CHAPTER - 1

INTRODUCTION

1.1 GENERAL

According to Gilmore and Williams (2009) HRM is the only

route where you can put your employee in the different

scale from where they can get improvement for time to

time in an organization. The whole organization stands on

the different people`s performance specially most of them

are selected for some specific goal. They are already

trained by their organization for the given role. HRM is

performing with a lot of responsibility within any

organization, which is divided into different working

departments, the employees are selected and recruited on

the basis of their previous experience.

According to Foot and Hooke (2005) it’s very simple to

understand if we look to development of the professional

performance. Several names are used to describe this part

of work. According to the Web Pro News (2010) in 1833 by

the factory act a first male inspector was appointed and

in 1878 they passed a law for the reduction of the

working hours for women and children up to 60 hours per

week. The trade union was in development stage at this

time. In 1885 eleven trade unions were elected and

demanded the improvement of wages and the employment

regulation.

1

According to Amstrong (2000) the concept of Human

Resource Management came in the mid of 1980`s and put the

successful attraction on society particularly academic,

Science, and the nation of industry. Later on all the

organizations followed the philosophy of HRM and they

believed that HR is the most important department in any

successful organization to manage the employees.

1.2 BACKGROUND OF THE STUDY

Organizations develop human resource policies that

genuinely reflect their beliefs and the relationship

between management and employees, or they may merely

devise policies that deal with current problems or

requirements. These practices include recruitment and

selection, training and development, performance

management, remuneration systems, occupational health and

safety, industrial relations, Human resource information

system, impact of recent legislation (Oakland & Oakland,

2001).

The human resources of the company are potentially

the only source of sustainable competitive edge for

organizations (Pfeffer, 1994). Research conducted at the

organizational level also suggests that human resource

practices affect organizational outcomes by shaping

employees behaviors and attitudes (Arthur, 1994).

HRM is purportedly being viewed as a strategic staff

enterprise aligned with organizational values, mission

2

and vision. As a consequence, there is now much greater

attention to measuring and enhancing employee and

organizational performance; equal employment opportunity

and affirmative action polices designed and implemented

by personnel offices have contributed greatly to the

diversity of the workforce; staffing techniques have

become much more sophisticated; employee benefits system

have expanded; and job design and processes have become

more creative.

1.3 AN OVER VIEW OF TESCO

According to the website telegraph (2010) Tesco was

introduced to the world in 1919 when Jack Cohen was

selling super grocery in east London from a stall. He

made profit ₤1from sales of ₤4 on his first day. After

five years the Tesco first appeared in 1924 when he did

the deal of tea shipment from Mr T.E Stockwell. And then

Tesco appeared with combined title Tesco in 1929 in

Burant Oak north London. In 1930`s Tesco moved to

regional direction and Mr Cohen opened a headquarter and

warehouse in north London.

In 1932`s Tesco was first time entitled as Private

Company Limited and in 1947 they started selling the

shares on price of 25p. In 1950`s Tesco smashed several

retailers in their field and took over from them. They

bought 70 William stores, 200 Harrow, 97 Charles Phillip

stores and Victoria value was taken over. In 1960`s Tesco

was awarded as a largest super store in the Europe and In

1970`s Tesco decide to be a national store network to

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cover the whole UK and started selling the more product.

1974`s Tesco introduced a big change in the market and

introduced first time the Tesco Patrol station and became

success and award winner Patrol retailer. In the 1990`s

Tesco opened the several stores in the UK and deeply

smashed their competitor included Sainsbury’s which is a

strong grocers supermarket in the UK.

In 1995`s Tesco started the club card scheme to provide

the advantages to their customers and took over from

other competitors specially Sainsbury’s who was the UK

leading grocery supermarket. In 1996`s Tesco started the

24 hours service and extended their business open there

branches outside the country in Poland, The Czech

Republic and Slovakia. In 1997`s Tesco Sir Terry Leahy as

Cheap Executive and launched the online business in 2000

on the Tesco.com which is now doing electronic, Clothes,

and Personal Finance.

In 2006 the Tesco announced to be open there branches in

US as a name of “Fresh and Easy”. Now it’s operating in

13 country of the world. In year`s 2008 the recorded

sales of Tesco was £51.8bn and pre-tax ₤2.8bn.

