Research Proposal / Synopsis

Managing Employee Retention through

Employees Engagement in an Organization



Submitted by:
Sumbla Tarannum (MC13-548)
M.Com (1.5 years).

Hailey college of Commerce, University of Punjab
(Quaid-e-Azam Campus) Lahore.


Submission Date:
16 June, 2014.



Abstract:
In todays worldwide economy, organizations have to intimately think about every
business phase in looking for a viable benefit and competitive advantage in order to
make certain enduring pecuniary/ financial triumph. Areas to look into for opportunities
may perhaps incorporate sales, finance, operations, marketing, product or service mix, or
managing human assets. Successfully and efficiently managing and understanding these
business areas might come up with positive impact on the business. One topic of interest
noticeably moving to the forefront in todays business world is employee retention. In
order to increasing performance and retention in the organization established employee
engagement needed. Employee engagement leads to commitment and psychological
attachment and reflects in the form of high retention (low attrition) of employees. The
level of engagement in employees can be enhanced by identifying its drivers (influential
factors) and work on them. For analyzing the impact of employee engagement on
employee retention this research will be conducted and drivers of employee engagement
will be identified here. Data will be collected through questionnaire and it will be
collected from employees of sample organization. And then data will be analyzed and
results will show positive or negative impact of enhanced employee engagement on
employee retention. Furthermore suggestions regarding this context will be provided.

Keywords: Employee retention, employee engagement, organization.












Introduction:
This study will look into the linkage between employee retention and employee
engagement within an organization and what role an enhanced employee engagement
plays in managing retentions within an organizations context. Employee engagement is
a complex concept. It has been extensively studied during the last decades, and many
different definitions of employee engagement have been created by many different
authors (e.g. Rutledge, 2005; Cook, 2008; Elegbe, 2010; Hellevig, 2012). Engagement at
work was first conceptualized by William A. Kahn (1990) as harnessing of an
organizational members selves physically, cognitively and emotionally during role
performances. Alpha Measure defines employee engagement as the level of
commitment and involvement an employee has towards their organization and its values.
The primary behaviors of engaged employees are speaking positively about the
organization to coworkers, potential employees and customers, having a strong desire to
be a member of the organization, and exerting extra effort to contribute to the
organizations success. Many smart organizations work to develop and nurture
engagement. It is important to note, the employee engagement process does require a
two-way relationship between employer and employee.
Maslach et al (2001) define employee engagement is concept with a sparse and diverse
theoretical and empirical demonstrated relevance the relationship among potential
antecedents and consequence of engagement as well as the components of engagement
have of engagement have not been rigorously conceptualize, much less studied. Doherty
(2010) said Engagement is about respect going both up, down and across a business,
transparency throughout and alignment of HR and management policies to business
culture and objectives. Doherty (2010) concerned engagement as the respect each other
and building from the internal staff and the organizational culture building.
From literature review the key drivers for employee engagement are identified
(Balakrishnan, Masthan, & Chandra, 2013).





Main drivers of Employees Engagement
Sr. No Main drivers

1 Communication

2 Rewards and Recognition

3 Manager/Supervisor
relationship

4 Teamwork

5 Role clarity

6 Work environment

7 Career development

8 Compensation and benefits

9 Work Life Balance


Retention and employee turnover are two terms that are closely linked to each other.
Employee turnover means the rate of employees leaving the organization and the employees
joining it. The turnover rate is often studied in organizations, and when the turnover rate is
high, it creates financial problems. When an employee who has been carefully recruited and
fully trained for a job decides to leave the company, it actually creates monetary loss to the
company. According to Hebenstreit (2008:4) employee retention is a significant concern and
expense for every organization, with the expense of recruiting and retaining a new worker
costing anywhere from half to 200% of the departing employees annual salary.
Schuler and Jackson (2006:216) define retention as everything an employer does to
encourage qualified and productive employees to continue working for the organization. The
main objective of retention is to reduce unwanted voluntary turnover by valuable people in
the organization. Together, effective recruitment and retention efforts attract individuals to
the organization and also increase the chance of retaining the individuals once they are hired
More widely, Crispin R. Coombs (2009) mention retention is about how to manage three
their environment of the employee, there are altitude toward behavior, subjective norm,
perceived behavioral control into intention and intention will made behavior surrounded
the employee.
Problem Statement:
Is there any linkage between Employees retention and Employee engagement and How
Retention can be managed through effective job engagement within an organizational
context.
Research Objectives:
The objective of this research is to
Identify relationship between employee retention and employee engagement.
Analyze the impact of enhanced employee engagement on retention within an
organization.

