PROJECT REPORT On Employee Retention

PROJECT REPORT
ON
“EMPLOYEE RETENTION IN PRIVATE SECTOR”
SUBMITTED IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
AWARD OF THE DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION
ACADEMIC SESSION (2009 – 2011)
NATIONAL INSTITUTE OF TECHNOLOGY
(Institute Of National Importance)
Kurukshetra-136119
SUBMITTED TO: SUBMITTED BY:

Dr.P.J.Philip Neha Sharma
Head of Department Roll No.-309383
D.B.A.
Employee Retention In Private sector
DECLARATION
This to certify that the project report entitled “Employee Retention In Private Sector” is
done by me is an authentic work carried out for the partial fulfillment of the requirements for
the award of the degree Masters Of Business Administration, under the guidance of Dr.
Kranti Walia. The matter embodied in this project work has not been submitted earlier for
award of any degree to the best of my knowledge and belief.
Student sign:
Neha Sharma
309383
MBA
N.I.T. KURUKSHETRA
NIT KURUKSHETRA
ACKNOWLEDGEMENT
A project report is the result of not only hard work of the student but also a symbol of
guidance, encouragement and help given by many people.
This is actually a teamwork done by many people including research guide, parents and my
brother.So before presenting the work I would like to serve my sincere regards and thanks to
these people.
I would like to give special thanks to Dr.Kranti Walia for constant guidance and
encouragement throughout.
With special regards I sincerely submit my heartiest devotion to my parent and friends who
provided me with the time, support and inspiration which are very much needed to prepare
this report.
NEHA SHARMA
MBA 4th Semester
2009-2011
NIT KURUKSHETRA
NIT KURUKSHETRA
CONTENTS
SR.NO TOPIC PAGE NO
1. Introduction 2
2. Plan Of The Study 30
3. Research Methodology 33
4. Limitations Of The Study 35
5. Data Analysis And Interpretation 36
6. Findings 52
7. Suggestions 56
8. Recommendations 58
9. Conclusion 60
10. Questionnaire 63
11. Bibliography 65
NIT KURUKSHETRA
ABSTRACT
Employee retention is a process in which the employees are encouraged to remain with the
organization for the maximum period of time or until the completion of the project.
Employee retention is beneficial for the organization as well as the employee. Employees
today are different. They are not the ones who don’t have good opportunities in hand. As
soon as they feel dissatisfied with the current employer or the job, they switch over to the
next job. It is the responsibility of the employer to retain their best employees. If they don’t,
they would be left with no good employees. A good employer should know how to attract
and retain its employees.
Most employees feel that they are worth more than they are actually paid. There is a natural
disparity between what people think they should be paid and what organizations spend in
compensation. When the difference becomes too great and another opportunity occurs,
turnover can result. Pay is defined as the wages, salary, or compensation given to an
employee in exchange for services the employee performs for the organization. Pay is more
than "dollars and cents;" it also acknowledges the worth and value of the human contribution.
What people are paid has been shown to have a clear, reliable impact on turnover in
numerous studies.
Employees comprise the most vital assets of the company. In a work place where employees
are not able to use their full potential and not heard and valued, they are likely to leave
because of stress and frustration. In a transparent environment while employees get a sense of
achievement and belongingness from a healthy work environment, the company is benefited
with a stronger, reliable work-force harbouring bright new ideas for its growth Blog Online
And Earn Money.
NIT KURUKSHETRA
INTRODUCTION
NIT KURUKSHETRA
INTRODUCTION
HUMAN RESOURCE MANAGEMENT
Human Resource Management (HRM) is the strategic and coherent approach to the
management of an organization's most valued assets – the people working there, who
individually and collectively contribute to the achievement of the objectives of the business.
The terms "human resource management" and "human resources" (HR) have largely replaced
the term "personnel management" as a description of the processes involved in managing
people in organizations. Human Resource Management is evolving rapidly. Human Resource
Management is both an academic theory and a business practice that addresses the theoretical
and practical techniques of managing a workforce.
The Human Resources Management (HRM) function includes a variety of activities and key
among them is deciding what staffing needs exist and whether to use independent contractors
or hire employees to fulfill these needs; recruit and train the best employees, ensure they are
high performers; dealing with performance issues; and ensuring the personnel and
management practices conform to various regulations. Activities also include managing the
approach to employee benefits and compensation, employee records and personnel policies.
Usually, small businesses (for profit or non-profit) have to carry out these activities
themselves because they cannot yet afford part or full-time help. However, they should
always ensure that employees have and are aware of – personnel policies which conform to
current regulations. These policies are often in the form of employee manuals which all
employees must have.
HRM is seen by practitioners in the field as a more innovative view of workplace

management than the traditional approach. Its techniques force the managers of an enterprise
to express their goals with specificity – so that they can be understood and undertaken by the
workforce – and to provide the resources needed for them to successfully accomplish their
assignments. As such, HRM techniques, when properly practiced, are expressive of the goals
and operating practices of the enterprise overall. HRM is also seen by many to have a key
role in risk reduction within organizations.
NIT KURUKSHETRA
There is a long-standing argument about where HR-related functions should be organized

into large organizations, e.g., "Should HR be in the organization development department or
the other way around?"
The HRM function and HRD profession have undergone tremendous change over the past 20
to 30 years. Many years ago, large organizations looked to the "Personnel Department"
mostly to manage the paperwork around hiring and paying people. More recently,
organizations have begun to consider the "HR Department" as playing a major role in
staffing, training, and helping manage people so that the people and the organization are
performing at maximum capability in a highly fulfilling manner.
EMPLOYEE RETENTION
Effective employee retention is a systematic effort by employers to create and foster an

