Employee Retention of Deere & Company : Deere & Company, usually known by its brand name John Deere (NYSE: DE), is an American corporation based in Moline, Illinois, and the leading manufacturer of agricultural machinery in the world. In 2010, it was listed as 107th in the Fortune 500 ranking. Deere and Company agricultural products, usually sold under the John Deere name, include tractors, combine harvesters, balers, planters/seeders, ATVs and forestry equipment. The company is also a leading supplier of construction equipment, as well as equipment used in lawn, grounds and turf care, such as ride-on lawn mowers, string trimmers, chainsaws, snowthrowers and for a short period, snowmobiles.
The company's slogan is "Nothing runs like a Deere" and has a picture of a deer as a logo, a word play pun on "nothing runs like a deer."
Additionally, John Deere manufactures engines used in heavy equipment and provides financial services and other related activities that support the core businesses.
The company was founded in 1837 by John Deere, who developed and manufactured the first commercially successful cast-steel plow.
Best-practice organizations featured in APQC's 2009 Collaborative Research study Talent Management in a Tough Economy all proactively assess departure risk for critical employees and make these individuals the focus of targeted retention efforts. Raytheon, Deere & Company, Textron, and URS Washington Division know that, even in times of economic recession, their best workers are highly employable. These organizations also understand that the cost of proactively managing key employee retention is substantially less than the cost of reactively finding and training replacement workers who may never fully replicate the specific skills and knowledge of former employees.
When operating in an open system environment, organizations are being forced to make
changes which are negatively impacting the retention of employees. This paper discusses
how an organization working in an open system contributes to the problem of employee
retention; it identifies the organizational costs in losing employees; and offers
propositions on how organizations can help keep their employees. Lastly, the paper
presents an organizational model which was developed based on the literature review.
The model is intended to help institutionalize a new culture in the organization and offer
individual career opportunities for employees. The paper will conclude with some
suggestions for future research.
Operating in an open system where the organization is interacting with the environment to secure both material and human resources has always been a challenge for organizations. Back in the year 2000 the Bureau of Labor Statistics was already reporting a shortage of 5 to 6.2 million people for jobs by the year 2008 in the United States (Jamrog, 2004). But this problem is not getting better. There is an increasing need in the whole world for quality people, and the human resource war of trying to attract talented, experienced individuals from other firms continues. These retention problems are not just happening in the manufacturing world but also exist in other sectors, e.g., service, private and public. The real estate industry is currently facing a forty-five percent turnover rate (Lee, 2004), small CPA firms are reporting turnover rates of seven to ten percent and twenty-two to twenty-eight percent for large national firms over the past four years (Satava, 2003), and the health care industry is trying to fight off the employee turnovers by focusing on retention of employees rather than recruiting new blood (Manion, 2000)
Companies operating in the open system are being asked to adapt to changing technology and to deal with diversification. To do this, companies are loosely coupled with other organizations and are also forming alliances. These organizational strategies increase the problem of employee retention as the employee is being exposed to other firms, other cultures and other people outside of their organization. With these outside associations, employees are creating relationships and networks outside of the company making it easier to learn of new opportunities and reducing their loyalty to the organization. An article on networks and organizations written by Brass, Galaskiewicz, Greve and Tsai, stated that ties outside of the organization increases turnover (Brass, Galaskiewicz, Greve & Tsai, 2004). An example of how this would work is where a manufacturing firm implements a modular organization form by contracting some of their core technology, e.g., press work. Employees in the organization will be working closely with the new supplier to make sure the transition goes well. As a result, employees within the organization will form relationships and networks with others outside the firm. These relationships can reduce the employee’s loyalty to the organization and make it easier for the individual to leave if they perceive better opportunities elsewhere.
