Retaining Talent in Organisations
Info: 5419 words (22 pages) Example Literature Review
Published: 9th Dec 2019
Tagged: EmploymentHuman Resources
Finding qualified workers is a difficult and tedious process. Every industry has been finding ways to attract and keep its workforce. One of the factors leading to turnover is by adopting bad retention management. Turnover is a perennial problem and to retain talents within the organization requires the process of attracting, career planning, skills upgrading, developing and motivating the staffs. Talent, sometimes also called high potential, high performer or high professional, being identified by the organization, requires training, development, presented opportunities, work challenges and appreciation. People with this special talent are normally in demand as their productivity and other value-added traits exceed their total compensation costs (Rothwell, pp.163).
One of the strategies to retain these talents within the organization is through appreciation. The act of appreciation includes carrying out formal personalised employee development, flexible working arrangement, recognition and rewards. This paper shall discuss in details the influence of recognition and rewards in retaining talents within an organization.
1.2 Objectives and Research Questions
Management is constantly seeking solutions on the provision for the best method to recognise and reward the innovations and achievements of their staffs. In today’s world, most people do not regard money as the best motivator and in fact, they are looking for more. This paper aims to find out:
Objective 1 : To identify the different categories of recognition and rewards
- Research Question 1 : What are the four types of intangible recognition and rewards?
- Research Question 2 : What are the four types of tangible recognition and rewards?
Objective 2 : To identify an effective recognition and rewards program to retain talents
- Research Question 3 : What are the elements of an effective recognition and reward program?
- Research Question 4 : How to develop an effective recognition and reward program?
1.3 Overview Of Chapters
In the first chapter, this paper discusses about the background issue of turnovers within any organizations. The objectives and the research questions of this topic are identified as well. The second chapter relates the theories by past researches and a research framework is developed. In the third chapter, the methods used to identify the research questions are explained and implemented. Chapter four shall provide the findings and analysis derived from the applied research methods. The final chapter concludes and reflects on the findings of this study.
Chapter 2 : Literature Review
Definition of Talents
The term ‘talent’ may means differently between organisations based on their strategic goals and objectives. High potential, high performer and high professional in this pool of talents have been defined by Roth well (2010, pp.128) as :
High Potential (HIPO) :
People who does at least acceptable work but promotable to the next level when expectations are met;
Doing at least acceptable work but are capable of promotion to two or more levels higher within five years based on objective assessment;
Capable of being promoted to CEO in the future;
Well matched to the organizational leaders’ definition of HIPO which may be specialized.
High Performer (HIPER)
People who consistently outperform the average and measurable performance level of workers in their job categories;
People who are the most outstanding performers based on objectively assessed measures of productivity in their job categories.
High Professional (HIPRO)
People who are experts on specific problems, challenges or issues that confront the organization;
Unique and important organizational work processes;
Specific technical or functional competencies of the organization;
The history of the organization and how the organization overcame past.
These groups of high flyers call for special attention from their managers and specific arrangements from their organisation to develop their career advancement.
Definition of Recognition and Rewards
Smith (2001, pp.161) defines recognition as a form of sincere praise or appreciation given to an individual by another and reward as the earned item of value presented to an individual for successful accomplishment of a particular service, task or mission. Recognition and reward program has always been an effective strategy for retaining employees and it normally do not cost much and not very time-consuming. Informal recognition and reward program can recognize outstanding performance rather quickly while formal program develops the performance growth in a long term basis. A well planned recognition and reward program builds comradeship within the team and makes employees feel valued and appreciated. Employees want to feel appreciated and seldom will they find compliments a surplus.
