Effect Of Human Resource Practices On Employee Retention: A Research Study

Literature Review

The business world has experienced massive growth and tremendous revolutionary changes during the last 2-3 decades. Some of these changes include privatisation, globalisation, and progression. Baruch (2004) asserts that these changes impact the lives of workers, work itself, and the society at large, prompting organisations to significant degrees of adaptable, limitless and innovative exercises. The approaches to conducting business shift from the conventional specialist culture to the modern computerised data management. Consequently, the workforce needs to be trained in higher refined and more sophisticated methods of business resulting in the diminishing of administrative hierarchical faithfulness.

Highly skilled employees tend to work on projects that enhance their skills and knowledge, and in the end, boost their career and future earnings. Therefore, the employees tend to leave their current employer at the slightest notice of a greener pasture elsewhere. The challenge for many employers is the difficulty in retaining talented employees amid a competitive environment with a shortage of experienced candidates (Chiang & Hsieh, 2012; Al-Emadi, Schwabenland, & Wei, 2015). Typically, businesses that stand out from other organisations can identify the trends in skilled culture and adapt accordingly (Hamid & Al-Damoe, 2012). It is the work of the human resource (HR) manager to ensure that employees make a committed and valid stand to remain faithful to the organisation to generate best results characterised by expanded deals, increased efficiency, gainfulness and improved representative maintenance (Hamid et al., 2012). As such, this paper proposes to carry out a research study to determine the effect of human resource practices on employee retention.

The primary aim of the study will be to determine the model that best illustrates the relationship between the HR practices and employee retention. Additionally, the study will investigate the mediating outcome of affective commitment from the relationship between employee retention and HR practices.

The general objective of the study will be to determine the effect of HR practice on employee retention. Other specific objectives will include:

• To investigate the mediating effect of employee commitment on HR practices.
• To examine existing strategies for reducing employee turnover.
• To determine the best alternatives for employee retention.

The study will be guided by the following research questions:

• What is the effect of HR practice on employee retention?
• How does employee commitment affect HR practices?
• What are the current strategies for reducing employee turnover?
• Which are the best alternatives for employee retention? 

This section will discuss relevant literature relative to the HR practices’ impact of employee retention. It will include the theoretical literature review, the critical literature review, and the conceptual framework.

Kehoe and Wright (2013), researched on “The impact of human resources practices on employees’ attitudes and behaviours” with the aim of understanding the relationship between high-performance HR practices on absenteeism, intent to remain in the business (employee retention), and behaviour in the organisation. The Study shed light on the mediating role of the organisation in the relationship between HR practices and employee behaviour and attitude. Kehoe and Wright’s study focused on the hospitality industry and concluded that employees’ collective perspective of high-performance HR practices relate to organisational commitment and behaviour, employee retention, and are negatively connected to absenteeism. Moreover, the study asserts that affective commitment moderately mediates the relationship between high-performance HR practice perceptions and organisational behaviour, and fully mediates the relationship between high-performance HR practices and employee retention (Kehoe & Wright, 2013).

Impact of HR Practices on Employee Retention

A similar study was conducted by Dhiman and Mohanty (2010) to determine how HR practices affect attitudinal outcomes and employee turnover in the Indian oil and Gas exploration and production sector. The experimental study surveyed a sample population of 450 high-level employees guided by the mediation hypothesis. The study concluded that there exists a relationship between HR practices, affective commitment and turnover intent.

Other studies have shown that consistent systems emphasising HR practices are likely to better support sustainable performance outcomes than individual practices (Delery & Shaw, 2001). Secondly, all HR systems are not mutually effective (Delery & Shaw, 2001; Wang, Bruning, & Peng, 2007). The particular HR practices included in high-performance HR systems have been different across studies; a common thing across methods in any high-performance approach is the focus on promoting workforce ability, motivation, and opportunity for performing behaviours consistent with organisational objectives and (Al-Emadi, Schwabenland, & Wei, 2015). Other HR practices such as improvement, acquisition, reconciliation upkeep, and remuneration propose to increase adequacy in associations and to hold skilled workers but are hardly engaged, and the proposals are seldom on theoretical grounds (Mahal, 2012).