According to the website cn Tesco (2010) Tesco is the

biggest retailer in the UK which is working on the basis

of four main parts such as Tesco Superstore, Tesco Metro,

Tesco Extra, Tesco Express.

All the four parts are operated in the 13 countries of

the world which are Republic Of Ireland, Hungry, Czech

Republic, Slovakia, Turkey, Poland, China, Japan,

4

Malaysia, South Korea, Thailand, India and USA. Tesco now

have 3700 stores and 440000 employees.

1.4 STATEMENT OF THE PROBLEM

Although most current organizations opt for policy

formulation strategies that reflect their own cultures

and priorities, the crucial issue is whether the employee

have been consulted, and whether the resultant policy

reflects a compromise between management and employee

interests, acceptable to both, or is it simply a

management or HR directive?

As change has remained a constant in the practices

of HRM, many of the assumptions on which HRM operates

have been severely challenged in the last two decades due

to the series of inexorable reforms. In the contemplating

the future prospect of HRM, it is worthwhile to examine

the developments and directions of HR policies in terms

of their relevance to the contemporary workforce

especially in the area of attraction and retention of

employees.

An employee decision to resign from a company is

rarely due to a single event, such as being passed over

for a promotion, a plum assignment or for monetary

reasons. One such event may however serve as a catalyst,

but most employees leave because of multiple factors- the

turnover drivers such as diminished job satisfaction, a

tense work environment and better advancement

5

opportunities elsewhere. Isolating these factors requires

a disciplined research effort.

Turnover is a symptom of larger systematic problem

such as ineffective retention management; companies need

to understand what causes people to commit themselves to

being productive and loyal. Then they must design jobs,

systems and organizations that support rather than

inhibit it.

The present study addressed the causes of poor

retention and the elements that contribute to high

retention. Therefore, to achieve retention organizations

need to determine the retention factors relevant to each

of their employee and than focus strategies on these

factors.

1.5 OBJECTIVES OF THE STUDY

The aim of this study was to investigate and

determine the current human resource practices on the

retention of employees. The specific objectives of the

study were:

1. To examine the Human Resource practices currently

being employed in Tesco.

2. To study the relationship between HR practices and

employee retention.

3. To frame suggestions that may be helpful for an

effective HR practices contributing to retention.

1.6 SCOPE OF THE STUDY

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The research was very important from many

dimensions. The most important one was it helped in

determining the level of the human resource practices

that were currently being employed in the organizations.

Therefore the major focus of this study remained on the

human resource practices. Furthermore, its impact on the

retention of employees will also determined. It reflected

the dynamics of the HR practices that are employed to fit

the respective industry demand and hence the effect on

the retention of the employees.

1.7 SIGNIFICANCE OF STUDY

The high attrition rate of employee is costly to

corporations. Loss of key talent results in the stripping

of valuable human capital, critical skills and

institutional memory. Organizations not only suffer from

lost productivity but also lose the knowledge that these

employees possess that can be beneficial to the company.

High performing employees know the industry, competitive

strength and weaknesses, product, customers and

processes. The information’s in their head is a

significant part of corporate equity (Hom and Griffeth,

1995; Oh, 1997 and Gutherie, 2001). There was also a need

to develop competences in order to enhance corporate

competitiveness and performance. Retaining these valued

7

employees is therefore a strategic issue and a

competitive business advantage. Managing employees is

being a more important source of competitive advantage

because traditional sources (product and process

technology, protected or regulated markets, access to

financial resources and economies of scale) are less

powerful than they once were. Moreover, this research

will further help in developing HRM practices on the

emerging trends of the businesses.

1.8 LIMITATIONS OF THE STUDY

As the study will cover only the one chain store sample,

for data collection so it may not be generalize to other

sectors of business activities. Second limitation for the

study is the time, as due to time constraint I will not

be able to collect the data for different outlet of

subjected business.

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CHAPTER - 2

REVIEW OF LITERATURE

In this chapter we will explain the relationship

between the HR practices and employee retention. It

explains different factors of HR practices that influence

employee retention. According to (Phillips,1997) from

last few years it has been noticed that the way the

employee are treated or managed is the important factor

in improving the overall performance of the organization.

