How Companies Can Utilize Organizational Behavior For Employee Retention in

the Workplace

Shruti Pokharna

Introduction

Organizational Behavior is the multidisciplinary, academic study of how people interact within

groups. The principles of the study of organizational behavior are applied primarily in attempts

to make businesses operate more effectively: for instance, improving job performance, increasing

job satisfaction, promoting innovation, and encouraging leadership. In this review, I discuss the

implications of organizational behavior in the workplace, and primarily on employees.

Employees are the base of a strong and long-running organization. They effectively run the

organization at its each and every level. However, over the past decades, the United States has

seen a rise in the amount of people resigning from their jobs. Though the pandemic catalyzed

and magnified this phenomenon, the reasons for “The Great Resignation” are not primarily

attributed to the coronavirus, but rather the failures of the corporate workplace to develop strong

organizational culture. An organization's culture consists of shared beliefs and values established

by leaders, which are then communicated and reinforced to, ultimately, positively shape

employee perceptions, behaviors and understanding. While organizations can fail to promote

healthy organizational cultures in their workplaces, employers can utilize teachings embedded in

organizational behavior to uphold strong organizational cultures and in turn, produce higher rates

of employee retention.

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The Great Resignation

The Industrial Revolution of the late 18th century came alongside the rise of steam power,

machine tools, and new manufacturing processes as they concurrently converted field jobs to

factory jobs. In the 1950s, companies such as IBM centralized workplaces, leaving

mom-and-pop shops faded into the background. The rise of modern office jobs paved the way for

the era of knowledge work. In the early 2000s, the Internet boom changed work once again,

spurring a digital revolution in workplaces that suddenly needed to be connected on a massive,

worldwide scale. Now, the globe is in the midst of another revolution — the era of hybrid work.

When offices shuttered across the country in March 2020 and millions of workers submitted to

mandatory stay-at-home orders, many employees were forced to work remotely. Overnight,

organizations had to pivot to a virtual-first or virtual-only mode of operation. Remote work had

barely begun to take hold before the pandemic, with only 6% of workers working primarily from

home, compared to more than 30% that found themselves in that situation by May 2020. Just

some months later, we saw the outcomes of that thinking: the Great Resignation. According to

the U.S. Bureau of Labor Statistics, nearly four million Americans quit their jobs in July 2021

alone. The resignation rate in the U.S. is now at a two-decade high, with more than 11 million

jobs open. One recent study found that 95% of workers would consider a job change. Harvard

Business Review noted that employees between the ages of 30 and 45 have had the greatest jump

in resignation rates, with an average increase of more than 20% between 2020 and 2021 (Bauer,

Dixit, 2021).

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Why People Quit: A Lack of Appreciation in the Workplace

Employee dissatisfaction stems in large part from a feeling of undervaluation and

underappreciation. In an investigation on the impact of appreciation, Office Team discovered that

66% of workers would leave their jobs if they didn't feel valued (Lipman, 2017). According to

the same poll, nearly 8 in 10 millennial workers said they would look for other possibilities if

they didn't feel valued by their coworkers or supervisors. For younger workers, that percentage is

much higher. Employee recognition has improved for businesses that have adopted a strategic

strategy. According to research by Bersin & Associates, work cultures that value recognition had

a 31% lower voluntary turnover rate (Greenwood).

Why People Quit: Feeling Burnt Out

Research by Kronos and Future Workplace into what they term "the employee burnout problem"

revealed that burnout has a significant negative impact on employee retention. Almost all (95%)

of the HR leaders they questioned claimed that fatigue was adversely influencing turnover in

their report (Gouthro, 2017). There was also talk of "burn and churn" in larger businesses, with

15% of HR professionals at companies with more than 2,500 workers claiming that burnout was

the main reason for more than half of their yearly turnover. Burnout is a challenging problem to

address in part because of the variety of contributing variables, with responsibility being spread

over many departmental desks (Greenwood).

