Retention of Employees through Career Management, Talent Management, and Succession Planning - Research Paper Example

 Retention of Employees through Career Management, Talent Management, Succession Planning, Integration of L&D with Employee Relations, and Reward Strategies Table of Contents I. Introduction ……………………………………………………………….. 3 II. Employee Retention Techniques ……………………………………… 4 a. Effective Career Management ……………………………… 4 b. Talent Management, Succession Planning, and the Integration of Learning and Development with Employee Relations …………………………………………… 5 c. Reward Strategies …………………………………………….. 7 III. Discussion ………………………………………………………………... 8 IV. Personal Stand with regards to the Best Employee Retention Technique ………………………………………… 10 V. Conclusion ………………………………………………………………… 10 References ……………………………………………………………………… 12 - 14 Introduction As a result of globalization, human resource management is being challenged to improve the organization’s employee retention strategies in order to reduce the high costs associated with high rate of employee turnover. These unnecessary costs are usually related to the costs of hiring new employees and training them so as to increase their productivity at work. As a result of not being able to satisfy, motivate, and retain employees, the business organization is also expected to lose some of its valuable company knowledge related to its customer-base including its past and future projects which are likely to be passed on to the company’s competitors. Among the most recent employee retention techniques that are commonly adopted by HR management includes: (1) effective career management; (2) talent management; (3) succession planning; (4) integration of learning and development with employee relations; and (5) reward strategies. With the application of effective employee retention techniques, business executives are expected to have the power to improve the work efficiency of its employees. For the purpose of this study, a research analysis will be conducted to determine the similarity and contradicting position of each author(s) pertaining to the advantages and disadvantages of using these employee retention techniques. Eventually, the researcher will discuss his/her chosen position based on the evidences gathered in the study and employee retention strategies used at Middlesbrough Council. As part of the conclusion, the researcher’s personal opinion with regards to the different arguments presented in this study will be provided followed by discussing the recommended ways that Middlesbrough Council should consider as their next approach in terms of improving its currently applied employee retention methods. Employee Retention Techniques Among the common techniques used by HR managers to prevent employee turnover includes the use of effective career management, talent management, succession planning, integration of learning and development with employee relations, and reward strategies. In other words, the ability of the HR manager to satisfy employees with their existing jobs will result to a higher chance that the business organization will be able to control employee turnover and increase the rate of employee retention (Tas, Spalding, & Getty, 1989). Effective Career Management Career development program (CDP) is referring to the actual organizing, formalizing, and planning on employees’ career growth based on the specific job requirements needed by the business organization. (Lips-Wiersma & Hall, 2007) Career management can been viewed negatively by some employees because of its paternalistic nature such that men in general have a higher privilege of being promoted at work as compared to women (Maume, 1999). Contrary to the research findings of Maume (1999), Cassirer and Reskin (2000) stated that “gender is not associated with promotion attitudes”; it is the fact that male employees give more importance to work promotion that made most of them able to reach higher managerial positions than female employees. Several studies revealed that managers can effectively motivate employees to deliver a good work performance since career management is considered as an effective work motivating strategy (Eby, Allen, & Brinley, 2005; Crabtree, 1999). Likewise, the study that was conducted by Chen, Chang, and Yeh (2006) on the impact of implementing a career or professional development program on research and development personnel reveals that most employees were able to experience a higher level of work satisfaction and motivation which significantly improves the quality of employees’ work performance and the overall business productivity. As a result of continuously promoting the equal rights of women, modern HR managers consider this strategy to be effective in terms of improving the work performance of both male and female employees by allowing them to manage their own career growth (Baruch, 2003; Dreher, 2003). As a result of giving employees the power to control their career path, competition between male and female employees increases. According to Baruch (2003), employees have the right to desire on having several careers all at the same time. Therefore, each employee has a tendency to become less committed in a single occupation, career, or even an industry (Parker & Arthur, 2000). Talent Management, Succession Planning, and the Integration of Learning and Development with Employee Relations There are similarities between talent management and succession planning in the sense that both are sensitive to environmental and economic changes (CIPD, 2008: p. 8). In general, talent management is about effectively managing employees that has outstanding talents in different areas which can be an advantageous on the part of the business organization (Blass, 2007) whereas succession planning is referring to the process wherein organizational position like senior-level openings are carefully planned for and eventually filled based on the employees’ adopted skills and other qualifications that are suitable for the work demands of a successful manager. (Dessler, 2000: p. 133, 681) Due to external pressure related to globalization and work-life balance, a lot of business organizations have been competing on hiring the best talents within the industry (Pearson & Bracker, 1986). Training and development is actually one of the key factors that contribute to an effective succession planning. When it comes to building the personal character of employees and retaining them to serve the needs of the business organization, Krewson (2004) explained that skills can be developed through daily experiences at work. Therefore, allowing each employee to share their work experiences with other employees can improve the skills of other workers. Likewise, Barlow (2006) gave emphasis on the individual talents and skills of each employee. For this reason, gathering employees as a team can enhance the learning experience of each member. According to Digeorgio (2004), HR managers should enable employees to know their personal strengths and weaknesses since knowing their own weaknesses will provide them a new opportunity to improve their own knowledge and skills. By developing an organizational culture that uses mentoring and coaching approach between the team leaders and employees, there is a greater chance that employees can be developed as the future leaders of the business organization (Pollitt, 2005). Reward Strategies Rewards can either be intrinsic or extrinsic. Intrinsic reward is a motivational approach that uses a sincere acknowledgement for a good performance like thanking the employees for their effort at work. (Shamir et al., 1993) On the other hand, extrinsic rewards can be in a form of increased salary or bonus given to employees. The type of company rewards offered by any business organization contributes a lot in the quality of work performance and job satisfaction of its employees. Although the use of traditional reward system such as compensation and promotions are still effective in some employees, this type of reward are slowly becoming ineffective in terms of motivating the generation X and Y employees. (Craig, March-April 1989) Material rewards such as cash incentives could even result to demotivating the employees. (Anthony, Dearden, & Bedford, 1989: p. 57; Cecil Hill, Spring 1989) This is the main reason why ‘pay-for-performance’ concept fails to work is because in exchange with the money, the pride and job satisfaction of employees suffer. Several studies show that the use of ‘pay-for-performance’ strategy does not guarantee the improvement in employees’ work performance, retention rate, and job satisfaction (Bowley & Link, 2005; Sherwood & Wechsler, 1986; Lawler, 1971: 151). With regards to the relationship between the use of pay practices and employee retention, the study that was conducted by Guthrie (2000) revealed that the use of skill-based pay system is better than the use of group-based compensation in terms of imrpoving employee retention. The author also reported that the use of group-based compensation is very much associated with higher rate of employee turnover (Guthrie, 2000). Eventhough extrinsic rewards such as increase in pay or bonus given to employees could still be effective in terms of motivating employees and increasing their job satisfaction (Heywood & Wei, 2006), a study shows that the use of intrinsic rewards such as congratulating the employees for a job well done either verbally, written on a personal note, through public recognition, or implementing a celebration for success in work performance is more effective in motivating employees to increase their work performance (Graham & Unruh, 1990). Discussion Considering that the population of Generation X and Y workers are more flexible in terms of dealing with organizational change, changing employment or career has never a problem since globalization combined with the youths’ dependency on the use of the internet technology has gradually made employment opportunity more open and diverse. This is the primary reason why HR managers are having a difficult time trying to retain employees over a long period of time. In general, there is a significant generation gap among the baby boomers, generation X and generation Y employees in terms of their work perspectives, attitude, and behaviour at work. Even though most of the work force today is composed of generation X, the work experience and managerial skills of the baby boomers is still needed in running the business smoothly. For this reason, HR managers should carefully align succession planning with talent management, learning and development processes, expected work performance, and reward system (CIPD, 2008: p. 8). In line with this matter, HR managers should be flexible in developing work benefits and packages that can effectively motivate and attract a diverse group of employees to retain within the work force. There are many ways to retain competitive employees within the business organization. Based on the study of Walsh and Taylor (2007), the commitment level of managers are likely to increase when they are given challenging work opportunities that allows them to learn as they stay longer with the company, given competent leadership tasks, and fair compensation for their effort. Organizational learning has also recently gained equal importance in the field of HRM. Therefore, competitive employees’ decision to stay or leave a business organization highly depends on the challenge, freedom of expression, and personal growth they receive from work (Lips-Wiersma & Hall, 2007; Walsh & Taylor, 2007). To improve employee retention within an organization, HR managers should encourage employers to invest not only a proper career development program but also establish an organizational culture that promotes organizational learning aside from providing employees with tools that will enrich their career development and fair compensation (Walsh & Taylor, 2007). Basically, the best way to make this strategy work is to have a mutual agreement between the employer and employees. Without the mutual agreement between employer and employees, it would be very difficult to implement an effective career development program within the business organization. Aside from the importance of organizational learning, examining the organization’s reward system is also necessary. Nowadays, the old traditional way of rewarding an employee is no longer the same with the type of reward system that is more effective in today’s younger generation. In the past, extrinsic rewards work well in motivating the employees to perform well at work. Today, it is the intrinsic reward that is more effective since it allows the team leader to develop a closer ties with his/her subordinates. Although cash rewards can still motivate some employees, the concept of ‘pay-for-performance’ has been tested and proven to be ineffective in terms of being able to get the employees to deliver good working performances. Personal Stand with regards to the Best Employee Retention Technique There is no fix rule when it comes to developing an effective employee retention strategy. Based on my personal point-of-view, HR managers should be able to integrate the existing motivational strategies that could increase employees’ level of satisfaction at work. So long as employees are very much satisfied with the challenges they have with their current job and receive sufficient monetary pay for the effort they have exerted with work, there is a lesser chance that a business organization would fail to retain its competitive employees over a long period of time. Conclusion Middlesbrough Council has recently developed a Workforce Development Strategy which aims to improve employees’ work performance and retention. For this reason, there are very few minor activities going on within the organization. Although job evaluation has been recently utilized to determine the impact of using the monetary incentives to improve the job satisfaction and work improvements of the employees, the organization has not yet developed a fix strategy that will be used to retain its existing employees. To increase employee retention at Middlesbrough Council, HR manager should carefully analyze the external and internal factors that will significantly affect its ability to hire competitive employee. In the process of going through the hiring process, HR manager should develop a succession plan that has competitive employment packages to encourage highly competitive individuals to join the organization. Upon hiring new employees, HR managers should ensure that they apply talent management by developing ways to increase the learning experience of each employee. 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