From the review of literature, it is stated

that the employees should be treated like an assets, as

firm has to invest in HR and have to give value to the HR

on the bases of there philosophy (Maguire, 1995; Annand,

1997). The importance of HR practices can be viewed as

it has become the competitive advantage for most of the

firms of this dynamic era (walker, 2001). Consistent with

this perspective, is an equally important issue for

organizations, the retention of their employees.

The retention problem cannot be solved just

by addressing the increase incentive and bonuses, as

practiced by most of the firms, as it may be the factor

but not the only factor. (Gumbus and Johnson, 2003) In

current business scenario the job retention has been

targeted by the organizations as the strategic issue.

(Walker, 2001).

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2.1 HUMAN RESOURCE MANAGEMENT FACTORS INFLUENCING

RETENTION

It has been evidence that human resource management

has a important role in retaining a high quality,

devoted employee. Studies of progressive HRM practices

in training, compensation and reward sharing have

revealed that these can lead to reduce turnover and

absenteeism better quality work, and better financial

performance (Meyer and Allen, 1991; Solomon, 1992; Snell

and Dean, 1992; Arthur, 1994; Snell and Youndt, 1995;

MacDuffie, 1995; Delaney and Huselid, 1996; Ichniowski,

Shaw and Prennushi, 1997). Furthermore, an extensive

study (Accenture, 2001) on high performance issues

identified the retention strategies of organizations

primarily from US, Europe, Asia and Australia.

According to Fitz-enz (1990), retention management

of employee is influenced by several key factors, which

should be managed congruently: organizational culture and

structure, recruitment strategy, pay and benefits

philosophy, employee support programs, and a training and

career development system. Consequently, organization

utilizes a wide range of these HRM factors driving

retention and commitment (Stein, 2000; Beck, 2001;

Clarke, 2001; Parker and Wright, 2001). For the purpose

of this study, these factors are reviewed and categorized

into HR factors (person organization fit, remuneration,

training and career development) and organizational

factors (leadership behavior, teamwork relationship,

10

company culture and policies and satisfactory work

environment).

2.2 HUMAN RESOURCE FACTORS INFLUENCING RETENTION

1. Person Organization Fit (Selection)

The concept of person-job (p-j) fit emphasizes

matching people and jobs in term of qualifications based

on knowledge, skill, ability, and overlooking other

personal characteristics of applicants that might be more

suitable for the assessment of “fit” (Lofquist and Dawis,

1969; Edwards, 1999). However, as the complexity of work

increases, organization now uses more selection methods

that capture the applicant capability to do the work.

Research on person job fit has found that workers

gravitate to jobs with complexity levels commensurate

with the ability (Wilk et al., 1995; Wilk and Sackett,

1996). However, selection should also improve fit between

the applicant and other aspects of work such as e.g.

personality fit and organizational fit (Smith, 1994).

Person organization fit is considered in the context

of personnel selection and can be based on the congruity

between personal and organization beliefs (Reilly et al.,

1991; Netemeyer et al., 1997) or individual and company

goals (Kristof, 1996). The concept of organizational fit

(Brown, 1969; Kidron, 1978; Steers, 1997) identifies

convergent goals and values between the individual and

the organization as an important element to affective

commitment. Barnard (1938) defined organization fit as an

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individual willingness to cooperate in an organization as

cohesion and proposed that “its immediate cause is the

disposition necessary to sticking together”. Selection

should therefore consider improving fit between an

applicant values and the organization culture (Cable and

Judge, 1997).

Lauver and Kristof-Brown (2000) found that both

person jobs fit and person organization fit was a better

predictor of intention to quit. Thus, people who are not

well suited for the job and/or organization are more

likely to leave than those who have a good person-job or

person-organization fit. Lee et al., (1992) espoused the

theory that states an employee satisfaction with a job,

as well as propensity to leave that job, depend on the

degree to which the individual personality matches his or

her occupational environment.

Many person organization fit studies emphasized the

match between people values and the values of the

organization, because values are conceived of as

fundamental and relatively enduring (Kristof, 1996; Van

Vianen, 2000). In this study, value congruence and person

culture fit are treated as equivalent terms.

