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Topic: FACTORS HAVING A SIGNIFICANT IMPACT ON THE RETENTION OF
EMPLOYEES IN A COMPANY

Structure
1. The definition of institution or enterprise
2. The structure of enterprise
3. The analysis of human’s demands based on the theories
4. The analysis of factors having a significant impact on the retention of employees in a
company through the management structure and employees’ needs
5. The plans for building up human resources
6. Conclusion
7. References

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1. THE DEFINITION OF INSTITUTION OR ENTERPRISE
An organization is a social factor that brings its own unique characteristics but
cannot be separated from the general social environment. It aims at plans set out before,
while implementing the activities and methods that are coordinated and planned on
purpose to capably reach the goals. Enterprises act more accurately than other types when
they create opportunities to enable to achieve and comparatively to others, enterprises or
organizations bring more effectiveness because they help achieve the goals much faster or
with lower cost of mental, politics, society, culture and economics.
2. THE STRUCTURE OF ENTERPRISE
The official assignment of duties, powerful relationship and communication
influence on monitoring the way employees coordinate and carry out their work.

The social structure

limits the selection of
activities

Activities are
implemented to create
social effects

Figure 1: The duality of structure

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Organization behavior management


Employees’
families

Banks and financial institutions

Union
Local
community
Local government
(tax, policy)

European
union

Organizatio
n

/
Enterprises

Group of staff

Politicians
(national and local)

Competitors
(existing and
potential)

Civil services
(tax, etc)
Customers
(existing, potential)

Civil

Environmental
advocacy group

Suppliers

Communication/
media

Figure 2: Organization/ enterprise environment

 The elements and principles of structure and building structure of an enterprise:

+ Horizontal distinction
+ Vertical distinction
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Organization behavior management


+ Centralization and handling irregular decisions
+ Communication, coordination and integration
+ Formalization and standardization
+ Build-up work

Head office

Department
of product B

Department
of product A

Humance
resource

Sale

Department
of product C

Finance

Department
of product D

Produce

Figure 3: Diagram of organization structure by function

3. THE ANALYSIS OF HUMAN’S DEMANDS BASED ON THE THEORIES
The comparison among the theories of demands
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Organization behavior management


Maslow

Alderfer

Selfactualizati
on
Esteem

Herzberg

Growth
Hygience
factors

Achievement
motivation

Power
motivation

Relatedness

Love/
belonging
Safety

Mc Clelland

Motivator
factors

Existence

Affiliation
motivation
?

Physiologi
cal

Among the theories of demands, A. Maslow’s theory reaches the peak in the
identification of human’s natural needs. So far, there is no better alternative theory
although many “candidates” have intension of replacing this theory.
According to A. Maslow’s theory, the natural needs of human being are divided
into different up-stairs from the “bottom” to “top” to reflect its “basic” about the
existence and development of men that are both a natural organisms and a social object.

The division of demands into up-stairs from low to high scale shows the
“barbarian” of people reducing and the “civilization” increasing…

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MASLOW’s hierarchy of needs
High level
Self-actualization
Esteem
Love/ Belonging
Low level
Safety
Physiological
Content of Maslow’s hierarchy of needs

The structure of the hierarchy has 5 floors, in which the human’s needs are listed in
like a pyramid.
For the most part, physiological needs are obvious – they are the literal
requirements for human survivals, including metabolic requirements, clothing and sholter,
resting, sexual instinct and so on. Next level is safety needs. With their physical needs