environment that encourages current employees to remain employed, by having policies and
practices in place that address their diverse needs. A strong retention strategy, therefore,
becomes a powerful recruitment tool.
Retention of key employees is critical to the long-term health and success of any
organization. It is a known fact that retaining the best employees ensures customer
satisfaction, increased product sales, satisfied colleagues and reporting staff, effective
succession planning, and deeply embedded organizational knowledge and learning. Employee
retention matters as organizational issues such as training time and investment, lost
knowledge, insecure employees, and a costly candidate search are involved. Hence, failing to
retain a key employee is a costly proposition for an organization. Various estimates suggest
that losing a middle manager in most organizations costs up to five times his salary.
Intelligent employers always realize the importance of retaining the best talent. Retaining
talent has never been so important in the Indian scenario; however, things have changed in
recent years. In prominent Indian metros at least, there is no dearth of opportunities for the
best in the business, or even for the second or third best. Retention of key employees and
treating attrition troubles has never been so important to companies.
In an intensely competitive environment where HR managers are poaching from each other,
organizations can either hold on to their employees tight or lose them to competition. For
gone are the days when employees would stick to an employer for years for want of a better
NIT KURUKSHETRA
choice. Now, opportunities are abound. In fact, some reports suggest that attrition levels in IT
companies are as high as 40 percent. Though BPO industry shoots ahead at 40 to 50 percent
a year, it is now losing 35 to 40percent of its 350,000-odd employees as well.
In India, there are few sectors where the attrition level is much larger compared to other
sectors, for example, IT sector and BPO; whereas, there are organizations like Air India,
HAL, DRDO, BARC where the attrition is much lower nearly 5% or less than that. Clearly,
the only way out is to develop appropriate effective retention strategies.
Employee turnover is one of the largest though widely unknown costs an organization faces.
While companies routinely keep track of various costs such as supplies and payroll, few take
into consideration how much employee turnover will cost them: Ernst & Young estimates it
costs approximately $120,000 to replace 10 professionals. According to research done by
Sibson & Company, to recoup the cost of losing just one employee a fast food restaurant
must sell 7,613 combo meals at $2.50 each. Employee turnover costs companies 30 to 50% of
the annual salary of entry-level employees, 150% of middle-level employees, and up to 400%
for upper level, specialized employees. Now that so much is being done by organizations to
retain its employees. Why is retention so important? Is it just to reduce the turn over costs ?
Well, the answer is a definite no. It’s not only the cost incurred by a company that
emphasizes the need of retaining employees but also the need to retain talented employees
from getting poached.
Retention involves five major things:
 Compensation
 Environment
 Growth
 Relationship
 Support
NIT KURUKSHETRA
Compensation constitutes the largest part of the employee retention process. The
employees always have high expectations regarding their compensation packages.
Compensation packages vary from industry to industry. So an attractive compensation
package plays a critical role in retaining the employees. Compensation includes salary
and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc. While
setting up the packages, the following components should be kept in mind:
 Salary and monthly wage: It is the biggest component of the compensation

package. It is also the most common factor of comparison among employees.
It includes:
· Basic wage
· House rent allowance
· Dearness allowance
· City compensatory allowance
Salary and wages represent the level of skill and experience an individual has.
Time to time increase in the salaries and wages of employees should be done.
And this increase should be based on the employee’s performance and his
contribution to the organization.
Bonus: Bonuses are usually given to the employees at the end of the year or on
a festival. Economic benefits: It includes paid holidays, leave travel
concession, etc.
Long-term incentives: Long term incentives include stock options or stock
grants. These incentives help retain employees in the organization's start up
stage.
 Health insurance: Health insurance is a great benefit to the employees. It saves

employees money as well as gives them a peace of mind that they have somebody
NIT KURUKSHETRA
to take care of them in bad times. It also shows the employee that the organization
cares about the employee and its family.
 After retirement: It includes payments that an Employee gets after he retires like
EPF (Employee Provident Fund) etc.
 Miscellaneous compensation: It may include employee assistance programs (like

psychological counselling, legal assistance etc), discounts on company products,
use of a company cars, etc.
Environment
It is not about managing retention. It is about managing people. If an organization

manages people well, employee retention will take care of itself. Organizations should
focus on managing the work environment to make better use of the available human
assets. People want to work for an organization which provides
 Appreciation for the work done
 Ample opportunities to grow
 A friendly and cooperative environment
 A feeling that the organization is second home to the employee
Organization environment includes

 Culture
 Values
 Company reputation
 Quality of people in the organization
 Employee development and career growth
 Risk taking
 Leading technologies
NIT KURUKSHETRA
 Trust
Types of environment the employee needs in an organization
 Learning environment
It includes continuous learning and improvement of the individual, certifications
and provision for higher studies, etc.
 Support environment
Organization can provide support in the form of work-life balance. Work life
balance includes:
 Flexible hours
 Telecommuting
 Dependent care
 Alternate work schedules
 Vacations
 Wellness
 Work environment
It includes efficient managers, supportive co-workers ,challenging work,
involvement in decision-making, clarity of work and responsibilities, and
recognition. Lack or absence of such environment pushes employees to look for
new opportunities. The environment should be such that the employee feels
connected to the organization in every respect.
NIT KURUKSHETRA
Growth and Career Growth and development
are the integral part of every individual’s career. If an employee can not foresee his
path of career development in his current organization, there are chances that he’ll
leave the organization as soon as he gets an opportunity. The important factors in
employee growth that an employee looks for himself are:
 Work profile
The work profile on which the employee is working should be in sync with his
capabilities. The profile should not be too low or too high.
 Personal growth and dreams

Employees responsibilities in the organization should help him achieve his
personal goals also. Organizations can not keep aside the individual goals of
employees and foster organizations goals. Employees’ priority is to work for
themselves and later on comes the organization. If he’s not satisfied with his
growth, he’ll not be able to contribute in organization growth.
 Training and development