2. Remuneration, Reward and Recognition of Employee

Value

Compensation is the most critical issue when it

comes to attracting and keeping talent (Willis, 2000). A

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fair wage is the cornerstone of the contractual and

implied agreements between employee and employers, the

underlying assumption being that money can influence

behaviour (Parker and Wright, 2001). Companies often

provide pay packages superior to the market for critical

talent. These include special pay premiums, stock

options, or bonuses.

Bassi and Buren (1999) found that “leading edge”

firms, defined as firms that use high performance work

practices such as total quality management and training,

provide innovative compensation such as profit sharing

and group based incentive pay.

Organizations in most industries are implementing

innovative compensation approaches to differentiate

themselves (Parker and Wright, 2001). Innovative

practices reflect the individual player contract model,

focusing on “what it will take” to attract and retain

each individual, regardless of the pay of others (Boyd

and Salamin, 2001). This “lets make a deal” approach is a

radical departure from traditional pay equity approaches,

but seems to work in a highly competitive, individualized

talent market. Others act more broadly, ensuring that all

“players” are paid near the top of the market, whether

through base salary or bonuses (Williams, 1999; Stein,

2000). This raises overall compensation cost but may

reduce the risk, and therefore the cost, of attrition.

Wages influence the recruitment and retention of

workers (Williams and Dreher, 1992; Highhouse et al,

13

1999) and therefore play a role in the staffing process.

However these studies recognize that pay, by itself, will

not be enough to retain people. Low pay will often drive

employees out the door, but high pay will not necessarily

keep them. Ultimately, they stay because they like their

co-workers are engaged and challenged by work that makes

them better at what they do.

Pay continues to be important in determining

motivation to perform (McCallum, 1998). Past motivational

theories such as expectancy and equity theories have

predicted variation in motivation as a result of varying

valences of outcomes as pay (Das, 2002). However, in

practice, pay is treated as just one of the outcomes and

often measured with little precision (Mitchell and

Mickel, 1999). Although an association exist between

compensation satisfaction and commitment and is one of

the drivers of organization commitment, nevertheless, it

has to be considered as one of the pieces in a complex

picture (Boyd and Salamin, 2001; Parker and Wright,

2001). Just as important is the organization need to

communicate its total compensation package to its

employees. It must emphasize not only the salary, bonuses

and benefits, but other highly valued aspects of

employment such as supporting life style balance

initiatives and flexible work arrangements. These are non

monetary benefits known as intrinsic rewards and they

have significant role in compensation satisfaction

(Mitchell and Mickel, 1999; Parker and Wright, 2001).

14

According to a study by Mercer (2003), employees

will stay if they are rewarded. Employees are usually

rewarded based on quality based performance. A sense of

accomplishment is recognizes as important and a strong

motivator. Employees tends to remain with the

organization when they feel their capabilities, efforts

and performance contribution are recognized and

appreciated (Davies, 2001). Employees are increasing

their commitment to the use of rewards as essential

elements of talent management programs. It is

increasingly important for companies to use their reward

budget effectively to differentiate the rewards of the

top performers, thus driving an increase in return on

investment (ROI) on human capital investments. The

alternatives are decreased employee performance or the

attrition of key performers to competitors in an

increasingly competitive environment.

Thus companies that are committed to their employees

typically invest more than similar firms in progressive

HRM practices such as training and education, and in the

total package of compensation (Arthur, 1994; Huselid,

1995). They also distribute rewards more equitably and

generously. Compensation provides recognition, but other

forms of non-monetary recognition are also important.

Recognition from managers, team members, peers and

customer enhance commitment (Walker, 2001). Particularly

important to the employees are opportunities to

15

participate and to influence actions and decisions

(Davies, 2001; Gold, 2001).

There are studies that have highlighted the rewards

retention link (Watson wyatt, 1999; Mercer, 2003; Tower

Perrin, 2003) and provide insights into what employers

are doing, how they feel, and what employee have to say

on the rewards issue. The recent studies give further

support to the belief that a broad and well implemented

reward program assists in talent management.

Mercer human resource study measured the return on

reward investments of 302 companies. The research

assessed the effectiveness of specific reward and

identified the reward program issues and challenges

confronting US companies. Mercer findings indicate that

most company are increasing their focus on attracting and

retaining talent.

