CHAPTER 8& HUMAN RESOURCE STRATEGIES PNP Ceo IN THIS CHAPTER: ‘+ Successful human resource management is based on a company's ability to attract and hire the best employees, ATAGLANCE equip them with the knowledge and skills they need to excel, compensate them fairly, and motivate them to reach SPOTLIGHT their full potential and perform at high levels. re z Human resource ‘+ Human resource management is a key function in an | ‘management overview organization to achieve its strategic goals and objectives, [1 through creating a strategy for meeting current and future [Fs Recruitment. suman resource needs. « ‘+ This chapter will focus on key elements of human resource Selection ‘management function such as: ‘Training & development ~ Strategy and planning ~ Job analysis and description Employees retention ~ Recruitment and selection process re ee ee ~ ‘Training and development activities SELF-TEST Compensation and benefits Retention strategies THEINSTTUTE OF GHARTERED ACCOUNTANTS OF PANTAN EESPreity (CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, 1, HUMAN RESOURCE MANAGEMENT OVERVIEW Human resources (labour) is one of the four traditional factors of production. It refers to the economic contributions of people working with their minds and body. The success of a business entity depends on the skills and experience of Its human resources. A critical success factor for an entity might be to have at its disposal sufficient human resources with the necessary skills. Without the key skills, it might be impossible to develop the business successfully, ‘Today's competitive business environment is based upon knowledge and learning, The companies that succeed will be those that learn fast, use knowledge efficiently, and develop new insights. Accordingly, the role of human resources has evolved over the years. Human resources are mainly employees (full time, part time, home workers). However, human resources might also be individuals who provide consultancy services or expert services, but are not employed by the entity, Human resources might also be provided by sub-contractors and other organisations to which work is outsourced 1.1 The objective of human resource strategy A responsibility of the human resource management function is to ‘+ assess the quantity and quality of human resources currently available, including strength and skills. + estimate the quantity and quality of human resources that will be needed in the future, including numbers and skills, ‘© consider ways of ‘filling the gap’ and ensuring that the entity has the human resources that it needs. ‘The key objective of a human resources strategy is to ensure that the human resources are available, as required, (In some cases, it might also be necessary to consider reducing the numbers of employees whose skills are declining in importance, through programs of redundancy or re-training and relocation). 1,2. Human Resource Planning ‘A human resource plan consists of forecast of the human resources that will be required ata given time in the future, and plans for ensuring that the required numbers and skills will be available. A plan will typically look forward about three to five years. Beyond five years, it might be difficult to forecast requirements with any accuracy or reliability. Ahuman resource plan of a business enterprise would cover the following areas: + job analysis and design + human resource requirements - skills and strength ‘© recruitment of new staff ‘+ training and development to improve skills + performance appraisal, to monitor and control the development of skills + promotion and rewards = motivation strategy + redundancies, where some employees will be surplus to requirements, and © restraining. ‘The plans should be realistic, and should therefore take into consideration environmental factors such as: ‘+ population trends, and the total size of the work force in each country where the entity has its operations ‘+ government policy, such as changes in the retirement age of workers + educational system, and the numbers of students going from elementary school to college and university education ‘the availability of individuals who are trained in a particular skill or vocation [EEny tee restrute or cratenen accountants oF PARsTANPRC 5: INTRODUCTION To BUSINESS, (CHAPTER @: HUMAN RESOURCE STRATEGIES ‘+ changing patterns of employment, possibly with increasing numbers of part-time workers or home workers ‘= competition for high skill human resources from competitors and other businesses such as programmers trends in sub-contracting and outsourcing ‘© trends in IT and other technological changes that might affect labour requirements 1.3. Job Analysis, Job analysis involves the observation and study of pertinent information about a job—the specific tasks that comprise it; the knowledge, skills, and abilities necessary to perform it; and the environment in which it will be performed. Managers use the information obtained through a job analysis to develop job descriptions and job specifications, Job analysis is performed as part of human resource management which includes defining the scope of jobs, writing job descriptions, holding performance appraisals, selecting and promoting staff, performing a training needs assessment and as the basis for compensation and organisational