Retaining skilled employee, case study in Mai Diem textile & garment limited company = giữ chân người lao động có năng lực tại Công ty TNHH Dệt may Mai Điểm

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TABLE OF CONTENT

ACKNOWLEDGEMENTS i
ABSTRACT ii
TÓM TẮT iv
TABLE OF CONTENT vi
LIST OF FIGURE ix
INTRODUCTION 1
1. The necessity of the thesis. 1
2. Objectives of the research 3
3. Research scope 3
4. Hypothesis of the research (Research questions) 3
6. Methodology 4
7. Thesis‘s limitation 5
8. Significant 5
9. Thesis structure 5
CHAPTER 1: LITERATURE REVIEW 6
1.1Employee retention. 6
1.1.1 Definition of employee retention 6
1.1.2 Reasons of employee retention 7
1.1.3 Factors make employees leave Company 8
1.2 Employee retention components. 9
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1.2.1 Work environment and Job Design. 9
1.2.2 Leadership 11
1.2.3 Employee Recognition, Rewards and Compensation. 13
1.3 Employee retention tactics. 14
1.3.1 Employee Compensation. 15

1.3.2 Employee Benefits. 16
1.3.3 Employee Recognition and Reward Program. 18
1.3.4 Job satisfaction 20
1.3.5 Creating a comfortable work environment. 22
1.3.6 Coaching programmes. 24
1.4 Employee retention in Garment and textile industry 25
1.4.1 Overview on Vietnam‘s garment and textile industry. 25
1.4.2 Human resource management and development solution 26
CHAPTER 2: ANALYSIS OF MAI DIEM’S EMPLOYEE RETENTION
29
2.1 Overview of Mai Diem Garment and Textile Company 29
2.2 The Research methodology 30
2.2.1 Overall approach 30
2.2.2 Questionnaire development 31
2.2.3 Target Population 32
2.3 Findings and analysis 33
2.3.1 Benefit programs 33
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2.3.2 Strategies 41
2.3.3 Organizational culture 49
2.3.4 Employee Satisfaction 57
CHAPTER 3: RECOMMENDATION AND CONCLUSION 68
3.1 Overview of the current human resource system at Mai Diem 68
3.2 Recommendation for Mai Diem Garment and Textile Company 68
3.2.1 Clear Objectives about work climate 68
3.2.2Training and Motivation 70
3.2.3 Benefits and Compensation 71
3.2.4 Communication and Assistance 72
3.2.5 Create belief for the employees in the future development of Mai

Diem 73
3.3 Action plan 74
3.3.1 The action plan in long term 74
3.3.2 The proposed action plan in short term to attract newcomers and
sustain current employees from the researcher: 77
CONCLUSION 80
REFERENCE 82
APPENDIX 84


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LIST OF FIGURE

Figure 2. 1 Steps of the research 31
Figure 2. 2: The perception of Mai Diem participants about the salary and
compensation 34
Figure 2. 3: The perception of Mai Diem participants about the Leave
Benefits 35
Figure 2. 4: The perception of Mai Diem participants about the Retirement
Plan 36
Figure 2. 5: The perception of Mai Diem participants about the health-related
benefits. 37
Figure 2. 6 : The perception of Mai Diem participants about the Long-term
Care 38
Figure 2. 7: The perception of Mai Diem participants about the Tuition
Reimbursement 39
Figure 2. 8: the perception of the participants about the Employee Assistance
Program 40
Figure 2. 9: The perception of Mai Diem participants about the Work-life

