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The company in the past few years has been experiencing problems retaining its staff. 1.2 Ray Sessions the Managing Director has asked John Shaw the Personnel Manager to investigate the problem and identify strategies to improve the staff retention problem. 1.3 The aim of this report is to investigate the problems that REDE Engineering is having, and using the case studies of Science Applications International Corporation (SAIC), Southwest Airlines and Richer Sounds, identify solutions on how to solve these problems and come up with recommendations as to how the motivation of the employees can be improved. 2.1 REDE Engineering is a medium sized business. It is family owned and run business. 2.2 REDE Engineering manufactures gallery kitchens for airliners and in this market it is a world leader. 2.3 In recent years the firm has been experiencing great problems retaining staff, in certain department the staff turnover has been running at 150% per year. 2.4 Due to this problem the firm has experienced problems in delays in customer orders. This has resulted in the firm incurring costly penalties for the late delivery of the products. 2.5 The Personnel Manager John Shaw has been asked to carry out an investigation into the staff retention problem and also to find a solution to the company’s current skill shortage. 2.6 The investigation began with asking the employees what they perceived to be wrong with the company. 3.1According to the testimonies of some of the employees it would appear the Skills and qualifications of many employees aren’t being utilised properly. The employees that have had some sort of previous training aren’t being used efficiently and so this could be why there appears to be a skills shortage in the firm. There is evidence also to suggest that jobs have not been assigned properly as many employees are completing tasks that are not a part of their own specific jobs. 3.2 There is no real induction process when introducing new employees to the business and the process that is set up is not very efficient. 3.3 The working conditions are fairly poor; the pay is low the work areas dark and cold in winter, and too hot in summer, the noise from the machinery is highly distracting for other workers, the deadlines are unrealistic and the facilities for the employees e.g. the canteen are very poor. 3.4 The firm has provided no incentive for the employees to remain at the company; this could explain the staff retention problem. This lack of stability can be a great de-motivating factor for the other employees and so they too leave. 3.5 In addition to this the firm has very poor communication links between employees, especially between the senior personnel and the other workers. There is a serious lack of respect between the two, which can create quite a hostile work atmosphere. Managers have not been able to delegate effectively, and there seems to be a need for de-layering to remove the largely unnecessary jobs. 4.1 If the evidence collected about the firm is compared to the motivational theories of Maslow, Herzberg and Taylor it is possible to identify why REDE Engineering is having the problems it is with regards to staff retention. 4.2 Abraham Maslow an American psychologist put forward a hierarchy of needs to explain human behaviour. There are 5 levels to this hierarchy: Level 1Physiological needs- these are the basic essential e.g. food, shelter, warmth etc Level 2 Security needs- he stated that people have a need to be in a secure stable environment. Level 3 Affiliation needs- This is the need to give and receive friendship, which help to create a sense of belonging. Level 4 Esteem needs- This is feeling self-respect and experiencing the feeling of being respected by others. Level 5 Self-actualisation needs- this is the need to achieve creative self-fulfilment. Physiological needs are a person’s first source of motivation. Once the first level of need is met, people look for satisfaction in other ways, this continues until they reach a level at which they fell totally fulfilled. Maslow’s theory proposes that when people initially seek employment, they are likely to be motivated by needs for money and a secure job. Once these needs have been met through holding this job, they will then seek to fulfil their higher needs. Under-performance at work can be caused by an employees inability to fulfil their higher needs. Merely being offered a pay rise or better contract may not be enough to encourage a person’s true commitment and determination at work. 4.3 Taylor, an American engineer founded the scientific approach to management. He maximised efficiency by re-organising working methods on the shop floor. He believed that by setting financial incentives to reward the worker for hard work would benefit both the worker and the business. · To observe the workers at work, and record and time what they do. · Identify the most efficient worker and see ho w this is achieved. · Break the task down into more easily manageable pieces. · Devise or develop equipment specifically to speed up tasks. · Set out exactly how the work should be done in the future. · Set up some form of reward scheme to reward those who reach or exceed output targets, and penalise those who don’t. 4.4 Herzberg created his theory based on an experiment he carried out which involved 200 engineers and accountants, who were interviewed and asked to name factors that were sources of job satisfaction and dissatisfaction. The results were surprising. Motivation factors were sources of satisfaction but not generally of dissatisfaction, conversely maintenance factors were sources of dissatisfaction but not generally of satisfaction. This to managers meant that areas such as working conditions matter in preventing dissatisfaction but having met the need, additional provision of these factors will not create extra satisfaction. Likewise, motivation factors are the real sources of satisfaction, but their absence will not create dissatisfaction. The implications of Herzberg’s ideas to managing people are that firstly managers must recognise that attention to maintenance factors can only help to eliminate dissatisfaction. To increase job satisfaction it may be necessary to redesign jobs so that they provide access to the motivation factors identified. People need to feel that they are trusted to do a job well. They may need opportunities to use their initiative, so that the job becomes more personally fulfilling. 