What happens exactly on organizational performance, when retention strategies were not in place?
When retention strategies were not in place, organizational performance was not either measured or was not a critical factor. Ever since businesses started caring for organizational performance and started monitoring the same, many of them realized that employee retention is not just a KPI but a critical success factor. Because employees are (tacit) knowledge power house and their performance contributes substantially to the organizational performance. It could be an interesting area for future research. Apple Inc suffered a lot after Steve Jobs left and clearly there was no retention strategy in place at that time.
Dear Sujata, no doubt the studies support that when organization is unable to retain its employees the detrimental effect would be there. Loss associated to turn over of employees will be 17 % in annual income before tax. (Sagie et al. 2002). But the question is this either organization should keep the holy cows with it or get rid of. Similarly there are many employees who are loyal and associated with the organization but are unable to cope with the latest technologies and procedures, should they be retained to meet the future challenges to the organization? If you go through the TATA India case study for getting rid of such employees and retaining the employees coherent to organizational current and future challenges, you will find the exact answer. Regards
In India, proper retention strategy was not adopted in public sector enterprises, Bharat Heavy Electricals Limited (BHEL) and Steel Authority of India Limited (SAIL) like organizations become so-called 'white elephants'. In private sector enterprises getting rid of un-retainable is not that difficult, particularly in the current scenario when there is so much of importance on business performance management. The point under discussion, to my mind is, retention of talent and knowledge workers. In absence of a clear strategy for talent retention there could be a significant (negative) impact on firms business performance.
Thanks Hussain Sir and Kettunen Sir for providing an insight and suggestions on the topic.
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