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CHAPTER 2

REVIEW OF LITERATURE

2.1 INTRODUCTION

Employee retention is the biggest challenge that HRM is facing

today. Retention and attrition are the buzz words in the IT industry at Global

level in general and in India in particular. Unlike other industries, the IT

Industry employs high skilled workers also known as ‘knowledge workers’.

Knowledge workers are assets of the company because knowledge is the

source of profit and sustainable competitive advantage. Hence, retaining

these knowledge workers is vital for companies in today’s fast changing

environment. Retention of existing software development employees is

important and is the focus of this research.

The review of literature indicates the timeline developments in the

field of recognition and retention and also depicts the earlier efforts made in

an attempt to investigate the practices of employee retention. This chapter

thus reviews the scholarly evidence and develops a theoretical retention

framework for this study. The important earlier research studies in the field of

recognition and retention in general and IT sector in specific have been

examined and substantiated as below.

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2.2 LITERATURE REVIEW

Deisi Patriota (2000) indicated that with the intention to investigate

the role of HR practices and the Perceived Organization Support (POS) in the

process of key employee retention, the study developed a model that was

empirically explored through the case studies .Interestingly, pay and the

relationship between R&D managers and employees indicated to be of also

crucial relevance in the process of retaining key employees. Furthermore,

there are indications that the management style signaled to be a facilitator

element for the efficiency of such practices in generating job satisfaction for

retaining employees. However, the surfaced data from the research study

indicates that employees are affectively committed to their managers and to

their work rather than to the organization as a whole.

Hinkin Timothy and Tracey Bruce (2000) discussed that even for

jobs that do not require very elaborate skills, a retention strategy can

positively affect the employee engagement, turnover and, ultimately, financial

performance, especially, for positions that involve interaction with customers.

Adkerson Michelle (2000) expressed that the best way to retain

good employees is to pay close attention to these issues and to view them as

tools in your company's overall retention strategy. The top four retention tools

put forward are: (i) Work that is meaningful, challenging, and offers training

and development opportunities (ii) Management that assists and supports, but

does not dictate (iii) Explicit awareness of life beyond the office (and life in

the office) (iv) An array of core benefits and the power of choice.

Griffeth et al (2000) expressed that there were no differences

between the quit rates of men and women. The study also cited evidence that

gender moderates the age-turnover relationship and found no link between

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intelligence and turnover and none between race, turnover and employee

retention.

Jhonson et al (2000) examined turnover functionality (high and

low-performing quitters and stayers) in a business-to-business sales setting.

The study developed a new criterion of turnover functionality. Additionally,

common antecedents of turnover frequency were examined to see to see if

they could differentiate between high and low-performing quitters and

stayers. The results indicate that several antecedents associated with turnover

frequency are able to discriminate among different groups of high and low

performing quitters and stayers. Specifically, satisfaction with promotion,

work, and global satisfaction contribute to our understanding of turnover

functionality. Additionally, role conflict, role ambiguity, anxiety, evaluation

of job alternatives, and intention to quit are also good discriminators of

turnover functionality.

Brenda Mark and Hu Sockel (2001) used structural equation model

to examine the IS employees' motivation and intent to stay. The Results

showed that latent motivation has an impact on latent retention, with job

satisfaction and perceptions of management on career development as

indicator variables for the former, and burnout, loyalty, and turnover intent as

indicator variables for the latter.

Jill Kickol (2001) revealed that the Entrepreneurial organizations

have undergone substantial workforce changes and transformations during the

last two decades in order to compete successfully on a global scale. The

ability to attract and retain reliable and competent employees has become a

key component in developing an effective and sustainable competitive

advantage. The study investigated the role of the psychological contract and

the types of promises made and communicated by small business

17

organizations to attract and retain their employees, the results demonstrate

that perceived unfulfilled promises can have a considerable impact on

workplace attitudes, commitment, and intentions to leave the organization.

Roger Herman (2002) discussed the benefits of stability of the

workforce and provided various tips for retaining the employees in the

organization. These according to him may be (i) Hiring right to begin with

(ii) caring about your people (iii) Making training count and (iv) Be out there

for your employees. But too low employee retention is also detrimental for an

organization.

Robert et al (2003) expressed that the three studies investigated the

relationships among employees’ Perception of Supervisor Support (PSS),

POS and employee turnover. These studies suggest that supervisors, to the

extent that they are identified with the organization, contribute to POS and,

ultimately, to job retention.

