A Study of employee Retention in Retail Industry with special reference to Big Bazaar in South region of Gujarat

A Research Proposal for the partial fulfillment of Master of Business Administration (MBA) (2010-12) Gujarat Technological University-Ahmedabad

Submitted by

Gujjar Mayuri K.
MBA III (2010-12) Enrolment No: 107550592001

Ataliwala Nirali V.
MBA III (2010-12) Enrolment No: 107550592032 Under The Guidance of

Dr. T.D.Tiwari
(Director General of SPEC)

Mr. Mehul Shah (Assistant Professor - MBA)

Submitted to

Sardar Patel College of Administration & Management (SPCAM - MBA)

Approved by All Indian Council for Technical Education (AICT) New Delhi AFFIILATED WITH Gujarat Technology University, Ahmedabad SPEC Campus, Vidhyanagar, Vadatal Road, Bakarol-388315, Anand (Gujarat)

INDEX
Chapter No. 1 1.1 1.2 1.3 2 3 4 5 6 7 8 Particulars Introduction of the study Retailing Employee Retention Importance of Employee Retention Literature Review on Employee retention Significance of the study Scope of the study Objective of the study Research Methodology Detail Chapterization Bibliography Page No. 1 1 2 3 4-5 6-7 8 8 9 9 10

1. Introduction of the study

1.1 RETAILING
 According to Kotler: Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use.  The Indian retail is dotted by traditionally market place called bazaars or hats comprises of numerous small and large shops, selling different or similar merchandise. The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the countrys GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof.

A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key factors in the growth of the organized Retail sector in India. The growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the India Retail Industry. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry

in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations. The Indian retail sector is now worth about $250bn (140bn) a year, but it is heavily underdeveloped. Well over 95% of the market is made up of small, uncomputerised familyrun stores. Now there are finally signs that the Indian government is dropping its traditionally protectionist stance and opening up its retail market to greater overseas investment. Last month it eased restrictions on foreign investment, allowing overseas retailers to own 51% of outlets as long as they sell only single-brand goods. For the first time, chains like McDonalds, Marks & Spencer, Body Shop and Ikea can, if they want to, open and control their own operations in India. Previously, many of them had gone down the path of working with franchise partners, a policy followed by M&S which supplies clothes to eight "Planet Sports" stores. They look like M&S stores on the inside, but they are owned by local retailers, and the UK retailer has no plans for that to change. "This is now our policy for overseas expansion," said a spokeswoman. "We rely on franchisees who know their local market; it's working very well in India."

1.2 Employee retention

Retention is the rate at which current employees of your organization are staying in their jobs. Retention is the opposite of turnover. Therefore, if turnover is low, then retention is high. Today, a lot of organizations are facing the hurdle of how to ensure Employee Retention. But, in the first place what does the term connote? Employee Retentions nothing but steps taken by an organization to maintain maximum longevity of an employee in the company. In the recent past years, due to the jolt of the economic pressures, organizations have made it a learning phase; and with the current situation of the economic catastrophe coming back to the track, Employee Retention becomes of utmost importance at this very point of time. A frozen job market in lieu of the recession hit phase is gradually opening doors to many professionals thereby lowering the scope of effective retention of the employees. Organizations are in constant search of people who possess the right skills coupled with right knowledge needed to fit into the post. However, that does not serve the purpose entirely. More than recruiting, it is retaining the employee which needs much attention and efforts. Job switch becomes common in a scene where employees cannot get the right opportunities or lets say decreased satisfaction. With the multiplicity of opportunities available to any person today, losing an employee is a potential risk. Thereby, it is the need of the hour for any organization that has an ambition to grow, must first internally grow with the workforce they have.

