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The HRM and Employee Retention Rate
INTERNAL RECRUITING EFFORTS:
Promotion from within concept - current employees are able to bid for jobs which are identified through HRM systems or referral by fellow employees; .e.g. UPD, McDonalds use these policies to develop candidates for promotion; 40% of the top 50 executives in McDonalds started out in restaurants. The promote-from-within-where-ever-possible policy has these advantages:- Promotes good public relations- Builds morale- Encourages individuals who are qualified and ambitious- Improves the probability of good selection, because information on the individual's performance is readily available- Is less costly than going outside to recruit- Helps with recruiting entry level workers- Reduces orientation and training costs- When carefully planned can also act as a training device for developing middle and to-level managers
The Principal Financial Group, one of Fortune magazine's "100 Best Companies to Work For," gets at least 40% of new hires by employee referral. Wegmans, a regional grocery chain that is also on the "Best" list, reports that one in five of their employees are related to another Wegman's employee. Many of these organizations include a reward if an employee referral candidate is hired for a position which is hard-to-fill. Referral bonuses a $10,000 or more are not unusual in these fields. Employee referrals are an excellent means of locating potential employees for hard-to-fill positions. Both organization and employee benefit. Higher-level positions, however, are more likely to be referred by professional acquaintance rather than a close friend.
Discuss: How does HRM implement employee retention?
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