Hrm Practices Ensure That Critical Employees Are Retained Business Essay

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As the HR manager in a newly merged knowledge-intensive organization, critically assess what HRM practices might need changing to ensure that critical employees are retained.


In the modern day business organizations, one of the fundamental focuses of human resource management are to ensure that critical employees are retained at all times. This is because, the success and growth of the organization rest on them. The retention of specialists such as information technology and other technical employees is a major concern for much human resource management. `The demand for such specialists and other highly skilled employees is so strong that companies have been very innovative in their retention efforts` (Greer, p.39).

In recent years, several intensive discussions have been taking place, highlighting the importance of knowledge intensive management within our organizations. The rapid emerging knowledge organizations however, not only changing current industries and companies around the world but also expanding up new opportunities around the entire business world which are genuinely knowledge based. For instance, the introduction of the internet has rapidly helped in the fast duplication and transfer of information at a virtually low or no costs at all. This development has facilitated vigorous competitiveness within organizations which saw more rapid growth and development around the world. Critical employee in a knowledge-intensive organization is more or less a knowledge worker whose vital roles contribute to the sustainability of competitive advantage with varying degree of success. Therefore, "A knowledge worker is a new kind of employee that is characterized by being paid not to create, produce or manage a tangible product and/or service, but rather to gather, develop, process and apply information that generates profitability to the enterprise" (Smith, & Rupp, p.146).

As the HR manager of a newly merged knowledge-intensive organization, this paper will try to look into the nature and role of a HR manager, the importance of the retention to the organization and the various methods of doing so would be critically discussed. This would be followed by some theoretical evidence and the importance of their performance to the organization. Then, thoroughly evaluate and assess some of the key practices/policies that might need to be adapted in order to retain critical and most valuable employees; and then follow by the conclusion.

The HR manager within an organization

The HR manager is in charge of managing the manpower activities within an organization. That is to say, he/she is in charge of maintaining and running all the activities of the personnel department in an organization. Their role includes posting or approving advertisements for new intakes screening resumes and applications process, arranging interview process and being part of it. In most organizations, the HR manager plays a vital role in providing supervisions and evaluations of the employees, retraining and providing mediation services for struggling employees as well as firing those that failed to meet their performance standards. In order for a company to benefit or profit, the importance of human assets in various areas of the organization should to play a greater role. Since human capital is strongly believed to be one of the most important elements of strategic success for many organizations, therefore, the role of the HR goes a long way to develop between traditional administrative duties and the fairness of almost all employees within an organization. However, the ratio at which an employee can be retained is directly proportionate to the pattern in which he/she is treated. A HR manager always ensures that there is an inter-departmental employee relationship at all times. The HR department as mentioned above is in charge of all developmental and the implementation of ongoing research on strategic programs, while embark on hiring, terminating and training staff at the same time.

The importance of retention

Retention of employees in general refers to the total effort made by employer to maintain desirable staffs in the organization in order to achieve the set business objectives. In other words, Frank et al. (2004, p. 13) defines retention as "…the effort by an employer to keep desirable workers in order to meet business objectives".

The word "turnover" is generally used to describe the unplanned loss of key employees who leave the organization voluntarily (Frank, Finnegan and Taylor, 2004). In other words, it can be defined as the rate of change in the working staff of a concern during a definite period or to say it shows the importance of shifting of the workforce into and out of an organization. All organizations mainly rely on the quality and efficiency of the human and intellectual capital at their disposal, especially when taking critical staffs into consideration. Hence their retention absolutely remains vital and important strategic choice to uphold. Thus frequent changes in the business environment may bring about difficult alterations to the psychological agreement between the employee and the employer (Lee, 2001). The loss of trust and loyalty is key fundamental factors that affect retention and engagement in an organization. The major contributor to the decline in trust is the high number of lay offs (Frank et al. 2004).

