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In this age of globalization, there exists greater pressure for organizations and businesses to continuously attract and keep the best employees, improve performance and enhance business results. Any good manager will testify that rewarding people for their efforts directly impacts on productivity positively. An effective reward system will improve morale, motivate employees and reduce turnover, and, as a result, provide the business with a competitive advantage. The following is a detailed argument for paying employees more money with the aim of reducing turnover. The study will show the types of money that should be given, towhom and the result of doing so.
Zinghein (2007) suggests that “reward results with variable pay (cash incentives or equity). Variable pay is the key pay communication tool for linking employees to customer goals, extending their line of sight to include company needs and values, and sharing in the success of the enterprise.” Variable pay is earned year by year, and it can be in form of cash or equity. It can be used to reward a combination of individual or collaborative results and focuses on a variety of financial and strategic measures and goals. It is used as a vital tool for the entire workforce. Paying great employees a little bit more than demanded by the market helps attract better talent and reduce turnover. Moreover, the firms the firms making the choice to ‘overpay’ their employees, rather than constructing elaborate incentives outperform their competitors.
Daniel Pink, in his book, cites that when people are paid really well and their pay continuously increased, the issue of money is removed from their desks; they start thinking about the work at hand instead of competing for bonuses. Based on the information above, it is evident that employee turnover can be reduced by paying them well and continuously increasing their pay or overpaying them. Paying them more money enhances their personal satisfaction in their working environments and leads to better performance, thus making them comfortable to stay in the organization.
An exit interview process helps the employer and the organization understand why people quit and get clues as to where improvements need to be made. Research shows that people resign from their duties for the following possible reasons: an unsolicited job offer, a grievance that was not handled correctly or a new career opportunity. It is for these reasons that exit interviews are done; to resolve the outstanding or unresolved concerns of both the employer and the employee, and, therefore, the HR manager has the duty to keep the information confidential.
Since this may be a good position to retain the employee, one hurdle that needs to be overcome in every situation is to ensure that the information given by the employee should never be used for retaliatory action for the employee’s perception of the truth. Such retaliation is illegal and may become known to public quickly, and any good that comes from the interview and all other future exit interviews may be undermined. The information given should be kept confidential and only used for the purposes of improving the working environment of the organization.
The person interviewing the exiting employee should provide him or her with his obligation to protect confidentiality of the company’s information and comply with all restrictive covenants if any. If the corporate HR employees do not provide the employee with such information, then they will be responsible for any outcomes if he or she exposes the company’s secrets.