Means, standard deviations and correlations of the variables
SD | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | |||
---|---|---|---|---|---|---|---|---|---|---|---|---|
1. | Retention | 4.73 | 1.84 | |||||||||
2. | CSR | 4.90 | 1.22 | 0.64** | ||||||||
3. | Autonomy | 5.07 | 1.51 | 0.54** | 0.39** | |||||||
4. | WLB | 4.62 | 1.63 | 0.22** | 0.11* | 0.26** | ||||||
5. | Technology | 5.40 | 1.40 | 0.49** | 0.45** | 0.46** | 0.18** | |||||
6. | Intrinsic motivation | 4.76 | 1.73 | 0.65** | 0.48** | 0.54** | 0.26** | 0.44** | ||||
7. | TFL | 4.77 | 1.44 | 0.65** | 0.48** | 0.48** | 0.25** | 0.44** | 0.70** | |||
8. | Generation X (dummy) | 0.19 | 0.39 | 0.01 | −0.01 | 0.00 | 0.11* | 0.10* | 0.07 | 0.09* | ||
9. | Generation Y (dummy) | 0.57 | 0.50 | −0.01 | 0.07 | 0.03 | −0.06 | 0.00 | 0.01 | 0.05 | −0.55** | |
10. | Generation Z (dummy) | 0.25 | 0.43 | 0.00 | −0.08 | −0.04 | −0.03 | −0.09* | −0.08 | −0.14** | −0.27** | −0.66** |
Model | df | CFI | RMSEA | SRMR | |
---|---|---|---|---|---|
Seven-factor model | 757.41 | 254 | 0.95 | 0.06 | 0.07 |
Six-factor model | 840.28 | 255 | 0.95 | 0.07 | 0.10 |
Five-factor model | 842.77 | 257 | 0.95 | 0.07 | 0.09 |
Four-factor model | 904.35 | 260 | 0.94 | 0.07 | 0.09 |
Three-factor model | 926.28 | 264 | 0.94 | 0.07 | 0.09 |
Two-factor model | 947.56 | 269 | 0.94 | 0.07 | 0.09 |
One-factor model | 1,033.82 | 275 | 0.93 | 0.08 | 0.13 |
Summary of the reliability and the convergent and discriminant validity of constructs
Latent variables | Dimension/item | Standardized factor loadings | AVE | CR |
---|---|---|---|---|
Retention | RT1 | 0.901 | 0.845 | 0.942 |
RT2 | 0.928 | |||
RT3 | 0.928 | |||
Transformational leadership | Charismatic leadership | 0.883 | 0.814 | 0.946 |
Inspirational motivation | 0.813 | |||
Intellectual stimulation | 0.945 | |||
Individual consideration | 0.961 | |||
Corporate social responsibility | Economic | 0.709 | 0.607 | 0.860 |
Society | 0.869 | |||
Human rights and labor | 0.807 | |||
Environmental | 0.719 | |||
Autonomy | AT3 | 0.936 | 0.834 | 0.938 |
AT2 | 0.898 | |||
AT1 | 0.905 | |||
Work–life balance | WLB5 (reverse coded) | 0.653 | 0.652 | 0.903 |
WLB4 (reverse coded) | 0.835 | |||
WLB3 (reverse coded) | 0.802 | |||
WLB2 (reverse coded) | 0.867 | |||
WLB1 (reverse coded) | 0.860 | |||
Technology | T3 | 0.808 | 0.721 | 0.885 |
T2 | 0.884 | |||
T1 | 0.853 | |||
Intrinsic motivation | MI3 | 0.919 | 0.815 | 0.929 |
MI2 | 0.853 | |||
MI1 | 0.934 |
Model | Δ | df | Δdf | CFI | RMSEA | SRMR | |
---|---|---|---|---|---|---|---|
Hypothesized model | 2,194.49 | 122.29 | 1,031 | 5 | 0.95 | 0.03 | 0.07 |
Alternative model: removing direct paths from independent variables to retention | 2,316.78 | – | 1,036 | – | 0.94 | 0.04 | 0.07 |
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Hongyun tian.
1 School of Management, Jiangsu University, Zhenjiang, China
Shamim akhtar, sikandar ali qalati, farooq anwar.
2 Lahore Business School, The University of Lahore, Lahore, Pakistan
Associated data.
