FACTORS AFFECTING EMPLOYEE RETENTION

Compensation

Trevor et al. (1997) demonstrated that wage growth has a negative effect on turnover. Davies, Taylor, & Savery (2001) presented the opinion that every organization pays compensation to the best employees, but very few organizations use it strategically. They said, “Salary and benefits policies are not being used strategically, within the organization to improve morale, reduce turnover, and achieve targets within an establishment”. Gardner et al., (2004) explained that the salary can be a motivation factor to keep the employee within the organization.

Reward and recognition

The term ‘reward’ was defined by Agarwal (1998) as something that the organization delivers to the employees in response to the job and performance and something that the employees desire.

Walker (2001) asserts that praise from superiors, coworkers, and clients increase loyalty. In the year 2002, the international consulting firm "Watson Wyatt" carried out a study in the USA, surveyed 12750 workers across all career levels and throughout all significant industry sectors to learn about their perspectives regard their employers and place of employment. According to the report, acknowledgment is crucial for employees, and they want to hear that the job they did was recognized and valued.

 

Promotion and Opportunity for growth

Pergamit and Veum (1989) discovered a strong link between promotions and job satisfaction help to retain employees longer. According to research by Meyer et al (2003), Internal career development of employees is frequently the best indicator of an employee's effective performance. Prince (2005) stated that skilled workers are necessary for retaining a competitive advantage and employees seek out career development chances to advance in their careers.

 

Participation in decision-making

Hewitt (2002), describes modern organizations always keep their employees properly informed about all of the significant business matters and involve them in decision-making at all levels so that they may take advantage of their talents. Supporting this point of view, Noah (2008) discovered in his research that employee participation in decision-making aids in the development of a sense of belongingness among the workers, which aids in the creation of a good congenial working environment and aids in the development of a good employer-employee relationship.

 

Work-life balance and employee retention

Hyman et al. (2003) in their empirical study conducted in the UK, discovered that forcing work obligations into employees' personal lives (such as working on the weekend) led to increased stress and emotional tiredness.

According to a 2006 research by the Australian Telework Advisory Committee, 70% of companies that offered telework choices noted a variety of advantages, including enhanced business productivity, lower costs, improved employee flexibility and work-life balance, and higher workforce engagement.

Work environment and employee retention

Wells & Thelen (2002), stated that organizations with generous human resource policies have a very good chance of retaining workers by giving them an appropriate level of privacy and sound management of the workplace, which increases employees' motivation levels to commit to the company for the long term. Ramlall (2003) emphasized that considering an employer's particular needs into account will encourage commitment and a comfortable working environment.

Training and Development and Employee Retention

Investment in employee training and career development is one of the key determinants in employee retention. According to Messmer (2000), every organization makes investments in the form of training and development for those employees who they anticipate will provide a return on their investment. Tomlinson (2002) advanced the idea that businesses can maintain a competitive edge by investing in employee training on the newest technologies. According to Garg & Rastogi (2006), employees' feedback is crucial for firms in today's competitive environment since the more knowledge an employee has, the better they will perform and be able to handle the market problems.

 

Leadership and Employee Retention

Eisenberger and associates (1990) explains, a worker's relationship with their boss has a significant impact on how they view the company. McNeese-Smith (1995), in his study on the Leadership behavior of hospital directors, reported finding a substantial positive correlation between staff loyalty to the organization, productivity, and job happiness. According to Brunetto and Farr-Wharton (2002) , immediate manager supervision raises workers' levels of job satisfaction in the public sector. According to research by Chung-Hsiung Fang, Sue-Ting Chang, and Guan-Li Chen (2009) , leadership style can positively influence organizational commitment and work satisfaction, and work satisfaction can positively influence organizational commitment and work performance.

 

Job Security and Employee Retention

Abegglen (1958) discovered during a research among Japanese workers, that employment characteristics including a lifelong employment, seniority structure, job security, and high commitment: lead to high job satisfaction and employee retention. Ashford et al. (1989) and davy et al. (1991), have discovered that job discontent results from employee insecurity. Rosenblatt and Ruvio (1996), discovered a negative relationship between job insecurity and organizational commitment and job performance.

References

• Abegglen, J.C (1958). The Japanese Factory. Aspects of Its Social Organization. Free Press. Glencoe. IL.
• Agarwal, N.C. (1998). “Reward Systems: Emerging Trends and Issues”. CanadianPsychology, 39(1), 60-70.
• Ashford, S, Lee,C & Bobko, P. (1989). “Content, causes, and consequences of job insecurity: A theory-based measure and substantive test”, Academy of Management Journal., 32: 803-829.
• Australian Telework Advisory Committee Report(2006). Telework for Australian Employees and Businesses: Maximising the Economic and Social Benefits of Flexible Working Practices.
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• Chung-Hsiung Fang, Sue-Ting Chang, Guan-Li Chen (2009) “Applying Structural Equation Model to Study of the Relationship Model among leadership style, satisfaction, Organization commitment and Performance in hospital industry”.
• Davies, D., Taylor,R., Savery, C (2001). “The role of appraisal, remuneration and training in improving staff relations in the Western Australian accommodation industry: A comparative study”. Journal of European Training, 25 (6/7). 366-373.
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