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International Journal of Multidisciplinary Consortium Volume – 1 | Issue – 2 | September 2014

[email protected]| http://ijmc.rtmonline.in | ISSN 2349-073X

P u b l i s h e d b y : M o d e r n R o h i n i E d u c a t i o n S o c i e t y | P a p e r I d : 0 4 3 0 2 9

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A STUDY ON FACTORS AFFECTING EMPLOYEE RETENTION IN RETAIL

SECTOR

by

Anshu Thakur | Assistant Professor | Acropolis Institute of Technology and Research |

Indore M.P | [email protected]

ABSTRACT

Availability of the quality employee and its retention becomes more difficult in the present

era of competitive world, because every company is more or less manufacturing or

providing same type of product but only the difference lies in its employee strength which

makes a brand big or small, a company big or small. This research tries to find out what

are those factors which affect the retention of any employee.

KEYWORDS: Retail , Factors, Employee, Retention.

INTRODUCTION

“The best companies now know, without a doubt, where productivity—real and Limitless

productivity—comes from. It comes from challenged, empowered, excited, rewarded

teams of people. It comes from engaging every single mind in the organization, making

everyone part of the action, and allowing everyone to have a voice—a role—in the success

of the enterprise. Doing so raises productivity not incrementally, but by Multiples.”

Jack Welch ,Former Chairman and CEO of General Electric

Employee retention is emerging as the most complicated and challenging workforce

management of the immediate future. Many researchers have shown that in the future,

successful organizations will be those which adapt their organizational behaviour to

the realities of the current work environment where longevity and success depend

upon innovation, creativity and flexibility. In fact, the dynamics of the work environment

will have to reflect a diverse population comprised of individuals whose motivations,

beliefs and value structures differ vastly from the past and from one another.

According to The HR Priorities Survey from ORC Worldwide an HR consulting and data

services firm, nearly 62 percent of respondents to their survey opined that talent

management will be the most pressing strategic issue they face in year. The findings of the

survey also indicated that 33 percent of talent management programs include workforce

acquisition, assessment, development, and retention as areas that will consume most of the

survey respondents' time this year 2007. Retention has emerged as the focus of much time

and attention in recent years, particularly as part of talent management programs, and so

much is known about it that the HR practitioner who tries to integrate it into a talent

program may grow confused by the huge volume of research about it. Employee retention

is more than just keeping employees on the job. It is also about sustaining employees,




Page 38

primarily by enhancing their job satisfaction. Job satisfaction, in turn, can increase

productivity and keep employees energized and motivated to give their best. Job

satisfaction can equate to employees who stick with their current employer and strive to

perform at or above expectations and standards. Employee retention is commonly

considered to mean the ability to maintain a stable workforce. It is often linked to morale

and to organizational productivity. Retention is thus the opposite of turnover, a well-

known concept.In addition the perception of having a job for life in a public sector role no

longer exists. The trend for the younger generation of workers is to shift from job to job

and this is becoming a norm of society. Companies that can recruit the best talent and

retain them will have an edge in the long run.“Today talented persons are like frogs in a

wheelbarrow, which can jump at any point of time when they sense opportunities”

ATTRITION RATE IN DIFFERENT COUNTRIES ROUND THE GLOBE

ATTRITION RATE (%)

US 42%

Australia 29%

Europe 42%

India 18%

Global Average 42%

Table : 1 Attrition Rate In Different Countries Round The Globe

ATTRITION RATES IN DIFFERENT SECTORS

Following chart shows attrition rate in different sectors in India:

Fig. 1 Attrition Rates In Different Sectors




9

RETENTION - A BIG CHALLENGE

Fundamental changes are taking place in the work force and the workplace that promise to

radically alter the way companies relate to their employees. Hiring and retaining good

employees have become the chief concerns of nearly every company in every industry.

