economy of the country. Motivating and retaining staff is easier said than done. Companies have been financially affected and, therefore, they aren't seen as secure solutions for employees anymore. Companies that were attractive to employees are now just another run of the mill company looking for staff. With the economic crisis now behind us, thousands of new businesses are opening throughout the country each year.
Research has revealed that a company that is successful will adapt based on the current working environments through flexibility, innovation, and creativity. That being said, creating a dynamic working environment and focusing on motivation and commitment can ensure that values and beliefs continue to be respected throughout the company at all times.
12.2 Retention
Retention is a strategic business plan that needs to be implemented to protect the company against the turbulent world of business. Having a stable work force means you have an advantage over your competitors, where a company
with an unstable workforce is going to pay out thousands in new recruits, orientation, and training and supervision as a result.
Companies sometimes don't enjoy long-term business relationships with their customers, but the one relationship that they do need to nurture and maintain is the one with their employees. In the event that employees are unhappy or don't feel secure in their positions, efficiency will be reduced, productivity will be hampered, and the company can suffer.
When you are dealing with a workforce that is not committed or motivated, you will find your company is going to suffer in the long run. Competent and dedicated staff members are one of the biggest assets to any company and give the company an advantage over their competition. Losing an employee can be a hard thing. It takes time to replace them with someone who is just as competent, and sometimes, it is almost impossible to find that person. Competition is good for companies and people, but at the same time, you don't want to find yourself hiring the wrong person, who isn't as competent and cannot provide the company with the same productivity levels moving forward.
Of course, when an employee leaves, the replacement is going to need time to settle into their new role, get essential training and, over time, they will become a valued member. This is not an overnight success story. The more staff the company loses and the more incompetent the new staff become, the harder it is going to be for the company to provide outstanding customer service. Unhappy customers can break a company. You will notice a reduction in cash flow. Customers these days focus extensively on customer service and they need to know that they are getting fast response times and specialized knowledge when they contact a company.
At the same time, what you may not know is that creditors also focus on the performance and stability of their clients, and rightly so. If there are any problems, they will monitor the situation very closely to identify if there is any risk that they need to know about. High staff turnover rates will raise concerns with investors, customers, and potential future employees.
Unhappy employees can be detrimental to a company, as they not only affect employee morale, but they can affect the entire company moving forward. The quality of the work, the productivity, and so much more can be negatively affected by one disgruntled employee. Instability is often a result of an ineffective manager, which makes it hard for workers to get their jobs done, which, in turn, will result in them looking for other jobs where they will be appreciated
for the work that they do.
The expanding economy combined with labour shortages makes recruitment and retention even more important than before. Meeting employment requirements means hiring the right calibre of person for the job in the first instance and then motivating them to gain their commitment to the company to boost retention levels in the future.
12.3 Cost of employee turnover
You will find that calculating the cost of turnover can be a challenge and an eye opener. Identify what costs to include and any indirect costs, and remember that a company pays a high amount in order to replace an employee, in terms of the induction, the training, and the loss of productivity for a period of time. The cost of employee turnover is often underestimated. Even losing a low level employee can result in forfeiting up to 12 months' pay in costs. Now you can imagine what that cost could be if you were looking at a top level employee moving on from your company. A manager, skilled technician, or a professional member of the team can cost up to two years of pay
to replace.
What do you include when working out costs of employee turnover?
Here is a list of some ideas you can incorporate:
-Productivity loss while replacement gets up to date on company methods
-Overtime or cost of temporary employee to assist during the selection process
-Efficiency affected
-Morale lowering of current employees
-Vacation pay
-Recruitment costs to include advertising, interviewing
-Employment agency fees interview times
-Hiring costs which include criminal checks, credit checks, and drug checks.
-Relocation costs and housing benefits
-Orientation
-Loss of contracts
-Loss of some other employees as a result
Employee turnover has a negative impact on the company and can cause irreparable damages in the long run. Finding a perfect replacement that is equal is near impossible, which means recovery can take time.
12.4 Why employees become demotivated
When you ask the managers or supervisors of a company why their team members are leaving, many will tell you that it is money related. But the truth is that it is often more than that. Some will tell you that the employees received another offer. While this may be true from time to time, a high staff turnover is definitely a cause for concern.
It is not uncommon for managers to blame company policies and pay schedules.
