National Pharmaceuticals: The Art of Employee Retention
(8 pages of text)
The chief human resources (HR) officer at National Pharmaceuticals (National), established in 1937 in Bihar, India, had been with the organization since 2007. The organization had been facing high employee attrition rates since 2013. Although the organization had reduced its employee attrition rate from 44 per cent in financial year (FY) 2014–15 to 25 per cent in FY 2017–18, the organization was yet to reach the industry benchmark rate of 12–13 per cent. This issue needed to be urgently resolved, as the organization would soon launch a new product range for which it required additional employees. A meeting was called with all the functional heads within HR. As the group discussed what had gone wrong and what had helped National in the past, they identified several factors that had led to the company’s high employee attrition rate and noted various human linked HR policies. The group had two weeks to create an effective action plan to meet the benchmark attrition rate of 12 per cent. This plan would be presented to the board of directors. Should the company change its recruitment, selection, performance management, and training policies to create the organizational culture the leaders aspire to? Should it invest in more training and development?
This case is suitable for undergraduate- and graduate-level courses in human resource management (HRM) and elective courses in strategic HRM. It can also be positioned as an introductory case in a course on organization behaviour. After working through the case and the assignment questions students should be able to do the following:
- Identify and describe the factors that contribute to employee attrition.
- Develop an action plan to reduce employee attrition.
- Explain the importance of HR policies and their impact on the organization.
- Outline why compensation is not the only reason for employee attrition.
- Describe how HR policies are interlinked and how each policy affects other policies.
- Apply a comprehensive approach to retention management.
- Develop a strategic orientation to HR issues to align to firm’s objectives.
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