THE RELATIONSHIP BETWEEN EMPLOYEE RETENTION STRATEGIES AND EMPLOYEE TURNOVER

CHAPTER TWO

REVIEW OF LITERATURE

2.1 INTRODUCTION

Our focus in this chapter is to critically examine relevant literatures that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

Precisely, the chapter will be considered in two sub-headings:

 Conceptual Framework

 Theoretical Framework

2.2 CONCEPTUAL FRAMEWORK

Employee Retention

Hom and Griffeth (1995) described in a study that the process of encouraging employees to stay for a long period or till the project completion is termed as retention. Wysocki, B (1997) pointed out the view of “The Society of Human Resource Management” that retention of employee is the hottest topic in the current scenario. Drucker (1999) explained that employees voluntarily quits their job is a potential retention issue. Trip, R, while discussing turnover stated that for many organizations, voluntary turnover is a big challenge. Turnover may be

i. voluntary or involuntary and

ii. functional or dysfunctional. Voluntary turnovers refer to leaving of an employee in an organization voluntarily ie. the employee himself decides to leave/resign from the organization. In involuntary turnover, the employer expels the employee i.e. the employee leaves the organization unwillingly. It could be due to low performance, conflict or due to employment-atwill. When a low performer leaves the organization, it is referred as functional turnover. When a high performer leaves, it is referred as dysfunctional turnover which incurs cost to an organization. Terence et al., (2001) stated that there are so many reasons for an employee to leave voluntarily. Some may be personal and some may be influenced by organizational factors. Personal reasons such as family situation, career growth and attractive job offers etc. Organization factors includes lack of promotional opportunities, unfair treatment among employees and mismatch between personal values and organizational values etc., Overall turnover is a great problem for both organization and individual. Further it is clearly discussed that occurrence of shock which is expected or unexpected leads to serious thoughts (i.e. intention) to leave. Shocks may be positive, negative or neutral. Positive such as alternative job offers, pregnancy etc., Negative such as leaving of friends, poor performance appraisal etc. and neutral such as relocation of spouse, changes in administration etc. Maqsood Haider et al. (2005) undergone a research in Telecom sector and conversed that the competition to hunt and retain talents is tougher all the time and discussed that employees effective human resource practices show a positive and direct relationship in retaining employees. Further, it is analysed that culture and compensation have a positive impact; training & development has a negative impact over employee retention. Abeysekera (2007) in a study evaluated the HR practices like realistic information about job, job analysis, work life balance and career opportunities, supervisor support and compensation and their impact on employees’ intentions to leave which resulted that compensation and job analysis have positive impact on employee turnover. Holtom et al. (2008) discussed in this study that the factors that makes the employee for staying and leaving were different. Hay Group (2009) stated that employee engagement includes components such as commitment and discretionary effort. Commitment refers to employees’ attachment with an organization and the intent to continue with. Discretionary effort refers to the employees’ readiness to leave. It is discussed that these two components must be considered seriously. Taylor (2010) while explaining turnover stated that pull and push factors are to be considered. Positive attraction towards alternative job opportunity is pull factors, in which employees are searching for alternative job opportunities even if they are happy and satisfied. In this circumstance, it is highly essential that employer/management must understand the real value of their employees and identify the reasons for searching or what they are expecting in the current job and this would help to retain the talents. The next important factor is push factors, in which some dissatisfied circumstances are prevailing in the current organization which makes the employee to leave for refining work life. There are several attributes for pull and push factors that need to be identified and focussed more. Cardy and Lengnick-Hall (2011) conducted a study on retention of employees, which emphasizes more on customer-oriented approach. Employee equity model is the method followed in this research. This study explores more regarding employees’ values rather than external factors which have effects on the employees whether to stay or to leave. In other words, this study was concentred towards internal factors which makes the employees to stay or leave. Chitra Devi and Latha (2011) conducted a research on employee retention in IT sector. The main aim of the research is to identify why employees are migrating one from companies to another i.e. reasons for migration and to analyse the retention benefits. Discriminate analysis tool was used and resulted that the sector has to focus on compensation, job satisfaction and job security as these were some of the important tools used for retention of employees in organizations. Tripathi et al. (2011) attempted to analyse the problems faced by the professional institutions i.e. private and government institutions and the factors to overcome the difficulties faced by them. Analysis with respect to private and government institutions for Level of job satisfaction, tenure of working, working environment, working hours, job switches and its reasons, faculty loyalty and tenure of service and retention tools were suggested in this study. Pay Dissatisfaction, lack of career growth opportunities, uncomfortable work environment, unsecured job, Loyalty are the factors which determine an attitude in faculties concerning their institutions. The study cited reasons for faculties leaving in existing employment and what made them to stay in the current employment. Sadaf Zahra et al. (2013) conducted a study in Pakistani Universities and found that compensation, support of the supervisor and work-life policies are some of the key factors in turnover intention and employees consider these a lot when compared to recognition and rewards. It is concluded that less flexibility and heavy work load affects family life. Apart from these motivation, competitive pay, supervisory support, leadership, programs for career development would reduce intention to leave. Chartered Institute of Personnel and Development report i.e CIPD (2015) has identified the factors for employee leaving as push and pull factors. Gary Dessler and Biju Varkkey, while discussing a comprehensive approach to retaining employees, stated that after identifying problems of retention, action can be taken to boost employee retention by way of pay rise, hire smart, discuss careers, provide direction, offer flexibility, attractive employee welfare measures, HR practices for high performance, binding contracts etc. Priyanka and Dubey S K (2016) in their study performed exploratory factor analysis using principal component technique. They have identified employee turnover intentions through eight factors such as i. quality of management practices, ii. Low salary, iii. No career growth opportunity, iv. Lack of support from the peer, supervisors and family members, v. little learning opportunities, vi. Poor working environment i.e. no workplace safety, vii. Communication and viii. Insecurity in job. Kossivi and Kalgora (2016) attempted to study the various factors for retention from the findings of various previous research studies and brought some factors such as opportunity for development, work-life balance, compensation, style of leadership of the management, work environment, autonomy, training & development, social support etc., In their study, supervision and leadership are explored more and the factors like organizational culture, autonomy and training & development are less explored. Further the scope for further research also stated in the conclusion that based on category of employees can be done in future. Vijayalakshmi V (2012) attempted to analyse the influencing factors of employee retention in automobile industries in India. Objectives of the study are i. to study the employee retention practices in automobile industry ii. To find out employees’ overall satisfaction towards work environment culture iii. To examine the training and development opportunities offered and its effectiveness iv. To analyse compensation factors. Tools used in this study are chi-square analysis, regression analysis, Mann-Whitney test, Kruskal Wallis test and analysis of variance. This study discussed the retention management in global perspective as “It includes salary which is competitive, balancing work-life between personal and professional life, offering training, determining the performance of the employees through conducting semiannual reviews, conducting events i.e. celebrations, providing appropriate rewards & recognitions with the view to motivate employees for better performances. These are all the factors considered both by the employer as well as the employee globally. Apart from these, some of the measures are advised to be adopted by the firms. Firstly, assessment and reward of managers are to be taken care of. Secondly, it’s about conducting period interviews focussing on retention. The linking factor behind these strategies is HR managers and their role is very vital in retaining employees in organizations”. Further it is discussed about the retention management in Indian perspective as “Strategies like better working environment, good compensation i.e. monetary & non-monetary, and flexi work hours, good superiorsubordinate relationships, spending money on training and development which can enhance learning environment-are considered in retaining employees in any companies in a current scenario. Additionally, management support, stimulate corporate culture, employee empowerment lead to job satisfaction which in turn increase employee retention. In Indian perspective, better communication between superior and subordinate, and growth and training opportunities have high preference and improvement of monetary benefits also lead to better employee retention.

