CHAPTER - 1

INTRODUCTION

1.1 GENERAL

According to Gilmore and Williams (2009) HRM is the only route where you can put
your employee in the different scale from where they can get improvement for time to
time in an organization. The whole organization stands on the different people`s
performance specially most of them are selected for some specific goal. They are
already trained by their organization for the given role. HRM is performing with a lot
of responsibility within any organization, which is divided into different working
departments, the employees are selected and recruited on the basis of their previous
experience.

According to Foot and Hooke (2005) it’s very simple to understand if we look to
development of the professional performance. Several names are used to describe this
part of work. According to the Web Pro News (2010) in 1833 by the factory act a first
male inspector was appointed and in 1878 they passed a law for the reduction of the
working hours for women and children up to 60 hours per week. The trade union was
in development stage at this time. In 1885 eleven trade unions were elected and
demanded the improvement of wages and the employment regulation.

According to Amstrong (2000) the concept of Human Resource Management came in

the mid of 1980`s and put the successful attraction on society particularly academic,
Science, and the nation of industry. Later on all the organizations followed the
philosophy of HRM and they believed that HR is the most important department in
any successful organization to manage the employees.

1.2 BACKGROUND OF THE STUDY

Organizations develop human resource policies that genuinely reflect their

beliefs and the relationship between management and employees, or they may merely
devise policies that deal with current problems or requirements. These practices include
recruitment and selection, training and development, performance management,

1
remuneration systems, occupational health and safety, industrial relations, Human
resource information system, impact of recent legislation (Oakland & Oakland, 2001).

The human resources of the company are potentially the only source of
sustainable competitive edge for organizations (Pfeffer, 1994). Research conducted at
the organizational level also suggests that human resource practices affect
organizational outcomes by shaping employees behaviors and attitudes (Arthur,
1994).

HRM is purportedly being viewed as a strategic staff enterprise aligned with

organizational values, mission and vision. As a consequence, there is now much
greater attention to measuring and enhancing employee and organizational
performance; equal employment opportunity and affirmative action polices designed
and implemented by personnel offices have contributed greatly to the diversity of the
workforce; staffing techniques have become much more sophisticated; employee
benefits system have expanded; and job design and processes have become more
creative.

1.3 AN OVER VIEW OF TESCO

According to the website telegraph (2010) Tesco was introduced to the world in 1919
when Jack Cohen was selling super grocery in east London from a stall. He made
profit ₤1from sales of ₤4 on his first day. After five years the Tesco first appeared in
1924 when he did the deal of tea shipment from Mr T.E Stockwell. And then Tesco
appeared with combined title Tesco in 1929 in Burant Oak north London. In 1930`s
Tesco moved to regional direction and Mr Cohen opened a headquarter and
warehouse in north London.
In 1932`s Tesco was first time entitled as Private Company Limited and in 1947 they
started selling the shares on price of 25p. In 1950`s Tesco smashed several retailers in
their field and took over from them. They bought 70 William stores, 200 Harrow, 97
Charles Phillip stores and Victoria value was taken over. In 1960`s Tesco was
awarded as a largest super store in the Europe and In 1970`s Tesco decide to be a
national store network to cover the whole UK and started selling the more product.
1974`s Tesco introduced a big change in the market and introduced first time the
Tesco Patrol station and became success and award winner Patrol retailer. In the
1990`s Tesco opened the several stores in the UK and deeply smashed their
competitor included Sainsbury’s which is a strong grocers supermarket in the UK.

2
In 1995`s Tesco started the club card scheme to provide the advantages to their
customers and took over from other competitors specially Sainsbury’s who was the
UK leading grocery supermarket. In 1996`s Tesco started the 24 hours service and
extended their business open there branches outside the country in Poland, The Czech
Republic and Slovakia. In 1997`s Tesco Sir Terry Leahy as Cheap Executive and
launched the online business in 2000 on the Tesco.com which is now doing
electronic, Clothes, and Personal Finance.
In 2006 the Tesco announced to be open there branches in US as a name of “Fresh
and Easy”. Now it’s operating in 13 country of the world. In year`s 2008 the recorded
sales of Tesco was £51.8bn and pre-tax ₤2.8bn.
According to the website cn Tesco (2010) Tesco is the biggest retailer in the UK
which is working on the basis of four main parts such as Tesco Superstore, Tesco
Metro, Tesco Extra, Tesco Express.
All the four parts are operated in the 13 countries of the world which are Republic Of
Ireland, Hungry, Czech Republic, Slovakia, Turkey, Poland, China, Japan, Malaysia,
South Korea, Thailand, India and USA. Tesco now have 3700 stores and 440000
employees.

