Purpose And Benefits Of Career Development Management Essay

The concept of career development is of growing concern to organizations since it matches the needs of a business with the career goals of employees. Formulating a career development plan can help employees to do their jobs more efficiently. Additionally, these plans can be beneficial for employees who might want to move up in a company or look for other jobs in the future. Today, challenging organizations have developed new concerns for the career development of their employees. They put greater emphasis on ‘career’ with coherent induction, training and development, increased job security by the accrual of experience and qualifications valued in the labour market. According to Appelbaum and Santiago (1997, pp.11-20), firms have flatter structures whereby an employee can begin to look at career strategies to improve his/her career opportunities.

Since a high majority of workers change their careers at midlife, it becomes evident that career development programs are needed throughout the life cycle. Other major reasons for this concern are:

The growth and productivity of organizations depend on the effectiveness of employee performance.

A change in the social values where employees do not consider work as the most important thing in life but rather selecting occupations and careers that fit the individual.

2.1 Definition of Career Development

McDaniels and Gysbers (1992, p.138), state that career development is “the total constellation of psychological, sociological, educational, physical, economic, and chance factors that combine to shape the career of any given individual over the life span.

On the other hand, Gilley and Eggland, (1989, p.48) has defined career development as ‘an organized, planned effort comprised of structured activities or processes that result in a mutual career plotting effort between employees and the organization.’

Greenhaul et al (2000) cited in Desimone, Werner and Harris (2002), has defined career development as “an ongoing process by which individuals progress through a series of stages, each of which is characterized by a relatively unique set of issues, themes and tasks.” Career development involves two sets of activities: career planning and career management. Career planning is defined as the activities performed by an individual, with the assistance of counselors and other individuals to assess the skills and potential of employees to be able to establish a realistic career plan while career management consists of activities that help an individual to develop and carry out career plans. Desimone, Werner and Harris (2002) points out that “career management involves taking the necessary steps to achieve that plan, and generally focuses more on what the organization can do to foster employee career development.”

2.2 Purpose and Benefits of Career Development

Career Development is a very important aspect of a person’s life. Rewards and benefits are obtained only when a person is able to develop the career. Career Development helps individuals to develop their capabilities and improve their performance. It is a challenge for organizations to respond to the development initiatives that individuals are engaged in and to make career investments in order to enjoy quicker returns in terms of career growth and progression (Koropov and Kapova, 2007). A recent study of Jo Justin (2010) outlined the various benefits of career development which are as follows:

Reduces attrition of employees

A Career development program helps to increase the level of satisfaction of the employees and therefore reduce the number of people who intend to leave the organization.

Provides equal opportunity employment

There is chance for equal opportunity employment when one considers the career development program since these programs identify each person for the merits. Highly effective people and the results that are shown by the individual are taken as a criterion for their development and not other criteria, which therefore demonstrate equal opportunity.

Improves the use of the employees

Career development enables employees to learn better aspects of their work and improve their capabilities. It also helps them to manage their time efficiently and ensure that the use of employees increases over time.

Improves the quality of the work life of employees

Career Development helps employees learn better methods of working, work ethics and other important aspects of work.

Improves the organization itself

Through a career development program, employees have an increased knowledge of the various activities of the firm. Therefore the sharing of knowledge and work ethics tend to make the organization improve.

Increases the skill of the employees

An employee’s skill is improved if he/she goes through a career development program. These programs aim at increasing various facets of a worker’s life which makes the latter perform better at work.

2.3 Key success factors for Career Development

2.3.1 Organisational support

Organisational support for Career Development, also called organisational sponsorship or organizational career management, refers to programs, processes and assistance provided by firms to support and enhance their employees’ career success. Organisational career management comprises formal and informal strategies. Formal strategies include studies sponsorship, career planning, training and assessment centres while informal support include mentoring, coaching and networking opportunities (Barnett and Bradley, 2007, p.622). In our competitive labour market, it is increasingly difficult and costly to attract and retain the best employees with the necessary skills. Hence it is imperative for organizations to convince employees that they provide better opportunities, challenges and rewards than their competitors. As such, Erdogan et al., (2004); Heslin (2005) in Barnett and Bradley (2007) state that it is a challenge for firms to attract, motivate and retain the best employees. One way that organisations may meet this challenge is to support employees to develop their own careers and increase their career satisfaction. Baruch (2006, pp.125-38) argued that organizations need to adopt a supportive rather than directive role, which can enable their employees’ career success. This implies that organizations should adopt strategies that enhance employees’ career satisfaction and so potentially increase the organisation’s ability to attract and retain these employees.