Attraction and Retention
Attraction and retention of employees have become increasingly important for any organization to ensure sustained competitiveness. Organizations that invest resources in the process of attracting and retaining employees will most likely convert a potential problem into opportunities in gaining industry leadership (Boxall and Steenveld, 1999, pp.451). Investment of resources associated with attraction, retention and development of human resources can therefore contribute to organizational competitiveness (Wright et al, 2001, pp.303). The key to long-term renewal of organization is the development of human resources that emphasise on knowledge-based economy, attraction and retention (Hamel and Prahalad 1993, pp.79). Organizations that focus more on attracting and nurturing talents produce better results and higher performance. Incapability to do so may cause failure or obstacles to the organizational growth. Kamoche (1998, pp.1042) mentioned that senior management that work in a principal-agent capacity may not focused on long-term performance, but on short-term performance that enhances their management and ultimately their reward.
Employees with transferable skills normally seek for employability and not employment. This, in turn, may induce them to change jobs frequently. Drucker (1998, pp.23) recognizes these employees as gold-collar workers with high level of skills and abilities to apply their skills to critical problems of the organization. These talents, possessed with the exceptional knowledge, skills and abilities, attract large rewards and as they are career focused and highly mobile, they tend to be lured by jobs that offer challenges and opportunities for self-development (ACIRRT, 1999, p. 3).
Thus, the management of these critical resources requires greater significance and emphasis. Newell et al. (2002, pp.29) note that talents call for better management accompanied with excellent working opportunities. Newell et al. (2002, pp. 30) also argued that inability to take into consideration of these human resources, the organization may not be possible to develop competitive advantage. Brown and Hesketh (2004, pp. 66) state that the value of human capital has never been greater, given the increasing value of intangible assets such as proprietary networks, brands, intellectual capital and talent.
Effective Recognition System
Six key themes for effective recognition system have been identified as below (Campbell-Allen et al.2008, pp.127-128):
- Acknowledgement and praise is a necessity for everyone and is considered a universal motivator.
- Some form of individual or team nomination process is used for awards, e.g. using notice boards, newsletters, presentation ceremonies etc.
- Programmes need to be aligned with organizational goals, directions and values.
- Recognition and reward programmes should contain an element of individualization.
- Recognition may be formal or informal, financial or non-financial.
- Money does not typically drive employees to take, keep or reject a job. Intrinsic or internal factors that motivate them at a personal level are also considered.
Effective Reward System
Six key principles for effective reward system have also been identified by Campbell-Allen et al. (2008, pp.126-127).
Rewards must support organizational goals and reward the desired repeated behaviour that assists the organization to succeed.
Rewards must be fair.
Rewards must promote co-operation, encourage teamwork and aim for a win-win result.
Rewards must have a positive impact on performance and reward programs.
Rewards must be effective at any times.
Rewards must ultimately focus performance on customer relationship.
Further to the above-mentioned, a combination of group rewards and individual rewards are encouraged. Rewards that recognize purely on individual performance instead of group performance may entice group members to act out of self-interest and demoralize the team efforts. On the contrary, rewards based purely on group performance may allow workers to laze and ride on others’ efforts.
Hypothesis 1 – Effective recognition and reward program attracts and retain talent
Hypothesis 2 – An effective recognition and reward program consists of both intrinsic and extrinsic factors.
2.2 Four Types of Intangible Recognition and Rewards
In general, the most valued form of recognition have shifted from formal to informal and spontaneous, as well as from tangible to intangible and interpersonal (Nelson, 2005, pp.ii). Intangible recognition presents greater sense of motivation to employees for today’s working industry, especially when the recognition and rewards are tailored to each individual’s needs. This section shall discuss about four intangible forms of recognition and rewards.
2.2.1 Day to Day Recognition and Rewards
Personal Praise and Recognition
Personal praise is considered one of the most important ways to recognize a person’s effort and performance. Unfortunately, not many of the managers know how to sincerely and correctly praise a person and sometimes, too much of a praise that is repeated every other days become excess.
It is the daily interactions that add up to define the relationships at work and it is the little things that the superiors do or not do to make a difference in how others feel about working with and being part of the organization (Nelson 2005 pp. 6). These types of praises cost little or no cost at all.