1.4 STATEMENT OF THE PROBLEM

Although most current organizations opt for policy formulation strategies that
reflect their own cultures and priorities, the crucial issue is whether the employee
have been consulted, and whether the resultant policy reflects a compromise between
management and employee interests, acceptable to both, or is it simply a management
or HR directive?

As change has remained a constant in the practices of HRM, many of the

assumptions on which HRM operates have been severely challenged in the last two
decades due to the series of inexorable reforms. In the contemplating the future
prospect of HRM, it is worthwhile to examine the developments and directions of HR
policies in terms of their relevance to the contemporary workforce especially in the
area of attraction and retention of employees.

An employee decision to resign from a company is rarely due to a single

event, such as being passed over for a promotion, a plum assignment or for monetary
reasons. One such event may however serve as a catalyst, but most employees leave

3
 because of multiple factors- the turnover drivers such as diminished job satisfaction, a
tense work environment and better advancement opportunities elsewhere. Isolating
these factors requires a disciplined research effort.

Turnover is a symptom of larger systematic problem such as ineffective

retention management; companies need to understand what causes people to commit
themselves to being productive and loyal. Then they must design jobs, systems and
organizations that support rather than inhibit it.

The present study addressed the causes of poor retention and the elements that
contribute to high retention. Therefore, to achieve retention organizations need to
determine the retention factors relevant to each of their employee and than focus
strategies on these factors.

1.5 OBJECTIVES OF THE STUDY

The aim of this study was to investigate and determine the current human
resource practices on the retention of employees. The specific objectives of the study
were:

1. To examine the Human Resource practices currently being employed in

Tesco.

2. To study the relationship between HR practices and employee retention.

3. To frame suggestions that may be helpful for an effective HR practices

contributing to retention.

1.6 SCOPE OF THE STUDY

The research was very important from many dimensions. The most important
one was it helped in determining the level of the human resource practices that were
currently being employed in the organizations. Therefore the major focus of this study
remained on the human resource practices. Furthermore, its impact on the retention of
employees will also determined. It reflected the dynamics of the HR practices that are
employed to fit the respective industry demand and hence the effect on the retention
of the employees.

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1.7 SIGNIFICANCE OF STUDY

The high attrition rate of employee is costly to corporations. Loss of key talent
results in the stripping of valuable human capital, critical skills and institutional
memory. Organizations not only suffer from lost productivity but also lose the
knowledge that these employees possess that can be beneficial to the company. High
performing employees know the industry, competitive strength and weaknesses,
product, customers and processes. The information’s in their head is a significant part
of corporate equity (Hom and Griffeth, 1995; Oh, 1997 and Gutherie, 2001). There was
also a need to develop competences in order to enhance corporate competitiveness and
performance. Retaining these valued employees is therefore a strategic issue and a
competitive business advantage. Managing employees is being a more important
source of competitive advantage because traditional sources (product and process
technology, protected or regulated markets, access to financial resources and
economies of scale) are less powerful than they once were. Moreover, this research
will further help in developing HRM practices on the emerging trends of the
businesses.

1.8 LIMITATIONS OF THE STUDY

As the study will cover only the one chain store sample, for data collection so it may
not be generalize to other sectors of business activities. Second limitation for the
study is the time, as due to time constraint I will not be able to collect the data for
different outlet of subjected business.

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 CHAPTER - 2

REVIEW OF LITERATURE

In this chapter we will explain the relationship between the HR practices and
employee retention. It explains different factors of HR practices that influence
employee retention. According to (Phillips,1997) from last few years it has been
noticed that the way the employee are treated or managed is the important factor in
improving the overall performance of the organization.

