employee retention strategy

1. INTRODUCTION

The purpose of the research is to test the applicability of three strategies which

could solve the problem of employee retention in the companies, especially in

Small and medium scale industry in Bangalore. To find out this the researcher

has approached managers of Small and Medium Scale Software companies and

collected the data in a questionnaire. Three categories of employees have been

identified.

1. Satisfied employees (showing the tendency to stay the company or retention).

2. Indifferent employees (Neither satisfied nor dissatisfied or indifferent).

3. Dissatisfied (showing the tendency to quit the company or attrition)

To find out the applicability of the first retention strategy, the researcher has

classified number of employees comes under the above three categories in to

two other categories; the employees who prefer position titles when they change

the company and employees who prefer all other benefits except position titles.

To find out the applicability of the second retention strategy, the same three

categories have been classified under the employees who prefer variable benefit

structure and employees who do not prefer variable benefit structure.

A questionnaire survey has been conducted and classified the respondents in to

respective categories. Chi – square tests (test for independence) has been

conducted to find out the relation ship between satisfaction, dissatisfaction and

Indifference to the perception of benefits of the employees.

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Applicability of the third retention strategy has been tested by using an opinion

survey conducted by the researcher and verified the result using sign test ( a non

parametric test). This report is not exhaustive, one can innovate many new

strategies to retain employees. These are just the basics and if implemented in a

proper way can give good results.

1.1. THE FACTORS AFFECTING EMPLOYEE ATTRITION

1. Intra organizational Factors. Factors which affect the job satisfaction of

the employee inside the organization for example; strained superior

subordinate relationship.

1. Personal reasons; These reasons are specific to each employee such as

family responsibilities, personal preference for location of job etc.

2. Extra organizational factors

When an employee compares his/her position with that of same position in

another company, this may lead to an inequity in the mind of employees,

this will result in employee attrition, for e.g. An employee comparing his

salary, position, work environment, and benefits with that of same position

in another company may lead to preference for the other company.

The study concentrates only on extra organizational (3rd reason) reason which is

conventionally perceived to be uncontrollable. The researcher has formulated

three new strategies to control this perceptional gap. The strategies are based on

Adam’s Equity theory.

1.2. RETENTION - A BIG CHALLENGE

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Fundamental changes are taking place in the work force and the workplace that

promise to radically alter the way companies relate to their employees. Hiring

and retaining good employees have become the chief concerns of nearly every

company in every industry. Companies that understand what their employees

want and need in the workplace and make a strategic decision to proactively

fulfill those needs will become the dominant players in their respective markets.

The fierce competition for qualified workers results from a number of workplace

trends, including:

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

Life balance

Concurrent with these trends, the emerging work force is developing very

different attitudes about their role the workplace. Today's employees place a high

priority on the following:

Family orientation

Quality of life issues

Autonomy

Social status of the job

To hold onto your people, you have to work counter to prevailing trends causing

the job churning. Smart employers make it a strategic initiative to understand

what their people want and need -- then give it to them.

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division of the organization but it directly affects the Human Resource

division as well. The organizations are competing each other to acquire

the scarce talent pool.

Internal advertisement simply meant to tell the employee that the

organization which they are working is good and a company favorable

comparison should be given to employees to solve the inequity they

perceive. The major difference with internal advertisement is that the

communication channel is different from that of marketing channels. Here

the communication

1.3. RETENTION STRATEGIES

In this study the researcher is particularly interested in three retention strategies

and its applicability in the industry. This is not an exhaustive list, one can add or

delete any of the below mentioned strategies. Secondly, the need of the hour is

to have "right basics". Every individual is different, his needs are different, and

his emotions, his problems are different. There are many employee retention

strategies are available in the industry.

I have classified retention strategies according to the solution offered by the

strategies into three:

1. Unique organizational structure strategy

2. Variable benefit strategy

3. Internal advertisement strategy

1.3.1. Unique organizational structure strategy

Creating a company-specific organization structure and position title is the

crux of this theory. This will reduce the employee’s tendency to compare

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his position title and benefits with that of same in other companies. Rather

than force the employee to confine his talents to structured jobs, set job

titles according to the knowledge, skill and ability of the employee.

If an organization possess a unique structure with position titles and its

responsibilities will keep the employee concentrated in the same company rather

than choosing the job in other companies. following important factors must be

present in the Unique organizational structure.

a. Set Clear Expectations

When people enter in a company for the first time as an employee, he/she may

have many expectation regarding the salary, work environment etc. the primary

need for the employee is to yearn a decent salary to live, when this objective is

fulfilled the employee will look for social status such as attractive position titles

and benefits structure which satisfy the egoistic needs of human being. So the

company must manage this expectation by understanding the employee’s

perception.

o What is the employee’s attitude to other organization and its benefit

structure for the same position?

o What are the employee’s expectations from employers/team-

members? What are the parameters to measure their

performance?

o A good communication channel present in the organization.

o What will be the rewards, if the employees exceed the expected

level?

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If the employees are not having any expectations, how an employer is

going to appraise, the employees? This must be based on some standard.

The employee must have the feeling that his role is important for the company.

Also his position title must be socially acceptable. It should fulfill the egoistic

needs of the employee.

Setting expectations initiates the process. Managers need to sit down with

each employee and clearly define what's expected of them. When

expectations are not clear, employees may not be in sync with their job's

current demands and priorities. Setting expectations is not a once and

done activity. Jobs change. Priorities change. Resources change.

Managers need to revise and set new expectations throughout the year.

Setting expectations revolves around the following three areas:

o Key job responsibilities

o Performance factors and standards

o Goals

Why is a setting expectation important? Quite simply, this process can

be the cornerstone of improving the motivational climate within your

sphere of responsibility. If your employees know what is expected of

them, it allows them to focus on results and to monitor themselves

against the set standards. Environments in which expectations are not

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clear, or change from week to week, seldom create high-performing

work groups.

The three principles that should drive expectations are clarity,

relevance, and simplicity.

b. Clarity. Expectations should focus on outcomes, not activities. In other words,

employee achieves clarity when the employer identifies the expected results

rather than the method for achieving them. Managers often make the mistake of

attempting to direct the process that an employee will use rather than being clear

about results..

Defining the objective often requires some thought on the part of the manager

because it is easy to fall into the "activities trap." While developing a strategic

plan for a department or division is a worthy activity, it does not represent an

outcome. In the activities trap, developing a plan is the goal, rather than

increasing your market share.

c. Relevance. The principle of relevance helps define the "why" of the

assignment. If your employees have a full understanding of the project's

importance, they can make adjustments as unanticipated factors crop up within

the process. They probably also will be more committed to the result because

they can see more easily how it fits into the big picture and how their efforts

impact the company.

This understanding typically is accomplished through dialogue between the

manager and subordinate, which allows for a more thorough review of the

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situation and for feedback and discussion. This process builds good will with the

employee and sets the stage for additional responsibilities.

d. Simplicity. Simplicity creates a sense of grounding for employees as they

endeavor to carry out assignments. If managers identify the work in simple,

straightforward terms, employees will find it much easier to follow through on

managers' wishes. To accomplish this, a manager must identify the key message

in a fashion that the employee can embrace.

e. Talent and skill utilization

Talent and skill utilization is another environmental factor your key employees

seek in your workplace. A motivated employee wants to contribute to work areas

outside of his specific job description. How many people could contribute far

more than they currently do? You just need to know their skills, talent and

experience, and take the time to tap into it. As an example, in a small company, a

manager pursued a new marketing plan and logo with the help of external

consultants. An internal sales rep, with seven years of ad agency and logo

development experience, repeatedly offered to help. His offer was ignored and

he cited this as one reason why he quit his job. In fact, the recognition that the

company didn't want to take advantage of his knowledge and capabilities helped

precipitate his job search. In this case the manager can easily change the

position title of the employee and include the relevant job description in the

position title.

f. Fairness and equitable treatment

The perception of fairness and equitable treatment is important in employee

retention. In one company, a new sales rep was given the most potentially

successful, commission-producing accounts. Current staff viewed these

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decisions as taking food off their tables. The employer can bet a number of them

are looking for their next opportunity. In another instance, a staff person, just a

year or two out of college, was given 20,000 in raises over a six month time

period. Information of this type never stays secret in companies so the employer

must know, beyond any shadow of a doubt; the morale of several other

employees will be affected.

g. Career growth

The best employees, whom you want to retain, seek frequent opportunities to

learn and grow in their careers, knowledge and skill. Without the opportunity to

try new opportunities, sit on challenging committees, attend seminars and read

and discuss books, they feel they will stagnate. A career-oriented, valued

employee must experience growth opportunities within your organization.

