Employee Retention
In Britain, over the past 40 years, the extraction industry in general has experienced severe decline. The picture is no less foreboding for the quarrying industry where ‘consolidation’ through mergers and acquisitions has seen in excess of 5,000 quarrying companies in 1960 reduced to some 200 currently. Of the remaining 200 operators, five large companies, referred to as ‘the majors’, now claim over 80% of the total output throughout mainland Britain (Source: British Aggregates Association).
The frenzy of industry sector integration has led to a significant opportunity for rationalization that has in turn resulted in a considerable decline in employment. Between 1990 and 2000 the number of operational quarries reduced from 1,780 to 1,710, while during the same period employee numbers fell by 40% from 31,500 to around 18,000 (Source: Annual Minerals Review Inquiry). Future predictions are for more of the same.
In terms of technology, working methods and conditions, the quarrying industry has remained comparatively unchanged and is still regarded as one of the most dangerous working environments. Despite this, employees rarely resign from their original location and long-service achievements of over 25 years are commonplace. In an industry where career advancement, task variety, sense of achievement, learning opportunities and fringe benefits are all limited, what makes employees stay and does loyalty, characterized by employee commitment to the organization, have a role to play in this decision?
Most organizations do not have a handle on the actual reasons why employees stay, but they do know considerably more about why they depart. The conclusion is that the reasons why employees stay are not always the same as the reasons why they leave. Loyalty is fundamental to the question of why employees stay or leave and, reciprocally, organizations recognize it as a source to be nurtured to gain competitive advantage, eg increased productivity. According to Reichheld (1996), ‘Knowing what your employees cost but not what they’re worth is worse than deeply cynical; it is deeply counter-competitive’.
Retaining workers was less of an issue in the past when the UK’s manufacturing industry was a dominant force, but the shifting tides of the psychological contract have created new currents in the workplace. The old contract asked employees to work hard, be loyal and give their all, and in return they would receive a job for life, a home away from home, regular salary increases and a good chance of promotion. The new contract is substantially different. Workers are expected to work harder, be multi-skilled and flexible. In return job security is tenuous, promotions are scarce, salary increases modest and the constant uncertainty of change ever-present. Is it any wonder, therefore, that employee loyalty is on the demise?
The commitment that once bound employers and employees is now seen by workers as demonstrably lacking on the part of the employer and has, in turn, created a new generation of employees who withhold loyalty from their employer. Loyalty is less of a priority than upward progress on the pay scale. However, it is predicted that over the next few years employees will consider quality of life issues rather than financial rewards when choosing a career. Money and security will always be important, but it is feasible that individual primary objectives may shift so that employees who are allowed to make a difference and be part of a company’s growth and success, while maintaining a balanced life and work contentment, will again emerge as loyal employees.
The quarrying industry, in secure employment terms, has never looked more foreboding. Confirmed as the ‘weakest component of industrial output, falling by 7.3% in the year to November 1999’ (Source: Office of National Statistics), and overall as a ‘low pay’ industry with a median wage below the UK average (Source: NES 1997, UK), what makes this industry almost unique in terms of employee retention and long tenure of its workers? What makes employees stay?
The research proposition
To explore this paradox research was designed to ask and resolve four questions:
- Are the perceptions influencing loyalty among employees in the mineral extraction industry effected by factors relating to: job satisfaction, fairness at work, care and concern for employees, trust in employees, reputation of the organization, work resources?
- Does a link exist between the perceptions influencing loyalty among employees in the mineral extraction industry and the theories formulated by Abraham Maslow —Hierarchy of Needs (see Note 1) — and Herzberg — Hygiene and Motivational Factors (see Note 2)?
- Do the perceptions of employees in a mineral extraction and processing unit, regarding any of the variables in question 1, differ in terms of demography, ie years on the job, age, skill etc?
- What factors do employees in a mineral extraction and processing unit consider to be of most and least importance to their continued commitment to the organization?
- what effect union representation has on employees’ physiological and safety needs, and therefore ??their motivational desire?
- what effect social reforms, and in particular the Working Time Directive, have on employees’ desires to satisfy particular needs?
- how employees characterize their job commitment?
- if employees are aware of the need to balance work and home commitments?
- what level of social support employees experience on the job?
- the relationship of family responsibility (number of dependents, sole wage earner etc) to employees’ intentions to quit?
- how employees characterize job autonomy?
- what level of job autonomy employees experience?