From the review of literature, it is stated that the employees should be treated
like an assets, as firm has to invest in HR and have to give value to the HR on the
bases of there philosophy (Maguire, 1995; Annand, 1997). The importance of HR
practices can be viewed as it has become the competitive advantage for most of the
firms of this dynamic era (walker, 2001). Consistent with this perspective, is an
equally important issue for organizations, the retention of their employees.

The retention problem cannot be solved just by addressing the increase

incentive and bonuses, as practiced by most of the firms, as it may be the factor but
not the only factor. (Gumbus and Johnson, 2003) In current business scenario the job
retention has been targeted by the organizations as the strategic issue. (Walker, 2001).

2.1 HUMAN RESOURCE MANAGEMENT FACTORS INFLUENCING

RETENTION

It has been evidence that human resource management has a important role in
retaining a high quality, devoted employee. Studies of progressive HRM practices in
training, compensation and reward sharing have revealed that these can lead to reduce
turnover and absenteeism better quality work, and better financial performance
(Meyer and Allen, 1991; Solomon, 1992; Snell and Dean, 1992; Arthur, 1994; Snell
and Youndt, 1995; MacDuffie, 1995; Delaney and Huselid, 1996; Ichniowski, Shaw
and Prennushi, 1997). Furthermore, an extensive study (Accenture, 2001) on high
performance issues identified the retention strategies of organizations primarily from
US, Europe, Asia and Australia.

According to Fitz-enz (1990), retention management of employee is

influenced by several key factors, which should be managed congruently:

6
organizational culture and structure, recruitment strategy, pay and benefits
philosophy, employee support programs, and a training and career development
system. Consequently, organization utilizes a wide range of these HRM factors
driving retention and commitment (Stein, 2000; Beck, 2001; Clarke, 2001; Parker and
Wright, 2001). For the purpose of this study, these factors are reviewed and
categorized into HR factors (person organization fit, remuneration, training and career
development) and organizational factors (leadership behavior, teamwork relationship,
company culture and policies and satisfactory work environment).

2.2 HUMAN RESOURCE FACTORS INFLUENCING RETENTION

1. Person Organization Fit (Selection)

The concept of person-job (p-j) fit emphasizes matching people and jobs in
term of qualifications based on knowledge, skill, ability, and overlooking other
personal characteristics of applicants that might be more suitable for the assessment of
“fit” (Lofquist and Dawis, 1969; Edwards, 1999). However, as the complexity of
work increases, organization now uses more selection methods that capture the
applicant capability to do the work. Research on person job fit has found that workers
gravitate to jobs with complexity levels commensurate with the ability (Wilk et al.,
1995; Wilk and Sackett, 1996). However, selection should also improve fit between
the applicant and other aspects of work such as e.g. personality fit and organizational
fit (Smith, 1994).

Person organization fit is considered in the context of personnel selection and

can be based on the congruity between personal and organization beliefs (Reilly et al.,
1991; Netemeyer et al., 1997) or individual and company goals (Kristof, 1996). The
concept of organizational fit (Brown, 1969; Kidron, 1978; Steers, 1997) identifies
convergent goals and values between the individual and the organization as an
important element to affective commitment. Barnard (1938) defined organization fit
as an individual willingness to cooperate in an organization as cohesion and proposed
that “its immediate cause is the disposition necessary to sticking together”. Selection
should therefore consider improving fit between an applicant values and the
organization culture (Cable and Judge, 1997).

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 Lauver and Kristof-Brown (2000) found that both person jobs fit and person
organization fit was a better predictor of intention to quit. Thus, people who are not
well suited for the job and/or organization are more likely to leave than those who
have a good person-job or person-organization fit. Lee et al., (1992) espoused the
theory that states an employee satisfaction with a job, as well as propensity to leave
that job, depend on the degree to which the individual personality matches his or her
occupational environment.

Many person organization fit studies emphasized the match between people
values and the values of the organization, because values are conceived of as
fundamental and relatively enduring (Kristof, 1996; Van Vianen, 2000). In this study,
value congruence and person culture fit are treated as equivalent terms.

