Employee retention at the age of uncertainty is one of the extremely critical issues that the leader of the organisations faces as a consequence of limited skills, high employee turnover and financial growth. It is vital for a company through its employee process, attracting as well as retaining the quality employees in the company. It is essential for the managers to plan strategies so that the company can retain the skilled employees in service. Retaining talented staffs leads to retention of loyal customers. This also resulted in avoiding the cost of staff replacement. In this age of uncertainty, the managers need to steer the organisations in this current competitive world. They will certainly handle such challenge only if they consider the employees as the company’s assets and care to maintain a good working culture. This will provide a competitive advantage by assuring permanency of the skilled employees’ performances. This paper discusses the relationship between the leadership style and staff retention in an organisation at the age of uncertainty.
The concept of employee retention is quite recent as it emerged in 1970s. Prior to this period, most of the employees used to enter the organisation and worked for the same company for a good long time, sometimes whole working life. in recent times, job mobility and voluntary service changes started to increase, the worker have found themselves in a problem of employee turnover and employee rotation.
Retention is an initiative by the company that engages skilled employees for a long time. The chief purpose of employee retention is to minimize the number of potent employees from parting with the company because this have adverse effect on the service delivery as well as productivity (Asrar-ul-Haq and Kuchinke 2016). Retention also allows the senior managers to effectively hold critical skills as well as high performing employees. They identify and retain the committed workers for long because this is mutually beneficial for both the employees and the company.
Management is quite different from leadership. it is about developing, planning and finally controlling the resources of the organisation whereas a leader aligns people for the desired outcomes for the organisational vision. Leadership is a process of influencing employees for working towards objectives. It is a human factor the connects individuals together and by motivation transforms the team’s potentials into reality. The leaders maximize the team work for the organisation’s benefit. This influencing factor of a leader is not executing power over the subordinates for achieving the goals but it is the personal traits of the leader that manipulate the employees’ behaviour as well as actions. The successful leaders not only influence the subordinates with words but also with calculated actions.
The organisational commitment, culture, staff motivation gets influenced by the leaders and managers. These have direct connection with the decision of the employees whether they will leave the organisation or stay. This analysis seeks to explore the empirical studies made on the contribution of leadership on the employee retention and turnover.
The famous theory of Douglas McGregor the differentiates between theory X and Y defines the two extreme styles of leadership and its effect on the employee retention in an organisation. In the behavioural theory, he explains have two distinct varieties those are task oriented management style and relationship oriented style of management. In this theory he has observed that the leadership practice articulates deep assumptions about human nature. There are basically two theories of human nature.
Theory X states that most of the human beings like to be guided by a leader as they lack ambition and dislike changes. The corresponding leadership approach therefore emphasises entire control. Hence employee motivation is all about pain and fear. Gilley et al (2015) oppose theory X’s negative perspective of human beings and its autocratic approach for enforcing organisation’s standards. The theory Y directly opposes the concept of theory X. it sees the human beings as active shaper of themselves as well as their environment. Instead of being unambitious, they assume responsibility that corresponds with the relationship oriented style of management. Barkhuizen et al (2014) assume that adoption of theory Y helps in employee retention in an organisation and contributes in the company’s growth.
In his book, David McClelland identified the motivators by which a man moves forward. These are a need for achievement, affiliation and power. People usually have characteristics that depend on one of these dominating motivator. The Achievement Theory is also known as Learned Needs Theory because the researchers found that these motivators are learnt irrespective of age, gender or culture. These motivators always remain within a human being but the dominant one is built by the life experience and his culture (MANDHANYA 2015). According to the scholars, the employee who is driven by the needs for achievement, sets and achieves challenging goals, takes calculated risks thus progresses alone. The people who are driven by the needs for affiliation, usually prefer working in a group and choose collaboration over competition. The workers with needs for power as dominant motivator, prefer competition and control others. These traits in human being are to be understood by the managers so that they can manage the employees accordingly thus their task to retain employees becomes easier.