Recruitment and Retention:

Frankeiss (2008) discussed in this study that policies and practices on talent management, recruitment and retention policy can play an important role in decreasing the attrition rates. Oracle white paper (2012), it is discussed that recruiting the right person in the first place would be the best practices for retention of employees. Beardwell and Wright (2012) emphasized in a study that organizations systematic approach to recruitment and selection which would help in decrease in turnover of employees.

Development opportunities and Retention:

One of the important factors of retention is development opportunities. The following researches have mainly focussed on development opportunities. Horwitz et al., (2003) explored in a research that an important factor of retention is personal as well as professional growth and it is the promotion opportunities which enhance commitment of the employees and in turn results in employee retention. Illeris, (2003) emphasized the learning organization strategy model through which the employees’ best learning in the work environment actually happens. Kroon (2013) identified that development opportunities can improve employee commitment to retain employees in organizations.

Compensation and Retention:

There are many studies that have explored the relationship between compensation and retention. Some studies have a positive impact of pay on retention and some have not. Tremblay et al., (2006) in a study explored by a team of researchers that performance related pay is an important factor in determining retention. Milkovich and Newman (2004) discussed that monetary pay is an essential factor in keeping the employee. Hytter (2007) concluded in a research that there is a correlation between reward and retention. Some studies have some negative impact on pay with retention. Hausknecht et al, (2009) discovered in a research that compensation and benefits contribute to retention. Daniel Eseme Gberevbie (2010) conducted a study among the civil servants at Nigeria and concluded that to retain talented employees for performance, suitable incentives must be provided. Pitts et al., (2011) identified that compensation predicts turnover of employees. Onyango (2014) found the positive correlation between direct & indirect financial rewards and employee retention.

Work Environment and Retention:

Horwitz (2003) observed in this study that fun working environment is a conducive factor of retention. Ellet et al., (2007) identified that flexibility plays an important role in retention of employees. Abrams et al., (2008) gave more importance towards the work environment where learning and working is possible in an organization. Tiwari (2012) suggested that organizations in a competitive environment use various strategies which are linked systematically with HR practices so that work environment can be improved.