Balance 40
Figure 2. 10: Perception of Mai Diem Participants about the Alternative Work
Schedule 42
Figure 2. 11: The perception of Mai Diem participants about the wellness
program 43
Figure 2. 12: The perception of Mai Diem participants about the Mentoring
and Coaching 44
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Figure 2. 13: The perception of Mai Diem participants about the Job rotation
and new Assignment 45
Figure 2. 14: The perception of Mai Diem participants about the Rewards and
Recognition 46
Figure 2. 15: The perception of Mai Diem participants about the Education
Opportunities 47
Figure 2. 16: The perception of Mai Diem participants about the Job-related
Training Opportunities 48
Figure 2. 17: The perception of Mai Diem participants about the annual
performance appraisal 49
Figure 2. 18: The perception of Mai Diem participants about the Development
plan 50
Figure 2. 19: The perception of Mai Diem participants about Task group
assignment 51
Figure 2. 20: The perception of Mai Diem participants about Career
development program 51
Figure 2. 21: The perception of Mai Diem participants about New assignment52
Figure 2. 22: The perception of Mai Diem participants about Supervisor
communicate 53
Figure 2. 23: The perception of Mai Diem participants about Value of
diversity 53

Figure 2. 24: The perception of Mai Diem participants about Openess and
trust 54
Figure 2. 25: The perception of Mai Diem participants about Fairness and
Respect 55
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Figure 2. 26: The perception of Mai Diem participants about Supervisor
listening 56
Figure 2. 27: The perception of Mai Diem participants about Supervisor
empower 56
Figure 2. 28: The perception of Mai Diem participants about Opportunities for
personal growth and development 58
Figure 2. 29: The perception of Mai Diem participants about the feeling of
worthwhile accomplishment from the job 59
Figure 2. 30: The perception of Mai Diem participants about The amount of
independent thought and action exercised from the job 60
Figure 2. 31: The perception of Mai Diem participants about The amount of
challenge in the job 60
Figure 2. 32: The perception of Mai Diem participants about the amount of
job security 61
Figure 2. 33: The perception of Mai Diem participants about the amount of
pay and fringe benefits 62
Figure 2. 34: The perception of Mai Diem participants about the degree to
which I am fairly paid for what I contribute to my organization 63
Figure 2. 35: The perception of Mai Diem participants about the people I talk
to and work with in my job 64
Figure 2. 36: The perception of Mai Diem participants about the amount of
support and guidance received from the superiors 65
Figure 2. 37: The perception of Mai Diem participants about the overall
quality of supervision received in the job 65

Figure 2. 38: The perception of Mai Diem participants about opportunities to
learn new knowledge 66
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LIST OF TABLE
Table 2. 1: Mai Diem employee‘s response rate 33



1

INTRODUCTION
1. The necessity of the thesis.
In today‘s economy, the bottom line in business is profits. Where do
the profits come from? From sales of services and/or products. We have
developed the following acronym (ECP) that explains how companies will
increase their profits.
E— Employee retention and employee satisfaction. When you have
satisfied employees (who are not caught up in the quagmire of bureaucracy
and leave), they are more able to help the customer.
C— Customer retention. The more effective the customer services the
greater the customer retention.
P— Profit. The equation is simple from this point on. When we keep
customers that are satisfied, and continue to add more, the corporation has
increased the likelihood of increased profits.
Employee Satisfaction + Customer Satisfaction = Increased Profits
Employee is the most important asset of enterprises but many
enterprises have failed to introduce reasonable solutions to retain qualified
employees. This reduces the main competitiveness of enterprises in the
current period.

Skilled employee is defined as a segment of the work force with a high
skill level that creates significant economic value through the work performed
(human capital). Skilled labor is generally characterized by high education or
expertise levels and high wages. Skilled labor involves complicated tasks that
require specific skill sets, education, training and experience, and may involve
abstract thinking.
2

So, attracting and retaining skilled employees are the best solution to help
enterprises develop rapidly and sustainably. However, Vietnam enterprises always
have to deal with the risk of losing their top talents to competitors.
Enterprises need to be aware that retaining employees is not a
countermeasure but a strategy. A strategy of retaining and developing human
resource need to process fully and professionally which follows a consecutive
chain including recruitment, training, retaining and human resource
development. This includes such factors as: Creating human resource + Reduce
dissatisfaction + Motivation. Solutions that give enterprises introduce to retain
good employee must meet the three mentioned-above groups of factors.
If one enterprise ignores the above issue and just pays attention to
income, compensation, promotion, it is not differentiated from others.
Moreover, other enterprises may offer better compensations so as to attract
good people. Nevertheless, if one enterprise focuses much on income for
employee, however, it fails to create a professional working environment,
such excellent labor will fell boring and they soon leave for other companies.
Retaining excellent labor is a throughout process, beginning at the work of
attraction-recruitment-working and cooperation for productivity. These items
need to be processed professionally together with the sharing and close
cooperation of leaders, which can make excellent labor think again before
they decide to accept attractive invitations.
Mai Diem textile and garment limited Company specializes in domestic