Employees should be trained and given chance to improve and enhance their
skills. Many employers fear that if the employees are well rained, they’ll leave the
organization for better jobs. Organization should not limit the resources on which
organization’s success depends.
These trainings can be given to improve many skills like:
Communications skills
 Technical skills
 In-house processes and procedures improvement related skills or customer
satisfaction related skills
 Special project related skills
NIT KURUKSHETRA
Need for such trainings can be recognized from individual performance reviews,
individual meetings, employee satisfaction surveys and by being in constant touch
with the employees.
Importance of Relationship in Employee Retention Program Sometimes the
relationship with the management and the peers becomes the reason for an employee
to leave the organization. The management is sometimes not able to provide an
employee a supportive work culture and environment in terms of personal or
professional relationships. There are times when an employee starts feeling bitterness
towards the management or peers.
This bitterness could be due to many reasons. This decreases employee’s interest and
he becomes demotivated. It leads to less satisfaction and eventually attrition. A
supportive work culture helps grow employee professionally and boosts employee
satisfaction.
Relationship
To enhance good professional relationships at work, the management should

keep the following points in mind.
Respect for the individual: Respect for the individual is the must in the
organization.
 Relationship with the immediate manager

A manger plays the role of a mentor and a coach. He designs and plans work
for each employee. It is his duty to involve the employee in the processes of
the organization. So an organization should hire managers who can make and
maintain good relations with their subordinates.
NIT KURUKSHETRA
 Relationship with colleagues

Promote team work, not only among teams but in different departments as
well. This will induce competition as well as improve the Relationship among
colleagues.
 Recruit whole heartedly

An employee should be recruited if there is a proper place and duties for him
to perform. Otherwise he’ll feel useless and will be dissatisfied. Employees
should know what the organization expects from them and what their
expectation from the organization is. Deliver what is promised. Promote an
employee based culture: The employee should know that the organization is
there to support him at the time of need. Show them that the organization cares
and he’ll show the same for the organization. An employee based culture may
include decision making authority, availability of resources, open door policy,
etc.
 Individual development
Taking proper care of employees includes acknowledgement to the
employee’s dreams and personal goals. Create opportunities for their career
growth by providing mentorship programs, certifications, educational courses,
etc.
 Induce loyalty
Organizations should be loyal as well as they should promote loyalty in the
employees too. Try to make the current employees stay instead of recruiting
new ones.
NIT KURUKSHETRA
Support
Support Lack of support from management can sometimes serve as a reason

for employee retention. Supervisor should support his subordinates in a way so
that each one of them is a success. Management should try to focus on its
employees and support them not only in their difficult times at work but also
through the times of personal crisis. Management can support employees by
providing them recognition and appreciation. Employers can also provide
valuable feedback to employees and make them feel valued to the
organization. The feedback from supervisor helps the employee to feel more
responsible, confident and empowered. Top management can also support its
employees in their personal crisis by providing personal loans during
emergencies, childcare services, employee assistance Programs, counselling
services, etc.
Employers can also support their employees by creating an environment of
trust and inculcating the organizational values into employees.
Thus employers can support their employees in a number of ways as follows:

 By providing feedback
 By giving recognition and rewards
 By counselling them
 By providing emotional support
NIT KURUKSHETRA
THE IMPORTANCE OF RETAINING EMPLOYEES
The challenge of keeping employees, its changing face has stumped managers and business
owners alike. How do you manage this challenge? How do you build a workplace that
employees want to remain with and outsiders want to be hired into? Successful managers and
business owners ask themselves these and other questions because, simply put, employee
retention matters.
High turnover often leaves customers and employees in the lurch; departing employees take a
great deal of knowledge with them. This lack of continuity makes it hard for the
organizations to meet their goals and serve customers well. Replacing employee costs money.
The cost of replacing an employee is estimated at up to twice the individual’s annual salary
(higher for positions based on their level within the inter-organizational hierarchy, such as
middle management) and this does not even include the cost of lost knowledge.
Recruiting employees consumes a great deal of time and effort, much of it futile. There is not
just one organization out there vying for qualified employees, and job searchers make
decisions based on more than the sum of salary and benefits.
Bringing employees up to speed takes even more time and when an organization is short-
staffed, they often need to put in extra time to get the work done.
NIT KURUKSHETRA
The 3 R’s OF EMPLOYEE RETENTION
To keep employees and keep their satisfaction levels high, any organization needs to
implement each of the three R’s of employee retention: respect, recognition, and rewards.
Respect is esteem, special regard, or particular consideration given to people. As the pyramid
shows, respect is the foundation of keeping your employees. Recognition and rewards will
have little effect if you do not respect employees.
Recognition is defined as “special notice or attention” and “the act of perceiving clearly.”
Many problems with retention and morale occur because management is not paying attention
to people’s needs and reactions.
Rewards are the extra perks you offer beyond the basics of respect and recognition that make
it worth people’s while to work hard, to care, to go beyond the call of duty. While rewards
represent the smallest portion of the retention equation, they are still an important one.
You determine the precise methods you choose to implement the three R's, but in general,
respect should be the largest component of your efforts.
Without it, recognition and rewards seem hollow and have little effect – or they have
negative effects. The magic truly is in the mix of the three. When implemented, the “3 R's”
approach yields reduced turnover and the following benefits:
NIT KURUKSHETRA
 Increased productivity,
 Reduced absenteeism,
 A more pleasant work environment (for both employees and management/employer),
 Improved profits.
Furthermore, an employer who implements the three R's will create a hard-to-leave
workplace, one known as having more to offer employees than other employers. It becomes a
hard-to-leave workplace – one with a waiting list of applicants for any position that becomes
available – purposefully, one day at a time.
NIT KURUKSHETRA
INTRODUCING THE RETHINKING RETENTION MODEL
It's time to rethink retention. We all wish turnover solutions were as simple as
tweaking co-pays for employees' health insurance, but unfortunately retention is more
vexing and much more complex. Rather than pulling on one rope, it requires pulling
many strings.
Here's a graphic representation of an organization-wide model for keeping your best