Written Praise and Recognition
There is a variety of praise in written format. They may be letters of praise, notes of thanks or thank-you cards. Written praise is an effective recognition strategy however, this may be time-consuming depending on the contents that the superiors intend to portrait to the employees. A simple thank-you card or notes can actually create an impact more significant than you can imagine. Cards or notes can be evidence for others to view that superiors appreciate your efforts and be proud of.
Electronic Praise and Recognition
This is quite similar to written praise but it is must faster, easier and more convenient than written method. They include emails, voicemails, mobile phones and faxes. Communicating via technology methods has been increasingly used throughout the world. New technology may make us more efficient in terms of reducing travelling time, booking of meeting rooms or inconveniency due to time zone difference. However, it also cause an alienating effect between workers by taking away the interpersonal feel and interactive relationships that human beings should possess. Managers should use technology in positive ways to reinforce good work and encourage the human spirit by keeping the human element at work. Praise and recognition through electronic communication can also amplify good news by forwarding easily to the right people. A positive use of technology can go a long way towards creating more positive work relationships and a more humane and supportive working environment.
Public Praise and Recognition
Public praise has always been highly desirable by employees and it reinforces the value that comes with it. There are many ways to acknowledge employees publicly. From sharing letters of praise with fellow colleagues to posting them on the bulletin board, these gestures prove to be the most powerful way to praise employees. Outstanding leaders will go out of their way to boost the self-esteem of their employees and when they believe in themselves, it is amazing at what they can accomplish.
No matter which method the organizational leaders adopt, the best praise has to be timely, sincere and specific to each individual to be effective. Managers should create time, whether formal or informal, over lunch or after working hours, to thank the employees for their efforts in work.
2.2.2 Information, Support And Involvement
Employees getting information about their jobs, performance and the company’s performance tend to motivate themselves in the emotional and practical level. When information is communicated in a timely and personal manner, the experience will be highly valued. An individual without information cannot take up responsibilities and an individual who is given information has no choice but to take up responsibilities. Nothing creates more self-respect than being included in the decision making process. Involving individuals in the business is the most effective way to create an organization where people want to know more, care more and do the right things. Productivity and performance improve the most when employees have the training, opportunities and authority to participate in decision making.
2.2.3 Autonomy And Authority
One of the top motivators for employees is having autonomy and authority. They create the foundation of trust and respect that employees value so high. It provides them with a sense of independence and freedom to add their own imprint to their work. This freedom fosters employees’ creativity, resourcefulness and best efforts which in turns lead to higher performance and increased employee satisfaction and fulfillment at work. With autonomy and authority, employees feel more confident in taking initiative in their work and more competent that this will pay off and lead to better results and enhanced abilities to take on greater assignments and responsibilities. To tap into the potentials of the employees, micromanaging is a no-no for most. Managers need to give them more room and encourage them to take up more responsibilities. Clear directions and guidelines are necessary to assign authority to individuals. Control management will be another essential key in this instance.
2.2.4 Learning And Career Development
Employees value the opportunities of training and development given by the company. The advantages of training employees includes helping to reinforce desired behavior and to gain skills to improve their marketability. Special tasks can be created for high potentials by assigning them to train others or send them to advanced skill training. Business increasingly recognized that having a workforce that is trained, educated and equipped with the right skills is important to maintaining the great competition in the working industry. Education is an essential bridge between awareness and action and it provides employees with specific tools and techniques to achieve goals. Encouragement and anticipation from the management in the development process of the employees can greatly impact and influence the motivational level of each individual.
2.3 Four Types of Tangible Recognition and Rewards
Tangible forms of recognition and rewards normally possess monetary value and these include cash, vouchers, trophies, food, special privileges and employee services. This section shall discuss about four intangible forms of recognition and rewards.