2. Variable benefit strategy

Periodical change in the benefit structure leads to increased awareness

and satisfaction with the benefits. One of the purpose of benefit structure

is to motivating the employee. Unfortunately continues enjoyment of the

benefits leads to reduced satisfaction and motivation. This can be solved

by periodical change in benefit structure, i.e. periodically introduce new

benefits and remove the old benefits.

Following are the important factors present in the variable benefit structure.

a. Proper Rewarding

Proper rewarding is important for the employee to be motivated during the job.

A research reports says that in today's scenario,

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o 70% of the employees are less motivated today than they used to

be.

o 80% of the employees could perform significantly better if they

wanted to.

o 50% of the employees only put enough effort into their work to keep

their job.

Employee Reward covers how people are rewarded in accordance

with their value to an organization. It is about both financial and

non-financial rewards and embraces the strategies, policies,

structures and processes used to develop and maintain reward

systems. The ways in which people are valued can make a

considerable impact on the effectiveness of the organization, and is

at the heart of the employment relationship.

b. Attracting the employees

The aim of employee reward policies and practices, if any in your organization is

to help attract, retain and motivate high-quality people. Getting it wrong can have

a significant negative effect on the motivation, commitment and morale of

employees. Personnel and development professionals will be involved frequently

in reward issues, whether they are generalists or specialize in learning and

development or employee relations. Keep following parameters in mind, while

designing a reward policy:

c. Recognition of the work

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Recognition is the most cost-effective motivator. While the high cost of other

rewards forces us to give them sparingly, recognition can be given any time, at

very little cost.

Some very ordinary items and events can be imbued with extraordinary

motivational significance, far in excess of their monetary value, motivation of a

pizza or movie tickets can be high if it is given with sufficient appreciation. A

sincere thank you can be delivered at any place and at any time, costs absolutely

nothing and can be more motivationally powerful than a substantial monetary

bonus. Organizations can provide innovative recognition in an infinite number of

ways.

For example, (A Hypothetical Incident) a small manufacturing company made its

employees feel like heroes when they attained a major safety milestone - 100

days without a single accident. On the morning of day 100, it was announced that

a catered lunch would be served the next day, if they made it to the 5:30 shift

without an accident. At 5:15 anticipating was building. Managers took confetti

and streamers to the balcony overlooking the shop floor. When the 5:30 whistle

blew, there were congratulations all around, confetti flew through the air and

banners were unfurled. It was a great moment for everyone - and one that was

not soon forgotten. The recognition value of this celebration was extremely high,

while the monetary cost was relatively low.

Highly motivating organizations even celebrate small successes. A health-

conscious company distributes fruit bowls to employees' work areas when key

personal milestones are attained. Another company uses a more fattening

approach: fresh-baked chocolate-chip cookies to say thank you.

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Clearly the traditional "pay for loyalty" systems in most organizations need to be

changed. Don't let attendance be your major criterion for rewards. Most

employees resent those who only put in their time and yet receive the same

reward as those who go the extra mile. Today's employees have higher

expectations for what work can and should be, and they want to receive rewards

that reflect their personal efforts and contributions.

This is why so many companies are moving toward performance-based rewards,

including performance bonuses, gain-sharing and non-monetary recognition.

Although not a panacea, companies are finding that these new reward systems

do allow them to give substantial rewards to those who really deserve them.

Smart organizations are looking for opportunities to reduce across-the-board

entitlements, and thereby find more resources for discretionary performance-

based rewards, without increasing the total cost of rewards.

The Law of Rewards - "What you reward is what you get" - Is extremely powerful.

No matter what your orientation materials or job description might say, it is the

rewards your organization gives that communicate the real expectations. The

most important question to ask in evaluating the reward system in your

organization is, do the rewards we are giving elicit the performance we want?

Start with the results you want to achieve and then pinpoint the types of

behaviors needed to achieve them. For example: Also, don't confuse employees

with too many rewards. It is better to focus rewards on the critical few behaviors

and results, rather than diluting them by rewarding the trivial many.

d. Timely action

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Rewards should be given as soon as possible after the performance has taken

place. This is why the most successful gain-sharing programs pay employees

monthly, rather than quarterly or annually as in the past.

There is a well-accepted law of behavioral psychology, that if you want someone

to repeat a behavior, you should positively recognize it immediately. From this

law, smart supervisors and managers can learn a vital lesson: Look for any

employee doing something right, right now, and recognizes it.

e. Type of reward

Rewards are as different as the people who receive them and it doesn't make

sense to give rewards that recipients don't find rewarding. For example, some

people prefer more pay, while others prefer more time off. A promotion might be

more rewarding to one person, while a job-sharing arrangement might be more

rewarding for another. Some people are excited about sports events, others

about movies. Some employees would love a dinner in a romantic restaurant,

others a book by their favorite author. Food, fun, education, improved work

environment, gifts, travel, family-oriented activities - the options are endless.

How do you know what will be rewarding to employees? Ask them. Smart

organizations are also letting employees choose their own rewards from reward

menus and catalogs. Personalizing rewards shows that a company cares enough

to discover what "interests" each employee, rather than just distributing generic

items. It also reduces the following danger: In one organization I was visiting, an

employee opened a big drawer in his desk and disdainfully showed me all the

"worthless trinkets" he had collected over the years.

f. Longevity of the reward

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Increase the longevity of rewards can be done in a number of ways: One of the

keys to reward longevity is symbolism. The more symbolic an item is of the

accomplishment, the more likely it is to continue reminding the employee of why

it was given. For instance, a T-shirt of coffee mug with a meaningful inscription

will continue rewarding those who wear it, or use it, long after its initial receipt.

There are many tokens of appreciation I still keep on or near my desk that remind

me of the joy of past accomplishments, while the monetary rewards I have

received are long spent and long forgotten.

Another way to increase the longevity of rewards in your organization is by using

some kind of point system. Rather than rewarding each individual behavior or

accomplishment, points can be awarded, which employees can accumulate and

eventually trade for items from a reward menu or gift catalog. This keeps the

anticipation of rewards fresh for longer periods of time. It also addresses the

need for reward individualization.

One company that designs motivational systems offers an electronic debit-card

system to help larger clients cope with the complexity of distributing, tracking and

redeeming employees' points.

Employees can use their points to purchase virtually anything they want, from

sports equipment and clothing to automobiles and overseas vacations. They only

caveat for such programs is to make sure that the recognition value of the

rewards isn't lost because of the impersonal nature of the technology.

g. Decrease the de-motivators

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Interestingly, when researchers have investigated the motivational dynamics of

these workplace games, they have found that the major motivator is the playing,

not the prize.

Most de-motivators can be dramatically reduced by soliciting employee

involvement in identifying highest-priority de-motivators and by enlisting top-

management commitment to support their reduction.

It is probably self-evident that considerable sensitivity is needed in the

administration of any reward system. One de-motivator that is probably endemic

in any reward system modification (especially as an organization moves from

entitlements to more performance-based rewards) is a sense that something is

being taken away. Employees need to be educated about the reasons that this is

being done, understand the ultimate benefits to them and the organization, and

should probably have some input into the change process.

h. Avoid perception errors

To avoid the perception of unfairness, it is important, first and foremost, that the

process for allocating rewards is viewed by employees as being impartial. This

requires an objective measurement system that few organizations have. Without

such objective measurement, any reward system is probably destined to failure.