Companies that understand what their employees want and need in the workplace and

make a strategic decision to proactively fulfill those needs will become the dominant

players in their respective markets. The fierce competition for qualified workers results

from a number of workplace trends, including:

A robust economy

Shift in how people view their careers

Changes in the unspoken "contract" between employer and employee

Corporate cocooning

A new generation of workers

Changes in social mores

Life balance

Concurrent with these trends, the emerging work force is developing very different

attitudes about their role the workplace. Today's employees place a high priority on the

following:

Family orientation

Quality of life issues

Autonomy

To hold onto your people, you have to work counter to prevailing trends causing the job

churning. Smart employers make it a strategic initiative to understand what their people

want and need - then give it to them. The study has been conducted with the following

objectives

To study the various factors affects Employee Retention among Retail sector

employees.

To study the importance of factors causing Employee Retention.

To study the benefits of Employee Retention.

To study need of all employees is same or different.




0

To find right strategy for particular factor.

To find the rank of factors of Employee Retention.

To study the relationship between Employee Retention & Productivity.

To increase awareness of the importance of employee retention.

LITERATURE REVIEW

Warner Cable (2009) any organization's best asset is its workforce. Moncarz. E. et

al.(2009)The findings reveal that Corporate Culture, Hiring and Promotions and Training

practices influence non-management employee retention. Chung.T.L. et.al.(2012) The

study suggests that perceived organizational support, role ambiguity, and emotional

exhaustion are the most influential factors for most facets of retail employees’ job

satisfaction. Sinhala.C.et al.(2012) The study explores to identify the main factors of

retention management strategies in organizations. The factor analysis of the component

‘retention management strategies’ led to the extraction of 3 factors each from both the

organizations. The factors for EEPL* were “competence & relationship oriented”,

“scholastic & futuristic oriented” and “developmental & reward oriented”; while for

MBPL*, the factor were “relationship oriented”, “competence & scholastic oriented” and

“reward oriented”. The results indicate that these factors have substantial roles to play in

making employees stay and how at middle managerial level different aspects are valued

while deciding upon the retention strategies in similar contexts (i.e. sector).T.

Stephen(2000) suggests that the retention effect is limited in terms of both its potency and

its extent. A particular finding is the varying importance of pension schemes in terms of

the retention of different staff groups. Taylor.J.L.et al.(2006)suggest that a proper cause

and effect process will produce a desired path to change.Anis.et.al (2011) attracting and

retaining key employees should be a top priority for any company worth its salt. Gberevbie

E.D. (2010) it is more profitable for organizations to put in place appropriate employee-

retention strategies such as good organization's image, staff participation in decision

making, enhanced and regular salary package, and humane treatment of employees as

strategies for organizational performance. Pascal Paillé et al (2011)show that the model

that best fits the data is the one in which both affective commitments to the dispatcher and

to the colleagues affects the intention to leave the organization through affective

commitment to the organization. Hong.C.L. et al(2008) Study results revealed that

organizational climate has a significant association with employees’ intention to leave. All

the four organizational climate Dimensions had significant negative correlations with

employees’ intention to leave. Meanwhile, both the dominance and sociability

personalities were found significantly moderating the relationship between organizational

climate and employees’ intention to leave. This study was therefore able to prove the

hypotheses proposed and provide support to the existing theories. Bhatnagar J(2007)The

results were in the expected direction and fulfilled the research aims of the current study.

In the first phase low factor loadings indicated low engagement scores at the beginning of

the career and at completion of 16 months with the




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organization. High factor loadings at intermediate stages of employment were indicative of

high engagement levels, but the interview data reflected that this may mean high loyalty,

but only for a limited time. In the second phase factor loadings indicated three distinct

factors of organizational culture, career planning along with incentives and organizational

support. The first two were indicative of high attrition.Bairi.J.et al (2011)The paper

provides evidence of various strategic, technological, and local issues influencing the

success of retention and its benefit to KM programs in global IT service companies.

Organizations adapt attrition control measures for long-term benefit. These measures help

in effective KM, serving the client at lower cost with consistent service levels. Govaerts N

et al (2011)The results show that when organizations want to retain their employees it is

important to pay attention to the learning of employees. Letting people do more and learn

more of what they are good at will encourage them to stay with the organization. Results

concerning the selected employee variables show that only age has a significant

relationship with retention. Regarding the intention to stay, there exists a positive

relationship between age and retention. Strothmann M et al(2011)Respondents reported

that initiatives related to professional development are the most widely available type.

