The workforce or labour force is a group within the organisation that is undeniably one of the most important factions that contributes to its success. A business cannot exist without financial capital, but it also can never exist without human capital (Davis, C. 2003). It is the employees who work for the company, performs the necessary tasks to make the company function, and are responsible for the profit and growth of the company (Ellis, R, 2000). In MBH Joint Venture, the staff/employees are their general representatives who basically give out everything they can. They are the great contributors and they set the path for MBH's success. With such great roles and responsibilities tasked to the staff/employees, they are being kept by the company through strategic compensation and benefits schemes. However, are compensations and benefits enough to make employees perform everything they can? Making employees give their best on their job and tasks is perhaps one of the most challenging endeavours that the company should perform. Making this consistent is even more challenging. Employees can do many things during work that may disrupt or support the attempts of the company to earn money. For instance, employees are required to submit to a list of regulations that the company designed. Employees' acceptance or self-application of such regulations will reflect to their performance on the company. If an employee is not abiding some of the regulations, it can be a problem. This is just a light example and basically, there are tons of other reasons why a company should always give the effort to motivate their employees. Motivating employees means empowering them to lead the company into the path of competitiveness (Bridges, L. 2001). Motivation or empowerment of employees is important to give the employees enough reason to stay in the company (Ellis, R. and B. Lindsay Lowell 1999).
With this regard, the employee and employer relationship would not be able to function without wages and compensation. The distinction between efficiency wages and compensating payments is, at best, rather vague in both the theoretical and empirical literatures positing a relationship between wages and the intensity of labour effort (Beam, B.T. & McFadden, J., 2000). While efficiency wages and compensating payments are both related to work intensity, the mechanisms that generate these relationships are in each case quite distinct. Compensating payments exist in competitive labour markets to equalise overall compensation across identical workers with dissimilar working conditions. Workers who expend more labour effort must be paid more or they will seek employment elsewhere (Erbschloe, M. 2002). Efficiency wages are employment rents paid by firms in order to ensure adequate labour effort. On the other hand, compensation is described to be a form of payment or reward granted to an employee for having performed some labour services. Payment and reward may be both monetary and non-monetary. Compensation is largely responsible for granting employees their motivation in working in their current occupation (Fair, C. et al 2004). In most business organisations, employers would hire "higher white-collar employees" or employees who possess expertise and specialist knowledge rather than employees with no experience at all. Knowing their inherent skills and knowledge these employees are granted a certain extent of autonomy and discretion. In exchange for such services, payment is granted through "a form of compensation and consideration" for having performed the assigned tasks and submitting trust to the employers. Such payment may be enacted as what is called salary, which is a monetary gain, or through other non-financial means, which would be the non-monetary gains. Monetary gains, or salaries are considered to be forms of direct compensation as work accomplished or effort extended is rewarded through concrete or monetary means. According to Farris, G.F. (2000), employees may either be paid "by the hour, by the month, or by another method". Salary implies long-term commitment in the company, it is associated with monthly pay, and not pay for tasks but by time immediately translates as income to the employee which may be used to purchase some goods and services desired. Non-monetary benefits on the other hand are indirect and may comprise of abstract concepts such as work culture and environment but they do not, in any way, fall short in significance with monetary benefits. This would comprise of the value provided to employees which are not necessary expendable through monetary means. This may be enacted through benefits or what Donald Caruth and Gail Handlogten (2001) call as "psychological satisfactions".
It is important to tackle the question of retaining the workforce or the human resources through non-monetary means and its context within the MBH Joint Venture. It is the task of the Human Resources department to not only attract, develop talented employees but also retain them (Butkus, R. and Green, T. 1999). According to Robert Reich, "the organisation's ability to attract, develop, and retain a talented workforce will be a critical factor in developing a high-performance organisation" (1998, pp. 124). Human Resource Managers have what it takes to meet a "high-performing organisation" and meet success amidst a "global, dynamic, and continuously changing competitive environment" (Sims, 2002;p. 2)
The retention of a firm's employees with exceptional skill is already tantamount to a competitive advantage amidst a turbulent time especially within the current era. It will take true skill and knowledge to be able to navigate such a challenging and chaotic environment where change is almost apparent daily as new technologies are discovered in such a short span of time. The retention of top employees will also ensure the constant outputs through products and services.