1.3.3. Internal advertisement strategy

It communicates the advantages and benefits an employee received from

the company. The theory holds that an organization must extend its

marketing strategies to inside the organization. Competition is not just

confined to marketing division of the organization but it directly affects the

Human Resource division as well. The organizations are competing each

other to acquire the scarce talent pool.

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Internal advertisement simply meant to tell the employee that the

organization which they are working is good and a company favorable

comparison should be given to employees to solve the inequity they

perceive. The major difference with internal advertisement is that the

communication channel is different from that of marketing channels. Here

the communication

Communications

Communication is the first step toward creating the kind of environment that

people care about, and if they care, they just may stay. Keep the employees

in the loop about what's happening with the company. At any time, all of your

employees should have a pretty good idea of how business has been, and

they should be aware of what issues the company is attempting to address.

Regularly keep the employees up to date with important events affecting the

company. If November was good, let them know, and while you're at it, tell

them what you expect to happen in December. Share good news, as well as

points of concern.

Listen to the employee’s when they have ideas for improvement. Again, the

benefits extend beyond just making people feel appreciated for their

contributions. These are, after all, the people who do the work every day.

They may have some ideas to improve productivity, and when the employees

do come up with one, let everybody know where it came from. Post a "brag

board" in your break room, or circulate an internal newsletter that touts these

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contributions. The pay-off is a contagious feeling of pride and, perhaps, some

new efficiency that saves the company money.

Speak freely

The ability of the employee to speak his or her mind freely within the

organization is another key factor in employee retention. Does the

organization solicit ideas and provide an environment in which people are

comfortable providing feedback? If so, employees offer ideas, feel free to

criticize and commit to continuous improvement. If not, they bite their tongues

or find themselves constantly "in trouble" - until they leave.

1.4. THE CONCEPTS

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1.4.1. Applicability of Unique organizational structure strategy

Chart No 1.1

Dissatisfied employees (B)

Satisfied employees ©

Indifferent to satisfaction level

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 inside and outside the top inner circle are

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Employees who believe positional benefits

will give job satisfaction (A)

Employees who believe various benefits will

give job satisfaction (d)

(D)

(A)

(B)

©

different, it shows that job satisfaction level is depends on the employee belief on

position title

The exhibit No1.1 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.

1.4.2. Applicability of Variable benefit structure strategy

Chart No 1.2

Dissatisfied employees (B)

Satisfied employees (C)

Indifferent to satisfaction

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

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(D)

(A)

(B)

©

Indifferent to satisfaction level(E)

Periodic change in existing benefit structure will give job satisfaction (A)

Various benefit structures will give job

satisfaction (D)

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 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.


contribute to the employee inequity. The variable benefit structure strategy can

solve employee attrition in the shaded area. Larger shaded area in exhibit No1.2

shows greater percentage of applicability of the strategy.

1.4.3. 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

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2. RESEARCH DESIGN

2.1 STATEMENT OF THE PROBLEM

A significant problem faced by the small and medium scale software enterprises

is retaining employees in the organization. In the wake of globalization, Small

and medium scale enterprises (SMEs) are losing their 80% of the valuable

managerial talent pool to big multinational companies. Often aspiring managers

view these firms as tavern or just a stepping stone to climb to prestigious MNCs.

2.2. MANAGEMENT QUESTION

Applicability of advanced employee retention strategies for middle management

level in small and medium scale software enterprises in Bangalore.

2.3 RESEARCH OBJECTIVES

Validity of Unique organizational structure strategy

1 To find out whether the unique organization structure increase retention

2. To what extent the unique organizational structure strategy can solve the

problem of employee attrition.

Validity of Variable benefit strategy

3. To find out whether the variable benefit strategy increases retention

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4. To what extent variable benefit structure strategy can solve the problem of

Employee attrition

Validity of Internal advertisement strategy

5. To what extent an internal advertisement strategy can be implemented in the

companies.

2.4. RESEARCH QUESTIONS

Validity of Unique organizational structure strategy

1. To find out whether Organizational structure is related to employee

preference for staying the company.

2. What is the percentage of employee attrition can be solved by implementing

unique organizational strategy.

Validity of Variable benefit strategy

3. To find out whether employee’s belief on variable benefit is related to

employee preference for staying the company.

4. What percentage of employee attrition can be solved by implementing

Variable benefit strategy.

Validity of Internal advertisement strategy

5. What is the opinion of employees on the success of implementation of

internal advertisement strategy in small and medium scale software industry

in Bangalore?

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2.5. HYPOTHESIS

a) Applicability of Unique organizational structure strategy

Research question No1 To find out whether unique Organizational structure is

related to employee preference for staying the company.

In this research the main factor in the unique organizational structure is position

titles. The hypothesis will test whether the position title and Employees

preference for staying the company are associated or Independent.

Variables in the chi square test

Position title

1. Employees who believe Position title is important

2. Employees who believe Position title is not important

Preference for staying the company

3. Retention

4. Attrition

5. Indifference

The first question in the questionnaire will decide whether the respondent will

prefer position title or other benefits other than position titles while planning to

quit the company.

The combined scores of 3, 4, 5 in the questionnaire will show the employee’s

preference for, retention, attrition or Indifference (neither retention nor attrition)

H0a: The positional benefit is not associated with employee preference for

staying the company.

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χ2 ≤ χ 2 (critical)

H1a: The positional benefit is associated with employee preference for staying

the company.

χ2> χ 2 (critical)

b) Applicability of Variable benefit strategy

Research question No. 3 To find out whether employee’s belief on variable

benefit is related to employee preference for staying the company.

The second question in the questionnaire will decide whether the respondent will

prefer variable benefit structure.

Variables in the chi square test

Variable benefit structure

1. Employees who believe variable benefit structure is important

2. Employees who believe variable benefit structure is not important

Preference for staying the company

6. Retention

7. Attrition

8. Indifference

H0b: The employee’s belief on periodic change in benefit structure is not

associated with employee preference for staying the company.

χ2≤ χ 2 (critical)

H1b: The employee’s belief on periodic change in benefit structure is



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c) Applicability of Internal advertisement strategy

Research question No 5 What is the opinion of employees on the success of

implementation of internal advertisement strategy in small and medium scale

software industry in Bangalore?

H0c: Combined percentage score is 50 and above (Internal advertisement

strategy is accepted)

µ≥µ0, µ0=50%

H1c: Combined percentage score is below 50 (Internal advertisement strategy is

rejected)

µ<µ0, µ0=50%

2.6. POPULATION SIZE AND AREA OF STUDY

The study encompasses small and medium scale software enterprises in

Bangalore. Total population size of lower and/or middle level managers (in all

organizational divisions) in small and medium scale software enterprises in

Bangalore.

2.7. SAMPLING METHOD AND SAMPLE SIZE

Sampling method is convenient sampling; the study was designed to be

descriptive in nature..

Sample size

Calculating the sample based on critical investigative questions

The formula for determining sample size is:

n = S²/ σ x²

σ x = Standard error of the mean or the standard deviation of all possible x s

At 95% (0.5) confidence level z=1.96

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σ x 2 =(0.5/1.96)2 = 0.065

S = Standard deviation of the pilot study sample.

n = Sample size required

The required number of samples can be calculated by conducting a sample

questionnaire survey. Here “n” is the minimum required sample size for each

question in the questionnaire.

