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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS


RETENTION MANAGEMENT IN BANKING SYSTEM AN EVIDANCE FROM MULTAN,PUNJAB PAKISTAN

MAY 2013

VOL 5, NO 1

AMBREEN KANWAL MUHAMMAD MAJID DEPARTMENT OF MANAGEMENT SCIENCES NATIONAL UNIVERSITY OF MODERN LANGUAGES H-9 ISLAMABAD, PAKISTAN Abstract This study was aimed to realize the fact that the organizations must have unique and valuable strength In Pakistani scenario that is necessary to determine the retention of employees in banks but necessary to compute the factors that are in relevance to the Bonus and rewards, satisfaction of employees with the job, Training as a career exposure management team work, are the major contributors towards the employee retention in an organization. Trust of employees with the organization increased the loyalty that in turn increased the employee satisfaction. In essence increased the employee retention in the organizations. Therefore, All these factors lead to the synergic effect and it would result in the increased over all performance of the employee. It is main and necessary contributor towards the retention of employees in the organization. The study was conducted at the banking Sector of Multan. So, 100 respondents participated in the study. So, it is equally important for both the manager and employees must work together should have effective collaboration with each other and communicate the requisite of employee retention in banks. Keywords: RETENTION MANAGEMENT IN BANKING SYSTEM AN EVIDANCE FROM MULTAN,PUNJAB PAKISTAN

Introduction: Employee retention It is the basic building block of an organization and the factors which are the important contributors laid the foundation must be analyzed by the management in an effective manner. Today, the environment of the organization has changed dramatically as well as the behavior of employees has also changed. They are not the ones who have only one opportunity to survive but they have many offers at hand at one point of time. It is more than just keeping the employees on the job. It is the main responsibility of the employer to keep the best employees in the banks. Employee retention is an effective
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mean or a way to maintain a workforce in banks which is both stable and sustainable. There are certain reasons for the employees to leave an organization. Expectations play an essential role to determine whether an employee is satisfied or dissatisfied with the current job. These expectations will range from pay, working hours, holidays and bonuses etc. If the expectations have been unrealistic from the day one of the job that would be result in unnecessary cost to the organization and it would take more time to reach the goals and objectives, revenue and profitability. Employees to find themselves in a role that is somewhat different from their individual strength, tend not to stay for a long period of time. Employees who find a mismatch for their particular talent or ability may choose to leave the company and go for another job in another organization. Culture is basically the environment in which the employees function to the best of their abilities. An employee who put a culture which doesnt suit his personality, his life style that would result in under performance. Employees want the opportunities for the development and improvement as a next step up the career ladder. If they are able to realize the significance of building. New skills, refining the current abilities and exposure of getting the new experiences than the loyalty would also increased with each step with the organization. Employees always want to be treated as special while they are at work. If they felt that the timeless efforts, their major contribution and hard work was not recognized or appreciated by the management they will tend to take way their efforts from the work setting. The stronger relationship the manager and employees have with each other tend to make the employees to stay with that particular organization for a longer period of time. Poor relationships are maintained between the employer and the employees are one of the most important reason for the employees to turn over. Much of the dissatisfaction is the essence of compromise that the employee made in the form of pay toward the organization. When the employees have learned that a new arrival is getting a higher salary for a similar role then them leads to dissatisfaction. A peaceful and friendly working environment is a good way to produce good and efficient results that are beneficial for the both employees and the employers in the banks. Stress causes the employees to move away from the work place. Employees have definitive responsibilities towards their organization, their family and friends.
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need time to make them more satisfied with the balanced life.