Leadership and Retention:

In many studies, it is found that the leadership style has a greater impact on employee retention in organizations. Mc Neese and Smith (1995) identified in a research that manager’s attitude also impacts on commitment of employee in organizations. Kaye and Jordan-Evans (2002) highlighted that a good boss can influence retention of employees in an organization. Budhiraja and Malhotra (2013) explored in his study leadership style determines the success/failure. Alkhawaja and Arwa (2017) while discussing the leadership style and employee turnover stated that increase in turnover is due to unbalanced treatment of employees and hence while dealing with people, leaders should question themselves regarding their personal judgements, biases and assumptions, this ultimately results into high motivations and organizational effectiveness.

Training and Retention:

Bassi and Van Buren (1999) identified in this research that competency and professional advancement is the primary factor for retention of employees which are acquired through training. Investing money on training is not a cost, it adds value and strategy of an organization is reflected through training for the growth and successful survival. Deery (2008) suggested that one of the ways to improve retention and commitment is providing on the job training opportunities to workforce. Sarah Leidner et al., (2013) in this study, it is highlighted that for promoting employee devotion to the organization HR practices play an important role. It is found in this study that providing better training to workers leads to employee loyalty.

Job Satisfaction and Retention:

Davy et al., (1991) clearly stated the relationship between job security, job satisfaction and retention and highlighted that the results of insecurity among workforce results into job dissatisfaction. Abraham (1994) when comparing effectiveness of teaching, it is evidenced that faculties with high and medium level of satisfaction were more effective than those with low level of job satisfaction. Koh and Goh (1995), highlighted the significant factors that affect turnover intentions which were job satisfaction with respect to career growth, identity of company and financial rewards and results showed that the higher satisfaction over these factors causes lower turnover intentions. Vijaya Mani (2010) in a study to analyse employee job satisfaction and motivation used scorecard. It is found that if employees are dissatisfied, it is struggle for the employer to retain the knowledgeable people in the organization. Noltemeyer and Patrick (2014), it is proved in this study that there are certain responsibilities which accounts for job satisfaction. These are responsibility, work, good supervisor and employee recognition.

Performance appraisals and Retention:

Both the employer as well as employee is benefited out of performance appraisal. It helps employees to realize their strength and weakness. It also helps to identify the performance gap between the actual and the set standard. It helps the individual as well as the organization where they are. Based on the performance feedback, efficiency of employees can be improved. Performance appraisal helps in increasing monetary (pay) as well as non-monetary benefits like rewards, recognition, career development, management support etc which are some of the important factors in determining the employee to stay or leave the organization. Ingersol Company has developed a 360-degree online performance appraisal for performance evaluation and they had conducted a survey with the company heads being interviewed like TATAS, Hyundai Motors, Reliance Industries, Infosys, etc. Jonathan P. et al. (2011) found that it is required to be given that ‘extra’ to motivate the employees to stay.

Work-life balance and Retention:

The balance between the professional life and personal life is one of the factors in employee retention. Hyman and Summers (2004) stated in this study that work which demands interventions into employees’ personal life would exhaust them emotionally and result into high stress among the employees. Noor and Maad (2008), this study revealed that satisfaction towards work-life balance leads to low turnover intentions. Deery (2008) suggested some retention strategies which helps in balancing the personal and professional life e.g. i. flexible working hours, ii. flexible working arrangements, iii. providing adequate resources iv. training opportunities, v. correct workload, vi. providing adequate breaks in a day, vii. permission to take leaves i.e. carer’s leave and sabbatical leave etc., viii. staff reward, ix. inviting staff families for staff functions, x. wellness opportunities, and xi. effective management practices. Shrotriya (2009), it is proved in this study that balance between professional and personal life increases the employee productivity and competence which in turn would result into commitment and satisfactions. Branch (2011) contended that to improve employee retention, encouraging a good work-life balance was not the only way to retain employees, but a good compensation structure in a competitive range, career and development opportunities and some other factors also have some influence over it. Further, it is essential to have a balance between personal and professional work which would improve commitment towards the organization. Khairunnezam Mohd Noor (2011), in this study correlational analysis and mediation analysis were performed. In correlational analysis, it was found that perceived work-life satisfaction have negative impact with the intention to leave. In simple mediation analysis which resulted that job satisfaction & organizational commitment are partial mediators in proving the relationship between work-life balance and intention to leave among academics.

Employee Commitment and Retention:

Allen and Mayor (1990) found that in organizations, employees with strong/high employee attachment or commitment have low turnover intentions when compared to weak/poor employee attachment or commitment. Fitz-enz (1990) found in a research that employee commitment and retention cannot be determined by a single issue and it is determined by many factors. Goulet and Frank (2002) conducted a research in which organizational commitment in public, non-profit and profit sectors were studied and it was discovered that the workers from the profit sector was the most committed to their organization and next committed was non-profit and finally the public sector employees. Due to extrinsic and intrinsic motivation, the employees from the public & non-profit sectors were anticipated to have high organizational commitment but the study resulted against the expectation. Rashmi (2016) explained that in a competitive environment, survival of organization becomes very tough because there is increase in poaching of employees and hence it is highly essential for retaining committed employees in organizations.

