1.1 Knowledge Management
Knowledge management takes the understanding that people have an economic value to an organisation through the skills, experience and knowledge that they posses; something that is particularly important for a specialist service organisation such as Trident. Robinson and Stern (1997) argue that organisations that desire a competitive advantage should move to develop systems to leverage the value of knowledge, with Snell and Dean (1992) adding that it is the skills, experience and knowledge that enhance productivity. Therefore profitability is maximised where investment in skill building has taken place when ‘the longer the period over which returns from the investment can accrue’ (Mueller. 1982: 94), further highlighting the importance of retention of key personnel.
1.2 Motivational Theories
Motivational theory continues to be considered on a daily basis, to provide an overview the more established theories are considered below.
Maslow’s Hierarchy of Needs: - Maslow’s hierarchy consisted of five key wants and needs, physiological, security, affiliation, esteem and self-actualization and that all humans aspire to becoming self-actualizing. This includes the motivation of employees within organisations where they have ‘the desire to achieve or maintain the various conditions upon which these basic satisfactions rest’ (Ramlall. 2004: 53). Based on this, managers can successfully motivate their employees through aiming to satisfy unmet needs. This theory also supports the practice of employees leaving a job due to lack of career progression, or in this context, their needs are not met.
McClelland’s Need Theory: - This theory goes on the basis that people have three core needs of achievement, power and affiliation. People then have varied levels of each need and this determines their motivation. ‘Achievement theories propose that motivation and performance vary according to the strength of one’s need for achievement’ (Kreitner. 1998). The affiliation theory defines the need to spend time in social activities and relationships and that successful managers will have a low need for affiliation combined with a high need for power.
Vroom’s Expectancy Theory: - This theory believes that people are motivated in ‘ways that produce desired combinations of expected outcomes’ (Kreitner and Kinicki. 1999: 227) The key elements of this theory relate particularly to the action-outcome element of an employee’s actions where motivation towards a task or job is influenced by the expected outcome said task.
Herzberg’s Motivator-Hygiene Theory: - Herzberg (1966) argues that in relation to employee motivation there are two elements, hygiene factors (e.g. company policy, salary and co-worker relations) and motivational factors (e.g. achievement, recognition and advancement). Herzberg argues that the hygiene factors, if not met, cause dissatisfaction and once met provide a neutral state from which the motivational factors can then provide an effect.
1.3 Other Considerations
Lewis et al. (2003) consider the term psychological contract which in addition to the formal contract of employment ‘refers to the expectations of employer and employee’ (Lewis et al. 2003:12). This specifically relates to what each party of the employment perceives is owed to them and although neither party will know the exact terms of the contract (e.g. expected career progression or particular level of output), they do affect the behaviour and relationship between the employee and employer. It is now considered that each party involved in the psychological contract is less dependent upon the other and that ‘There is no job security. The employee will be employed as long as he or she adds value to the organisation…the employee has the right to demand interesting and important work…receives extra pay…and gets the experience and training needed to be employable here or elsewhere’ (Hiltrop 1995:289). This is in direct contrast of the previously mentioned motivation-hygiene theory as Hiltrop claims here that the hygiene factor of security plays no part in motivational context.
There are various websites that provide there own theories on employee retention and motivation. However as it is difficult to verify the specific sources of the information; a degree a caution should therefore be applied. The Employee Retention Headquarters is a good example of this (www.employee-retention-hq.com) as it provides a top ten for employee retention; this provides tips in relation to pay, praise, treatment, communication, recognition and opportunities. However the author is anonymous and there is no verification available on the information provided.
Steve Truelove (1995) is one author whom associates employee motivation to their training and development needs; Truelove recognises that ‘people vary in their needs and drives.’(Truelove 1995: 292) In contrast to Maslow’s Hierarchy, Truelove does not believe that all employees aspire to self-actualization and require sustained growth and development as some people ‘prefer to take risks. They do not want to be constantly tackling new things, but are content to do their current jobs well.’ (Truelove 1995: 292) Truelove also believes that a level of staff turnover is healthy so as to avoid the organisation from becoming clogged by long serving employees ‘who occupy positions that they once dreamed of attaining’ that now bore them and they feel trapped as there is little option for change and this makes the ‘organisation inefficient and unresponsive’. (Truelove 1995: 295) He believes that this situation comes about when the organisation pays to little attention to the needs of its employees.
2.0 Research Methodology
2.1 Research Design
This study is of exploratory nature based on the factor that there is currently no problem with employee turnover and retention at Trident. The aim of the report is to address to objectives and provide recommendations so that Trident can better its existing position in relation to turnover and retention as opposed to identify answers to existing issues.