Lynch (2003) indicated that a survey conducted in 32 countries

asked 9,700 employees to respond to what they expected of their employer.

The employees responded by identifying care, concern, and fair treatment as

primary factors for joining and remaining with an organization.

Sunil Ramlall (2003) stated that the total cost of employee turnover

is about 150% of an employee’s salary. Because of this high cost of turnover,

the organization sought to understand their employee’s turnover intentions

and the reasons for the potential turnover. Through a series of surveys,

observations, and interviews, it was determined that the location of the

company and its compensation package were the most common factors in

remaining with the company and that compensation and lack of challenge and

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opportunity were the most common factors in contemplating leaving the

organization.

Peter Boxall et al (2003) indicated that the study represented the

most comprehensive survey to date of labor turnover and employee loyalty. In

terms of the reasons for employee turnover, the study demonstrates that

motivation for job change is multidimensional. While interesting work is the

strongest attractor and retainer in the labor market, the results also show that

there is a strong employee expectation that management should make

personnel decisions based on merit, demonstrate that extrinsic rewards play a

role in both employee retention and turnover, lend support to the idea that

there is growing concern with work–life balance, and underline the retention

value of good relationships with co-workers and supervisors. The results

demonstrate that employee turnover is not risk less for individuals: some

benefit a lot, while others do badly out of it.

William Brow and Carlton Yoshioka (2003) indicated that the

nonprofit organizations rely on the mission to attract resources and guide

decision making. Increasingly, mission statements are recognized as a strong

management tool that can motivate employees and keep them focused on the

organization’s purpose. The research investigated employee attitudes toward

the mission in a youth and recreation service organization. In general, the

employees expressed positive attitudes toward the organization’s mission, and

those attitudes were related to employee satisfaction and intentions to remain

with the organization. However, dissatisfaction with pay tended to override

employee’s mission attachment as explanation of why they may leave the

organization. The implication is that mission might be salient in attracting

employees but less effective in retaining them.

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Allen and Meyer (2003) created a model through which the effects

of HR practices (i.e. participation in decision making, fairness of rewards and

growth opportunities) and POS on voluntary employee turnover were

investigated. As outcome of that, the study reported a quantitative assessment

that strongly supported the influencing relationship of these organizational

factors in employee withdrawal.

Legge and Wolfe (2003) concluded top ten strategies critical to

successful retention: (i) Be data driven (ii) Develop a profile of your ideal

candidate (iii) Develop a compelling value proposition (iv) Increase your pool

of candidates (v) Improve your selection process

(vi) Invest in employee orientation (vii) Focus on people development

(viii) Develop your managers (ix) Run a high-performing organization (x)

Provide employee recognition.

Dockel (2003) suggested that organizations need to accommodate

employees by providing access to telecommuting, childcare centers, referral

programmes and employee assistance programmes. Employees regard work-

life balance policies as organizational care and this positively influence

employees’ psychological attachment to their organization, which plays an

important role in employee retention.

Morrissette and Rosa (2003) found very little correlation between

quit rates and the introduction of different bundles of alternative work

practices in the Canadian manufacturing sector.

Ramlall and Sunil (2004) provided a synthesis of employee

motivation theories and offered an explanation of how employee motivation

affects employee retention and other behaviors within the organizations. The

research also explained how effective employee retention practices can be

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explained through motivation theories and how these efforts serve as a

strategy in increasing organizational performance.

Chris Smith Selby et al (2004) indicated that from on-going

research on labor-management relations in transnational companies, the issue

of labor turnover and the management of labor retention .The study

contextualizes management decision-making with regard to labor turnover

through a political economy and firm-level analysis. At the macro-level the

study highlights a shift from using wages and strong internal labor markets as

labor retention mechanisms, towards an inter-firm collusion on wages, non-

poaching and union-avoidance. At the micro-level these strategies are

matched with firm-level HRM policies of careful labor selection, company

paternalism, segmentation of the labor force into temporary and permanent

group and accommodation to higher levels of labor turnover to balance

product demand and labor supply.

Mullich and Joe (2005) reported on the human resource strategies

employed to retain employees and reduce training cost. It is found that

establishment of employee engagement teams plays a important role in

employee retention.

