Rocky Marketing Network is faced with two issues concerning to their workforce i.e. low retention rate and poor performance that are telling upon their profitability and challenging their position with a comparison to their competitors. The current report has been prepared after a careful investigation of the causes of the reported issues. After a deep study, it was detected that both the issues are overlapping each other to a considerable extent and are the products of poor HRM performance. Furthermore, it is suggested that the company can tackle both the issues by taking appropriate initiatives, which are as follows:
All these initiatives are supposed to lift employee motivation and increase their understanding and (subsequently) their engagement into work, which is sure way to level up both job satisfaction as well as labor’s performance.
Rocky Marketing Network is a new real estate marketing company based in the US, which was founded in 2012. The company deals in both residential and commercial marketing, and undertakes all the responsibilities in this regard i.e. banners, billboards, TVCs, brochures, leaflets, etc. Even though the background of the top management of the organization stamps their deep insight and extensive experience in the field of development and marketing, the company is facing issues of low level of both employee retention as well as performance that they have reported to the writer of this report. Despite attractive compensation plan, they are not able to keep their employees loyal and make them deliver the quality completion of assigned tasks, and this tendency shown by them is reflecting on organizational performance.
The current report is supposed to provide the best solution to the underlying issue encountered by the RMN. It will discuss the reasons at the bottom of reported low level of performance and retention rate, and analyze their impact on the organizational level. Discussing further, the best attempt will be made to recommend some of the most practical initiatives to the company to tackle the reported issue in the most skilled and appropriate manner.
Nature of Problem
Rocky Marketing Network are concerned over the low retention rate and the poor performance shown by their workforce. In the light of various studies, the writer of this report considers the reported problem to be threatening to the sustainability and profitability of the organization. For instance, the performance of employees is one of the major determiners of the competitiveness and the reputation of any organization (Carton, 2006). So, the lapse of performance shown by the workforce tells very badly on organizational health, which may result in total demise in extreme cases. Apart from this, a company’s inability to retain their employees directly means the lack of experience on organizational level. Because they have (mostly) to rely on fresh sailors who are supposed to be replaced in near future. Dibble (1999), holds that this is one of the most abundantly faced and critical issues for companies. In simple words, both the reported problems are serious in nature and should be undone as soon as possible to smoothen the way towards progress that is massively hurdled by their existence. If the management overlooks these issues, they may hollow the roots of the organization in years to come.
Analysis of Company’s Defined Goals
Foundation of the company (Rocky Marketing Network) is associated with some of the very definite goals and milestone defined by its founders. Real estate market in the US is a highly concentrated market, which denotes the existence of perfect competition not allowing any company to generate abnormal revenue. Furthermore, the company has to compete the well-established marketing organizations like Media 4 Agents, Fortune Marketing, and Extraordinary Marketing. These companies have shown their magical impact and earned immense credibility due to their proven track record of successful accomplishment of a higher percentage of undertaken projects.
Rocky Marketing Network, even though a new company, yet is determined to compete some of the best real estate marketing companies including ones above in the US. Their positioning strategy revolves around differentiation that they want to achieve through high-quality performance. Furthermore, as a new company, they also want to compete on price, so that they may stand out in the market on the basis of a perfect blend of cost-effectiveness and quality. So, the defined goals of the company (differentiation and low price) require them to achieve both employee retention and their decent turnover. Furthermore, they also have to maximize the performance of their workforce to the maximum extent. Reported problems in these areas are certainly unparalleled to the company’s defined objectives.
