CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Employee retention is one of the major problems facing companies facing the competitive environment. The big business challenge is to align your goals with the growing demand for a balanced organizational climate that meets basic human needs and where work is synonymous with personal fulfillment and fulfillment (Teixeira & França, 2013). In this sense, managers are increasingly convinced that attracting, managing and retaining good employees goes far beyond paying the best salaries in the market. It is imperative to understand the factors that lead people to stay in a job, since all business action requires financial and human resources, and the latter act better when motivated. Thus, implementing an effective employee retention strategy helps the company to ensure better performance by properly utilizing employee capital.Human resources are the most important elements in the competitive process in which organizations are. Establishing lasting advantages in the modern world is only possible when these advantages can’t be imitated. Achieving this purpose depends on people, the ability to create, innovate, diversify and offer unique experience to consumers. Das and Baruah (2013) and Ampomah and Cudjor (2015) corroborate that the health and long-term success of any organization depends on employee retention. Therefore, it is the prime task of management to encourage employees to stay in business for a long time. Aguenza and Som (2012) emphasize that retention and employee involvements are fundamental to the organization. This is because they are the driving force for achieving planned development and achieving organizational goals and objectives. According to Samuel and Chipunza (2009), turnover occurs when employees leave their jobs and it becomes necessary to replace them, which entails costs for organizations. For this reason, Khan and Aleem (2014) argue that retaining employees, especially the most talented, has become the major challenge for managers.
Long-term health and success of any organization depends upon the retention of key employees. To a great extent customer satisfaction, organizational performance in terms of increased sales, satisfied colleagues and reporting staff, effective succession planning etc., is dependent upon the ability to retain the best employees in any organization. Encouraging employees to remain in the organization for a long period of time can be termed as employee retention. It is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Maertz & Campion (1998) stated “relatively less turnover research has focused specifically on how an employee decides to remain with an organization and what determines this attachment…retention processes should be studied along with quitting processes”. Zineldin, (2000) has viewed retention as “an obligation to continue to do business or exchange with a particular company on an ongoing basis”. Denton (2000 has clearly stated that employees who are happy and satisfied with their jobs are more dedicated towards their work and always put their effort to improve their organizational customer’s satisfaction. Stauss et al., (2001)has defined retention as “customer liking, identification, commitment, trust, readiness to recommend, and repurchase intentions, with the first four being emotional-cognitive retention constructs, and the last two being behavioral intentions” . Panoch, (2001)forwarded the view that organizations today take great care in retaining its valuable employees and good employees as they are increasingly becoming more difficult to find . Walker (2001) [6] was of the view that managing and retaining promising employees’ is an important fundamental mean of achieving competitive advantage among the organizations. Cutler (2001) was of the view that one of the most important demands on management today in any organization is keeping the most vital and dynamic human resources motivated and dedicated. It is not important to see who the organization hires but what counts is that who are kept in the firm. Steel, Griffeth, &Hom (2002) added to this view that “the fact is often overlooked, but the reasons people stay are not always the same as the reasons people leave”. Researchers such as Amadasu (2003); Taplin et al.(2003); Gberevbie (2008)have found that if appropriate employee retention strategies are adopted and implemented by organizations employees will surely remain and work for the successful achievement of organizational goals . In the view of Acton et al., (2003), the Human Resource Department plays an active role in retaining its employees. It make policies for employee betterment such that employee would be satisfied with the organization and stay with the firm for longer time. This shows that it is not just retention of employees but also retention of valued skills. This shows that it is not just retention of employees but also retention of valued skills. Researchers such as Cascio (2003)Heneman and Judge(2003)Gberevbie (2008) have agreed that an organization’s inability to formulate and implement strategies capable of recruiting competent employees and retaining them to achieve organizational goals is one of the main challenge facing organizations in the area of performance. Workforce Planning for Wisconsin State Government (2005) has defined employee retention as “….a systematic effort to create and foster an environment that encourages employees to remain employed by having policies and practices in place that address their diverse needs.” According to Olowu and Adamolekun (2005) [16], it is becoming more essential to secure and manage competent human resource as the most valuable resource of any organization, because of the need for effective and efficient delivery of goods and services by organizations, whether in public or private sector. Therefore, for an organization to realize its goals, appropriate strategies for employee recruitment and retention are sine-qua-non for enhanced performance. Researcher such as Kaliprasad (2006) has confirmed that despite the fact that a company may try to bring all these factors into play to enhance employee retention, an employee can still choose to leave the workplace because of, for example, bad management. Kaliprasad (2006) pointed out that an organizations ability to retain its employees completely depends upon its ability to manage them. He found out four interlinked processes that can be utilized for an effective human resource management system: the motivational process; the interaction process; the visioning process; and the learning process. Baker (2006) gave stress on the fact that hiring new employees are far difficult as well as costlier than to keep the current employees in the organization. Therefore this research centers on measuring and management of employee retention.