Roger Herman (2005) revealed that as HR managers meet future

challenges to find, optimize, and retain qualified workers. Employee retention

specialists should play an increasingly important role in organizations of all

types. In their strategic position, these specialists will have to significantly

influence at the senior levels of organizations, showcasing their expertise,

dedication, and effectiveness. The study asserts that this important work

should be a career springboard into higher levels of employment.

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Ward Whitt (2005) indicated that a mathematical model is

developed to help analyze the benefit in contact-center performance obtained

from increasing employee retention, which is in turn obtained by increasing

agent job satisfaction. The model describes the consequences of such changes

on the long-run average staff experience and the long-run average

performance.

Branham Leigh (2005) enumerated the common reasons that

corporate retention initiatives fail. These were

(i) Too much emphasis on pay, benefits and perks (ii) Blindly following other

companies' best practices (iii) Failure to train managers and hold them

accountable. He says that the companies must look into their individual needs

for employee retention so that suitable practices can be obtained to retain their

employees. Retention of people should be considered a business goal rather

than a damage control measure. In order to be effective, retention strategy not

only requires a joint effort on the part of managers, senior managers, human

resource managers, training and development managers and individual

employee but also requires continuous surveillance to ensure that it sustains

and succeeds to meet the organizational objectives.

Tadwalkar Sunil and Sen Manjira (2005) expressed that

organizations have two choices when it comes to employee retention

programs in the face of bankruptcy. They can do the right thing with fair and

equitable, carefully planned and well communicated retention program.

Specifically, organizations should consider the following when contemplating

such a plan: who is most critical to the organization; what will get past the

creditors and the judge; the employee performance and strategy linkage;

public opinion and employee support.

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Juliano and John (2006) presented information about the knowledge-retention

(KR) programs. The result showed KR program is essential to stop the

outflow of knowledge in the form of employee retirement and workforce

attrition.

Glen and Clayton (2006) examined effective, practical and holistic

people strategies that address key skills retention, employee engagement,

employee motivation and attendance gaps, with a view to positively impact

organization costs, productivity and business performance. The result of the

study revealed that workplace context is important to take a holistic view of

the key elements of the business most likely to impact team engagement,

motivation, attendance and retention, link individual assessment directly to

the key drivers of the business, and recognize that key talent is likely to thrive

on experience-based career leverage opportunities.

Becki Murphy et al (2006) investigated the nature and extent of

employee retention and turnover. The research suggested that proper cause

and effect process will produce a desired path to change.

It was determined how one type of organization could contain employee

turnover by using the logic of Goldratt’s thinking process.

Lloyd Taylor et al (2006) indicated the nature and extent of

employee retention and turnover for metropolitan police and fire departments.

In order to maximize the system production, the weakest link must be

improved and all other links in the processes regulated to the speed of the

weakest link. The findings of the study suggested that a proper cause and

effect process will produce a desired path to change. It was determined how

one type of organization could contain employee turnover by using the logic

of Goldratt’s thinking process.

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Clayton Glen (2006) expressed that the effective, practical and

holistic people strategies that address key skills like retention, employee

engagement, employee motivation and attendance gaps. This is done with a

view to positively impact organization costs, productivity and business

performance. The study also examined the value of assessment and feedback

in talent engagement and retention, and to look at developing employees via

experience-based development initiatives.

Mervin Munsamy and Anita Bosch Venter (2006) indicated that the

Organizations require an Employer Value Proposition (EVP) to attract and

retain people in management. The study was undertaken to understand the key

retention factors that influence experienced management employees, in the

maintenance phase of their careers, to remain employed at a local government

organization. Retention factors inform the organization’s EVP. A qualitative,

empirical-analytical research paradigm with a modernist approach was

adopted.

Cosgrove (2006) found that Chief Information Officers (CIOs) are

doing their best to retain their IT talent. Recognizing the importance of

professional development, the majority of CIOs surveyed are increasing the

training they offer to their employees as well as the benefits that facilitate

more work-life balance, such as flexible schedules and telecommuting

options.

Huang Ing-Chung et al (2006) examined the effect of individual-

based, firm-based and market, factors on employee retention, basing the

hypotheses on human capital theory and signaling models and found that

marriage, honored employee status, relative pay, speed of promotion, and

economic cycles had a significant impact on how long the employees retained

their jobs, but education level and individual performance did not. Firm-

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specific human capital, wages, and signaling effects were proved to affect

employee retention. Firm-based factors had a significantly more pronounced

impact on the ultimate decision than individual-based factors.

