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MGT 206 Self Directed Project Retention Management in Supermarkets 1
Research Report
“RETENTION MANAGEMENT”
IN SUPERMARKETS
DR EUNICE
BACHELOR OF BUSINESS
26 MAY’2015
Report Commissioned by MAZHAR ALI MOLWANI
MGT 206 Self Directed Project Retention Management in Supermarkets 2
Memo of Transmittal
To: Dr Eunice
From: Mr Mazhar Ali Molwani
Date: 26 May 2015
Subject: RETENTION MANAGEMENT (SUPERMARKETS)
Find enclosed the report you asked me to complete. The subject of research report is retention
management.
In this report, on the basis of in depth exploration and analysis, I have come up with the in depth
knowledge about retention management, reason behind high turnover, different ways to retain
employees and need of retention management in Super Markets.
I want to express my deep gratitude to Dr Eunice who was very helpful throughout making of this
report and provided the necessary assistance and data whenever required, although the opinions
expressed in this report (and any errors) are solely mine.
Thanks for providing me the opportunity to work on this report which has proved to be very beneficial
and has given me a learning experience, and hope you find this report useful.
If you further want to discuss this report, please contact me.
MGT 206 Self Directed Project Retention Management in Supermarkets 3
Executive Summary
Nowadays retention management is a vital feature for most of the organizations. There are
numerous grounds which may force employee to go for other job; these may embrace
disproportionate employee treatment, less valued by supervisor, inflexible working conditions, low
salary and most important less career opportunity at current job. When employee feels himself
stagnant, sluggish and inactive at his current job so, it can diminish his excitement level. Dread of not
rising and developing motivate him to switch his job. On other hand we have many solutions to
escape from these problems. HR department of organization should conduct detail study and should
understand employee needs, desires & tribulations. After understanding them they should implement
corrective measures which are better for organization and employees in long tenure.
Employee retention is decisive in the long term wellbeing and success of super markets. Managers try
to retain their best employees which guarantee customer satisfaction, increased production sales that
pleased co-workers. It also promotes business in operative succession planning and deeply imbeds
organizational knowledge and learning. Smart employers always realize the significance of retaining
their greatest employee. It’s well-known reality that retention of key employee ensures customer
satisfaction and increased productivity.
Retaining employees in supermarkets are comparatively difficult because of their employment
policies. Supermarkets hire staff on part time and casual basis therefore when they can’t manage their
schedule because of their school and other activities they quit.
It is very essential to retain key employees. Furthermore, top management level understands this
feature very well so they spend time and money to figure out how they can retain their employees.
This activity of top management is beneficial for organization development in long term because it
will save heavy amount of money which organization will spend on training and hiring new
employees.
An effective retention policy which understands how employee will fit in job and community is
compulsory therefore in this research report we discussed ideas and made recommendations which
will integrate into a future comprehensive retention plan.
MGT 206 Self Directed Project Retention Management in Supermarkets 4
Table of Contents
Research Report ................................................................................................................................ 1
Memo of Transmittal ......................................................................................................................... 2
Executive Summary .......................................................................................................................... 3
Introduction ....................................................................................................................................... 5
Research Scope ................................................................................................................................. 5
Research Objective ............................................................................................................................ 5
Research Question ............................................................................................................................. 6
Methodology ..................................................................................................................................... 6
Hypothesis ........................................................................................................................................ 7
Literature Review .............................................................................................................................. 7
Summary of Findings ...................................................................................................................... 10
Discussions ..................................................................................................................................... 13
Research Literature Review Contributions ....................................................................................... 15
Recommendations ........................................................................................................................... 16
Conclusion ...................................................................................................................................... 16
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Introduction
Employees are the back bone of an organization and contribute dominantly to its fruitful
running and income making. An organization cannot survive if the employees are more concerned
about their personnel interest.
Every organization spend to prepare a new employee and make him capable enough to work in a
corporation keeping in mind his job task and relation with co employees. The organization is totally at
loss when its employee is fully trained and leaves their job.
Top level management make various policies which let the employee stick to an organization for a
longer period of time that is called retention management.
This literature review investigates reasons of high employee turnover, procedure, importance and
ways of retaining employees in supermarkets. Discussion segment will provide evidence that retaining
employee’s benefits an organization and at last future recommendations are made which provide a
ground of revising retention policies and make them better.
Research Scope
The scope of this report is to know the importance of retaining employees and to analyse the
ways of retaining them in supermarkets. This report will elaborate the reasons of high employee
turnover which result in spending heavy amount of profits made by such entities.
Employees are the back bone of any organization and the survival of any business without potential
and experienced member is next to impossible therefore this report will be helpful for the future of
supermarkets as it will provide comprehensive knowledge on employee management and ways of
retaining them.