Reasons behind Employee Poor Performance
Poor performance of employees may result from any of a plethora of factors. These factors would include high turnover, low salaries, poor training, misunderstanding to the organizational needs, discouraging work environment, lack of HRM intervention, etc (DuBrin, 2011). As for RMN, attractive compensation plan rules out the possibility of many of the factors like low salaries and high turnover to be the reason for the underlying issue. It also confirms that the most fundamental driver of this critical situation is the poor human resource management (HRM). HRM and employee performance are far more interlinked with each other in the modern age than they were ever before (Hollenbeck, Gerhart, & Wright, 2004). It implies that any negligence shown by any of HRM activities is threatening to organizational performance. Poor performance by HRM has been detected in three areas on which the organization needs to work. They include recruitment and selection policy, development and training, and employee motivation. The figure given below explains this further:
Reasons behind Low Retention Rate
If any company has planned to ensure the existence and prevalence of experience in their work field, they have to retain and polish their talented employees. Again, HRM plays a key role in retaining workforce by taking certain relevant initiatives in this direction. HRM and employee retention go hand in hand, especially in today’s dynamic and turbulent business climate. Berger (2011) holds that there may be several reasons prompting the employees to quit the work relation with any organization. Some of the reasons would include high turnover, unfavorable working environment, discouragement, poor human resource management, lack of understanding of the assigned tasks, etc. Any lapse in any of these areas can lead to a low level of employee retention. Again, there are slimmest chances of high turnover to be the reason behind this problem. The reason is that the compensation plan of the company is highly competitive to the plan offered by some of the well-established of their competitors in the real estate market. Work environment provided to the employees by the company is also appreciable and coping with the modern definition of satisfaction. The only thing found faulty is the role of human resource management (as in the case of poor performance). Retention of employees is also highly dependent on human resource management (Taylor, 2002). Without properly strategized HRM formula, the organization cannot hope to retain their employees and add to the aggregate experience on the organizational level. There are again many faulty areas detected with respect to the poor management shown by Rocky Marketing Network including hierarchy in the workforce, improper development and training program, and the absence of appraisals. If the company succeeds in improving their HRM performance in all these three areas, they can materialize their dream of enhancing the employees’ retention to great extent as shown in the figure below:
Solution to the Reported Problem
Since, the underlying problem of the organization is divided into two categories including poor performance is shown by the workforce and the low retention level of employees. The solution also needs to be broken down into two parts accordingly. The first part will be addressing the issue of poor performance while the second part is supposed to deal with the problem of retention.
Solution to the Issue of Employee Poor Performance
As mentioned above, RMN’s human resource management is to be held responsible for the lapse of performance shown by their deployed workforce. Furthermore, there are three major areas on which the organization is supposed to focus to enhance their employees’ working potential.
Recruitment and selection
Recruitment and selection is the basic area of consideration in this regard because any negligence shown towards recruitment or selection is similar to damaging the organizational base. It holds pivotal importance in determining the anticipated profitability as well as sustainability of a company (Brown, 2011). On the basis of the undertaken study and analysis of the organization, it is found that the company has no properly defined mechanism for recruitment and selection, and they are carried out casually. The lack of a predetermined model for this purpose is leading to several complications, and the lack of performance is one of them. There are no preliminary tests, and professionally taken interviews involved in this procedure. The organization relies on roughly defined system that can be understood from the diagram given below:
Current Recruitment and Selection Procedure
It shows that the selection of an employee is based on reference followed by casually taken the interview, which provides no adequate confirmation regarding the suitability of the selected employee for the occupied position. The company should replace this faulty procedure with a definite and transparent procedure utilized for recruitment and selection by the most successful companies today. The figure given below provides the outline for the recommended process for recruitment and selection:
Once the company has implemented a proper and well-defined structure for the underlying purpose, it will ensure the availability of the potential workforce. The next step is to polish the capabilities of existing workforce with full confidence in their expertise, which is based on the display of performance shown by them in the recruitment process.
After selecting the employees for vacant positions through a transparent and reliable process (one mentioned above), the next initiative to be taken by the HRM of RMN is to train their workforce properly. This would be helpful in taking maximum advantage of their expertise and talent. Even though the organization is (currently) holding development and training programs, yet there are long time lags lying between them. Furthermore, due to the absence of proper selection procedure, there is always a question mark on their feasibility. In other words, if the company is training an employee for a certain purpose, it is not confirmed whether that particular purpose lies within or beyond the work capacity of that particular employee. So, before implementing the proper training sessions, it is essential to put into action the recommended recruitment procedure.
The workforce achieved by the company after the implementation of the proper selection process should be focused on the newly defined training procedures. These training sessions need to be both frequent and comprehensive. In simple words, they should be organized on a regular basis (annually or after each six months at least). Furthermore, in these programs, the company must train their workforce on how to accomplish the assign tasks in the most appropriate manner. Moreover, they should train how important it is to put maximum effort into them for their benefit as well as for organization.
It was found in the study focused on the employees’ behavioral approach towards their assignments that most of them lack eagerness. Demotivation has enveloped the whole organization despite attractive salary packages and other facilities due to the poor performance shown by HRM in this context. Many initiatives taken by HRM can trigger employee motivation, which mainly include appraisals, training, and appreciations (Burke, and Cooper, 2005). However, the organization lacks all these three characteristics. To undo the climate of disappointment prevailed in the organization; the HRM has to take the following initiatives:
Introduce appraisal system:
It includes the monitoring and assessment of employee’s performance on an individual level and establish punishment and reward system (Broderick, & Mavor, 1991). Every employee will be rewarded in the shape of bonus or commission for his/her good performance. This will motivate him/her towards working with more engagement and purpose.