workers longer. Follow this map and employee retention will improve and drive all
other key metrics in your favour.
NIT KURUKSHETRA
THE PRINCIPLES OF THE RETHINKING RETENTION MODEL
There are three basic principles at the foundation of retention.
Point 1: Employees quit jobs because they can. Workplace demographics

leave employees with too many job choices, even in down economies. Avoid
the dead-end road of basing retention solutions on exit surveys and other
reasons you believe employees leave. Instead, build a proactive solution you
can control.
Point 2: Employees stay for things they get uniquely from you. Who are
you as an employer? What does your organization offer that others do not?
Identify it and build hiring, training, and all other processes on the things that
are uniquely you.
Point 3: Supervisors build unique relationships that drive retention...or

turnover.Supervisory relationships are unique levers that deeply impact
employees' stay/leave decisions. Some employees stay for supervisors, some
leave because of them, and some just avoid them.
THE STRATEGIES OF THE RETHINKING RETENTION MODEL
Once you've grasped the principles, the following strategies will help you improve
retention, productivity, and all other important metrics.
Point 4: Hold supervisors accountable for achieving retention

goals. Supervisors won't achieve any other goal you assign them if they lose
their best performers, so make them accountable and give them "skin in the
game" for retention.
Point 5: Develop supervisors to build trust with their
teams. Communication, recognition, and development all fall behind trust.
Who values information and praise if you don't believe it?
NIT KURUKSHETRA
Point 6: Narrow the front door to close the back door. New hires must
align with who you are—your jobs, values, and standards—and give clear
indications they intend to stay.
Point 7: Script employees' first 90 days. First impressions predict how long

employees stay, so early activities must be scripted to present your company
in ways that are both positive and truthful.
Point 8: Challenge policies to ensure they drive retention. Blow the dust

off last decade's thinking and drive your rules toward retention.
Point 9: Calculate turnover's cost to galvanize retention as a business

issue. Dollars speak louder than numbers and percents.
Point 10: Drive retention from the top, because executives have the
greatest impact on achieving retention goals. Think about how your
company manages sales, service, quality, and safety and then build those same
methods for retention.
The core ingredient of the Rethinking Retention model is the shared
responsibility of operations management and staff support. In most
organizations, operations management drives sales, service, quality, and
safety, with various staff departments providing tracking, training, and other
services. With retention, however, HR tends to manage on its own.
Making people management work requires organizations to run on all cylinders, to

involve all who can help. Each company has developed successful, shared-
responsibility models for managing sales and other key initiatives, so why not
replicate these ways with retention?
Driving retention processes from top to bottom is the key. Savvy organizations
manage retention with the appropriate amount of accountability and other operations-
driven tactics to be fully effective.
We looked at the types of tops-down processes our clients usually had in place before
our engagements with them. While a few of these organizations provided coaching for
NIT KURUKSHETRA
supervisors who failed to keep good workers, no retention processes for

accountability, recognition, consequences, or skill-specific training were in place.
And most of the retention coaching was provided by HR instead of the supervisor's
manager.
Organizations that manage retention in that way turn to HR to solve it. The result is
usually programs such as career classes or benefits like vision care.
IMPLEMENTATION OF MIS IN HRM
NIT KURUKSHETRA
APPLICATIONS OF RETENTION STRATEGY
Applicability of Unique organizational structure strategy
Chart No 1
Employees who believe positional benefits

will give job satisfaction (A)
(A)
Dissatisfied employees (B)

(C)
(B)
(B)
(D)
© Satisfied employees ©
Employees who believe various benefits will

give job satisfaction (d)
(D)
Indifferent to satisfaction level(E)
The outer circle shows the number of employees who believe that various benefits provided
by the company will give job satisfaction and this satisfaction will result in employee
retention
The top inner circle shows the number of employees who believe positional benefits will give
job satisfaction. The position title shows the authorities and responsibilities in the
organization structure. Employees feel that more authority and more responsibility mean
more recognition from the society. This attitude triggers the employee to look for position
title which represents more authority and responsibility.
The small inner left and right circles represent number of dissatisfied and satisfied employees
in the organization respectively. If the ratios between satisfied and dissatisfied employees
NIT KURUKSHETRA
inside and outside the top inner circle are different, it shows that job satisfaction level is
depends on the employee belief on position title
The exhibit also shows to what extent the organizational structure contribute to the employee
inequity. The unique organizational structure strategy can solve employee attrition in the
shaded area. Larger shaded area in exhibit No1.1 shows greater percentage of applicability of
the strategy.
Applicability of Variable benefit structure strategy
Chart No 2
Periodic change in existing benefit structure

will give job satisfaction (A)
(A)
Dissatisfied employees (B)
(B)
(B)
(D) (C)
Satisfied employees (C)
© Various benefit structures will give job
satisfaction (D)
(D)
Indifferent to satisfaction level(E)
The outer circle shows the number of employees who believe that various benefit structures
provided by the company will give job satisfaction and this satisfaction will result in
employee retention
The top inner circle shows the number of employees who believe Periodic change in existing
type of benefits will improve the job satisfaction and motivation to continue the job in the
same company.
The small inner left and right circles represent number of dissatisfied and satisfied employees
in the organization respectively. If the ratios between satisfied and dissatisfied employees
NIT KURUKSHETRA
inside and outside the top inner circle are different, it shows that job satisfaction level is
depends on the employee’s belief on periodic change in existing type of benefits.
The exhibit also shows to what extent the organizational structure contribute to the employee
inequity. The variable benefit structure strategy can solve employee attrition in the shaded
area. Larger shaded area in exhibit shows greater percentage of applicability of the strategy.
Applicability of Internal advertisement strategy
The Important factors to retain the employees in an organization are; conducive

organizational culture, emotional bond with organization and awareness of benefits receiving
from the organization. These factors can be improved by effective communication. The
important factors for implementing such an advertisement strategy are:
1. Presence of internal communication channels.