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relatively satisfied, the individual’s safety needs take precedence and dominate behavior

including personal security, health and well-being and safety net against accidents or
illness and their adverse impacts. Higher level than safety needs is love or belonging
needs. It is interpersonal and involve feelings of belongingness, such as: religious group,
professional organization or small social connection (family members, intimate partners,
mentors…). Above this level is the esteem needs - the need of being respected and having
self-esteem and self-respect…. This is the human’s desire to get attention, concern and
respect from others surroundings and expect themselves to become a “significant chain”
which is indispensable in the labor systems. Being respected shows that they themselves
want to be a useful person in a simple way as “society has a favor of assets and work”.
Therefore, people intend to have desire of high status to be more respected by others.
Above all, it is self-actualization. This level of need pertains to what a person’s full
potential is and realizing that potential. People feel free to do their interested job only to
be satisfied only when the work is done. The theory of demands arrange the human’s
needs from low to high. The higher-level needs will be satisfied when lower level
demands are met.
Individuals or people in an organization mainly act following needs. The
satisfaction of needs makes them happy and encourages them to act. At the same time, the
needs are most satisfactory, which is the target of human’s action. Based on that analysis,
human’s demands become and important dynamic in impacting on individuals’ needs to
change human’s behavior. In other ways, the leaders or managers can control the
employees’ behavior by using tools or strategies to influence on their needs or expectation
to make them more aggressive to their duties. In the opposite case, employees are not
assigned to work is the way to diminish their enthusiasm and also they can understand
that they need to find a job somewhere else.
Basic needs can be met by paying competitive and fair wages, supplying free lunch
or mid-shift meals, or making sure of other benefits such as bonuses under the title of
emulation and reward as travels, tours…
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Organization behavior management

To meet the safety needs, managers can ensure the favorable working environment
and fair treatment to all employees and job is maintained stable. To satisfy the demand of
relationship, workers should be facilitated to work in team, given the opportunities to
broaden communication among departments. Moreover, they should encourage their staff
to raise their ideas for the development of the whole enterprise. Also, they should provide
outdoor activities in the anniversary day or holiday to meet the demands of developing
relationship.
To satisfy the esteem needs, workers’ personality qualities should be respected.
Besides competitive salary, they also want their value to be respected. Managers,
therefore, should have some policy for praising and emitting the results of individual’s
achievement widely. Furthermore, employees need providing timely feedback and
promoting on the new position with larger sphere of impact.
To self-improvement needs, managers should provide the opportunities to
developing personal strengths. Moreover, employees need training to developing,
encouraging to participate in the improvement process within the area of agency or
organization and facilitating for their own career development. The big international
corporations in the world hunt a number of talents from different countries including very
strict people by their attractive policies of human resources such as giving them cars,
buildings, high salary and promotion even offering high position in the company… So, to
have skills of encouraging and motivating employees, managers or leaders should
concentrate on researching the study of the specific needs of their employees to give
effective policies. It means that they need to know the way to “satisfy” their employees
suitably and on purpose. For a newly recruited member in need of employment and
reasonable salary, the creation of chance of employment and income are a matter to be
considered first. Whereas, for an employee working here for many years with some real
experience and competitive salary, the need is to be promoted higher position in the
company, which will encourage this employee to work harder and more effectively.

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4.

THE ANALYSIS OF FACTORS HAVING A SIGNIFICANT IMPACT

ON THE RETENTION OF EMPLOYEES IN A COMPANY THROUGH THE
MANAGEMENT STRUCTURE AND EMPLOYEES’ NEEDS
Human resources and capital are two necessary factors to set up a company.
Financial capital helps the company ensure the external face of the organization.
However, human resources play an important part in creating competitive advantages
because that is the strength of the enterprise. Talented staff dominates the competitive
advantages because they directly influence on implementing the business strategies which
are the key factors for the success of company. With powerful strategies, the percentage
of success accounts for 50%. Based on Maslow’s theory, we can divide workers into 3
groups as following:
Group 1: They are unskilled workers. According to “Maslow’s hierarchy of needs”, this
group just meet the low level demands (floor No.1 and 2)
 Stable employment
 Stable salary
 Safe working environment
 Welfare policy and social security, spiritual life, for example: insurance, union,
hostel, kitchen, health, culture and sport
 Training to improve skills
Group 2:

They are professional staff, technical experts. According to Maslow’s

hierarchy, this group’s demands needs meeting at floor No. 3 and 4, which means that the
enterprise should ensure the following requirements:
-