Research Objective
The objective of this research is to analyse the importance of retaining employees in super
markets and to protect super markets annual turnover which they spend over training and hiring
processes.
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Research Question
The literature emphasizes on the following questions
What is retention management and importance of retaining employees?
What are the causes of employee turnover in super markets?
Whether retaining employees may lead super markets in making more profits?
What are the ways of retaining employees?
Methodology
According to Dr Malcolm Todd, Julia Waldman, Dr Anne Hollows and few more authors:
Research Methodology is the way of approaching your question and constructing your dissertations.
Research report is a relation of research design, research question, approach and dissertations.
Approach means the kind of data you use which states to your complete orientation and types of
statements you will make for studies. Dissertations are based on either Qualitative or Quantitative data
or combination of both. It depends upon your preferences, ability and particularly the type of
approach that is suitable for the topic. (Research methodologies, 2014)
Saul McLeod and Minichiello, V’ shared a common thought on Qualitative and Quantitative data
which are:
Qualitative research is an information collected that is non numerical. In Qualitative research the work
of an expert is interpreted and researcher needs to take great care while doing so. This research is
suitable at individual level in which a researcher finds out the ways people think on that particular
topic. Data collected in such method is either unstructured or semi structured and data analysis are
non-statistical. In this research the findings are not conclusive however it gives understanding on
future decision making.
Quantitative Research is a numerical form of research that generalise result from a sample of
population. Structured techniques are used to conduct such kind of research; Data is organized
statically and used to validate a final course of action.
(Saul Mc Qualitative Quantitative | Simply Psychology, 2008)
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This literature review is based on mixed method procedure i.e. Qualitative and Quantitative.
Quantitative method in this report includes gathering, examining, understanding and writing the
results of the study.
Qualitative data includes open ended research by taking to the employees of super markets as I am a
team member of Cole’s supermarket.
Hypothesis
Employee retention creates a relation between their organization developments that make a
positive attitude towards organization mission.
By employee retention, a company can save widest unknown cost of employee turnover.
Literature Review
Many literatures have been proposed on employee’s retention but this literature covers a wide
variety of such research, this review will focus on causes of employee turnover, procedure and ways
of retaining employees. Although literature offers these themes in range of context, this paper will
mainly focus on importance of retaining employees in supermarkets.
Retention Management is defined as an effort made by employers to value their workers to stay and
work effectively in organization. (Employee Voice and Employee Retention, 2010)
According to the article published on The Wall Street Journal hiring employees is first step to create
a workforce that run organization and to retain them is second. This article also provides the tactics to
retain employees which includes, offering them competitive packages that fit their needs, use
incentives to keep them motivated, Conducting interviews and ask employees are they happy with the
working environment, Promote employees when possible, Training employees to learn new job skill,
Open communication of an employee with management, Financial rewards can be offered, A human
resource manager should be hired who provide structure of every individual employee and keep track
on his performance. (The Wall Street Journal, 2015)
On the basis of research conducted by Rod Loader he developed a metric on the employee retention
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(Employee Retention Matrix, Rod Loader 2014)
In this matrix it is found out that if the level of morale is high the turnover of an employee is low.
Dr Jevon Powell listed the most common reasons of employee turnover that are Lack of opportunities,
In adequate compensation, Lack of challenge, Poor work/Life balance, Job stress and unfair treatment.
In response of this article Robert Bullock made some recommendations to overcome these causes
such as job rotation, mentoring formal programs, work/life balance initiatives, collaborative decision
making.
(Top 5 Reasons for Employee Turnover | Centrino-Powell, Robert Bullock 2012)
According to the Bureau of Labour Statistics (BLS), supermarket places are mutual among first-time
job searchers. Most of the employees working in supermarkets as casual or part time are high school
and college students who are working for earning extra money. When school opens and they cannot
manage their schedule so they resign. This is one of the dominant causes of supermarket employee’s
turnover.
(Demand Media, Sophia Cross, 2013)
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The other reason includes lack of flexibility when an employee thinks his management is not flexible
and doesn’t allow him to take personal leave it makes employee frustrated and depressive. If an
employee eagerly wants a day off and his manager doesn’t allow or is not able to make the change
employee may call in sick and supermarket floor will suffer from shortage of staff. This lack of
flexibility can result in losing that employee, or employee will not work with full of his efficiency.
Some supermarkets and discount retailers with grocery units hire managers straight out of business
school. Harry, a supermarket stocker with numerous years’ experience, said in an interview, "Our new
manager is a fresh graduate from a business school. He thinks that he is on a power trip and shows
his authority having no knowledge of ground reality. He continued that my mates were thinking
someone from us will be getting an opportunity to become a manager and as a result of that they lost
couple of their valuable staff”.