Employee Engagement and Retention:

Mike Johnson (2004) in his book “The new rules of engagement” described that one of the utmost organizational battles for the future 10 years and it is the ability of the organization to engage employees to work with the business of the organization successfully. This is the hot topic currently i.e., in the 21st century and almost all the organizations are attempting to achieve this to their extent. Gemma Robertson-Smith and Carl Markwick (2005) in IES Engagement survey 2005 discussed that job satisfaction, feeling valued and involved, equal opportunity, health & safety, total service, ethnicity, communication and co-operation are employee engagement drivers in organizations. Hemsley and Fraser (2008) cited that higher employee engagement leads to low turnover of employees’ i.e. high retention, high productivity and profits and return on investments.

Concept of Employee Turnover

Employee turnover is delineated to a situation in which employees depart the organization for several reasons, and thus, negatively affect the organization in terms of overall expenditure and the abilities to distribute the minimum required services (Yankeelov et. al., 2008). When employees leave the organization, this may not only impact on organization but also on workforce itself. Due to its depressing impact, employee turnover has been considerable topic for scholars, academics and managers. The reasons for individual turnover intention are age, gender, marriage, education levels and years of working in the organization (Liu and Wang, 2006). Previous studies found that the rate of female employee turnover is higher, as compared to male employees. It can be associated with women duty that women need to give birth and take care of the family. Therefore, this is a pressing issue that needs to be dealt with urgently. Though employees work in units or positions for a long period, they feel tired and tend to leave the jobs. According to Ma et al. (2003), “Employees with young, inexperienced and high education level tend to have low level of satisfaction about jobs and careers, and have lower commitment to the organization, these negative attitudes are associated with turnover intention”. One of the key factors of turnover intention is Individual aptitude. When individuals have strong ability, or individuals are not core competent at their job and cannot progress them completely in the organization, they are prone to turnover intention (Chen and Li, 1998). For employees aged over 30, individual responsibility is also a factor to consider them leaving the organization. We can study this when the more responsibility (such as workers are the single father or mother, or their income is the main source, etc.) persons bear in the family, the lesser the possibility of their turnover (Zhang and Zhang, 2003)). In short, all these individual factors directly influence the turnover intention, or indirectly affect on them through the rule of other variables. Interpersonal relationship amid the different departments has a significant impact on employee turnover intention. When an organization or a department have intricate interpersonal relationship, there are many sections or small groups, it may be complicated for employees to deal with the relationship with coworkers and managers, or the workers are to spend a lot of energy to have relationships within the organization or the department, they are rather likely to leave the job (Zhang, 2016). Training and learning opportunities will also have considerable effects on employees staying in the organization. If the company does not provide them the opportunity to learn, they cannot improve their skills and abilities. In other words, employees are most unlikely to get self-realization so that they cannot continue to grow in the company. As a result, employees may tend to quit the job (Liu et al, 2006). Pearce and Mawson (2009) have described contradictory effect regarding the low rate of training in the organization, leading to poor job performance and higher rate of employee turnover. On the other hand, some organizations, which provide appropriate training program for their employees’ learning and skill development, achieve the high ratio of success and helping to minimize the level of employee turnover. Therefore, employees might have greater commitment to their job and full encouragement to stay in the organization (Amos et al., 2008). However, one of the significant effects of turnover is to increase cost due to recruiting and training new employees. It costs businesses money to call for interview and hire candidates. Besides, it is a costly process that skilled workers rarely spend the time and contribute in income-generating activities, because they provide training to new workers. In other words, experienced workers are responsible for training new employees so that they are less able to concentrate on their normal job duties. In a small business, the owner himself might have to train new employees. In addition, the combined effect of the negatives can result from high turnover, leading a firm to generate less profit. Anything that leads to increase costs or reduce productivity, income will tend to reduce profit. Evidence for this is provided by the Harvard Business School, when businesses experience higher turnover, they will get lower profit margins (Zeynep and Robert, 2008). It often takes months or years for a new business to achieve profitability due to increase of unexpected costs as high turnover and needs to start new venture to make a profit. Thirty nine cases regard as job satisfactions have been assessed in the past fifty years and it was discovered that all but four studies demonstrated negative relationship (Firth et al., 2007). By contrast, Simon and Kristian (2007) opine that job satisfaction is one of the predictors of turnover intention. In the perspectives of Western research, several studies have found that jobrelated factors are the key determinants of job satisfaction, organizational commitment and turnover intentions among employees. (Boxall et al., 2003, Malhotra et al., 2007; Meyer and Smith, 2000). A different study illustrates that both lower job satisfaction level and organizational commitment are associated with the higher rate of turnover (Zhao and Zhou, 2008). However, Zuber (2001) states that “turnover may matter more in organizations where jobs are not standardized and procedures do not exist for transmitting knowledge to new members”. Employees possibly exit the organization due to economic reasons. Michal et al. (2001) have used the economic model to predict labor turnover in the market. Some socio-economic factors such as economic development level, condition of labor market, employment structure, job opportunities, property enterprise, transport and communication, accommodation, education and medical facilities, living cost, quality of life and so on all have an influence on the intention of employee turnover (Huang and Huang, 2006). Economic growth, short supply of organization personnel, better employment opportunities increase will lead to turnover intention. The nature of organization affects the intention of employee turnover. Members of staff in state-owned organizations have the highest level of turnover intention, the next is workers in private organizations, and the final is staff in foreign funded organizations. Generally, these three types of business organization have the higher rate of turnover intention, more than the average. To a certain extent, transportation, shelter, schooling and health care facilities are negatively interrelated to the employee turnover. Under the circumstance of high expenditure of living, in order to make a living, the likelihood of employee turnover will reduce. Employees are likely to choose to quit the current job for getting the chance of high-paid job in pursuit of a better quality of life (Zhao et al., 2003). Experts also have opined that overall corporate culture of an organization affects the employee turnover. However, the most important issue here is the trust in and respect for the management team. If organizations appreciate employees, treat them with respect, and provide compensation, benefits, and perks that demon strate respect and caring, they will stay in the organization. In other words, employees appreciate a workplace in which communication is transparent, management is accessible, executives are approachable and respected, and direction is clear and understood (Huselid, 1995). In addition, a lack of recognition is one of the significant factors that may contribute to turnover. Organizations must provide a lot of genuine appreciation and recognition as icing on the cake for employee retention. Otherwise, there is a probability that employees tend to leave. Apart from the debate of employee’s turnover, many researchers have attributed the theories of employees’ retention as an important topic of inquiry. Employee retention is an effort by a business to maintain a working environment, which supports current workforce in remaining with the company. Retaining skilled employees would be a serious concern for organizations in the face of ever increasing high rate of employee turnover at national and global level (Samuel and Chipunza, 2009). Literature has overwhelmingly proved that valuable workforce or functional workforce retention can play a significant role for the survival of an organization. As a result, this could have adverse effect on productivity and profitability (Bogdanowicz and Bailey, 2002). Many experts agree that employees’ retention policies are aimed at addressing the various needs of employees to enhance their job satisfaction and reduce the substantial costs involved in hiring and training new staff. It is essential for an organization to maintain corporate strategic advantage by retaining the hardworking and talented employees. Hence, managers must understand the difference between a valuable employees and an employee who does not contribute much to the organization so that they can design appropriate strategies to retain the potential employees. These strategies may range from lucrative rewarding packages to involving employees in every sphere of the functioning of the organization (Mak and Sockel, 2001). Previous empirical studies have observed that factors such as competitive salary, friendly working environment, good interpersonal relationships and job security are the key motivational variables that can lead to retain them in the organizations (Samuel and Chipunza, 2009; Kinnear and Sutherland, 2000; Maertz and Griffeth, 2004). Two factor theory propounded by Herzberg et al. (1959) is an important theory that explains what satisfies or dissatisfies employees and, hence, serves as an important framework for employee retention.