and exported products. Building and maintaining a high-skilled workforce has
enabled the company to produce high-quality products. For many years, the
Company has focused on investment to building a high-skilled workforce,
having realized that its development and success are heavily based on the
quality of such workforce, to be able to cope with the change of the new
3

environment. The year 2008 has marked a period when the competition of
local garment industry has reached another level, challenging Mai Diem to
foster its success and maintain the well-living condition for its 200
employees. Attracting and retaining the high-skilled employees is seen as one
of the vital factor for maintaining the competitive advantage of the company.
As one of committed employees in Mai Diem company, I choose the topic
"Retaining skilled employees, case study in Mai Diem textile and garment
limited Company." as the official one for my Business Administration thesis.
2. Objectives of the research
The purpose of this research is to identify the relationship between
these factors: salary, compensation and benefit, working environment, career
promotion chance, employee‘s satisfaction, especially in Mai Diem garment
& textile Company. Thence, the thesis aims to achieve the following
objectives:
- Identifying and assess actual situations of Mai Diem‘s Human
Resource Management and its current employee retention.
- Develop some suggestions and recommendations to retain skilled
employee in Mai Diem Company.
3. Research scope
Doing research Human resource management is a broad topic. The
thesis only concentrates on employee retention with case study in Mai Diem
garment textile Company. The definition of employee retention using in this
study means skilled employee. Research period from 2006-2010.

4. Hypothesis of the research (Research questions)
From my point of view, the research focuses on main factors in order to
satisfy needs of employees to retain them, as follows:
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Hypothesis 1: The higher the income, the more loyal and dedicated
employee are.
Hypothesis 2: Working environment at the Company affects the level
of labor‘s loyalty by proportional.
Hypothesis 3: Career development opportunities of individuals affect
to the level of labor dedicated to Company by proportional
5. Data sources
- Reports of Mai Diem garment & textile Company from 2006 to 2010
(including HR reports, financial reports and other statistical reports relating HR)
- Data from survey, observation, direct interview and discussion with
CEO & employees of Mai Diem Company.
- Data from other sources such as specialist magazines and books, internet.
6. Methodology
In the research for this study, the objective is to identify the relationship
among various factors as describe and understand the current employee
retention status at Mai Diem textile and Garment Company. Therefore, a
research survey is very effective to gather data on the background of the
research hypotheses for the purpose of analysis. Dawson (2009) has
emphasized on the importance of the research survey as it will help the
researcher to collect data from the participants while the population of interest
can also be understood. Based on such effectiveness, the researcher has used
the quantitative method to carry out the research through using the
questionnaire. Moreover, the research aims to apply to descriptive analysis
and logical reasoning to analyze the data collected.
5

7. Thesis’s limitation
The thesis focuses on employee retention in Mai Diem Company. Due
to time and ability limitation, the research can not cover a large size of data
and information.
In addition, the economic and labor situations change day by day. The
solutions in this thesis are not completely suitable with all managers or
companies, it depends on financial statement, business field of each
Company.
8. Significant
Due to the practical meaning of the research, the analysis of
employee‘s requirement is the way leading to answer the doubtful question
about employee retention. Together with specific and clear recommendations
and solutions, the thesis is expected to make great contribution to Mai Diem
Company and other companies in their applying measures to retain skilled
employees.
9. Thesis structure
TOPIC “Retaining skilled employees, case study in Mai Diem
garment & textile limited Company‖
Introduction
Chapter 1: Literature review
Chapter 2: Analysis of Mai Diem‘s employee retention.
Chapter 3: Recommendations and conclusions
References
Appendix
6

CHAPTER 1: LITERATURE REVIEW

1.1Employee retention.

