Managing Retention



Thereare a number of concerns that have been established at IrontownIncorporated that have led to high turnover rates, which the companyintends to reduce to below 20% in the next three years. Some of thesechallenges include: employees getting better job opportunities, someemployees are stressed while on the job, some upon being employed inthe company find the job does not meet their expectations, a numberof employees have complained about the compensation package beingbelow what other competing companies offer and finally the companydoes not have the capacity to solve customer challenges.

Thefact that individuals work for a company is not automatic they needto be motivated if they are to share the vision of an organizationinnovative ideas that realize the best business functions and augmentthe performance of their organization. It is through total rewardstrategies that this can be realized. The aim of evaluating totalreward systems in regard to financial performance provides informeddecisions when it comes to implementing types of reward strategies.

Thetotal reward strategy is a policy that offers certain directions fora company to come up with programs that guarantee the reward ofperformance measures that support the attainment of its long termstrategic goals. Vicki (2013) opines that a reward strategy providescertain directions on how companies design their reward systems. Thispaper discusses the root causes of turnover in Irontown Incorporatedand provides Solutions to the root causes through the implementationof a reward system in the organizations to improve employees’productivity. It will also discuss how the proposed solutions willreduce staffing costs while improving production quality.


Rewardstrategies are the deliberate employment of the pay system as acritical integrating process by which efforts of the organization’sdepartments are geared towards attaining its strategic goals. Theobjective of total reward systems is to optimize the combined effectof a number of reward elements on job engagement, motivation andcommitment. Total reward systems tend to embrace all elements thatare valued by employees in an organization. O’Neal (2012) opinesthat total reward strategies are critical in order to addresschallenges that stem from recruiting and retaining of employees sinceit creates an experience that meets employees’ needs whileencouraging them to apply more efforts.

Barneyand Wright (2007) point out that the total reward system benefitsinclude the fact that a combined impact of various rewards makes adeeper and permanent effect on employees’ commitment andmotivation. Apart from that the total reward system creates anemployment relationship that optimizes the use of transactional aswell as relational rewards thus having a far reaching appeal to theemployees. Positive psychological contracts are also delivered byrelational rewards which serve as the recruitment marketdifferentiator for its difficult to replicate it compared to personalpay practices.

Professionaland personal development: Opportunities in this area includeperformance management, training and career development and tend tomake up important rewards for an organization’s employees. This isbecause it enables the employees to acquire certain skills that arelikely to add value to the company. The skills are valuable becausethey cannot be copied by a company’s rivals thus giving it acompetitive edge in the market (Barney and Wright, 2007).

Theworking environment is a critical element in a company’s rewardstrategy. Apart from the work setting in form of the office size jobdesign also entails psychological attributes in terms of howemployees perceive their work, whether it affords them independenceand if so if they identify with their roles as well if it ischallenging or meaningful. O’Neil(2012) holds that if work is perceived positively by employees, itmay lead to more motivation by employees and thus better performance. Studies that have been conducted in the past to test this theoryindicate that there is a positive correlation between employeemotivation and job perception on the other hand they indicate a weakcorrelation between employee performance and job perception.

Jobrecognition is also critical and these systems tend to be cheaperwhen compared to personal and professional growth, compensation aswell as benefits. Job recognition equally offers a strong effect onthe performance of employees and it can impact the effectiveness ofthe company just as financial incentives. However, the effectivenessof financial and nonfinancial incentives is strongest if usedtogether (Onwuegbuzie, 2005).

Worklife balance undertakes several forms and in most organizations theyare executed as compressed work weeks as well as flexible workschedules. Studies indicate that this form of reward system tends tohave mixed results on a company’s priorities. Absenteeism has beenthe largest impact and is followed closely by productivity. Flexibletime tends to greatly impact managers than employees (Vicki, 2013).

However,Barneyet al., (2007) argue that if a company’s work schedule is veryflexible the greater it is likely to have a positive effect on jobsatisfaction. Findings also indicate that compressed work schedulestend to improve employees` attitudes compared to their performancewhile flexible work schedules have a more positive effect on theirjob performance than on their attitudes.

O’Neil(2012) points out that the practice of reward systems by companiesdevelops discretionary behavior, enhances motivation and increase jobengagement. He also defines the motivation mechanism as a line ofaction that makes employees to attain objectives, establish goals andtake action which is a valued reward because it tends to satisfytheir individual needs.

Onwuegbuzieet al., (2005) hold that the practice of thanking employees is inline with the total reward system that improves employees’productivity. This is because it assists a company fulfill the needfor employees to be recognized, appreciated and to have a positivereinforcement. It does not just recognize employees’ organizationalloyalty, but also assist in the cultivation of an appreciationclimate in the company.

Thisis done through the sincere acknowledgement of good work as well asadditional efforts regularly and in ways that are unexpected. Irontown Incorporated can do this through the creation of a number ofacknowledgement programs. In the end, employees are able tocomprehend how their performances relate to the success of thecompany and their remuneration. Consequently, they are motivated togive their individual best while promoting teamwork.


Anevaluation of various motivation theories indicates that sufficientmeasures can be undertaken to augment the company’s managementtrainee program. Given that there is a shortage of human resources inIrontown Incorporated, in order for it to realize the attraction,development, and optimization of human resources it has to employstrategic human resource principals rather than depending on theemerging HR practices.

Itis critical that the management of the Company should revise itsworkers’ salaries as well as their incentive structure. Thecompany management has to rectify the problem in remuneration bycoming up with proposed incentives for increment in both the companyand employee performance. The company management should considerdeveloping accountability processes as well as procedural justice.The deliberate misuse of authority should be avoided at all costs.The company management should listen to employees’ grievances andmake its appraisal based on their concerns.


Barney,J.B., &amp Wright, P.M. (2007). Onbecoming a strategic partner: The role of human resources in gainingcompetitive advantage.HumanResourceManagement,37(1),31.

O’Neil,S.(2012),ThePhenomenon of Total Rewards,ACAJournal,7(3),8–12.

Onwuegbuzie,A., &amp Leech, N. (2005). Takingthe “Q” out of research: Teaching research methodology courseswithout the divide between quantitative and qualitative paradigms.Quantityand Quality, 39, 267-296.

Vicki,F. (2013), TotalReward Strategy: A prescription for organizational survival.Compensation&amp Benefits Review,26(1), 44-53.