planning ‘The purpose ofa job analysis is to: ‘© produce a detailed specification of the job (a job description’); and, + produce a specification of the qualities needed from the individual who will do the job (a ‘person specification’) Job Description ‘A jab description is a formal, written explanation of a specific job that usually includes job ttle, tasks to be performed (For instance, receiving customers front desk), relationship with other jobs, reporting lines, physical and mental skills required (such as communication with sales staff or daily MIS reporting), duties, responsibilities, and working conditions. Every job description should also have the position (eg, AVP, VP) ‘within the company’s organizational hierarchy and range of annual remuneration. job description is a formal description of a job, its purpose and scope, and the formal duties and responsibilities of the jobholder. Job Specification Ajob specification describes the qualifications and skills necessary for a specific job, in terms of education (some Jobs require a college degree), experience, personal characteristics (job ads frequently request outgoing, hardworking persons), and physical characteristics. Both the job description and job specification are used to develop recruiting materials such as newspapers, trade Publications, and online advertisements. Both may be used in the selection process, to identify the most suitable applicant for a job vacancy. Once the human resource managers have developed an HR plan including an estimated demand for new staffing needs, their job duties and responsibilities and the qualifications that would help them carry out their jobs in an ‘effective manner, they can begin the recruitment and selection process. Both are discussed individually in the following sections whereas the chart below summarizes the various stages involved in both activities. THEINSTTUTE OF GHARTERED ACCOUNTANTS OF PANSTAN EES pens(CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, Agree the vacancy to Stage 1 be filled Recruitment Stage 2 Identify the skills needed for the job Stage 3) Obtain applicants for the job vacancy Select candidates for Stage 4| _interviews/shor-isting Selection Stage 5| Selection interviews: offer the job to the selected candidate g : [EEE tee nestrute or crarenen accountants oF PasTANPRC 5: INTRODUCTION To BUSINESS, (CHAPTER @: HUMAN RESOURCE STRATEGIES 2. RECRUITMENT ‘The people who work for an organisation are extremely valuable assets. Without its employees, an organisation ‘would not exist and could not operate. The efficiency and effectiveness of an organisation depend on the skills and abilities ofits employees. Over time, changes occur in the work force, + Some existing employees leave the organisation, for example, to take a job somewhere else or due to retirement. ‘+ Employees who have acquired enough skills and experience might be moved on to other jobs within the organisation that make better use of their developing talent. © The labour requirements of the organisation will change, as new skills requirements are created and old skills are no longer required. People are recruited to fill the new jobs, with new skills, Some existing employees might be made redundant, Changes in a work force must be properly managed, in order to make sure that the work force remains efficient and effective. It is therefore important to make sure that job vacancies are filled when they occur. It is also important to make sure that suitable individuals are appointed to do the jobs. This is where the function of recruitment and selection come in, Recruitment starts when a job vacancy is identified. It is the process of obtaining a supply of suitable possible ‘candidates to fill the vacancy. Job analysis y ¥ Job description Person specification —— -— Advertise the vacancy (internally and/or externally) Provide a job application form for applicants to fill in Figure - A plan for the recruitment process THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PANSTAN pensPreity (CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, Jobs must be brought to the attention of individuals who might want to apply for them. A job vacancy might be ‘advertised’ ‘+ within the organisation (internally) to existing employees; ‘+ externally, to people outside the organisation; and ‘© both internally and externally, Internal Recruitment Internal recruiting seeks to fill open positions with persons already working in the company. The cost of hiring. current employees to fill jab openings is inexpensive when compared with the cost of hiring and training new ‘employees from external sources. Itis also good for employee morale. Internal recruiting can also be beneficial because existing employees have already been proven. Their personalities are known, and their potential capabilities and limitations have been thoroughly assessed. However, hiring from within creates another job vacancy to be filled Internal recruitment can be greatly facilitated by using a human resource information system that contains an employee database with information about each employee's previous work experience, skills, education and certifications, job and career preferences, performance, and attendance. Promotions and job transfers are the ‘most common avenues to fill positions by the method