Barber Carol (2006) through her work with multinational

organizations and small start-ups developed a list of best practices followed

by those companies who enjoy great morale and high retention, they sweat the

details of on boarding; they set clear expectations and objectives; they provide

training and development at all levels; they don't wait for trouble to find them;

they value open communications above all else; they believe in work/life

balance; they view workforce diversity as a competitive advantage; they

understand the power of teamwork; they never think they have it right.

Employee retention activities considered most important are highly diverse; in

their sum, they amount to a compendium of good management tools. Nearly

every aspect of a company's activities is relevant to staff retention. Efforts by

employers to gain the loyalty of their personnel are highly selective and are

focused on the strong performers.

Jyostna Bhatnagar (2007) investigated talent management and its

relationship to levels of employee engagement using a mixed method research

design. The study indicated three distinct factors of organizational culture,

career planning along with incentives and organizational support as vital for

employee retention.

Clapp and Bruce (2007) discussed the steps to be taken at one's

bank to remove the “mystery” associated with retention and attrition. The

result showed the necessity to create retention actions based upon positions

within the organizations.

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Hoffman and Michael (2007) discussed the implications of

effective leadership to employee retention in the hotel industry. The study

states that hotel owners should aim to be effective managers because they

could help hire and retain the best employees.

Hokanson Cynthia et al (2007) investigated the importance of

knowledge management in young employees on mitigating the loss of

knowledge resulting from the attrition of younger generation employees. The

study believes that companies need to invest in younger generation and also to

find ways of earning their loyalty to stay with the company.

Jyotsna Bhatnagar (2007) investigated talent management and its

relationship to levels of employee engagement using a mixed method research

design. 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 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, incentives and organizational support.

Among these, the first two were indicative of high attrition.

In a research by Recognition council (2007) the findings indicated

that engaged employees increased earnings per share by 28%. The same study

showed that companies with low employee engagement experienced declines

of 11% in earnings per share. Engaged employees can help lift business

performance and the overall economy. Engaged employees make significant

contributions to profitability regardless of the business environment.

Recognized employees become engaged employees. Employees who feel

valued stay with companies and are measurably more productive. Engaged

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employees foster customer satisfaction and company loyalty and tend to stay

with the company.

Hedberg and Lisa (2007) sought to investigate and to analyze how

company leaders, today, can retain their key employees. The study opinioned

that leaders and their skill in creating a culture of retention, has become a key

factor in why people stay and what usually drives them away from a

company. For organizations to keep its key employees their number one

priority should be to look at their management. The leader’s relation to the

employees plays a central role in retaining employees, because employees

need a sense of involvement and importance. When retention is a core value,

good things happen for customers, employees, and the company.

Ian Cunnigham et al (2007) examined the role that management

style plays in retaining workers in a high labor turnover industry. Case study

approach based upon extensive interviews with workers and managers

derived from industry wide data set. The study inferred that Positive actions

by management promote worker attachment to leaders and the organization

and are crucial in sustaining work values that diminish the likelihood of

turnover. Whereas most studies of turnover focused upon individual

attributes, the study also examined the structural characteristics of the

workplace that permit workers of different ages and skill sets to maximize

their efficiency and earnings and the role played by management style in

decisively shaping that structure.

Sen Gupta Santoshi and Gupta Aayushi (2008) identified the main

causal agents responsible for high attrition in the BPO industry. They argued

that there is a vicious circle of attrition because 'Low Perceived Value' drives

the employees to quit which further lowers the Perceived Value.

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Nolan and Sara (2008) in their research study on current trends in

talent management, emphasized critical recognition as one of the main topics

for developing and retaining the best employees and enabling organizations.

Punia et al (2008) investigated the influence of procurement

practices on employees' retention intentions in the Indian IT industry, the

influence of organizational procurement practices on employee retention

intentions on the basis of personal and positional variables of employees and

also examined the variations in the corporate perception on the procurement

practices as a retention tool for IT Personnel.

Richmann Amy et al (2008) examined the relationship of perceived

workplace flexibility and supportive work-life policies to employee

engagement and expectations to remain with the organization (expected

retention). The results revealed that perceived flexibility and supportive work-

life policies were related to greater employee engagement and longer than

expected retention.