The datasets generated for this study are available on request to the corresponding author.
This study investigates the impact of transformational leadership on employee retention in small- and medium-sized enterprises (SMEs) and probes the mediating role of organizational citizenship behavior (OCB) and the moderating role of communication. Data were collected using convenience sampling from 505 employees of SMEs. A Smart PLS structural equation modeling (PLS-SEM) was used to estimate the various relationships. The findings of the study reveal a positive and significant relationship between transformational leadership and OCB. Similarly, this study finds a positive and significant relationship in OCB and employee retention. In addition, OCB had a positive mediating effect on the relationship between transformational leadership and employee retention. Furthermore, communication positively moderates the transformational leadership– OCB and OCB–employee retention relationships. Leaders at SMEs should implement the traits of transformational leadership such as developing a compelling vision for employees, focusing on goal achievement, having problem-solving techniques, having a sense of purpose, and spending time on the training and development of the team to enhance OCB and employee retention.
Small- and medium-sized enterprises (SMEs) face high levels of uncertainty and complexity concerning employee retention (ER) ( Park et al., 2019 ). Leadership plays a vital role in retaining employees ( Covella et al., 2017 ) and enhancing organizational citizenship behavior (OCB) ( Ahmet, 2014 ). Several leadership styles, including transactional, instrumental, laissez-faire, and transformational leadership (TL), have been studied in recent years ( Antonakis and House, 2014 ). TL inspires followers by attraction to advanced moral values and ideas ( Burns, 1978a ). In contrast to transactional leadership, TL significantly increases employee commitment within the organization ( Deichmann and Stam, 2015 ). Against the background of Bass (1985) , the TL theory best explains the model constructed for this study. The theory supports the idea that transformational leaders modify the behavior of subordinates ( Burns, 1978a ), resulting in a higher ER ( Sow et al., 2016 ). Furthermore, TL increases the intellectual ability of employees ( Fletcher et al., 2019 ). Past research shows that several of the world’s most successful companies have achieved their goals by implementing the TL process ( Sow et al., 2016 ; Dedaj, 2017 ; Jiang et al., 2017 ; Maaitah, 2018 ).
Employee retention is essential if organizations are to achieve and maintain success ( Das and Baruah, 2013 ; Arachchillage and Senevirathna, 2017 ; Paul and Vincent, 2018 ). ER has always been a significant concern for organizations because experienced employees make vital contributions to the success of an organization ( Das and Baruah, 2013 ). Additionally, ER fundamentally impacts the longevity of organizations, even though it is a challenging task in this age of intense competition ( Das and Baruah, 2013 ; Arachchillage and Senevirathna, 2017 ; Kaur, 2017 ; Nelms, 2018 ; Sulamuthu and Yusof, 2018 ). Scholars have discussed two levels of retention: individual and group turnover ( Muir and Li, 2014 ). Therefore, leaders must eliminate the reasons for low ER with the help of the human resource management department ( Deshwal, 2015 ; Juneja, 2015 ). Some scholars argue that TL plays a vital role in ER ( Khan, 2015 ; Kossivi et al., 2016 ; Nasir and Mahmood, 2016 ; Gyensare et al., 2017 ) and achievement of personal and organizational goals ( Sow et al., 2016 ; Gyensare et al., 2017 ). Dimensions of TL, including “idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration,” affect employee performance and retention ( Jiang et al., 2017 ).
It is essential to note that leaders’ effective communication and motivation enhance employee satisfaction ( Sergeeva, 2018 ), OCB ( Yildirim, 2014 ; Herfina and Rubini, 2015 ; Chan and Lai, 2017 ), which significantly affects ER ( Paillé et al., 2015 ; Popescu et al., 2015 ; Olendo and Muindi, 2017 ). There is evidence that employees show OCB when they are in an optimistic mood, and this finding has been further tested by relational mechanisms ( Nohe and Hertel, 2017 ). The relationship between TL and OCB is based on the trust between leaders and employees ( Nohe and Hertel, 2017 ). Owing to the direct and indirect impacts of interlinked behaviors, the effects of OCB on the ER cannot be ignored. Individual OCB affects ER in a way that the more the employees show individual OCB and a macrointerest in an organization, the less they will leave the organizations. Moreover, organizational factors such as helping, civic virtue, and sportsmanship affect the OCB of employees, further affecting ER ( Paillé et al., 2015 ). Past studies on TL have examined the mediating role of OCB on sustainable employee performance ( Jiang et al., 2017 ), creativity, and ER ( Rashid et al., 2018 ). However, this study aims to examine the mediating role of OCB between TL and ER. The lower level of ER in SMEs can be managed with proper communication, which leads to higher ER and SME performance ( Ugbam et al., 2012 ; Effiong et al., 2017 ). However, there is little research investigating the main reasons for high turnover in SMEs: that turnover is mainly due to their spending fewer resources on the well-being of employees compared with large organizations ( Bilau et al., 2015 ).