2. Remuneration, Reward and Recognition of Employee Value

Compensation is the most critical issue when it comes to attracting and

keeping talent (Willis, 2000). A fair wage is the cornerstone of the contractual and
implied agreements between employee and employers, the underlying assumption
being that money can influence behaviour (Parker and Wright, 2001). Companies
often provide pay packages superior to the market for critical talent. These include
special pay premiums, stock options, or bonuses.

Bassi and Buren (1999) found that “leading edge” firms, defined as firms that
use high performance work practices such as total quality management and training,
provide innovative compensation such as profit sharing and group based incentive
pay.

Organizations in most industries are implementing innovative compensation

approaches to differentiate themselves (Parker and Wright, 2001). Innovative
practices reflect the individual player contract model, focusing on “what it will take”
to attract and retain each individual, regardless of the pay of others (Boyd and
Salamin, 2001). This “lets make a deal” approach is a radical departure from
traditional pay equity approaches, but seems to work in a highly competitive,
individualized talent market. Others act more broadly, ensuring that all “players” are
paid near the top of the market, whether through base salary or bonuses (Williams,
1999; Stein, 2000). This raises overall compensation cost but may reduce the risk, and
therefore the cost, of attrition.

8
 Wages influence the recruitment and retention of workers (Williams and
Dreher, 1992; Highhouse et al, 1999) and therefore play a role in the staffing process.
However these studies recognize that pay, by itself, will not be enough to retain
people. Low pay will often drive employees out the door, but high pay will not
necessarily keep them. Ultimately, they stay because they like their co-workers are
engaged and challenged by work that makes them better at what they do.

Pay continues to be important in determining motivation to perform

(McCallum, 1998). Past motivational theories such as expectancy and equity theories
have predicted variation in motivation as a result of varying valences of outcomes as
pay (Das, 2002). However, in practice, pay is treated as just one of the outcomes and
often measured with little precision (Mitchell and Mickel, 1999). Although an
association exist between compensation satisfaction and commitment and is one of
the drivers of organization commitment, nevertheless, it has to be considered as one
of the pieces in a complex picture (Boyd and Salamin, 2001; Parker and Wright,
2001). Just as important is the organization need to communicate its total
compensation package to its employees. It must emphasize not only the salary,
bonuses and benefits, but other highly valued aspects of employment such as
supporting life style balance initiatives and flexible work arrangements. These are non
monetary benefits known as intrinsic rewards and they have significant role in
compensation satisfaction (Mitchell and Mickel, 1999; Parker and Wright, 2001).

According to a study by Mercer (2003), employees will stay if they are

rewarded. Employees are usually rewarded based on quality based performance. A
sense of accomplishment is recognizes as important and a strong motivator.
Employees tends to remain with the organization when they feel their capabilities,
efforts and performance contribution are recognized and appreciated (Davies, 2001).
Employees are increasing their commitment to the use of rewards as essential
elements of talent management programs. It is increasingly important for companies
to use their reward budget effectively to differentiate the rewards of the top
performers, thus driving an increase in return on investment (ROI) on human capital
investments. The alternatives are decreased employee performance or the attrition of
key performers to competitors in an increasingly competitive environment.

Thus companies that are committed to their employees typically invest more
than similar firms in progressive HRM practices such as training and education, and

9
in the total package of compensation (Arthur, 1994; Huselid, 1995). They also
distribute rewards more equitably and generously. Compensation provides
recognition, but other forms of non-monetary recognition are also important.
Recognition from managers, team members, peers and customer enhance commitment
(Walker, 2001). Particularly important to the employees are opportunities to
participate and to influence actions and decisions (Davies, 2001; Gold, 2001).

There are studies that have highlighted the rewards retention link (Watson
wyatt, 1999; Mercer, 2003; Tower Perrin, 2003) and provide insights into what
employers are doing, how they feel, and what employee have to say on the rewards
issue. The recent studies give further support to the belief that a broad and well
implemented reward program assists in talent management.

Mercer human resource study measured the return on reward investments of

302 companies. The research assessed the effectiveness of specific reward and
identified the reward program issues and challenges confronting US companies.
Mercer findings indicate that most company are increasing their focus on attracting
and retaining talent.

