The aim of this paper is to conduct a literature review of academic articles on the topic employee retention. The paper shall review the relevant articles and provide a critical analysis of two research articles from amongst the ten selected articles related to the topic. The paper shall also identify any limitations and propose a research question in order to identify and cover the gaps.
Since ages, the companies have faced the issue of employee retention and have been finding out ways to improve the employee retention rate. Organizations all over the world incur huge costs in recruiting, selecting and training the staff. The organizations are unwilling to leave potential employees for its competitors. This results in the incurrence of huge costs in recruitment and selection and even financial losses to several organizations (Ahammad et al. 2016).
Employee retention refers to the capability of an organization to maintain and preserve its employees. Employee retention can be measured in terms of the efforts put in by the employers for retaining his or her workforce (Aruna and Anitha 2015). The organizations strive to decrease the rate of employee turnover by attempting to retain its employees, which would have otherwise resulted in the loss of talent and increase in the recruitment and training costs. Several organizations have their own retention programs that involve career development, executive coaching, orientation and motivation (Cascio 2014).
The figure below shows the several parts of strategic human resource management that lead to employee retention. The recruitment, selection, training, and motivation work together in attracting and retaining the employees. Improper recruitment might affect the quality of the employees in the selection stage and improper selection of candidates shall hamper the productivity of the organization.
Figure 1: Factors causing employee retention
(Source: Pinder 2014)
According to Terera and Ngirande (2014), an organization can remain ahead of its competitors only when it has talented employees that help in distinguishing the company from the others. In order to gain competitive advantage, the organizations need to attract and retain good quality and talented employees who work towards the achievement of the organizational objectives.
According to Bode, Singh and Rogan (2015), the cost incurred by the companies in recruiting and selecting the candidates often turns out to be more than the yearly salary of the employees.
According to Alias, Noor and Hassan (2014), recruitment is the process of attracting the right kind of candidate for a job role. Recruitment is one of the major parts of human resource management. Recruitment is the first step of hiring an employee. The process of recruitment involves job analysis, sourcing, and screening. job analysis refers to providing the proper description and specification of the job vacancies. Job analysis refers to mentioning the job role and the required qualification according to which the candidates may apply for the vacant post. Alias, Noor and Hassan (2014) stated that sourcing involves finding out the strategies of attracting the candidates.
According to Gupta (2014), selection refers to the process of choosing the best possible candidates from among the ones who have cleared the initial stage of recruitment. Selection involves selecting a qualified person who has the potentiality of contributing to the development of an organization. The selection system involves judging the candidates on the basis of their knowledge, skills, and abilities. Selection involves several ability tests, personality tests, interviews and knowledge based tests. The selection ratios of different companies vary largely.
Beynon et al (2015) conducted a research to establish a relationship between selection methods and the employee retention rate in the organizations. The researchers have proven that there is a direct relation between the selection process and the employee retention rate. On the other hand, any error in the selection process shall increase the expenses of an organization without increasing the productivity.
According to Pinder (2014), training and development is an essential part of human resource management wherein the selected candidates are provided the knowledge about their exact job roles and their skills and knowledge are sharpened for improving their performance. Training involves providing theoretical as well as practical knowledge about the job role and making them fit for their job role. The training can be in the form of on the job training, online training, case studies, apprenticeship, classroom training, mentoring and off the job training.
Training helps the employees to improve their performance and gain appreciation. Appreciation, in turn, helps in keeping the employees motivated, which in turn helps in increasing the retention rate. Training is also an effective way of motivating the employees and creating a sense of belongingness among them (Pinder 2014).
According to Das and Baruah (2013), motivation refers to inspiring the employees and instilling enthusiasm within them so that they work more efficiently towards the achievement of the goals and objectives of an organization. Motivation can be of two types namely monetary motivation and non- monetary motivation. The monetary motivation involves motivating the employees by providing them with salaries, compensations, incentives, bonus, profit sharing and other monetary benefits. The non- monetary motivation involves motivating the employees by providing them rewards, recognition, appreciation, status, work- life balance, promotion, job enlargement and job enrichment.