Employees will generally strive to fulfill their obligations, by showing greater organizational commitment, higher productivity levels, higher job satisfaction and lower turnover levels, if they perceive that the company is fulfilling its obligations through suitable career development practices, promotion, training and support, and so on. As such, organizations must adopt a strategy for careers that tackles career management in an integrative and holistic way. As pointed out by Harrison (1997), top management in an organization must ensure that line managers take full responsibility for building and maintaining an environment in which it becomes possible for employees to take responsibility to develop their own careers and make good choices.

2.3.2 Planning

Harrison (1997) identified five different kinds of planning needed for a career management system to achieve its aims in an organization:

planning for staffing

planning for performance management and development

planning for change

planning for leveling off and disengagement

planning for replacement and re-staffing.

2.4 Evolution of Career Development

Desimone, Werner and Harris (2002), depicted two approaches of career development namely: traditional model and contemporary model of career development.

2.4.1 Traditional Models of Career Development

An adult progresses through a sequence of stages during his/her work life. Greenhaus et al (2000) describe the traditional model as “the notion of an orderly series of career stages linked to age ranges, place the career into the context of a person’s life, and contains overlapping concepts.” In this regard, Greenhaus combined these approaches into a five-stage model which are briefly described below:

Stage 1: Occupational Choice (Preparation to work)

Individuals engage in assessing possible occupations and selecting the best one

Stage 2: Organisational Entry

This stage is where an individual selects a job and a firm to start working in the chosen career field.

Stage 3: The Early Career (Establishment and Achievement)

At this stage, an individual has established a career by finding a right place in the world and becoming proficient in an organization.

Stage 4: The Midcareer

The midcareer stage is when an individual his/her life structure and choices adopted during the early career.

Stage 5: The Late Career

There are two challenges at this stage:

An individual strives to remain productive in work and maintain self-esteem.

An individual prepares for effective retirement.

2.4.2 Contemporary Views of Career Development

With the emergence of new technology, globalization, changing of employment relationship, team working and flatter organizational structures, employees and organizations are now flexible and adaptable in an uncertain environment. As such, Hall and Mirvis (1995) advanced the concept of protean career which means that individuals drive and reinvent their own careers. Hence, with time, an individual will be involved in lifelong learning and self-development which are the core aspects of career development. A more recent study (Yongho 2009, p.637) found that “protean career reflects a new psychological contract between employer and employee which is based on the transactional relationship”. Furthermore, Hall (2002) pointed out that protean career is the extent to which an individual manages his/her career in a proactive and self-directed way driven by personal values.

2.5 Conceptual Model of Career Development

As proposed by Jackson et al (2006), a conceptual model of career development helps to establish a clear definition of career development process and its components which comprises of assessment, direction and development.

Figure 1: Components of Career Development

Source: Donald W. Jackson Jr et al (2006)

Component 1- Assessment

It is concerned with evaluating an employee’s strengths and weaknesses through self-assessment or organizational assessment which may be evaluated through performance appraisal or assessment centres.

Component 2: Direction

Direction involves the type of career an employee wants to take and the drivers to achieve the career goals. It includes socialization, career workshops, individual career counseling and career information services.

Component 3: Development

Development is the process on trying to build on strengths and overcome weaknesses by developing appropriate programs to ensure individual success and capabilities.

Based on our study, we will focus mainly on the development part.