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They need a better and sophisticated balance between these responsibilities. They

Employee need a great confidence in the leadership of the firm in which they are working. Support of the employer towards their employee can be derive in a

number of ways. By providing the proper feed back to the accomplishment of their goals, by providing them an attractive salary, recognition an bonuses and bonuses. By counseling them in their hard times, and if an emotional support from the employer works the best in every situation of their work. The main objectives of this study was to find out the reasons why employee leave the organization. To identify the significant factors which are the major contributors towards employee job satisfaction and the perceived factors which motivate employees to continue in the current work setting Literature Review Human resources are one of the significant precious and valuable assets for any organization. They are the ones who can shape the organizations working in a much better way in order to produce the competent work force for better performance. There were several of works available in respect of employee retention in literature. Work has been done by the several scholars to the importance of employee retention in the banks. Denton (1992) strengthen this thought that the better match between employees of the organization and organization the more likely it is to retain them. Lynn (1997) argues that you must take time when you are going to hire the new employees to make wise decisions. The employer must be frank, about work setting, opportunities, career advancement, responsibilities and other important details regarding of making mistakes during hiring process be lessened. Tylor and Cosenza (1997) strengthen this thought by noting that a true image of the organization should be given by the prospective employees of the organization. Zaffane, R.M (1994) argue that the turnover of the employees had been a great issue of importance under the shadow of the organizational literature. It is had been widely discussed that they has been great deal of involvement in this study to assess the intention of employees to continue in the current work setting or to leave the organization.

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Carney (1998), said that the foundation on which the key to employee retention base is communication. It is clearly a simple logic to have communication between the employees and the management to retain them for a longer period of time. Making an impression that would be long lasting on the employees mind is valuable in a sense to make the employees to have great loyalties with that particular organization. Tett and Meyer (1993) said that it is psychological process that caused the e employees to leave the organization. therefore, it is difficult for the researcher to comprehend it in a precise way. Marx (1995) describe earlier it is important that the employees are the valuable member of the organization. Training also shapes their talent and abilities the employees providing a way show the respect and want the employees to grow. Proper training and exposure toward their career can contribute by building a flexible, positive work environment and by providing more career advancement opportunities. Mendonsa (1998) explained this concept further that the training helps the employees to be refresh in the current work environment of the organization. Training imparts the new skills and abilities in the employees for achieving important goals and objectives, although it is an another significant way to make career opportunities more progressive and a chance to do something different from other in the business world. It also emphasized that they are the most valued and appreciated by the employer by imparting the training programs in their work. Lynn (1997) said that to make the employee to retain with organization must offer career opportunities that are more progressive towards the achievement of their goals and objective. Departments failing to offer the employees advancement opportunities, a proper space for improvement and skill and knowledge development may find it hard to maintain a competent, qualified work force. Appreciation by the management and participation of the employees at work all are important determinants when dealing with employee retention. Mendonsa (1998) said that rewards and benefits are providing the basis to become competitive in the working environment. Although it is an essential factor in finding out whether a person stays or retain in the organization. Employees want more span of control, more responsibility, and enhanced satisfaction on the current job is only possible through the reorganization and rewards or incentives.
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Barron (1983) said that there is a positive relationship between the job performance and motivation of employees. The effective performance management can lead the planned success for an organization by focusing its attention on important activity of the business. Brand Shelly (1998) said that money may be a reason to leave the organization at a certain point of time during the job. Cheng, H (1995) elaborated his views in his challenging work for banks management is to encourage the employees to provide the better services in the regards of customers expectations. It is the first and foremost responsibility of the human resource manager to keep the employees motivated and to do their best by retaining in the organization. Motivation can be in the form incentives, emotional support by providing progressive opportunities and enhancement of their live styles. Dissatisfaction of the employees with the working environment cause the poor performance which intern leads to the higher turnover in an organization. Mendonsa (1998) explain further that the lack of rewards programs and low wages causes the people to leave their current job and move to another one offering best opportunities to grow. Deeprose (1994) examined the fact that effective rewards program leads to increased productivity which makes the employees to participate in the organization in a better and efficient way. Flynn (1998) explained his view by putting a major concern for reward schemes that how these schemes contribute the effective communication of employees and how clearly define the scope of strongly linkage between rewards program and performance of the employees. Robert (2005) also takes into consideration the account of motivation enhance the performance. But if it is followed by the rewards intern can influence the motivation in the same recognized way. Abbasi (2000) explained his view by providing the evidence that when employees migrate to the competitive organization by having a tremendous knowledge and trade secrets acquired by the former employees. Therefore creating a more complex and difficult situation for the later. Kennedy (1997) found an explanation for training program for particular kind of job within the organization causing a huge improvements in the skills and abilities
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customers and a great attachment with a business of the organization. Conceptual Frame Work