Respondents expressed satisfaction with most of the initiatives available to them and

general agreement with positive workplace environment statements; however,

administrators were substantially more satisfied than employees in other positions. Few

indicated that their libraries had adopted a formal retention program, implying that the

reported retention strategies are generally seen as serving another purpose. Varkkey.B.et

al(2011) The paper argues that, post recession the companies whose decisions were pro-

labor retention (hoarding) oriented were able to come back in business stronger and

perform better.

Srivastava P et al (2008) by reflecting recruitment and culture need fit, an environment is

created at the workplace where employees feel more passionate about their work and

exhibit the behaviors that organizations need to drive better results.

METHODOLOGY

The research will be conducted on various factors which affect Employee Retention

among employees working in Retail Sector.

A sample of 50 employees in Retail sector like Retail stores, Retail Banking. I use random

Sampling for collection of data.

Structures questionnaire has be used as a tool for Primary data collection in this study

from employees of different public sector companies. In questionnaire, nearly 12-15

determinants was there and with the use of rating scale people will give their opinion.

Secondary data has been obtained from published journals, company broachers, books,

internet, etc.




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DATA ANALYSIS

The data will be analyzed using percentage based analysis with the help of bar graphs and

Pie Charts and through factor analysis method.

Which of the factor influence an employee to stay or leave the organization?

0% 32% 52% 4% 12% 0% 0%

1. Which of the factor influence an employee to stay or leave the

organization?

Fig. 2 factor influence an employee to stay or leave the organization

Interpretation: according to questionnaire filled by employees of retail sector they mainly

focuses on GROWTH OPPORTUNITIES to retain in organization than any other factor,

but here is also another factor which closely compete this factor is ENVIRONMENT.

Under motivation fit, where does the reason lie for an employee to leave the

organization?

28%

4%24%

28%

12%

4%

2. Under motivation fit, where does the reason lie for an employee to leave

the organization?a) Quality of relationship with supervisor or manager

b) Amount of meaningful work

c) Clear understanding of work objectives

d) Level of challenges in work

Fig.3 Reason lie for an employee to leave the organization




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Interpretation: under motivation fit there are three factors each simultaneously compete

each other are a) Quality of relationship with supervisor or manager, c) Clear

understanding of work objectives, d) Level of challenges in work.

Under Home life, where does the reason lie for an employee to leave the

organization?

60%

40%

0

0 Under Home life, where does the reason lie for an employee to leave the

organization?

a) Ability to balance work and home life

b) Desirability of employee’s geographic location.

Fig. 4 Employee Retention is balance between personal and professional

Interpretation: Under Home life fit, factor which affects Employee Retention is balance

between personal and professional life.

Under company direction, where does the reason lie for an employee to leave the

organization?

0% 10% 20% 30% 40%

a) Quality of mission and …b) Ability of organization’s …

c) In effective policiesd) In effective administration

36%

8%32%

24%

Column2

Fig. 5 Employee Retention is Quality of mission and strategy from senior management




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Interpretation: Under Company Direction factor which affects the Employee Retention is

Quality of mission and strategy from senior management.

Under Co-operation and trust, where does the reason lie for an employee to leave the

organization?

0%

10%

20%

30%

40%

50%

60%

Level of co-operation and trust with co workers

b) Level of co-operation and trust with supervisorc) Level of co-operation and trust with sub-ordinatesd) Level of trust in workplace

60%

20%

4%

16%

5. Under Co-operation and trust, where does the reason lie for an employee to leave

the organization?

Fig. 6 Co-operation and trust with co workers than any other factor

Interpretation: Under Co-operation and trust fit factor which affects Employee Retention

is Level of co-operation and trust with co workers than any other factor.

Effectiveness Of Various Strategies Which Is Currently Practiced

42

34

24

38

26

34

46

50

26

32

30

46

12

12

32

20

30

12

0

4

10

4

12

8

0

0

8

6

2

0

0 10 20 30 40 50 60

Profit sharing

Open culture

Exit interview

Survey of retained …

Job enrichment

Survey feedback

Highly ineffective

Ineffective

Neutral

Effective

Highly effective

Fig. 7 Effectiveness of various strategies




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Interpretation: Major result on Effectiveness of various strategies which is currently

practiced

Profit sharing - Effective

Open culture - Effective

Exit interview - Neutral

Survey of retained employees – Highly Effective

Job enrichment –Effective & Neutral

Survey feedback- Effective

Building Brand Recognition Is A Tool Of Retention.

