Employee Retention Strategies and Organizational Performance

Article excerpt


The study empirically examines the relationship between employee retention strategies and organizational performance. Using a sample size of 120 respondents in a leading beverage establishment in Nigeria, the results shows that organizations with adequate employee retention strategies in form of enhanced and regular monthly Salary package, workers participation in decision-making on issues affecting them, policies that favours job security and provision of incentives that bothers on staff family welfare retains and enhances employee performance. Implication of the results for practice is that any organization that fails to put in place adequate employee retention strategies is not likely to retain competent and motivated workforce in its employment and hence experience frequent labour turnover and poor organizational performance.

Keywords: Employees, Retention, Motivation, Job Security, Labour Turnover and Organizational Performance.


Studies have shown that one of the major concerns of any organization in a high-growth business is employee retention (Peterson, 2005). This is because the human resource is the most valuable asset in any organization (Adebayo, 2001; Ejiofor and Mbachu, 2001). So, for the goals and objectives of any organization to be achieved, the importance of effective implementation of adequate employee retention strategies cannot be overemphasized.

In order to accomplish their goals, organizations put in place measures to retain their workforce for enhanced performance. However, one major problems facing organizations is on how to retain competent workforce for performance. This problem has deprived many organizations of having in their employment capable workforce needed to achieve their desired goals and objectives (Cascio, 2003; Heneman and Judge, 2003). Where competent employees are available arising from appropriate recruitment strategies of an organization, frequent labour turnover arising from non-provision of adequate employee retention strategies have made it almost impossible for organizations to have in their employment competent staff to carry out the tasks of these establishments (Cascio, 2003).

To overcome this negative development, organizations spend a lot of resources to put in place Sveli packaged' incentives and 'proper working environment' to enable these staff to contribute meaningfully towards the realization of organizational goals. Despite these measures, the problem still persists in some organizations. What are the possible reasons for this development? One of the reasons that informed this study has to do with the unique role under-taken by competent workforce in bringing about the realization of the goals and objectives of organizations. In so far as competent employees are necessary for organizational performance, there is the need therefore to identify and examine how best to retain these competent employees for the achievement of the goals and objectives of organizations. The objective of this study therefore is to empirically examine the relationship between employee retention strategies and organizational performance.

Research Hypotheses

In order to achieve the objective of this study the following hypotheses stated in null form were tested:

Ho 1: There is no significant relationship between employee retention strategies and organizational performance.

Ho. 2: There is no significant relationship between labour turnover and organizational performance.

S c o pe and Limitations of the Study

The scope of this study is defined in terms of industry and time- frame. The study focuses on employee retention strategies and organizational performance in Nestle Nig. Pie, a foremost beverage industry in Nigeria. The period covered by the study is 2001 to 2005. The justification for Nestle Nig. PIc is based on the fact that it is reputed to be the largest beverage manufacturing company with a market capitalization of =N= 98. …


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