Q3 SDxi fi d=x-2 fd fd2

0 4 -2 -8 161 5 -1 -5 52 6 0 0 03 7 1 7 74 8 2 16 32

30 10 60S² 1.888889

σ x² = 0.065 n= S²/ σ x² 29.05983


0 2 -2 -4 81 4 -1 -4 42 10 0 0 03 8 1 8 84 6 2 12 24

30 12 44S² 1.306667

σ ˉx² = 0.065 n= S²/ σ ˉx² 20.10256


0 2 -2 -4 81 6 -1 -6 62 2 0 0 03 9 1 9 94 11 2 22 44

30 21 67S² 1.743333

σ ˉx² = 0.065 n= S²/ σ ˉx² 26.82051

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0 0 -2 0 01 3 -1 -3 32 12 0 0 03 8 1 8 84 7 2 14 28

30 19 39S² 0.898889

σ ˉx² = 0.065 n= S²/ σ ˉx² 13.82906


0 0 -2 0 01 3 -1 -3 32 10 0 0 03 10 1 10 104 7 2 14 28

30 21 41S² 0.876667

σˉ x² = 0.065 n= S²/ σˉ x² 13.48718


0 1 -2 -2 41 9 -1 -9 92 7 0 0 03 10 1 10 104 3 2 6 12

30 5 35S² 1.138889

σˉ x² = 0.065 n= S²/ σ ˉx² 17.52137


0 5 -2 -10 201 6 -1 -6 62 3 0 0 03 3 1 3 34 13 2 26 52

30 13 81S² 2.512222

σ ˉx² = 0.065 n= S²/ σ ˉx² 38.64957

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From the analysis table it is clear that maximum sample size is required for

Question number 9 (38.64, i.e. 39 samples)

To get an accurate sample and to increase the number of frequencies in the Chi2

table the sample size is 50.

2.8. DATA COLLECTION DESIGN

The questionnaire for research included a combination of the following kinds of

question

Close-ended

Direct question

Responses from middle level managers of Small and medium scale software

companies for each question in the questionnaire will be collected. A single

questionnaire will contain 8-9 questions.

Primary data will be collected through questionnaire survey of lower and/or

middle level managers (in all organizational divisions) from small and medium

scale software enterprises in Bangalore. In this method questionnaire was

prepared and given to the sample population to fill.

2.9. METHOD OF ANALYSIS

The data collected through questionnaire and the records available was

examined in detail. It was further classified and tabulated with the help of

Microsoft excel software.

Statistical tools

Chi-square test and Sign test are used for testing the hypothesis

28

The non-parametric tests used for the testing the hypothesis is “Chi-square test”

(m*n tables) and Sign test It is suitable for the test for independence of attributes.

Chi-square test

χ2 = ∑ [(O-Ej)2 ∕Ej]

O = Observed number of frequencies categorized in the category

E = Expected number of frequencies in the ith category under Ho

One sample Sign Test

Total number of Plus signs (+)

Total Number of signs (+&-) p – z. σ

z= value In the normal distribution table for normal curve

σ = √p.q/n

p=1/2, (probability of getting sample value less than mean)

q=1/2, (probability of getting sample value higher than mean)

n= Number of Signs

2.10. SCOPE OF THE STUDY

Through this study the researcher is trying to probe the applicability of three new

HR strategies in Small and medium scale software enterprises.

This will help the SMEs to retain the talent pool.

29

2.11. LIMITATION OF THE STUDY

1. The study only concentrates on urban industrial area in Bangalore.

Employees in other urban and rural areas may have different behavior

pattern in terms of job preferences. So the applicability of the research is

confined to Bangalore city only.

2. The findings and conclusions drawn out of the study will reflect only

existing trends in the organization.

30

3. PROFILE

3.1. BACK GROUND OF THE STUDY

A general idea of the retention measures present in the industry is important to

understand the research environment.

Apart from the legal and mandatory benefits such as provident-fund and gratuity,

below is a list of other benefits IT professionals are entitled to the following:

1. Group Medi-claim Insurance Scheme: This insurance scheme is to

provide adequate insurance coverage of employees for expenses related

to hospitalization due to illness, disease or injury or pregnancy in case of

female employees or spouse of male employees. All employees and their

dependent family members are eligible. Dependent family members

include spouse, non-earning parents and children above three months

2. Personal Accident Insurance Scheme: This scheme is to provide

adequate insurance coverage for Hospitalization expenses arising out of

injuries sustained in an accident. This covers total / partial disablement /

death due to accident and due to accidents.

3. Subsidized Food and Transportation: The organizations provide

transportation facility to all the employees from home till office at

subsidized rates. The lunch provided is also subsidized.

4. Company Leased Accommodation: Some of the companies provides

shared accommodation for all the out station employees, in fact some of

the IT companies also undertakes to pay electricity/water bills as well as

31

the Society charges for the shared accommodation. The purpose is to

provide to the employees to lead a more comfortable work life balance.

5. Recreation, Cafeteria, ATM and Concierge facilities: The recreation

facilities include pool tables, chess tables and coffee bars. Companies

also have well equipped gyms, personal trainers and showers at facilities.

6. Corporate Credit Card: The main purpose of the corporate credit card is

enable the timely and efficient payment of official expenses which the

employees undertake for purposes such as travel related expenses like

Hotel bills, Air tickets etc

7. Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to

the employees on the basis of business need. The employee is

responsible for the maintenance and safeguarding of the asset.

8. Personal Health Care (Regular medical check-ups): Some of the IT

company’s provides the facility for extensive health check-up. For

employees with above 40 years of age, the medical check-up can be done

once a year.

9. Loans: Many IT companies provide loan facility on three different

occasions: Employees are provided with financial assistance in case of a

medical emergency. Employees are also provided with financial

assistance at the time of their wedding. And, the new recruits are provided

with interest free loans to assist them in their initial settlement at the work

location.

10.Educational Benefits: Many IT companies have this policy to develop the

personality and knowledge level of their employees and hence reimburses

the expenses incurred towards tuition fees, examination fees, and

purchase of books

11.Performance based incentives: In many IT companies they have plans

for, performance based incentive scheme. The parameters for calculation

32

http://www.bpoindia.org/research/retention-strategies-call-center-industry.shtml

are process performance i.e. speed, accuracy and productivity of each

process. The Pay for Performance can be as much as 22% of the salary.

12.Flexi-time: The main objective of the flextime policy is to provide

opportunity to employees to work with flexible work schedules and set out

conditions for availing this provision. Flexible work schedules are initiated

by employees and approved by management to meet business

commitments while supporting employee personal life needs .The factors

on which Flexi time is allowed to an employee include: Child or Parent

care, Health situation, Maternity, Formal education program

13.Flexible Salary Benefits: Its main objective is to provide flexibility to the

employees to plan a tax-effective compensation structure by balancing the

monthly net income, yearly benefits and income tax payable. It is

applicable of all the employees of the organization. The Salary consists of

Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists

of: House Rent Allowance, Leave Travel Assistance, Medical

Reimbursement, Special Allowance

14.Regular Get together and other cultural programs: The companies

organizes cultural program as and when possible but most of the times,

once in a quarter, in which all the employees are given an opportunity to

display their talents in dramatics, singing, acting, dancing etc. Apart from

that the organizations also conduct various sports programs such as

Cricket, football, etc and regularly play matches with the teams of other

organizations and colleges.

15.Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs.

7000/- based on their level in the organization.

16.Employee Referral Scheme: In several companies employee referral

scheme is implemented to encourage employees to refer friends and

relatives for employment in the organization.

33

17.Employee Stock Option Plan. Employees will be entitled to get the

shares of the company. This will make employee directly related to the

profit.

Now, the actual question, why people are leaving? What types of retention

strategies are required? What is expected from HR Professional and how they

can address this issue?

4. DATA ANALYSIS AND INTERPRETATION

4.1. SAMPLE QUESTIONS AND ITS VALUATION

1. If you look for a new Job, (in a new company) what will be your preference?

(1) Position title is important

(0) Position title is not important

34

2. What is your opinion about replacing the old benefits with new benefits on a monthly basis in your organization?

(1) Improve the job satisfaction

(0) No improvement in the job satisfaction

3. Are you satisfied with the current job (0) Not at all

(1) Very less

(2) Moderately satisfied

(3)Farley satisfied

(4)Very highly satisfied

4. To what extend do you feel that quitting the present job will give you a satisfied job.

(0) Not at all

(1) Very less

(2) Moderately

(3) Farley

(4) Very highly

5. To what extend you are emotionally attached to your company. (0) Not at all

(1) Very less

(2) Moderate

(3) Farley enough

(4) Very high

The total score 0f question Numbers 3, 4, 5 will be calculated and the region will

be specified by the researcher on the scale given below.