The Watson Wyatt annual survey of employee attitudes toward their

workplace and their employers, work USA, 2002, reflected the views of 12,750
workers at all job levels and in all major industries on a number of workplace issues,
including rewards. The finding of study revealed that recognition matters to
employees and they need to hear that they are appreciated.

The Towers Perrin study examined twenty two large US employers and their
talent attraction and retention practices. Participants in the year long study range from
companies with 2500 employees to those with more than 364000; their revenues
ranged from $ 1.6 billion to $ 58 billion. This research identified a strong correlation
between incentive pay and retention.

3. Training and Career Development

Training is considered a form of human capital investment whether that

investment is made by the individual or by the firm (Goldstein, 1991; Wetland, 2003).
Once employee are hired, training program enhance employee job skills. Employees
are expected to acquire new skills and knowledge, apply them on the job, and share
them with other employees (Noe, 1999). Lauri, Benson and Cheney (1996) found that

10
firm often delays training to determine whether workers are good matches and
therefore have a lower probability of leaving the firm.

Training provides employee with specific skills or helps to correct deficiencies

in their performances; while development is an effort to provide employees with
abilities the organization will need in the future (Gomez et al, 1995). Skill
development could include improving basic literacy, technological know-how,
interpersonal communication, or problem solving abilities.

A firm has the incentive to invest in the human capital of its workers only if
there is expectation of a return on its investment. Increasingly, companies are
strengthening development for talent, through competency analysis, input on
individual interests, multi source assessment of capabilities and development needs,
and formulation of action plans (Messmer, 2000; Clarke, 2001).

A survey of literature on training by Bishop (1998) revealed that larger,

established, unionized, manufacturing firms tended to provide training as did multi-
establishment firms with high performance or flexible production systems. Findings
of Black and Lynch (1996) indicated that larger employers, establishment with high
performance systems and those which use more physical capital were more likely to
retain their employees. Firms in industries with rapid technical progress and output
growth trained more as well as those which had experienced no competitive crisis in
the last decade. Frazis et al, (1998) found that firms that provide more benefits and
have innovative work practices train their employees more than other firms.

According to Storey and Sisson (1993) training is a symbol of employer

commitment to staff. It is also reflective of an organizational strategy based on adding
value rather than lowering cost. Leading companies have acknowledge that providing
employee with a comprehensive range of career and skill development opportunities
is the key to attracting and retaining the kind of flexible, technological-sophisticated
workforce that companies need to succeed in the digital economy (Bassi and Van
Buren, 1999; Accenture, 2001).

The training and development of people at work has increasingly come to bee
recognizes as an important part of HRM (Oakland and Oakland, 2001). An analysis of
employee commitment among hospital administrators, nurses, service workers and
clerical employee as well as among scientists and engineers from a research lab

11
concluded that the employer ability to fulfill the employee personal career aspirations
had a marked affect on employee commitment (DeToro and MCabe, 1997;
Marchington and Wilkinhson, 1997). Consistent with this work is a study of
employees of a manufacturing plant where it was similarly found that internal
mobility and promotion from within, company sponsored training and development
and job security were all correlated with employee commitment (Bassi and Van
Buren, 1999). Training plays an important role in the success of many organizations
(Bassi and Van Buren, 1999).

Levels of employee turnover and training are expected to be inversely related:

the higher the level of turnover, the lower the amount of training. This expectation is
based on the reasoning that the longer an employee stays with an employer; the higher
will be the return to training. A recent study by Frazis et al. (1998) indicated that
employee working in lower turnover establishments spent about 59 percent of their
total training time in formal training, compared with 18 percent for employees in high
turnover establishments. From the employees view, if the training involve skills
specific to the establishment, it is likely to contribute to an increase in productivity at
that establishment. Greater productivity at the establishment, in turn, will tend to raise
a workers wage above what he or she would earn elsewhere, thus providing an
incentive to stay. In other words, training can serve to lower turnover (Frazis et al,
1998; Wetland, 2003).

