Studies have shown that it is more cost-effective for a company to retain employees than it is to hire and retrain. While there are never any guarantees an employee will stay with one particular company for any length of time, a satisfied employee is more likely to stay.
Generally, the wants and needs of an employee are simple. They need to:
Be rewarded for a job well done
Feel involved in the business
Feel that their contribution is valued, and
Work on tasks which are interesting and/or fulfil their potential.
There are steps that you, as an employer, can put in place to help retain your employees.
Training – one of the top causes of employee dissatisfaction is lack of training. Training increases job productivity and overall quality.
Performance Reviews – this is an effective tool in communicating with your employee on current job performance plus future goals and incentives.
Performance Bonuses and Incentives – gives you the flexibility to reward your employee for meeting certain agreed goals or objectives.
It doesn’t matter how much time and money you spend on selecting an employee, unless the selection is backed up with proper training, that money can be wasted.
Training helps employees perform more competently as well as increasing the efficiency of the business and the employees’ own satisfaction.
The benefits of training include:
Reduction of learning time and costs – people learn the job quickly, to required standards, safely and with minimum waste of business resources.
Improved job performance – increased output, improved quality work done on time.
Increased customer satisfaction through improved goods and services.
However, before you start a training program, there are some things you need to consider:
1. What is realistic and what is essential?
2. What financial limitations are there?
3. What is the tax effect of providing training? Often training is FBT (Fringe Benefit Tax) exempt and can provide a tax-deductible expense for the business.
4. What material is available?
5. What resources are available?
6. What level should the training be aimed at?
7. How competent are the trainers?
In addition to that, you should consider on-the-job training, training from institutions such as TAFE and even industry associations which may provide training on industry-specific issues and techniques.
You are also legally responsible for certain work-safe training practices, such as your safety procedures, as regulated by the Occupational Health and Safety Act. Advice on the relevant legislation can be obtained from the federal and state government departments.
Another area to consider is training subsidies. There may be training subsidies available in your state or territory for apprenticeships and job seekers, such as the National Training Wage (information is available from the Australian Industry Group), the Federal Apprenticeship Scheme (administered by the Commonwealth Department of Employment, Education, Training and Youth Affairs) and the Federal Traineeship Scheme (administered by individual state governments). You will need to contact the appropriate authority in your area to ensure you meet all the requirements.
Before hiring an apprentice or trainee, you will need to contact your state government’s education and training department to see whether your business and program qualifies. You can also find out whether your program qualifies for any of the subsidies.
Here is a guide to beginning your own program.
Employers are able to hire apprentices if they have the facilities and resources to provide structures and appropriate supervision
Employers must enter into formal training agreements with apprentices which specify appropriate on-the-job training and make provision for off-the-job training at TAFE, at an approved training institution or at the workplace.
The program targets the 16-64 age group
Traineeships provide flexible arrangements for combinations of on-the-job and off-the-job training and employment
Trainees are only paid for the time spent at the workplace
Employers can recruit their own trainees or seek placements through the Commonwealth system.
Remember, employee training is a big investment in terms of the cost of the training and the time lost when the employee is away from the job.
Choose the training carefully. Involve your employee in the choice. The employee may be more aware than you of the training he/she could benefit from.
More and more companies are now realising that performance reviews not only help the employer but also the employee.
These reviews are an important management tool and are an ideal way of assessing your employee’s progress plus communicating your company’s future goals. From an employee’s point-of-view, it is a means of receiving recognition, feedback and development.
If you are unsure of what is involved in a performance review and prefer not to “go it alone”, MAUS Performance Review software can help you create personalised reviews in minutes. It incorporates a variety of different job criteria and also a ranking system. It also includes HR advice and a recording system for problems and achievements.
Traditionally, reviews are initially given in the first three to six months of employment and then annually.
To start a performance review:
1. Let your employee know the review is approaching and organise a date/time to conduct it. (Two weeks advance notice is usually sufficient.)
2. Ask your employee to write down a list of achievements, future goals and any challenges in advance to bring to the meeting. (If it is the first review, these achievements will usually cover the start of employment till the review. Otherwise, it will be since the last review.) This gives the employee the opportunity to think about the review process and be an active participant.
3. Evaluate your employee’s performance to date, taking into account: achievements, attitude, behaviour, competency and core jobs.
4. Outline any training or development which may be needed as well as future goals for the employee. Start thinking about any performance-based incentives you may want to offer your employee.
5. Make sure you have all of your points for the review in writing.
6. At the review meeting, discuss your points with your employee and ask for any
feedback. This is the ideal opportunity for your employee to let you know what progress he/she has made, what sort of motivation he/she may need and of course, any challenges or problems which may be hindering his/her work efforts.
7. Outline with your employee any goals you would like your employee to achieve and the remuneration involved, such as a bonus, increased wages, promotion, etc. Make sure your employee understands what is involved and agrees to work towards these goals. Put it all in writing.
Having completed the performance review, you can include it into your business plan, factoring in items such as training, development and any additional expenses which you may be incurring, including bonuses, increased wages, other incentives and any additional tools or products your employee may have asked for to increase work productivity.
The review will also help you with an employee’s poor performance. It can outline where the employee appears to be failing and your steps to remedy it. As the review is in writing, it can become important if the poor performance continues.
Performance bonuses and incentives
In the past, salaries and wages have been based on a set figure with an incremental increase included. More and more, however, employers are shifting to performance-based remuneration. Typically, this involves a base pay and a bonus paid when certain agreed goals are met.
This system works best if the goals are achievable quickly (within six months at the maximum) so employees see the benefit of their improved work.
These incentives are a good way to encourage employees to go “above and beyond” their normal duties and achieve certain goals.
Bonuses and incentives can vary depending on the employer and do not necessarily have to focus on cash bonuses.’
It can be something as simple as asking your employees to come up with a money-saving idea and rewarding the best idea with a paid day off. Or, as mentioned previously, it can be a bottle of wine or dinner for two at a local restaurant.
The best way to develop a good performance-based remuneration plan is to first think about the goals you would like your employees to achieve. Set short-term and long-term goals so employees are continuously encouraged to achieve more and incorporate them into the performance review.
Talk to your employee and discuss your objectives. Get your employee’s ideas and incorporate those into your plan. Let your employee know what the “reward” will be if the goals are met on time. Be aware though that whatever incentive you are using, you must stick to it and follow through. Otherwise, it becomes a disincentive for your employee.