Result 0………………………….4………………………..8…………………….12

Retention Indifference Attrition

35

1

Reference table

6. Is there any internal communication channel in your organization?

(0) No channel

(1) Any one channel

(2) Any two channels

(3) Any three channels

(4) Four channels and above

7. What is the frequency of the internal communication in your

organization?

(0) Nil

(1) Very less

(2) Moderate

(3) High

(4) Very high frequency

8. Do you have accessibility to the communication channels present in

your organization?

(0) No accessibility

(1) Very less

(2) Moderate

(3) High

(4) Very high

Common internal communication channels in the organization

Channels 1. E-mail/printed circulars2. Employee meetings and celebration of special occasions of the 3. employee4. others

36

9. What is your opinion about creating awareness on company values

and Employee benefits to its own employees to retain them?

(0) Not useful

(1) Very less

(2) Moderate

(3) Good

(4) Very high

Result

Total

4.1.1. Sample analysis of applicability of unique organizational

structure

OBJECTIVE NO: 1To find out whether the unique organization structure increase

retention

Step 1Finding employees position in the row of the Chi-square test table

37

The first question in the questionnaire will decide whether the employee belongs

to employees who believe Improvement in Positional benefit gives Job

satisfaction (1st row) or employees who believe increase in other benefits give

job satisfaction ( 2nd row)

Step 2

Finding employees position in the column of the Chi-square test table

Combined score of Question numbers 3, 4, 5, in the questioner will decide the

employee’s position in the column (I.e. Satisfied (1st column), Indifferent (2nd

column), dissatisfied (3rd column). If the total response value of question number

3, 4, 5, is equal &/or larger than 0 and less than 4 (0≤ Value >4) indicate a

dissatisfied employee and if the value is between 4 and 8 (4≤ Value >8) indicates

an indifferent employee, but if the value is between 8 and 12 (8≤ Value >12)

indicates a satisfied employee.

Example:

Table No 4.1

Sample Chi-squire test table Employee

choice of staying the

companyPreference for benefits (when looking for a new job)

Retention

C1

Indifferent

C2

Attrition)

C3

Total

C4

38

Improvement in Position(Q1)R1

5 (frequency) 10 20 35

(Number of “1s”)See Exhibit No.7.2. Page No:76

Not Improvement in position(Q1)R2

2 3 10 15

(Number of “0s”)

Total ∑R3

7 13 30 50

Assumptions

1. There must be employees who believe positional benefits give job

satisfaction (1st row)

2. There must be dissatisfied people among employees who believe

positional benefits give job satisfaction (1st row, 3rd column, exhibit No

4.1)Step3 Hypothesis testing Test statistics Chi2 = ∑ [(O-Ej)2 ∕Ej] O =

Observed number of cases categorized in the categoryE (Expected

number of cases in the ith category under Ho) Possible findingsUnique

organizational structure strategy will solve the dissatisfaction in the

shaded area (exhibit No1.1). This in turn will improve the retention of the

employee in the organization. Unique organization structure increase

retention if:The chi-square table must meet all the Minimum Conditions for

applying the theory in Industry

1. The number of employees in the 1st row, 4th column must be higher than

that of 2nd row, 4th column.

2. Number of dissatisfied in the 1st row must be higher than satisfied and

indifferent employees in the same row.

39

The number of solvable attrition by unique org. structure in SMSI as a percentage of total

employees in SMSI

40%

60%

Attrition among employees who prefer positional improvement

Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

3. The hypothesis test must reject the H0: i.e. it should prove that preference

for positional benefits and employee choice of staying the company are

dependent.

OBJECTIVE 2. To what extent the unique organizational structure can contribute

to the employee retention.


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.

INTERPRETATIONS

1. Number of employees in the 1st row, 3rd column (dissatisfied employees)

as a percentage of 3rd row, 4th column (sample size) in exhibit No 4.1 will

give exact size of applicability of the strategy.

Graphical representation of the findings

Example;

Chart No 4.2

40

Interpretation of the graph

1. 40% of the employees in the small and medium scale software industry

are dissatisfied with their current position and benefits, when they

compare their position and benefits with that of other organizations.

4.1.2. Sample analysis of applicability of variable benefit strategy

OBJECTIVE NO3 To find out whether the variable benefit strategy increases retention.

Step 1Finding employees position in the row of the Chi-square test table

The second question in the questionnaire will decide whether the respondent

belongs to employees who believe Periodic change in existing type of benefits

will Improve the job satisfaction (1st row ,exhibit No 4.3) or employees who

believe other benefit structures will Improve the job satisfaction ( 2nd row)

Step 2

Finding employees position in the column of the Chi-square test table

Combined score of question numbers 3, 4, 5, in the questioner will decide the

respondent’s position in the column (I.e. Satisfied (1st column), Indifferent (2nd

column), dissatisfied (3rd column). If the total response value of question number

41

3, 4, 5, is equal &/or larger than 0 and less than 4 (0≤ Value >4) indicate a

dissatisfied employee and if the value is between 4 and 8 (4≤ Value >8) indicates

an indifferent employee, but if the value is between 8 and 12 (8≤ Value >12)

indicates a satisfied employee.

Sample Chi-square test table for Variable benefit structure strategy

Employee choice of

staying the company

employee’s belief on periodic change in existing type of benefits

Retention Indifferent Attrition Total

(Improve the job satisfaction)(Q2)

4 6 10 19(Number of “1s”)See Exhibit No.7.2. Page No:76

(No Improvement in the job satisfaction (Q2)

3 7 20 31

(Number of “0s”)

Total 7 13 30 50

Table No 4.3

42

Assumptions

1. There must be employees who believe periodic change in existing type of

benefits will Improve the job satisfaction (1st row exhibit No 4.3)

2. There must be dissatisfied people among employees who believe Periodic

change in existing type of benefits will Improve the job satisfaction (1st row,

3rd column, exhibit No 4.3)Step3 Hypothesis testing Test statistics

Chi2 = ∑ [(O-Ej)2 ∕Ej] O = Observed frequencies categorized in the

categoryE (Expected frequencies in the ith category under Ho)

INTERPRETATIONSVariable benefit structure strategy will solve the

dissatisfaction in the shaded area (exhibit No1.2). This in turn will improve

the retention of the employee in the organization. Variable benefit

structure will increase retention if:The chi-square table must meet all the

Minimum Conditions for applying the theory in Industry

1. The number of employees in the 1st row, 4th column must be higher than

that of 2nd row, 4th column (exhibit No 4.3).

2. Number of dissatisfied in the 1st row (exhibit No 4.3). must be higher than

satisfied and indifferent employees in the same row.

3. The hypothesis test must reject the H0: i.e. it should prove that employee

choice of staying the company and employee’s belief on periodic change

in existing type benefits are dependent

OBJECTIVE 4. To what extent variable benefit structure strategy can solve the

problem of Employee attrition.

The exhibit No1.2 also shows to what extent the benefit structure contribute to

the employee inequity. The variable benefit structure strategy can solve

43

The number of solvable attrition by variable benefit structure In SMSI as a percentage of total

employees in SMSI

17%

83%

Attrition among employees who prefer variable benefit structure


employee attrition in the shaded area. Larger shaded area (exhibit No2) shows

greater percentage of applicability of the strategy.

INTERPRETATIONS

1. Number of employees in the 1st row, 3rd column (dissatisfied employees)

as a percentage of 3rd row, 4th column (sample size) in exhibit No 4.3 will

give exact size of applicability of the strategy.

Graphical representation of the findings


1. 17% of the employees in the small and medium scale software industry

are dissatisfied with their current benefit structure.

Chart No 4.4

44

4.1.3. Sample analysis of applicability of internal advertisement

strategy

OBJECTIVE NO 5 To what extent an internal advertisement strategy can be

implemented in the companies.