The Watson Wyatt annual survey of employee attitudes

toward their workplace and their employers, work USA,

2002, reflected the views of 12,750 workers at all job

levels and in all major industries on a number of

workplace issues, including rewards. The finding of study

revealed that recognition matters to employees and they

need to hear that they are appreciated.

The Towers Perrin study examined twenty two large US

employers and their talent attraction and retention

practices. Participants in the year long study range from

companies with 2500 employees to those with more than

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364000; their revenues ranged from $ 1.6 billion to $ 58

billion. This research identified a strong correlation

between incentive pay and retention.

3. Training and Career Development

Training is considered a form of human capital

investment whether that investment is made by the

individual or by the firm (Goldstein, 1991; Wetland,

2003). Once employee are hired, training program enhance

employee job skills. Employees are expected to acquire

new skills and knowledge, apply them on the job, and

share them with other employees (Noe, 1999). Lauri,

Benson and Cheney (1996) found that firm often delays

training to determine whether workers are good matches

and therefore have a lower probability of leaving the

firm.

Training provides employee with specific skills or

helps to correct deficiencies in their performances;

while development is an effort to provide employees with

abilities the organization will need in the future (Gomez

et al, 1995). Skill development could include improving

basic literacy, technological know-how, interpersonal

communication, or problem solving abilities.

A firm has the incentive to invest in the human

capital of its workers only if there is expectation of a

return on its investment. Increasingly, companies are

strengthening development for talent, through competency

analysis, input on individual interests, multi source

17

assessment of capabilities and development needs, and

formulation of action plans (Messmer, 2000; Clarke,

2001).

A survey of literature on training by Bishop (1998)

revealed that larger, established, unionized,

manufacturing firms tended to provide training as did

multi- establishment firms with high performance or

flexible production systems. Findings of Black and Lynch

(1996) indicated that larger employers, establishment

with high performance systems and those which use more

physical capital were more likely to retain their

employees. Firms in industries with rapid technical

progress and output growth trained more as well as those

which had experienced no competitive crisis in the last

decade. Frazis et al, (1998) found that firms that

provide more benefits and have innovative work practices

train their employees more than other firms.

According to Storey and Sisson (1993) training is a

symbol of employer commitment to staff. It is also

reflective of an organizational strategy based on adding

value rather than lowering cost. Leading companies have

acknowledge that providing employee with a comprehensive

range of career and skill development opportunities is

the key to attracting and retaining the kind of flexible,

technological-sophisticated workforce that companies need

to succeed in the digital economy (Bassi and Van Buren,

1999; Accenture, 2001).

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The training and development of people at work has

increasingly come to bee recognizes as an important part

of HRM (Oakland and Oakland, 2001). An analysis of

employee commitment among hospital administrators,

nurses, service workers and clerical employee as well as

among scientists and engineers from a research lab

concluded that the employer ability to fulfill the

employee personal career aspirations had a marked affect

on employee commitment (DeToro and MCabe, 1997;

Marchington and Wilkinhson, 1997). Consistent with this

work is a study of employees of a manufacturing plant

where it was similarly found that internal mobility and

promotion from within, company sponsored training and

development and job security were all correlated with

employee commitment (Bassi and Van Buren, 1999).

Training plays an important role in the success of many

organizations (Bassi and Van Buren, 1999).

Levels of employee turnover and training are

expected to be inversely related: the higher the level of

turnover, the lower the amount of training. This

expectation is based on the reasoning that the longer an

employee stays with an employer; the higher will be the

return to training. A recent study by Frazis et al.

(1998) indicated that employee working in lower turnover

establishments spent about 59 percent of their total

training time in formal training, compared with 18

percent for employees in high turnover establishments.

From the employees view, if the training involve skills

19

specific to the establishment, it is likely to contribute

to an increase in productivity at that establishment.

Greater productivity at the establishment, in turn, will

tend to raise a workers wage above what he or she would

earn elsewhere, thus providing an incentive to stay. In

other words, training can serve to lower turnover (Frazis

et al, 1998; Wetland, 2003).