Hughes et al (2008) clarified what is meant by talent management

and why it is important (particularly with respect to its affect on employee

recruitment, retention and engagement), as well as to identify factors that are

critical to its effective implementation. The study suggested that organizations

interested in implementing a talent management and employment retention

strategy would be well advised to: define what is meant by talent

management, ensure CEO commitment, align talent management with the

strategic goals of the organization, establish talent assessment, data

management and analysis systems; ensure clear line management

accountability; and conduct an audit of all HRM practices in relation to

evidence-based best practices.

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Margaret Deery (2008) examined the literature relating to retention

of good employees and the role that Work-Life Balance (WLB) issues have in

an employee’s decision to stay or leave an organization. The key findings

emerged from study focused on job attitudes such as job satisfaction and

organizational commitment, personal attributes such as positive and negative

affectivity, the role of WLB in employee turnover and, finally, the strategies

provided to alleviate high turnover rates.

Sandra Broner (2008) in her quantitative study examined the extent

that employees’ perceptions of their leaders’ attitudes toward their

subordinates affected employee retention in the fast food industry. The

analysis of data revealed no significant differences between the employees’

perceptions of their leaders’ attitudes toward their subordinates and employee

retention. However, the age of the employees and the number of months

employed by the organization indicated a correlation.

Wesley Scroggins (2008) expressed that meaningful work has

become an increasingly important job outcome for individuals in recent years.

His findings indicate that many employees lack experienced meaningfulness

in their work and that organizations have not done a good job at creating

meaningful and emotionally satisfying work experiences for employees. His

work describes a person–job fit approach to meaningful work and employee

retention which consists of matching individual self-concept with job tasks

and behaviors. It is proposed that this self-concept– job fit will be strongly

related to meaningful work. It is also added that meaningful work is related to

important outcome variables valued by organizations, such as increased

worker performance and employee retention. Path analysis supports the

proposed relationships.

29

Julia Christensen et al (2008) suggested that, based on their

findings, many organizations, regardless of size or industry, could benefit

from the increased formalization and integration of some HRM practices that

fall clearly within the talent management domain, including retention,

workforce planning, leadership/high potential development, and professional

development. The study suggested that line managers have an important role

to play in this regard, particularly with respect to understanding what

motivates people, ensuring access to learning opportunities, and treating

people with respect. Instead, reflecting a reactionary approach, in many

organizations “raises or other sweetening of the compensation package are

common responses when a valued employee shows signs of leaving.

Elisa Moncarz and Jinlin Zhao (2008) investigated the

organizational employee-retention initiatives and practices, and to examine

the impact of those initiatives on employee turnover and retention. The study

revealed that corporate culture, hiring and promotions and training practices

influence non-management employee retention. At the same time, Hiring and

Promotion practices impact management retention, as well. Moreover,

organizational mission, goals and direction, and employee recognition,

rewards and compensation were found to positively reduce non-management

employee turnover.

John Hausknecht et al (2008) developed a content model of 12

retention factors in the context of employee retention. The identified

framework reveals that job satisfaction, extrinsic rewards, constituent

attachments, organizational commitment and organizational prestige were the

most frequently mentioned reasons for staying. Advancement opportunities

and organizational prestige were more common reasons for staying among

high performers and non-hourly workers, and extrinsic rewards was more

30

common among low performers and hourly employees, providing support for

ease/desirability of movement and psychological contract rationales. The

study highlighted the importance of differentiating human resource

management practices when the goal is to retain those employees valued most

by the organization.

Parkes and Langford (2008) concluded that work-life balance that

is the ability of employees to meet their work and family commitments as

well as other non-work responsibilities and activities plays a vital role in

employee retention.

Jaya Prakash (2009) in his report on CEO attrition in Indian firms

explained that the CEO poaching was a result of the return of Indians from

overseas with higher experiences and lower costs.

Nancherla Aparna (2009) discussed the high turnover rate of

employees in companies in India. The study surveyed employees from

industries including business process outsourcing, information technology,

engineering and manufacturing. The research found that most employees feel

that their immediate supervisors are unable to offer adequate support and

development and considered this as important reasoning quitting the

organization.

De vos Ans and Meganck Annelies (2009) explored HR managers'

and employees' views on the factors affecting employee retention using the

perspective of the psychological contract. The survey indicated that retention

practices focus more on the factors believed to cause employee turnover

(career opportunities and financial rewards) than on those believed to affect

employee retention (social atmosphere, job content, work-life balance).