1.1.1 Definition of employee retention
Retention defined as ―an obligation to continue to do business or
exchange with a particular Company on an ongoing basis‖ (Zineldin, 2000,
p. 28). A more detailed and recent definition for the concept of retention is
―customer liking, identification, commitment, trust, readiness to recommend,
and repurchase intentions, with the first four being emotional-cognitive
retention constructs, and the last two being behavioral intentions‖ (Stauss et
al., 2001).
Employee retention is a process in which the employees are encouraged
to remain with the organization for the maximum period of time or until the
completion of the project. Employee retention is beneficial for the
organization as well as the employee.
(Source:
Studies show that attracting existed employees costs less than acquiring
new talents as organizations know their employees and what they want, and
the initial cost of attracting the new employees has already been expended
(Davidow and Uttal, 1989). Employees retention also attain benefits such as
customers satisfaction, better service, lower costs (Reichheld, 1995), lower
price sensitivity, positive word-of-mouth, higher market share, higher
productivity and higher efficiency (Zineldin, 2000).
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1.1.2 Reasons of employee retention
The retention of employees has been shown to be significant to the
development and the accomplishment of the organization‘s goals and
objectives. Retention of employees can be a vital source of competitive
advantage for any organization.
In the past, employee retention was a way of life. If employees did a
good job and the Company could afford to pay them, they kept their jobs.
Times have changed. Employees are not as loyal as in the past. They know

they have options and aren‘t afraid of use them. It‘s now up to employers to
figure out how to keep good people.
There are additional reasons that retention is now back in the spotlight.
The challenges confronting employers are many. They include:
- Today‘s tightening labor market and tomorrow‘s predicted talent
crunch. It‘s getting increasingly difficult for companies to keep current
employees and find qualified replacements.
- A growing skills shortage. Many occupations are facing a severe lack
of talent.
- An aging workforce. The workforce is getting older and upcoming age
groups don‘t have the numbers to fill the spaces. Businesses need to keep
people as long as possible.
- Decreased employee loyalty. Gone are the days of the 25
th
anniversary
gold watch. Employees don‘t stay with companies as long as they did in the past.
- The search for new opportunities. In today‘s world, it‘s easy for people
to look for a job. They can open the newspaper or search the Internet for
instant job listings.
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1.1.3 Factors make employees leave Company
Retaining the correct workforce is always a challenge for employers. In
this current competitive business world, retaining employees is a game which
employers have to compete with others to retain their employees or their key
talent. Coff (1997) in a study claimed that the loss of talented employees may
be very detrimental to the Company's future success. Employees do not leave
an organization without any significant reason. There are certain
circumstances that lead to their leaving the organization.
Here are the most common reasons employees leave:

- Poor relationship between the employee and their immediate boss.
- Lack of a career advancement plan.
- A poor match between the employee and the job or the employee and
the Company.
- Compensation not competitive.
- No direct link between strong performance and increased rewards.
- A need for stimulating, meaningful work.
- Lack of appreciation, recognition, and rewards.
- Insufficient coaching and feedback.
- Quality of the people the employee works with.
- Insufficient alignment of how the employee‘s work achieves organization
objectives and how the employee can be greater success.
(Source: www.RetainsEmployees.com)
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Therefore, in order to retain skilled employees, leaders of enterprises,
firstly, should recognize the importance of skilled employees, understand the
reason why employees leave, know clear about employee‘s requirements then
have solutions can be made to keep them working for such enterprises longer.
1.2 Employee retention components.
Employee retention consists of a three major components: Work
environment and job design; leadership; recognition, reward and
compensation. If these components are adequately and collectively addressed,
the majority of employees will be content with their work environment and
actively engaged in their job.
1.2.1 Work environment and Job Design.
Employees will be happy to work in an environment which provide
positive work environment and where they feel they are making difference
and where most people in the organization are proficient and pulling together
to move the organization forward. A study by Milman and Ricci (2004) reveal