of internal recruitment. ‘When vacancies are filled by internal recruitment, the following methods may be used, individually or together: ‘© Performance reports and appraisals of individuals ‘+ List of potential employees who are ready for promotion may be invited to apply for a more senior job when a vacancy arises. ‘© The ‘in-house’ or company magazine ‘© The organisation’s website or HR portal External Recruitment External recruiting is an effort to fill positions with applicants from outside the firm, Some firms may seek to recruit more qualified candidates than current employees when using external recruiting, especially for some specialized job positions. In certain situations, to avoid internal competition, an external candidate is preferred, ‘There are a number of avenues to source external applicants for open positions. A company may choose the desired medium based on its goals and overall strategy. + Recruitment agencies + Media advertising (Television, Radio, National or international Newspapers) + Open-house (also called open-days) are commonly used in universities to attract fresh graduates + Job Fairs + Intemet resources (e.g. Rozee pk, Monster.com, ete.) and Social Media (eg. Linkedin) + Intemship programs + Company website (Careers section) [EBD tee nettute or crartenen accountants oF astaPRC 5: INTRODUCTION To BUSINESS, (CHAPTER @: HUMAN RESOURCE STRATEGIES 3. SELECTION Selection is the process of collecting information about applicants and using that information to decide which ‘ones to hire, It includes the application itself, as well as interviewing, testing, and reference checking and other tools organisatio ‘may use to filter out the most suitable applicants from the recruitment pool Selection isthe process of appointing the most suitable candidate to a job vacancy, by choosing the best individual ‘from the candidates available. ‘Whereas recruitment is concerned with quantity ~ getting candidates to apply for job vacancies ~ selection is concerned with quality - choosing the individual who seems the best for the jab. Selection steps or hurdles are described below: 1 Initial Screening During initial screening, an applicant completes an application form and/or submits a resume, and has a brief interview of 30 minutes or less. The job application includes information about educational background, previous work experience, and job duties performed, Another key discussion point is remuneration expectation to avoid wasting time and effort. Employment tests ‘Another step in the selection process is testing, Ability and performance tests are used to determine ‘whether an applicant has the skills necessary for the job. Aptitude, IQ, technical, or personality tests may ‘be used to assess an applicant's potential for a certain kind of work and his or her ability to fit into the organization's culture. Used individually o together, the tests can assess cognitive ability (ability to learn, adapt, and solve problems), motivation potential (attitude, behavior performance, and productivity), and knowledge and skills (math, verbal, data entry, software proficiency). Selection interview ‘The tool most widely used in making hiring decisions is the selection interview, an in depth discussion of an applicant’s work experience, skills and abilities, education, and career interests, For managerial and professional positions, an applicant may be interviewed by several persons, including the line manager for the position to be filled. This interview is designed to determine a person's communication skills and motivation. During the interview, the applicant may be presented with realistic job situations, such as dealing with a disgruntled customer, and asked to describe how he or she would handle the problem. Background and reference check If applicants pass the selection interview, most firms examine their background and check their references. In recent years, an increasing number of employers, such as Unilever and Shell Pakistan Limited, want to research applicants’ backgrounds, including their legal history, reasons for leaving previous jobs, their creditworthiness (credit check) or general conduct to assess job match, Physical exams and medical exams ‘A firm may require an applicant to have a medical checkup to ensure he or she is physically able to perform job tasks. Some jobs such as Airline industry or law enforcement may put more emphasis on physical fitness and mental agility. Other companies may ask candidates to submit medical tests (including drug test for certain jobs) to minimize medical insurance risks and related productivity THEINSTTUTE OF GHARTERED ACCOUNTANTS OF PANSTAN EES pensiro] re (CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, 6. Decision to hire. Once the screening is completed, the top candidate can be selected from this list and offered the job; the remaining qualified applicants can be considered if the top candidate does not accept the job offer. If an applicant progresses satisfactorily through all the selection steps (or jumps all of the selection hurdles), a decision to hire the person is made; however, the job offer may be contingent on passing a physical exam and/or general medical tests. The manager of the new employee plays a major role in the final decision to hire. By the time the steps for screening applicants are completed, the application list should have been reduced to a small number of qualified candidates. Some firms take their hiring process (and related effort and cost) very seriously because they recognize that their future performance is highly dependent ‘on the employees that they select. 