According to Davis (2013), remuneration refers to the payment made to the employees in return for the work done by them. Employees put in their efforts and work to earn money, which is their basic right. The organizations all over the world have a fixed minimum wage payment structure that is not related to the performance of the employees. When an employee over- achieves his or her targets or performs exceptionally, he or she is provided with an additional remuneration, which is usually termed as incentives. Remuneration plays a vital role in motivating the employees (Haider et al. 2015).
Rewards and recognitions are the non-monetary ways of motivating an employee. Rewards and recognitions are effective only when the employees are not attracted towards monetary and financial benefits. Retaining employees has always been a challenge for the organizations. (Pinder 2014).
Kwenin, Mauthe and Nzulwa 2013, conducted a research on the impact of rewards and recognitions on the employee retention rate within an organization. For this purpose, they prepared an online questionnaire and 60 percent of the 146 respondents agreed to the fact that rewards and recognitions help in motivating the employees that in turn increases the employee retention rate within an organization.
According to Pinder (2014), career planning refers to the process of matching the individual career goals and capabilities with the opportunities for their fulfillment. Career planning is not just the task of the employees but the employers are also responsible for helping his or her employees in the career planning and development of the employees.
Gupta (2014) has concluded that the organizations in which the employees have assisted their employees in managing their career have witnesses highly motivated and enthusiastic employees. These employees have been observed to stay longer with the organization. On the contrary, those organizations in which the employers have taken no interest in the personal development and career planning of the employees have witnessed employees with low morale.
According to Davis (2013), job satisfaction refers to the overall satisfaction that an employee derives from working for an organization. The satisfaction can be in terms of monetary benefits, non- monetary benefits, psychological benefits, and others. Cascio (2014) has stated that some employees lay more emphasis on the salaries, wages, incentives, bonus and other financial benefits. On the other hand, there are several employees who give more importance to the non- monetary benefits such as rewards and recognitions, good relationships with the employers, job enlargement, job enrichment and organization policies. These employees cannot be retained by offering them monetary benefits instead, these employees can be retained by providing them status, rewards, and recognitions.
In order to conduct the literature review, 10 research papers were identified as relevant journals to the main topic of employee retention. In order to support the 10 journals on employee retention, an additional 12 relevant journals were used as supporting references.
|
Research Methods |
Count |
|
Questionnaire/Survey |
7 |
|
Interview |
2 |
|
Secondary/Thematic Analysis |
1 |
|
Observational/Behavioral Analysis |
0 |
Table 1: Types of Research Methods used in 10 research papers
According to the table, the most preferred and used data collection technique on the topic of employee retention is by survey or questionnaire. The questions constituted of both open-ended and close-ended questions with options provided in Likert scale.
In a paper, secondary or thematic analysis has been conducted, as it included a comparison between the employee retention techniques of two different companies. These allowed the researcher to compare and a contrast between the employee retention strategies of both the companies and predict the rate of success.
Introduction to Research Article 1
This section of the report emphasizes on the research method followed and implemented by the Kwenin, Mauthe and Nzulwa (2013) in the research journal named The Influence of Employee Rewards, Human Resource Policies and Job Satisfaction on the Retention of Employees in Vodafone Ghana.
The research paper by Kwenin, Mauthe and Nzulwa (2013) aim towards evaluating the influence of rewards, job satisfaction and the human resource policies on employee retention. The most interesting research question in the aforementioned research paper is an association between rewards and job satisfaction on employee retention.
For this research paper, data has been collected from both qualitative and quantitative data collection technique. For example, the questions developed for the quantitative data analysis included responses in terms of rewards, places, and education. After collecting the response from the survey, statistical analysis has been conducted. The survey questionnaire was circulated online and it was not mandatory for all the participants for the response. However, the participants were allowed to gather a wide range of information related to employment and employee retention. These aforementioned factors emphasize on maximizing the rate of completion of the survey by offering incentives.