Average of the total values of question numbers 6,7,8,9 from all respondents will

give the industry opinion of applicability of internal advertisement strategy.

Step NO1

Find the total value of question number 6, 7, 8, 9 of each respondent

Example

Questionnaire analysis for Internal advertisement strategy

Question Values 1. Is there any internal communication channel in your

organization?2

2. What is the frequency of the internal communication channels

3

3. Do you have access to the communication channels present in your organization?

4

4. What is your opinion about creating awareness on company values and Employee benefits to its own employees to retain them?

1

Total 10

Table No 4.5

45

Step NO:2

Hypothesis testing

H0c: Combined percentage score is equal or above 50% (Internal advertisement


µ≥µ0, µ0=8 (50%)

H1c: Combined percentage score is below 50% (Internal advertisement strategy

is rejected)

µ<µ0, µ0=8 (50%)

One sample Sign Test

The one sample sign test is a very simple non parametric test applicable when

we sample a continuous symmetrical population in which case the probability of

getting a sample value less than mean in .5 and the probability of getting sample

value higher than mean is also .5. To test the null hypothesis µ= µ0 against an

appropriate alternative on the basis of a random size n we replace the value of

each and every item of the sample with plus sign if it is greater than µ0 and with

a minus sign if it is less than µ0.

TEST STATISTICS

Hypothesis will be acceptable if


Total Number of signs (+&-) > p – z. σ


σ = √p.q/n



46

n= Number of Signs

Step2

Horizontal analysis of each of the questions 6, 7, 8, 9. This will give more insight in to the

problems or barriers to implement internal advertisement strategy.

Example

Horizontal analysis of each of the questions for internal advertisement

Questionnaire

No

Is there any

internal

communication

channel in your

organization?

C1

What is the

frequency of the

internal

communication

channels

C2

Do you have

access to the

communication

channels present

in your

organization?

C3

What is your

opinion about

creating

awareness on

company values

and Employee

benefits to its

own employees

to retain them?

C4

1 2 3 4 1

2 … … … …

3

Total 120 …

INTERPRETATIONS

1. Accepting the H0c (hypothesis) indicate that the small and medium scale

software industry can implement internal advertisement strategy.

2. Horizontal analysis of the questions in the questionnaire will give the exact

percentage of availability of each of the factors such as Presence,

awareness, accessibility of communication channel and the opinion of the

employees on the effective ness of internal advertisement strategy.

Table No 4.6

47

Opinion about implimentation of Internal advertisement strategy

Not useful10%

very less20%

Moderate30%

Good 5%

very high35%

Sample Graphical representation

Example:

Chart No 4.7


The opinion of 35 %( vey high ) of the employees in the small and medium scale

software industry is the implementation of internal advertisement strategy will be

useful.

48

4.2. ANALYSIS OF ACTUAL DATA

4.2.1. Validity of Unique organizational structure strategy

OBJECTIVE No 1 :To find out whether the unique organization structure increases

retention.

Research question No 1

To find out whether positional benefit is related to employee preference for


Hypothesis testing

Step 1

H0a: The positional benefit is not associated with employee preference for


χ2 ≤ χ 2 (critical)

H1a: The positional benefit is associated with employee preference for staying

the company.

χ2 >χ 2 (critical)

Step 2

The level of significance is 5%

49

Step 3

Test statistics

Table No 4.8

Chi-squire test table for unique organizational structure

Employee choice of staying the company

Preference for benefits (when looking for a new job)


Improvement in Position

4 9 19 32

Not Improvement in Position

9 4 5 18

Total ∑ 13 13 24 50

Chi2 = ∑ [(Oij-Eij)2 ∕Eij]

O = Observed number of cases categorized in the category

E (Expected number of cases in the ith category under Ho)

With Yates’ correction factor

The correction factor is being used because some of the values in the chi squire

table are below 5

Chi2 = ∑ [(|Oij-Eij|-.5)2 ∕Eij]

50

Table No 4.9

Calculation table for chi square test (Unique organizational structure)

Observed frequencyOij

Expected frequencyEij (Oij-Eij) |Oij-Eij| |Oij-Eij|-.5 [|Oij-Eij|-.5] 2 [|Oij-Eij|-.5]2 /Eij

4 8.32 -4.32 4.32 3.82 14.5924 1.753894

9 8.32 0.68 0.68 0.18 0.0324 0.003894

19 15.36 3.64 3.64 3.14 9.8596 0.641901

9 4.68 4.32 4.32 3.82 14.5924 3.118034

4 4.68 -0.68 0.68 0.18 0.0324 0.006923

5 8.64 -3.64 3.64 3.14 9.8596 1.141157

Total 6.665804

Step 4

Degrees of freedom = (r-1). (c-1), here r= number of rows and c = number of

columns

(2-1). (3-1) = 2

Critical value = Chi2 (Probability under Ho, Degrees of freedom)

Chi2 (.05,2) = 5.99

Step 5

Since Chi2 value calculated is higher than the critical value, the hypothesis has

been rejected. And H1 is being accepted.

Chi2 (calculated) > Chi2 (Critical value)

6.665804 > 5.99

Conclusion

From the above test we can conclude that the unique organizational structure is

associated to retention of the employee.

51

OBJECTIVE 2. To what extent the unique organizational structure can contribute

to the employee retention.

Research question No.2

What is the percentage of employee attrition can be solved by implementing

unique organizational strategy.

ANSWER From the Chi2 table it is clear that total observed attrition in the Small

and medium scale industry is 24 and in that 24 respondents 19 respondents are

employees who prefer positional benefit. So 19 as a percentage of total sample

population (50) is 38%.

Since the Unique organization structure strategy can be applied to 38% of

the population, this will increase the retention of the employees in small

and medium scale software industries.

4.2.2. Validity of Variable benefit strategy

OBJECTIVE 3. To find out whether the variable benefit strategy increases

retention

Research question No.3

To find out whether employee’s belief on variable benefit is related to employee


Hypothesis testing

Step 1

H0b: The employee’s belief on periodic change in benefit structure is not


.

52

χ2≤ χ 2 (critical)

H1b: The employee’s belief on periodic change in benefit structure is



Step 2


Step 3

Test statistics

Table No 4.10

Chi-square table (Variable benefit)

Employee choice of

staying the company



(Improve the job satisfaction)

9 5 4 18

(No Improvement in the job satisfaction

4 8 20 32

Total ∑ 13 13 24 50

Chi2 = ∑ [(Oij-Eij)2 ∕Eij]

O = Observed number of cases categorized in the category

E (Expected number of cases in the ith category under Ho)

53

With Yates correction factor

The correction factor is being used because some of the values in the chi square

table are below 5

Chi2 = ∑ [(|Oij-Eij|-.5)2 ∕Eij]

Table No 4.11

Calculation table for chi square table (Variable benefit)

Observed frequency

Oij

Expected frequency

Eij (Oij-Eij) |Oij-Eij| |Oij-Eij|-.5 [|Oij-Eij|-.5] 2 [|Oij-Eij|-.5]2 /Eij9 4.68 4.32 4.32 3.82 14.5924 3.1180345 4.68 0.32 0.32 -0.18 0.0324 0.0069234 8.64 -4.64 4.64 4.14 17.1396 1.983754 8.32 -4.32 4.32 3.82 14.5924 1.7538948 8.32 -0.32 0.32 -0.18 0.0324 0.003894

20 15.36 4.64 4.64 4.14 17.1396 1.115859Total 7.982355

Step 4

Degrees of freedom = (r-1). (c-1), here r= number of rows and c = number of

columns

(2-1). (3-1) = 2

Critical value = Chi2 (Probability under Ho, Degrees of freedom)

Chi2 (.05,2) = 5.99

Step 5

Since Chi2 value calculated is higher than the critical value, the hypothesis has

been rejected. And alternative hypothesis H1 is being accepted.

Chi2 (calculated) > Chi2 (Critical value)

7.982355 > 5.99

54

Conclusion

From the above test we can conclude that Variable benefit structure is

associated to retention of the employee.