2.3.1 Outstanding Employee And Achievement Awards
These types of rewards are typically traditional forms of awards and often accompanied by recognition items like trophies, plagues or certificates. Outstanding employee and achievement awards are often selected based on formal process and they tend to be more meaningful when they are chosen by management. Human beings need to be recognized and rewarded for special efforts and awards are tangible proof to show that the management care. When basic compensation is adequate, it takes something extra to motivate people to greater heights and performance. High achievers, especially, love to be measured. Otherwise, they cannot prove to themselves that they are achieving.
2.3.2 Cash, Cash Substitutes And Gift Vouchers
Most employees considered cash bonus a positive and meaningful incentive. Extra spending money comes in handy for unplanned holidays, family planning or any unexpected financial needs. Although cash offers maximum flexibility to employees in term of how money is spent, the problem with giving cash is that it often comes expected. Once spent, it possesses no lasting value as remembrance of achievement. One of the ways to remind the employees of their awards is to let them choose the awards themselves. The two-factor theory by Herzberg (1968, pp. 13) states that money does not motivate employees but only satisfies them. Thus, low-salaried employees may possess a high level of motivation to work if the intrinsic motivators such as responsibility or achievement are high. While the high salaried employees may not be motivated to work if the intrinsic motivators are absent (Beel 2007 pp. 9). Gift vouchers offer a choice to let employees redeem them in a variety of places with flexible dollar amount and expiration dates. Some advantages of cash incentives are that they are desirable, easy to administer and provide an extra boost to a long term program. The disadvantages of cash awards are that they do not have a lasting value, impersonal, and tends to be an expected reward. Money is not going to have the same impact with upper management as it does with lower salaried employees. Nevertheless, everyone still appreciates recognition in any forms.
2.3.3 Nominal Gifts, Merchandise And Food
Almost any type of gifts, merchandise or food can be used as a form of recognition and reward. Gifts and merchandise incentives are desirable and promotable. They have a lasting value and reflect the quality of the recipient’s achievements as well as project a positive image of the company. Merchandise items are not only nice to have but they also help to motivate people to work more efficiently. Departmental luncheons or dinners can link and connect the team together during the sessions and when put in an informal setting, people tends to unwind and loosen up. This is the moment when the team can relax and allows the team head to know more about the members. One reason food is a good motivator is that it provides the achiever with an experience with fellow colleagues and friends. Food is a social gift.
2.3.4 Special Privileges, Perks And Employee Services
Special privileges and perks can accompany other forms of recognition, enhancing the honor of those awards and their desirability. These include assigned parking lots, no executive dining rooms and paid gym membership. These awards can add fun and excitement to the recognition activity for anyone involved. Employee services may include role rotation for a week, washing car for the winner and valet parking for expectant mothers.
To get the most out of tangible recognition and reward, companies should try to personalize the awards and provide a public context when used. Providing a context is a way of connecting the award to a greater meaning to which people can relate. The award can be tied to the organisation’s goals and objectives or the teamwork’s commitment. The simplest way to award the performer is to ask them what they want.
2.4 The Elements Of An Effective Recognition And Reward Program
An effective recognition and reward program recognizes and appreciates the efforts of individuals while taking into account their individual needs, differences and personalities. As a leader, do not assume that the approach of one-size-fits-all works for every companies or divisions. Before planning a recognition and reward program, it is essential to find out what motivates the team members. One of the methods is to develop an Individual Retention Profile in Appendix 1. The collection of the profiles will help understand the preferences of people working for you or with you. The ultimate method of adapting an effective program is to let the staffs choose the rewards they wish to receive for achieving a goal. Getting rewards wrong almost always produces expensive and unwanted results. (Kerr, 2009, pp.2). Another aspect is the variety of the program. Continuous upgrade or varying the activities can make the program interesting and captivating to the staffs to perform better. One example is to change the theme of the challenge rewards every quarterly. They may vary from spa parties to cooking lessons with famous celebrity chefs.