- what effect teamwork and employee involvement have on retention?
The study relied entirely on primary data collected in the form of a three-page self-directed survey. The questionnaire had four sections. The first was designed to collect demographic data (clas-sification questions, age, length of service etc). The second section, consisting of 39 closed questions, was constructed to capture information relating to the six major variables, ie job satisfaction, fairness at work, care and concern for employees, trust in employees, reputation of the organization and work resources. The third, a multiple-choice section (ranking), was designed to test the magnitude of an individual’s perceived preferences, while the fourth section consisted of a single open-ended question asking participants ‘why do you stay?’.
The survey itself was designed to be highly structured and self-directed. This was considered to be the most appropriate method of obtaining and recording the honest perceptions of the target population. Furthermore, state-ments appearing on the survey were designed to take an extreme position to which the respondents would react. The research aspired to mitigate the effect of respon-dents who might otherwise take the extreme position and skew the scoring of their individual percep-tions relative to one another.
The questionnaire was distributed to employees at several mineral processing units. All were male and comprised administration, supervisory, skilled and general operative staff levels. Working patterns were varied; some of the group worked continental shift patterns in small self-directed teams, while others were confined to a 39h week under the direction of a supervisor.
Summary of findings
The study to uncover what drives the loyalty and commitment of employees to their organizations has been both remarkable and fascinating. Remarkable in its intimation of enduring congruence between theory and practice (Hierarchy of Needs Theory) and fascinating in its portent of profound changes impacting on employee attitudes in general (Hygiene and Motivators Theory). The research executed for this study indicates that factors beyond mere economic reward are influencing the decision of employees to remain with their organizations. It is further suggested that the apparent desire, of theorists, to compartmentalize groups of individuals, to give order to chaos, is nowadays less achievable. Individualism and not individuality now dominates work and group structuring.
The purpose of this research was, simply, to attempt to discover what makes employees stay in a mineral extraction and processing company, and to see if any of the findings could be adopted as a test for loyalty throughout industry in general. The perplexity with this type of exploratory process is in determining those factors that actually do influence this ethos and those that are perceived, by the employees, to have an affect. An example of this dilemma is money or rewards, consistently perceived by the study group to be a motivational force, but proven the world over not to be the case. However, in recognizing and accounting for these limitations, a broader picture emerges from the data, one that does in some way provide answers to the questions posed.
The first question asked, ‘are the perceptions influencing loyalty among employees in the mineral extraction industry effected by factors relating to job satisfaction, fairness at work, care and concern for employees, trust in employees, reputation of the organization and work resources?’ The data (see fig. 1) was characterized by the group’s overwhelming contentment with mostly all elements relating to job satisfaction and the trust placed in them to determine outcomes. They appeared to be dismissive of the importance placed on the reputation of the organization and to a lesser extent the resources they need to carry out their activity, such as feedback on performance and future aims. Categories relating to perceived fair and equitable rewards faired the worst, most of the group believing that they were worth more for the service provided.
Accepting that loyalty to the company unquestionably exists within this group (by their own admission 80% said they were loyal), it would have to be concluded that job satisfaction and trust play a key role in perpetuating this paradigm. It may indeed be useful for any organization to first seek to discover the inherent strength of these two factors prior to determining their future human resource strategy.
The second question posed was ‘does a link exist between the perceptions influencing loyalty among employees in the mineral extraction industry and the theories formulated by Maslow (Hierarchy of Needs) and Herzberg (Hygiene and Motivational Factors)?’ If it is accepted that somehow retention and loyalty among employees are inextricably linked, and that high retention is indicative of employee loyalty, it may also be tempting to conclude that neither Maslovian nor Herzbergian theory has a bearing on loyalty. Data collated and charted using constructs defined in both theories may show adherence to the principles, however, they do not in any way explain why this group remains with the company. In the Maslow test instrument, conformity to hierarchical maxims was evident; what could not be explained is why 48% of the group stayed when not even their basic needs were being satisfied. Could this condition be present because of the lack of alternative employment? What was remarkable was the group’s almost unanimous (92%) satisfaction of their social needs. This could be interpreted as indicating the emergence of a new order where physiological and safety needs are nurtured by the state, leaving employers to succour the remainder.
The picture is even more chaotic when adopting Herzberg’s criterion, with only one of the group conforming to theory. Participants displayed the ability to position themselves in any of the two categories at will, therefore suggesting a need for a continuum rather than hierarchical structure. It is therefore suggested that neither the Maslow nor the Herzberg principle are usable as determinants of employee loyalty or commitment.