2.3 TURNOVER INTENTION

Intention to Stay/Intention to Leave

Turnover intention is defined as a conscious and deliberate willfulness to leave

the organization (Tett and Meyer, 1993). According to Fishbein and Ajzen (1975),
“the best single predictor of an individual behaviour will be a measure of his intention
to perform that behaviour”. It is therefore legitimate to use it as an outcome variable
in turnover studies (Gutherie, 2001; Gutman et al., 2001). Employers also consider
intention to quit a more important measure than the actual act of turnover. (Lambert et
al 2001). Empirical evidence strongly supports the position that intent to stay or leave
is strongly and consistently related to voluntary turnover (Dalessio et al., 1986;
Gutman et al., 2001; Mathieu and Zajac, 1990).

12
 Employee leave for many reasons, some of which organization have no
control over, such as retirement, a family member being transferred or the desire to
stay home to start a family. Some of the most common reasons employee leave
include: employee perception of poor leadership or supervision, unchallenging
positions, limited opportunities for advancement, no recognition for good
performance, limited control over the work and customer, salary benefits are not
commensurate with job requirements; and the opportunity for a better compensation
package elsewhere( Accenture, 2001; Jardine and Amig, 2001).

Wagar (2003) examined the relationship between an individual intention to

quit his job and the human resource management activities of the organization. The
study that employees of organizations with more sophisticated human resource
systems were significantly less likely to indicate they intended to quit over the next
two years.

2.4 TURNOVER INTENTION PREDICTOR

Organizational Commitment

Organizational commitment is also examined in several studies as a predictor

of both the intention to quit and turnover. According to Mowday et al., (1979), an
employee who is committed to the organization has values and beliefs that match
those of the organization, a willingness to exert effort for the organization, and a
desire to stay with the organization. Employees with lower levels of commitment are
less satisfied with their jobs and more likely to plan to leave the organization (Bennett
et al., 1993; Schnake and Dumler, 2000; Zangaro, 2001).

Availability of Employment

Availability of employment has a significant positive effect on turnover intent

(Tett and Meyer 1993). Employees are less likely to express turnover intentions when
they perceive that there are other acceptable employment opportunities. Many
researcher argue that most people will not leave their current job without reasonable
probability of finding other employment (Bame, 1993; Hom and Griffeth, 1995).
Some studies have used the local unemployment rate as a measure of alternative
employment opportunities (Mueller and Wallace, 1992; Vorhies and Harke, 2000).
However, this may not adequately measure an individual person availability of
alternative employment opportunities.

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Demographic Factors

Demographic Factors were among the most common and most conclusive
predictors in the turnover literature. A number of studies found age, education, job
level, gender and tenure with the organization to be significant predictors of turnover
(Miller and Wheeler, 1992). It was generally accepted that younger and better
educated (as well as less trained) employees are more likely to leave than are their
counterparts. The higher the job level one has within the organization, the lower is
ones likelihood of quitting (Bedian et al., 1992). Level of education was related to
turnover only for employees holding mid-levels jobs (Galang et al., 1999). This
means that those who have highly specialized skills, as well as those with limited
education, tend to remain on the job for longer period of times than those who have a
moderate degree of educational attainment.

2.5 CONCLUSION

The common theme in this literature review was an emphasis on the utilization
of human resource factors that influence retention of employees. A review of
relationships between HR practices and turnover intentions is explained. Various HR
factors were discussed to establish relationships among these variables. Turnover
predictors with respect to demographic, organizational and employment were
highlighted.

14
 CHAPTER - 3

RESEARCH METHODOLOGY

This chapter explains the overall methodology required to collect the data to
address the research issues of this study. It starts with the selection and justification of
the approach of the study: with respect to the in-depth interview and the employee
survey. It provides information about the sample population and further describes the
instruments, the data collection process and the type of analysis carried out in the
study.

3.1 HYPOTHESIS

The study was revolved around the basic question that what are specific
factors and how they are associated with employee retention. For this purpose the
following hypothesis can be developed:

Ho: Personal values congruent to organizational culture may not help to retain
employees in the organization.

HA: Personal values congruent to organizational culture may help to retain

employees in the organization.

Ho: Existence of organizational fairness may not lead to retention of employees in

organization.

HA: Existence of organizational fairness may lead to retention of employees in

organization.

Ho: Remuneration and recognition is not associated with turnover intentions.

HA: Remuneration and recognition is associated with turnover intentions.