2.2 Data Collection Methods
In total there are four separate forms of data to be collected as outlined below:
- Secondary Data – Trident UK’s HR department completed an employee satisfaction survey in September 2005. Access to the results of this survey has been granted for use in this study.
- Primary Data – There are three forms of primary data to be collected:
- Directors’ Interview – Interviews will be held with a sample of Trident UK’s directors. These will be on a one-to-one basis using pre-written questions.
- Leavers’ Interview – These interviews will involve two former Trident employees that have agreed to participate and will either be on a one-to-one basis or over the phone depending on availability.
- Employee Questionnaire – This will be on a sample of existing Trident UK employees on an unsupervised basis.
2.3 Sample Design
Samples will be used for two of the primary data collection populations, Trident UK directors and employees:
- Directors – There are currently seven directors at Trident UK and so as to get a balanced view two of the directors will be interviewed at random; approximately 29% of the population.
- Employees – To ensure that there is an even representation from throughout the structure at Trident UK stratified probability sampling will be employed for the data collection of the employees’ questionnaire. As the structure at Trident is not perfectly clear I will place each employee into one of three strata; manager, supervisor or standard based on their job role and importance within the organisation. An even representation (around the 30% mark) will then be taken from each stratum at random.
2.4 Analysis
The study and research will largely be of a qualitative nature and key points will be drawn from the findings of the employee satisfaction survey, directors’ and leavers’ interviews. This will also be the case for the employees’ questionnaire, however to assist with analysis questions one to seven will also be coded into table and graphical format.
3.0 Objectives
This report has three key objectives:
1. Review and analyse:
- Why employees leave
- Why employees stay
- What would motivate employees to stay
2. Identify motivational differences between shop floor and the directors.
3. Provide recommendations towards further improving Trident’s turnover and employee retention based on these findings.
4.0 Secondary Research: Findings Summary
The customer satisfaction survey carried out by the HR department at Trident UK in September 2005 involved every employee and asked questions regarding every aspect of their working lives including training opportunities, supervision and management qualities as well as employee considerations on the remuneration package they receive. The key statistics and facts from the survey are outlined below:
- 95% responded favourably when questioned about personal treatment.
- 70% responded favourably in relation to fair consideration for job openings.
- 33% responded favourably in relation to pay compared to similar jobs in the area.
- 22% responded favourably in relation to health insurance.
- 63% responded favourably to availability of training opportunities.
- 56% agreed that they receive performance feedback from supervisors
- 87% agreed they had a strong commitment to Trident UK
5.0 Employee Questionnaire: Findings Summary & Analysis
This section will review the answers from the employee questionnaire looking at the coded data and providing summaries of the findings in context to the objectives. Each question will be summarised by two key fact bullet points before further analysis takes place to help better put the findings into appropriate context; an example of a completed questionnaire can be found at APPENDIX FIGURE 1.
1. In general, how do you feel about working for Trident?
Summary:
- 72% employees on all levels ‘enjoy’ working for Trident.
- 0% feels negatively about their current position.
Analysis:
These results generally go along with the findings of the customer satisfaction survey where 87% responded favourably, with only 3% giving an unfavourable response. It may be possible that the 3%’s attitude has changes slightly in the five-month period between questioning.
2. What is your key motivation behind your work?
Summary:
- 41% consider career progression as key motivation.
- Only 11% claim money to be main motivation.
3. What do you most enjoy about your job?
Summary:
- 41% regard Trident UK itself as the most enjoyable element.
- 80% of supervisors consider the challenge to be so.
Analysis:
It is interesting to see the great difference in response between standard employees and supervisors. Whilst it is positive that such a high percentage considers Trident as a whole to be the most enjoyable element of their employment, the higher levels of management must be wary that they do not focus to heavily on gimmicks that please the masses; but also pay interest to the status of their more senior staff.
4. What do you most dislike about your job?
Summary:
- 59% claim pressure to be most dislikeable factor to job.
- 29% of standard employees put money as answer.
Analysis:
As only two key answers came out of this question the issues raised can be dealt with greater ease. The smaller percentage state that money is their most dislikeable factor but as highlighted in the directors’ interviews, the whole package offered by Trident compensates for this. Although to these respondents it is an issue they nonetheless remain in employment with Trident. Pressure however is an effecting factor from management down and with this in mind a competitor could offer a slightly better remuneration package that the employee takes to escape the pressure.
5. What makes you stay at Trident?
Summary:
- 47% state the company as their answer.