2.5.1 Career Development Programs

As pointed out by Jackson et al (2006), a career development programme is a planned process for linking employees’ career needs with the organizations career needs. Today every individual focuses on the development of his/her career as there is fierce competition in the labour market. Hence, organizations need to begin to realize the importance of career development programs that are eminently suited to all employees in an organisation. Career development programs have enabled managers to reconcile problems such as low productivity, high labour turnover and low morale at work. Tser-Yieth Chen et al (2004) argued that human resource managers must recognize that there are a number of diverse groups within an organization, and hence, the career development programs that are developed for these employees must be flexible enough to accommodate this diversity. As a result, career development programs help employees to satisfy their career expectations and enhance their level of job satisfaction

The career development programs are:

2.5.1.1 Mentoring

Murrell, Crosby, & Ely (1999) as cited in Vaiman and Vance (2008) state that “mentoring occurs between two people in which the more experienced and knowledgeable mentor provides a host of career development, (e.g., sponsorship, exposure, visibility, coaching, protection, and challenging assignments) and psychological (e.g., role modeling and acceptance) functions to a protégé.” Mentoring is therefore an important influence in professional development where the war for talent is creating challenges within organizations to retain talent. For instance, the benefits of mentoring include increased employee performance, retention, commitment to the organization and sharing of knowledge.

2.5.1.2 Job enrichment

Job enrichment is another aspect that can help towards the development of an individual’s career. Desimone, Werner and Harris state that “job enrichment involves varying some aspects of the job in order to increase the potential to motivate workers” (2002, p.585). In other words, this implies that jobs should be redesigned to motivate employees to take responsibility and attain increased levels of achievement. Hence, jobs should be challenging, interesting and meaningful and employees must be given appropriate recognition and advancement in their careers for a job well done.

2.5.1.3 Coaching

According to Armstrong (1996), coaching is “a person to person technique designed to develop individual skills, knowledge and attitudes.” Furthermore, Don and Bruce (1996), suggest that coaching requires a person who has the appropriate knowledge to instruct other people on an individual or team basis. While knowledge of the task is important, an effective coach must possess good communication skills to provide effective information to the individual.

2.5.1.4 Training programs

A recent study of Bhatti and Kaur (2009) stated that training is one of the most efficient and reliable human resource technique to enhance organizational and employee productivity. In line with this, Bhatti and Kaur (2010) pointed out that training programs should be designed in a way that create win-win situation for both the firm and employees. However, a recent study by Shrestha (2009) indicated that the negative aspects of training and development are increment in salary and promotion by the trained employees, demonstration of overconfidence and intention to quit the job.

2.5.1.5 Job rotation

Job rotation is a lateral transfer of employees between jobs in an organization. It is a staffing strategy for employees in their early careers than for those in late career. Job rotation is a way for employees to increase their networks of contacts and facilitate the transfer of company culture. Harvey and Bruce (1996), suggest that job rotation enables an employee to learn several job skills and a wide range of operations within an organization.

2.5.1.6 Tuition assistance programs

Firms must offer assistance programs to support their employees’ education and development. A tuition-reimbursement program is an important aspect of a professional development program as it increases the probability employees will continue with their education and continue to work for the firm in the future. These programs include educational expenses, including tuition and exams fees and such programs make employees become more valuable, creative and innovative (Desimone, Werner and Harrris, 2002).

Employee Retention

3.0 Introduction

The human resource possesses skills, experience and knowledge that add economic value to organizations. Employees play a fundamental role to the achievement of organisational goals. Hence, it becomes imperative for firms to adopt appropriate retention strategies for their workforce. In Mauritius, many organizations invest on employees’ studies as well as training and development programs to build employees capabilities. For instance, most of the accounting firms offer the possibility for HSC and degree holders to work for them and study at the same time by sponsoring their ACCA tuition and exams fees. Unfortunately, after a few years of working, many employees get better jobs elsewhere while others continue further studies abroad. Moreover, many organisations face the problem of frequent labour turnover arising job dissatisfaction on the part of the workforce due to inappropriate employee retention strategies which include poor working environment, lack of employee involvement in decision making, poor remuneration and the application of traditional retention strategies.