Ho: Perceived investment in employee training and career development is not

associated with turnover intentions.

HA: Perceived investment in employee training and career development is

associated with turnover intentions.

15
3.2 DATA COLLECTION METHOD

The objectives of this study were to investigate and determine current human
resource practices on the retention of employees. In order to successfully achieve this
aim, the study involved two approaches to data collection. One was interview with the
HR Manager and other was a questionnaire, administered to the employees of KMC,
Peshawar.

The interview being qualitative approach was employed with the objective to
acquire richer data from HR policy makers. The acquisition of this set of data enabled
the researcher to construct a more effective instrument for research survey. Research
survey involves a survey of employees of KMC, Peshawar.

This study aimed to rectify the gap in the extant literature and provide
valuable insights that may explain the differences in human resource management
practices that affect the retention of employees.

3.3 SAMPLE POPULATION

Sample population was done from KMC, Peshawar for in-depth interview and
employee survey for this research. A convenience sampling technique was adopted to
sample the employees and collect the data. A letter and questionnaire to this effect
was developed requesting an opportunity to conduct an interview with their human
resource manager and a survey of their employees.

3.4 METHODOLOGY FOR INTERVIEW

The research method involved was the interviewing of human resource

manager or representative of KMC, Peshawar, using a structured interview schedule,
which incorporated a list of HR best practices on retention. These questions were
based on the best practices identified through literature review. The objective of the
interview was to identify other HR elements not captured by the literature review but
considered to be important by practitioners. These final sets of HR practices were
identified during the interview process and utilize for the employee survey instrument.

Face to face interview was conducted lasting between 30-40 minutes with the
use of semi structured interview schedule .The interview schedule was developed in
order to provide some standardization interviews.

16
3.5 INTERVIEW FORMAT

The first section of interview schedule sought information on the

characteristics of their employees and their application of standardized or differential
HRM for different types of employees and the importance of the role of HR in the
organization (strategic or limited to administrative). The second section of the
schedule explored the importance of human resource factors in relation to its
influence on retention in the organization and the effectiveness of its implementation.
The final sectioned covered (1) contextual issues that affect the industry and the
retention management of employees (2) effective management of such as hiring
practices, performance appraisal practices, training and career development practices,
succession planning program, pay practices and leadership practices and finally (3)
the turnover rate.

Additional information such as asking interviewees to explain some of their

constraints to achieve effectiveness in their HR practices and the scope for
implementation of good practices might also be included in order to elicit further
information from the participants (Maykut and Morehouse, 1994).

3.6 METHODOLOGY FOR EMPLOYEE SURVEY

Employee survey was conducted to obtained employees perspectives of the

effectiveness of the identified factors in relation to their retention in their
organization.

The research method involves a survey of employees of KMC, Peshawar. The

questionnaire was developed based on literature studies, as well as the interview with
human resource manager. Simple random sampling was carried out in KMC,
Peshawar, with about 31 employees randomly selected to survey. The questionnaire
was distributed to 50 employees, however only 31 employees give feedback.

This questionnaire explored the employee perspective of their organization

human resources practices in relation to their decision to stay with there employer.
The employee questionnaire explores four (4) areas including the following
demographic details: organizational fit, reward and recognition, training and career
development, commitment and turnover intention. The demographic details will be
basic information regarding age, level of education, occupation, number of years in
current job and number of years in the organization.

17
 Chi-test was used as statistical tool. Chi-test was employed using the Pearson
formula in (Chaudry and Kamal, 2004).

r c (Oij − eij ) 2
χ = ∑∑
2

i =1 j =1 eij

Which under the null hypothesis (H0) follows a χ 2 -distribution with (r-1)(c-1)
degrees of freedom.

In above equation, Oij and eij are the observed and expected frequencies y of
cell in ith row and jth column, respectively.

3.7 DATA COLLECTION AND ANALYSIS

Data collected through questionnaire was analyzed by using SPSS. Descriptive

statistics was used as statistical tool for the analysis of the data. Chi-test was used to
determine the differences among the variables that were understudy and their
relationship with turnover factors.