In a newly merged, knowledge intensive organization, it is always vital to retain critical employees in order to achieve the health and success of such organization in the long term. Many research works have shown that managers are in no doubt agreed that retaining best or the most critical staffs ensure rapid customer satisfaction, which is the backbone of any business organization. This also sees improved in the sales of products, contented fellow colleagues and displaying appropriate performance, with effective and efficient planning succession. Therefore, if managers can live up to such expectation so well; why then do they behave occasionally in such a way that urges or forces great staffs to quit their jobs?

Retention of employees in general matters to any successful organization. Failing to retain key employees is always costly to any organization. Some suggestions estimated that losing a middle manager will cost the organization up to 100% or more of his/her salary. The loss of a senior critical manager is even more costly. Critical employee retention is one of the fundamental yardsticks to measure the health and success of any organization.

Theoretical approach to HRM practices in retaining critical employees

Achieving better knowledge-related outcomes as a result of effective management of human resources, implies that "retaining personnel, building their expertise into the organizational routines through learning processes, and establishing mechanism for the distribution of benefits arising from the utilization of this expertise" (Kamoche and Mueller, 1998, p. 1036). To help organizations select which of the HRM practices can be employed in order to help retain critical staffs, a brief review of some scholars are discussed.

Ingles et al. (2005), in a recent study of Canadian libraries found that at least 75% of senior librarians have worked for at least 11 years for the same organization. The study also suggests that over 65% of the librarians were over 45 years. The study indicates that librarians do not have high rate of turnover generally. A US survey conducted in 2003 estimated that 60% of librarians were 45 years or older (Matarazzo and Mika, 2004)

Many organizations have re-examined the rate of turnover and have committed more resources in their orientation programs, so that they would convincingly improve on their strategy of retaining critical staffs. Hammers (2003) found that a US national Bank realized a turnover rate of about 51% in 1999, while Corning Glass and Texas Instruments were also so concerned about their rate of turnover that they were forced to re-examine their orientation procedures (Omidsalar and Young, 2001; Zemke, 1989). Both organizations realized a drastic improvement in reducing their turnover rate after they have improved their orientation programs. All these strategies were geared towards not only encouraging their staffs to stay but retaining critical and most valuable ones.

It is always important for any organization to develop a business plan that will include recruitment, orientation, training, and retention programs, these will help organizations to improve in their strategies to attract, retain and motivate their key employees. Gering and Conner (2002) recommend a retention strategy that includes a business plan, a value proposition, progress measures and management influences. Kawasaki (2006) recommends that libraries develop a retention program that includes orientation, professional development and training.

Kalra (1997) develops the idea of the need for new ways of managing knowledge workers by arguing that HRM per se is not enough, instead should be replaced by the idea of human potential management (HPM) with human beings with the focal point. He went further to suggest that HPM`s distinctive characteristics are a concentration on self-management, which facilitates people`s ability and enable them to use it, hence, creating advantages for both the individual and consequently the organization.

Traditionally, economists have acknowledged job satisfaction with "professional suspicion" (Freeman, 1978, p. 135) because it is a subjective variable. In 2000, economists still consider the study of job satisfaction as "still in its infancy" (Blanchflower and Oswald, 2000, p. 8) [5]. The empirical analysis of job satisfaction whether directly or indirectly in the theoretical models mentioned above, shows that job satisfaction is specified as a function of several individual and job characteristics, and consequently interpreted as a utility function (Clark and Oswald, 1996; Easterlin, 2001).

However, some studies suggest that other HRM practices such as teamwork, greater discretion and autonomy in the work place and various employee involvement and pay schemes, do motivate workers and hence generate higher productivity (Cully et al., 1999; Boseli and Van der Wiele, 2002).