Conduct training activities:
It has already been recommended that the organization needs to implement comprehensive training programs at regular intervals to polish the capabilities of their employees to the maximum extent. This positive intervention of HRM is same as injecting the motivation in the workforce.
Appreciate quality deliveries:
Another great booster to employee motivation is the acknowledgment of the performance shown by him in handling any particular task. RMN should also focus on this aspect as they have been ignoring so far. Focusing would bring the level of motivation of their talented employees marginally up. But, for this purpose, it is necessary for the company to launch proper mechanism or scale through which they will evaluate the individual performance of each member of their workforce.
Solution to the Issue of Employee Low Retention Rate
The low retention level is the second issue reported by Rocky Marketing Network. And, it was detected that the poor performance shown by human resource management is at the bottom of this critical situation faced by the organization. RMN can overcome the situation if they follow the following recommendations:
Promote unity through equality
It was found that the top management treats some of the employees superiorly while others do not receive same kind of attention on the basis of which a sense of complexity is developed into them. Not only this, but this tendency is shown by the management also nurtures hierarchy and inequality. The inequality promoted by this biased approach by the management does not let provide fertile atmosphere for unity. And, lack of unity and teamwork is denting the profitability of the company quite badly, which is quite natural (Giacealone, and Jurkiewicz, 2003). Furthermore, this is one of the most basic reasons for the low rate of employee retention. To uproot the issue, the company has to discourage favoritism and promote the team based structure in the workforce. Certainly, it will influence the level of unity, which will cause significance reduction in resignations and improve the retention rate.
Development and training programs
According to the findings of the survey which was conducted to find out the basic causes behind the low retention rate faced by the company. It is crystal clear that most of the members in the workforce consider the assigned tasks burden on them. It is so because they have to spend more time in their accomplishment than usual due to improper understanding of them. Improper understanding is based on the infrequency of training programs. So, as the company wants to improve the retention rate of employees, they have to implement the training programs on a regular basis. This training will be helpful to keep their employees alive to the requirements of changes taking place on a frequent basis. It will give them a clearer idea of how to carry out a particular assignment within given timeframe without sacrificing the quality. It will lessen the psychological burden from this minds (which is the product of improper training mechanism), and will make them feel relax and relieved. No employee desires to leave a workplace that offers him both relaxation and attractive compensation plan.
As discussed earlier that the company does not have a predefined reward and punishment system, which is one the basic causes behind the demotivation developed among the members of the workforce. Demotivation can lead to either of two possible scenarios: bad performance or resignation. So, the company should implement above-explained appraisal system ensuring its maximum functionality (not confining it to paperwork only). In this way, the company can hope to retain most of their employees far longer than otherwise, and achieve the goal of the prevalence of experience in their staff.
The obstacles lying between RMN and success can be curbed by paying more attention to the role of human resource management. The findings of the research show that the major reasons behind the low retention rate and poor performance are quite avoidable if the HRM plays an active role in this direction. With improved understanding of assigned tasks and a higher level of motivation, the workforce can help the company to stand apart the competition and March smoothly towards the defined organizational goals. From recruitment and selection to development, training, and appraisals, all the HRM activities need to cope with the modern requirements perfectly.
Berger, A. (2011). Managing and Leading People.
Broderick, R. F., & Mavor, A. S. (1991). Pay for performance: Evaluating performance appraisal and merit pay. National Academies Press.
Brown, J. N. (2011). The Complete Guide to Recruitment: A Step-by-step Approach to Selecting, Assessing and Hiring the Right People. Kogan Page Publishers.
Burke, R. J., & Cooper, C. L. (Eds.). (2006). Reinventing HRM: challenges and new directions. Routledge.
Carton, R. B. (2006). Measuring organizational performance: Metrics for entrepreneurship and strategic management research. Edward Elgar Publishing.
Dibble, S. (1999). Keeping your valuable employees: retention strategies for your organization's most important resource. John Wiley & Sons.
DuBrin, A. (2011). Essentials of management. Cengage Learning.
Giacalone, R. A., & Jurkiewicz, C. L. (2003). Handbook of workplace spirituality and organizational performance. Me Sharpe.
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Taylor, S. (2002). The employee retention handbook. CIPD Publishing.
Rocky Marketing Network,
Please, refer to your letter sent on June 2, 2015. With utmost respect, it is in response to your request for providing you a report based on the solution to the reported issues. The current report has been prepared keeping into account everything within the scope of the underlying issues and perfectly complies with the defined objectives of your organization.