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of the employees and ultimately it will result in enhanced satisfaction of the

To implement the study various independent, dependent, variable will elaborated for the conceptual framework. Our dependent variable was employee retention and other variables that effecting the employee retention in banks are job satisfaction, flexible work environment, training and career opportunities, employee communication, trust and bonuses & rewards. It s evident from the existing literature of scholars that there are certain determined variables which have a great influence on the employees retention in banks. Therefore the employee retention in banks can be measured by measuring all the above mentioned factors. Important factors that are to be considered for the retention of employees are: Job satisfactions Flexible work environment. Support and facilities. Training Program. Bonuses and rewards Employee communication. Trust of the employees with the organization. Team work.

Research Methodology Research methodology includes the description of the design of the research. It identify the sample of the study and procedure to be followed to gather the data and finally leads to the statistical analysis. Research Design: The research design of this study was aimed to predict the impact of other significant factors on the employee retention. This study was of quantitative in nature to identify the patterns of different variables.
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Sample size: Population:

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Sekaran (2001) stated that the population can be defined as the entire group of people, events and things of interest that a researcher wishes to investigate The population of this study was comprised of Habib Bank Limited Branches that are currently operating in Multan. The ten branches of Habib Bank Limited were considered as population as including the main branch for the purpose of this study. From each branch the operational manager, branch manager and other eight employees from the other different departments of the HBL. In this way the total of ten branches were included in this study. A sample consisting of 100 respondent was selected for this study under consideration. A questionnaire was developed after a thorough review of literature and by studying various research paper and consulting the supervisor and was given to the sample of the study. The questionnaire was developed to include all the possible present factors that a revealed in the literature review. It included several demographic variables as well. It was a structured questionnaire in which all the questions are predefined before conducting the survey. This study covered the area of the Habib Bank Limited in Multan, Pakistan.

Analysis and Results The frequency distribution of the independent and other important variable had been taken with the help of bar charts that gave the percentage of these variables under consideration of this study. The data received from the respondents was analysis with the help of a statistical software program SPSS. Total of 100