Voluntary and involuntary turnover

While employees quit the job from an organization, it is stated as voluntary turnover (Noe et al., 2006). It is set off the decision of the employee. Another definition is furnished by Egan et al. (2004), indicating “An instance of voluntary turnover, or a quit, reflects an employee’s decision to leave an organization, whereas an example of involuntary turnover, or a discharge, reflects an employer’s decision to terminate the employment relationship”. Voluntary turnover can be affected by not having job satisfaction, job stress, as well as due to getting a better job at another organization, a conflict with a manager, or personal matter such as staying home and giving enough time to the family member (Manu and Shay, 2004). It is, therefore, essential to reflect on attractions such as alternatives whilst appearing to voluntary turnover. Nevertheless, voluntary turnover can be foreseen and, in turn, be managed. Chiu and Francesco (2003) define involuntary turnover as “… an instance of involuntary turnover, or a discharge” that “reflects an employer’s decision to terminate the employment relationship”. Involuntary turnover includes retirement, death and dismissal. Employee turnover is regarded as involuntary when leaving the job to take care of seriously sick family member or to accompany a spouse to remote area. Therefore, employees have no control over and decide to quit the job (Martin and Martin, 2003).

Avoidable and unavoidable turnover.

Avoidable turnover has been described as the one organization can prevent through recruiting, assessing and motivating employees more efficiently and effectively (Luecke, 2002). So any business organization requires verifying whether voluntary turnover has been dealt with properly. Such confirmation is also needed, because this will lead to take the necessary initiatives to enhance the employee retention. The phenomenon of turnover is psychosomatic, managerial and expensive (Weisberg and Kirschenbaum, 2002). There is currently no conventional model to understand the route of turnover as a whole. A variety of factoring is applied to evaluate the causes of employee turnover. It contains personal factoring, job content factors, working environment and external factoring. Chiu et al. (2002) have stated that “Unavoidable turnover results from life decisions that extend beyond an employer’s control, such as a decision to move to a new area or a job transfer for a spouse”. However, almost eighty percent of turnover is due to recruiting mistakes, several of these mistakes can be avoided. Organizations have a need of taking certain measures while selecting and evaluating potential employees.