While conducting the research in 2013, the online website of the survey has received several responses with valid returns. The respondents sampled belonged to the employees of Vodafone in Ghana, Africa. As the online survey gathered thousand of responses, inclusion, and exclusion criteria were used to bring the data to the minimum. Respondents above the age 60 and self-employed participants were excluded to minimize the respondents. Moreover, monetary rewards as low as $3 to $ 400 were also excluded. The final sizes of the sample used for statistical analysis for the research were 142.
The size of the sample needs to fulfill the minimum criteria from the employees of Ghana. The data was further skimmed by creating various sub-categories of the population identified by the researcher. The main purpose of creating the subpopulations was to filter the large set of data and narrow it down. Narrowing the data set gathered through online survey helped in conducting the SPSS accurately and appropriately. In order to make the respondents more presentable, propensity score and post-stratification weighting were used by the researcher.
During 2008-2013, the online survey questionnaire was continuously available on the website. However, the paper fails to mention whether the online survey questionnaires were updated during 2008-2013. Failure to update may result in the lack of relevance of the questions with the research topic. For example, responses to the global crisis of 2008 might have influenced the employees to stay with the organization and retain their position to enable job security. Lastly, the research for this study has been conducted by implementing questions that were composed previously.
The hypothesis stated by Kwenin, Mauthe and Nzulwa (2013), in accordance with the research topic are:
H1: Reward and employee retention are not associated with Vodafone Ghana Ltd.
H2: Job satisfaction and employee retention have no effect on each other for Vodafone Ghana.
H3: The human resource policies have no effect on employee retention for Vodafone Ghana.
H4: Rewards, job satisfaction and human resources policies influences and determines employee retention in Vodafone Ghana.
Kwenin, Mauthe and Nzulwa (2013) have conducted the entire research by using a wide range of analysis in order to prove the alternative hypothesis correct. The researchers have also used previous kinds of literature as references in this topic to justify their viewpoint and opinion.
The researcher used descriptive statistics and Pearson Chi-square analytical techniques to test the formulated hypothesis. The formulated hypothesis can only be proved by using theories and models of employee retention in terms of rewards, job satisfaction, and human resource policies. Upon evaluating the results of descriptive analysis and Pearson Chi square test, it has been seen that the first three hypothesis has been rejected.
Figure 2: Chi Square Test
(Source: Kwenin, Mauthe and Nzulwa 2013)
The result of the Chi Square test states that job satisfaction, rewards, and human resource policies significantly affects the employee retention in Vodafone Ghana. All the employees of Vodafone Ghana agreed that rewards based on performance, job satisfaction and human resource policies have influenced their opinion and viewpoint of staying with the organization. However, results varied with a number of incentives the organizations offered to the employees based on their performance. Some of the employees felt the offered incentives were less compared to their job roles and responsibilities whereas others were satisfied with low incentives. This is because their preferences were the suitable and preferable human resource policies the organization offered to the employees.
The primary gap identified in this research is that the online survey questionnaire had only close-ended questions for the participants. Though close-ended survey questions help in producing better statistical analysis, it restricts the choice of the participants to voice their opinions and viewpoints on a particular topic.
Having only close-ended questions makes it difficult to produce the entire list and extended range of survey questions. This makes it difficult for the researcher to consider all the response gathered from the online survey. In addition to, the participants are not allowed to give any extra comments on the survey questions. Even if the participants are unhappy with and do not agree with the options provided, it is mandatory for them to answer from the options provided. As a result, it might be difficult for the participants to answer correctly rather than selecting a near match within the options. Only close-ended question to yes or no restricts the opportunity for the participants to answer according to their opinion thereby, minimizing the rate of variation in the answer.
Kwenin, Mauthe and Nzulwa 2013 also suggested that the analysis conducted by them in the research would have been better if another variable was included. Having more variables would have provided more opportunity for the researcher to compare and contrast. Moreover, the time span of conducting the entire research would have altered the obtained results. The period of six years for conducting the research was hectic but allowed the access to large data sets. As a result, this might help in avoiding averages of natural turnover.