Nature of Problem
Staff, employees or workers are fuels of every organisation. Without them, the organisation will not function well. They perform every task necessary for the success of the organisation. The owner cannot make a business grow all by himself. Employees are needed to ensure that different tasks are being given focus and that the business operations function with ease and mobility. Thus, employees should be treasured and taken care of. Employees with exceptional skills are hard to find, and sometimes it takes a considerable amount of time just to find one. These employees should also be valuable for their values and loyalty to the organisation. However, ironic as it may seem, these types of employees are not willing to share their skills for nothing. This is the problem that most business organisations currently confront. Strengths of employees with exceptional skills are derived from motivational factors that they can find. Without motivation, employees would be less willing to give their best and would rather be a slacker. The logical reason that can first come to mind is that there is purpose for them to give their all because their efforts are not recognised anyway. Motivation or empowerment of employees is important to give the employees enough reason to stay in the company (Computing Research Association, 1999). Empowerment is also useful to update employees of their skills and make sure that they do not lag behind with the changes taking place. Without empowerment, capabilities of will be stagnant and eventually deteriorate, which would then lead to turnover. Without empowerment, employees would feel that the company does not care about them, and that they do not have any security at all. Thus, in this regard, this paper attempts to evaluate, identify and determine the staff retention strategies of MBH Joint Venture in order to meet their project target and improvement of project/service quality.
The organisational background presented several issues that only emphasises and stresses the need for a study in determining strategies of MBH Joint Venture in the retention of staff. So far, the strategies usually employed are large bonuses, promotions and salaries but these are hardly enough to keep the employee within the doors of the firm.
The studies mentioned earlier agree that employees need to be provided continuous opportunities for growth and development through an acquisition of the newest and latest skills and knowledge. This will only be possible if they are subjected to constant education and training in which some of the non-monetary strategies that this study would bring to mention and tackle in order to determine the sufficiency of such strategy in maintaining and retaining MBH's top talents to meet the project target and quality improving.
As part of the possible outcome of this study, this research study only covers the strategies of MBH in retaining their staff in order to meet target goal and quality improving. The outcome of this study is limited only to the data gathered from books and journals about employee/staff retention, HRM, motivation, and from the primary data gathered from the result of the questionnaire survey and interview that were conducted by the researcher.
Aim of the Dissertation
The aim of this study is to determine the retaining and maintaining strategies of MBH's staff in order to meet their project goal and quality improving. Specifically, the aims are:
Relationship to Previous Work
According to Gillis (2004), employees basically refer to people who work for another in return for wages or salary. Legally, an employee is referred to a person hired to provide services to a company on a regular basis in exchange for compensation, and who does not provide these services as part of an independent business (Gillis, 2004). However, Gillis (2004) stated that employees are more than any of those definitions. Employees are the lifeblood of the organisation because they are the ones who provide products and services that define corporations, organisations and government entities (Gillis, 2004). They are referred to as the most precious assets of the organisation because without them, the organisation is crippled and cannot function effectively.