This theory assumes that the leadership is based on some definable yet learnable behaviour. This theory does not seek default capabilities but focuses on the methods that the leaders can actually adopt. The leadership traits are not inherent but learnt (Westphal and Zajac 2013). This model identifies two leadership behaviour which are task oriented and relationship oriented among which, the latter is more preferred at the age of uncertainty.
This paper is grounded on the literature review and adopts exploratory strategy to establish the dominant views on the influence of leadership on employee retention at the age of uncertainty. It analyses the empirical studies to find how the leadership styles influence the employees’ decision to stay of leave an organisation.
Numerous studies aimed to describe the diverse styles of leadership along with the level to which the style of the leaders can mark the success of team even an organisation which are being led by the leaders. In addition, these studies aimed to describe the relationships between the leadership styles as well as the various aspects of the administrative behaviours of the employees.
Bezrukova, Caldwell and Burger (2016) define leadership style to be a way in which the tasks of leadership can be executed along with the means that the managers choose to behave to their employees. Numerous theories on the leadership introduce various styles of the leadership. This paper emphases on the behavioural studies of the styles. To Ou et al (2017) leadership style is behaviourally concerned with attitude to comprehend the notion of leadership. The assistants, usually find their leaders’ behaviour to be their leadership style. From this point of view, it can be stated that the behaviour approach as well as style method can be used interchangeably. The style emphases on the behaviours of the leaders as well as explains their method of combining task with relationship behaviours in order to influence their subordinates to reach their organisational target. Several studies focused to two styles of leadership. These are the task-oriented and the relationship-oriented leadership styles (Shapiro et al 2016).
The chief concern of the task oriented leaders is to achieve a definite target of the organisation. Atomsa and Raju (2014) argued that the leaders of a successful company always encourage the employees for achieving their individual as well as company’s target by making them realise their roles, establishment of targets along with the criteria of evaluation. They do this by specifying the direction, instruction for achieving the goals and setting a time schedule. These researchers believe that these leaders apply a specific on way method of communication to link with their subordinates. To them, the leaders have specific activities like clarifying the responsibilities, defining objectives, measurement and control of performance and planning for short period. This concept, defines how the task oriented behaviours connect with the motivation of the employees to retain in an organisation. Specifying the direction and defining the roles may be motivators to some employees but also demotivate some.
The chief concern of the relationship-oriented leadership is to build and develop the interpersonal relationships. According to Kruzich, Mienko and Courtney (2014), unlike the task oriented leaders, this relationship oriented leaders favour two-way method of communication with their subordinates. The idea is to provide emotional and social support to the employees. These leaders try to keep a comfortable working culture thus develop the careers. The most important traits of the relationship oriented leaders are categorised in three types which are supporting, developing and recognising. Despite these facts, the success of leadership largely depends on the characteristics of the employees.
As mentioned before, employee retention at the age of uncertainty is one of the most discussed issue in the area of HR management. According to Peltokorpi, Allen and Froese (2015), the employee turnover is the rotation of employees around available job position. This rotation can result in transmission between the organisations, change in job position as well as occupation and shift between states regarding employment as well as unemployment.
The research explores different reasons behind the employees’ movement form one organisation to the other. According to Tillman (2013), there are influence of job stress as well as range of stressors, low level of commitments as well as job dissatisfaction which motivate an employee to leave his company. The leadership style of an organisation can also be a stress factor for the employees because a manger is the first refection of the company in the eyes of the workers. He is responsible for maintaining and representing the working culture of the organisation.
The authors like McGinnis Johnson and Ng (2016) found some economic reasons that manipulates the employees to leave an organisation. On the other hand, Nolan (2015) and Tillman (2013) believe that there must be a strong link between the level of job satisfaction and rate of unemployment. To them, job stress results in the employee turnover. Ambiguity in responsibilities is a cause of uncertainty that often leads to stress and finally employee turnover. Bezrukova et al (2016) holds misunderstanding associated with workplace expectation can play a vital role in turnover. The expectation about the workplace often contrasts the methods with which these expectations are met result in ambiguity therefore, the organisations fail to retain their employees. The employee turnover gets accelerated if these responsibilities are not implicitly defined.