Talented employees are of great value for companies (Hiltrop, 1999), but precisely which employee is talented? Anyway, talent is being defined as "any innate capacity that enables an individual to display exceptionally high performance in a domain that requires special skills and training" (Simonton, 1999, p. 436). Two perspectives can be found in the literature. The first one makes a distinction between high potentials and non high potentials (Dries and Peppermans, 2007, 2008; Lombardo and Eichinger, 2000). High potential or critical employees are those considered by senior management as persons with the potentials to perform an executive functions within the company (Cope, 1998; Dries and Peppermans, 2008; Peppermans et al. 2003). Features that can be linked to high potential employees include intelligence, social skills, flexibility, stress resistance, team spirit, negotiation skills and proactivity (Conner, 2000; Lombardo and Eichinger, 2000; Peppermans et al., 2003; Snipes, 2005). Such are the critical staffs that almost every HR manager will do their best to retain in their organizations, because their contribution is vital to the success of such organizations.

The second perspective is a belief that everyone has talent. In that respect, talent is a phenomenon that cut across the entire company and has no specific function. This brings us to the notion that in order for a company to realize its potentials, it has to consider the added value of each and every employee of that organization and not only of those in top management (Houtkamp and Maree, 2008).Current organizations focus more on retaining talented and most valued technical staffs in order to achieve their set objectives. Finally, Hytter (2007) experimented that convenience factors around the workplace such as rewards, incentives, bonuses, leadership styles, career opportunities, training and development of skills, physical working conditions, and work life balance, have an indirect influence in retention of talented employees. By and large, as a HR manager in a newly merged knowledge-intensive organization, I will consider improving almost all the environmental factors in the workplace outlined by Hytter (2007). Therefore learning and development have been considered by many researchers as vital retention-enhancing strategies. This is because the research believed that as long as employees feel that they are learning and growing, their likelihood of looking for another job will be minimized, and vice-versa.

New HRM practices/policies to retain critical employees

As a HR manager in a newly merged knowledge-intensive organization, accordingly the following suggested HRM practices are thought to be sound enough to ensure that critical employees are retained. The retention of employees especially the best and most desirable ones is a fundamental challenge in any organization today. This is because the retention of key employees is always critical for the long term health and success of the organization.

In the first place, I will open up the doors of communication to all employees especially, the critical ones between them and senior management, so that their complaints and concerns will be heard; and appropriate actions taken. If the employees feel safe, then, they will tell you exactly what is in their minds. The improvement of work culture must nurture a successful two way communication. The improvement of the culture of `fearless` within the work environment will be put in place, so that employees will feel free to speak up their minds without any fear of retribution.

I will also improve and bring about positive changes in field of learning and development so that critical employees will feel the prospect of the future.

Also I will bring about positive changes in the reward, incentive and recognition schemes, which are proven cost effective way of motivating staffs.

As a HR manager, I will create a smooth atmosphere where employees must feel recognized, rewarded and appreciated so that they feel part of the decision making of the organization especially those that affect them. And continue to improve on the use of the word `thank you` to employees, this goes a long way to boost their confidence. Security of the job, monetary rewards, bonuses and gifts make the thank you even more welcomed. In general, it is strongly believed that almost all aspect of work is about money and that every employee wants more. This is evidenced from the discussion above which saw many employees shifting from one job to another. However, in certain cases, money is not the end of all. For instance, when Kaka, the Brazilian footballer of the year 2009 turned down a 91 million pounds move from AC Milan to Manchester City, he said, he actually felt great in a place where everybody loves him and that he was very happy to stay. Sadly enough, not everyone will be as happy as Kaka some therefore, can make a hasty decision to move on whenever huge sum of money speaks on their future.


From all that have been said above, it is clear that, be it newly merged knowledge intensive organization or any form of business organization, it is always essential for such organizations to do everything within their powers to retain their key and most valuable staff at all times. This is because, such retention of key employees is very important to the long term strength and achievement of such organization. This will enhance the mass satisfaction and retention of all customers, improved the sales of products and services, happiness of all colleague workers and boost in their performance and above all, achieve growth, development and sustainability. Since retention is of the utmost importance to the organizational knowledge and learning, it is widely believed that for any organization to lose their key staff will cost them more than 100% of the salary of that staff.