From the study of Gillis (2004), it is very necessary for any organisation to maintain their employees. Because of the important role of employees, organisations like MBH Joint Venture have the responsibility to motivate them so as they can function more effectively. Theories of motivation such as Maslow's theory, Alfelder's theory, McClelland's theory, and Herzberg's theory (Mullins, 1999) explain why employees should be motivated and why organisations should take this concept into consideration. But what really constitutes effective employee motivation? Several research and organisational reports point positive communication as one of the most important factors that build effective employee motivation. For instance, Riccomini (2005) cited a couple of organisational research by General Electric and Hewlett-Packard in the eighties that concludes: "The better the managers' communication, the more satisfied the employees were with all aspects of their work life". Building a positive communication with employees is important because they are the organisation's best ambassadors or loudest critics, depending on how fast they get relevant information and the context in which it is received (Howard, 1998). Information consistency affects the success of the company and if it fails to communicate information internally and externally, the reputation of the company may fall. Communication basically uplifts the morale of an employee as it makes them feel that they are valued by the organisation. This also builds employee loyalty and satisfaction. As Goldfarb (1990) stated: "
Employers are becoming more aware that employee loyalty, commitment, and concern for quality depend on effective employee communication.
On the other hand, employee motivation in itself has become a history of psychological strategies in encouraging the employee into producing the maximum output possible. These psychological conditions had been the goals of business managers and scholars since time in memoriam. The roots to organisational productivity and competitiveness really spring from human behaviour and tendencies and thus to achieve these is to optimise employee performance. According to Moorhead & Griffin (1998, p.1), Employee performance is frequently described as a joint function of ability and motivation, and one of the primary tasks facing a manager is motivating employees to perform to the best of their ability Motivation can be described as the driving force of individual behaviour to fulfil needs or achieve goals (Foote, D. 1998).
In a capitalist economy, both employers and employees have learned to rely on monetary benefits as the sole reward system and primary means to hire and retain a professional (Farris, 2000). It may be even said that it is salary, wages or cash flow among other monetary incentives is central to the employment system in general. This alone however, would not be enough to motivate employees; and in fact, non-monetary methods such as bigger job scope, revised roles and responsibilities, training and development opportunities will make employees to become more happy, enthusiastic and devoted to work that would in turn translate itself to optimise productivity which will beneficial to the firm.
From the outcome of these previous studies, the psychological satisfaction may be regarded as the kind of compensation that would include "opportunities to perform meaningful work, social interactions with others in the workplace, job training, advancement possibilities, recognition, and a host of similar factors" which is also apparent to most business organisations today such as MBH Joint Venture. In order for a compensation system to be effective, this element would need to be present. Non-monetary gains should actually be interrelated with monetary gains. It has been a misconception that retaining employees is only through monetary or financial incentives. According to Raymond Butkus (1999; p. 142) the general impression of managers is that they expect employees to demand promotion or salary increase. They fail to notice that what the employees actually desire more importantly in order to become more motivated are "additional recognition, more satisfying assignments, and increased feedback". There are such things as the maintenance of morale which in itself is important for top quality employees and their retention. On the other hand, Fitz-enz, J. (2000) stated that most managers believe that they may maintain their top employees through salary increases but it is only one of the ways to retain them and in fact, it is a very insufficient manner in retaining them.
To retain staff/employees, empowerment of employees should be given enough consideration. Employee empowerment has been considered as a management technique which can be applied universally across all organisations as a means of dealing with the needs of modern global business (Case, P. 2000). Conger and Kanungo (1988) stated that empowerment describes working arrangements which engage the empowered at an emotional level. They differentiate between concepts of empowerment which are relational and motivational. As a relational concept empowerment is concerned with issues to do with management style and employee participation. As a motivational construct empowerment is individual and personal, it is about discretion, autonomy, power and control. This motivational aspect to empowerment becomes the defining feature of the initiative. Furthermore, Johnson (1993) stated that an empowered employee must feel a sense of personal worth, with the ability to effect outcomes and having the power to make a difference. In addition, advocates of empowerment claim that employee empowerment helps firms to enthuse and enable employees to take responsibility for the service encounter (Grembergen, W.V. 2001).