Moreover, the research only included the participants from Vodafone Ghana. Only considering the employees of Vodafone Ghana allowed the researcher to consider only the organizational perspectives rather considering the global perspective. This minimized the scope of variation within the research. However, at the end of the research, the researcher has been able to prove the alternative hypothesis right. This means that rewards, job satisfaction and human resource policies of the organization, Vodafone Ghana help in employee retention. Decreased employee turnover rate has helped the organization in gaining a competitive advantage over others. After conducting the research, the research has successfully proven the alternate hypothesis.
In the second paper written by Premalatha (2016), the research emphasizes on evaluating the impact of the relationship between the employee and the managers in employee retention in IT industry.
The objective of the research is to determine the impact of the relationship between the reporting managers and the employees while retaining staffs by the organizations. While conducting the research, a qualitative analysis was used by the researcher. As a result, the researcher interviewed fifty-two participants across ten IT industries. The participants included the reporting managers, the employees of the IT sector, the HR managers and the employees of the management. The researcher used theoretical and purposeful sampling technique for the current research.
The researcher recorded each word of the interview conducted. This allowed the researcher to go through the interviews later in order to analyze the interview for results. The methods used by the researcher to analyze the recorded interviews were coding, selective, axial and open methods. The results were further categorized in order to group them in sub categories. The researcher manually evaluated the data that were collected during an interview, theoretical memos, documents and field notes during coding. The researcher also stored the information gathered from the interviews in the form of research questions and used to develop main concepts in regards to the research topic. In the case of axial coding, the researcher included another form of non-textual data. The non-textual data signified events, incidents and the perceptions of the researcher that was categorized and analyzed later towards the end.
While conducting the research, the researcher implemented grounded theory. This allowed the researcher to develop own concepts and ideas based on the gathered data. On the contrary, the previous literature as conducted followed a general literature review structure. As a result, the results were seen having a positive relationship between the reporting manager and employee turnover.
The findings of this research highlighted a number of options that supported the literature review that has been conducted previously. One of the assumptions in the research suggested that authorizing the reporting managers by implementing management styles would have a positive influence on employee retention. However, this assumption has already been proved right by other journals, as the method of improving the relationship between the employer and the employee.
The main area that is investigated in the case of qualitative data collection is the role of the researcher. This is because the emotional aspect of the researcher influences the transcripts of the interviews. It might be that the researcher might manipulate the transcripts of the interviews according to the wish for successfully completing the research. Moreover, the researcher might fail to understand the viewpoint of the interviewee. This might result in misconception during analyzing the interview. The researcher has failed to mention the number of researchers present while conducting the interview. The presence of third parties and attendees are important, as their presence help in avoiding and eradicating the potential misunderstandings.
The sample size used by the researcher for the current research is considered small. The main feature of using ground theory is that the relevant information used for the research needs to be rich in content. The researcher has failed to mention the entire content of the questions along with an average sample size of 5.3 employees from each organization. Such small sample size might be considered negligible for the entire population. In the case of qualitative data collection techniques, the findings need to be contextual and unique.
Credibility issues are quite normal in the case of qualitative data collection technique. In the case of this research, the researcher has failed to state the peer reviewed journals of any interview transcripts in order to confirm the authenticity before conducting the analysis.
Conclusion
In this literature review, it can be concluded that there are various factors that influence the decision and desire of the employees to stay with an organization. The human resource policies of the organization emphasize on developing and implementing policies that help in employee retention.
According to the research conducted by Kwenin, Mauthe and Nzulwa 2013, highlighted the factors such as rewards, job satisfaction and human resource policies and their relation to effective employee retention. After analyzing the research methodologies, it is suggested that the data collection technique could have been improved. The process of data collection could have been improved by including some qualitative questions in the online survey questionnaire. This would allow the participants to share their viewpoints and the results could also have some variations.
In accordance with both the researchers, it is suggested to develop research questions based on factors such as strategic human resource management and employee retention. This can be done effectively by investigating and analyzing the various factors that influence the decision and desire of the individual employees to stay within the organization. In order to avoid the previous challenges encountered while data collection, researchers need to include both quantitative and qualitative techniques. This will allow the participants to respond according to the Likert scale and share their viewpoints regarding the topic.
References
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