that employees who have a positive experience with regards to working hours,
working environment, sense of fulfillment with their jobs and higher job
satisfaction are more likely to stay with the current employer.
Work environment is an important factor for an employee to be
successful in their carrier. If the environment does not motivate employees to
work then it will be an excuse for employees for not performing to the
standard and giving reason as environment is too noisy, condense, not hygine,
feel stress and no fun in the working environment. Besides using
compensation, retaining talented employees may also be accomplished
through improving their work environment and Job Design. Company can
create a positive work environment and money and benefits may bring
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employees through the front door, but poor work conditions will eventually
drive them out the back. Ramlal (2003) in his studies mentioned that it's very
important to recognize the emerging needs of individuals to keep them
committed and provide the work environment as necessitate. Managers can
play an instrumental role in creating a work environment that neutralises the
otherwise problematic aspects (Ian & Jonathan, 2007).
According to (Fields, 2001) work environment should mutate regularly
to keep up with the times and:
- Allow individuals to balance work and personal life activities.
- Have a well-defined culture. People understand how their performance
is measured and what gets rewarded and punished.
- Foster learning opportunities to improve workers' intellectual capital
and sustainable marketability in a world where continuously learning in
order to keep a job is a given.
- Have benefits that are in line with where individuals are in their life cycle.
In a study done by Herman and Gioia (1998) reveals that research has
shown employees want to do more than merely "attend" work. Response

Analysis of Princeton, New Jersey surveyed 1600 employees from a variety
of industries regarding the most important aspect of work. The majority, 52
percent, wanted to be responsible for their work and the results it produces, 42
percent wanted acknowledgement for their contributions and 39 percent
wanted their task matched to their strengths. Designing work so that
employees can take responsibility and rewarding them appropriately is a
major step toward making work meaningful (Debra 2002).
Employees need to be given certain level of freedom, authority and
responsibility to make decision on their work to get things done. Company
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should listen to the feedback or suggestion provided by employee to improve
the work environment or the job design that they are doing. Small ideas given
by employees may lead to great improvement which might result in higher
productivity with less work. In another aspect employees should also be given
chance to rotate their job if there is request or if there are opportunity to grow
in a different job scope then employees should be given an opportunity to
grow with the Company. This will proof the Company is giving employees
empowerment and they cares for the best of employees. Retention initiatives
are often thought of as separate from recruitment. They are, however,
inextricably tied together. An organization may have the most elaborate and
sophisticated recruitment program imaginable, but once individuals are hired,
if the environment is inhospitable, given the choices that employees have in
this labor market, companies will soon find themselves looking for another
replacement. They'll also see the huge impact that turnover has on the bottom
line (Fields, 2001).
1.2.2 Leadership
―Employees will stay if they have a good relationship and open
communication with their immediate boss‖ (HRI Institute, 2001). The key
reason an employee leaves within 6 and 12 months of commencing in a new

role is the relationship they have with their manager (Chaminade, 2006). This
is the ―leadership factor‖ which highlights the impact that leaders and
managers can have on productivity and retention. People will put in
discretionary effort for personal/social recognition received from their peers
and immediate manager.
Leadership is defined as the ―process of social influence in which one
person could enlist the aid and support of others in the accomplishment of a
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common goal.‖ It involves using one‘s role and ability to influence others in
some way, which delivers business results and contributes to the
organisation‘s overall success. True leadership comes from influence,
congruence and integrity. A successful leadership involves the management of
relationships and communications within a team, and drives the team towards
achieving a specific goal. Leadership reflects on the ability of one to ―express
a vision, influence others to achieve results, encourage team cooperation, and
be an example‖. It is important to note, however, that one who is in the formal
role of a leader may not necessarily possesses leadership skills nor be capable
of leading. Leadership is essentially related to one‘s skills, abilities and degree
of influence, instead of power.
There are six important leadership skills that are deemed crucial for an
organisation‘s future success. These areas include challenging assumptions,
encouraging risk taking, inspiring employees, clearly defining expectations,
rewarding achievements and participative decision-making (Jordan, M. 2010).
Hence, organisations may position their businesses for future success through
focussing on these key areas.
Organisations with leadership development programmes might
experience significant business impacts, which includes improvements in
leadership strength, leader retention and employee retention. The impact of
leadership development is not determined by the amount of money spent, but

