Importance Of Adopting A Holistic Reward Strategy To Retain Employees

In every industry, every organization keeping has become one of major priority. When organizations hires and invests in people, it creates a valuable asset. There is a direct relationship between the way organization treats their employee, employee productivity, creativity, morale, satisfaction and RETENTION. Retention is the percentage of employees who are remaining in the organization. In 21^st era employee retention has become one of major issue organizations have to deal with. For an organization it is very important to retain employees to reduction of turnover. (Jack J and Adele O, 2004) Therefore organizations need to adopt a strategy which can help to retain employees who keep business in business.

Research and surveys have proven that, there is a inter connection between retention, motivation and rewards (Armstrong, 2007). With the adoption of better reward strategy practices, employee wants to make outstanding work, thus they would like to stay in because they know there is a value for their hard work. According to Tracy (2013) motivation means a process that energizing and making interest in what they doing. The truth of the matter is that employees are spurred to do what is to their greatest advantage. For an employee job satisfaction is the chief way to be motivated. To be satisfied in their job, employer has to offer several kinds of rewards. When this happens, motivated employees are likely to remain in the organization. There are numerous types of rewards to motivate employees. Offering holistic rewards is the best way to motivate employee to retain. It might be a financial cost for an organizations, even though companies need to adopt different sort of reward strategies to retain employees. (Avlar et al., 2015)

When employees do hit the target set by organization, organizations should reward them straight away, otherwise employees will not connect with achievement they attained (Houldsworth and Jirasinghe, 2006). Although, employer need to be careful when it is setting up strategy for offering rewards. Abraham Maslow who introduced the hierarchy of needs believed that satisfying just physiological and safety needs is not enough to motivate a person fully to get what you want from them. However, likeness of the reward depends on mentality of the employee. Every so often most employees like to get non-monetary rewards rather than getting a monetary reward. (Moser and Nicholas, 2013)

Frederick Winslow Taylor developed a theory admitting that workers are mostly like to attain rewards as money (Herzberg, Mausner and Snyderman, 2010). Whitely (2002) demonstrated that, pay increases or financial benefits like bonuses to recognize achievement could prevent staff turnover. Not only bonus and pay raises employees also willing to reward stock options, profit sharing from their employer. Recently biggest social media leader, Facebook has been shared its profit with their employees (The Guardian, 2015). However these monetary rewards are short term. Even though it is still a reward which can fulfil all other physical, social needs which included in Maslow s hierarchy of need and it is often make employee retention high (Moser and Nicholas, 2013). Latham (2007) explained, world famous Wall-Mart has been unable to retain its 50% of employees because of lack of good salary.

On the other hand, for a large portion of the representatives cash is not by any means the only incomparable element that effect on their retention, there are certain non-financial persuading powers which can satisfy the identity and self-acknowledgment needs of employee. For only short-term, Taylor s theory can be successful, because when it comes to repetitive, employees are not getting excited or motivated (Elliot and Dweck, 2005). UK s Development dimensions international has proved by their survey that, pay was the 5th reason for people leaving jobs (Peacock, 2011). That means employees expect more from employer than just money. For the reason that is, since cash spend, it is gone. But other rewards talk to employees heart not to their hands.

Beside monetary rewards, such as education, relaxed working environment, recognition and appreciation, more training and development and more autonomy are other good ways to share reward (Raymond and Fowler, 2001). Companies like Microsoft, Apples, Samsung, Google, have been used this strategy effectively. To make employees to work for the organizations, nowadays tactical management are creating innovative incentives. Organizations who have understood this scenario had made their workplace into phase that everyone wants to work here (Moser and Nicholas, 2013).

For an example Google employees play not only video games, table tennis, cricket during work hours, have hair cut and spa bath at Google salon for free. If employees don t to sit and work they got bed. Therefore employees love what they do, not hesitated to work long hours. As a result, Google s employee retention was 100% in 2014 (The Economist, 2015). Also McDonald is a company who is not paying good wage for their employees. However, it is adopting certain reward strategy to keep employees with the organization. McDonalds is giving Employee of the Month award for the person who worked hard. Not only the award, a thank you note by manager, gift vouchers, golden badge and more things included with it. Company is offering this once a year and McDonalds has proved that, pay is not the only way to retain employees.

If a company fail to retain their employees, it will affect all organizational activities. Lack of employees could make organizational operation process slow, ineffective and inefficiency. When organization couldn t fulfil the demand in time because of the staff turnover customer loyalty will lose. Therefore it will cause to the profit drop and fall down of market share. Moreover, industry competitors who are adopting better reward strategy will attract employees and organization will lose most valuable brains (Griffeth and Hom, 2001). When it comes to hiring people organizational management needs to find an answer to the question that are we going to make a culture that could make them stay? Organization can t stop employees from leaving unless organization has a plan to make them stay. Thus there is a need of giving more priority to develop and maintain a reward strategy to retain its staff for every organization.

References

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