Opportunities to improve working knowledge

-

Working environment

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Organization behavior management


-

Working condition and facilities

-

Career promotion opportunities

-

Opportunities to show of professional knowledge (working in the trained job)

-

Building-up the work culture
The failure of business is in individuals and employees and talented staff is an

inseparable entity. They want to be satisfied at the highest level both material and spiritual
demands because they can evaluate their own value. Keeping good employees is a big
issue for the leaders, however, to appreciate the employees’ capacity, we should also
consider how to be regarded as a good employee.
Good staff: They are the people who can help with the development of the
enterprise and adapt to the company’s working environment and culture. Above all, a
company needs many talented employees because they are important elements affecting
almost orientation and business revenue. To keep this manpower, we need two following
factors:


Brand attraction of the company: Brand is a key factor in deciding the

appeal and motivation to attract talents for enterprise.


Benefits the company offers: to be able to recruit skilled employees, we

should have good welfare. Besides competitive salary, the company should pay more
attention to other needs of the employees to help them happily concentrate on working,
showing off themselves and devoting their best for the job.
To encourage the talents to work effectively and help company succeed, there
should be a strategy for talent development together with oriented skill process. Based on
the desire and real situation of the company, the plans for developing good employees are
built up and associated with business goals that company expect.

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Right person, right job and right time are important things that managers should
focus on. Also, we should distinguish between ability and competence of staff. Ability is
what belongs to nature or quality while capacity is likely to meet certain work
requirements. Person who has ability and capacity in this company unsurely meet the
qualified ability and capacity in another company.
Group 3: According to Maslow’s theory, managers and leaders have highest demands
(floor No. 5), however, there are some basic concepts of two objects:
 Management:

This

process

includes

planning,

arranging,

leading

(or

implementing) and monitoring resources to reach goals
 Leadership: This process impacts on other people so that they can understand most
clearly and go to the agreement on what and how to do and the process of supporting the

efforts of individuals and groups to achieve common goals.
Attracting and retaining talents are not new problems but usually “hot” to the
enterprise. There are many methods to hunt talents but whether they can work here for a
long time or not depends much on human resources management of each company.
The most concern of the talents is not finding jobs but finding a company and a
boss giving them opportunity to develop personal capacity and reach the peak of their
career. Thus, to retain good employees, the company should retain the talented managers
first. The best way to do this is building friendly working environment and competitive
salary with high commission, suitable fair benefits and sincere concern of leaders for
employees.
Among the four most important factors making the brand attractive employees in
recruitment, the compensation is ranked last.

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Factor considered as most important in attracting talents in recruitment is good
leader team (the answer of 76% of people), then it is working environment (75.2% of
surveyed people recognize)
71.8% think that the programs for supporting training and development are the
third importance and 66.4% of respondents involve in salary and commission.
Salary, bonus and benefit are important but not all. Good talent leader team is not
only important factor for success but also contributing to attracting talents.
According to experts, in the difficult condition of economy, the disturbance in the
field of human resources is inevitable. Moreover, the “war” to hunt talents becomes more
and more intensive. The best way to retain talents is that the leaders should understand
their employees more than themselves and help them orient and develop their career
objectives.

If the boss can do all of those things, they can build the inheritated potential and
reliable human resources. So, company no long faces up with the crisis of human resource
if some problems happen.
5. EIGHT WAYS TO RETAIN TALENTS BY GOOD LEADERS
5.1.

Sincere: Frankly, the management is how your employees feel happy. When

they do so, employees are willing to work hard and want to commit for a long-term.
Retaining good employees means making employees satisfied and happy.
5.2.

Concern about staff: The most common reason for high off-work rate is

unfair in management. Leaders should consider the needs of employees and treat fairly
with them. Some inexperienced managers usually do to much favor of employees but
forget to remind or discipline them if necessary.