how it is designed and executed. The leadership development gives five
benefits: Morale booster, Limits employee turnover, Increases productivity,
Provides better vision, Fosters new ideas. Talent Management
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1.2.3 Employee Recognition, Rewards and Compensation.
Attractive remuneration packages are one of the very important factors
of retention because it fulfills the financial and material desires as well as
provide the means of being social by employee's status and position of power
in the organization. For many organizations, the entire concept of retaining
top employees boils down to one topic which is compensation. "To keep our
best employees, we must pay them well" is the cry. Well, up to a point, that's
true but only as a negative. If you don't pay your top performers well, they'll
surely leave. But only paying them well does not ensure that they'll stay
(McKeown, 2002). 0rganizations need to have a proper rewards, recognition
and compensation program in place if they want to retain their key employees
for a longer period.
If your compensation policies are below market level, you'll have
trouble retaining top employees because you're not meeting their
compensation needs. If you adjust compensation upward to meet the market
level, you get a one-time effect on employee retention. But this is where many
organizations make the mistake of stopping their retention efforts (McKeown,
2002). Below are the definition of Employee Recognition, Rewards and
compensation:
Recognition: Can be defined as a form of sincere praise or appreciation
given to an individual by another.
Compensation: Wages and other financial benefits earned from labor.
Reward: An earned item of value presented to an individual for
successful accomplishment of a particular service, task, or mission.
A clear-cut compensation system offers the kinds of incentives and

rewards that help retain staff and motivate promising future leaders.
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Established compensation levels and programs also support a successful
succession plan. Studies have revealed that highly competitive wage systems
promotes employee commitment and thus results in attraction and retention of
a workforce.
A reward can be extrinsic or intrinsic, it can be a cash reward such as
bounces or it can be recognition such as naming a worker employee of the
month, and at other times a reward refers to a tangible incentive. Silbert
(2005) in a study says that in a corporate environment rewards can take
several forms. It includes cash bonuses, recognition awards, free merchandise
and free trips. It is very important that the rewards have a lasting impression
on the employee and it will continue to substantiate the employee's perception
that they are valued. Rewards are very important for job satisfaction because
it fulfills the basic needs as well as helps to attain the higher level of goal.
Studies show that a lack of appreciation and recognition is the primary
reason why people quit their jobs. We have to understand the importance of
recognition in its broadest sense and the value of reward systems in both
monetary and non-monetary terms (Bowen, 2000). Bowen also said that
reward and recognition are the factors that can most influence worker attitude,
productivity, and organizational competitiveness not only with respect to
selling and servicing customers but also with respect to attracting and
retaining valued human resources
1.3 Employee retention tactics.
Employees retaining is the most imperative target for the organization
because hiring of qualified candidate is essential for organization but their
retention is more important than hiring, because a huge amount is spending on
the orientation and training of the new indicated employees. Study finds that
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the cost of replacing of old employees with new is estimated up to twice the
employee annual salary. When Employee leaves the job, organization lost not
only employee, but also lost the customers who ware loyal with the employee,
knowledge of production, current projects, competitor and past history of the
organization. Below are key elements to employee retention:
1.3.1 Employee Compensation.
Compensation has long been used as a vehicle to attract and retain
employees. Compensation is payment to an employee in return for their
contribution to the organization, that is, for doing their job. The most common
forms of compensation are wages, salaries, bonus-based programs,
commission-based program.
Any employee wants to feel that he or she is being paid appropriately
and fairly for the work he or she does. Make sure that if compensation
package is not competitive, employee will find this out and look for
employers who are willing to offer more competitive compensation packages.
Here are some tips when building a competitive compensation package:
A performance-based compensation plan: should be designed to
encourage employees to behave in ways that will result in attainment of the
goals of Company, while also meeting employees' personal objectives. The
pay plan must be objective and fair to all employees. Additional commissions
are paid for experience, helping to generate office revenue growth, and
attaining and maintaining professional.
Loyalty based Bonus: Company can introduce a Loyalty Bonus
Program in which Company can reward employee after a successful
completion of a specified period of time. This can be in the form of Money or
16