Causes And Influencing Factors Of Employee Turnover

Turnover, in essence, results from job dissatisfaction for individual employee in the work place. However, being dissatisfied in a work is not the only reason of leaving the company. When employees possess skills that are in demand, they are likely to be tempted by a high salary, more benefits or better potential for career development. Consequently, it is sometimes necessary to understand and identify the difference between employees who are unsatisfied, leaving the job and those who quit for other reasons. There is a variety of causes and influential factors that result in employees’ turnover of an organization.

Managerial factors.

High employee turnover is caused by the instability in the management of an organization. Employees are more inclined to stay and work when the organization is stable and friendlyworking environment (Bergmann and Scarpello, 2001). The obligation of a quantitative approach to managing the employees has led to disillusionment of employee and so it directs to turnover. Because of this, managers should not apply the quantitative approach in supervising their employees (Dress and Shaw, 2001). Approving a cost oriented approach to labor costs increases employee turnover (Liu, Liu and Li, 2006). If managers take steps to cut the labor turnover, it is essential to avoid all these approaches (Dobbs, 2001). Organizations could eventually reduce in size turnover unless organization has performed as wellbalanced communication system between managers and workers (Griffeth and Hom, 2001). Zhang (2016) has quoted that “The participation degree of company or department decision also positively influences the level of job satisfaction, in turn, directly or indirectly affect turnover intention”. Employees feel satisfied about their work and stay longer in their positions to get them involved in the organizational decision making process. For this reason, workers should understand concerning issues that influence working environment (Khatri et al, 2001). One argument put forward is that a high turnover of labor possibly implies poor staffing and selection policy, poor supervisory system, weak grievance procedure and lack of motivation. All these issues can result in high labor turnover in the sense where there have been no appropriate managerial guidelines on personnel issues and, thus, employees decide to leave the job (Lambert et al., 2001).

Working environment

If working environment is low-grade due to lack of all the basic facilities such as proper lighting, working in a space with some natural light, ventilation, air conditioning system, open space, restroom, lavatory, furniture, safety equipment while discharging hazardous duties, drinking water and refreshment, workers will not be capable of facing up the difficulty for a long time (Singh, 2008). Besides, a bad boss creates an adverse working environment, thereby leading the employees to leave the job.

Pay

According to Shaw et al (1998), “Pay is something given in exchange for services rendered in an organization”. It has played a significant role in retaining and rewarding high quality human resources. To be more precise, one of the critical factors of employee turnover is lower salary. When employees’ receive lower salary and insufficient financial rewards, they tend to stay no longer with the organization (Lavob, 1997). It is often said that job dissatisfaction is the major cause of poor pay scale procedure, leading employees to leave the job. A good illustration of this is that a new employee may guess why the person next to him gets a high salary for what is supposed to be the similar job (Dobbs, 2001). A common opinion is that good pay can be a strong determinant of job satisfaction that leads to achieve higher productivity in the organization.

Fringe benefit

A fringe benefit is a meandering incentive contracted to an employee or a group of employees as a part of executive membership, which has an effect on performance and employee retention (Alexander et al., 1994). It can be argued that benefit scheduling is a critical section of human resource planning process on account of huge expenditures and financial resources approved for the future (Weiss and Cropanzano, 1996). At the managerial level, a fringe benefit is critical to attract, retain and motivate the employees who may continue to work for organizational success. One reason for this is that fringe benefits play an important role to persuade individual’s interest to work with an organization. In fact, numerous organizations provide fringe benefits, incentives and recognize employee’s performance, directing a device of motivation (Lee and Mitchell, 1994).

Career promotion.

In wide terms, reward program demonstrates the broad theory of compensation strategy which is described as the “deliberate utilization of the pay systems as an essential integrating mechanism through which the efforts of various subunits or individuals are directed towards the achievement of an organization’s strategic objectives” (Labov, 1997). The best way of promoting and motivating employees would be a combination of pay, promotion, bonus and other kinds of rewards to achieve organizational performance (Ting, 1997). The reason behind is that lack of promotion and ordinary work responsibilities considerably can lead to the intention of turnover (House et al, 1996). To an extent, employees consider leaving the organization due to the ineffective performance assessment and perceptions of job unfairness (Weiss and Cropanzano, 1996). By implementing “job enrichment” programs, organization would be capable of retain employee and to provide the opportunities for better career development (Magner et al., 1996).

Job fit

According to Campion (1991), Selection process is related to the fit between the candidate and the job. O’Reilly et al (1991) argued that job satisfaction levels will go up if there is a good fit between qualities of the applicants and the job. Therefore, it is imperative to have a good fit between what the candidate wishes for and what the organization requires. Organizations will increase the productivity if they recruit the suitable employees and take necessary measures to increase job satisfaction. On the other hand, turnover will not be minimized until employees are not satisfied with the job. As a result, management needs to deal with the pressing issue of employee’s turnover and job satisfaction. Thompson et al. (2006) state that “A happy worker is a productive worker”.