Creating the right culture in the organization will control organizational behavior (Shafritz & Ott, 2001). An important element in creating the desired culture is the leader or manager. The leader can create a culture by the questions he/she asks, the decisions he/she makes and the way they act. The actions of the leader and the culture he/she creates will also help in employee retention. The supervisor or leader is the person who focuses the employee on what is important. The boss’s values, actions and words determine how well the employee performs and if the job is accomplished (Brooks, 2000). It is the immediate supervisor or manager’s responsibility to create job satisfaction for the employee as they have the power to develop challenging jobs and rewarding experiences. Sometimes the supervisor or manager needs to be trained on how to satisfy quality performers and build loyalty in their people (Emmerick, 2001). The “lone wolf” leader who stays in his or her office and delegates, issues deadlines and monitors goals is no longer effective in an open system organization. Today our leaders need to have a high level of energy, enthusiasm and a high desire to achieve in order for them to inspire others (Manion, 2000). The leader of the future needs to have a relationship with his/her subordinates. It is recommended that a manager acknowledges the employee when he/she sees their subordinates and makes an effort to interact with them. Satava suggests that the supervisor or manager should talk with each employee at least twice a week. Some of the topics they could chat about would be personal things like family or sports but not work. Satava performed surveys of CPA firms in order to find out why people were leaving. He found that management’s style made a difference. The survey indicated that management’s relationship with their employees had a significant influence on how long the employee stayed on the job (Satava, 2003). Satava found the better management treated their people the longer the employees would stay with the company. In addition, a Gallup Organization study based on queries from two million workers at 700 companies, found that poor supervisor behavior was one of the main reasons people left a company. The results of that study were also supported by Pekala’s finding that the relation between the supervisor and his/her employees affected how long the employee would stay with the company
In addition to having an effective leader, the literature also indicates that training is an important criteria for satisfying employees. Since organizations operating in an open system need to make decisions quickly and also need more information for those decisions, the organizations are going to flatter organization structures. The flatter structures decrease the number of advancement opportunities. A good alternative for career enhancement in the absence of promotion opportunities is to develop the skills of the employee to make them more marketable. David Finegold from the University of Southern California states “with career advancement high on the agenda, continuous learning is a crucial part of any retention program. Our research shows that many leading firms are pursuing innovative approaches to developing employees skills, such as e-learning, on-line simulations, project-based learning using new electronic tools and the creation of online corporate universities” (Pekala, 2001, p. 25). Employers can also provide lateral moves into other functional areas of the organization, e.g., accounting, supply management, marketing, etc. enabling employee to develop other marketable skills and enhance their business experience.
open system organizations are required to make decisions to survive in their environment which are negatively impacting the retention of employees. Propositions were offered that state if the employer changes their culture to fit the needs of the employee and develops career building opportunities for their employees, the company will have a higher probability of retaining employees than a company that does not adopt such strategies. Organizations need to institutionalize these changes and make them a permanent part of the organization where people know this is the way things are done in this company. To accomplish this, an organizational tool, based on this paper’s literature review, has been developed. This tool will allow firms to change their culture to fit the varying needs of their employees and implement career building opportunities. The tool is called a Cafeteria Career Plan. The tool will allow the individual to choose the work style that is appropriate for them. They can choose to be an “Indian” or a “Chief”. They can choose a balanced work-family life or they can choose to focus on career development.
Health Insurance
Our health insurance package is administered by Blue Cross Blue Shield of North Dakota. Various levels of coverage are available at reduced group rates.
Full-time employees become eligible for health insurance coverage the first of the month following their starting date of employment.
Life Insurance
The company pays for a basic $50,000 life insurance policy for all full-time employees. There are also optional additional levels of coverage available for you and your family members. Full-time employees become eligible for the life insurance the first of the month following their starting date of employment.
Flexible Spending Account
A flexible spending account is available to full-time employees for pre-tax medical and dependent care expenses. Full-time employees become eligible to enroll the first of the month following their starting date of employment.
Dental & Vision Insurance Plans
Our dental and vision plans are optional benefits offered at affordable group rates. Full-time employees become eligible for the optional dental and vision insurance coverage the first of the month following their starting date of employment.
Disability Coverage
Long-term disability. A company-sponsored plan provides you with continued income upon a disability. Under this plan, you are paid 60 percent of your monthly income (based on your last year-end earnings) starting on the 180th day of your disability.
Short-term disability. By selecting the optional short-term disability coverage, you will receive income should unexpected illnesses or injuries arise, until your Long-Term disability goes into effect. (Not available in California and New York)
Full-time employees become eligible for disability coverage the first of the month following their starting date of employment.
Employee Assistance Program
The Employee Assistance Program (EAP) is an employer sponsored benefit available to you and all the members of your household. The EAP provides limited services to help you with financial problems, relationship and family difficulties, depression, or drug and alcohol abuse. Services are confidential and available nationwide.
PTO (Paid Time Off)
PTO is a consolidated “bank” of hours that you can use for vacations, personal time, illness, medical appointments, unpaid holidays, military leave, maternity leave, and weather-related absences when the company is not officially closed.
