3 segments of employee retention and challenges that come with it
https://ilokabenneth.blogspot.com/2014/03/3-segments-of-employee-retention-and.html
Author: Iloka Benneth Chiemelie
Published: 30th of March, 2014
Introduction
Retaining employees is very important in the
business world because it defines the extent of competitive advantage that a
company can have in its market. This is because when companies retain employees
with huge potentials, sustainability in both production and profitability are
assured, which is a major plus for the company. Even in the mist of differences
in their approach, motivational thinkers of the early age such as Maslow
(1954), Herzber (1966) and Deci (1975) do agree on two distinct motivational
subsystems as: intrinsic and extrinsic motivation. Intrinsic are of the internal
in terms of the factors or feelings that defines people’s will and desire to
achieve, perform or become very much involved in activities. They are motivated
by the employees’ underlying need for competence and self-esteem, which can be
done without the influence or help of external forces. On the other hand, extrinsic
are those kind of motivation that stems from the working environment external
to the task, and they are normally stimulated by external rewards. This is
where financial and non-financial rewards come to play as they are both
extrinsic rewards.
Three
nonfinancial segments of total reward
There are numerous kinds of recognitions. In accordance
with research conducted by IDS (1999), there is no standard approach when it
comes to adopting financial recognition. This is because variance exist in
terms of the size and sector of the employer, and the objective of the approach
(take for instance when the company intends to recognize a particular behavior,
e.g. timeliness to work). In any case, the IDS still proceeded to argue that
the most influential factors determining the nature of any adopted approach is
organizational culture. The organizational culture determines the form of
recognition that will be most appropriate for them. In assessing their evidence,
the following methods stand out as the most widely used form of non-financial
recognition scheme and they are:
1.
Appraisal
2.
Vouchers
/ gifts
3.
Promotion
/ nomination
Implementation
across cultures
In this section, the three identified
segments of reward will be discussed in terms of what they actually mean and
how they are applied across culture.
Appraisal – this is the most fundamental level of
non-financial recognition and it comes in the form of simple personal acknowledgement
from the management to the employees, recognizing the fact that they have
performed well. Obviously, this form of appraisal is very easy because it doesn’t
cos much to just say “thank you.” In any case, good management practice
suggests that this should be done irrespective of the reward approach adopted. For
instance, my Boss (Mrs. Vivian) is very particular with appraisal as she takes
time to acknowledge the performance of employees and encourage them to do more.
On a personal ground, this is very motivating as I feel energized being appraised
by the boss in front of my colleagues. In any case, it should be noted that
this can lead to organizational conflicts and politics especially in cases
where a particular employee is constantly being appraised even if the employee
is performing well constantly. It can limit knowledge sharing due to increased
internal competitiveness.
Vouchers
/ gifts – besides appraising
employees, companies can be more direct by offering employees free vouchers to
attend shows, go shopping or holidays, or other gifts as an appreciation of
their efforts. This is also an effective approach in Nigeria. For instance, the
Nigerian government recognized the performance of “super eaglets” s they won
the under 17 world cup in Dubai by offering them national recognitions, cash
and houses as gifts as well as holiday packages. This is now a major motivation
for both the super eaglets to perform better in future competitions, as well as
the super eagles to perform well in the 2014 world cup coming June (Brazil). Thus,
it can be seen that the recognition of employees’ performance is not within the
private sector only, but can extend to the private sector. The issue here as
noted by People Management (2004) is that the HRM managers is normally the one
deciding on what the employees will get, which means that what employees get
are not necessary what they want to get but instead what the HRM managers want
to get.
Promotion
/ nomination - for
their continued performance, employees are be nominated or promoted to higher
positions in the organization. While this does come with some financial
benefits, employees can still be promoted in some cases without financial
benefits (retaining their original salary (Michael, 2004). This is probably the
most difficult to implement as some culture (such as japan) demand that
employees be promoted based on their length of stay in the company and not just
on their performance. In my own company (Nigeria), promotions are based on
performance and not length of stay. For instance, I was promoted within just 4
months from marketing executive to brand manager. Also, I want to point out
that this can also be a case of circumstances and chance as my promotion was because
of the brand manager quitting the company, which left the position vacant and I
the most prominent to fill it. I was put on 1 month trial of which I delivered
and it landed me the job. Just like the appraisal, this can lead to
organizational conflict and politics. In my own cases, I have had direct charges
from colleagues that where they before me or feel that they cannot take orders
from me because they are older than I am.
Potential
challenges in implementation
From the above discussions, it can be seen
that are number of challenges are potentially possible in the course of
implementing these reward segments and they are:
Defining
value of the scheme – as noted
by IDS (2002), reward schemes are very effective when they are inclusive of all
staffs, but the inclusion of all staffs is difficult because the manager cannot
maintain close watch on all these staffs (especially in multinational
companies), which means that some well performing staffs can be ignored in the
process.
Credible
assessment guideline –
another issue comes in the form of instilling fairness in the procedural aspect
of the scheme. It is very important that process is robust, credible and
transparent irrespective of what form of reward is used. However, human nature
means that preferentialism is inevitable, which can become very challenging for
managers to assure fairness in the reward system.
Cultural
fit – as noted in the case of Japan, the way
non-financial rewards are viewed can be conflicting, which means that understanding
cultural fit of reward systems is a potential challenge and multinationals need
to know what is obtainable in their different markets.
Conclusion
From the above analysis, appraisal, voucher
and nominations remain the most adopted form of non-financial reward. However,
the fact that cash is not involved doesn’t make it easy to adopt as numerous
challenges occur in the course of implementing non-financial rewards. Cultural fit
is the most significant, which means that multinationals and even local
companies employees diverse cultural workforce needs to understand the
perception of cultural values of their workforce and align it with that of
their corporate culture in order to create the right environment for successful
implementation.
References
Income
Data Services (2002), ‘Employee recognition scheme’, IDS studies plus, Autumn
issue.
Maslow
A (1954), Motivation and personality, Harper and Row: New York.
Michael
S. (2004), ‘Non-financial reward: the most effective recognition?’. Available at: http://www.employment-studies.co.uk/pdflibrary/mp4.pdf
[Accessed on: 3/29/2014]
People
Management (2004), ‘Reducing features’, People Management Magazine, 15 july.