HR practices impact workers by influencing the operational, financial, and share value execution. The employees’ behaviour and attitude towards the HR structure depend on the HR practices that the representatives of the organisation see as existing in their work setting (Kehoe & Wright, 2013). Hamid and Al-Damoe (2012) stated that if the employees of an organisation have a positive perspective of HR practices, they are more likely to put effort and resources into bringing exceptional customer services.

Affective commitment is an employer’s or employee’s emotional connection or attachment to the organisation. Employees with affective commitment will stay in the organisation and work hard to attain the goals of the organisation (Long, Lim, & Chuen, 2016). Affective commitment is an emotional attachment that drives the employees to remain in the business because of the organisation’s interest in their benefits (Zargar, Vandenberghe, Marchad, & Ayed, 2014). Individuals are typically willing to behave in a particular manner based on the organisation’s point of view on account of loyalty relative to strong emotional attachment to the organisation (Mahdi, Mohd, & Almsafir, 2014).

The concept of employee retention described in the literature varies. Hamid and Al-Damoe (2012) distinguished the idea as a global procedure by any organisation to benefit a domain which inspires employees to stay in the organisation for the long run. Mandhanya (2015) differentiated employee retention as an action taken by the administrative department to keep employees from leaving the organisation by giving them compensations for doing their jobs adequately, guaranteeing a harmonious workplace.

Affective Commitment and Employee Retention

This section describes the approach to be used in conducting the research. In essence, it includes the philosophical approach/paradigm, strategy, data collection, data analysis, challenges and limitations, and the ethical matters.

Research philosophy explains the process to be followed in collecting and analysing systematically. Understanding the philosophical approach is vital in comprehending the research questions to choose the most relevant research strategy. This research will use the philosophy of positivism as described by Chiang and Hsieh (2012) as it supports knowledge acquisition using scientific analysis. The view of positivism relates research findings to the conclusion giving no room for data manipulation. Therefore, it guarantees a valid analysis since the respondents can be linked to their answers.

The research strategy elaborates the framework that the study will use (Bryman & Bell, 2015). This paper proposes to employ a deductive approach. As such, the research will utilise a mixed research approach that uses both the qualitative and quantitative designs. The researcher will use these methods to answer the research questions and achieve the goals of the study. The qualitative approach will be crucial in gathering primary data from the respondents concerning HR practices. On the other hand, the quantitative method will be vital in retrieving statistical information about employee retention.

Data collection refers to the instruments to be used in gathering data from research respondents. The study will use interview, observation, and transcription to collect data from the respondents regarding the research questions.  The researcher will collect both primary and secondary data. Telephone, email and Face-to-face interviews will be used during the four weeks survey. Face-to-face interviews will allow the researcher to make pertinent observations. The telephone interviews will be recorded for transcription. Sekaram and Bougie (2010) indicate that the interview is an important instrument in the collection of relative data as it allows the respondents to air their opinions concerning the research questions. Sekaram da Bougie (2010) emphasize that interviews give unbiased information.  The secondary data will be collected from published and peer-reviewed sources online explaining relevant theories on HR management.

According to Kothari (2004), the interview is a written paper containing research questions that require the respondent to fill appropriately. Interviews are completed either in writing or orally. The researcher has the option of reading out the questions and recording the independent responses of each participant. In this study, the researcher will develop a list of pertinent questions for the interview and distribute them to the respondents accordingly. The questions will be clear and concise to avoid ambiguity. The researcher will carry out the interviews physically allowing ample time for participants to respond. Nonetheless, a pilot study will be conducted to determine the areas of the questions requiring adjustment (Sekaram & Bougie, 2010).

Research Methodology

When the research has collected a significant number of the questionnaires, the answer will be edited for consistency and completeness (Bryman & Bell, 2015). Data from the interviews will be coded and grouped into themes.  Open coding will be used to summarise the data into themes and labelling observation data.  The coded data will then be compared using axial coding to identify relationships in the open codes. The data will then be tabulated for interpretation and analysis (Zikmund et al., 2013).

Data analysis will be employed in examining the collected information after the survey to make deductions and inferences. During the analysis, the responses will be assigned numerical values.  The qualitative data will be analysed systematically to deduce logical conclusions and recommendations. Percentage distribution and frequencies will be calculated where necessary.

1. Time constraint during survey and collection of data.
2. Lack of sincerity among some respondents. All employees might not disclose the data’s as it is. Some may be reluctant to be sincere during the process.
3. Non-response.Since the data collection is done through online and offline, there is a chance where the person does not respond to the questionnaire.