OBJECTIVE No.4

To what extent variable benefit structure strategy can solve the problem of

employee attrition.

Research question 4

What is the percentage of employee attrition can be solved by implementing

Variable benefit strategy.

ANSWER From the Chi2 table it is clear that total observed attrition in the Small

and medium scale industry is 24 and in that 24 respondents only 4 respondents

prefer periodic change in benefits. So 4 as a percentage of total sample

population (50) is 8%.

Since the Variable benefit strategy can be applied to 8% of the population,

this will increase the retention of the employees in small and medium

scale software industries. This strategy will not be able to solve the

remaining (as 33.3% of 24) 2/3 of the attrition tendency.

55

4.2.3. Validity of Internal advertisement strategy

OBJECTIVE 5. To what extent an internal advertisement strategy can be

implemented in the companies.

Research question 5.

What is the opinion of employees on the success of implementation of internal

advertisement strategy in small and medium scale software industry in

Bangalore?

Step 1

H0c: Combined percentage score is 50 and above (Internal advertisement


µ≥µ0, µ0=8 (50%)

H1c: Combined percentage score is below 50 (Internal advertisement strategy is

rejected)

µ<µ0, µ0=8 (50%)

Step 2


Step 3

Test statistics


Total Number of signs (+&-) > p – z. σ (prop)


σ (prop) = √p.q/n

56



n= Number of Signs

Table No 4. 12

Questionnaire analysis table for internal advertisement strategy

RESPONDNT NO

Question No Q1

Question No Q2

Question No Q3

Question No Q4

Total Q1+ Q2+ Q3+ Q4

Values not equal to 8

Plus/minus sign

1 4 4 4 4 16 16 +2 3 3 3 1 10 10 +3 3 4 2 4 13 13 +4 4 3 4 4 15 15 +5 3 2 3 3 11 11 +6 2 4 3 4 13 13 +7 2 2 3 4 11 11 +8 4 3 0 4 11 11 +9 4 3 3 4 14 14 +

10 3 3 2 4 12 12 +11 4 4 4 4 16 16 +12 2 3 3 4 12 12 +13 2 3 3 4 12 12 +14 2 3 3 2 10 10 +15 2 4 3 4 13 13 +16 2 2 2 4 10 10 +17 4 2 3 1 10 10 +18 3 4 1 0 8 Total 1719 2 2 1 3 8 6 -20 2 3 1 0 6 5 -21 1 1 1 2 5 7 -22 1 2 2 2 7 7 -23 3 2 1 1 7 7 -24 4 1 1 1 7 6 -25 3 2 1 0 6 5 -26 2 1 2 0 5 7 -27 2 4 1 0 7 9 -28 1 3 2 3 9 7 -29 2 2 2 1 7 7 -30 3 2 1 1 7 6 -31 4 1 1 0 6 4 -32 1 1 1 1 4 5 -33 0 0 1 4 5 7 -

57

34 2 3 1 1 7 7 -35 3 1 1 2 7 7 -36 2 2 2 2 8 6 -37 1 2 2 3 8 6 -38 2 2 2 1 7 7 -39 2 4 1 1 8 6 -40 3 2 1 0 6 7 -41 2 2 2 2 8 4 -42 3 1 1 1 6 5 -43 2 3 2 0 7 6 -44 2 2 1 1 6 1 -45 2 2 3 0 7 Total 2646 1 1 1 1 4 N = 4347 3 1 1 0 548 3 2 1 2 849 2 3 1 0 650 0 1 0 0 1

Totals 119 117 91 95

Table No 4.13

Calculation table for sign test

Number

of +

values

Number

of -

values

n p q σ (Prop)√p.q/n

Z p – z. σ

(prop)

No. of+

values/n

17 26 43 0.5 0.5 0.005814 1.64 0.490465 0.395349

58

Step 4

Critical value = 0.490465

Step 5

Since probability of values greater than 8 calculated is lower than the critical

value, the hypothesis has been rejected. And alternative hypothesis H1 is being

accepted.

Critical value > Calculated value

0.490465 > 0.395349 (17/43)

Conclusion

From the above test we can conclude that the opinion of Small and medium

scale software industry employees are not favorable for the implementation of

Internal advertisement strategy

59

Employee preference for staying the company In SMSI

26%

26%

48%

Employees prefering retention Indifferent employees

Employees prefering Attrition

5. FINDINGS RECOMMENDATIONS

AND CONCLUSION

5.1 FINDINGS AND RECOMMENDATIONS

Chart No 5.1

The above graph shows that 48% of the employees prefer to leave

the job to improve their current status. This 48% is not satisfied with

their current status. 26% of the employees are indifferent to retention

or attrition. Another 26 percentage are satisfied with their current job

and they prefer to stay the job and the company.

60

Reasons for attrition in SMSI as a percentage of total Attrition in SMSI

79%

21%


Attrition due to other reasons

5.1.1 Findings from the research on Unique organizational

structure strategy

Chart No 5.2

The small and medium scale software industry (SMSI) in Bangalore

shows 48% attrition and in that 48 percentage 79% (above graph) is

quitting the company to improve their position. All other reasons are

only 21%.

The chi2 test analysis confirmed that there is a relationship between

position titles and employee retention. So the organizational

structure is related to employee preference for staying the company.

To retain the talent in the organization companies can give position

titles which convey high social status and responsibility.

61

The number of solvable attrition by unique org. structure in SMSI as a percentage of total

employees in SMSI

38%

62%



Another benefit of applying the unique organizational structure

strategy is to minimize the comparison tendency of the employee

with his benefit structure with that of other employees in other

companies.

Chart No 5.3

This graph shows that in the total population the unique

organizational structure strategy can be applied to 38% of the total

Small and medium scale software industry. So the extent to which

the unique organizational strategy can be applied is 38% of the total

employees in the SMSI.

Since the Unique organization structure strategy can be applied to

38% of the population, this will increase the retention of the

employees in small and medium scale software industries.

62

Attrition among employees who prefer different benefit structures

17%

83%


Attrition among employees who prefer existing benefit structure

5.1.2. Findings from the research on Variable benefit structure

strategy

Chart No 5.4

The chi2 test analysis confirmed that there is a relationship between

employee’s preferences for benefit structure is related to employee


The small and medium scale software industry in Bangalore shows

48% attrition and in that 48 percentage 17% (above graph) prefers

periodic change in benefit structure, i.e. they prefer variable benefit

structure strategy.

63

The number of solvable attrition by variable benefit structure In SMSI as a percentage of total

employees in SMSI

8%

92%



Chart No 5.5

But the employee’s attrition problem solvable by variable benefit

structure strategy is only 8% when comparing it to the total

employees in the SMSI. So the extent to which this strategy can be

applied is only 8%.

Applying this strategy is not economical as only 8% of the total

employees can be stopped from attrition by implementing Variable

benefit strategy.

64

Access to the communication channels present in the SMSI

very less44%

Moderate24%

No accesibility4%

Farley Enough22%

very high6%

5.1.3. Findings from the research on internal advertisement

strategy

From the sign test we can conclude that the opinion of Small and

medium scale soft ware industry employees is not favorable for the

implementation of Internal advertisement strategy

The main hurdles are:

Chart No 5.6

1. Very less accessibility to the communication channels. In

small and medium scale software industry. 48% of the

employees have either very less or no access to the

communication channels present in the organization.

65

Opinion about implimentation of Internal advertisement strategy

Not useful24%

very less26%Moderate

14%

Good 8%

very high28%

Chart No 5.7

2. Second reason is the general opinion about the

implementation of internal advertisement strategy is negative.

Around 50% of the employees don’t agree with the

implementation of the strategy.

66

5.2 CONCLUSIONS

The research shows that there is a relationship between Positional benefits and

employee retention in the organization. It also concluded that internal

advertisement cannot be used in the small and medium scale software

enterprises. Though there is an association between benefit structure and

employee preference for staying the company, the research revels that this

relationship is not conducive for implementing the variable benefit structure

strategy.