This study has the following contributions. Our approach takes a more inclusive perception to indulge the complex mediation role of OCB on ER. Previous studies on TL mainly examined the mediation role of OCB on sustainable employee performance ( Jiang et al., 2017 ), creativity, and ER ( Khokhar and Zia-ur-Rehman, 2017 ). However, we examine the mediating role of OCB on ER in Chinese SMEs. Furthermore, previous studies on TL examined the positive effects of communication on employee output and efficacy ( Hills, 2015 ; Luthra and Dahiya, 2015 ; Sadia et al., 2016 ). Moreover, effective communication by leaders was observed as a significant antecedent of OCB ( Yildirim, 2014 ; Herfina and Rubini, 2015 ; Diebig et al., 2017 ), but the moderating role of communication on TL, OCB, and ER was overlooked. We examine the moderation mechanism of communication. Finally, our study enriches the literature about TL, OCB, and ER.
Past research has examined employees’ behavior predicted by several factors, such as the creation of a positive organizational climate to stimulate safe work behavior in employees ( Smith-Crowe et al., 2003 ). Employees’ behavior, including OCB, was positively affected by the ethical climate through the social identity approach ( Pagliaro et al., 2018 ). Ethical climates such as friendship utilizing the social identity approach projected better behaviors and attitudes of employees concerning many outcomes including turnover intention ( Teresi et al., 2019 ). Studies also found that organizational justice theory impacts the effects on OCB through perceived restorativeness ( Bellini et al., 2019 ). However, studies on TL have examined TL theory and its four dimensions significantly affecting OCB ( Jiang et al., 2017 ) and ER ( Adekanbi, 2016 ; Sow et al., 2016 ). It is based on the view that transformational leaders transform their followers by changing their insights, ambitions, morals, and potential ( Bass, 1985 ). The qualities of leaders stimulate change, and they interconnect and establish ways of change to achieve the desired results ( Burns, 1978b ). The original theory of Burns says that leaders can change the life of the subordinates by changing their ambitions, insights, values, and expectations. Based on the Bass (1985) theory, the independent variable TL in this study is linked to four factors, including individual consideration (IC), which refers to the concept that the needs of the members of the team are focused and prioritized. The leader serves as an exemplar, counselor, organizer, and trainer to encourage an employee to take part in team activities and exhibit OCB. Intellectual stimulation (IS) includes support and encouragement provided by managers or leaders to members of the team, to generate innovative ideas on how to change existing procedures or orders in order to produce effective results; this, in turn, helps to boost ER. Leader inspiration (LI) involves helping followers to pursue a goal. Leaders establish and convey a vision or objective that they want the team to achieve, and the team is inspired to achieve that goal thanks to the leader’s explanation of the reasons for doing so. The leaders help and coach their team members to proceed in achieving their tasks. Idealized influence (II) includes setting a practical example as a leader and exhibiting the qualities of innovative thinking, trust, uprightness, faith, interest, pride, and effective communication ( Bass, 1985 ). These factors significantly affect ER in SMEs.