(Self-Interviewed at IGA Broadway)
This interview tells us that lack of promotion and appreciation lead an employee to quit job.
Daniell G Spenser investigated the procedure of retention management. In first phase employer
should be apparent about organizational goals, task & objectives. On this basis employer decides that
what he expects from his employee. Once the job description is defined i.e. what expertise and
competencies are required for this job so it will make clear that what is expected from him? So then
he can set his goals consequently. In second phase employer should conduct audit or interview in
order to analyse his employee's portfolio that at what ability he is good at, other option is to interview
them and acquire that what work excites him more. Employer should also do market research or
survey that either his employee’s skill is in demand in market, if his skills are exceedingly demanded
in market so you should take effective measure to retain them as they have more career opportunity in
market. On other hands if employee’s skill is not demanded in market or there are many people in
market who possess same skills at large, they should not be your current retention target. In third
phase you need to analyse those features which encourage and demotivate your employee. Once you
become well aware of motivating factors so they should be taken in account. Demotivating factors
should be erasing by taking corrective measures. The next task you need to do is to locate motivating
factors by using different techniques that can be weekly meetings, group discussions, survey and
questionnaire etc. In fourth phase you need to employ definite matrix, it may consist of major
motivational factors and its effect on employee psychology. At fifth you must implement those
factors. Make sure it should be same for all employee, they should be as per your organizational
culture. In final stage you need to evaluate the influence of these factors. If both employee and
employer are pleased with these factors so it’s ideal condition otherwise you need to revise those
factors. (Employee Voice and Employee Retention, 2015)
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Importance of retaining employees is huge because your existing employee is well aware of your
company’s environment, structure and culture. He knows what his managers and co-workers expect
from him and what he expects from them. Recruiting new employee will devour a lot of time and
effort and it does not confirm that you will end up in hiring them and you are also not sure that they
will join you. There are numerous reasons which inspire and dispirit employee to stay with company
or not. When your work force is less than the actual, so automatically you will be facing more work
load. Employees have to give over time in order to gain maximum productivity. This work load and
over time working can also create frustration in mind of employees and can make them lethargic
which may affect your organizational goals. (Need and Importance of Employee Retention, 2014)
Summary of Findings
According to the report released by Australian Food and Grocery Council (AFGC)
Employment decreased slightly in food, grocery and fresh industry, it is down by 2,571 or 0.9 percent
from the previous financial year. In 2013-14, the industry employed approximately 299,731 people,
down from 302,302 in 2012-13.
In regards to the number of businesses in the industry, in the 2013-14 financial year there was an
estimated 27,469 businesses, 183 fewer than in 2012-13. The vast majority of these businesses were in
the fresh produce sector (18,609 businesses), while grocery manufacturing has 1,353 businesses and
food and beverage manufacturing has 7,507 businesses.
The report further tells us that employee turnover in food, grocery and fresh industry is up but job
numbers are down, the juxtaposition of report defines that food industry is reducing labour costs to
earn more profits therefore they need to make sure their valuable employee must stay with them to
produce more efficiency and productivity.
(State of the Industry report released | Food Magazine, 2014)
Josh Bersin in his research mentioned that supermarkets have 30-60 percent of Employee turnover
and they need to understand the fact that money is not only the cost to value an employee.
MGT 206 Self Directed Project Retention Management in Supermarkets 11
Bersin gave a new model to drive retention “Your talent system”. In this model he put responsibility
over hiring authorities that they need to pick motivated and talented person by using tools like
LinkedIn.
(Employee Retention Now a Big Issue: Why the Tide has Turned | Josh Bersin |)
According to Chuck Williams author of the 2008 book “Management” retail market have an
employee turnover of 59%. If the organization put on best practices to retain employees it is lower
down to 4-15%. In supermarkets team members, stock takers and cashiers have the high turnover and
replacing one supermarket employee cost at least $3,637. Employee turnover in supermarkets have an
adverse effect low turnover will lead to more customer satisfaction. Barry Berman in his 2010 book
“Competing in tough times” wrote experienced staff will serve better and faster than new ones
because they can quickly find the items. If employees are leaving job at regular interval the store
wastes time and money training them.
(Data on Employee Turnover in the Grocery Industry | J Martin Demand Media 2013)
According to the study published by “The Families and Work institutes” percentage of factors
influencing job satisfaction is
MGT 206 Self Directed Project Retention Management in Supermarkets 12
(Job Satisfaction - PSYCH 484: Work Attitudes and Job Motivation - Confluence, 2014)
Another research conducted by Ruthie Stoner which shows how an organization can make an
employee to stay
(Ruthie Stoner, 2014)
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Ventana Research provided a Workforce Metrics which shows retaining employees is one of the
dominant factors of organization success
(Glob force Engages Employees with Social Recognition |Mark Smith, 2014)
As we identified employee retention is very important but for retaining employees strategies are very
significant. Robert Half identified seven factors that must be considered while making retention
strategies that are a strong career path, recognition, freedom, flexibility, competitive remuneration,
clear communication. (Retention strategy, Robert Half| 2015)
On the basis of above summary of finding we get too know if employee retention is not the priority of
an organization yet, it ought to be. If you are not able to keep your employee happy you are on threat
of losing your best talent to competitor.
