What impact does employee retention as on small business and its productivity?

The Effect of Employee Retention to Productivity in Small Business Enterprises

Executive Summary

This study explored the effect of employee retention strategies to productivity of small businesses . Based on previous literature , employee retention management is an important tool in ensuring that companies are able to retain their best workers and hence contribute to their competitive advantage . Small businesses however do not have the resources to offer the same kind of retention strategies that large companies do and hence have to contend with basic retention measures like a competitive salary , profit

sharing , flex time , day care provisions and fringe benefits . In the previous studies on company productivity as it relates to employee retention has been measured in terms of turnover rates . This study is therefore one of the few wherein employee retention was investigated as it directly impacts company performance through its sales . The study used a document research approach , wherein daily sales for a period of two weeks was tabulated and subjected to statistical manipulation , while the presence or absence of the identified employee retention strategies was given weighted scores . The results of the study have indicated that the presence of employee retention strategies significantly affected the rate of productivity or sales of the company wherein the group that had the identified retention strategies had higher sales than the company that did not have retention strategies . However the direct link between employee retention strategies and productivity has not been established wherein one cannot say that a company with complete retention management approach would have increased productivity . The findings of the study support the assumption that the presence of employee retention strategies would indicate better performance while the absence of it would lead to poor performance

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Table of Contents

Executive Summary . i Table of Contents . ii

List of Figures . iv

List of Tables . iv

Chapter 1

Introduction and Background of the Problem . 1

Purpose of the Study . 3

Research Objectives . 3

Limitations . 4

Assumptions . 4

Theoretical Framework . 5

Scope of Study . 7

Chapter 2 Review of Related Literature

Historical and General Background . 8

Existing Studies . 10

Compensation . 11

Career Development . 12

Job Characteristics . 12

Work Environment . 13

Work-Life Balance . 13

Methodology . 14

Instrumentation . 15

Statistical Approach 15

Relevant Results . 15

Summary of Literature Review . 16

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Chapter 3 Methodology

Research Methodology . 18

Data Collection . 18

Data Processing and Analysis Procedure . 19

Methodological Assumptions . 20

Limitations . 20

Chapter 4

Results . 22

Relationship of Employee Retention and Productivity of Small Businesses . 25

Chapter 5

Summary . 27

Conclusions . 29

Recommendations . 30 Definition of Terms . 32

References . 34

Appendix . 38

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List of Figures

Figure 1 : A simple model of HRM and performance . 7

Figure 2 : A simple model of Retention and Productivity . 7

Figure 3 Retention Measure Weighted Scores of Study Groups . 22

Figure 4 Daily Sales Report Study Groups in Dollars . 23

List of Tables

Table 1 Correlation Coefficient of Retention Measure Scores and Sales . 24

Table 2 t-test of Sales of Study Groups . 24

Table 3 of Retention Measure Scores . 38...