1.3 Importance of Employee Retention

An organization devotes not just time but also efforts that have a monetary edge to it. Investment on an employee is done in the form of training provided to the employee in order to sharpen their set of skills and knowledge. All this may a goes a waste when failing to achieve the needed retention measures. This abrupt outward lane is not feasible for the growth of the company. This step taken by the employees reflects a doubt on the image of the company if the departure becomes a common place viewed over a certain period of time. An organization devotes not just time but also efforts that have a monetary edge to it. Investment on an employee is done in the form of training provided to the employee in order to sharpen their set of skills and knowledge. All this may a goes a waste when failing to achieve the needed retention measures. This abrupt outward lane is not feasible for the growth of the company. This step taken by the employees reflects a doubt on the image of the company if the departure becomes a common place viewed over a certain period of time.

Not just the outwardly elements, but also within an organization the recurrence of losing employees can create a feeling of insecurity among the existing workforce. They may start to question their place in the company and may get other unnecessary thoughts that will slowly begin to interfere with their sincere efforts and regard for the company.

This hampers the trust put in the company which has a direct impact on the efficiency of an individual towards the organization. This may put off the employees of giving an extra effort, and their existing deficiency levels may also dip down significantly. Insecurity and lack of trust shown by the workforce raises a serious doubt about the power and prestige of the company. Not only the workforce within the company, but potential job seekers with right amount of skills and good knowledge may deter to seek a position within an organization that has a track record of losing employees at a quick rate. Furthermore, apart from the job seekers, also those who might have a business interest in the organization may reconsider their venture, and this may result in potential loss for the company.

Increased frequency in failing to retain the employees also disrupts the planning and strategizing efforts, as new people have to be trained right from scratch which implies wastage not only in time, but also monetarily and efforts put into the whole process.

It has been estimated that an organization where a high level manager decides to make a quit, it can incur the company the loss of almost his entire salary. Same is the case with executives placed at a higher level in the hierarchy of an organization. There have also been cases wherein a company had to face the loss of nearly double the salary of a senior level employee who made an exit from the company. All this highlights the importance of Employee Retention for the effective growth of a company.

Another major factor that puts stress on the concept is rather a larger picture oriented fact. While in the coming time, as the people comprising of age groups from forty to fifty-eight make an exit from the company on account of retirement, the preceding generation comprising the workforce from the age groups of twenty-five to thirtyfour makes for a mere forty-four billion strength as against the seventy-six billion work strength comprised by the people in the forty to fifty-eight mark. In order to curb the rising trend of departure from the organization, the department of Human Resource plays a vital role in understanding the reason behind the step. This can help the organization to work upon their grey areas in order to maintain a healthy environment within and infuse levels of trust and confidence and a positive attitude in the mind set of employees to ensure growth of company in a manner that satisfies one and all.

2. Literature Review on Employee Retention

Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. Every organization invests time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various measures taken so that an individual stays in an organization for the maximum period of time. Major companies are currently experiencing the effects of increased employee turnover rates. Rather than being an isolated issue, employee turnover faces the nation as a whole. This issue costs companies millions in the expenses needed to recruit and train new employees. Employee turnover rates are linked to corporate structure and environment and can therefore be modified through changes in policy.

Abundant studies have hypothesized and empirically validated the link between satisfaction and behavioral intentions and behaviors such as employees retention and word of mouth (e.g. Anderson and Sullivan, 1993; Rucci et al., 1998, Bansal and Taylor, 1999, Cronin et al., 2000). Indeed, this link is essential to the 11 marketing concept, which holds that satisfying employees needs and wants is the key to exist in the organization (Kotler et al., 2002). Further, the importance of satisfaction on retention is well recognized that some major economies now measure satisfaction at the industry level using large sample surveys to predict employee's retention and future financial performance (Fornell et al., 1995). Kay (2000) describe costs as in advertising and recruiting expenses, orientation and training of the new employee, decreased productivity until the new employee is up to speed, and loss of customers who were loyal to the departing employee. The costs and expenses mentioned above open another area of concern which is productivity. When high level of employees turnover existed, most of the workforce is at an entry level stage of production. A very high cost is associated with large numbers of employees who have not accomplish full productivity. This cycle continues with very few employees performing at maximum productivity. Numerous studies explain the importance of high employees involvement and how it could enhance their retention (Arthur 1994; Huselid 1995; Koch and McGrath 1996). Flexible work schedules and assistance programs need to be considered, however, only a small share of the workforce takes advantage of them (Perry Smith and Blum 2000). as

earlier studies indicated that young employees are more interested in payment, advancement opportunities and time off. Such differences may reflect stages in the career plan or deeper generation differences. Additionally, there are often gender differences within demographic groups; e.g., young female may want different things from what young male want (Beck 2001). the lack of opportunities to learn and develop in the work can be the top reason for employee dissatisfaction and thus turnover. A corporation namely Kimko, implemented this information and provide a training program that gave employees 12 an opportunities to develop their path and career direction. Turnover tumbled from 75 percent to 50 percent (Withers 2001). Studies indicated that employees stay when they have strong relationships with others with whom they work (Clarke 2001). this explain the efforts of organizations to encourage team building, project assignments involving work with colleagues and opportunities for interaction both on and off the job (Johns et al 2001). Other studies indicated that effective communications improve employee identification with their agency and build openness and trust culture. Increasingly, organizations provide information on values, mission, strategies, competitive performance, and changes that may affect employees enthuse (Gopinath and Becker 2000; Levine 1995). Many companies are working to provide information that employees want and need in better way of communication, through the most credible sources (e.g., CEO and top management strategies) on a timely and consistent basis. In summary, the literature defines retention as continuing relation between customers (employees) and their organization. The benefits of retention are lower costs for their agent, less price sensitivity, greater market share, improve productivity, increase employees performance and thus increase profits and meet their organizational goals and objectives. The relationship between satisfaction and retention in many studies has described as weak, and researches shows that satisfaction does not necessarily cause to retention. There are various studies done by researcher as well as institutions on the retaining of the employees which is the big issue nowadays. In the present study tries to find out the reasons or factors which affects the retention of employee. It is found that in the organized retail sector retention ratio is high due to the changing work environment. So present study will focuses on these issues in broader sense.

3. Signification of the study

Why retail Industry Emerge ???
There is no basis for the fear that malls in India will lose their status as shopping and entertainment hubs now that many mall developers are offering space to hotels and offices. The fact is, this is not affecting the overall mall experience of the customer, since in most cases there are separate entries for the hotel/commercial component and the retail part. The reason why mall developers are now offering space to hotels has more to do with the floor space index (FSI) and less with utility. In the case of retail, food, entertainment and multiplex, it is not always possible to utilize the complete FSI of the plot. The concept of mixed-use development with retail, entertainment, shopping and accommodation all under one roof helps diversify the tenant mix in the total construction, and also de-risks the developers investment. It also allows the developers to utilize the FSI and location. Such developments leverage... on the location and provide multiple solutions under one canopy. Mixed-use developments have evolved to increase the viability of projects and to utilize the location advantage. Residential and office markets are witnessing buoyant growth and are considered as relatively more risk-free development. A new concept which is also evolving, particularly due to FSI norms, is serviced apartments as an offering within mixed-use developments. Malls have a good reason to give space to hotels or office complexes: y y y It increases the viability of project and de-risks it. It helps utilize available FSI optimally; It makes the usage relatively more diversein some cases mixed use is the best use for real estate development; and y It fits with floor plate sizes. Retail historically does not work on more than three floors.

There are already examples of existing and upcoming projects where shopping, entertainment, residential and retail co-exist with office space. The existing ones include Treasure Island... at Indore, Inorbit Mall at Vashi, and the upcoming ones include Nirmal Lifestyle, Market City Projects, Phoenix Mills, Express Mall Chennai and DB Mall at Bhopal. Upcoming malls which have a proposed metro station within or parallel to their projects are expected to draw in considerable footfalls, reflecting positively on retailers sales. An example would be Mantri Square in Bangalore. Internationally, mixed use developments have been used to form the social fabric and have done well. Mixed-use developments create a captive catchment for the retailers and other components. The model is fairly successful in both metro and Tier I cities. In fact, in the light of changing retail dynamics, the response for such projects in Tier-II cities has also been encouraging. Advantages of mixed use developments to retailers: y y y y They add captive foot falls; Food and impulse item sales increase; They generate a wholesome social fabric and create destination developments; and In some cases, mixed use developments... can also help decrease the base rental and increase revenue for developers who operate on a revenue share model, which also increases feasibility for retailers.