But research shows that money isn't even in the top five reasons why employees will leave a company. How a company shares out money will identify what managers want, but at the same time, it affects employees and shows them what the company pays for in terms of incentives and performance. Paying to support employee development will go a long way for a company and help to motivate and commit members and reduce the risk of them leaving in the long run. Salaries and other benefits will attract applicants to a company, but this is seldom the cause of their leaving.
What does pay mean to an employee?
-Valued within the company
-Equal within their team and when compared to their colleagues
-Ability to maintain a set standard of living
-Results in jealousy when not paid based on their worth within the company
-Perceived that one employee is the favourite based on how much they are paid
-Recognized for certain aspects and abilities
-Entitled to more than a bonus for their extra effort
An employee will see the company as healthy when they are happy with their own working conditions and situations. Most people will feel good about their jobs most of the time, but then there are those days when things go wrong and they will blame the company. An employee will feel good about what they do when they have the skills and resources at their disposal to complete their duties to the highest standard and improve their own productivity each and every day.
A company will see the company as healthy when they are profitable and hold a top market position combined with superior levels of customer satisfaction. A company that is healthy will respond positively to change and they will adapt with ease. Companies that create commitment soon realise that this is a personal decision and this can have a negative impact on the conduct of the company, forcing it to make changes and be flexible in situations where they are not ready to make these changes.
Commitment by the company means that the company needs to be consistent in everything they do. They need to be patient, they need to be committed, and they must communicate with employees at all times to ensure that they are aware of what is going on, receive their feedback, and focus on their strengths to help the company moving forward. If the relationship between the company and the employee is expected to work then it must be emotionally rewarding.
Many employees will leave their jobs because they don't like their managers, even if they are well paid and recognised regularly for their efforts. In most instances, they receive regular training, but disliking a manager is a top reason why so many companies have a high turnover of staff.
Top reasons why employees leave include:
-Relationship with manager
-Inability to use their skills
-Cannot impact the company's mission or goals
-Reorganisations taking place too often
-They don't have room to grow
-There aren't enough resources to do the job to the highest standard
-Expectations are not clear
-No flexibility
The above reasons are often not given to you by the employee at their exit interview. Many employees will never share the real reasons why they leave a company. This is why you may find that the data you have doesn't match the departing data which you get when an employee leaves. Employees are often hesitant to tell you the truth in their exit interview, as they are worried they won't get a good reference if they are honest. You need to make sure they are comfortable with being honest, as you need to know where the problems are, ensure that they don't happen again, and reduce the risk of high staff turnover moving forward. Studies show that many employees don't give the real reason why they leave. Some feel that admitting this to the manager is risky to their future success.
Instead, the majority of answers you are going to get in an exit interview include:
-Better opportunities elsewhere
-The industry has changed
-Working conditions better at the other company
-They feel that development is lacking within the company.
During the recruitment process, a new employee that is highly talented will join a company because the benefits appeal to them, along with the training programmes and their ability to use their skills in the long run. Productivity will remain high until that employee gets a good understanding of their supervisor. Supervisors, managers, and team leaders are imperative to keeping that employee motivated and committed to the company in the long run. This is not only the job of human resources.
Reasons employees feel attracted to a company:
-Work available
-Opportunities within their career
-Development of skills
-Reputation of company
-Financial rewards
-Reasons why employees leave a company:
-Management issues
-Unable to use skills
-Feel unappreciated and undervalued
-No development opportunities
-Company regularly reorganising and changing
When someone leaves a company, it is important that you know that they take their value with them, usually straight out of your door and into a competitor's. A good manager is one that looks in towards the company, focusing on each individual employee and their different styles and abilities. They look at the goals and how to motivate each individual person. What you need to remember when it comes to motivating staff to gain their commitment is that every single employee is motivated in a different way and it is your duty to identify how to motivate them moving forward to reduce the risk of demotivation of teams in the future.
FACT
The average UK holiday entitlement including public holidays is 33.5 days.
Source: inews.co.uk
12.5 What motivates people?
You have to identify what will motivate each employee to do their best in their chosen position. Theory within companies usually focuses on certain motivating factors which include pay, status, pension, expense accounts, benefits, bonuses, etc. Yes, there are very powerful motivators, but they are not enough on their own. Employees these days want and expect more, and in order to achieve their best, they deserve more.
Years ago, when a company wanted the most from their teams, they would buy their commitment and motivation using money. Motivation is now more complex, focusing on the opportunity and wealth of the employees, which means richer rewards in the long run. Rewarding employees directly for the work they complete is one way to motivate employees and keep them committed to the company.