7. Offer of employment ‘The selection process ends with an offer of employment and acceptance of the offer by the chosen applicant. ‘The employer may not be sure whether or not the individual who is offered the job will accept it. It is therefore prudent to identify a short-list of acceptable applicants, listed in order of reference. If the candidate at the top of the list refuses the job, the next person on the list can be made an offer, and so on until someone in the list accepts the offer of the job, When the job has been accepted, the arrangement should be confirmed and accepted in writing. Employment legislation might require that the new employee should be given a formal written contract of employment. Importance of good selection Good selection decisions improve the quality of employees within the organisation, When an organisation has high-quality employees, it should perform better. It will become a competitive advantage for it. A good selection is therefore an important factor in improving the human capital of the organisation (employee quality) and helping the business to be more successful in achieving its objectives. [EDD tee rettute or crarenen accountants OF PARsTANPRC 5: INTRODUCTION To BUSINESS, (CHAPTER @: HUMAN RESOURCE STRATEGIES 4, TRAINING & DEVELOPMENT Once the most qualified applicants have been selected, have been offered positions, and have accepted their offers, they must be formally introduced to the organization and trained so they can begin to be productive members of the workforce. ‘To ensure that both new and experienced employees have the knowledge and skills to perform their jobs successfully, organizations invest in training and development activities. Training and development involves, learning situations in which the employee acquires additional knowledge or skills to increase job performance. ‘Training objectives specify performance improvements, reductions in errors, job knowledge to be gained, and/or other positive organizational results, Well-motivated individuals learn from undertaking their work, and get better at what they do over time. Organizations benefit from individuals learningas people become more efficient and more effective as they learn. Training is a process in which individuals are taught something specific. A training programme should have a articular objective, to teach the individual some theoretical or practical knowledge, or to give the individual a new information or skills related to their work, Development is a process of learning through experience and doing work that augments an employee's skillset and prepares him/her for growth. Individuals learn as they develop by doing different things at work and gaining new experiences, Development is achieved through gaining experience and therefore developing a career. Individuals learn and develop through experience in different work situations and by having extra responsibilities or opportunities to use their own initiative. Organizations benefit from the training and development process, because it produces a better work force, and there should be programs of training and development for employees at different levels, 44. Benefits of training and development ‘Training and development have benefits for both the employer and the employee, Benefits for the employer ‘The benefits of training and development for the organisation are as follows ‘© Training and development creates a more talented and skilled work force leading to: ~ higher productivity, therefore lower costs of output; less waste; better performance by employees in their jobs; therefore, higher standards of achievement; less need for close supervision of subordinates by their managers; and an ability to compete more effectively with business rivals, ‘Providing employees with training and planned development will improve their morale, and increase their commitment to the organisation. It should be easier to retain talented staff. If employees are not given the training and development they wantand expect, they may resign and go to work fora different employer. Benefits for the employee ‘There are also benefits of tr ing and development for the individual: + Learning through training and development improves the motivation of the individual and gives them a sense of being more valuable (and marketable), + Career development increases jab satisfaction. ‘+ Training and development, by raising the level of skills and abilities, improve the individual's prospects, for promotion and higher pay. THEINSTTUTE OF GHARTERED ACCOUNTANTS OF PANSTAN EEE pensPreity (CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, Since an individual gains personal benefits, and at the same time there are benefits for the organisation, training and development can help to create compatibility between the personal objectives of individual employees and the corporate objectives of the organisation. 