PTO accrual begins at the first month following the starting date of employment for all full-time employees and is granted on the last working day of each pay period. The accrual rate is based on years of service.
401K Retirement Plan
All employees, 21 years of age and older, are eligible to enroll the first of the month after one month of service has been completed and may contribute up to 25 percent of pay up to the annual IRS maximum. We provide a semi-annual discretionary matching contribution.
The company's slogan is "Nothing runs like a Deere" and has a picture of a deer as a logo, a word play pun on "nothing runs like a deer."
Additionally, John Deere manufactures engines used in heavy equipment and provides financial services and other related activities that support the core businesses.
The company was founded in 1837 by John Deere, who developed and manufactured the first commercially successful cast-steel plow.
Best-practice organizations featured in APQC's 2009 Collaborative Research study Talent Management in a Tough Economy all proactively assess departure risk for critical employees and make these individuals the focus of targeted retention efforts. Raytheon, Deere & Company, Textron, and URS Washington Division know that, even in times of economic recession, their best workers are highly employable. These organizations also understand that the cost of proactively managing key employee retention is substantially less than the cost of reactively finding and training replacement workers who may never fully replicate the specific skills and knowledge of former employees.
When operating in an open system environment, organizations are being forced to make
changes which are negatively impacting the retention of employees. This paper discusses
how an organization working in an open system contributes to the problem of employee
retention; it identifies the organizational costs in losing employees; and offers
propositions on how organizations can help keep their employees. Lastly, the paper
presents an organizational model which was developed based on the literature review.
The model is intended to help institutionalize a new culture in the organization and offer
individual career opportunities for employees. The paper will conclude with some
suggestions for future research.
Operating in an open system where the organization is interacting with the environment to secure both material and human resources has always been a challenge for organizations. Back in the year 2000 the Bureau of Labor Statistics was already reporting a shortage of 5 to 6.2 million people for jobs by the year 2008 in the United States (Jamrog, 2004). But this problem is not getting better. There is an increasing need in the whole world for quality people, and the human resource war of trying to attract talented, experienced individuals from other firms continues. These retention problems are not just happening in the manufacturing world but also exist in other sectors, e.g., service, private and public. The real estate industry is currently facing a forty-five percent turnover rate (Lee, 2004), small CPA firms are reporting turnover rates of seven to ten percent and twenty-two to twenty-eight percent for large national firms over the past four years (Satava, 2003), and the health care industry is trying to fight off the employee turnovers by focusing on retention of employees rather than recruiting new blood (Manion, 2000)
Companies operating in the open system are being asked to adapt to changing technology and to deal with diversification. To do this, companies are loosely coupled with other organizations and are also forming alliances. These organizational strategies increase the problem of employee retention as the employee is being exposed to other firms, other cultures and other people outside of their organization. With these outside associations, employees are creating relationships and networks outside of the company making it easier to learn of new opportunities and reducing their loyalty to the organization. An article on networks and organizations written by Brass, Galaskiewicz, Greve and Tsai, stated that ties outside of the organization increases turnover (Brass, Galaskiewicz, Greve & Tsai, 2004). An example of how this would work is where a manufacturing firm implements a modular organization form by contracting some of their core technology, e.g., press work. Employees in the organization will be working closely with the new supplier to make sure the transition goes well. As a result, employees within the organization will form relationships and networks with others outside the firm. These relationships can reduce the employee’s loyalty to the organization and make it easier for the individual to leave if they perceive better opportunities elsewhere.