Literature Review:
Employee engagement:
Employee engagement can be defined as as an individuals degree of positive or
negative emotional attachment to their organization, their job and their colleagues
(Scarlett, 2007). Employee engagement pertains to the degree to which employees
perform their role in a positive and proactive manner. Employee engagement can be
summed up by how positively the employee: thinks about the organization; feels about
the organization; is proactive in relation to achieving organizational goals for customers,
colleagues and other stakeholders. Thinking, feeling, and doing are the three aspects of
employee engagement (Cook, 2008, p. 3-4).
Academic interest in employee engagement has been rising over the last decade.
Nevertheless Kahn (1990), in his much cited paper, described an employees personal
engagement as the harnessing of organization members selves to their work roles; in
engagement, people employ and express themselves physically, cognitively, and
emotionally during role performances (p. 694). Physical engagement pertains to actual
labor expended by an employee to accomplish his/her tasks and duties. Cognitive
engagement relates to employees perception and knowledge of the work environment.
Emotional engagement concerns employees feelings and attitudes about the employer
and working conditions.
Soldati (2007) analyzed Gibbonss work to conclude that eight drivers of employee
engagement included:
Trust and integrity how well managers communicate and walk the talk?
Nature of the job Is it mentally stimulating day-to-day?
Line of sight between employee performance and company performance
Does the employee understand how his work contributes to the company's Performance?
Career Growth opportunities Are there future opportunities for growth?
Pride about the company How much self-esteem does the employee feel by being
associated with the company?
Coworkers/team members How do they significantly influence one's level of
engagement?
Employee development Is the company making an effort to develop the employee's
skills?
Relationship with one's manager Does the employee value his or her relationship
with his or her manager?
Richman (2006) and Shaw (2005) pointed out that engaged employees have high degrees
of involvement and attachment to their employers and/or organizations. Employee
involvement seeks to increase members input into decisions that affect the organization
performance and employee well-being. Four key elements associated with employee
involvement include power, information, knowledge and skills [and]rewards
(Cummings & Worley, 2008, p. 351).
Evans (2010) explained that employee engagement is key driving performance in
organization to achieve good performance and retention. Employee engagement depends
on organizational structure, the system of work and quality of leadership and
communication skill, performance management. Evans (2010) more distinctly, if
employee engagement can be linked to the organizational performance easily because
both of them were bounded each other and cannot be separated. Evans (2010) there are
some valued to develop employee engagement, (1) Bring employees closer to strategic
decisions made by senior management, (2) Creating buy in to the strategic decision, (3)
Dealing with suspicion, (4) Continued improvement satisfaction and building trust, (5)
Create a positive and credible employee voice in a culture where employees want to
contribute and get involved. Many researchers concluded that employee engagement is
the personal psychological feeling which is catalyst to increase performance and
retention and this feeling coming from two side have synergy form among each other
there are internal factor and external factor.
Engaged employees are more likely to be happy in their workplace and, therefore, less
likely to look for work elsewhere. This means anticipated retirements and their impact
could be lessened for those companies who focus on employee engagement. It is possible
that those eligible to retire will chose to remain employed if they are engaged with their
work and workplace.




