The same as other business capitals, the productivity level of human capital can vary depending on their skills, knowledge, experience, or simply resources such as training that have been invested on them (page 53). Employee retention, similar to business capital, must be strategically governed in organizations to ensure they meet their Return on Investment (ROI). The theory of human capital relates to the employee’s length of service in the organization and according to Ulrich’s (1998) “intellectual capital equals the knowledge, skills, and attributes of each individual within an organization multiplied by their willingness to work hard.” The commitment of an employee to his organization is derived from organization’s needs, it may therefore be necessary for the organization to plant a desirable environment for its employees in which one would be willing to work (Harris, 2000). The success of any business is directly linked to the satisfaction and motivation of its employees 2. Motivation is derived from internal or external factors that stimulate desire and willingness for a strong commitment to a job, role, or achieving a goal. There are several theories for motivation including need, equity, expectancy, and job design model. Need theories identify the internal factors that energize behavior and can fluctuate and be influenced directly by …show more content…
This “security need” increases employee productivity and at the same time provides comfortable physical working condition. Private heating and ventilation in each office and the encouragement for creativity for personal themes in each office are other benefits that employees enjoy.
John Stacey Adams, a behavioral psychologies, believed that a fair balance between an employee’s inputs and his output would motivate employees in a work environment (1963). SAS, with an annual growth of 25% has only 4% turnover rate and it is the largest privately owned software company. According to equity theory, such turnover is probably less than other software companies. In fact SAS employees are probably more motivated, which according to Pfeffer (1998), theories that make motivation contingent on compensation are myth and has little or no supporting evidence 6.
According to expectancy theory, the motivation of employees in an organization will be increased when the employee believes that more effort in job means higher performance, and high performance leads to organizational reward (instrumentality). The organization rewards are then valued by the employees (valence) 7. SAS offers all the above elements of the expectancy theory to its employees. SAS employees are compensated and/or rewarded based on their performance, and are satisfied with all benefits offered by the