18
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26
APPENDICES
APPENDIX-I: EMPLOYEE SURVEY

Section A: Background Information

Please complete this section. The following question requires a written response.
1. Your Age. 20-29 30-39 40-49 50-65

2. Gender Male Female

3. Years of service
4. What is your occupation?

Section B: Human Resource Factors

The following statement relate to the way in which you perceive the human
resource practices within your organization. For each statement, you are asked to
mark an X in the box that best describe your response.

(a) How accurately do the following statement best describe your personal fit with
your organization culture and values?

1 2 3 4 5
Strongly disagree Disagree Neutral Agree Strongly Agree
Organization Fit
1 2 3 4 5
5. This organization does not have the same value
as I do with regard to fairness.
6. I feel that my personal values are good fit with
this organizational culture

27
(b) How accurately the following statement describes your organization
remuneration and recognition system?
1 2 3 4 5
Strongly disagree Disagree Neutral Agree Strongly Agree
Remuneration and Recognition
1 2 3 4 5
7. Employees are given positive recognition when
they produce high quality work.
8. This organization pays well.
9. This organization offers a good benefits
package compared to other organization.

(c) How accurately the following statement describes your organization training
and career development practices?
1 2 3 4 5
Strongly disagree Disagree Neutral Agree Strongly Agree
Training and Career Development
1 2 3 4 5
10. People are properly oriented and trained upon
joining this organization.
11. This organization does provide regular
opportunities for personal and career
development.

(d) What are your plans for staying with this organization?
1 2 3 4 5
Strongly disagree Disagree Neutral Agree Strongly Agree
Turnover Intention
1 2 3 4 5
12. I plan to work at my present job as long as
possible
13. I will most certainly look for a new job in the
new future.
14. I would hate to quit this job.

APPENDIX-II: INTERVIEW
SECTION A: CHARACTERISTICS OF EMPLOYEES
1. Approximately how many employees are there in your organization?

28
 _______________________________________________________________
2. Does your organization consider effective management of human resources to
be a source of competitive advantage? How is this evident in your
organizational practices?
_______________________________________________________________
3. As the senior HR person who do you report to?
_______________________________________________________________
4. Does HR play in important role in the strategic business planning of your
organization? How do you contribute to this area?
_______________________________________________________________
5. Does your organization have a separate human resource department?
_______________________________________________________________
6. Which of the following are controlled centrally by the HR department?
Personnel record,
Training programs,
Salary
Performance appraisal guidelines
7. Do you outsource any HR function?
_______________________________________________________________
8. How many employees do you have in the HR department?
_______________________________________________________________

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SECTION B: HUMAN RESOURCE PRACTICES/ FACTORS THAT
INFLUENCE EMPLOYEE RETENTION.
9. The following factors have been suggested as important to human resource
management. Could you identify the top three and explain how you believe
this impact on the retention of employees?
Attrition.
Hiring
Promotions
Demotions
Transfers
Changes in workers skill sets.
10. The following list has been identified by research as the top five human resource
factors that influence employee retention. please indicate the extent of their
importance to you company with the regards to the retention of your
employees.(e.g. very important, important, somewhat important)
Effective selection
Reward and recognition of employee value
Career development.
Challenging employment assignments and opportunities.
Equity of compensation and benefits.
11. Are any one of the following evident in your work context?
Market place competition has increased dramatically.
Conditions in our business environment are rapidly changing.
Government regulations are rapidly changing.
The technology in our product/service is complex.
Short supply of skill people in the labour market.
Can you give example of how they are impacting on the employee?
Activities and work environment?

12. Please indicate to what extent your organization hiring practices influence the
retention of employees. State the type of performance measure/s used to test
the effectiveness of the hiring practices.

30
13. Please indicate to what extent your organization performance appraisal
practices influence the retention of your employees.

14. Please indicate to what extent your organization training and career
development practices influence the retention of your employees.

15. Please indicate to what extent your organization succession planning

program influence the retention of your employees.

16. Please indicate to what extent your organization pay practices influence the
retention of your employees.

17. What voluntary turnover rate organization had in the last year?
None 11 to 20% 31% to 40%
10% 21% to 30% 41% to 50% and above
18. Does your organization monitor the turnover rate and the reason for the
turnover? Please state the reasons.

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

31