To suggest effective ways to retain employees at ABANA Enterprise Co.

in Saudi Arabia

Chapter One: Introduction 1.1 Research Background Armstrong (2005) says that the most important assets that an organization has are its employees, or the human assets and thus, the careful management of them is an ultimate necessity. There are different views as to why the management of the human resource is important. One view is that of an investment meaning that the employees of an organization can be looked upon as a financial investment and thus, as all other investments, they should be managed properly so as to maximize the returns achieved through them. Another view is that from an economic perspective which says that the humans are actually a very important resource for this world which is scarce and the wants of them are amazingly great in each arena of life and therefore, these scarce resources should be as efficiently allocated as possible. An important strategy then that forms the part of human resource management is the retention strategy. Given the scarcity of resources (human and physical) it is important that the valued employees which steer the direction of the organization towards success be retained into the organization (Dibble, 1999). It is important for an organization to be able to retain employees also because of the competitive advantage that the organization enjoys because of them (Burrell and Morgan, 1979). This proposed paper is going to be focusing upon the importance of retention strategies specifically and human resource management with respect to an Arab organization ABANA. ABANA is location and is operational in Saudi Arabia where it offers a wide range of business solutions. The business solutions include banking equipment, point of sales terminals, teller cash recycles, ATMs, internet facilities and similar others (abana.com, 2011). Established in

1977 ABANA today is the industry leader in offering a standard and quality of business solutions equipment. Even though ABANA has a strong business position in the Saudi Arabian market, it is facing difficulties regarding its human resources. The situation of the problem is that the employees are leaving ABANA for other jobs. The interesting thing to note however is that the unemployment rates in Saudi Arabia make the understanding to employee retiring from ABANA co. a seemingly foolish act. What factors then, given a 9.6 percent unemployment rate in Saudi Arabia and the fact that airs or rebel in Bahrain and Oman have been fuelled by the high unemployment rates, contribute to the retirement of employees of ABANA co. will be the focus of the proposed study. This fact will be studied in the light of the human resource management s theories and concepts and necessary recommendations will then be placed at the end of the proposed research as to what policies should ABANA co. incorporate to not only retain its employees but also to attract more employees towards themselves. 1.2 Significance of the Research The proposed research will be significant for not only educational purposes but also for policy making of the organization. Moreover, other organizations can take understanding from the study of ABANA co. and then incorporate the findings into their own management systems to better the situations of their human resources. 1.3 Research Aims and Objectives The proposed research will be conducted under the following aims and objectives: i) To explore and understand the basic underpinnings of the concepts of human resource management. ii) To gather enough knowledge about human resource management and retention strategies to be able to analyze exactly the problem with ABANA co. s human resource position.

iii)

To be able to reach a conclusion about the basic policy problems and the external business situation faced by the organization.

iv)

And finally, the aim is to be able to recommend policies which will help ABANA co. in improving its current position. This is aimed to be done such that other business organization can also retrieve help and learning from the proposed research.

1.4 Research Questions Primarily the proposed research will be focusing on the following research questions: i) What is human resource management and what importance does it hold in the current competitive and evolutionary market system of the day? ii) What are retention strategies and why are they important for business organizations? iii) iv) What problems (if any) is ABANA co. facing with respect to its human resource? Is there an external explanation to the problem or are the retiring stuff even in high unemployment rates caused by an internal factor. v) Finally, what policies should be adopted by ABANA co. to get rid to the current human resource problem to be able to succeed better in the current economic recession of faced by the country?

Chapter Four: Literature Review This review will be presenting the ideas and concepts in bullet form and will not be extremely lengthy unlike the usual literature reviews that are conducting during proposing and reporting a research report. The aim of this is to study the basic ideas on human resource management and retention strategies briefly. y Ivancevich (2007) writes that human resource management is the effective management of people at work. This filed examines what can and should be done to make people at work more satisfied with work and thus to make them more productive and efficient. y y Wood (2009) however says that the applicative boundaries of HRM are still limited. The reason for the increased importance of HRM is the evolution of the market forces and the increase in competition (Pieper, 1990). y Jackson and Mathis (2008) state that one of the reasons that human resource management is not respected in the corporate and education field is because it is considered to be bureaucratic which tries to stretch the ability of the workers beyond their tenacity. y Dessler (2009) states that human resource management is about hiring the right people and then giving them the right direction of work for perfect efficiency. y Dibble (1999) says that the retention strategies start with the job description and person specification for the job and that the organization should place value at retaining the valued employees. y Rankin (2005) quotes the results of the study and says that of the sample, 76.3% people found it hard to recruit new employees whereas 55.6% employers found it hard to retain employees. y In order to aid the retention strategies for an organization, the employers should conduct an exit interview with the retiring employee and know what factors contributed to requirement (Suff, 2010).