respondents were taken as a sample but 80 respondents answered to our questionnaire. Low pay given to employees can be a major determinant of the dissatisfaction level of employees in the organization long working hours was another major contributors towards the dissatisfaction of the employees and it showed a higher percentage of turnover that made the employees not to be retain in the bank. Employees satisfaction can be increased by the evaluation of the job performance and its impact on employee satisfaction with the job in the organization. Bonus & rewards have been the major factors of the employee retention in the bank and showed higher frequency on the bar chart. If there is any team operating in the bank may decrease the employ turnover and made the employees to maintain a healthy relationship with the
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organization. Support and facilities that are provided by the employer to employees made them more satisfied. In essence a longer duration of employees would result with the same organization. Employees trust has significantly effect the loyalty of the employees in respect of the organization and results in a higher percentage. Findings and discussion It has been found from the analysis that 84% of the respondents paid a huge attention that a low pay is one of the factors that causes the employees dissatisfaction but 16% has a reverse concept they said that the low pay may not be a major contributor towards the dissatisfaction of employees in the banks. That in turn causes the employees to move to another organization and the concept of employee retention is not managed well in respect of this variable. 80% of the respondents supported that the long working hours is greater factor of the employees dissatisfaction but 20% are not in this favor. 80% of the respondents supported the view that effective the communication of the employees with the employer in necessary for the retention of the employees in the bank. 85% of the respondents have paid a great attention to the bonuses and rewards schemes in respect of maintaining and retaining the employees in the bank while 15% are disagree with this statement. 60% respondent supported the evidence the presence of the management team may decrease the employ turnover and 40% are not agree with this statement. 53% of the respondent are satisfied with the support and facilities provided by the bank but 47% are not in this agreement and have not been in relationship of retention with the bank. Trust of the employees influence the loyalty of employees with organization. 72% are in agreement with this statement but 28% are not agreed in respect of trust. Conclusion The study was aimed to managing an employee retention in the bank in Pakistan (A case study of HBL, Multan). Organization have a great need to recognize the importance of employee retention in order to create a clear understanding of this phenomena. Several factors are uncovered that contribute to the employee performance when they are retain in the organization for a longer period of time. However this fact is also known to us that the human resource does not posses a full combination of competency and knowledge to perform their duties and responsibilities. The study was conducted to identify the several major factors that are
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contributing to the employ retention. Among all the factors training and development had a significant impact on the employee retention. Other factors that have been recognized in the literature review had a synergic effect on the employees performance. Most of the organization in Pakistan trained their employees before and even during the job and their effect also resulted into high performance and collectively contributing to the organizational performance. Therefore it is necessary for both the employees and the Manager must work in a team and had a effective collaboration with each other while performing in the team work. These factors must also provide the guidance to the achievement of employee retention in banks Limitations This study has been taken place in the branches of Habib Bank Limited, Multan. Ten respondents were selected from each branch including the operational manager and branch manager. Resources, time and funds are not sufficient enough to get a large sample for this study. The findings of this study are applicable only to the branches of HBL in Multan. These findings cannot be generalized to whole population of HBL in Pakistan in all cities. Future Research Employee retention is a major contribution towards the employees performance in banks. This study can also uncover certain other factor that leave the employees to become more motivated regarding their jobs and to be self satisfied. This study can also be explode by keeping in view the impact of employee retention in terms of return on investment, a stronger commitment to the organization and a need to understand the intellectual capacity of each employee to perform the best in the work setting. Having a great emphasis on the psychological factors such as behavior and attitude can also lead to the advancement of employee performance in bank which in turn leads to the employee retention in the bank. This study can also be taken into account to create the learning environment for the employees who are working in the organization.

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References Abassi, (2000). Turnover: the real bottom line. Pub. Pers. Manage.
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Cheng, H. (1995). Assessing the Importance of Employee Motivation in the Hotel Industry in Taipei, Taiwan. Unpublished masters thesis, University of Wisconsin-Stout, Menomonie, Wisconsin, United States. Deeprose, D. (1994). How to recognize and reward employees. New York: AMACOM. Denton, D. Keith (1992). Recruitment, retention, and employee relations. West Westport CT: Quorum. Flynn, et. al (1998). Test of a mediated performance-turnover relationship highlighting the moderating roles of visibility and reward contingency. Journal of Applied Psychology, 86, 1011-1021. Kennedy, C.H (1997). Planning to become an employer of choice. Journal of Organizational Excellence, 24, 57-68. Lynn, Jacquelyn (1997). Hard to hold: Conquer the tight labor market by retaining valuable workers. Entrepreneur, 34. Marx, Mary (1995). Keeping your best employees. Journal of Property Management, 26-29. Mendonsa, Robert (1998). Keeping who you want to keep: Retaining the best people. Supervision, 10-12. Taylor, Susan L. & Cosenza, Robert M. (1997). Internal marketing can reduce employee turnover. Supervision, 3-5. Tett, RP. Meyer, JP. (1993). Job satisfaction, organizational commitment, turnover intention, and turnover: Path analyses based on meta analytic findings. Pers. Psych. 46: 259-93. Zaffane, R.M (1994). Understanding employee turnover. Int. J. Manpower. 15(9): 22-33.

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