Clear job expectation

If organizations cannot fulfill the highest capacity of personal job demand, employees may have a feeling of job dissatisfaction that result in turnover intention. One of the major causes of employee’s turnover is that employees depart the organization, while newly hired employees do not get their job expectations. Secondly, some employees are rather unlikely to be in a situation to tolerate few managers or supervisors and, hence, they come to a decision leaving their positions (Makhubu, 2006). As a consequence, it is more imperative for an organization to understand employee’s job anticipation and, side by side, take necessary steps to fulfill their needs.

Perceived alternative employment opportunity

Employees leave the organization if there is a possibility to get an alternative work (Luthans, 1995). However, it can be argued that this is an unmanageable issue, depending on the external environmental factors, such as job availability and the rate of unemployment. A study conducted by Carsten and Spector (1987) found considerable relationship between job availability and voluntary turnover. To be more precise, perceived alternative opportunity may also be exaggerated by the market condition and educational background (Jacob, 1998). We observe this when personnel with higher educational background is more qualified and experienced so that they can perceive alternative job opportunity (Cotton and Tuttle, 1986). In other words, higher educated employees have more chance of upgrading their positions in comparison with less educated employees and are likely to consider their qualification as a competitive advantage.

Influence of co-workers.

In 2002, a study carried out by Martin and Martin (2003) of 477 workers in 15 companies investigates the reasons why employees are intended to quit the job. One of their major findings is that “co-workers intentions have a major significant impact on all destination options – the more positive the perception of their co-workers desire to leave, the more employees themselves wanted to leave”. In fact, job change acts as a form of social pressure or rationalization on employees while co-workers intend to leave their positions.

Strategies To Minimize Employee Turnover

It is uncompromisingly indispensable to stay put the potential employees in the organization. Managers need to arrange training and learning program how to focus on key employee satisfiers and dissatisfiers so that they can make a well balanced job design and control system to retain employees in the organizations (Staw et al., 1986). One of the major causes of job dissatisfaction is poor income, which may result in employees leaving the organization. Therefore, it is more essential to build up a sound retention plans and have a good relationship between managers and workers in any organization.

Recruiting suitable employees.

According to Hulin et al. (1985), staffing is designed at providing a pool of latent human resources from which business organization can select the suitable employees on the basis of job condition. Hence, if the organizations try to minimize the rate of employee turnover, it is required to ensure that the suitable applicants have considered for recruitment and selection in the job. Re-cruitment is the process of attracting the potential candidates so that they will possibly contribute to the organization (Steel and Ovalle, 1984). It becomes noticeable that sound strategies are needed to draw an attention to the employees and motivate them to stay put in the organization. However, organizations should have the ability to identify the right, qualified and experienced employees and thus, this will lead to achieve the business goals. What this means is, businesses would have letdown or diminutive growth unless they recruit skilled workforce (Schervish, 1983).

Retaining valuable employees

Mobley (1982) describes that it is the responsibility of an organization to retain the potential employees because they will probably contribute the firm to reach the destination. The immediate cause of this, retaining the best employees for an employer could have a competitive advantage as compared to others. HR management should take steps for an appropriate employee assessment so that the most suitable candidates are employed. According to Mobley (1982), “The quality of an organization’s people is always an essential ingredient of successful strategy execution – knowledgeable, engaged employees are a company’s best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence”. Firms may employ next to kin of applicants as the best way to motivate and retain the top talent. Despite the fact of family reasons, this approach will minimize the family reasons to quit the organization, particularly, in the technical work.

Effective leadership.

It is fairly likely that employees will not stay in their jobs due to the lack of support from managers (Mobley, 1977). Many researchers are of the view that poor supervision is one of the leading factors of employee turnover and, hence, it is vital for an organization to coach its managers in order to improve their organizational and leadership skills (Porter and Steers, 1973). It comes to appear that employees do not have to be friends with their boss, but they need to have a good relationship with their respective boss. However, one argument put forward by management experts is that boss needs to provide direction and feedback, spend time in one-to-one meetings, and work with them cooperatively. HR managers often develop new ideas to improve employee retention, but HR experts believe that one of the most important retention tools is being a leader instead of a manager, so they suggest that a manager needs to push towards the potential of employees and appreciate them in terms of their performance. It would be also a responsibility of an effective leader to take care genuinely about their concerns and provide tools for personal and professional development (Guion and Gottier, 1965). An employee reports to undermine the employee’s engagement, confidence, and commitment to have a toxic relationship with the individual. A bad boss is one of the reasons why employees quit their job. A good illustration for this is that boss keeps update information that employees need to succeed. He or she cannot perform his job or accomplish his goals without their help. So, manager shares a critical interdependence with employees. If manager rarely supports them to complete the tasks successfully, they cannot perform well in their assigned responsibilities. In fact, employees will not progress without the information, perspective, experience, and support of manager (Maertz and Griffeth, 2004). Based on a recent study, it can be argued that the direct and indirect effect of managerial support on turnover cognition represent inconsistency of the reason of manager on turnover intention (Campbell and Allen, 2007).

Training and development

Management should initiate to create an environment, where key information has been freely communicated. Employees have the opportunities to be well-informed and insightful for further career development, as well as variety form of training program will rationally be foremost to an organization. Therefore, this will result in retaining the employees and have a positive impact on organizational productivity (Singh, 2008).