- Only 1 manager from all respondents gave money as reason.
Analysis:
Again the company itself is highlighted as the main reason for employees prolonging their careers at Trident, whilst money is also barely mentioned. The company’s current policy towards making Trident the best company to work for is currently highly effective and it is essential that complacency does not sneak in and start to deteriorate this ethic.
6. What would make you leave Trident?
Summary:
- 30% state a job offer of more money would make them leave Trident.
- Bad management and no career progression both received 25%.
Analysis:
Management qualities and career progression are two factors that Trident is successful at in relation to feedback gained on this questionnaire and the employee satisfaction survey. The money factor is something that Trident is aware of and has lost key employees because of it in the past but the directors remain committed to their current practices that continue to work.
7. What would increase your morale/job motivation?
Summary
- 43% state money would increase morale/motivation.
- 23% state career progression.
8. What activities do you see Trident doing to increase morale/motivation?
Summary
- Activities such as continuing to recognise staff, social club, timeouts, competitions and training opportunities were mentioned.
- Over 40% failed to think of more than one answer.
Analysis
Many respondents struggled to come up with answers and those raised were generally from the same people within the sample. It may be the case that respondents just could not think of an answer and the fact that the answers were no longer prompted may have thrown them off. However it may be the case that a lot of the activities such as regular competitions, sandwiches on a Friday or even the themed weeks (e.g. to celebrate being at premises for a year) are now taken for granted by many of the employees as standard practice. This is indicated in a comment by the joint M.D. of the company where ‘people generally don’t point out an activity that goes well…but are very quick to point out something that goes badly’.
9. Have you ever considered leaving Trident? If yes, please explain why!
Summary
- 24% have considered leaving, with 10% of respondents stating money as reason.
- Other reasons include lack of recognition, lack of confidence in management and pressure.
10. If you were to consider leaving Trident, what would encourage you to stay?
Summary
- 33% stated that more money would encourage them to stay.
- 19% stated that further career development (promise of) would be encouragement enough.
6.0 Directors’ Interview: Finding’s Summary
A copy of the questions used in each of the directors’ interviews can be found in APPENDIX FIGURE 2
Below is a summary of key points and opinions highlighted from the interviews:
- Strategy to be the best place to work, not related to pay.
- Offer whole package aside from money, including various benefits and activities to make ‘work life fun’.
- Opportunities for development at any level with encouragement to do so. Also chance to work with biggest brands in the world.
- To dissuade potential leavers would be open and honest about intended future and weigh up what they were being offered to the package they receive at Trident.
- At top level organisational needs have to be a priority over those of the individual, although the two come hand-in-hand.
- Structured route of progression seen to be key factor for encouraging continued service.
- Unsuitability identified as key reason for employees leaving.
- Small, natural turnover regarded as positive to keep business healthy.
- Responsive to needs, identified reason for a number of leavers in short period and applied counter measure.
- Pro-active attitude in approach to morale and motivation.
7.0 Leavers’ Interview: Findings Summary
Below is a summary of the key points raised in response to the interview questions. A copy of the interview questions can be found at APPENDIX FIGURE 3
- Left Trident with mixed positive/negative reflection.
- Variance in reasons for leaving; money being main reason on one occasion and clash with management for other.
- Both stated a pay increase would encourage stay.
- Both stated would not consider a return to Trident as felt bridges had been burnt.
- Agree that Trident do enough to keep hold of key personnel as have low employee turnover.
8.0 Research Limitations
The research had the following limitations:
- Availability issues affected the random sampling of directors and employees where on certain instances a second selection of random participant had to be chosen.
- The findings conclusiveness is affected due to the sample being of around 30%, where 100% would be ideal.
- Employees may have held back on answering certain questions completely honestly in fear of reprieve, even though confidentiality assurances were made.
- Leavers’ interviews used extremely small sample and may not be entirely representative.
9.0 Conclusions
Why do employees leave?
In general, they do not; Trident has an extremely healthy employee turnover rate and manages to keep hold of the majority of its key and most highly skilled employees. Approximately 7% of the current workforce are ‘leavers’ that have returned. The directors believe the main reason for employees leaving is that they just are not suitable to the task or culture, which certainly is a valid train of thought in relation to new employees that fail to settle. However when considering key personnel that have served with the company for some time this is unlikely to be the case and from the findings of this research it comes down to money.
Why do employees stay?