2. Frequency of internal communication
3. Accessibility to internal communication channels
High Attrition Rate: A Big Challenge
Attrition: A reduction in the number of employees through retirement, resignation or death.
NIT KURUKSHETRA
Attrition rate: The rate of shrinkage in size or number.
Introduction:
In the best of worlds, employees would love their jobs, like their coworkers, work
hard for their employers, get paid well for their work, have ample chances for
advancement, and flexible schedules so they could attend to personal or family needs
when necessary. And never leave.
But then there's the real world. And in the real world, employees, do leave, either
because they want more money, hate the working conditions, hate their coworkers,
want a change, or because their spouse gets a dream job in another state. So, what
does all that turnover cost? And what employees are likely to have the highest
turnover? Who is likely to stay the longest?
The study also revealed that the top employee retention strategy being used by the
organizations in Asia was to pay above the industry standards, providing opportunities to
employees to learn new skills, and provide work life balance.

From employee point of view
NIT KURUKSHETRA

According to the employees, attrition at the professional/supervisor/technical level was the

highest (39%) and lowest at the senior/top management level (1% approximately).
Attrition Rates in Different Sectors In India
NIT KURUKSHETRA
All the sectors are facing attrition.
CAUSES AND REASONS FOR HIGH ATTRITION
NIT KURUKSHETRA
1. Expectations not met:
Expectations play a large part in determining whether an employee is satisfied or

dissatisfied with the current state of affairs.
On joining the firm the individual will have a range of expectations covering areas
such as the style of management, the working hours, holidays, pay, bonus and so on.
It is not unusual for employees to leave within the first six months when they discover
that things aren’t quite as they imagined they would be.
Their expectations may have been unrealistic from day one, but each departure is yet
more disruption, harming productivity, adding extra unnecessary costs and making it
more difficult to reach goals for sales, revenue and profitability.
Few firms seem to appreciate the importance of expectations. They don’t ask
candidates about their expectations, giving them the opportunity to select someone
who is unlikely to be disappointed, and therefore, more likely to stay.
2. Mismatch between the person and the role
Employees who find themselves in roles that do not suit their individual strengths,
tend not to stay around that long.
A productive employee gets promoted into a position that requires skills that they do
not possess. A role that exposes their weaknesses, and as a result, a role that they do
not enjoy.
Faced with the prospect of having to spend many months, perhaps years, in a job that
is a struggle, a job that they find difficult, a job that is a mismatch for their specific
talents, most of them choose to leave the company and go.
3. Mismatch between person and the culture of the firm
It is not so much that there is a single ideal culture, more that cultures vary, and as
many departures show, not everyone is likely to be ideally suited to culture of your
firm.
Some workplaces are high pressured, fast paced, dynamic. Ideal for people who thrive
on adrenaline, who enjoy this tempo, constantly being on the go. Others are caring,
NIT KURUKSHETRA
emotional, long discussions, shared views. Endless dialogue before action is taken.
Everyone’s opinion counts.
Put an employee in a culture that suits their temperament and they feel at home. It is
an environment in which they can function to the best of their abilities. But put an
employee in a firm whose culture does not suit their personality, their style or their
approach and it rarely works. They don’t settle, they under-perform, they miss the feel
of previous employers where they were able to contribute more. They leave.
4. Insufficient opportunities for growth and advancement
Employees want to make progress, to get ahead. They want to make that next step up
the career ladder. They think about where they would like to be in 5 years time, in 10
years time.
Their loyalty is largely to themselves, to make the most out of the natural talents, the
skills, and determination they possess.
They recognize the importance of building new skills, refining current ones, getting
new experiences. If the opportunities aren’t available with their current employer,
they will find look elsewhere.
5. Insufficient recognition or appreciation
The Employees that don’t receive adequate recognition for their contribution, that get
little appreciation for their efforts, start to wonder why they bother. And it doesn’t
take much to tempt them away.
Employees that did not feel valued, that felt that their efforts, their hard work, was not
appreciated. That their achievements, their contribution to the success of the business,
was not recognised.
Employees want to feel valued; as though their role is important, as though the
business needs them. They want someone to say thank you. Thanks for that piece of
work, thanks for helping out in a crisis, thanks for dealing with that problem.
6. Problems with direct manager
NIT KURUKSHETRA
The state of the relationship between an employee and their direct manager goes a
long way towards determining whether they stay or leave.
Some employees stay far longer than might otherwise be expected because of the
relationship they have with their supervisor. Others leave jobs in the first few months
because they sense their manager is not someone that brings the best out of them.
And they need to get away. Because the daily challenge of dealing with someone they
dislike, someone that lacks basic people skills, is just too much to bear.
Poor relationships between employees and their managers are one of the most
common reasons for employee turnover.
7. Dissatisfaction with pay
Not receiving a fair salary, a fair pay rise, a fair bonus. Dissatisfaction with financial
rewards is complex.
Much of the dissatisfaction is due to comparisons. A previously adequate salary starts

to feel insufficient when you have just learnt that a new arrival is receiving a higher
wage for performing a similar role.
Salaries rarely remain a secret. The information leaks out. If it isn’t fair, if it isn’t
equitable, if the procedure for determining pay settlements is tainted, employees
become dissatisfied. And in time many of them leave.
8. Stress
The stress of work, the stress from working long hours, the stress related to pressure
from above; employees can take only so much.
Stress drives employees into the arms of alternative employers. They simply want to
get away from the workplace, from the people involved, from the firm.
A stressful workplace is rarely a productive one. Attrition is high, people don’t

matter; there will always be someone else to fill the vacancy. And in time they too
will probably leave for much the same reasons.
Stressful work environments tend to be high turnover environments. If there is an

alternative, people take it.
NIT KURUKSHETRA
9. Lack of work life balance
Employees have responsibilities to their employer, to their families, to their friends.