2.3 TURNOVER INTENTION

Intention to Stay/Intention to Leave

Turnover intention is defined as a conscious and

deliberate willfulness to leave the organization (Tett

and Meyer, 1993). According to Fishbein and Ajzen (1975),

“the best single predictor of an individual behaviour

will be a measure of his intention to perform that

behaviour”. It is therefore legitimate to use it as an

outcome variable in turnover studies (Gutherie, 2001;

Gutman et al., 2001). Employers also consider intention

to quit a more important measure than the actual act of

turnover. (Lambert et al 2001). Empirical evidence

strongly supports the position that intent to stay or

leave is strongly and consistently related to voluntary

turnover (Dalessio et al., 1986; Gutman et al., 2001;

Mathieu and Zajac, 1990).

Employee leave for many reasons, some of which

organization have no control over, such as retirement, a

family member being transferred or the desire to stay

home to start a family. Some of the most common reasons

20

employee leave include: employee perception of poor

leadership or supervision, unchallenging positions,

limited opportunities for advancement, no recognition for

good performance, limited control over the work and

customer, salary benefits are not commensurate with job

requirements; and the opportunity for a better

compensation package elsewhere( Accenture, 2001; Jardine

and Amig, 2001).

Wagar (2003) examined the relationship between an

individual intention to quit his job and the human

resource management activities of the organization. The

study that employees of organizations with more

sophisticated human resource systems were significantly

less likely to indicate they intended to quit over the

next two years.

2.4 TURNOVER INTENTION PREDICTOR

Organizational Commitment

Organizational commitment is also examined in

several studies as a predictor of both the intention to

quit and turnover. According to Mowday et al., (1979), an

employee who is committed to the organization has values

and beliefs that match those of the organization, a

willingness to exert effort for the organization, and a

desire to stay with the organization. Employees with

lower levels of commitment are less satisfied with their

jobs and more likely to plan to leave the organization

21

(Bennett et al., 1993; Schnake and Dumler, 2000; Zangaro,

2001).

Availability of Employment

Availability of employment has a significant

positive effect on turnover intent (Tett and Meyer 1993).

Employees are less likely to express turnover intentions

when they perceive that there are other acceptable

employment opportunities. Many researcher argue that most

people will not leave their current job without

reasonable probability of finding other employment (Bame,

1993; Hom and Griffeth, 1995). Some studies have used the

local unemployment rate as a measure of alternative

employment opportunities (Mueller and Wallace, 1992;

Vorhies and Harke, 2000). However, this may not

adequately measure an individual person availability of

alternative employment opportunities.

Demographic Factors

Demographic Factors were among the most common and

most conclusive predictors in the turnover literature. A

number of studies found age, education, job level, gender

and tenure with the organization to be significant

predictors of turnover (Miller and Wheeler, 1992). It was

generally accepted that younger and better educated (as

well as less trained) employees are more likely to leave

than are their counterparts. The higher the job level one

has within the organization, the lower is ones likelihood

of quitting (Bedian et al., 1992). Level of education was

22

related to turnover only for employees holding mid-levels

jobs (Galang et al., 1999). This means that those who

have highly specialized skills, as well as those with

limited education, tend to remain on the job for longer

period of times than those who have a moderate degree of

educational attainment.

2.5 CONCLUSION

The common theme in this literature review was an

emphasis on the utilization of human resource factors

that influence retention of employees. A review of

relationships between HR practices and turnover

intentions is explained. Various HR factors were

discussed to establish relationships among these

variables. Turnover predictors with respect to

demographic, organizational and employment were

highlighted.

23

CHAPTER - 3

RESEARCH METHODOLOGY

This chapter explains the overall methodology

required to collect the data to address the research

issues of this study. It starts with the selection and

justification of the approach of the study: with respect

to the in-depth interview and the employee survey. It

provides information about the sample population and

further describes the instruments, the data collection

process and the type of analysis carried out in the

study.

3.1 HYPOTHESIS

The study was revolved around the basic question

that what are specific factors and how they are

associated with employee retention. For this purpose the

following hypothesis can be developed:

Ho: Personal values congruent to organizational culture

may not help to retain employees in the

organization.

HA: Personal values congruent to organizational culture

may help to retain employees in the organization.

Ho: Existence of organizational fairness may not lead to

retention of employees in organization.

HA: Existence of organizational fairness may lead to

retention of employees in organization.

24

Ho: Remuneration and recognition is not associated with

turnover intentions.

HA: Remuneration and recognition is associated with

turnover intentions.