There are two forms of motivation; intrinsic and extrinsic. An effective program consists of both intrinsic and extrinsic motivational tools. Intrinsic motivation belongs to the highest form of motivation. They are basic, essential, comes from the heart, soul and mind. People who are intrinsically motivated do what they are supposed to do with little or no external pressure or influence (Gregory 2001 pp. 165). Extrinsic motivation is inessential and appears to be a kind of bribe. It is also being described as a ‘carrot and stick’ approach. To retain the best talents, the organization needs to offer competitive pay and benefits (Gostick & Elton 2005 pp. 3). However, Sirota et al. (2005, pp.344) prescribes praise over cash when it comes to retaining the best and brightest. People have a basic human need to feel appreciated and recognition programs help meet that need. Prestigious awards that outline the organizational objectives often spur them to strive to the best they can offer. However, not all people will react positively to this type of approach. Staffs whom are intrinsically motivated and have good attitudes normally are motivated simply by good conducive working environment. To them, extrinsic incentive may be just a gimmick.
One of the most important aspects in implementing an effective recognition and rewards program is the involvement of good leadership. Leadership is the compass that keeps people focus and heading in the right direction. A good leader will remove barriers and obstacles and create opportunities to exploit the employees’ potential to its best. If leadership is absent, any amount of cash, incentives or awards will not replace or make up for all the wrong things at the wrong timing. Gabarro et al. (2009, pp.107) affirmed by saying that it is natural to promote your best and brightest, especially when you think they may leave for greener pastures if you do not continually offer them new challenges and rewards.
2.5 The Development Of An Effective Recognition And Reward Program
To develop an effective recognition and reward program, the first step is to understand and comprehend the goals and objectives of the organization. For an effective recognition and reward program to implement and apply onto the pool of talents within the organization, careful considerations and planning have to be well-thought of.
Below are the steps in developing an effective recognition and rewards program :
Step 1: Focus on the desired behavior or goals of the program
Begin with a clear and concise goal, such as improved attendance, loyalty or response time. Ensure that the goals are specific, simple, quantifiable, measurable and obtainable. Highly challenged goals will only complicate things and result in unachievable outcomes. The goals set out need to be fair and reachable for the target group.
Step 2: Select an implementation team
Appoint and gather a group of employees to obtain recommendations from the people who will be affected by the recognition effort. Whenever necessary, engage outside experts for advice. Implement by letting the team members set the goals, determine the performance factors and report any obstacles to improvement. It is also useful to appoint one coordinator for each division, depending on the size of the organization, to provide support and information directly to the team.
Step 3: Outline a strategy
Build and decide on the methodology to be used in this program. Prepare a master program and outline the schedule for the groundwork. Focus on the target group of people involved in this program. Allow adequate planning time and create a specific implementation schedule. Ensure that there is sufficient time to achieve the desired objectives and write down the rules to avoid misunderstandings.
Step 4: Select the type of recognition or reward
Select the rewards from a variety of resources available. It is important that the awards be perceived as being the effort required from the eligible participants. Spend time on the selection of awards with the target group and work within the stipulated budget. It would be a better strategy if the winners can select from a range of prizes.
Step 5: Develop a communication strategy
The communication strategy is the most important yet usually the most overlooked step in the process. Poor communication can lead to distortion and misunderstandings between the said objectives and the meanings set in this program.
Step 6: Implement the program
Kick off the program by getting maximum participation of the target group. Involvement and commitment from the management is critical and it is important to have the top management to convey and introduce the program because communication put across by them normally possesses a certain weightage and influence.
Step 7: Create a meaningful presentation strategy
A presentation strategy is critical to the program’s overall success. The program has to be presented in a manner that it shows appreciation to the awardees and to encourage others to strive for the award. It is important to tell the employees how significant their efforts are to the organization and that their efforts are valued.