There are times when the demands of work require extra hours, staying late to get
things finished, working during weekends to meet deadlines.
For some employees the demands of work are no longer compatible with the needs of
their family, the needs that exist beyond the workplace. Perhaps they coped better
when they were younger, before they got married, before they had a family. But now
the arrangement just isn’t practical.
They need a better balance. They need to have time for themselves. Time to take care
of loved ones. Free time not devoted to work.
10. Loss of confidence in the firm, particularly leadership.
Confidence matters. Companies go bust; you just need to read the papers, watch the
news, to realize the risk involved.
When employees lose confidence in the firm’s leadership they head towards the exit
door.
They know that confidence matters, that seemingly invincible companies can collapse
in days, if not hours. They don’t want to be left without a job, should the company go
under, or be taken over.
Other factors for Retention being a challenge are:
 A robust economy
 Shift in how people view their careers
 Changes in the unspoken "contract" between employer and employee
 Corporate cocooning
 A new generation of workers
 Changes in social mores
NIT KURUKSHETRA
PLAN OF THE STUDY
NIT KURUKSHETRA
Objectives Of The Study
A project will haywire if it does not have its objectives clear. If one knows the goal, only then
the right path can be decided and with disciplined work and positive attitude achieving these
objectives will be a catwalk.
Therefore, we also set down the objectives before starting the project, which are as follows:
1. To assess the employee retention strategies of the two telecommunication
companies.
2. To analyze the variance in the employee retention strategies of the two
telecommunication companies.
NIT KURUKSHETRA
FOCUS OF THE STUDY
There are several problems faced by the employees that become a challenge for HR as
how to manage problems and to motivate employees for not leaving the organization. The
study says that the attrition in Private Sector has become the major issue. The focus of the
problem is that how HR can retain employees in this industry. The study will identify the
cause and need to fulfil the requirements of the employee.
NIT KURUKSHETRA
RESEARCH METHODOLOGY
NIT KURUKSHETRA
RESEARCH METHODOLOGY
The steps in which the project was carried out was by collecting both the primary and the
secondary data. The secondary data was collected first. This collection of data was done by
means of reading various materials such as books, journals, magazines, newspaper articles,
etc.; looking for similar content online (i.e., on the Internet).
The project work was, therefore, carried out on the basis of the data collected therefore.
Descriptive & Exploratory Research Methodology is adapted for this project work.
The present study is descriptive in nature, as it seeks to discover ideas and insight to bring out
new relationship. Research design is flexible enough to provide opportunity for considering
different aspects of problem under study. It helps in bringing into focus some inherent
weakness in enterprise regarding which in depth study can be conducted by management.
 Data Collection-sources and methods
Primary data: Primary data has been collected by the following methods:
 Questionnaire
Secondary data: Secondary data has been collected by the following methods:
 Websites
 HR books
Sample size
10 employees of Telecommunication companies Ericsson and Huawei each.
NIT KURUKSHETRA
LIMITATIONS OF THE STUDY
 Time is very short for research, so this is very difficult to get the knowledge about
everything.
 Since the filling of questionnaire and interviews need special attention so may be
the employees are less interested in entertaining.
 The information was collected through the questionnaire is subject to willingness
of the respondent to respond.
NIT KURUKSHETRA
DATA ANALYSIS AND INTERPRETATION
NIT KURUKSHETRA
DATA ANALYSIS AND INTERPRETATION
Ques. Your management comes forward when you are facing with critical situation.
Interpretation:
t-Test: Two-Sample Assuming Equal Variances
Variable
1 Variable 2
Mean 3 3
Variance 0.888889 0.444444444
Observations 10 10
Pooled Variance 0.666667
Hypothesized Mean Difference 0
Df 18
t Stat 0
P(T<=t) one-tail 0.5
t Critical one-tail 1.734064
P(T<=t) two-tail 1
t Critical two-tail 2.100922
NIT KURUKSHETRA
Ques. You work over-time very often.
Interpretation:
Variable Variable
1 2
Mean 3 2.8
Variance 2.222222 1.511111
Observations 10 10
Df 18
t Stat 0.327327
P(T<=t) two-tail 0.747197
NIT KURUKSHETRA
Ques. Employee work loads are distributed fairly.
Interpretation:
Variable Variable
1 2
Mean 3.6 2.6
Variance 0.711111 0.266667
Observations 10 10
Df 18
t Stat 3.198011
NIT KURUKSHETRA
Ques. Employee participation in management is encouraged here.
Interpretation:
Variable Variable
1 2
Mean 3.4 2
Variance 1.6 0.888889
Observations 10 10
Df 18
t Stat 2.806243
NIT KURUKSHETRA
Ques. Work-life balance is supported by this organization.
Interpretation:
Variable Variable
1 2
Mean 3.4 2.8
Variance 2.488889 0.622222
Observations 10 10
Df 18
t Stat 1.075706
NIT KURUKSHETRA
Ques. Better infrastructure amenities are available in this organization to do your job well.
Interpretation:
Variable Variable
1 2
Mean 4.4 3
Variance 0.711111 0.444444
Observations 10 10
Df 18
t Stat 4.118439
NIT KURUKSHETRA
Ques. Recreation activities are conducted very often in this organization.
Interpretation:
Variable
Variable 1 2
Mean 3.4 3.8
Variance 0.711111 0.622222
Observations 10 10
Df 18
t Stat -1.09545
NIT KURUKSHETRA
Ques. You have opportunities to learn and grow.
Interpretation:
Variable Variable
1 2
Mean 4.2 4.2
Variance 0.622222 0.177778
Observations 10 10
Pooled Variance 0.4
Df 18
t Stat 0
P(T<=t) two-tail 1
NIT KURUKSHETRA
Ques. Interpersonal relationships are encouraging in this organization.
Interpretation:
Variable Variable
1 2
Mean 4 3.8
Variance 0 0.177778
Observations 10 10
Df 18
t Stat 1.5
NIT KURUKSHETRA
Ques. The welfare facilities provided by this organization are satisfactory.
Interpretation:
Variable Variable
1 2
Mean 4 4
Variance 0.444444 0.444444
Observations 10 10
Df 18
t Stat 0
P(T<=t) two-tail 1
NIT KURUKSHETRA
Ques. The job you are performing is satisfactory.
Interpretation:
Variable Variable
1 2
Mean 3.4 3.4
Variance 0.266667 0.266667
Observations 10 10
Df 18
t Stat 0
P(T<=t) two-tail 1
NIT KURUKSHETRA
Ques. You are satisfied with your existing pay structure.
Interpretation:
Variable Variable
1 2
Mean 3.2 3.8
Variance 0.177778 0.622222
Observations 10 10
Pooled Variance 0.4
Df 18
t Stat -2.12132
NIT KURUKSHETRA
Ques. Your organization conducts training programs often.
Interpretation:
Variable Variable
1 2
Mean 4 3.4
Variance 0 0.266667
Observations 10 10
Df 18
t Stat 3.674235
NIT KURUKSHETRA
Ques. Your training program is always linked with your career development.
Interpretation:
Variable
Variable 1 2
Mean 3.4 3.8
Variance 0.266667 0.177778
Observations 10 10
Df 18
t Stat -1.89737
NIT KURUKSHETRA
Ques. There are no barriers of communication while you are communicating with your
supervisor.
Interpretation:
Variable Variable
1 2
Mean 4 3.6
Variance 0 0.266667
Observations 10 10
Df 18
t Stat 2.44949
NIT KURUKSHETRA
FINDINGS
NIT KURUKSHETRA
FINDINGS
 From weighted average I found that In Ericsson management takes more care of
employees problem than in Huawei.
 From weighted average I found that employees often work over time in Huawei than
in Ericsson.
 From weighted average I found that work is distributed fairly in Ericsson than in
Huawei.
 From weighted average I found that employees participation in management is more
in Ericsson than in Huawei.
 From weighted average I found that work life is more balanced in Ericsson than in
Huawei.
 From weighted average I found that in Ericsson better infrastructure is provided to
employees to do their job well than in Huawei.
 From weighted average I found that in both Ericsson and Huawei recreation activities
are conducted very often.
 From weighted average I found that employees have more opportunities to learn and
grow in Huawei than in Ericsson.
 From weighted average I found that interpersonal relationship are more encouraged in
Ericsson than in Huawei.
 From weighted average I found that in both Ericsson and Huawei welfare facilities
provided to their employees are satisfactory.
 From weighted average I found that in both Ericsson and Huawei employees have
neutral attitude to their work satisfaction.
 From weighted average I found that employees are mors satisfies with their pay in
Huawei than in Ericsson.
 From weighted average I found that Ericsson conducts training program more often
than Huawei.
 From weighted average I found that in both Ericsson and Huawei training program is
linked with career development of employees.
 From weighted average I found that in Ericsson there are less barriers of
communication while communicating with supervisor than in Huawei.
NIT KURUKSHETRA
 The method of calculating employee turnover is number of the employees at the