Discussions
According to the Bureau of Labor Statistics turnover in supermarkets is steadily rising and at
sometime they are even concerned to keep their least valuable worker.
(News Analysis London, May 2015)
Great supermarkets employees are not born they are being trained to perfectly fit in the atmosphere.
To retain employees it is very important to create a positive work environment.
MGT 206 Self Directed Project Retention Management in Supermarkets 14
(Australian, 2015)
According to the article posted on The Australian Coles supermarket is overtaking territory shoppers
and key characteristic of this achievement are employees. While I was on shift I had a talk with my
mates and they were happy about the work environment, top management and work policies offered
by Coles who has made Coles top the list of supermarket chains operating in territory. This proves
that employee plays a healthy role in upgrading any company and its feedback system, strengthening
employees strengthens organization economy.
(Coles on top of Woolies with private label lines | The Australian, 2015)
According to Bob Phillips who is called retail doctor, he gave 8 dominant reasons for high turnover in
supermarkets which includes incorrect staff are hired, lack of motivation, Employees are fortified to
do not to think, employees are thrown into the job, lack of training, no flexibility, no individual
incentives, no challenges.
(Retail Wire-Discussion: Bob Phillips, 2014)
These all reasons can be well answered by developing a competent Retention Strategies. Do not let
staff to leave and staff turnover and training cost effect your business. With right strategies you can
keep your employees happy and raise retention level.
MGT 206 Self Directed Project Retention Management in Supermarkets 15
Research Literature Review Contributions
This literature review examined the work of different scholars on topic of retention
management and discovered the importance, reasons and ways of retaining employees in
supermarkets. This literature will be very useful in future to develop a competent retention strategy.
In previous research conducted by various authors on retention management tried to explain different
reasons, importance and ways of retaining employees but this literature review re-state some of the
ideas as it told that turnover issue is basically HR responsibility. HR people need to sit with line
managers and question the reasons of turnover. Once speaking to them takes these issues and
suggestion to the senior management.
The core asset as well as the foundation of success of any organization is human capital. As we are
living in highly competitive business environment, employee turnover which is also called
undesirable turnover create negative effect in organization such as increasing labour cost, less
productivity, increased recruiting cost and lessen customer satisfaction therefore HR people must not
only rely on simple calculation of turnover rate but should keep an eye on employee movement
within organization.
According to the research of Chuck Leddy more than half of all companies do not have any retention
strategy. With economy improving there is a lot of job available for middle market companies such as
supermarkets, employee retention especially for your top performers is very important because losing
your best people will damage company morale.
The literature review tells us that a formal retention strategy is a big investment; it will not only save
your money but will help you to keep your best employee within the company that will increase your
overall productivity.
MGT 206 Self Directed Project Retention Management in Supermarkets 16
Recommendations
Supermarkets should use thorough selection process, they should hire the best employee, who
can understand their organization culture and environment and can stay with the organization
for long term with dedication, devotion and allegiance.
Every employee in your company is an asset, treat them equally and value them and their
ideas.
Training should be given to managers and leaders with the skills that effectively sustain and
develop other employee of organization. Managers should also gain knowledge of how can
they supervise their employee in an enhanced and cooperative way.
Most importantly, strengthen the Human Resource department, ask them to produce regular
survey which can give the company a detailed knowledge of whether the employees are
gratified with their current work or not.
They can also have group discussion sessions in which they can share their tribulations,
difficulties & mystification regarding work and workplace. This will reduce the ingrowing
frustration in them, which ultimately leads to the decision of leaving work.
There should be performance evaluation of all classes of employee including the managers so
that none should feel humiliated.
Conclusion
Retention is making your key employees stay in organization; retaining confident and
motivated staff will play a dominant role in business development. Employee turnover will raise
heavy expenses and also an adverse outcome on company. Applying an employee retention program
is an active way of making sure key workers keep on employed while upholding job performances
and output. Employee Retention is a concept that should be applied by every corporation as human is
the most valuable asset. In supermarkets employee retention is very important as it plays vital role in
creating customer satisfaction therefore managers should make an environment that motivates and
stimulates employees and make them feel valuable. In conclusion, retention is beneficial for both
employers and employees.
MGT 206 Self Directed Project Retention Management in Supermarkets 17
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