Managing Employee Retention Essay
President and CEO of Store24 Bob Gordon along with its CFO Paul Doucette and COO Tom Hart were worried and hence discussing about strategies for increasing store level employees retention. The extent to which the profitability of the stores was related to “people factors” was considered to be an important element. This could be found out by estimating of the actual financial impact based on the tenure of the manager and the crew at a store.
The site-location factors such as population, number of competitors, pedestrian access, visibility, location and timings were also to be considered as key drivers of profitability. However, a huge amount of variation existed with manager and crew tenure. Also the stores in the sample appeared to be widely disbursed, complicating site-location factors. An opinion was to be formed as to whether increasing wages, implementing a bonus program, instituting new training programs, or developing a career development program would be the best course of action. We need to determine whether employee energies performance and how well his/her tenure impacts financial sheets compared to site location factors.
Data Analysis Data given in the case seemed to be insufficient and inappropriate for the purpose of analysis using regression model. Hence, we
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Regression of Profitability with Manager & Crew Tenure Inferences: After the regression modeling in the excel sheet, we got R-square statistic as 0.63 which implies that less than half the points fit on the regression line. The p-statistic value corresponding to the MTenure is 0.049 which is within a significance level of 0.05 so the null hypothesis can be accepted and the result is significant. However, CTenure’s p-value 0.809 does not lie within significance of 0.05 so the alternate hypothesis holds and hence the regression result is insignificant. Hence, we can conclude that a strong relationship exists only between profits and MTenure. Regression of Profitability with only the Manager Tenure
Inference: The R square value of 0.61 signifies a better explanatory power than CTenure. The p-value 0.0025 lies within a high significance level of 0.05 so the null hypothesis holds and the regression result is significant. So the tenure of a manager is one of the key drivers of store profitability. From the data analysis, we can infer that the most relevant factor for the profitability of a store is the tenure of a manager. The tenure of crew member was not found to be that a significant factor. The location parameters were also found to be less relevant. The quantitative analysis is also supported by the facts such as in the top 10 profitable stores the mean tenure of the manger was found to be 110.6 months. This is 4.87 times of the tenure of a manager in the bottom 10 least profitable stores where the mean tenure is 22.7 months.
Recommendations How to retain the managers? Store24 has to implement the following to retain the managers Increase wages annually based on performance contribution to sales Implement Bonus program: Create a bonus structure where employees can earn an annual bonus if they meet pre-specified performance goals. Institute comprehensive training programs Deploy career development programs Promote from within whenever possible: Give managers a clear path of advancement. They will become frustrated and may stop trying if they see no clear future for themselves at your company.
Create Open communication between Managers and Top management: Hold regular meetings in which managers can offer ideas and ask questions. Have an open-door policy that encourages them to speak frankly with their Top management without any fear of repercussion. Communicate your business’s mission. Feeling connected to the organization’s goals is one way to keep managers mentally and emotionally tied to your company. Offer ESOPs.
Consider offering stock options for managers who meet performance goals and stay for a predetermined time period, say, three or five years. Implement a well-designed assessment and selection process. Include behavioral assessments and structured behavioral interviewing techniques to increase the likelihood of hiring people who can, and will, do the job at a high level in your environment. Make sure they know what’s expected of them and how they can grow within your company.