beginning of year divided by the number of employees at the closing of year
multiplied by 100, i.e.
Employee turnover = No. of employees at beginning of year x 100
No. of employees at the end of year
 Ttest Results
Sr.no Null Calculated Tabulated Degrees of Results

hypothesis value of t value of t freedom
1 1 2.100922 18 Accepted
2 .747196808 2.100922 18 Accepted
3 .004984237 2.100922 18 Accepted
4 .01167939 2.100922 18 Accepted
5 .296266649 2.100922 18 Accepted
6 .000645205 2.100922 18 Accepted
7 .28776307 2.100922 18 Accepted
8 1 2.100922 18 Accepted
9 .150950452 2.100922 18 Accepted
10 1 2.100922 18 Accepted
11 1 2.100922 18 Accepted
12 .048037526 2.100922 18 Accepted
13 .00173543 2.100922 18 Accepted
NIT KURUKSHETRA
14 .073940198 2.100922 18 Accepted
15 .024769559 2.100922 18 Accepted
NIT KURUKSHETRA
SUGGESTIONS
SUGGESTIONS
 Employee should be provided with proper training which are linked with their career
development.
 Employee should be appreciated for good work.
NIT KURUKSHETRA
 Employee should be motivated to welcome the change.

 To improve employee retention, one needs to understand what they value the most.
 Pay structure should be redefined so that they remain monetarily satisfied.
There are two things that are critical in achieving the objective of keeping the attrition
rate in check and increasing the degree of employee retention; they are:
 Right people must be hired for the right job, with an emphasis of following the right
procedure and focus on their developmental needs such as training, etc.
 Right reason as to why the employees leave the organization must be found out and
addressed so as to prevent such a turnover.
NIT KURUKSHETRA
RECOMMENDATIONS
RECOMMENDATIONS
For Huawei
 As it is new in telecommunication so it should take care of their employees so as to

retain talents in their organisation.
NIT KURUKSHETRA
 HR manger takes care that work should be distributed more fairly.