1.2 STATEMENT OF THE PROBLEM
Organizations are facing the challenge of Managing and measuring employee retention effectively due to increased competition in the market. The Competitive environment of business has changed not only in the business world but also in the mindset of the individuals that work in those organizations. Employee Retention becomes one of the biggest issues for industries in Nigeria because employees are the one who generates profits and are considered as the capital or asset of the organization. Talented employees are valuable and often are irreplaceable resources of an organization as no organization thrives without retaining its talented employees. Hence, the retention of the employees is an important tool in keeping the organization on track.Employees are ready to switch over when the current position is not meeting employee’s needs and an opportunity to join another organization is available. As a result of these employers lose money, not only does employee turnover cost a firm money, but it also cost them morale; remaining employees can get frustrated by constant inflow and outflow of co-workers.
In this context, organizations need to make strategies to retain the most valuable employees for the longer period of time [Biju. (2015)]. Only employees that are creative, loyal, talented and experienced can make business successful and can tackle the tough situation of the business environment. Therefore this research centers on measuring and management of employee retention.
1.3 OBJECTIVES OF THE STUDY
The general objective of this work therefore is the Measuring and management of employee retention.the specific objectives of the study are:
1) Identify the roles of management regarding employee retention
2) Determine relationship between rewards and Job satisfaction
3) Examine the impact of rewards on employee retention
4) To Examine the Determinants of employee retention
1.4 RESEARCH QUESTIONS
1) What are the roles of management regarding employee retention?
2) What is relationship between rewards and Job satisfaction?
3) What is the impact of rewards on employee retention?
4) What are the Determinants of employee retention?
1.5 RESEARCH HYPOTHESES
Hypothesis 1
Ho: Rewards has no significant impact on employee retention
H1: Rewards has a significant impact on employee retention
Hypothesis 2
HO: There is no significant relationship between job satisfaction and employee retention
H1: There is a significant relationship between job satisfaction and employee retention
1.6 SIGNIFICANCE OF THE STUDY
The study would have contribution to enlighten the society on measuring and management of employee retention. It would also prepare ground for interested researcher who might wish to conduct further research in related areas and could contribute to the existing literature.
1.7 SCOPE AND LIMITATION OF THE STUDY
The study is restricted to the Measuring and management of employee retention
1.8LIMITATION OF THE STUDY
Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)
Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work
1.9DEFINITION OF TERMS
Employee Retention: Refers to the ability of an organization to retain its employees. Employee retention can be represented by a simple statistic. However, many consider employee retention as relating to the efforts by which employers attempt to retain the employees in their workforce.
Job Satisfaction: Is defined as the level of contentment employees feel with their job. This goes beyond their daily duties to cover satisfaction with team members/managers, satisfaction with organizational policies, and the impact of their job on employees' personal lives.
Reward: Something that is given in return for good or evil done or received or that is offered or given for some service or attainment the police offered a reward for his capture. A stimulus (such as food) that is administered to an organism and serves to reinforce a desired response.
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