In any business organisations or in MBH Joint Venture, employee empowerment has been associated with many of the key issues related to employment practices in general, namely in gaining competitive advantage through improved service quality. However, the attempt to gain competitive advantage is difficult – because of the difficulties in defining the successful service encounter, particularly in the intangible sources of customer satisfaction. Moreover, there are in fact, some base level customer expectations of employee performance, positive interpersonal contacts, service deliverer attitudes, courtesy and helpfulness that are all closely related to customer evaluations of service quality (Grembergen, W. 2003). Then another problem is in the quality of the service encounter itself. This involves the performance of the employee, on how the employee work and perform the service that should be given to the customers. Hoshschild (1993) stated that seeming to love the job becomes part of the job; and managing the appropriate feelings of enjoyment of the customer helps the worker in this effort. Enabling employees to sense their own power and the significance of their role in the service drama may help employees manage the emotions required of their performance (Hilton, M. 2001). Thus, it can be said that a respond or action of an employee enhanced by satisfaction can be the basis that the employee will give his or her best to the company. Empowered employees willingly take responsibility for the service encounter, they respond more quickly to customer needs, complaints and changes in customer tastes (Hilton, M. 2001). This is important in employee development and retention because it will provide high staff morale and employees will take responsibility for their own performance and its improvement. Furthermore, employees' inherent skills and talents will be put to work for the organisation so as to produce more satisfied customers and profits.
Motivation and Employment Performance
Literatures deal with the notion of motivation primarily in terms of intrinsic and extrinsic motivation, or physiological and social motives. Intrinsic motivation is related to 'psychological' rewards such as job content, a sense of achievement, recognition, advancement, a feeling of competence, opportunity for growth and responsibility (Mullins 2002). Deci & Ryan (1985) suggest that intrinsically motivated behaviours represent the prototype of self-determined activities: They are activities that people do naturally and spontaneously when they feel free to follow their inner interests. This indicates an impressive shift in attitudes towards work, from work as a means of survival to work as a means of enhancing self-development and self-expression. The consequent needs of intrinsic motivation can be explained by Maslow's hierarchy model. It is also supported by Herzberg's Motivation-Hygiene Theory. His theory points that employees are motivated by their own inherent need to succeed at a challenging task. The manager's job, then, is to provide opportunities for people to be motivated to achieve. Herzberg's survey of US workers clearly indicates that about 80 per cent of the factors in satisfying job opportunities come from the intrinsic elements of the job such as achievement, recognition, and the work itself (Herzberg 1982). Inherent needs mean individual differences that affect the degree to which people will experience need satisfaction in different contexts. McClelland (1985) assessed individual differences in need strength and used that as the primary basis for predicting behaviour. Therefore there is a need to use both characteristics of the social environment and individual differences to predict people's need satisfaction and, in turn, the quality of their experience and behaviour. Comparing with intrinsic motivation, extrinsic motivation is more related to 'tangible' rewards such as salary, security, promotion and work environment, etc. (Mullins 2002). External motivators include strategies and incentives, which are designed by the organisation to motivate employees and influence their work behaviour. An employee could get improved motivation from the good relationship with his boss or recognition from his manager, thus result in high performance. But it is unlikely that management and employees will always agree on a reward system based on subjective issues such as 'good interpersonal relations', 'appreciation of work done', or a 'feeling of being in on things' (Mead 1998) without any tangible reward system, e.g. monetary reward system. To employees in the organisation, it is not only the material value of the reward, but also the boost in self-esteem that public recognition associated with monetary reward affords (
Clearly, employees need reassurances about job security, salary raises, promotions and the health and stability of their company. And they also place high value on sense of achievement and consequent full appreciation for work done.
As we have discussed in above content, despite the individual differences that exist in the process of satisfying needs, employee behaviour can be influence and motivated by certain factors to achieve productive behaviours. To identify these factors that motivate employees is very important for organisations. In turn, organisations can use this information to improve employee motivation, and thus improve employee performance and productivity.