Transformational leadership focuses on real-time problems, defines new benchmarks, builds understanding, and motivates and shapes the behavior of subordinates to achieve organizational goals effectively ( Manshadi et al., 2014 ; Nagy and Edelman, 2014 ; Middleton et al., 2015 ; Jiang et al., 2017 ; Matwally and El Zarka, 2017 ; Arif and Akram, 2018 ). Studies suggest that the role of every manager in the organization is to be a leader instead of only a manager ( Hall et al., 2015 ). Organizational success improves through the enhanced effects of TL ( Sun and Henderson, 2017 ; Maaitah, 2018 ). TL also enhances employee performance in groups/teams ( Amin et al., 2016 ). Past research has shown that TL plays a critical role in the success of Chinese SMEs ( Lin and Sun, 2018 ). Chinese employees prefer leaders who exhibit the traits of TL (idealized consideration, IS, LI, and II), for instance, acting as a role model, selflessness ( Farh and Cheng, 2000 ), avoiding the use of abusive power, setting a good example, and working for employee well-being ( Dunfee and Warren, 2001 ; Cheng et al., 2004 ; Xiaoxia and Jing, 2006 ; Chen et al., 2012 ; Lin and Sun, 2018 ; Su et al., 2019 ).
During the past decade, there has been extensive research on TL and its relationship to multiple outcomes. TL significantly affects OCB ( Rodrigues and Ferreira, 2015 ; Sarwar et al., 2015 ; Ismaeelzadeh et al., 2016 ; Saif et al., 2016 ; Cofie, 2018 ; Hassi, 2018 ). Additionally, employees exceed their assigned duties when a TL style is used ( OCB, 2018 ). Within SMEs, all four dimensions of TL play a vital role in cultivating OCB ( Jiang et al., 2017 ). Past research examined the positive effect of TL traits on OCB ( Emami et al., 2012 ; Pickford and Joy, 2016 ; Majeed et al., 2017 ; Cofie, 2018 ). Bass (1985) explained that the qualities of transformational leaders such as individualized consideration, IS, inspirational motivation, and individualized influence enhance OCB in employees; for instance, Jiang et al. (2017) examined positive impacts of TL dimension on OCB. The following relationship has been established for this study:
Hypothesis 1: TL has a positive and significant impact on OCB.
There is a considerable amount of literature on ER, highlighting its importance for all types of firms. The cost of losing employees is much higher than retaining them through compensation plans ( Carter et al., 2019 ). To investigate this issue, many factors have been considered, such as the control variables of age, education, experience, sex ( Deshwal, 2015 ), peer support ( Ali et al., 2017 ), recruitment and selection, job preview, organizational culture, employee relations, awards and recognition, work–life balance, and training and development ( Olendo and Muindi, 2017 ). Leadership equally benefits employees and organizations, and specifically, TL affects ER ( Amankwaa and Anku-Tsede, 2015 ), both directly and indirectly ( Khan, 2015 ; Nohe and Hertel, 2017 ). Transformational leaders improve subordinates’ performance by achieving organizational goals ( Sow et al., 2016 ) and implementing a reward system to retain employees ( Adekanbi, 2016 ). TL increases ER ( Abouraia and Othman, 2017 ; Gyensare et al., 2017 ; Jiang et al., 2017 ) and reduces turnover intention ( Maaitah, 2018 ).
Transformational leadership influences the retention choices of employees ( Sulamuthu and Yusof, 2018 ). Furthermore, the theory of transformational leaders strongly supports the relationship between TL and ER ( Amankwaa and Anku-Tsede, 2015 ; Khan, 2015 ). This study proposes that employees show higher levels of retention when leaders exhibit individualized influence, IS, inspirational motivation, and individualized influence. Past studies have examined the relationship between TL and ER through TL theory ( Adekanbi, 2016 ; Sow et al., 2016 ). Therefore, we have proposed the second hypothesis, as follows:
Hypothesis 2: TL has a positive and significant impact on ER.
The concept of OCB first appeared in the early 1980s and initially described the specified behavior of employees within the organizations. Scholars described “organizational commitment and individual traits” as factors to enhance OCB ( Emami et al., 2012 ). Voluntary behaviors of employees to prove themselves as good citizens of the organization are called OCB ( Tambe, 2014 ). Similarly, an organization’s success is critical without OCB ( Obiora and Okpu, 2014 ). The positive effects of OCB’s three dimensions, namely, public benefits, sportsmanship, and self-sacrifice, on employee well-being increase ER ( Tambe and Shanker, 2015 ; Yurcu et al., 2015 ). Additionally, OCB refers to the behaviors that employees exhibit outside of their formal responsibilities. Leaders can help employees enhance OCB and benefit the organization ( Pickford and Joy, 2016 ; Yaylaci, 2016 ; Zeyada, 2018 ). Furthermore, OCB refers to discretionary behavior, which is not directly or explicitly recognized by the formal reward system. However, such behaviors promote the effective functioning of the organization ( Majeed et al., 2017 ). OCB enhances both individual and team performance ( Mehdizadeh et al., 2018 ; OCB, 2018 ). Few studies have also examined a negative relationship between OCB and turnover intention ( Islam et al., 2012 ). A higher level of OCB significantly affects ER ( Dash and Pradhan, 2014 ; Paillé et al., 2015 ; Pivi and Hassan, 2015 ; Anvari et al., 2017 ; Olendo and Muindi, 2017 ; Mittal and Kaur, 2018 ). This relationship will be analyzed in Chinese SMEs with the following hypothesis:
Hypothesis 3: OCB has a positive and significant impact on ER.