 Management should provide better infrastructure to their employees so that they can
do their job well.
 Management should help employees in balancing their work life.
 Right employee should be employed at right position so that they feel motivated and
can do work more efficiently.
For Ericsson
 Management needs to focus on training program as it must be linked with the career
development.
 Right employee should be employed at right position so that they feel motivated and
can do work more efficiently.
 Management should redefine the pay structure of their employees.
NIT KURUKSHETRA
CONCLUSION
CONCLUSION
Retention is an important concept that has been receiving considerable attention from
academicians, researchers and practicing HR managers. In its essence, Retention comprises
important elements such as the need or content, search and choice of strategies, goal-directed
NIT KURUKSHETRA
behaviour, social comparison of rewards reinforcement, and performance-satisfaction. The

increasing attention paid towards Retention is justified because of several reasons. Motivated
employees come out with new ways of doing jobs. They are quality oriented. They are
more productive.
Any technology needs motivated employees to adopt it successfully. Several approaches to
Retention are available. Early theories are too simplistic in their approach towards Retention.
For example, advocates of scientific Management believe that money is the motivating factor.
The Human Relations Movement posits that social contacts will motivate workers. Mere
knowledge about the theories of Retention will not help manage their subordinates. They
need to have certain techniques that help them change the behaviour of employees. One
such technique is reward. Reward, particularly money, is a motivator according to need-based
and process theories of Retention. For the behavioural scientists, however, money is not
important as a motivator. Whatever may be the arguments, it can be stated that money can
influence some people in certain circumstance. Being an outgrowth of Herzberg’s, two factor
theory of Retention, job enrichment is considered to be a powerful motivator. An enriched
job has added responsibilities. The makes the job interesting and rewarding. Job enlargement
refers to adding a few more task elements horizontally. Task variety helps motivate job
holders. Job rotation involves shifting an incumbent from one job to another.
Staggered Employee force
NIT KURUKSHETRA
HR Associates, takes care of all
A Happy Employee Force
NIT KURUKSHETRA
QUESTIONNAIRE
Dear Sir / Madam,
This questionnaire is intended to know the employee perception towards the retention
policies provided by this organization and the extent to which these retention policies are
effective here, which is a part of my academic project.
It contains a series of statements ,while answering questions you are kindly requested to
express your free frank opinion. Your choice is important.
Neha Sharma
MBA student,
NIT Kurukshetra
Indicate the extent to which each of the following statements you agree in your organization
using the five point scale by marking a tick mark [√] against that column.
S.No Statements Strongly Disagree Neutral Agree Strongly

Disagree Agree
(2) (3) (4)
(1) (5)
1. Your management comes

forward when you are facing
with critical situation.
2. You work over-time very

often.
3. Employee work loads are
NIT KURUKSHETRA
distributed fairly.
4. Employee participation in
management is encouraged
here.
5. Work-life balance is supported

by this organization.
6. Better infrastructure amenities

are available in this
organization to do your job
well.
7. Recreation activities are

conducted very often in this
organization.
8. You have opportunities to

learn and grow.
9. Interpersonal relationships are
encouraging in this
organization.
10. The welfare facilities provided

by this organization are
satisfactory.
11. The job you are performing is

satisfactory.
12. You are satisfied with your

existing pay structure.
13. Your organization conducts

training programs often.
14. Your training program is

always linked with your career
development.
15. There are no barriers of

communication while you are
communicating with your
supervisor.
NIT KURUKSHETRA
**********THANK YOU**********
BIBLIOGRAPHY
NIT KURUKSHETRA

PROJECT REPORT On Employee Retention

Uploaded by

Copyright:

Available Formats

PROJECT REPORT On Employee Retention

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PROJECT REPORT On Employee Retention

Uploaded by

Copyright:

Available Formats

PROJECT REPORT

AWARD OF THE DEGREE OF

MASTERS OF BUSINESS ADMINISTRATION

ACADEMIC SESSION (2009 – 2011)

NATIONAL INSTITUTE OF TECHNOLOGY

(Institute Of National Importance)

SUBMITTED TO: SUBMITTED BY:

SR.NO TOPIC PAGE NO

2. Plan Of The Study 30

4. Limitations Of The Study 35

5. Data Analysis And Interpretation 36

HUMAN RESOURCE MANAGEMENT

HRM is seen by practitioners in the field as a more innovative view of workplace

There is a long-standing argument about where HR-related functions should be organized

Effective employee retention is a systematic effort by employers to create and foster an

 Salary and monthly wage: It is the biggest component of the compensation

 Health insurance: Health insurance is a great benefit to the employees. It saves

 Miscellaneous compensation: It may include employee assistance programs (like

It is not about managing retention. It is about managing people. If an organization

Organization environment includes

Types of environment the employee needs in an organization

Growth and Career Growth and development

 Personal growth and dreams

 Training and development

To enhance good professional relationships at work, the management should

 Relationship with the immediate manager

 Relationship with colleagues

 Recruit whole heartedly

Support Lack of support from management can sometimes serve as a reason

Thus employers can support their employees in a number of ways as follows:

THE IMPORTANCE OF RETAINING EMPLOYEES

The 3 R’s OF EMPLOYEE RETENTION

INTRODUCING THE RETHINKING RETENTION MODEL

Here's a graphic representation of an organization-wide model for keeping your best

THE PRINCIPLES OF THE RETHINKING RETENTION MODEL

There are three basic principles at the foundation of retention.

Point 1: Employees quit jobs because they can. Workplace demographics

Point 3: Supervisors build unique relationships that drive retention...or

THE STRATEGIES OF THE RETHINKING RETENTION MODEL

Point 4: Hold supervisors accountable for achieving retention

Point 7: Script employees' first 90 days. First impressions predict how long

Point 8: Challenge policies to ensure they drive retention. Blow the dust

Point 9: Calculate turnover's cost to galvanize retention as a business

Making people management work requires organizations to run on all cylinders, to

supervisors who failed to keep good workers, no retention processes for

IMPLEMENTATION OF MIS IN HRM

APPLICATIONS OF RETENTION STRATEGY

Applicability of Unique organizational structure strategy

Employees who believe positional benefits

Dissatisfied employees (B)

Employees who believe various benefits will

Indifferent to satisfaction level(E)

Applicability of Variable benefit structure strategy

Periodic change in existing benefit structure

Dissatisfied employees (B)

Indifferent to satisfaction level(E)

Applicability of Internal advertisement strategy

The Important factors to retain the employees in an organization are; conducive

1. Presence of internal communication channels.