Ho: Perceived investment in employee training and career

development is not associated with turnover

intentions.

HA: Perceived investment in employee training and career

development is associated with turnover intentions.

25

3.2 DATA COLLECTION METHOD

The objectives of this study were to investigate and

determine current human resource practices on the

retention of employees. In order to successfully achieve

this aim, the study involved two approaches to data

collection. One was interview with the HR Manager and

other was a questionnaire, administered to the employees

of KMC, Peshawar.

The interview being qualitative approach was

employed with the objective to acquire richer data from

HR policy makers. The acquisition of this set of data

enabled the researcher to construct a more effective

instrument for research survey. Research survey involves

a survey of employees of KMC, Peshawar.

This study aimed to rectify the gap in the extant

literature and provide valuable insights that may explain

the differences in human resource management practices

that affect the retention of employees.

3.3 SAMPLE POPULATION

Sample population was done from KMC, Peshawar for

in-depth interview and employee survey for this research.

A convenience sampling technique was adopted to sample

the employees and collect the data. A letter and

questionnaire to this effect was developed requesting an

opportunity to conduct an interview with their human

resource manager and a survey of their employees.

3.4 METHODOLOGY FOR INTERVIEW

26

The research method involved was the interviewing of

human resource manager or representative of KMC,

Peshawar, using a structured interview schedule, which

incorporated a list of HR best practices on retention.

These questions were based on the best practices

identified through literature review. The objective of

the interview was to identify other HR elements not

captured by the literature review but considered to be

important by practitioners. These final sets of HR

practices were identified during the interview process

and utilize for the employee survey instrument.

Face to face interview was conducted lasting

between 30-40 minutes with the use of semi structured

interview schedule .The interview schedule was developed

in order to provide some standardization interviews.

3.5 INTERVIEW FORMAT

The first section of interview schedule sought

information on the characteristics of their employees and

their application of standardized or differential HRM

for different types of employees and the importance of

the role of HR in the organization (strategic or limited

to administrative). The second section of the schedule

explored the importance of human resource factors in

relation to its influence on retention in the

organization and the effectiveness of its implementation.

The final sectioned covered (1) contextual issues that

27

affect the industry and the retention management of

employees (2) effective management of such as hiring

practices, performance appraisal practices, training and

career development practices, succession planning

program, pay practices and leadership practices and

finally (3) the turnover rate.

Additional information such as asking interviewees

to explain some of their constraints to achieve

effectiveness in their HR practices and the scope for

implementation of good practices might also be included

in order to elicit further information from the

participants (Maykut and Morehouse, 1994).

3.6 METHODOLOGY FOR EMPLOYEE SURVEY

Employee survey was conducted to obtained employees

perspectives of the effectiveness of the identified

factors in relation to their retention in their

organization.

The research method involves a survey of employees

of KMC, Peshawar. The questionnaire was developed based

on literature studies, as well as the interview with

human resource manager. Simple random sampling was

carried out in KMC, Peshawar, with about 31 employees

randomly selected to survey. The questionnaire was

distributed to 50 employees, however only 31 employees

give feedback.

This questionnaire explored the employee perspective

of their organization human resources practices in

28

relation to their decision to stay with there employer.

The employee questionnaire explores four (4) areas

including the following demographic details:

organizational fit, reward and recognition, training and

career development, commitment and turnover intention.

The demographic details will be basic information

regarding age, level of education, occupation, number of

years in current job and number of years in the

organization.

Chi-test was used as statistical tool. Chi-test was

employed using the Pearson formula in (Chaudry and Kamal,

2004).

Which under the null hypothesis (H0) follows a -

distribution with (r-1)(c-1) degrees of freedom.

In above equation, Oij and eij are the observed and

expected frequencies y of cell in ith row and jth column,

respectively.

3.7 DATA COLLECTION AND ANALYSIS

Data collected through questionnaire was analyzed by

using SPSS. Descriptive statistics was used as

statistical tool for the analysis of the data. Chi-test

was used to determine the differences among the variables

that were understudy and their relationship with turnover

factors.

29

30

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43

APPENDICESAPPENDIX-I: EMPLOYEE SURVEY

Section A: Background Information

Please complete this section. The following question requires a written response.