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During long time for experience in interviewing thousands of candidates, I find the
model of beloved managers as “firm but fair”. In case an employee makes some mistakes,
the manager should help them realize that he/ she is doing wrong but not lower his/her
value. “Commendation publicly, criticize/ remind in person” are a working principles that
managers should apply. Many studies have shown that the lack of respect and capacity
recognization cause the off-work of employees. For most of the employees, if they are
respected and their value is recognized, they would rather stay in the company than look

for another job.
5.3.

Training plans: Managers should set out the training plan for their

employees so that they know how to work effectively. It is unfair when we do not train
employees but comment that their capacity is not good enough.
5.4.

Guideline provision: Employees should be provided all documents about

workflow and rules of the company so that they can know what it expects to get from
them. Additionally, employees should be guide to work with the process written in paper,
which can help them not “reinvent the working wheel” or frequently retraining new
employees when someone leaves.
5.5.

Promotion opportunities: Employees need knowing about the opportunities

for being promoted. This does not mean that all of the staff has the chance to become
leader but simply that staff can become the “right hand” of managers.
5.6.

The support from the Department of Human Resources: Employees need

understanding and supporting their needs Chief of Human Resources Department who
will discuss directly welfare, holiday or any other matter that employees concern. Instead
of giving some simply guide to employees, Chief of Human Resources Department
should spend some minutes explaining them about the company’s regulations. This seems
simple but helps the employees feel concerned and avoid being misunderstood that can

happen later. Nevertheless, company should be flexible to change some roles to make
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employees think that you take care of them and then they feel excited and willing to work.
I myself witness a off-work of an employee only due to the dispute of the payment for 30
– minute overtime remuneration. Be careful because sometimes a small drop of water can
flood out of the glass and a misleading dialogue can make a “star” employee quit.
5.7.

Salary: Salary is not the most important factor to motivate employees but

the common reason for employee to quit. Please keep in mind the cost when the company
must pay when there is high rate of off-work employees. Imagine that if you pay salary 510% higher than the average of the labor market, how will percentage of off-work
employees reduce?
5.8.

Benefits: What will you award for your employees when they are

appreciated? Reward for Tet holiday or quarterly? Please remember that only a small
worthy reward can make employees satisfied.

6. THE PLANS FOR BUILDING UP HUMAN RESOURCES
6.1.

Mathis and Jackson identify key steps in planning strategies for human

resources as following:

* Review the organization’s targets and strategies
* Consider carefully the external environment to find information about labor supply
* Adjust the availability and potential of internal workforce
* Develop the forecast of workforce based on the above information
* Based on the forecast, identify the demands of labor in short term, medium term and
long term
* Then, determine the suitability of current internal labor comparative to requirements

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* Finally, define human resources strategies in relation to the external resources, career
development, training and effective performance management.
6.2. Building-up human resources
 Recruitment: indentifying reasonable number of potential employees who can
meet the requirements of job, then suitable individuals will be selected into next round of
the process.
 Selection: including short – listed candidates. Bowen and his co-workers in 1996
brings three suitable levels during the recruitment:
+ Consistent with organization or enterprise
+ Consistent with department and team
+ Suitable for the description
-

Training and development

-

Methods of empowering and attracting participants

-

Fair and diversity

7. CONCLUSION
There is an obvious formula that: happy employees are loyal employees.
Nowadays, in case many enterprises making significant effort to lower the rate of staff
turnover, those getting most benefits are employees.
Enterprises are now facing with greater challenges in finding skilled workers,
building young enthusiastic teams and reducing large amount of old workers who are
going to retire. Moreover, companies can attract and retain employees and improve the
working productivity by applying 5-step process called PRIDE as following:

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Organization behavior management


P – Provide: Providing professional working environment
R – Recognize: Recognizing, rewarding and reinforcing appropriate behavior
I – Involve: Attracting and sticking
D – Develop: Developing skills and potential
E – Evaluate: Recognizing and evaluating

8. REFERENCES:
/> />Textbook: Organization behavior management

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Organization behavior management