Scholars have argued that OCB plays a critical role in SMEs’ success in China ( Farh et al., 2004 ). TL affects ER in Chinese SMEs, both directly and indirectly ( Sun and Wang, 2017 ). Furthermore, OCB was found to partially mediate the relationship between internal corporate social responsibility and intention to quit ( Rashid et al., 2018 ). Jiang et al. (2017) found that OCB mediated more than half of the effects of TL on sustainable employee performance. Saoula and Johari (2016) studied the positive mediation of OCB between the relationship of perceived organizational support and turnover intention.
Similarly, Khokhar and Zia-ur-Rehman (2017) examined the positive and significant mediating role of OCB between TL, creativity, and ER. Selamat and Ran (2019) found that OCB significantly mediates the relationship between organizational justice and performance within SMEs in China. Chiang and Hsieh (2012) found that OCB partially mediated the relationship between perceived organizational support and job performance. The four traits of Bass’s (1985) theory, including individualized influence, IS, inspirational motivation, and individualized consideration, develop specific leadership skills in leaders. Transformational leaders help to develop OCB in their followers ( Emami et al., 2012 ; Majeed et al., 2017 ; Cofie, 2018 ), further leading to ER ( Adekanbi, 2016 ; Sow et al., 2016 ). However, this relationship with the perspective of Chinese SMEs has not been extensively explored. We propose that OCB plays a mediating role in the relationship between TL and ER. Therefore, we develop the following relationship to check the mediation of OCB:
Hypothesis 4: OCB positively mediates the relationship between TL and ER.
Communication is critical to motivate employees, measure success, deliver products and services to customers ( Conrad, 2014 ; Nwata et al., 2016 ), and enhance the performance of employees ( Femi, 2014 ). Effective communication between leaders and employees significantly increases employee output and efficiency ( Hills, 2015 ; Luthra and Dahiya, 2015 ; Sadia et al., 2016 ) and employee commitment ( Marchalina and Ahmad, 2017 ). Therefore, through effective communication, employees feel valued, motivated, and rewarded for their efforts toward organizational success ( Kukla, 2017 ), and individual and organizational betterment ( Sergeeva, 2018 ). According to scholars, “communicators have finally started putting a greater focus on the development of leadership and management communication” ( Gatehouse, 2018 ).
Scholars have argued that effective communication by leaders increases OCB ( Yildirim, 2014 ; Herfina and Rubini, 2015 ). Diebig et al. (2017) studied the positive moderation effect of direct communication on TL and daily team cooperation. Garnett et al. (2008) studied communication as a moderator between organizational culture and public organizations’ performance. Pettit et al. (1997) studied the moderation of communication between job performance and satisfaction. Similarly, Villegas and Cerveny (2004) also found communication to mediate between job satisfaction and absenteeism positively. On the basis of the discussion above, we propose that communication could be considered a moderator between the relationships of TL, OCB, and ER. Bass’s (1985) theory supports the idea that leaders must effectively convey the vision and mission they have for the organization. This study explores the relationship in SMEs in China. All the constructed relationships are presented in Figure 1 .
Research framework.
Hypothesis 5: Communication positively moderates the relationship between TL and OCB.
Hypothesis 6: Communication positively moderates the relationship between OCB and ER.
Sample and procedure.