This study will be subject to ethical matters.  Participants will be expected to sign a written letter of acceptance confirming their willingness to take part in the research. Concomitantly, the respondents in the study will be required to sign a debriefing and withdrawal letter assuring them of their voluntary participation and freedom to withdraw from participating in the study at any stage without consequences.

Participants will be encouraged to familiarise with the objectives of the research during the initial stages of the study and will be assured of privacy and confidentiality of any information that they will give. The information provided will also not be used for other purposes except for the completion of this research study. Therefore, the study shall not abuse or cause any harm to the participants either physically or psychologically. 

The study is expected to take an estimated period of three (3) months. The milestones of the study are shown on a Gantt Chrt in figure 1 below:

During the first and second weeks of the study, the researcher will develop the research proposal and seek the approval of the academic supervisor. During this period, the researcher will also make the necessary adjustments according to relative advise from the supervisor. During the third week, the researcher will prepare to conduct the actual research by ensuring that the tools needed for data collection are in place, are reliable, valid and trustworthy. From the fourth week to the seventh week, the researcher will engage in data collection and evaluation. The data collected will be analysed during the eighth and ninth weeks. Results from the analysis of data will be discussed during week nine and ten. The last two weeks, week 11 and 12 will be used to develop the conclusion and recommendation and to report the findings of the study respectively.

Research Philosophy

Al-Emadi, A. A., Schwabenland, C., & Wei, Q., 2015. The vital role of employee retention in human resource management: A literature review. IUP Journal of Organizational Behavior, 14(3), p.7.

Baruch, Y., 2004. Transforming careers: from linear to multidirectional career paths: organizational and individual perspectives. Career development international, 9(1), p.58-73.

Bryman, A., & Bell, E., 2015. Business research methods. USA: Oxford University Press.

Chiang, C.-F., & Hsieh, T.-S., 2012. The impacts of perceived organizational support and psychological empowerment on job performance: The mediating effects of organizational citizenship behaviour. International journal of hospitality management, 31(1), p.180-190.

Delery, J. E., & Shaw, J. D., 2001. The strategic management of people in work organizations: Review, synthesis, and extension. Emerald Group Publishing Limited.

Dhiman, G. R., & Mohanty, R. P., 2010. HRM practices, attitudinal outcomes, and turnover intent: An empirical study in Indian oil and gas exploration and production sector. South Asian Journal of management, 17(4), p.74.

Hamid, K., & Al-Damoe, F. M., 2012. Exploring the determinant factors on organizational performance: A literature review. The 3rd International Conference on Technology and Operations Management, (pp. 439-444). Bandung – Indonesia.

Kehoe, R. R., & Wright, P. M., 2013. The impact of high-performance human resource practices on employees’ attitudes and behaviours. Journal of management, 39(2), p.366-391.

Kothari, C. R., 2004. Research methods: methods and techniques. New age international.

Long, C. S., Lim, Z. Y., & Chuen, T. W., 2016. Analysis of the relationship between leadership styles and affective organizational commitment. Int J Manag Account Econ, 3, p.572-598.

Mahal, P. K., 2012. HR practices as determinants of organizational commitment and employee retention. IUP Journal of Management Research, 11(4), p.37.

Mahdi, O. R., Mohd, E. S., & Almsafir, M. K., 2014. Empirical study on the impact of leadership behaviour on organizational commitment in plantation companies in Malaysia. Procedia-Social and Behavioral Sciences, 109, p.1076-1087.

Mandhanya , Y., 2015. A study of impact of working environment on retention of employees (with special reference to automobile sector). Global Management Review, 9(4), n.p.

Sekaram, U., & Bougie, R., 2010. Research methods for business: A skill building approach. United Kingdom: John Wiley & Sons Ltd.

Wang, X., Bruning, N. S., & Peng, S., 2007. Western high-performance HR practices in China: A comparison among public-owned, private and foreign-invested enterprises. The International Journal of Human Resource Management, 18(4), p.684-701.

Zargar, M. S., Vandenberghe, C., Marchad, C., & Ayed, A. K., 2014. Job scope, affective commitment, and turnover: The moderating role of growth need strength. Journal of occupational and organizational psychology, 87(2), p.280-230.

Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M., 2013. Business Research Methods. Mason, OH: South-Western Cengage Learning.

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