Indentifying the economic problem.

Generally, employees are most likely to generate the turnover intention due to a variety of economic reasons (Steers and Mowday, 1981). If we provide evidence, Ford’s car plants have experienced a significant number of employee’s turnover frequently reaching rates as high as 300 to 400 percent per year. When the company enables to realize and identify the problem, a decision has approved to increase the basic wages doubled from 2.50 dollars to 5.00 dollars per day and, by doing so, the rate of labor turnover has radically reduced (Muchinsky and Tuttle, 1979).

Job satisfaction.

The job content and autonomy are the two major job related motivational factors that lead to an increase of employees job satisfaction. Once employees realize that they are authorized to take part in the decision-making process, they could be motivated and desire to do their best for the organization. Shahzad et al. (2008) state that “Turnover studies primarily have established that satisfaction with supervision promotes job retention without necessarily identifying specific behaviors by supervisors that commit employees to the company”. Experts have identified some factors that are likely to make employees satisfied at work such as good pay, friendly working environment, cooperative colleagues, career counseling and opportunities for training and development (Sherman and Snell, 1998). It is also noted that “employees desire managers who realize and treat them fairly” (Dailey and Kirk, 1992). Unless managers are fair, logical and caring to their employees, it is fairly likely that they will not be happy about their jobs.

Unionization.

One of the major advantages of labor unions for organizations is that they lead to less employee’s turnover. It is quite probable that employees will not leave their jobs as frequently if they are the members of labor union. One cause for this is that they have to pay dues to be a part of the union, and they typically do not want to lose their position in the organization. Labor unions are organizations in which employees bond together to create a collective voice for negotiations with employers. Previous studies suggest that labor union may be capable to provide safe and better working environment by the negotiations between labor and management, resulting in lower turnover (Ferguson, 1986). Another benefit is that labor union by their effective working can improve employee satisfaction. While employees deal with unions, they are likely to be more satisfied, as they have a voice to speak to the employer and get higher wages on average and fringe benefits packages. Therefore, labor unions help in reducing the rate of labour turnover and developing systematic grievance settlement procedures leading to harmonious industrial relations. Trade unions can, thus, contribute to the improvements in level of production, productivity and discipline, thereby improving quality of worklife (Martin and Martin, 2003).

Organizational culture.

A well-developed organizational culture is one of the factors that influence the employees to stay put in the organization. If employees are not being contented with the culture, work environment, organizational structure, the probability is that they will quit the job (Mowday et al., 1982). It is often said that organizations are able to attract and motivate employees by practicing the best organizational culture. Thus, it may lead them to continue work in the organizations.

Balancing work and family life.

There can be avoided various retention problems if the organization finds a solution to help employees to effectively control their commitment at home and at work (TserYieth et al., 2004). It is also probable that parents are supposed to take responsibilities, while this comes up to the caring for the family. If we take an example, parents may help to bring back children from school. The study also suggests that flexible working hour can lead to deal with a better work-life balance and, by doing so, can counteract job stress (Boxall and Purcell, 2003). Hence, managers should be provided the flexible

2.3 THEORETICAL FRAMEWORK

This study adopts the decision-making theory as its analytical framework. The significance of the theory lies in its identification of the importance of decisions in organizations in the area of the strategies to be adopted to retain the workforce for organizational performance. The decision-making theory finds its early manifestation in the works of some scholars like Simon ( 1945; 1960); Weber (1947); Mintzberg (1973); Mintzberg and Waters ( 1990) and more recent that of Iyayi (2002) and Miller, Hickson and Wilson (2003) in their studies on decision-making in organizations. One of the major assumptions of decision-making in an organizatlOn according to these scholars is that organizational decisions are rational, and that these rational decisions are necessary to facilitate the smooth running of organizations in their quest to achieve enhanced performance (Miller et al, 2003). Another major assumption of the decision-making in an organization is that the whole concept and purpose of organizations revolve around decision-making (Tonwe, 1994). This means that decision-making is at the very heart of business success of any organization. Furthermore, it implies that the success and failure of any organization at any point in time is considered to be a function of the decisions taken by the management team as it affects a particular or whole aspect of that organization. This assumption is particularly relevant to this study and the success of an organization in its desire for enhanced performance (Gberevbie, 2008). It has however, been argued by some scholars that the assumptions of rationality in human behaviour in decision-making theory are highly contentious. This is because human beings including administrators- management team take decisions on their subjective views of a particular problem. Another major weakness of decision-making is the fact that it is almost impossible to identify and evaluate all possible alternatives open for a particular action before decisions are taken, this is because time and resources may be a constraint in identifying and evaluating all possible options for decisions (Tonwe, 1994; Simon, 1960 and 1945). Despite the weaknesses of decision-making in organizations as pointed above, it is worthy to state that the decisionmaking theory is adopted in this study because it identified the importance of decisions in organizations as a catalyst in their desire to realize their goals of enhanced turnover (Gberevbie, 2008).