Whether it's providing outstanding service to a customer or accomplishing something technical, it can be rewarded in a unique way to make the employee feel special and appreciated within the company. You will find that employees will need rewards in order to keep performing at their best. Companies can't just provide high pensions and guaranteed employment to keep staff loyal anymore; therefore, they need to focus on other innovative ways to motivate their teams, keeping them focused and productive.
At the same time, employees have found that they are taking more responsibility in terms of their own careers and where they are going moving forward. They are working on ways of developing their own skills in order to be employed now and in the future. As a result, the competition for skilled employees has risen considerably throughout the industries and around the world.
Talented and skilled workers have more choice and they can choose whether to stay in their current position or move on to one of the competitors, depending on their own personal preference. Many will choose to leave positions where they are not rewarded and don't feel motivated. Competition isn't only local anymore; you have to work hard to keep employees motivated and committed with global competition being very real. Rewards are now essential to keeping valued employees.
Companies have had to develop reward programmes that focus on ensuring the company benefits in the long run and that employees are improving daily. You need to concentrate on ensuring that work is fulfilling for all employees, reducing the risk of them leaving. Work is all made up of tasks which need to be performed to a certain standard. Tasks are not single activities; they are a number of activities put together in order to achieve a certain goal. Understanding the goal and the process to get there is what can help you identify what rewards to offer and how to motivate employees in today's working environment.
Employees expect their work to be rewarding and meaningful. This is something the company needs to focus on to keep the employee motivated and committed. Turnover isn't something that happens overnight. An employee isn't going to get out of bed one day and say that they are leaving. This is something that they have been thinking about for some time and over time they will take the steps to leave their current employment. Turnover is a decision, but the events leading up to that decision are what you need to focus on and hopefully catch before it is too late.
Research in this area has shown that employees will discover their desire to leave gradually. This is done as they identify what the company is really like to work for, what their manager is like, and what their duties entail. Numerous experiences over a period of time are going to push them towards a set decision.
Resignations are usually a number of experiences that have been triggered over the years, triggers that may have been able to be managed if HR were aware of the situation and had taken steps to provide a motivational working experience that is rewarding in the long run.
12.6 Employee commitment
What you may not realise is that your retention plan for an employee needs to start before they begin working at the company. Retention plays a role from when a position opens up, through the interview process and hiring stages, through to orientation and beyond. Retention and employee commitment can be seen from the job description to the selection process to the orientation stages of the company.
Career development opportunities, working environment, performance management, management teams, and work and life balance all play a vital role in the employee's commitment to the company. Each factor has an impact on the company's ability to attract and retain the right team member. Correct procedures and systems can improve the chances of keeping employees committed and reduce the risk of turnover.
It is important that you bear in mind that not everyone will be committed and there is not much you can do about this. It is impossible for any company to retain every employee they have ever hired, especially today with economic turmoil, global competitors, and work from home opportunities. The focus for the HR department is not how to retain each and every team member, but rather how to reduce the risk of losing the commitment of the good team members. This means identifying members of the company that you feel are good members and that you don't want to lose along the way.
Identifying important employees is a methodical process and you need to look at employees who will:
-Provide outstanding customer service
-Possess outstanding technical or functional knowledge
-Be creative thinkers
-Be flexible in their working day
-Focus on achieving goals
-Be committed to the company
Losing an employee who falls into the above categories is something you want to avoid at all costs. These are considered valuable employees and these are ones you want to ensure are motivated and committed to growing the business, achieving goals, and maintaining high productivity levels at all times. They are often spread throughout the company from back line positions to front line duties to managers and supervisors. The employees you want to keep are often recognised by the company for their skills, showing their commitment to the company on a daily basis. These are the employees you want to retain, as they play such a vital role in the success of the business.
Bear in mind the following statistics when it comes to employee commitment and retention:
-Three percent of employees are imperative to the company's success moving forward.
-13 percent are important to the company and everything should be done to try and keep them on board for as long as possible.
-68 percent are valuable and the company should go out of its way to accommodate them.
-13 percent need to improve their performance and skills or they should leave for other options.
-Three percent are not committed to the company and should already be heading towards termination.
This means that you need to focus on 97 percent of your work force, motivating them to achieve the best commitment from them daily.
Module Summary
This module gave you an in-depth look into the motivation and commitment of employees within a company. You learned about motivating employees, how to retain employees, and what demotivates them and makes them want to leave. This module also covered commitment within the work force, enabling you to identify which employees you should be focusing on now and moving forward.
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