As workforce reductions are becoming commonplace nowadays, job security is of increasing importance to employees. Employees' reactions to the lack of job security vary. Individuals may experience severe psychological reactions to job loss and/or the threat of job loss. Low self-esteem, low self-confidence, social isolation, anxiety and powerlessness may be results of possible psychological reactions. These reactions extend beyond actual job losers to their colleagues; also affect the organisation morale. Because not only is work commitment weakened by job insecurity, but organisational effectiveness can deteriorate as well. Thus, outcomes of job insecurity are usually negative. To counteract such outcomes, companies often use reward strategies. Compensation strategies (i.e. severance packages and early retirement incentives), career development schemes, and outplacement techniques may accompany workforce reduction efforts. These are intended to arouse positive psychological states that encourage and sustain productive, rather than destructive behaviour (Herselman 2000).
Promotion and growth in the organisation are longstanding factors that motivate people to do their best work. According to Herzberg's Motivator-Hygiene Theory (1959, cited in Mullins 2002), the most successful method of motivating is to build challenge and opportunity for achievement into the job itself. Moreover, McClelland's Socially Acquired Needs (1985) theory suggests that people with high achievement needs are motivated by challenging tasks with clearly attainable objectives, timely feedback and more responsibility for innovative assignments. Thus, promotion and growth in the organisation often are addressed through job redesign. The aim of job redesign is to enrich a job so that the employee is more motivated to do the work.
On the business side many managers seem to follow the simple belief that happy workers are productive ones. Workers who are more involved in their jobs display more work commitment and experience lower turnover (Sekaran & Ueno 1989). Workers who are more involved in job-related decisions and communications, receive reinforcement that they are competent in their jobs, and they respond by showing greater involvement and motivation (Sekaran 1989, p.349). Achieving job satisfaction can increase employees' commitment and performance, therefore, job redesign strategy need to be carried out for this purpose by means of making employees believe that their work is being performed competently and that their work is having a positive impact on the company. Also, it is important for employees to feel that they control their own actions (Thomas & Velthouse 1990, p. 672).
The fast paced business world is affecting companies left and right. With this ever changing business environment, companies have to adjust in order to be able to remain competitive. One way of maintaining a competitive edge is retaining and maintaining staff/employees. Specifically, the study is set to answer the following questions:
It is assumed that staff retention in MBH affects their capabilities to meet the project target and quality improving. However, retention of staff may produce a positive or negative effect to the company. Furthermore, it could be beneficial or beneficial or will not produce benefits for the company. This study would like to test the following null hypothesis:
"Employee/Staff retention has no significant effect on the performance of MBH Joint Venture."
"The employee/staff retention strategy of MBH has no significant relationship to the quality of their production/services."
Research Design & Methodologies
This part of the paper discusses the methods that have been used for this research. This detailed the steps the researcher took in order to accomplish the study. The said steps then include the collection procedure of the data that is required in the delivery and completion of the research. It also presents the manner in which these data will be utilised and integrated in the study and at the same time, detail how the research proceed to answer the aims and objectives in order to reach to the conclusion.
In this manner, this part of the paper justifies the means in which the study will be performed. It also emphasises its credibility by making mention of widely accepted scientific methodologies. Through the methods mentioned in this paper, a plausible conclusion will be obtained.
Looking back to the aims and objectives of the study, the study intends to determine the staff retention strategies of MBH Joint Venture. In order to identify the opinions of such staff, the study's methodology was focused on collecting both primary and secondary data through related literature research and the survey and interview materials.
As the research intends to discover the general consensus of staff in MBH with regards to retention, the immediate research methodology in mind is the descriptive research design. The research are taken from various data sources that is integral in identifying issues of employee retention, employee motivation and the status of their performance in MBH.
For this study, as previously stated the descriptive research method will be utilised. In this method, it is possible that the study would be cheap and quick. It could also suggest unanticipated hypotheses. Nonetheless, it would be very hard to rule out alternative explanations and especially infer causations. Thus, this study used use the descriptive approach. This descriptive type of research utilises observations in the study. To illustrate the descriptive type of research, Creswell (1994) guided the researcher when he stated: Descriptive method of research is to gather information about the present existing condition of MBH with regards to their retention strategies.