3.1 Employee Retention

Retention, as defined by Phillips and Connell (2003, p.2) is “the percentage of employees remaining in the organization.” Mayfield and Mayfield (2008), pointed out that valuable and skilled employees are regarded as important to an organisation’s performance and success, and therefore retention of these employees are essential to employers. In our highly competitive labour market, employees want to work for the best firms. In line with this, Fitz-enz (2000) stated that, to become an employer-of-choice involves acquiring the best talent for the organization, motivating workers to improve performance, providing job satisfaction, developing employees to promote career growth and ultimately retaining those employees. Further highlighting the importance of organizational commitment identified by Mowday (1998), is that committed employees are more likely to stay in the organization, build better relationships with customers, learn more effectively, work more efficiently and are more adaptable to change.

3.2 Employee Turnover

Organizations often pursue innovative ways to reduce employee turnover. Phillips and Connell (2003, p.2) have defined turnover as “the percentage of employees leaving the organization for whatever reason(s).” In a recessionary environment where unemployment is high in the aggregate, employee turnover can be even higher. One study indicates that turnover for an employee in their 20’s is as high as 22%, double that for older workers. In particular, research indicates that younger workers tend to be more frustrated by the slow pace of their careers (Mark-Kolakowski, 2010). Eder (2008) stated that when an organization acts positively with its employees, employees will feel the need to reciprocate and behave positively. Similarly, in the study of Knippenberg (2006) stated that in a booming economy, employees have more power and options, thus, if their working organization act in a positive way towards them, they are more likely to be committed and remain in the organization.

3.3 Labour market and mobility of labour

Mobility involves both turnover and retention, which may be considered as two sides of a coin. Huang, Lin and Chuang (2006) define turnover as an employee’s separation from a given employment relationship. Conversely, retention indicates the existence of an ongoing employment relationship. Erenberg and Smith (1994), pointed out that for the labour market, worker mobility represents the flow and exchange of labour forces. They view worker mobility as an important role which enables both employers and employees to be aware of the larger market place and to continuously examine each other’s needs. For a worker, it is the decision of either to stay or to leave the organization. As such, mobility performs a social role by matching employees with those employers who will value their skills. On the other hand, a recent study of Jin-Hyuk Kim (2007) state that “employee poaching” has become a prevalent and controversial issue. He defines “employee poaching” or “employee raiding” as a situation where a firm targets and recruits the key employee(s) of a close competitor. From an economic perspective, poaching a rival’s high-level employees or highly trained staff can pose a serious threat to the original employer because when the supply of top talent labour is scarce, job turnover can directly affect market competition between firms.

3.4 Causes of labour Turnover

In 2000, Griffeth et al. observed that job dissatisfaction, lack of organizational commitment, comparison of alternatives and intention to quit are the major factors of labour turnover. Moreover, he examined the relationship between pay, a person’s performance and turnover and concluded that high performing employees who are not rewarded accordingly are more likely to leave the organisation to seek employment elsewhere.

On the other hand, Kirschenbaum and Weisberg (2002) observe that “the influence of co-workers intention to leave their organization to seek employment elsewhere has a major influence on staff resignation from the workplace.” This implies that social pressure can encourage employees to quit their jobs if co-workers hold a positive attitude about leaving the organization. However, this can be true if both the resigning employee and co-worker are on the same hierarchical level of the organization, that is, same rank and salary grade, or else the level of influence from one employee to leave the firm may not affect the other one negatively. Hence, the differences in rewards systems among employees in an organization could motivate workers to remain in their job or de-motivate others to quit. In contrast, the study by Walsh and Taylor (2007) revealed that although compensation and work-life balance are the main motivators of employee retention, the lack or absence of opportunity for professional growth and development can affect management retention and turnover.

A study of Taplin et al. (2003) demonstrated two main reasons of employee turnover which are low level of wage rate and industry or organisation’s image. According to this study, employees who perceived their wage rate to be low or low rating of the organization in terms of lack of future prospect they are likely to achieve, employees are more likely to be demotivated and leave to seek employment elsewhere. Similarly, Aksu (2004), Hinkin and Tracey (2000) suggested that low-skilled and low-paying work, unsocial working hours, low job satisfaction and the lack of career advancement tend to aggravate turnover.