42%

38%

14%

6%

0%

Building brand recognition is a tool of retention.

a)Strongly agree b) Agree c) Neutral d) Disagree e)Strongly disagree

Fig. 8 Building Brand Recognition

Interpretation: According to survey unanimously accepted by Employees that Brand

recognition plays vital role in Employee Retention.

What according to you is retention in your organization?

I. Retaining employees

Options a)Strongly agree b) Agree c) Neutral d) Disagree e)Strongly

disagree Percentage 38% 50% 10% 2% 0%




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II. Retaining talent

Options a)Strongly agree b) Agree c) Neutral d) Disagree e)Strongly

disagree Percentage 36% 50% 14% 0% 0%

38

50

10

2 0

36

50

14

0 00

10

20

30

40

50

60

a)Strongly agree

b) Agree c) Neutral d) Disagree e)Strongly disagree

What according to you is retention in your organization?

A) Retaining employees

B) Retaining talent

Fig. 9 Retention in your Organization

Interpretation: This answer proves that Top management and Employees believe that

Indian organizations are focusing on both retaining employees as well as talent.

H01 There is no significant difference in the mean value of Employee Retention in the

organisation.

H11 There is a significant difference in the mean value of Employee Retention in the

organisation.

One-Sample Test

Test Value = 0

t df Sig. (2-

tailed)

Mean

Difference

95% Confidence Interval of

the Difference

Lower Upper

VAr 16.625 49 .000 1.52000 1.3363 1.7037

Table 2 : significant difference




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Interpretation: Null hypothesis has been rejected and alternate hypothesis has been

accepted hence it can be said that employees retention has important role in the

organisation(p=.000<.050)

H02 There is no significant difference in the mean value of identification of retention

faction by

HR during interview.

H22 There is a significant difference in the mean value of identification of retention factor

by

HR during interview.

One-Sample Test

Test Value = 0

t df Sig. (2-

tailed)

Mean

Difference

95% Confidence Interval of

the Difference

Lower Upper

VAr 18.198 49 .000 1.68000 1.4945 1.8655

Table 3 : significant difference

Interpretation: Null hypothesis has been rejected and alternate hypothesis has been

accepted , hence can be said that there is a significant difference in the mean value of

identification of retention factor by HR during interview(p=.000<.050)

RELIABILITY STATISTICS

Cronbach's Alpha N of Items

.705 11

Table 4 : Reliability Statistics

As we can see Reliability is .6<.705 so ,reliability is more than standard limit.




Page 48

FACTOR ANALYSIS

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .711

Bartlett's Test of Sphericity

Approx. Chi-Square 67.699

Df 55

Sig. .317

Table 5 : KMO and Bartlett's Test

Component

1 2 3 4 5 6

Profit sharing .546 .237 -.126 -.180 -.460 .099

open culture .172 -.380 .716 .199 -.083 .200

exit interview .047 .337 -.568 .572 -.172 -.008

survey of retained

employee .080 -.365 -.323 .179 .480 .579

job enrichment .620 .039 -.082 .122 .506 -.278

survey feedback -.291 .620 -.054 .086 .178 .483

brand recognition .672 .354 .130 .129 -.369 .195

retaining employee .171 .473 .385 .408 .425 -.338

retaining talent .498 -.061 -.337 -.580 .265 -.098

employee retention is

important .506 -.440 .042 .271 -.003 .253

factor in interview .076 .520 .350 -.426 .240 .333

Table 6 : Component Matrixa

Extraction Method: Principal Component Analysis.

Result : 6 components extracted are:

1. Profit sharing

2. Retaining talent, retaining employee




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3. factor in interview & exit interview

4. survey of retained employee & brand recognition

5. survey feedback

6. Open culture & job enrichment.

FINDINGS FROM THE STUDY

Survey is conducted on the retail sector employees and reveals very crucial facts and

figures are:-

It’s really shocking by analyzing factor which affects most to Employees is not

Monetary Benefits, it’s proven that it’s a myth that people can be Retain in

organization by money.