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Jinlin Zhao and Elisa Moncarz (2009) investigated the

organizational employee-retention initiatives and practices and the impact of

those initiatives on employee turnover and retention. The study revealed that

Corporate Culture, Hiring and Promotions and Training practices influence

non-management employee retention. At the same time, Hiring and

Promotion practices impact management retention, as well. Moreover,

Organizational Mission, Goals and Direction, and Employee. Recognition,

Rewards and Compensation were found to positively reduce non-management

employee turnover.

Dey and Subhendu (2009) focused on the move by business

organizations to improve performance through employee retention which

consists working environment and hiring. The study noted that good hiring

brings quality individuals in the company which creates a good foundation for

the company's performance and concluded that in a global market it is

difficult to retain all employees but retaining at least the high caliber

employees would bring good investment to the company.

Atanu Adhikari (2009) examined the relationship between the high

attrition rate in the Indian Information Technology (IT) and Information

Technology Enabled Services (ITES) sector. The study identified that people

segmentation relates high rate of job switching among its employees.

Eva Kyndt et al (2009) focused on the organizational and personal

factors that influence employee retention. The study found that a large

positive contribution of appreciation and stimulation of the employee to

employee retention.

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A research study by Corporate Leadership Council (2009) indicated

that approximately 90% of companies maintain some type of reward and

recognition program. The majority of companies use these programs to create

a positive work environment, improve employee morale, and motivate high

performance. Research suggests that when designed and implemented

properly, reward and recognition positively affects an organization’s bottom

line. Although reward and recognition programs have the potential to produce

positive returns to shareholders, research demonstrates that such benefits will

only be achieved through an effective program that reinforces an

organization’s goals and values in a well publicized, thoughtful program

affecting a large number of employees.

Lin Zhao and Humayun Rashid (2010) indicated that to enhance

employee retention, organizations have introduced various initiatives, which

have led to mixed results. This was based on a survey conducted in a large

global bank, which examined various job stressors impact on the retention of

Information Technology (IT) professionals and how these impacts are

mediated by work-leisure conflict. The results indicated that among all the job

stressors, role ambiguity has the most adverse influence on retention. Work-

leisure conflict partially mediates the negative relationship between role

conflict and retention and fully mediates the negative relationship between

role overload and retention. The empirical findings implied that organizations

should tackle role ambiguity with highest priority and relieve work leisure

conflict to effectively retain employees under job stress.

Combs Gwendolyn et al (2010) examined the relationship between

Indian service workers' hope and their performance outcomes in managing

BPO service workers in India. The results highlighted importance of

measuring and managing employee hope to maximize employee productivity

33

and performance and to effectively combat employee problems such as

attrition, stress, and burnout that have plagued the BPO industry.

Spurgin Ralph et al (2010) discussed the role of a leader in

improving employee’s job satisfaction in an organization in the six disciplines

of management. The dimensions are: Leadership, Culture/climate, Developing

people, Planning, Organizing, Controlling; Four kinds of organization

cultures, Stages of organizational growth, Development of red tape, and

Collaborations in organizations.

Rizwan Danish (2010) suggested that the Human Resources are

the most important among all the resources an organization owns, and to

retain efficient and experienced workforce in an organization is very crucial in

overall performance of an organization. The results showed that different

dimensions of work motivation and satisfaction are significantly correlated. It

also displayed that reward and recognition have great impact on the

motivation of the employees and their intention to stay with the organization.

Frans Kgomo (2010) indicated that retention of employees in the

contact centre environment is regularly documented as a major concern. In an

attempt to assist contact centers in developing retention strategies, his main

objective was to develop an employee engagement model that would facilitate

agent retention in the contact centre industry. Factor analysis was conducted

and the results presented two critical factors of engagement: (1)

Organizational commitment and (2) Management support. Logistic regression

was used to predict the intention to leave from the independent variables. The

results verified factors that can postpone the intention to leave if addressed.

The factors identified are: the job itself; regular, quality feedback from the

supervisor; and the competence level of the supervisor. The qualitative data

added the following critical retention actors: recognition, advancement

34

opportunities, leadership capabilities, work-life balance, work relationships

and staffing strategies.

