HR Retention Finding and Keeping the Right Term Paper

Excerpt from Term Paper :

HR Retention

Finding and keeping the right employees are major problems especially to big businesses today, but the biggest headaches appear to confront the retail, food service (Catlette 2000) and the high-technology industries. The National Restaurant Association alone approximated the turnover among fast-food workers at 300% or so fast that by the time one gets his or her order of French fries, the worker might have made a change in his or her career (Catlette). Some Florida companies were reported to have taken bold steps at fighting off a 2.8% unemployment rate among hospitality workers in an attempt at insuring that breakfasts were cooked and served, beds made and park sideways swept. Disney was said to have gone as far as Puerto Rico offering airline tickets and bonuses for a year's contract as maids or food service workers (Catlette).

The most businesses hire workers-based competence and experience but values, style and work preferences take priority. They make sure their workers fit their organization so that they would stay around long (Catlette 2000). All of Marriot Hotel chain's employees share the common quality of politeness, the one quality that fits into the job more than experience and CEO Bill Marriot observes it as rule number 9. Atlanta-based Chick-fil -- A observes the same viewpoint, according to its CEO Truett Cathy, especially in appointing someone to a position of leadership. So a main reason for manpower turnover is not competence or talent, but organizational unfitness.

The organization, for its part, must continue upgrading its standards. When these downgrade or loosen up, employees begin to bow out (Catlette 2000). They will not be part of a losing team or enterprise. Furthermore, workers leave managers who fail them and jobs that bore them. General Electric, in its 1995 report, identified such managers as type A managers who could come up with short-term achievements but did so by pressuring their people or putting them down. In their inability to coach employees to acceptable behaviors, they drive them away, often to competitors.

Employees move out of an organization that does not offer them suitable challenges and the freedom to pursue these (Catlette 2000). They want broader responsibilities, authority and accountability. This was demonstrated by Marriott's First 10 program, which treats a guest to total service from the door, checking-in and luggage to the room. Marriott Hotel near the Dulles Airport also demonstrated this thoroughness of service. Employees also tend to move out when they fail to see personal interest in them develop and the organization investing in the effort they put into their jobs. A manager at Crate & Barrel, for example, places a theater ticket at the handle of a broom as incentive to the first employee who will pick it up and use it. Part-timers at Starbucks get to enjoy benefits provided for regular employees.

Employee turnover, turnover costs and the poor perception of the dining or restaurant industry's career opportunities were among the problems and challenges Blumenthal said the industry faced (Duecy 2004). She said that replacing a manager would cost a restaurant around $23,000 and more than $2,000 for an hourly employee, according to studies conducted by the Resource Center for Workforce Solutions. Merrill Lynch economist Shipley added that restaurants could not raise prices too much because these would require greater productivity (Rubenstein 1997). In order to increase productivity and keep turnover manageable, work conditions must be made as pleasant as possible and through technology improvement, and in turn, pay higher wages, he explained. Marriott's Giacalone likewise said that the Hotel could not keep increasing wages but maintain its present competitive salaries and benefits and simply look for compensation options to offer its potential applicants.

Giacalone also said that Marriott took stock of the cost-effectiveness of classified ads in its recruitment efforts and referred to a "huge culture shift" in its series of discussions with an advertising agency on the matter of recruitment (Rubenstein 1997). The discussions were meant to optimize the costs of print advertising while encouraging a high flow of applicants. Marriott is an example of a large global enterprise that was going low on print ads. On the opposite end are high-growth business operators, which utilized the advantages of print ads even more. One such operator was Starbucks Coffee, which invited applicants for hourly partner, shift supervisor and store management positions in the New York Times for their new units in the Big Apple. The ad offered a competitive compensation and benefits for partners who would work for more than 200 hours a week, a pound of coffee per week and a 30% discount on all merchandise.

Captain D's general manager Mike Smith emphasized the importance of keeping or retaining the right employees and recruiting them while intending to retain them (Rubenstein 1997). He noted that unemployment in his area in Nashville was very low and that if employees were treated right, they would not leave the company even if they were offered higher salaries or wages.

Employee Turnover and retention were also crucial issues in the retail sector, where improved retention could save money, enhance customer service and reduce or control theft (Joinson 1999). Aon Consulting's own America at Work study, conducted in 1999, identified workforce share as a possible challenge for HR. It noted that companies' need for qualified workers grew at the same time with a decreasing manpower pool that showed little loyalty or gratitude towards the organization in considering other employments. The study revealed that 25% of those employees surveyed were willing to move to another job with a 10% or 20% pay increase. Santa Clara-based Saratoga Institute came up with a human resource financial report on front-line workers who had contact or established relationships with customers. It reflected exempt turnover at 17.7% and nonexempt at 78.8%, which led many retailers into giving in to this turnover rate as their inevitable cost of doing business. Other retail businesses, though, looked at the issue in another way. They would discourage casual movement of employees by means of good wages and benefits tied along with longevity or company ownership. Nordstrom, Inc. Of Seattle would attract qualified workers who wanted to make good money and provided them with the proper environment for it, according to VP for human resources Jose Demarte. He said that Nordstrom not only paid well but also gave its employees the chance to make more through its pay-for-performance commission system. His company rewarded merit and ability in employees who scored high in sales and customer service, and which his company credited for a low 35% turnover rate. He also stressed that Nordstrom observed the golden rule in offering the best benefit packages, promotions, employee discounts on merchandise and profit-sharing. He also said that employees who had been with the company longer actually sold more (Joinson).

Dick Summers, corporate human resources director of Kinko's, Inc. In Ventura, California also believed that employers were not that helpless. Kinko's has become more than a copy center into a creator of products for customers who came with important or complex materials and who wanted to see familiar faces (Joinson 1999). Summers referred to Kinko's employees as autonomous partners who, several years ago, were bound into a single, big company. Turnover was 78% at first, but through specific measures, the company brought the figure down to 50%. These measures were an upgraded compensation plan, a common training program for direction and sense of career, and incentives, including a founder's grant of $300 worth of stock for those with more than a year's employment and a 100% matched 401 k plan. On top of all these, Summers explained that good employee treatment could not be replaced and that the company's managers really care for its employees from the very top to the bottom.

Jay Lawrence of Lawrence Management Services, Inc. Of Sweet-water, Texas was one day stunned to realize that his grocery stores had a 70-140% turnover rate. Although the numbers appeared typical for retail grocers, he asked a consultant friend to help him bring the level down (Joinson 1999). He found that the turnover problem was concentrated on the entry-level employees. His grocery stores were a family-owned business and, as the first step in the new approach, he stressed to employees that they were part of the family and not just payroll figures. He asked the managers to provide employee information, such as anniversaries and other family events, and make it a point to go to the stores and visit employees. Then he expanded their pool of applicants and produced a recruiting brochure and a flier that could be inserted into shoppers' bags. His company also concentrated on associate referrals and aimed at senior citizens. These measures cut Lawrence's turnover into half. He said that hiring is expensive and that advertising, interviewing, drug tests, training and lost productivity all summed up to abut $6,000 for each new hire (Joinson).

The National Restaurant Association estimated that Starbucks Coffee Company would have a 300% turnover, typical of fast-food establishments (Joinson 1999).…

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