Performance appraisal without any bias enhances the chances of growth, Equality

given to each employee to prove their talent increases Employee retention.

Welfare strategies for employees satisfy employees and make them happy and

increase employee engagement.

People are still confused with Retaining employee and Retaining talent concept and

knowledge of HR terminologies and beliefs and its need to create awareness.

Brand name affects employee retention.

Level of trust and coordination, relationship among employees majorly affects

employee retention.

Level of challenges of work and stress is also reason of employees attrition.

SUGGESTIONS & RECOMMENDATIONS

According to survey employees believe that it is possible to find out Retention Factor

of any employee at the time of interview if a HR feels that Interviewees demand is out

of competency of company so it’s better to reject that employee or to be prepared for

attrition of that employee.

Participation of employees in management, open door policies, employee welfare

programmes, training and development programmes should be conducted.

Support of staff and management in work place plays a kind of relaxation for

employee and they can work with comfort and productivity will increase and

absenteeism decrease.

Importance and respect should be given to employees.




Page 50

Proper guidance and clarification with the goals will help to reduce stress in

organization and employee will proceed in right direction and after achievements of

goal it helps to increase employee’s morale and organization commitments.

CONCLUSION

It is HR's job, though not HR's job alone, effective human resource management practices

at both the strategic and day-to-day levels. That is, to be effective, human resource

management practices must be grounded in two ways.

First, they must reflect companywide commitments as to how it will manage and relate to

its employees.

Secondly, HR must implement these commitments so that the ideals of the enterprise and

deeds of its agents are congruent.

HR plays a key role in the development and execution of the Business Strategy of an

Organization. It should evolve from a transactional support role to partnering in the

organization's business strategy.

REFRENCES

1. How Time Warner Cable improves employee engagement, “Building relationships for

retention”: Strategic Direction, Vol. 25 Iss: 7(2009),

2. Elisa Moncarz, Jinlin Zhao, Christine Kay, (2009) "An exploratory study of US

lodging properties' organizational practices on employee turnover and retention",

International Journal of Contemporary Hospitality Management, Vol. 21 Iss: 4,

pp.437 – 458.

3. Te-Lin Chung, Brian Rutherford, Jungkun Park, (2012) "Understanding multifaceted

job satisfaction of retail employees", International Journal of Retail & Distribution

Management, Vol. 40 Iss: 9, pp.699 - 716,

4. Chandranshu Sinhala and Ruchi Sinha(2012) , “Factors Affecting Employee

Retention: A Comparative Analysis of two Organizations from Heavy Engineering”.

European Journal of Business and Management Vol 4, No.3, pp 145-162.

5. Stephen Taylor, (2000) "Occupational pensions and employee retention: Debate and

evidence", Employee Relations, Vol. 22 Iss: 3, pp.246 – 259.

6. Lloyd J. Taylor III, Becki Murphy, William Price, (2006) "Goldratt's thinking process

applied to employee retention", Business Process Management Journal, Vol. 12 Iss: 5,

pp.646 - 670”.

7. Anis, Kashif-ur-Rehman, Ijaz-ur-Rehman, Khan and Humayoun,(2011) “Putting

people first: Employee retention and organizational performance”,




Page 51

Source: Development and Learning in Organization, Volume: 25 Issue: 2011 An

International Journal. Vol. 25 (1), pp. 25-27.

8. Daniel Eseme Gberevbie, (2010) "Organizational retention strategies and employee

performance of Zenith Bank in Nigeria", African Journal of Economic and

Management Studies, Vol. 1 Iss: 1, pp.61 – 74.

9. Pascal Paillé, Pierre-Sébastien Fournier, Sophie Lamontagne, (2011) "Relationships

between commitments to the organization, the superior and the colleagues, and the

intention to leave among truckers", International Journal of Organizational Analysis,

Vol. 19 Iss: 2, pp.92 – 108.

10. Liew Chai Hong and Sharan Kaur, “A Relationship between Organizational Climate,

Employee Personality and Intention to Leave(2008), International Review of Business

Research Paper 4, Vol. 3 pp.1-10.