The penultimate question asked, ‘do the perceptions of employees in a mineral extraction and processing unit, regarding any of the variables in question 1, differ in terms of demography, ie years on the job, age, skill etc?’ Statistically, only a medium correlation was found; the age of a respondent positively affecting his (sic) perception of how the company supports the care and concern needs of that individual. Delving deeper within each category did reveal one strong correlation between all the major categories and the ability to balance work and home life. It was found that those able to balance home and work life were also more likely to achieve higher satisfaction, in all six categories, than those who were unable to do so. This again points to the new demands placed on employees — from the employers side, pressure to produce effective work outputs; and from the social side, pressure to have the means and time to satisfy home and ‰ leisure pursuits. Those that do, appear to have a greater opportunity to satisfy both basic and higher needs. It is suggested that this condition will, in future, need to be an area prioritized for investigation.
Lastly, ‘what factors do employees in a mineral extraction and processing unit consider to be of most and least importance to their continued commitment to the organization?’ It is hardly surprising that when asked to provide an ordered selection of personal values and preferences money or reward topped the list. More insightful, however, are the selections succeeding this principle choice (see fig. 2). In second place was decision-making (employees allowed to implement their own decisions in the workplace), third was satisfaction (with their role in the company) and fourth was responsibility (to control how their work is accomplished).
These findings could be interpreted as a significant indication of congruence between need and satisfaction. If the group places these needs as most desirable, in sustaining their motivation and commitment, and subsequently these needs are satisfied, by the organization, the inference is that the outcome will be employee retention. And should employee retention equate with loyalty then a case exists to herald this as a key finding.
The industry’s human resources fraternity will surely be disappointed by the apparent disregard shown by employees in the value of training and development (see fig. 3). While management may consider this element fundamental to both gaining competitive advantage and improving an employee’s status, it is clear that workers do not appreciate, comprehend or even register this fact. If training and development is to be leveraged for the purpose of improving commitment, motivation or retention, clearly the target market needs to be better understood and from this knowledge a human resource strategy developed to inform, promote and sell the proposition.
Conclusions
The binary certainties of the past — left and right, work and home, women’s and men’s roles — are being systematically eroded, as is the organizational process that once looked to control employee motivation. It would appear that much of what influences the loyalty ethos lies within workers themselves and is formed to an ever-increasing extent outside the sphere of work. The proliferation of workers’ rights legislation, unionization and collective bargaining, and most recently the Working Time Directive, are giving rise to new needs that require satisfying. The pressure is now on to work in order to support the demands of leisure time rather than to work to survive. Most households would boast owning their own home, running more than one car, having at least one foreign holiday a year and owning a myriad of modern accoutrements, so it is little wonder that workers are re-prioritizing their needs.
Organizations also have to seek a complementary balance of provisions that will fuel and sustain growth in loyalty and commitment, but importantly they first have to give credence to the demise of the old order and acceptance of the new ‘working life cycle’. This research may be testament to some of these changes in being and also a guideline as to what does and does not need to be propagated, in terms of satisfying those needs that give rise to employee loyalty tendencies.
Almost accidentally the study produced a simplified ‘Hierarchy of Needs’, obtained by asking just 12 questions. The resultant data could be interpreted as a workforce ‘health check’ — an indicator of those employees who are gaining satisfaction in key needs and those that need to be reinforced. This does not mean that in applying this principle loyalty is in any way affected, however, there is strong evidence that a contented workforce is far more committed than a dissatisfied one.
Finally, it should be recognized that, while this study focused on employees, the management of the organization is inextricably infused into its outcome. The target group, in its responses, has paid testament to the relaxed atmosphere within the workplace, the freedom to make and control decisions and the equality of treatment received. Management technique could therefore be acting as the catalyst for action and desire within individuals, encouraging them to reach for higher needs. It is a sobering thought that ‘no matter the conceptions of individuals within organizations, either as variable units of manipulation or as individuals with conscious selves negotiating their reality, the documented outcome is invariably the same. The individual increases effort for more spiritual rewards, but less relative financial remuneration’ (Coates, 1999).
The author, Mark Llewellyn, former senior operations manager for Tarmac Western, is currently director of operations for I-sa Assessment and Training and an associate lecturer in business at University of Wales College, Newport