According to Ayagi (2001), the adoption of traditional employee retention strategies in an organization such as fear, coercion, intimidation and blackmail can negatively affect employees’ loyalty to a firm. As a result, employees are less likely to have job satisfaction and work towards the organizational goals and objectives.

Causes of Labour Turnover

Author

Job dissatisfaction, lack of organizational commitment, comparison of alternatives and intention to quit

Griffeth et al(2000)

Influence of co-workers

Kirschenbaum and Weisberg (2002)

Differences in rewards systems

Walsh and Taylor (2007)

Low level of wage rate

Taplin et al. (2003)

Unsocial working hours, job dissatisfaction and lack of career advancement.

Aksu (2004), Hinkin and Tracey (2000)

Traditional employee retention strategies

Ayagi (2001)

3.5 Costs of Employee Turnover

Employee Turnover is a significant challenge for human resource management (HRM) strategies and organizational performance. As such, HR should describe turnover in financial terms, not only to know about the financial impact to the company, but also to decide on the scope of solutions required to solve the causes of turnover. For example, if the causes of turnover in a particular firm are due to lack of career growth and the turnover costs are calculated at $125000 a year, then investing $35000 to hire a consultant to devise career paths and provide training to managers and employees about career management would be cost-effective and beneficial (Daniel Nase, 2009). Cho et al., (2006) state that high labour turnover can mitigate the overall business outcomes thus affecting the organisation’s productivity and efficiency. The costs of labour turnover can be tangible and intangible. Similarly, Cascio (2006) noted that the turnover of an employee can cost the organization above one and a half times the employee’s annual salary, taking the overall costs, which include reassigning tasks, and recruiting and training a placement.

3.5.1 Tangible costs

A study of Davidson, Timo and Wang (2010, p. 454) state that, “labour is a significant cost and the leakage of human capital through unnecessary turnover is an element of critical importance to bottom line performance”. Tangible costs are the direct costs that firms incur when an employee leaves the organization. For instance, Hinkin and Tracey (2006) pointed out that the investment in recruitment, training, induction, growth and skill development, and quality represent a direct cost to the firm. Moreover, a common practice in businesses expecting a certain degree of turnover, tend to hire a person to cover absent staff which represent a direct cost (Karsan, 2007). On the other hand, Stohr et al., (1992, pp. 455-78) stated that “recruitment, selection, hiring, placement, training, and separation are among the direct costs of employee turnover”.

3.5.2 Intangible costs

Labour turnover is not only a significant tangible cost but also an intangible/ indirect cost associated with loss of skills, expertise, inefficiency and replacement costs. Other intangible costs of labour turnover as pointed out by Deery and Iverson (1994), Connell and Kung (2007), refers to the costs linked with organizational behavior and “hygiene factors” such as work monotony, poor job satisfaction, low morale, too much supervision and lack of career development opportunities that have a negative impact on employee productivity, effectiveness and quality. Moreover, according to Stohr et al., (1994, pp. 313-27), intangible costs include the costs of “transferring employees from other positions, time for assigned training, lost productivity, cost of filling the vacancy, negative public relations and disruption of social networks”.

3.6 Human Resource Strategies impacting Employee Retention

Management policies which support employees can also be expected to make an organization more attractive to employees, leading to lower turnover while also enhancing the organization’s competitiveness in hiring valuable and skilled employees. From a recent study, Perryer and Jordan, et al., (2010), stated that engaging and ensuring retention of current employees can be driven by many different approaches such as remuneration and promotion, as well as providing a positive and supportive working environment. The major retention strategies are:

3.6.1 Organisational commitment, mission and goals

Organisational commitment as suggested by Perryer and Jordan, et al., (2010) is considered as a stable attitude and is more closely related to the achievement of long-term organizational objectives due to its broader reaching implications. In line with this, Meyer et al., (1993, 2002) state that commited employees are less likely to quit the job and feel aim to go beyond normal job requirements. Moreover, committed employees are more likely to perform better, contribute personally to the organization, engage in organizational citizenship behaviours and are more likely to engage in productive behaviours. Furthermore, Meyer et al., (2002) found that organizational commitment arose due to positive job experiences, job satisfaction, trust between management and employees as well as attractive package of financial rewards. Perryer and Jordan, et al., (2010, p.912) noted that “organizational commitment is considered an important employee quality for organizations as it is indicative of a more stable, engaged and higher performing employee.” This will result in employee retention together with an increased in organizational productivity, quality and profitability. On the other hand, the establishment of well defined goals and objectives influence employee retention and job satisfaction. In the study of Kim et al., (2005) was found that organizational direction and support had positive impact on employee job satisfaction and overall commitment. Organizations that involve employees in decision making, goals and direction through team-working are more likely to experience job satisfaction and remain in the firm. As such, Cho et al., (2006) indicated that engage in high-performance work practices are more likely to experience lower turnover rates for non-managerial employees.

3.6.2 Corporate culture and communication

According to Becker and Huselid (1999), culture creates competitiveness as it changes employees’ behavior by engaging them to act within the firm’s desired corporate culture, hence influencing employee retention. For example, in a learning organization, culture comprises of learning and knowledge sharing. Learning often requires some amount of risk and therefore employees taking risks in situations should be encouraged and rewarded which inevitably motivate them (Desimone, Werner and Harris, 2002).

3.6.3 Establishing appropriate working environment and job design

Monetary rewards can be a top motivator for employees but the latter are more likely to be satisfied if they are provided a safe and good working environment together with flexible hours of working. Milman and Ricci (2004) found that employees’ retention is predicted by intrinsic self-fulfillment, good working conditions and higher level of job satisfaction.

Job enrichment, workspace and socialization as pointed out by Boles et al., (1995), Pizam and Ellis (1999) can reduce employee turnover. Moreover, Walsh and Taylor (2007) stated that primarily employees remain within a firm if employers repond to their professional growth. They noted: “those employees most committed to performing challenging work are the ones most likely to remain with their companies” (Walsh and Taylor, 2007, p. 147).

3.6.4 Customer centeredness and employee focus

If a firm takes good care of its employees, the latter are more likely to be satisfied and provide better service to customers. Arnett et al., (2002) found that higher satisfaction among customers and better employee performance will impact positively to employee retention. Furthermore, in 2005, Kim et al., found that firms with strong customer centeredness and employee focus will lead to job satisfaction and organizational commitment. Also, recognizing employees’ efforts with financial incentives, awards and promotions will reduce turnover intentions.

3.6.5 Training

Moncarz and Zhao et al. (2009, p. 441), revealed that “in organizations where employees receive the proper training needed to assume greater responsibilities, turnover rates are generally lower.” Similarly, Shaw et al. (1998) stated that firms with training opportunities experience lower employee turnover. Becker and Huselid (1999) argued that economic returns of extensive training are gained when motivated employees stay and contribute to the firm’s success fostered partly by selective hiring, competitive pay packages and team-orientated work environments.

3.6.6 Rewards and compensation

Compensation and benefits are the most notable employee retention strategies. Highly competitive wage systems will promote employee commitment resulting in attraction and retention of a superior workforce (Becker and Huselid, 1999; Guthrie, 2001; Shaw et al., 1998). Cho et al. (2006) investigated the relationship between the use of human management practices and organizational performance and found that organizations offering incentive plans to employees are more likely to experience lower turnover rates. Also, a firm would further reduce its turnover rate if it applies reward systems in the form of incentive plans to more employees across the organization.

3.6.7 Building a learning organization

Learning is the key to success. Serrat (2009, p.3) state that “to grow and protect the investment made in staff members, a learning organization pays careful attention to developing and retaining its people”. The importance of recognition and incentives for learning are closely linked to the development and retention of staff members. As such, learning organizations ensure that time and effort spent on effective knowledge management and learning is taken as core activities in the organization’s time and performance management systems which in return will help to retain employees.