4.2 Tools of training ‘Tools of training can be grouped into the following categories: ‘+ Formal training ina training room environment: ‘m house’, where all the trainees are from the same organisation. (In Pakistan itis common for ‘in- house’ training courses to be delivered by colleagues.) ‘external’, where the training is provided by an external trainer or training firm, and the trainees come from different organisations eg, the IBA Centre for Executive Education, © Computer-based training (CBT) where trainees work at their own pace from a computer training package. CBT is highly interactive and typically integrates information and learning-based components with short, frequent tests. + Training in the workk place, Training in the work place is a method of development of individuals, as, ‘well as a method of training. Work place training is for technical ar practical skills, whereas work place development helps the individual to gain experience and develop personal skills, such as management and leadership. ‘© Induction, In-house training may be provided by the organisation's own trainers and experts, Alternatively, in-house training may be provided by an external trainer or training firm, hired to deliver the training programme, Formal training may end in an examination, leading to a qualification or certificate ~ such as a professional accountancy qualification or an MBA degree (Master in Business Administration) with a business school 43 Onthe Job Training ‘When an employee learns the job in actual working site in real life situation, and not simulated environment, it is called on-the-job training and also known as job instruction training. This type of training is the most commonly used method. Under this method, the individual is placed on a regular job and taught the skills, necessary to perform that job, The trainee learns under the supervision and guidance of a qualified worker or instructor. On-the-job training has the advantage of giving first-hand knowledge and experience under actual working conditions. On-the-job training methods include job rotation, coaching, mentoring or training through participation in cross-functional team assignments. Some types of on-the-job training are listed below: © Orientation = Coaching © Mentoring + Job instruction manuals © Apprenticeships © Work shadowing 44 Offthe job Training Off-the-job training is conducted in a location specifically designated for training, It may be near the workplace or away from work, at a special training center or a resort. Conducting the training away {rom the workplace ‘minimize distractions and allows trainees to devote their fll attention to the material being taught. Also some trainings require special tools or facilities that may not be available at the workplace. Some organizations also invest in their own training centres outside of the work premises to send their employees for certain courses. For example State Bank of Pakistan sends their freshly hired trainees to the National Institute of Banking & Finance (NIBAF) for a specialized and intensive course before they can start the actual work. [EEG tee reate or cramrenen accountants oF aRsTANPRC 5: INTRODUCTION To BUSINESS, (CHAPTER @: HUMAN RESOURCE STRATEGIES Some avenues of off-the-job training may include: Class room lectures and courses Audio visual films and presentations Seminars Simulation Centres Game theory sessions Case Study sessions ‘Team-Building meets and activities Programmed Instruction Online courses 4.5 Tools of development Development improves the skills, knowledge and abilities of an individual through real work experience. Unlike on-the-job training, however, development is not so much concerned with teaching the individual how to do a particular task or job, It is more concerned with giving the individual more experience and responsibilities, so that he or she is able to improve and become a more valuable resource (employee), Development programmes are commonly associated with managers. They benefit from development to become better managers, capable of moving on to more senior positions, Tools of development can be grouped into the following categories: Job rotation, Job rotation means moving an individual from one job to another at fairly regular intervals, so that the individual gains familiarity with the work done in each job. For example, a trainee accountant in the accounts department might be given a job for three months or six months in the payables ledger section, before being moved to the receivables ledger, then to the payroll department, then to the costing department, and so on. Job rotation gives the individual a broad range of experience in the activities of the organisation. This should be useful when he or she is eventually ready for promotion toa more senior position. Secondment. An individual might be ‘seconded’ to work somewhere else for a period of time, Secondments are periods of time spent away from the normal working environment, in another department or as part of a project team. For example, an accountant might be seconded from the accounts department to work with the sales team fora while, Similarly, an accountant might be seconded to join a project team that has been set up to design and implement a new computer system. Individuals benefit from secondments because they gain experience from working with people from different parts of the organisation, or with external consultants, Deputising