Position. This will encourage the fellow employees as well whether they are
interested in money or position, they will feel fascinated.

Salary policy: Pay a fair market salary that will keep employees on par
with their peers in similar companies and positions. The salary of employee
need to be increased, which will not only retain the present employees but
will attract employees of other organization as well.
1.3.2 Employee Benefits.
Employee benefits include all financial rewards that generally are not
paid directly to an employee. Employee benefits typically refer to payment for
time not work, health benefits, security benefits, employee service. The key
factor is to offer the most important benefits the business can afford to attract
and keep the most qualified employee. Employee benefits program includes:
Vacation and days-off policies
Employees need time off occasionally for personal business or just for
rest and relaxation. Having a policy that employees understand and that
provides some flexibility will be greatly appreciated.
Health benefits
One of the most expensive components of a benefit package is health
coverage. Health savings accounts also permit employees to allocate pre-tax
compensation dollars for medical needs. Health benefits included health care,
dental care and vision care. Others Company programs that provide health
benefits for employee include employee assistance programs, wellness
programs and physical fitness program.
17

Disability Insurance
Short and long-term disability insurance is a valued benefit by both
employee and employer. Even if the business offers worker such as
compensation, disability insurance remains a major benefit for two important
reasons. First, disability (illness or injury) that occurs either at or away from
the workplace is covered. Second, disability claims typically are settled faster
and easier than those filed under workers compensation insurance programs.

Life Insurance
Life insurance coverage is both a valuable benefit from an employee
perspective and usually quite affordable for the small business. Most
programs provide term life coverage (pure protection with no cash savings
account) with the opportunity for the employee to purchase more insurance if
they wish. Some plans also allow employees to convert their protection to
whole life coverage (cash buildup and tax deferred dividends) and/or continue
their coverage should they leave their employer.
Education reimbursement programs
Many employees are interested in furthering their education. If your
business requires ongoing training in certain fields, it may be prudent to
provide partial or total reimbursement for certain types of classes. The
employees enhance their skills and you have a better-trained employee group.
Education Assistance
A much-desired employee benefit, education assistance is more
important than ever. As the cost of on-campus post-secondary education
increases, many employees simply cannot afford to improve their skills in the
classroom. However, the many wonderful educational programs offered
18

online at reasonable cost can help small businesses improve their staff quality.
Available at any time of day, both formal degree programs and continuing
education courses can be very effective and economical.
Retirement Plans
Retirement plan provide income for employees who retire after
reaching a certain age or having served the firm for a specific period of time.
Traditional pension plans, 401K programs and SEP IRAs (Simplified
Employee Pension Individual Retirement Accounts) are all popular with
employees and small businesses. 401K plans are often the most popular
programs because they permit employees to contribute to individual IRAs

along with participating in their employer retirement plan. SEP IRA programs
are tailored for small business as they have few administration expenses and
operate like individual IRA accounts. The right retirement plan should take
into account the business‘s needs as well as the employees‘ concerns.
Gifts at some Occasions
Company can give some gifts at the time of one or two festivals to the
employees making them feel good and understand that the management is
concerned about them.
1.3.3 Employee Recognition and Reward Program.
Rewards and recognition are a vital part of promoting an attractive
workplace. Recognizing employees in a fair and open way not only
encourages employees to work hard, but it also encourages loyal feelings
towards Company. Here are a few factors to keep in mind when build
Employee Rewards and Recognition Program: