Effects Of Human Resource Management Practices On Retention Of Employees

The study was focused on the effects of human resource management practices on retention of employees using Dataplus interactive in Abuja as case study. The study employed survey research design. with the use of purposive sampling method, thirty(30) respondent who are staffs of Dataplus Interactive were selected. Questionnaire was issued, retrieved and validated for the study. Data was presented and analyzed using frequency and table, which provided answers to the research questions. Findings from the study reveals that HRM units in organizations are typically responsible for a number of activities. Which include recruitment of employees, training and development performance appraisal and rewarding. The study therefore recommends that management should endeavor to link pay to performance. This type of compensation structure is known to ensure fairness, eliminate conflicts and tension and propel employees to higher performance.

Introduction

1.1 Background of the Study

Organization‟s important source of competitive advantage is the employees (Barney, 1991). Therefore, organizations should implement HRM practices that will motivate and ensure its human resource is well taken care of. Retaining competent employee is more important than going through recruitment and selection process in order to identify talented employee. Lack of talented and knowledgeable workforce, economic growth and employee turnover in organizations are factors that demand that organizations devise policies which will increase employee retention (Haider et al 2015). Managers use various human resource management policies and practices in recruitment, selection, development, rewarding, and harnessing the full potential of the human resources in their organizations. Retention of skilled employees is a big negative experience that HR managers go through daily because skilled job applicants have a wide range of choice in market globally (Harris, 2007). HRM practices which could elicit positive employee responses and have been found to enhance employee retention. These include work-life balance, training and development, compensation, job satisfaction and employee engagement according to (Bhatnagar, 2007, Mathis & Jackson, 2004; Thomsen, Jarbol & Sondergaard, 2006; Maxwell 2005).

By considering other factors like employee commitment and loyalty, HRM practices can assist in determining the best way to implement HRM practices and increase the retention of employees. Arthur (1994), Huselid (1995), and Koch and McGrath (1996) propose that work place ideals and satisfying employee engagement which can promote employee retention. An organization with effective HRM practices enjoys sustainable growth that will maximize economic opportunities which in turn enable the organizational achieve its goals (Tanveer, et al., 2011). Retention of employees with important skills assist organizations to preserve the resources they could have spent on training employees and as a result lower loss of human capital (Acton & Golden, 2003). This study will look at five HRM practices; performance management, training and development, compensation, supervisor support and work environment.

The study will look at Herzberg Two Factor Theory (1959) and Social Exchange Theory (Balue, 964). The two-factor theory also called the motivation-hygiene theory was introduced by Herzberg in 1959. He stated that if introduced, certain factors in a firm called the Motivators would motivate employees to work harder. However, certain factors de-motivate the employees from working hard and doing their best. Hygiene factors are very important motivators and are in relation to the real work for instance how fascinating the work is and the numerous opportunities it grants for extra responsibilities, employer appreciation and growth opportunities. Mostly, employees will come to work enthusiastic when an organization gives them with a sensible level of pay and safety measures though these factors will not endear him to work harder at his job once he is there. According to Frederick Herzberg, hygiene factors or pay for the work performed is the biggest motivator that helps employees to remain in a particular workplace for a longer period of time. He stated that organizations should adopt democratic approaches of management and strive to improve the nature and content of the job through various methods in order to motivate their employees. Job enlargement, job enrichment and empowerment are among the factors employers can use to motivate their employees. The Social Exchange Theory (Balue, 1964) shows that human relationships are enhanced by the use of cost-benefit analysis and comparing of alternatives. Where there are significant commodities and social rewards issued to employees by the organization, employees will tend to demonstrate more effort and loyalty in return (Blau, 1964). Based on the norm of reciprocity, HRM practices are posited to indirectly impact employee attitudes and behavior by creating a sense of obligation within individuals which will result to reciprocation by way of commitment to work, loyalty to the firm, retention among others (Eisenberger et al., 1986).

Human Resource Management is an indispensable function for the both the private and public sector organizations. The process deals with several operational objectives such as recruitment, providing proper training to the employee, selection of the employee, assessment of the employee, motivating and maintaining a proper relationship with the employee and maintaining welfare and health for the employees in the organization through laws created by the concerned state and country. The human resource management is a process through which the organization utilizes their limited skilled workforce. The main intention is to make effective utilization of the existing human resource for the organization. Apart from this, human resource management works in the diverse area like conducting of jobs, planning the employee"s needs and recruitment, determination of wages and salaries, resolving the disputes and creating better working and safety environment for the employees (Bowen & Ostroff, 2004). The organization uses their human resource management for the proper utilization of their resources. Furthermore, the department plays an important role in the overall development of the employees for encouraging personal and career growth. Alternatively, it helps in improving professional skills and knowledge of the employees. Human resource management provides quality work life for the employees.

In the early, 20th century HRM is a product of the human relation to movement, when researcher began documenting ways of creating business value through the strategic management of workplace. This was initially dominated by transactional work, such as payroll and benefit administration but due to globalization, company consolidation, technological advancement and further research, HRM now focuses on strategic initiative like mergers and acquisitions, talent management, succession planning, industrial and labour relations, diversity and inclusion.Therefore, the significance of the Human resource management with respect to the organizational performance is evident. Large number of organizations has established their human resource management department and they understand its need in today"s world of business (Cooke, 2005).Thus The overall aim of Human resources management is to establish a high employee performance culture in which individuals and teams take responsibility for the continuous improvement of the business processes and for their own skills and contributions within a framework provided by effective leadership.

1.2 Statement of Problem

Human resource has become the mainstay of organizations across the world over and when strategically placed it makes firms achieve competitive advantage by providing innovative solutions. Successful organizations are those that attract, develop and retain the people who are capable of managing overall firms, who are sensitive to their clients and the challenges and opportunities presented by technology (Armstrong, 2009). The human resource department has a duty to source, integrate, grow, offer competitive remuneration and retain these talented employees through progressive HRM practices (Benkhoff, 2007). Many organizations both public and private still face a challenge of employee retention since talented people have the luxury of choice in the global skills market (Harris, 2007).

In the recent times, the organizational are not only focusing on employees for the work related aspects but also focuses on the holistic well-being of an employee. It is the fact that, if the employees life can"t be compartmentalized and the disturbance in the life of the employee will disturb the professional life. Hence, the human resource management works for the overall development of the employee by reducing their stress and creating a healthy atmosphere in the workplace.

However over the years, it has been noticed that many organizations have not been able to get the best out of their employee"s as a result of ineffective human resources management some of the factors affecting effective HRM in most organizations are inadequate funding and poor administration of human resources, lack of adequate and viable policies on employee issues, poor implementation of Human Resources plans, policies and procedure. Thus it is against these backdrops that the study is set to examine Importance of Human Resources management in promoting employees performance.

1.3 Objective of the Study

The main objective of this study is to examine the effects of human resource management practices on retention of employees. Specifically it seeks

To examine role of Human Resources Management in an organization.

To examine the importance HRM in organization.

To determine if HRM promotes employees retention.

1.4 Research questions

The research is guided by the following questions:

What are the role of HRM in an Organization

What are the importance of HRM in enhancing organizational performance

Can HRM create an impact on the overall productivity of an organization

In what ways does HRM promotes employee retention

1.5 Hypothesis of the Study

Ho: There is no significant relationship between human resource management and the employee retention.

Ha: There is a significant relationship between human resource management and the employee retention.

1.6 Significance of the Study

The study will be relevance to manager and stakeholders of organization. This research work will offer a better understanding on the relevance of human resources management on employee"s performance with overall organization productivity. The study will enlighten CEOs" and Managing Directors of organizations on the need to establish a viable HRM department so as to get the best out of their employees. The study will contribute to the general body of knowledge and serve as a reference material to other researchers in this field.

1.7 Scope of the Study

The scope of this study borders on the effects of human resource management practices on retention of employees. The study is however, delimited to Dataplus Interactive, FCT Abuja.

1.7 Limitation of the Study

The following factors poses to be a limitation during the course of this research

Financial Constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time Constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 Definition of Terms

Human Resource Management:

Human resource management is the strategic approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer"s strategic objectives.

Employee Performance:

Employee performance is defined as how an employee fulfills their job duties and executes their required tasks. It refers to the effectiveness, quality, and efficiency of their output. Performance also contributes to our assessment of how valuable an employee is to the organization.

1.10 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.

Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.

Chapter three deals on the research design and methodology adopted in the study.

Chapter four concentrate on the data collection and analysis and presentation of finding.

Chapter five gives summary, conclusion, and recommendations made of the study.

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