4. Scope
What are the problems in Retention? Retention problem Begins during hiring Process
In most organizations the recruiting function is entirely separate from the retention effort, yet the design of the hiring process has a dramatic and direct impact on future turnover. I estimate more than one-third of the factors that drive future turnover have their roots in the recruiting, hiring, and on-boarding process. Unfortunately, most managers and many recruiters are unaware of this direct relationship and as a result, organizations suffer from unnecessary turnover. If you are a hiring manager, a recruiter, or a retention specialist, its important that you understand how the hiring process impacts the likelihood that someone will depart early. Recruiting Factor That Impact Future Retention 1. Hiring Candidates who are focused on Money. 2. The Source where you found candidate. 3. Their average Tenure in other Job. 4. On-boarding and Ordination. 5. Recruitment involvement after Hire. 6. The lack of diversity orientation and retention. 7. Manager reward for great retention.
8. Being aware of the most common cause of turnover.

5. Objective of the study

1. To empower the advantages in retail industry. 2. To understand the growth projects across a wide range of retail industries. 3. To study the high degree of skill transferability pertains to manpower. 4. To understand the challenges of the retail industry and understand the issues of retention of manpower power in Big Bazaar (retail industry).

6. Research Methodology
1. Descriptive Research Descriptive research is used to obtain information concerning the current status of the phenomena to describe "what exists" with respect to variables or conditions in a situation. The methods involved range from the survey which describes the status quo, the correlation study which investigates the relationship between variables, to developmental studies which seek to determine changes over time. 2. Research instrument For our research work we will use Questionnaire as a research instrument. 3. Research approach Survey research approach, this survey research will help to know employer retention that is prevailing in employees as well as in big bazaar. 4. Data collection As data required for any research activity, it is collected (for those both the primary and secondary) as follows:  Primary data collection I intent to carry out my research work through questionnaire as respondent is going to put his / her view point through in responding questioner.  Secondary Data:

This data is collected from different sources available consolidated from book publication reports, websites where used as a source of secondary data in order to do this project and to collect necessary data. I have used the previous research studies done on the employee retention in various sector and especially in retail sector.  Method of selecting sample Method of selecting sample: - Non Probability sampling by considering, Convenience sampling

7. Detail Chapterisation
y y y y y y y Introduction of the study Literature Review on Employee Retention Organized Retail sector in Gujarat Data analysis Conclusion Recommendations Bibliography

7. Bibliography
 Kotler et al, 2002, Principles of Marketing, Prentice-Hall, Englewood Cliffs, NJ  Fornell et al., 1995, A National Customer Satisfaction Barometer: the Swedish Experience, Journal of Marketing, 56 (January), 6-21  Arthur 1994, Effects of human resource systems on manufacturing performance and turnover. Academy of Management Journal, 37: 670-687  Huselid 1995, The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38: 635-672.  Koch and McGrath 1996, Improving labor productivity: Human resource management policies do matter. Strategic Management Journal, 17: 335-354.

 Perry Smith and Blum 2000, Work-family human resource bundles and perceived organizational performance. Academy of Management Journal, 43: 1107-1117.  Beck 2001, Why Associates Leave, and Strategies To Keep Them. In American Lawyer Media L.P., v5, i2, pp. 23-27Withers 2001  Clarke 2001, What businesses are doing to attract and retain  Employee-becoming an employer of choice. In Employee Benefits Journal, March, pp. 34-37.  Johns et al 2001, The Strategic Role of the Salesperson in Reducing Customer Defection in Business  Gopinath and Becker 2000, Journal of Management (JofM), 26(1), 63 - 83.  Levine s1995 ``Two Types of Compositionally Derived Events'',