Creating the right culture in the organization will control organizational behavior (Shafritz & Ott, 2001). An important element in creating the desired culture is the leader or manager. The leader can create a culture by the questions he/she asks, the decisions he/she makes and the way they act. The actions of the leader and the culture he/she creates will also help in employee retention. The supervisor or leader is the person who focuses the employee on what is important. The boss’s values, actions and words determine how well the employee performs and if the job is accomplished (Brooks, 2000). It is the immediate supervisor or manager’s responsibility to create job satisfaction for the employee as they have the power to develop challenging jobs and rewarding experiences. Sometimes the supervisor or manager needs to be trained on how to satisfy quality performers and build loyalty in their people (Emmerick, 2001). The “lone wolf” leader who stays in his or her office and delegates, issues deadlines and monitors goals is no longer effective in an open system organization. Today our leaders need to have a high level of energy, enthusiasm and a high desire to achieve in order for them to inspire others (Manion, 2000). The leader of the future needs to have a relationship with his/her subordinates. It is recommended that a manager acknowledges the employee when he/she sees their subordinates and makes an effort to interact with them. Satava suggests that the supervisor or manager should talk with each employee at least twice a week. Some of the topics they could chat about would be personal things like family or sports but not work. Satava performed surveys of CPA firms in order to find out why people were leaving. He found that management’s style made a difference. The survey indicated that management’s relationship with their employees had a significant influence on how long the employee stayed on the job (Satava, 2003). Satava found the better management treated their people the longer the employees would stay with the company. In addition, a Gallup Organization study based on queries from two million workers at 700 companies, found that poor supervisor behavior was one of the main reasons people left a company. The results of that study were also supported by Pekala’s finding that the relation between the supervisor and his/her employees affected how long the employee would stay with the company
In addition to having an effective leader, the literature also indicates that training is an important criteria for satisfying employees. Since organizations operating in an open system need to make decisions quickly and also need more information for those decisions, the organizations are going to flatter organization structures. The flatter structures decrease the number of advancement opportunities. A good alternative for career enhancement in the absence of promotion opportunities is to develop the skills of the employee to make them more marketable. David Finegold from the University of Southern California states “with career advancement high on the agenda, continuous learning is a crucial part of any retention program. Our research shows that many leading firms are pursuing innovative approaches to developing employees skills, such as e-learning, on-line simulations, project-based learning using new electronic tools and the creation of online corporate universities” (Pekala, 2001, p. 25). Employers can also provide lateral moves into other functional areas of the organization, e.g., accounting, supply management, marketing, etc. enabling employee to develop other marketable skills and enhance their business experience.
open system organizations are required to make decisions to survive in their environment which are negatively impacting the retention of employees. Propositions were offered that state if the employer changes their culture to fit the needs of the employee and develops career building opportunities for their employees, the company will have a higher probability of retaining employees than a company that does not adopt such strategies. Organizations need to institutionalize these changes and make them a permanent part of the organization where people know this is the way things are done in this company. To accomplish this, an organizational tool, based on this paper’s literature review, has been developed. This tool will allow firms to change their culture to fit the varying needs of their employees and implement career building opportunities. The tool is called a Cafeteria Career Plan. The tool will allow the individual to choose the work style that is appropriate for them. They can choose to be an “Indian” or a “Chief”. They can choose a balanced work-family life or they can choose to focus on career development.
Health Insurance
Our health insurance package is administered by Blue Cross Blue Shield of North Dakota. Various levels of coverage are available at reduced group rates.
Full-time employees become eligible for health insurance coverage the first of the month following their starting date of employment.
Life Insurance
The company pays for a basic $50,000 life insurance policy for all full-time employees. There are also optional additional levels of coverage available for you and your family members. Full-time employees become eligible for the life insurance the first of the month following their starting date of employment.
Flexible Spending Account
A flexible spending account is available to full-time employees for pre-tax medical and dependent care expenses. Full-time employees become eligible to enroll the first of the month following their starting date of employment.
Dental & Vision Insurance Plans
Our dental and vision plans are optional benefits offered at affordable group rates. Full-time employees become eligible for the optional dental and vision insurance coverage the first of the month following their starting date of employment.
Disability Coverage
Long-term disability. A company-sponsored plan provides you with continued income upon a disability. Under this plan, you are paid 60 percent of your monthly income (based on your last year-end earnings) starting on the 180th day of your disability.
Short-term disability. By selecting the optional short-term disability coverage, you will receive income should unexpected illnesses or injuries arise, until your Long-Term disability goes into effect. (Not available in California and New York)
Full-time employees become eligible for disability coverage the first of the month following their starting date of employment.
Employee Assistance Program
The Employee Assistance Program (EAP) is an employer sponsored benefit available to you and all the members of your household. The EAP provides limited services to help you with financial problems, relationship and family difficulties, depression, or drug and alcohol abuse. Services are confidential and available nationwide.
PTO (Paid Time Off)
PTO is a consolidated “bank” of hours that you can use for vacations, personal time, illness, medical appointments, unpaid holidays, military leave, maternity leave, and weather-related absences when the company is not officially closed.
PTO accrual begins at the first month following the starting date of employment for all full-time employees and is granted on the last working day of each pay period. The accrual rate is based on years of service.
401K Retirement Plan
All employees, 21 years of age and older, are eligible to enroll the first of the month after one month of service has been completed and may contribute up to 25 percent of pay up to the annual IRS maximum. We provide a semi-annual discretionary matching contribution.
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