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Why People Quit: Lack of Flexibility

Many businesses have started including some kind of flexible working as part of their core

employee benefits in an effort to draw and keep the finest talent. These efforts range from

condensed hours to schedule flexibility and remote working. According to XpertHR's study on

workplace flexibility, more than half of enterprises had noticed an increase in employee requests

to work more flexibly, and most of those requests had been granted by three-quarters of

businesses (Loew, 2022). While 70% of millennials have thought about switching jobs to one

with more flexible hours, this benefit would be valued by all age groups. Less than 10% of

respondents at either end of the generational range said that they would like to complete crucial

work outside of the workplace (Whiting, 2020).

Why People Quit: Lack of Career Growth

According to a poll conducted by the research firm The Harris Poll last year, employees' main

reason for leaving their prior employment was a lack of professional advancement. Despite

almost all of the 310 organizations that participated in the survey offering career development

opportunities, one in three employees claimed they left their previous job because they didn't

gain new skills or perform better. In actuality, just 26% of workers felt that their companies'

development tools met their needs (Allen, 2008). Global Talent Monitor conducted more

research into this relationship and discovered a larger association, with 40% of leaving

employees expressing dissatisfaction with the absence of future career advancement. The poll

also revealed that 28% of respondents are actively looking for work (Morris, 2018).

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Why People Quit: Corporate Culture

According to a poll of two thousand workers conducted by the recruiting business Hays, the

corporate culture was the key factor in over half of the respondents searching for new

employment (Greenwood). In summary, workers today want more than just a paycheck from

their employers, and they are ready to sacrifice on wages to find the right match (Allen, 2008).

Applicants are searching for a workplace culture that aligns with their beliefs, including strong

leadership, clear communication, work-life balance, and career development. While this study

illustrates the overall impacts of a bad culture, there are other, more focused factors at work that

may also play a role. For example, a report by Deloitte found that 72% of employees in the US

would leave their current company for one with a more inclusive culture (Heine, Horn, Arnold,

2019).

Why People Quit: Relationship with Management

According to research, it is undoubtedly true that workers work for a supervisor, not a

corporation, particularly when it comes to submitting a resignation letter. According to a survey

of more than a million US employees, poor management was the primary reason people left their

jobs, with 75% of those who left willingly citing their boss rather than the actual work (Hyacinth,

2017). Productivity, morale, and engagement among other employee success criteria all depend

on the connection with a direct line manager. But if that relationship breaks down for whatever

reason, it can cause mistrust, worry, and job discontent. A more recent survey of one thousand

employees indicated that 79% of them would see poor leadership as a dealbreaker for a job in

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deciding when to quit. Four in ten went so far as to say they would return to their old job if their

former boss was replaced (Theodorou 2020).

Why People Quit: Wanting to Work Remotely

Over the past ten years, employees' desire to work remotely has increased. This tendency is

particularly prevalent in the IT and digital industries, where the majority of daily duties may be

completed on a laptop with a reliable wi-fi connection (Loew, 2022). Under the category of

flexibility but focusing on contact time in an office environment, Gallup's study into the effects

of different benefits and perks discovered that 37% of workers would change jobs for one that

enabled them to work off-site at least occasionally (Mann, Adkins, 2017). 95% of Atlassian's

workers said they would be prepared to adapt how they operate to make room for more remote

work, according to an internal poll. Due to this, a focused program for remote work was created,

giving employees the option to work from home or in the office, based on an assessment of their

personality, role, and team (HRD, 2019).

Why People Quit: Poor Mental Health

It has long been recognized that poor mental health negatively affects both employee

productivity and the economy. Mental health problems cost UK companies upwards of $42

billion annually, according to studies from Deloitte and Business in the Community, with $8

billion especially going toward replacing workers who quit their positions due to poor mental

health (Taylor, Hampson, 2017). Poor mental health is a problem that affects people of all ages

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and genders. Six in ten men desire to leave their professions due to their mental health, according

to a CV-Library poll of two thousand employees, and this trend is exacerbated by a culture of

working long hours (Fenton, 2019).