fora manager or supervisor. An individual may be given the opportunity to deputise for his or her boss when the boss is absent from work for an extended period, on holiday or due to illness. The individual gains experience by doing the job of the boss for a period of time. Delegation, A boss who wants to develop individuals will give the individuals additional responsibilities, and delegate authority to the individuals to make their own decisions. Individuals will gain experience from the additional authority and responsibility, and will be accountable to their boss for how they have carried out the additional responsibilities. Appraisals. Formal appraisals are a part of development process. ~ Job Design, Employees can be given opportunities for development through careful job design, Job design involves looking at the current jobs in an organisation or department, and considering whether they can be altered (designed) in a way that gives more fulfilment and greater experience to the job holder. Two types of job re-design are: Job enrichment Job enrichment means making the job ‘richer’ by building more responsibility into it, When a job is enriched, the job holder is given more authority (authority for a higher level of decision-making) Job enlargement. Job enlargement means giving the job holder more tasks to do, but without any additional authority. All the additional tasks are at the same ‘level’ as the existing tasks in the job. THEINSTTUTE OF GHARTERED ACCOUNTANTS OF PANSTAN ESM pensPreity (CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, 5. EMPLOYEES RETENTION Once an organization has spent such a considerable time and investment in recruitment, selection and development of its employees, failing to retain a them would prove very costly to business and create organizational issues such as insecure coworkers, excess job duties that coworkers must absorb, time invested in recruiting, hiring, and training a new employee. 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. 5.1 Employee Turnover ‘Turnover, which occurs when employees quit or are fired and must be replaced by new employees, results in lost productivity from the vacancy, costs to recruit replacement employees, management time devoted to training and development, and socialization expenses for new employees. Part of employee turnover is inevitable due to retirement, separation, promotions and in the worst case death, Nevertheless, for operations to run smoothly, most organisations aim to optimize the rate of turnover for thetr organization, A well-organized human resources department strives to minimize losses due to separations and transfers because recruiting and training new employees is very expensive. Note that a high turnover rate in a company ‘may signal problems with the selection and training process, the compensation program, or even the working. environmrnt of company, To help reduce turnover, companies have tried a number of strategies, including giving employees more interesting job responsibilities (job enrichment), allowing for increased job flexibility, and providing more employee benefits. ‘To reduce voluntary turnover organisations can come up with various strategies to keep the employees satisfied and stay in the organization. To do these employers must recognize key reasons why employees would want to leave. Why employees leave? Employees quit their job for many reasons. They move due to family reasons to another location, stay home to take care of their loved ones, change careers, find career growth or promotions, go back for higher education or seek higher salaries. Those reasons are not easy to address by an employer because they involve life events in the employee's world outside of work. But, the majority of reasons why employees quit their job are under the control of the employer. In fact, any element of your current workplace, your culture, and environment, the employee's perception of his job and ‘opportunities are all factors that the employer can influence. Following are some examples of reasons that can affect an employee's decision to leave, among others: ‘+ Relationship with the supervisor and co-workers ‘© Unchallenging work tasks © Financial reasons © Family and personal reasons ‘+ Termination of fixed contract ‘+ Financial instability ofa company Lack of flexible work hours 5.2. Employee Retention Strategies ‘While offering a good paycheck is important, companies need to go a little deeper to make sure their turnover rate is low. Progressive HR functions are now ensuring that employees establish a long-term association with the company beyond the paycheck, [EDD ec restrute or crartenen accountants OF PASTANPRC 5: INTRODUCTION To BUSINESS, (CHAPTER @: HUMAN RESOURCE STRATEGIES Here are a few strategies that an HR function can employ to retain its valuable employees: 1, Awell-defined career path: Employees, whether freshers or ones with experience, want to understand how the leadership of an organisation can facilitate their growth, They want to see tangible examples of how their counterparts have grown in the firm. For many, growth is not just a vertical ladder. A lateral lattice is equally important, The young workforce is keen ‘on having early experiences of doing different things rather than being sandboxed into one job