IN SUPERMARKETS DR EUNICE BACHELOR OF BUSINESS 26 Report ... · IN SUPERMARKETS DR EUNICE BACHELOR...

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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

Transcript of IN SUPERMARKETS DR EUNICE BACHELOR OF BUSINESS 26 Report ... · IN SUPERMARKETS DR EUNICE BACHELOR...

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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

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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.

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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.

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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.

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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

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(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.

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(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.

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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.

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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.

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