Quantitative approach for managing the human resources is an important factor that effects in the disenchantment of the employees and eventually leads to turnover. Hence, the authors like Terera and Ngirande (2014) believe that the managers must avoid using the quantitative approach for managing the subordinates. The quantitative approach is usually applied by the task oriented leaders. The employee turnover is also increased by the cost-oriented approach towards employment (Wang, Yu and Ji 2013). This approach prevents prospect of enhancement of the company’s competitive position in the market.
According to Campione (2014) there is a close relation between employee performance, salary and turnover. He concludes that if the skilled and talented employees are no rewarded sufficiently, they tend to leave the organisation. Beside these, toxic working culture, lack of competitive rewarding and weak employment practices can be effective in employee turnover.
A wide range of leadership practices as well as policies are found to reduce employee turnover that includes open communication, trust building, job enrichment, implanting reward methods, promoting fairness and supporting family life.
The most important policies of management are to build a healthy working atmosphere which will ingratiate the organisations to their employees. This includes manipulating the decision of the employees to commit and continue with their organisations in spite of having better job opportunities outside their organisations. Aruna and Anitha (2015), argues that the employees move out chiefly their managers not their companies. According to Vaiman, Haslberger and Vance (2015) organisations now a day do not leave the responsibilities of employee retention in the hands of the HR Departments. All the responsibilities and accountabilities for retaining talented employees are endowed into the responsibilities of the leaders. Leaders apply their skills in constructing a culture of employee retention. It must be a culture that motivates the employees such a way that inspires the workers to stay. This can be the best defence by an organisation against any unexpected turnover. The leaders are the secret defence that helps in observance the valued talents longer. A cooperative communication is considered to be a core leadership competency as well as responsibility (Bezrukova, Caldwell and Burger 2016).
Leaders must accept a style that can establish as well as confirm the leadership authority though appearing competent as well as trustworthy. Actual leaders guide the members in such a way that permits them for contributing to the attainment of team’s overall goal. Henry et al (2015) argue that the employees prefer to remain in an organisation when they belief that the managers have interests as well as concerns for them. In this case the leader is responsible to make them know what the company expects of them. They need to be well converse with their roles that fit their capabilities and receive positive feedbacks and recognitions a regularly. The quality of rapport the employees have with their immediate managers extends their retention in the organisation.
Author like Kruzich, Mienko and Courtney (2014) affirm that inept leadership effects in reduced employee performance, lower job commitments, high stress, lower job satisfaction and finally turnover. Ou et al (2017) establish that the organisational culture along with leadership are chief reasons of staff turnover in every industry. They also contend that the transformational leadership that is equivalent to the relationship-oriented leadership style is a major factor in decreasing as well as mitigating the turnover intentions among the employees. The leadership style that records lack of participation specifically in the company’s decision making along with inadequate communication with the subordinates are some of the matters that cause dissatisfaction of the workers. Therefore, it is evident in this literature that the leadership traits are crucial in employee retention at the age of uncertainty. Organisations needs to take additional precautions when hiring their managers. In tallying to their professional capability, the managers need to be tested thoroughly for their preferred leadership style.
Conclusion:
Therefore, it can be concluded that according to the researchers the leadership tiles of an organisation largely influence the retention of their staff. All the literature that are here reviewed report an inverse connection between the leadership traits and employee turnover. Desire to leave a stressed workplace is found to be the most preferred process that affect a company’s human resources. With unfavourable leadership style, economy and unhealthy work culture increases the number of employees leaving an organisation whereas favourable culture decreases this threat. The right traits therefore, ensure the organisations to retain their treasured staff.
References:
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Bezrukova, K., Caldwell, D. and Burger, J.M., 2016. A multilevel perspective on faultlines: Differentiating the effects between group-and organisational-level faultlines. Journal of Applied Psychology, 101(1), p.86.
Campione, W.A., 2014. The Influence of Supervisor Race, Gender, Age, and Cohort on Millennials’ Job Satisfaction. The Journal of Business Diversity, 14(1), p.18.
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