role. Hence, itis important for companies to chart out well-defined career paths that factor in a ‘variety of work’ that encourages their employees to stick to the organisation, 2. Compensation 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 anattractive 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. Itis also the most common factor of comparison among employees. ‘+ 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: Its 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: It include stock options or stock grants. These incentives help retain employees in the organization's startup stage. ‘+Health insurance: It is a great benefit to the employees. It saves employees money as well as gives them ‘peace of mind that they have somebody 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 gratuity, EPF (Employee Provident Fund), ete. © Miscellaneous compensation: It may include employee assistance programs (like psychological counseling, legal assistance, etc), discounts on company products, use of a company car, etc, 3. Work Relationships Work relationships that affect employee retention include supervisory management support and coworker relations. A supervisor or manager builds positive relationships and aids retention by being fair and nondiscriminatory, allowing work flexibility and work-family balancing, giving feedback that recognizes ‘employee efforts and performance, and supporting career planning and development, Additionally, many individuals build close relationships with coworkers. Such work-related friendships do not appear on employee records, but these relationships can be an important signal that a workplace is positive. Overall, what this means is that it is not just where people work, but also with whom they work, that affects employee retention. If individuals are not linked with or do not relate to their coworkers, there is greater likelihood for turnover to occur. 4. Joband Work-Life Many individuals have seen a decline in job security during the past decade. All the downsizings, layoffs, mergers and acquisitions, and organizational restructurings have affected employee loyalty and retention, As coworkers experience layoffs and job reductions, the anxiety levels of the remaining employees rise. Consequently, ‘employees start thinking about leaving before they too get cut. Organizations in which job continuity and security are high tend to have higher retention rates. THEINSTTUTE OF GHARTERED ACCOUNTANTS OF PANSTAN EES pensPreity (CHAPTER @: HUMAN RESOURCE STRATEGIES PRC 5: INTRODUCTION To BUSINESS, Some jobs are considered "good" and others are thought to be "bad," but not all people agree on which jobs are which, As mentioned previously, the design of jobs and peoples’ preferences can vary significantly. Job design factors that can impact retention include the following: + Almowledge, skills, and abilities mismatch, either through overqualification or underqualification, can lead to turnover. ‘+ Job accomplishments and workload demands that are dissatisfying or stressful may impact performance and lead to turnover, ‘© Both timing of work schedules and geographic locations may contribute to burnout of some individuals. ‘+ The ability of employees to balance work and life requirements affects their job performance and retention, 5, Work-life balance: Irrespective of their industry, itis important for working professionals to maintain a work-life balance. While high-paying jobs do demand longer hours of work, organisations should implement flexible working hours and work from home policies while respecting their core office culture. Practices like occasional work from home, flexible work arrangements, ME’ time (keeping a chunk of their time to pursue a hobby of their choice) are ways to help employees maintain a healthy work-life balance. 6. Organizational Environment Itisnot about managing retention. Itis about managing people. Ifan 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 capital, People want to work for an organization which provides: ‘© Appreciation for the work done ‘+ Ample opportunities to grow ‘+ Friendly and cooperative environment ‘© Afeeling that the organization is second home to the employee Organizational environment includes: = Culture Values © Company reputation Quality of people in the organization Employee development and career growth Risk taking Use of leading technologies © Trust 7. Recognition and feedback: ‘Typically, bosses are quick on giving feedback when issues crop up. However, appreciation is rare when things go smooth, Letting your employees know that you appreciate their efforts, recognising and highlighting impactful ‘outcomes and giving timely feedback is crucial, Similarly, gaining feedback from employees and engaging oneself in meaningful dialogues to improve areas that are creating obstacles is important. 8, Transparent and fair reviews: Enabling transparent and clear reviews and appraisals for employees helps them achieve more with a clear picture of being rewarded on the basis of merit. The review process should celebrate key milestones in an employee's career in an organisation where the focus is on highlighting key achievements, strengths and development areas, followed by a mutually agreed upon goal setting discussion, [EDD tec ntrate or craetenen accountants OF PAsTAN