The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena. The researcher opted to use this kind of research considering the desire of the researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.
To come up with pertinent findings and provide credible recommendations, this study will utilised two sources of research: primary and secondary. Primary research data will be obtained through this new research study. Questionnaire survey and in-depth interview will be conducted. On the other hand, the secondary research data were obtained from previous studies on the same topic.
In order to come up with the most suitable research approaches and strategies for this study, the research process "onion" is undertaken. This is because conducting a research is like peeling the back layers of an onion—in order to come to the central issue of how to collect the necessary data needed to answer the research questions and objectives, important layers should be first peeled away. With the said process, the researcher was able to create an outline on what measures are most appropriate to be applied in the study.
This research study will employ deductive approach. Accordingly, this approach has five sequential stages: deducing a hypothesis; expressing the hypothesis in operational terms; testing this operational hypothesis; examining the specific outcome of the inquiry to either confirm the theory or indicate the need for its modification; and finally, modifying the theory in the light of the findings (if necessary) (Robson, 1993, p. 19).
Further, the deductive approach has a number of important characteristics. First, this approach is a search to explain causal relationships between variables, which consequently leading to the development of a hypothesis. Second, it involves the collection of a quantitative data (although it can, as well, use qualitative data), and these data are important to test a hypothesis that has been previously developed. The third characteristic of a deductive approach is that it controls to allow the testing of hypothesis. However, one must remember that with this approach, it is important that the researcher is independent of what is being observed—that is, the researcher should be objective and not subjective—so that the principle of scientific strictness will be pursued, as this approach emphasises scientific principles. (Saunders et al, 2003)
Also, it is important that concepts are operationalised, which will enable facts to be measured quantitatively. Finally, the deductive approach is generalisation (e.g., to be able to generalise about regularities in human social behavior, one must be able to select a sufficient numerical size of samples). (Saunders et al, 2003)
Qualitative or Quantities
The research described in this document is based fundamentally on both qualitative and quantitative research methods. This permits a flexible and iterative approach. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This allows investigation of important new issues and questions as they arise, and allows the investigators to drop unproductive areas of research from the original research plan.
Basically, quantitative method is compatible with this study because it allows the research problem to be conducted in a very specific and set terms (Frankfort-Nachmias and Nachmias, 1992). Besides, quantitative research plainly and distinctively specifies both the independent and the dependent variables under investigation (Matveev, 2002). It also follows resolutely the original set of research goals, arriving at more objective conclusions, testing hypothesis, determining the issues of causality and eliminates or minimises subjectivity of judgment (Matveev, 2002). Furthermore, this method allows for longitudinal measures of subsequent performance of research subjects (Matveev, 2002). Finally, it provides achieving high levels of reliability of gathered data due to i.e. controlled observations, mass surveys, or other form of research manipulations (Balsley, 1990). This study should be based on surveys and statistical treatments, so basically the quantitative approach fits well with it.
On the other hand, qualitative research is multi-method in focus, involving an interpretative (Saunders et al, 2004), naturalistic approach (Matveev, 2002) to its subject matter. This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret phenomena in terms of the meanings people bring to them. Accordingly, qualitative researchers deploy a wide range of interconnected methods, hoping always to get a better fix on the subject matter at hand. The reasoning process used in qualitative research involves perceptually putting pieces together to make wholes. From this process, meaning is produced. However, because perception varies with the individual, many different meanings are possible.
With this particular study, the researcher utilised both documentary secondary data in the form of articles from books, journals, magazines, and newspapers that are generally about corporate culture and quality service), and survey-based secondary data.
Sampling / population
The general population for this study is composed staff/employees of MBH Joint Venture. These respondents will be also interviewed aside from the HRM manager of the company. Basically these respondents are asked regarding the current status of retention strategy among employees and performance of the company.
n = a sample size
N= population size
e= desired margin of error (percent allowance for non-precision because of the use of the sample instead of the population).