11. Jyotsna Bhatnagar, (2007) "Talent management strategy of employee engagement in

Indian ITES employees: key to retention", Employee Relations, Vol. 29 Iss: 6, pp.640

– 663.

12. Jayachandra Bairi, B. Murali Manohar, Goutam Kumar Kundu, (2011) "Knowledge

retention in the IT service industry", Journal of Systems and Information Technology,

Vol. 13 Iss: 1, pp.43 – 65.

13. Natalie Govaerts, Eva Kyndt, Filip Dochy, Herman Baert, (2011) "Influence of

learning and working climate on the retention of talented employees", Journal of

Workplace Learning, Vol. 23 Iss: 1, pp.35 – 55.

14. Molly Strothmann, Lila Angie Ohler, (2011) "Retaining academic librarians: by

chance or by design?", Library Management, Vol. 32 Iss: 3, pp.191 – 208.

15. Biju Varkkey, Randhir Kumar, (2013) "Keeping the sparkle on: Workforce retention

in Indian diamond cutting and polishing firms during economic recession",

International Journal of Organizational Analysis, Vol. 21 Iss: 3, pp.454 – 470.

16. Pallavi Srivastava, Jyotsna Bhatnagar, (2008) "Talent acquisition due diligence

leading to high employee engagement: case of Motorola India MDB", Industrial and

Commercial Training, Vol. 40 Iss: 5, pp.253 – 260.

17. Cathy Hart, Grazyna B. Stachow, Andrew M. Farrell, Gary Reed, (2007) "Employer

perceptions of skills gaps in retail: issues and implications for UK retailers",

International Journal of Retail & Distribution Management, Vol. 35 Iss: 4, pp.271 -

288




Page 52

Annexure &Questionnaires

QUESTIONNAIRE

The questionnaire is meant for Major Research Project on “A study on factors which

affects Employee Retention in Retail Sector”. The information provided by you would

be kept strictly confidential & will be used solely for academic purpose.

NAME:

ORGANISATION:

DESIGNATION:

AGE:

NOTE: Please select your answers by ( ) symbol.

1. Which of the factor influence an employee to stay or leave the organization?

a) Monetary Benefits

b) Environment

c) Growth Opportunities

d) Relationship in Organization

e) Nature of work

f) Psychology Factor

g) Personal Factors

h) External Factors

2. Under motivation fit, where does the reason lie for an employee to leave the

organization?

a) Quality of relationship with supervisor or manager

b) Amount of meaningful work

c) Clear understanding of work objectives

d) Level of challenges in work

e) Autonomy – Freedom to direct work

f) How well individual goals and style matches with the organization.




Page 53

3. Under Home life, where does the reason lie for an employee to leave the

organization?

a) Ability to balance work and home life

b) Desirability of employee’s geographic location.

4. Under company direction, where does the reason lie for an employee to leave the

organization?

a) Quality of mission and strategy from Senior management

b) Ability of organization’s selection process

c) In effective policies

d) In effective administration

5. Under Co-operation and trust, where does the reason lie for an employee to leave the

organization?

a) Level of co-operation and trust with co workers

b) Level of co-operation and trust with supervisor

c) Level of co-operation and trust with sub-ordinates

d) Level of trust in workplace

Effectiveness of various strategies which is currently practiced

S.No Strategies Highly

effective

Effective Neutral Ineffective Highly

ineffective 6. Profit sharing

7. Open culture

8. Exit interview

9. Survey of retained

employees

10. Job enrichment

11. Survey feedback

12. Building brand recognition is a tool of retention.

a) Strongly agree b) Agree c) Neutral d) Disagree e) Strongly disagree

13. What according to you is retention in your organization?

I. Retaining employees


II. Retaining talent





Page 54

14. Employee Retention plays important role in an Organization?


15. Does the HR can identify retention factor of interviewee at the time of retention?


EXCEL SHEET ENTRIES ACCORDING TO RESPONSE BY PEOPLE

responde

nt no.

Profit

sharing

open

culture

exit

interview

survey of

retained

employee

job

enrichment

survey

feedback

brand

recognition

retaining

employee

retaining

talent

employee

retention is

important

factor in

interview

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