Standard retention schemes include pay rate rise, introducing performance related bonuses, market supplements and other financial incentives (Robinson, 1997).

Reasons for difficulties faced in employee retention include market competition, low morale in employees, restructuring of the organization, excessive training burden plus the gain of the required training experience and low salary (Bernthal and Wellins, 2002).

Spencer (1986) says that there has found to be a consistently low relationship between the job satisfaction and employee turnover and that increase and maintenance of employees satisfaction with the job is one of the best strategies of job retention.

Another important factor of high employee turnover is the variable organizational culture (Sheridan, 1992). If the employees think that they have to constantly change their behaviors and performance, the employee turnover rate in an organization increases.

As for the effect of high employee turnover on organizations is concerned, funds are wasted on consistent training programs and the overall efficiency of the organization falls because it takes time for the new employees to adapt to the situation. This is especially common in the MNCs (Reiche, 2007).

Ramlall (2004) studies that the motivation theories are lacking in the literature to support the retention strategies and that even though the practices of retention strategies has been there for a long time, the theories need to be developed.

Chapter Three: Research Methodology 3.1 Research Design For the proposed research, the design chosen is both primary and secondary in nature. The idea of a secondary research is to gather the maximum amount required information through the official sources and the related literature about the topic. The benefit of this will be the buildup of the concepts on human resource management and the application of it on the problem under discussion (Booth, Colombo and Williams, 1995). The research will be qualitative in nature and thus, theory will be discussed mostly. It will be doing all of the following: i) ii) iii) explore the problem through study describe the problem And finally explain why is exists and how it can be improved.

Finally, it will be deductive in nature. It will travel from a hypothesis to the finding out the truth of the hypothesis. 3.2 Secondary data collection As far as the concepts, theories, strategies and policies of human resource management and retention is concerned, online books and journals will be referred to. These books and journals, which basically form the literature on a topic, are actually rich sources of expert opinion which can be used further used to gather knowledge and analyze the data collected on the problem as efficiently and as effectively as possible. The information and data on the organization that is being studied however will be collected through the annual reports of the organization which are present on the website of the organization. The first instinct of the reader might be that the human resource of the organization and the employees who are retiring will not be discussed in the annual report and therefore they will not be able to be further analyzed. However this is not the case. Through the remuneration statement and the stated risks and uncertainties of the organization, a fair idea of the employee situation of the organization will be yielded. Moreover, the

unemployment rates and the economic situation of the country will be founded easily through the country government statements and also various newspapers whose links can be found online. Thus, a case study will be done on the topic. Yin (2003) says that case study is the in depth exploration of an occurrence or a relationship. The data analysis section of the proposed research then is going to analyze the data that will be collected through the above mentioned methods and the recommendation section will be presenting subjective opinion as to what the organization should do to control and improve the situation. 3.3 Limitations of the research The secondary nature of the research is one of its greatest limitations since primary data and empirical research will not be collected and done respectively. Moreover, given the specific mindset of the Arabic people, the research might not be able to be applied to other countries and thus it faces a limitation in the generalizability. This is also due to the fact that the Arab countries these days are smelling strongly of rebel and political instability and therefore, people might actually be moving out the of Arab nations in fear of physical and material security. This then makes it difficult to generalize the situation of the organization existing in this country to be able to be generalized. Nonetheless, the proposed research is going to be an important piece of literature for later studies and applicability even may be hampered, does exist to some extent. Another important limitation that needs to be taken into account is the fact that most of the Saudi business organizations are aggressive about their information and there maintain high level of business information confidentiality. For this reason, the gathering of the data will be of difficulty. 3.4 Ethics being taken into account Ethical issues form a very important part of the overall research process and even though the more the ethical issues are taken into account during conducting the research (Saunder, Lewis

and Thornhill, 2009), the more the research shifts away from the social reality, ethical issues need to be significantly stated while reporting the research. For the research under question then, fortunately, no ethical issues formed a major obstacle in the way. Apart from plagiarism which will be taken care of through proper referencing, there was no ethical constraint because secondary data was used which was already publicly available. Chapter Four: Conclusion This paper proposed the research to be conducted. The case chosen is that of ABANA co. located in Saudi Arabia, providing leading business solutions but facing the problem in retaining employees even given the high unemployment rates in the country. The proposed research will be focusing on the problem after studying the theory on the subject. The nature of research will be secondary and the biggest aim is to be able to study the matter in enough detail so as to provide recommendations for the problem that the organization is facing.

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