1. Your Age. 20-29 30-39 40-49 50-65

2. Gender Male Female

3. Years of service

4. What is your occupation?

Section B: Human Resource Factors

The following statement relate to the way in which

you perceive the human resource practices within your

organization. For each statement, you are asked to mark

an X in the box that best describe your response.

(a) How accurately do the following statement best

describe your personal fit with your organization

culture and values?

1 2 3 4 5

Strongly disagree Disagree Neutral Agree

Strongly Agree

Organization Fit

1 2

3 4 5 5. This organization does not have

the same value as I do with

regard to fairness.

44

6. I feel that my personal values

are good fit with this

organizational culture

45

(b) How accurately the following statement describes

your organization remuneration and recognition

system?

1 2 3 4 5Strongly disagree Disagree Neutral Agree

Strongly AgreeRemuneration and Recognition

1 2

3 4 5 7. Employees are given positive

recognition when they produce

high quality work.8. This organization pays well.9. This organization offers a good

benefits package compared to

other organization.

(c) How accurately the following statement describes

your organization training and career development

practices?

1 2 3 4 5Strongly disagree Disagree Neutral Agree

Strongly Agree

Training and Career Development

1 2

3 4 5 10

.

People are properly oriented and

trained upon joining this

organization.

46

11

.

This organization does provide regular opportunities for personal and career development.

(d) What are your plans for staying with this

organization?

1 2 3 4 5Strongly disagree Disagree Neutral Agree

Strongly Agree

Turnover Intention

1 2

3 4 5 12

.

I plan to work at my present jobas long as possible

13

.

I will most certainly look for anew job in the new future.

14

.

I would hate to quit this job.

APPENDIX-II: INTERVIEW

SECTION A: CHARACTERISTICS OF EMPLOYEES1. Approximately how many employees are there in your

organization?

____________________________________________________

___________

2. Does your organization consider effective management

of human resources to be a source of competitive

47

advantage? How is this evident in your

organizational practices?

____________________________________________________

___________

3. As the senior HR person who do you report to?

____________________________________________________

___________

4. Does HR play in important role in the strategic

business planning of your organization? How do you

contribute to this area?

____________________________________________________

___________

5. Does your organization have a separate human resource

department?

____________________________________________________

___________

6. Which of the following are controlled centrally by

the HR department?

Personnel record,

Training programs,

Salary

Performance appraisal guidelines

7. Do you outsource any HR function?

____________________________________________________

___________

8. How many employees do you have in the HR department?

____________________________________________________

___________

48

49

SECTION B: HUMAN RESOURCE PRACTICES/ FACTORS THATINFLUENCE EMPLOYEE RETENTION.9. The following factors have been suggested as

important to human resource management. Could youidentify the top three and explain how you believethis impact on the retention of employees? Attrition. Hiring Promotions Demotions Transfers Changes in workers skill sets.

10. The following list has been identified by research asthe top five human resource factors that influenceemployee retention. please indicate the extent oftheir importance to you company with the regards tothe retention of your employees.(e.g. veryimportant, important, somewhat important) Effective selection Reward and recognition of employee value Career development. Challenging employment assignments and

opportunities. Equity of compensation and benefits.

11. Are any one of the following evident in your workcontext?

Market place competition has increaseddramatically.

Conditions in our business environment arerapidly changing.

50

Government regulations are rapidly changing. The technology in our product/service is

complex. Short supply of skill people in the labour

market.Can you give example of how they are impactingon the employee? Activities and workenvironment?

12. Please indicate to what extent your organizationhiring practices influence the retention ofemployees. State the type of performance measure/sused to test the effectiveness of the hiringpractices.

13. Please indicate to what extent your organization

performance appraisal practices influence the

retention of your employees.

14. Please indicate to what extent your organization

training and career development practices influence

the retention of your employees.

15. Please indicate to what extent your organization

succession planning program influence the retention

of your employees.

51

16. Please indicate to what extent your organization pay

practices influence the retention of your employees.

17. What voluntary turnover rate organization had in the

last year?

None 11 to 20% 31% to 40%

10% 21% to 30% 41% to 50%

and above

18. Does your organization monitor the turnover rate and

the reason for the turnover? Please state the

reasons.

19. How long have you been in this current job?

52