5.1 If we look at Maslow’s motivational theory and his hierarchy of needs we can see that employees at REDE are only achieving the first level on the hierarchy, the physiological needs. They are to a certain degree also meeting the second level, as there is job security if they choose to remain at the firm, which many don’t. This may be due to the fact that the firm does not really meet its employees social and esteem needs and so the employees become highly de-motivated as they cannot fulfil their higher needs, this could explain why REDE is having such huge problems retaining its staff. REDE in order to solve this problem would need to find a way to create a work atmosphere in which some of the other needs are fulfilled and so employees become more motivated and have an incentive to stay. 5.2 Subsequently another problem at REDE was the fact that there was no incentive to stay at the business or to work hard as there was no reward and the pay was low. Taylor believed that by setting financial incentives for hard work both the business and the worker would benefit overall, the worker would be more motivated and the business would have a more efficient and so more productive worker. Taylor also developed a ‘differential piecework’, where a worker would receive a piece rate if he produced the standard amount, and then received a higher amount if he exceeded that standard. His idea of breaking tasks down would be beneficial to the workers of REDE who believed that some of the work was too challenging and deadlines too hard to meet. 5.3 Herzberg's hypothesis about human needs and motivation relates to those of REDE’s employees who are stuck doing jobs they shouldn’t be, or are working in poor conditions and are severely de-motivated. The managers of REDE need to eliminate sources of job dissatisfaction e.g. the working conditions. To increase the job satisfaction they may need to redesign jobs so that they provide access to the motivation factors identified, this may involve job rotation, job enrichment or job enlargement so that the employees are given greater responsibility and a greater number of tasks. This provides the employee with a variety of tasks to complete and the employees are able to gain greater expertise, authority and identity in the job which benefits the firm overall I the long term. 6.1 Using the business of Richer Sounds as an example-the firm ensures that all of their staff are properly trained. REDE Engineering could set up training courses for its employees before they start and present them with some sort of induction pack as an introduction to the company. This would help to solve the problem of the current skills shortage at REDE. 6.2 REDE could assign mentors to new colleagues, the more experienced staff would be able to help them through their induction period, and also this interaction between employees would fulfil Maslow’s level 3-affiliation need. Having someone taking care of them would make the employee feel more secure and would help them settle down easier and quicker so they are more motivated to work sooner. 6.3 It is important for employees to feel that they are valued and important to the success of the company and also helps the employees to settle in better. Julian Richer also believes this and makes a point of meeting all new staff. This is important as it makes the employee feel valued it also helps to break down the barriers between senior personnel and other employees so that there is no hostility between the two. This is especially relevant to REDE as there are very specific barriers between employees and managers. 6.4 Rewards for hard work and financial incentives are a very effective method of motivating employees, this was proposed by both Taylor and Herzberg who saw the importance of recognition and achievement in the workplace. Even if the pay is low employees will be motivated to work harder not just for the financial reward but also for the recognition of their hard work. Asking customers how well the employee responded to them etc, if the customers were pleased with the service, the worker could be rewarded could reward them. 6.5 A huge factor is also the encouraging employees to interact but also the need to feel as if you belong, the secure feeling a job offers is crucial to some people, the feeling of belonging is very important. At Richer Sounds the company has a number of committees which colleagues are encouraged to join, so that they can meet up and tackle any problems together. It is also to ensure that all the employees know what is happening within the firm. There is also a Five Year Club to reward loyalty where after five years the employee goes to dinner with Julian Richer at a very good restaurant, there are also organised group holidays for employees. At SAIC more than 95% of the workforce own shares in the company and even the most junior of employees are involved in staff committees which help to run the actual company. If you want to motivate employees it is necessary that they enjoy the work and by setting up committees and clubs etc employees can interact with each other and using Southwest Airlines principle they can ‘have fun’. 6.6 A firm could also set up a system similar to the one set up at Richer Sounds which involves employees giving suggestions in as to how the business should be run and any improvements they feel need to be made. This again gives the employees a sense of responsibility, which Herzberg found to be a great motivating factor it also again enhances the employees sense of being a part of a community. This is also beneficial to the firm as any problems that arise are identified straight away and the business is in tune to the employee’s wants, needs, and concerns. 6.7 A very effective way of motivating employees is to encourage the worker to take on new responsibilities and try new jobs, as the work itself is a very definitive motivating factor as Maslow and Herzberg discovered. This can be done through job rotation or job enlargement and enrichment, this provides the employee with a range of tasks to complete so that they do not get too bored as they would if they were performing one repetitive job the extra responsibility would also encourage them to work harder and more efficiently. 6.8 Finally the company can set a system where the work or sales figures of one department or branch is compared to that of another, this would act as an incentive to work harder and be the best cash rewards could also be offered for the best worker etc. 7.1 To conclude REDE Engineering is having problems retaining its staff because they are highly de-motivated and there are no incentives whatsoever offered by the company to encourage these employees to stay. 7.2 REDE needs to reorganise its business so that the needs of its employees are taken more into account. 7.3 They need to offer the employee’s incentives to stay and also to motivate them, these maybe financial but in a lot of cases this is not the only reward. Many employees find recognition for their hard work as a reward. 7.3 Finally REDE needs to create a better communication system between employees so that they can work together successfully and are able to motivate each other this may be through various committees etc or just by encouraging them to work together. So overall a more friendlier, productive efficient work environment is created. Bibliography: Reported to: John Shaw Reported by: Rabiya Ravat Date: 1 February 2001 Word Count: 2399
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