chapter 2 review of literature - shodhganga : a...
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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
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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.
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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
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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
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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
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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:
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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.