My dissertation for retention strategies in the software industry was highly

informative and supportive to my future it has helped me to gain knowledge of

conducting study of human resource function in an organization.

Many HR professionals feel that work performance is a contemplation of how

employees feel about themselves and their work, If an employee experience a

sense of pride in the job then the work quality, efficiency, and retention increases

significantly. Employees who suffer from low self esteem and display lack of

enthusiasm exhibits negative feelings at the work place. Protecting the self

esteem of the employee will be top agenda for future organization. One of the

best ways to achieve that is by providing socially acceptable positions titles to the

employees.

67

6. BIBLIOGRAPHY AND APPENDIXES

Bibliography

Books

1. C. R. Kothari, Research Methodology methods and techniques, Second

edition, Wishwa Prakashan year 1997

2. Donald R. Cooper, Pamela S. Schindler. Business Research methods,: Eight

editions Tata McGraw-Hill year 2004

3. K. Aswathappa, Organizational Behavior , Fifth editions, Himalaya Publishing

House year 1989

4. V.S.P Rao, The Human Resource management text and cases, second

editions , Excel Books year 1992

Journals

1. The ICFAIn Journal of management and research,Volume V No:2

Februvary 2007, ICFAI university press, Page no 65: Human resource

development climate in IT companies in India.

68

2. HRM review, Employer’s brand, ICFAI university press,June 2006

Websites

http://www.employeeretentionstrategies.com/bottomline.htm

http://www.ioma.com/audioconferences/471.html


69


http://www.ioma.com/audioconferences/471.html

http://www.employeeretentionstrategies.com/bottomline.htm

Appendix No.1

6.2.1. Questionnaire

KRISTU JAYANTI COLLEGE OF MANAGEMENT &TECHNOLOGY

Dear Sir,

We at Kristu Jayanti College of management and technology are conducting a

research study on the Applicability of advanced employee retention strategies for

middle management level in small and medium scale software enterprises in

Bangalore. Your help with the few questions on the attached pages will take only

few seconds and will make a real contribution to the accuracy and success of this

study. Your reply will be treated in strict confidence and will be available only to

my research guide and me. Any publication will be only of statistical totals and

inferences.

Sincerely,

Study Conducted by Mathew AbrahamMBA IV SEMKristu Jayanti College

QUESTIONAIREName of the employee…………………………………………………………………..

Designation…………………………………………………………………………. ….

Name of the company…………………………………………………………………...

Under the Guidence ofProf. A. M. TattiMBA coordinatorKristu Jayanti College

70

1. If you look for a new Job, (in a new company) what will be your preference?

(1)Improvement in Position

(0)Not improvement in position (Increase in other benefits)

2. What is your opinion about replacing the old benefits with new benefits on a monthly basis in your organization?

(1) Improve satisfaction from the benefits

(0) No improvement in satisfaction from the benefits

3. Are you satisfied with the current job

(4) Not at all

(3) Very less

(2) Moderate

(1) Farley enough

(0) Very high

4. To what extend do you feel that quitting the present job will give you a satisfied job.

(0) Not at all

(1) Very less

(2) Moderate

(3) Farley enough

71

(4) Very high

5. To what extend you are emotionally attached to your company.

(4) Not at all

(3) Very less

(2) Moderate

(1) Farley enough

(0) Very high

6. Is there any internal communication channel in your organization?

(0) No channel

(1) Any one channel

(2) Any two channels

(3) Any Three channels

(4) Four channels and above

7. What is the frequency of the internal communication in your

organization?

(0) Nil

(1) Very less

(2) Moderate

(3) Farley enough

(4) Very high frequency

Common Internal communication channels In the organizations1. E-mail/printed circulars2. Employee meetings3. celebration of special occasions of the employee4. print media5. others

72

8. Do you have accessibility to the communication channels present in your organization?

(0) No accessibility

(1) Very less

(2) Moderate

(3) Farley enough

(4) Very high

9. What is your opinion about creating awareness on company values and Employee benefits to its own employees to retain them?

(0) Not useful

(1) Very less

(2) Moderate

(3) Good

(4) Very high

Thank You

Mathew Abraham

73

Table No 7.1

6.2.2. PILOT STUDY TABLE FOR SAMPLE SIZE ANALYSIS (30

RESPONDENTS)

Q3 Q4 Q5 Q6 Q7 Q8 Q90 4 4 4 4 4 44 2 1 3 3 3 12 4 4 3 4 2 40 2 1 4 3 4 43 2 3 3 2 3 34 3 4 2 4 3 42 2 4 2 2 3 43 3 3 4 3 0 44 0 4 4 3 3 44 4 4 3 3 2 42 4 3 4 4 4 44 3 3 2 3 3 43 3 3 2 3 3 41 1 3 2 3 3 21 2 1 2 4 3 40 1 3 2 2 2 42 2 2 4 2 3 12 0 1 3 4 1 01 1 1 2 2 1 33 3 0 2 3 1 03 3 1 1 1 1 20 1 2 1 2 2 21 2 0 3 2 1 14 4 4 4 1 1 13 2 4 3 2 1 04 2 3 2 1 2 01 4 4 2 4 1 02 3 4 1 3 2 33 2 4 2 2 2 14 3 3 3 2 1 1

Number of ‘0s’ 4 2 2 0 0 1 5

Number of ‘1s’ 5 4 6 3 3 9 6

74

Number of ‘2s’ 6 10 2 12 10 7 3

Number of ‘3s’ 7 8 9 8 10 10 3

Number of ‘4s’ 8 6 11 7 7 3 13Total 30 30 30 30 30 30 30

Table No 7.2

6.2.3 QUESTIONNAIRE DATA ANALYSIS TABLE FOR CHI-SQUIRE TESTS

Q1 Q2 Q3 Q4 Q5Total (Q3+Q4+Q5) RETENTION INDIFFERENT ATTRITION

1 0 0 4 4 8 11 1 4 2 1 7 11 0 2 4 4 10 11 1 0 2 1 3 11 0 3 2 3 8 11 0 4 3 4 11 11 0 2 2 4 8 11 0 3 3 3 9 11 0 4 0 4 8 11 0 4 4 4 12 11 0 2 4 3 9 11 0 4 3 3 10 11 0 3 3 3 9 11 0 1 1 3 5 11 0 1 2 1 4 11 0 0 1 3 4 11 0 2 2 2 6 11 0 2 0 1 3 11 0 1 1 1 3 11 0 3 3 0 6 11 0 3 3 1 7 11 1 0 1 2 3 10 1 1 2 0 3 11 1 4 4 4 12 11 1 3 2 4 9 11 1 4 2 3 9 11 1 1 4 4 9 11 0 2 3 4 9 11 0 3 2 4 9 11 0 4 3 3 10 11 0 0 4 4 8 11 1 2 0 3 5 10 1 0 3 0 3 10 1 0 0 0 0 1

75

0 1 0 2 0 2 10 1 1 1 1 3 10 0 2 4 4 10 10 0 3 2 4 9 10 0 4 4 4 12 10 0 1 2 0 3 10 0 2 0 1 3 10 0 0 3 0 3 10 1 1 1 2 4 10 1 0 4 1 5 10 1 3 2 1 6 10 1 4 0 1 5 11 1 1 3 1 5 10 0 0 2 0 2 10 0 3 4 3 10 10 0 4 3 2 9 1

Total 13 13 24Number of “1s” =32

Number of “1s” =18



Table No 7.3

6.2.4. Chi-square table for unique organizational structure


Preference for benefits (when looking for a new job)


Improvement in Position(Q1)

4 frequencies 9 19 32(Number of “1s”)

Not Improvement in position(Q1)

9 4 5 18 (Number of “0s”)

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Total ∑ 13 13 24 50

Table No 7.4

6.2.5 Chi-square table for Variable benefit structure




(Improve the job satisfaction)(Q2)

9 5 4 18(Number of “1s”)

(No Improvement in the job satisfaction (Q2)

4 8 20 32(Number of “0s”)

Total ∑ 13 13 24 50

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employee retention strategy

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