Why People Quit: Lack of Engagement

Over the past 20 years, there has been a steady increase in attention being paid to employee

engagement as more people have realized its value in the workplace and impact on financial

outcomes. Moreover, a lack of engagement contributes to staff turnover. According to a Gallup

study, employees who are engaged are 59% less likely to look for a new job or profession in the

upcoming year (Mann, Adkins, 2017). Furthermore, Google searches for "staff engagement"

have increased globally since 2004 (Allen, 2008). Using net promoter ratings and responses to

survey questions on loyalty as a gauge of engagement, a comprehensive study of thirty-four

million workers globally looked for a correlation between voluntary turnover and turnover rates,

suggesting a nine-month trend from disengagement to separation (Morris, 2018).

Why People Quit: General Unhappiness at Work

Research of more than one thousand United Kingdom based employees reported a generally

positive picture of staff morale with respondents evaluating it on a scale of roughly seven out of

ten. But one in three said they would think about leaving if they were dissatisfied (Taylor,

Hampson, 2017). Performance declines are not just a result of unhappy employees. According to

studies, infectious emotions may have a detrimental effect on an entire team without the players

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even being aware of it. Companies like Zappos and Amazon have taken notice of this and now

even pay workers to leave if they're dissatisfied (Wilson, 2022), knowing that it is the most

optimal option for themselves and their coworkers if they do.

What is Organizational Culture?

The term "culture" refers to a group of people's traditions, accomplishments, values, standards,

and fundamental beliefs. Therefore, organizational culture establishes the context for all

activities that take place within an organization. How a business runs on a daily basis is

determined by the expressed and unspoken actions and mindsets of its workforce. Additionally,

organizational culture specifies the conditions under which workers labor. The vision and

objectives, values, leadership and employee expectations, organized performance management,

and general employee involvement levels all contribute to an organization's culture. Businesses

can energize their staff, help them realize their potential, and give stability and direction by

creating a strong corporate culture (Trinet, 2021). Even though organizational culture is an

essential component of a company, long-term employees may not always notice it- it becomes

automatic and ingrained. Organizational culture persists, regardless of whether one has recently

joined the firm and is overburdened with new routines or whether one is a seasoned employee

who is desensitized to the fast-paced atmosphere around them. There are several specific reasons

for why organizational culture aids companies in achieving success, discussed below.

The Critical Nature of Organizational Culture: Increased Employee Engagement

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A workplace with organizational culture is motivated by a purpose and has defined expectations.

Employee engagement in their professional responsibilities and interpersonal relationships is

subsequently motivated and inspired by this. High levels of staff involvement also result, which

boosts productivity (Smith, 2020). An aura of positivism is hard to ignore when one feels deeply

connected to a company and its employees.

The Critical Nature of Organizational Culture: Decreased Turnover

People are less likely to leave a firm if they feel appreciated and valued there. Brands must thus

cultivate a successful company culture that upholds their basic principles and mission statement.

Less turnover results from contented workers (Caucci, 2021), which saves businesses time and

money throughout the hiring process. Companies that develop a strong culture must also take

action to maintain it in that state and grow to improve.

The Critical Nature of Organizational Culture: Elevated Productivity

Employees are more productive and perform better overall when they have access to the

resources and tools they need. People with the same skill set are brought together at work

because of how organizational culture affects workplace structure (Harbour, 2018). When

working together on business ventures, those with comparable backgrounds and talents could

accomplish their tasks more rapidly.

The Critical Nature of Organizational Culture: Strong Brand Identity

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The organizational culture of a corporation reflects its reputation and public image. Based on

their interactions both within and outside of the organization, people form assumptions about

companies. Customers may be hesitant to do business with anyone who is linked with the brand

if it lacks organizational culture or has a poor reputation. Strong brand identities help businesses

draw in more customers and job applicants who share their ideals and support their objective

(Yohn, 2019).

The Critical Nature of Organizational Culture: Transformational Power

Businesses with strong organizational cultures have the ability to turn average employees into

fully committed brand ambassadors, something not all companies can claim (Bass, Avolio,

2007). Companies are more likely to notice a difference in workers as they feel an impression of

achievement if they acknowledge their employees' efforts and celebrate victories.