As previously stated money is the main factor involved when considering key personnel leaving Trident and as this study has highlighted it is a factor that all employees are dissatisfied with, so why do they stay? Trident operates to the strategy of being the best place to work, a way of thinking starting with the directors and pushed down the company hierarchy and currently it is working. Employees seem content with being dissatisfied with their pay packets in exchange for what the directors describe as ‘the whole package’; being not simply the additional benefits such as pensions and sick pay, but the fact that work is fun through ongoing competitions and endorsed social arrangements. It is this whole package concept that must continue to be managed with as much importance as a customer account as it appears to be the adhesive that binds the employees to the organisation. However there are signs in this research that suggest that thoughts and feelings do vary greatly between the standard workers and key employees. The research shows that the supervisor class employees are more focussed on the challenge the job gives them as opposed to the organisations interactive activities and Trident must ensure that all levels are catered for and not just appeal to the masses.
What would motivate employees to stay?
There are two key factors involved in answering this question, money and career development. Respondents from every level including directors, leavers and standard employees have highlighted these two elements with money being the number one priority. This however is not the preferred option as previously explained by Trident’s strategy; instead a focus is placed on career development as this is something that Trident can genuinely offer its staff to the rapid pace it is growing. Many staff see career development as the reason for staying at Trident and for those that do not there is a niche there to exploit.
Identify motivational differences between shop floor and the directors
A possible key to Tridents current prosperity could be down to the factor that the differences between shop floor and the directors are so small. The directors seem to have identified the motivational needs and wants of its staff very effectively with specific mentions again given to career development, good benefits and work being fun. The only flaw in the directors’ viewpoint on staff motivation is that of the role of money; however with Trident’s current excellent turnover and retention rate they cannot be blamed for putting the importance of money behind others. The specific importance of money on motivation, morale and retention based on respondents’ answers in this instance should also be questioned. Trident do not pay poorly, they simply do not pay the best and it seems from data gained from the employee satisfaction survey and this research that the existing employees are more than happy to substitute that little bit extra cash for the added value that Trident give to a job. So perhaps in Trident’s case money is not so much of a motivation/morale issue but more of an ‘I wouldn’t mind a bit more’.
10.0 Recommendations
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Undertake any enquiry into the pressure that employees on all levels are facing: - Although the results indicate that it is not to an extent that would make employees consider leaving Trident, it is the most disliked aspect of the employment with the organisation. The pressure is highly likely to be attributed to the ongoing success and growth of the organisation that therefore places additional strain on the human resource available and due to the nature of the business new employees require extensive training and mentoring before being fully operational.
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Consider introducing health insurance into the employee benefits package: - The employee satisfaction survey suggested that, although not expected, the company does not stand well (in the eyes of the employees) in relation to its competitors for its health insurance offerings. Introducing some sort of health insurance to the benefits of employees could potentially improve morale and motivation but will also enhance the ‘whole package’ offered by Trident without too serious cost implications.
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Review basic supervision practices: - The employee satisfaction survey indicated that only 56% of employees agree that they receive sufficient supervision and feedback from line managers, whilst the employee questionnaire results also show that lack of confidence in management and lack of recognition could leave to employees to consider their position. A review of these practices to ensure that company standards are met in terms of regular and effective supervision for all employees could highlight areas of weakness that need addressing.
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Increase practice of exit interviews: - Although Trident’s current employee turnover is very low and a degree of natural turnover deemed an acceptable practice, use of such interviews can potentially benefit Trident; this is particularly important for key personnel when a desire to leave is expressed. Such an interview is often held and the management look at the reasons why they are leaving and see if there is any reasonable remedy to the issues. However increased use of these interviews on all leavers can not only assist in dissuading key personnel from leaving but can also uncover smaller issues that can be easily addressed. It must be ensured that these interviews are held by an appropriate representative (likely to be an HR officer) so as to encourage genuine answers from the interviewee, as some may feel uneasy about speaking their true feelings about the company to e.g. a director.
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Introduce career development plans for all employees within one year of starting: - The importance of career development has been deemed an important factor in relation to all employees morale and motivation. Although it seems that a number of employees have their intended path set out for them, there are also a number of employees that are unsure of their future within the company and this proves to be unsettling. The directors’ interviews indicated that as a dissuasion technique for those considering leaving a clear outline of where that employee stands within the company is given as well as where they are seen to be heading. Implementing this practice at an earlier stage, possibly through supervision interviews, could prevent the consideration to leaving from actually happening. Through having a clearly defined career path of timed progression within the company employees’ security needs have not only been considered but their self actualisation desires have been addressed therefore increasing motivation and providing goals for which the employee can work towards, potentially increasing productivity.
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