Organization Espresso

One of the key issues which are currently faced by the organizations across the world is retaining talent and the problem is far more acute in the services sector which is primarily labor people intensive in nature. The attrition figures have not only bothered HR departments for long but I have seen people having nightmares over their people quitting with no sight of a replacement.
Taking my examples from Indian job market, in a generation prior to me the attrition rates were down and close to zero in some cases, leaving a government job was considered to be a sin. So going back and have a detailed look that what actually were the factors then and how can one regenerate the same scenario by modifying the factors within the control of an organization process.
The basic deterrents for a person to switch his/her employer can be broadly listed as following-
1- Opportunity Cost
2- Fear of Change
3- Satisfied Professional needs
4- Ego Issues & Political Clashes
Of the above mentioned four broad areas the first three are can directly be tweaked or impacted by the organization and processes, particularly by the shift in the organizational structure.
The corporations need to understand that motivation is the most effective tool for the ground level work force or junior level employees. Similar to a military unit the bottom most layer of the troops needs to be highly motivated and disciplined and the fact of the matter is that neither maintaining discipline nor motivating them is a tough task.
The professional needs at those levels are more on the lines of getting appreciation for their work, may be a small reward. The major concern in the bottom rungs of the hierarchy are concerned with the orientation, direction and rewards. So ensuring the efforts and small achievements of the employee set are recognized and acknowledged. This might be through the means of a small hike, monetary rewards, prize or acknowledgment token, change in title or designation. All this means a lot when the basic insecurities are about how well they are doing in the organization, how they need to work to grow. A small rewards goes a long way to motivate an employee and sent an example of positive rewards and motivation for all the peers too.
The opportunity costs, have been a key factor for the retaining of the government employees, the prospect of the pensions post-retirement has been an opportunity carrot which have kept lured and working millions of the employees despite all the issues, slow growth, politics etc associated with the government job. It is not advisable or practical for the private organizations to take such kind of liabilities but still the Opportunity costs could be raised by having split levels and sooner promotions. The psyche works in strange way, a person(primarily junior/ jr. middle employee) would react to the following situations-

A Promotion in next year with 20% Hike he would wait for the entire year and take the promotion.

A Promotion 3-4 Years down the line with 50% hike he might consider a switch this year for 25% hike.

So having a hierarchy structure that ensures the role maturity requirement for a promotion increases only with the hierarchical positions.

The fear of change is also a key factor when an employee determines to change ships midway. The risk taking ability and acceptance of change is something inversely proportional to the level of comfort of an employee in the organization. So while designing the organizational framework, an organization should always key in the factor that what are the essentials which would directly impact the work critically for the all the rest the level of comfort and enhanced risk should be traded of carefully. A great example of a very successful trade-off has been IBM, which has consistently had its attrition rates below the Industry averages by creating a non pushy and comfortable workplace. Though this trade off is dynamic which would always vary with the competition’s response.
With flat organization structure might be the in-trend which appeals to a induct a lot of employees but then this would not keep the internal employees motivated. No matter how much we brag about performance driven organization and related jargon, we can agree in a professionally managed large companies stakeholders are not comfortable with a 28-30 year old with 4-5 years of experience as CEO unless the company is a start-up or the 28-30 Year old is the son/daughter of the promoters. The board always prefer someone experienced (not necessarily old) to take the helm of a corporations.
Concluding the whole issue that though no two organizations can be alike and the basic DNA’s are always different with stakeholder’s expectations, vision and missions set for them. But still an organization should always fine tune the hierarchy such a way with a higher hierarchy for the junior and start of middle level and gradually becoming flatter towards the helm. Because once reaching for the recruitment over the middle level the people tend to judge the organization on how close they are to being a CEO. So a flatter structure finally becomes more appealing and makes the organization a preferred choice of workplace.

The above graph is indicative and should be plot as a mapping exercise for individual organization

by Prats | on Friday, November 20th, 2009 at 10:33 am | Organization Culture . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.