The Critical Nature of Organizational Culture: Effective Onboarding

Businesses with an organizational culture are increasingly dependent on efficient onboarding

procedures to teach new employees. New hires are assisted in accessing the appropriate

resources and ensuring a smoother transition into their jobs via onboarding procedures that

include orientation, training, and performance management programs. This encourages employee

longevity and loyalty and lessens the level of annoyance some workers feel when they don't have

the knowledge necessary to do their jobs effectively (Bauer, Erdogan, 2011). Onboarding is an

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excellent approach for companies to ensure that new workers are aware of their company's key

principles.

The Critical Nature of Organizational Culture: Healthy Team Environment

Organizational culture influences how decisions are made. It also aids teams in overcoming

ambiguity-related obstacles (Indeed, 2020). Team members that are aware of and knowledgeable

about certain procedures are frequently more driven to complete tasks. People can work together

with purpose when there is a defined culture that unites employees and supports organized work

arrangements.

Organizational Behavior Tactics for Employers

Having discussed the failures of the workplace to develop a healthy organizational culture, but

also the factors that critically maintain organizational culture in the workplace, employers must

know how to implement strategies to retain their employees.

I. Employee Compensation, Perks, & Rewards

Motivation Theory explains the factors that drive someone to work towards a particular goal or

outcome. In the workplace, a particular goal or outcome is reward could be in the forms of

compensation (salary), perks, and bonuses. It is essential for companies to pay their employees

competitive compensation, which can take shape in several forms. For instance, employers must

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evaluate and adjust salaries regularly based on the individual performance of an employee, as

well as the overall performance of the company. Compensation can also appear as health care

benefits and retirement plans, helping to raise employees’ job satisfaction. Furthermore,

companies sometimes include stocks and options as part of employee compensation. These are

non-cash in nature and represent an ownership of the company, allowing employees to gain a

share of the overall profits of the company, apart from their salary and non-monetary benefits.

When employees are adequately compensated, they feel motivated to come to work; their morale

remains high, and their job satisfaction levels increase. High morale ensures that employees

deliver work to the best of their abilities, and are also less likely to look for opportunities outside

of their current work. According to the Society for Human Resource Management, 63% of U.S.

employees said that compensation and benefits are an extremely important factor when

determining job satisfaction (Wooll, 2022).

II. Work-life Balance, Flexible Work Arrangements

The use of Self-Determination Theory can also boost employee morale. Self-determination is the

use of external factors and internal beliefs to set and achieve personal goals. For instance, giving

employees autonomy over their schedules demonstrates the employer’s concern and trust.

Flexible work drives employee engagement; engaged employees are more enthusiastic, energetic

and have better physical health. Research shows that employees are engaged, their performance

soars. Engaged workplaces claim numerous benefits like 40% fewer quality defects, 41% lower

absenteeism and 21% higher profitability (Austin-Egole, Iheriohanma, Nwokorie, 2020). With

more control over their time, employees have a greater sense of freedom to complete work tasks

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while having ease to take care of personal responsibilities. In fact, they work more hours and

display better impact driven results.

III. Continuous Feedback on Performance, Training and Development

To satisfy another aspect of self-expectancy, employers should prioritize moments of growth for

their employees. Feedback helps to focus employees' work-related activities on the desired

personal and organizational goals (Kleinbeck, 2004). It also enhances an individual's

self-awareness (Herold & Greller, 1977), helps to adjust self-perceptions and self-ratings, and

helps to detect performance gaps (Mory, 1996). Furthermore, employers must also put an

emphasis on training and development. Upskilling employees is especially pertinent today as

technology evolves. When people upskill, they gain new abilities and competencies as business

requirements change.

IV. Recognition, Acknowledgement of Milestones

Recognition aids employees in seeing that their organization values their contributions to the

company overall. It helps employees build a sense of security in their value to the company,

motivating them to continue great work, and fulfilling the human desire for competency

(Hastwell, 2021).

Conclusion

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This review highlights the failures of organizations to retain their employees when they do not

promote healthy organizational culture, but also sheds light on healthy practices to uphold

employee safety, comfort, and satisfaction. In an era of mass resignation, the corporate sphere

can utilize techniques outlined in the study of organizational behavior to retain their employees

and develop effective rewards/incentivisation systems, while also fulfilling the human desires for

competency, autonomy, and relatedness.

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