Rochelle Habeck et al (2010) published a report of their survey

entitled Organizational Factors that Facilitate Successful Job Retention of

Employees with Health Impairments and Disabilities. The findings of the

study substantiated a positive relationship among retention practices and

outcomes. Both are associated with retaining employees who develop

potentially disabling conditions; but they are not directly connected to hiring

people with disabilities. These appeared to be two different policy and

practice issues within most companies.

Herman Roger (2011) focused on employee retention strategies

followed by their HR mangers. The study opinioned that a vital task of HR

managers as employee-retention specialists is to design, develop, and

implement effective retention strategies that produce measurable results.

These professionals should ensure that all transactional activities flow from a

deliberate strategic perspective. They should recognize and communicate the

top warning signs that talent is considering leaving, as well as the top five

principal reasons people leave jobs. Employee-retention specialists should

concentrate on training and coaching to improve retention skills of leaders,

managers, supervisors, and employees at all levels of an organization.

Muneer Aysha et al (2011) elaborated the retention of employees;

its benefits and factors that may help to retain the best talent of the

organization. The research findings proved significant relationship of career

path with employee retention.

Chris Smith Selby et al (2011) examined the determinants of

employee turnover and long-term skill retention and three new perspectives:

35

the difference between short-run turnover and long-term retention; the role of

different high performance work systems philosophies and human resource

practices. The results suggest that the role of learning within organizations is

of fundamental importance in reducing short-run turnover and improving

long-term skills retention.

Furtado Luis Carlos do Rego et al (2011) aimed to identify nurse

managers' leadership behaviors and to determine if they had a direct impact

on turnover or career abandonment intention among nurses. The study

identified that the most expressive leadership styles were persuading and

sharing, which helps in employee retention.

Sohail et al (2011) elaborated the retention of employees its

benefits and factors that may help to retain the best talent of the organization.

The result proved that there is a significant relationship between career path

and employee retention.

Jonathan Doh et al (2011) found that responsible leadership and the

employee perceptions of the support they receive from managers, the HR

practices, and corporate socially responsible actions may be an overarching

construct that connects them to the organization and in employee retention.

Maureen Hannay and Melissa Northam (2012) observed that the

practical concern of most employers is, preventing, what can be termed,

dysfunctional turnover. Dysfunctional turnover occurs when the best

employees move on to new organizations; while the company’s worst

employees stay on with the employer. The study opinioned that the retention

crisis cannot be solved by money alone instead, improved employee retention

begins with effective, targeted recruitment and is sustained by a work

environment that satisfies both the extrinsic and intrinsic needs of employees.

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Focusing only on increasing financial compensation at the expense of the

growth and development needs of employees will likely foster rather than

reduce turnover. Salary is an easy figure for employees to compare; if the

only factor that keeps employees loyal is their paycheck, then they can easily

be lured away by a competitor with a bigger and better offer. A work

environment that provides challenge, opportunity, autonomy, respect and

variety is not easily found and can be even harder to leave. Focusing on these

important, yet relatively inexpensive factors could be the key to improving

retention in the organization.

John Linn et al (2012) explored employee retention strategies and

tactics implemented by firms in recession. The investigations showed just

how big a challenge many organizations face in their ability to manage

employee retention effectively. While leading organizations have embedded

real-time employee life cycle management, developed accurate early warning

systems, price elasticity models and ‘ deal calculators ’ , the organizations the

study spoke to have only gone as far as calculating the value at risk and

building simple predictive models.

Jon Carr and Allison Pearson (2012) indicated that research on

organizational socialization processes has not firmly established the

relationships among prior work experience, pre entry variables, and post entry

attitudes and behavior. Using a longitudinal sample of 218 newcomers, a

survival model was developed to test whether the relationship between prior

occupational experience and retention is mediated by such pre entry variables

as person-job (P-J) fit, value congruence, and organizational expectations.

Results indicated that prior occupational work experience significantly affects

retention.

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Seok Eun Kim and Jung Wook Lee (2012) indicated that Nonprofit

organizations have been known as mission-driven entities, in which people

are attracted by their passion for the mission and remain there to accomplish

it. This study tested the traditional assumption of mission orientation among

nonprofit employees by replicating Brown and Yoshioka’s research on the

role of mission attachment as a factor in nonprofit employee retention. The

results of the hierarchical regression analysis are generally consistent with

Brown and Yoshioka: Human services employees showed a positive attitude

toward the agency’s mission, but dissatisfaction with working conditions, pay

and career advancement overrode the role of mission attachment in employee

retention. However, employees’ positive perceptions and strong correlations

between nonprofit working conditions and mission attachment suggest that

mission can still play a significant role in retaining nonprofit employees by

reducing dis satisfaction with pay and career advancement.