Step 8: Improve the program
The team shall continue to evaluate and collect feedbacks from the awardees and coordinators on how to improve the program. Determine whether the program has achieved its objectives and learn from past mistakes. Write an evaluation plan and begin planning for the next program.
2.6 Research Framework
An effective recognition and reward program consists of many factors which include tangible, intangible, intrinsic and extrinsic factors. When an effective recognition and reward program is activated and implemented, motivation levels of the staffs increase. This, in turn, results in improved performance and lower turnover rate.
Chapter 3 : Methodology
There is a variety of research methods used in business management findings. This chapter aims to understand which type of research methods to be used in this study. In the next section, two types of research methods will be described and Section 3.3 will discuss on the rationale for choosing these methods in this study. Section 3.4 describes the research design and the sampling population used. Ethical issues and limitations of the research process are discussed in Section 3.5 and 3.6 respectively. The last section summarises the methodology for this survey.
3.2 Types Of Research Methods
Although there are various types of research methods available and accessible in the business research process, only two types of approaches shall be discussed. Quantitative and qualitative approaches (Robert et al. 2001) will be used in this research as this study involves human relationship management. Quantitative approach is a formal, objective and systematic process on which numerical data are utilized to obtain information (Saunders et al. 2007, pp.151). It is mainly used in any data collection technique and data analysis process that requires numeric data. They come in different forms eg. questionnaires, graphs and statistics.
Quantitative data can be divided into two types: Continuous data and Discrete data. Continuous data refers to data for which any value within a sequential range of values is possible. Discrete data refers to data for which only certain fixed values are possible.
Qualitative data is used mainly for any data collection technique and data analysis process that generates or uses non-numerical data. This includes interview, case study and video clips. Qualitative data can be categorized into nominal and ordinal data (Smailes & McGrane 2000, pp.2). Nominal data refers to data which can be divided into non-measurable named categories eg, dollars. Ordinal data refers to data where numbers can act as labels or ranks eg. positioning.
3.3 Rationale for Choice Of Research Methods
In this research, questionnaire comprises of both qualitative and quantitative approaches are used. Talent management is a strategic business challenge to most companies and the value of outstanding talent will continue to increase as the knowledge economy continues to develop. This questionnaire is targeted at a group of selected talent whereby time may be an issue. Thus, structured interviews using questionnaires based on predetermined and standardized set of questions are used to determine the chosen answers to shorten the survey timeframe.
3.4 Research Design
3.4.1 Instrument Design
The first part of the survey hands out the Individual Retention Profile (Appendix 1) for demographic and individual information. The latter part of the assessment distributes questionnaires equipped with closed questions (Appendix 2).
The purpose of this questionnaire is to find out the satisfaction, contentment and fulfillment that talents desired in their organization. Because of the busy schedule during the financial period of the company, the questionnaire uses closed questions rather than open questions. This study requires participants to choose from a pre-existing set of answers, ranking scale options and multiple choices with the option of ‘Other’. Saunders et al. (2007, pp.374) refer to closed question as closed-ended question or forced-choice questions whereby the respondent is instructed to choose from a number of alternative answers provided. This method is usually quicker and easier to administer and answer, as they require minimal writing. List question in this survey offer the participants a list of responses they can choose from. The list of answers has to be clear and meaningful to the respondents (Saunders et al. 2007, pp.375).
Data collected from the questionnaires were analysed using Excel program and a frequency table is constructed to find out the responses of the variables. The findings are finally transformed into percentage form rounded up or down to the nearest whole number. Please refer to Appendix 2 for the questionnaire and answers.
The questionnaire was conducted during the month of March 2010 targeted at a group of 200 talents from a 4000-staff strength financial and banking institution. These employees have been selected under the talent scheme by the management and surveys were sent to them via email or by hand. The sample characteristics of the respondents group of 159 include 55% female and of minimum executive level.
3.5 Ethical Issues
The target group of participants belongs to a special group of staffs iden
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