Employee Retention:
The Management Study Guide defines employee retention as the policies, practices and
measures in the organization that allow the employees to stay in the company for the
maximum period of time. (Management Study Guide: Employee retention). Retention is
about capabilities capture the extent to which the organization effectively develops
talent, information and resource to increase customer value. Engagement is to extent to
which employees are willing to go beyond the minimum requirements of their role to
provide additional energy or to advocate for their organization to others as a great place
in which to work or invest. When the three factors of people equity are at maximum
strength, people work at peak performance, often with the most personal fulfillment
(Schieman, 2009 cited in Pornrat Sadangharn, 2010). Huang (2010) states Mobility
involves both turnover and retention, which may be considered as different sides of a
coin. A workers turnover indicates her/his separation from a given employment
relationship. Conversely, retention means the existence of an ongoing employment
relationship. The different perspectives about retention come up from Sigler. Sigler
(1999) said retention is about willingness to stay at organization which is influenced by
incentive pay or compensation and job satisfaction. Sigler, also, mention about the
problem retention in the many companies is about so many companies have dilemma
when they face on the retention problem. If the companies keep the talented people, the
talent employee will gain the more value than the others but otherwise the company
cannot avoid in order keeping them stayed because the company still need that employee
in their office to keep the stabilization. Moreover, Sigler (1999) said the companies must
aware about detail information before to retain the talented employee because the wrong
information about employee can conduct big problem in the future. To help the
companies decided which employee should be retains or not, Sigler categorized the
employee into two kinds. First, the talented employee which should be retains must have
big contribution and have positive risk adjusted profit to the firm. Second, the talented
employee must be categorized as, the person who has influenced on the firm than any
employee hired to replace him or her.
More widely, Crispin R. Coombs (2009) mention retention is about how to manage three
their environment of the employee, there are altitude toward behavior, subjective norm,
perceived behavioral control into intention and intention will made behavior surrounded
the employee. Coombs (2009) studied retention in some public sector company in United
Kingdom and found TPB (theory planned of behavior) to maintain and create retention
effectively. TPB is about behavioral beliefs, attitude toward the behavior, subjective
norm, perceived behavioral control, identification with organization can create intention
(Coombs, 2009).
Taylor et al (2006) define retention as the effort to keep the employee from Goldrat
Theory of Constraints
(TOC) causes and symptoms of the. More distinctly, Taylor (2006) said if the
TOC causes is about some symptoms which is can be recognized by undesirable
effects (UDEs). This need to determinant and eliminated to create retention in the
company. UDEs can be described as step by step symptoms which is leads to
resign (Taylor, 2006). Taylor (2006) take sample from police and fire department
symptoms, there are, first, police and fire / EMS personnel want opportunities for
career advancement and higher rank, second, public safety employees decide that
they do not enjoy working in police fire / EMS careers, third, police and fire
/EMS employees is not capable of completing the required training to be in police
or fire/EMS field, fourth, police and fire/ EMS personnel feel that their salary
package is too low for the dangerous and specialized work they do, etc. The
sample symptoms called UDEs must be determined and eliminated in order to
create employee engagement. Taylor (2006) public or private company must be
aware about these symptoms in order to keep the employees stay in the company.
Impact of Engagement on Retention:
Employees are assets of any organization and organization always try to avoid
losing the key performers. Employee retention can be defined differently as per the
context of its usage. It can be represented mathematically in percentage such as retention
level is 87%, which means the organization could keep its 87% of its employees with
them for a specified period which is normally taken as a year. In other context employee
retention refers to the ability of an organization to retain its employees. In this case the
employee retention is considered as a strategy, based on the effort by which the
organization attempts to retain the employees. Employee retention involves taking
measures to encourage employees to remain in the organization for the maximum period.
Whereas retention management has become major source of competitive advantage in
the modern rapidly globalizing business world(Vaiman,2008).Randenbush, S.W. &Bryk,
A.S. (2002) argue that the employee turnover affects family, organization and society. It
brings stress in family as relocation of family and employee will become necessary and
financially related issues in connection with the relocation also arise. For organization it
may lead to disruption of service to clients and dissatisfaction of employees due to extra
workload. When an employee with critical skills to support the society leaves the
organization, it impacts the society badly.With retention a growing concern for
organizations, understanding the factors that drive commitment and loyalty among
employees is essential for managing increasing turnover risk in the months and years
ahead,(Mark Royal, Hay Group News release,2011). As per Corporate Leadership
Council report (2008) the highly engaged organizations have the potential to reduce the
staff turnover by 87%, the disengaged are four times more likely leave organization than
average employees. It was observed that the employee retention can be improved by
improving employee engagement.

Methodology and Research Design:
Population: personnel of Organizations in Pakistan.
Sample: 150 employees of one chosen sector (banking, education, industries)
Located in Lahore, Punjab.
Sampling
Technique: Probability Sampling, Simple Random Sampling, Convenience Sampling.
Unit of Analysis: Individuals.
Instrument for data collection: Questionnaire (either adapted or self administered).
Nature of Questions: Close ended
Scale: 5 point likert
Analysis: Correlation, Regression. Reliability
Further Research:

In the future it would be beneficial for the company to address someone within the
company as responsible for the engagement issues and retaining the employees, since
currently there is no one doing this. In addition, exit interviews could be a good source of
information about why the employees have decided to leave, and what could be done in
the future to prevent similar decisions.

Expected Results:
There might be a link between employee engagement and retention, even though it could
not be stated that engagement alone would help to retain the employees.

References:
Balakrishnan, C., Masthan, D., & Chandra, V. (2013). Employee Retention Through Employee
Engagement - A Study At An Indian International Airport. International Journal of Business and
Management Invention , 9-16.
Firth,L.,D.J.Meller,K.A.Moore and C.Loquet, How can managers reduce employee
intention to quit?, Journal of Management Psychology,19(2),2007,170-187.

Gibbons, J. (2006, November). Employee engagement: A review of current research
(Report No. E-0010-06-RR). Ottawa, ON, Canada: The conference Board of
Canada.

Gibbons, J. (2007, June). Finding a definition of employee engagement (Report No. A-
0236-07-EA). Ottawa, ON, Canada: The Conference Board of Canada.

Ologbo, A. & Saudah, S. Individual Factors and Work Outcomes of Employee
Engagement. 2012. Elsevier
Ltd.http://www.sciencedirect.com/science/article/pii/S1877042812006891. Ac-cessed on
26.04.2013.
Philips, J.J., Connell, A.O. 2003. Managing Retention: a strategic accountability
approach. Butterworth: Heinemann.

Schuler, S.R., Jackson, S.C. 2006. Managing Human Resources. Cengage Learning.
Taylor, Lloyd J. Murphy, Becki. Price, Wiliam.(2006). Goldratts thingking process
applied to employee retention. Business Process Management Journal. 12(5). Pp.646-
670.

Tyler, Tom.R (2003). Trust within Organisations.Personalreview.32 (5).556-568.