Pooja Wadhwa and Saroj Koul (2012) analyzed critical factors

affecting retention through a case of the IT Industry. According to the

inference of the research, there are two strategies that are most useful. Firstly,

to provide salary hikes in accordance with industrial standards. Secondly, to

recruit those only who has long-term orientation towards the organization or

those who will stay in company for longer time period. The research study

identified that the factors related to compensation issues have the highest

effect on attrition.

Bisht Nidhi and Singh (2012) conceptualized to understand

different variables which instigate intent to leave in these professionals are

responsible for attrition of employees. The findings of the study show that the

antecedents for attrition of employees vary with different levels of experience.

Practical implications: Deeper comprehension of antecedents of attrition for

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employees having different levels of experience taken separately; can help to

understand the psyche of these employees which can be used as an indicator

to predict attrition related concerns to chart future course of action.

Anuradha Verma et al (2012) explained that HR practices are

driven by three dimensions of job satisfaction namely information, variety,

closure and pay and understanding these dimensions are important in

employee retention.

Sen Gupta et al (2012) made a comprehensive attempt to explore

the dimensions of attrition by identifying the factors that lead to it, assessing

the contribution of the factors toward attrition, and comparing the dimensions

across the various demographic variables.

Narendra Agrawal et al (2012) in the research on Managing Growth

and Human Resource Management challenges facing the Indian software

industry, identified several challenges such as managing human resources in

globally distributed team, shortage of software professionals having sufficient

knowledge and competencies, low-skilled nature of the work, lack of well-

developed HR systems and processes, high employee turnover, lack of work-

life balance, and the problems associated with the use of contract employees

as some of the factors affecting employee retention.

Supachok Wiriyakosol et al (2012) investigated how leadership

roles are related to employees retaining practice in the research article on

Leadership roles on Employee retaining practices in Non Government

organizations. The results found managers’ leadership skills played important

roles in the employees’ retention in addition to other job satisfaction factors in

most organizations.

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James Mathew and Leena Lissy (2012) made an attempt to

understand the impact of Retention Strategies on Employee Turnover in IT

sector in India. The research reveals that variables such as Welfare Benefits,

Personal Satisfaction and Organizational Culture, which are said to be

positively associated with the Employee Turnover.

Kim and Soonhee (2012) analyzed the impact of human resource

management on state government IT employee turnover intentions. The result

show that promotion and advancement opportunities, training and

development, supervisory communications, pay and reward satisfaction, and

family-friendly policies are all significant variables affecting turnover

intentions, and suggested that executive leaders, managers of IT departments,

and human resource managers need to acknowledge these factors when

addressing the issues of employee voluntary turnover and turnover intentions.

Ratna et al (2012) analyzed the key factors of retention, employee's

satisfaction level about key factors and the retention strategies being followed

in the telecom sector. The results found that factors such as compensation

level, rewards, recognition training, and working conditions affect employee

retention.

Mohlala Joy et al (2012) tried to understand the challenges faced by

the banks information technology leadership teams to retain employees. The

results of the study indicate that employee turnover is the main contributor of

skill shortage in the organization.

Paill and pascal (2012) focused on the employee retention and the

relationship between Organizational Citizenship Behavior (OCB) and

decision to leave. It was shown that employees who have low levels of OCB

have higher chances of leaving their employer.

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2.3 CONCLUSION

The study on employee retention management has been a focus of

researchers and academicians throughout the world and recently it has

attracted many researchers in India. There has been continuous research and

contributions in the field of employee retention practiced by organizations

both in private and public sectors in India as well as aboard. It is evident from

the review presented that attempts are being made to examine the various

factors like organizational commitment, work force commitment, employee

motivation, HR practices, pay, market factors, employee life cycle

management programmes, organizational factors, employee engagement,

employee loyalty, role of psychological contract, organizational climate,

employer value proposition etc influencing the employee retention in the

organizations. However, the review reveals that not much effort has been

made to analyze the extent of role of leadership in employee retention in

companies. The present study is therefore focused on studying the role of

leadership in employee retention and recognition management in IT Industry

of India in the study area.