Employees of manufacturing SMEs in Jiangsu Province Mainland China participated in this study. A sample size of 505 was obtained using random sampling technique. A total of 600 employees were contacted personally and online to distribute the questionnaires. Out of the 516 questionnaires received, 11 were rejected owing to missing information/incomplete responses. A total of 505 (84.16%) response rates were recorded for further examination. A total of 406 male and 98 female participants accounted for 80 and 20%, respectively. Participants in the 20–30 (210), 31–40 (231), 41–50 (42), and 51–60 (21) age groups accounted for 41.5, 46, 8, and 4%, respectively. Similarly, 56 participants had intermediate (high school) education, 210 participants had bachelor’s degrees, 210 participants had master’s degrees, and 28 participants had Ph.D. degrees, accounting for 11, 41.5, 41.5, and 5.5%, respectively. Twenty-eight participants had less than 1 year of work experience, 196 participants had 1–5 years, 182 participants had 6–10 years, 77 participants had 11–15 years, and 21 participants had more than 15 years of work experience, accounting for 5.5, 39, 36, 15, and 4% of the total participants, respectively ( Table 1 ).
Demographic information.
Controls | Variance | |
Gender | Male | 406(80%) |
Female | 98(20%) | |
Age | 20–30 years | 210(41.5%) |
31–40 years | 231(46%) | |
41–50 years | 42(8%) | |
51–60 years | 21(4%) | |
Career level | Entry level | 119(23.5%) |
Middle level | 294(58%) | |
High level | 91(18%) | |
Education | High school | 56(11%) |
Bachelors | 210(41.5%) | |
Masters | 210(41.5%) | |
Ph.D. | 28(5.5%) | |
Experience | <1 year | 28(5.5%) |
1–5 years | 196(39%) | |
6–10 years | 182(36%) | |
11–15 years | 77(15%) | |
>15 years | 21(4%) |
This study examined the TL (e.g., “My leader articulates a compelling vision”) by five-item scale (α = 0.931, Table 2 ), developed by Bass and Avolio (1995) .
Measurement model.
Construct | Item code | Loading | -value | CA | CR | AVE |
Transformational leadership | 0.931 | 0.948 | 0.785 | |||
TL1 | 0.886 | <0.000 | ||||
TL2 | 0.888 | <0.000 | ||||
TL3 | 0.911 | <0.000 | ||||
TL4 | 0.881 | <0.000 | ||||
TL5 | 0.863 | <0.000 | ||||
Employee retention | 0.926 | 0.944 | 0.772 | |||
ER1 | 0.846 | <0.000 | ||||
ER2 | 0.875 | <0.000 | ||||
ER3 | 0.894 | <0.000 | ||||
ER4 | 0.904 | <0.000 | ||||
ER5 | 0.873 | <0.000 | ||||
Organizational citizenship behavior | 0.897 | 0.924 | 0.709 | |||
OCB1 | 0.859 | <0.000 | ||||
OCB2 | 0.849 | <0.000 | ||||
OCB3 | 0.907 | <0.000 | ||||
OCB4 | 0.850 | <0.000 | ||||
OCB5 | 0.737 | <0.000 | ||||
Communication | 0.895 | 0.923 | 0.705 | |||
C1 | 0.846 | <0.000 | ||||
C2 | 0.880 | <0.000 | ||||
C3 | 0.815 | <0.000 | ||||
C4 | 0.846 | <0.000 | ||||
C5 | 0.810 | <0.000 |
Five items adapted from Lee and Allen (2002) were used to measure OCB (e.g., “I show genuine concern and courtesy toward colleagues,” α = 0.897, Table 2 ).
This study measured ER (e.g., “My work gives me satisfaction in this company”) by five-item scale (α = 0.926, Table 2 ), developed by Kyndt et al. (2009) .
Five items adapted from Roberts and O’Reilly (1974) were used to measure communication (e.g., “It is very important for me to progress upward in my present organization,” α = 0.895, Table 2 ).
The statistical software SmartPLS was used to analyze data. First, measurement model techniques were used to test the Cronbach alpha, heterotrait–monotrait (HTMT) ratio, composite reliability (CR), and average variance extracted (AVE). Second, this study used discriminant validity and correlation to analyze the theoretical model. Third, the study assessed the structural model by analyzing collinearity/common method bias [variance inflation factor (VIF)], coefficient of determination ( R 2 ), F 2 , predictive relevance ( Q 2 ), and standardized root mean square residual (SRMR). Finally, this study performed structural equation modeling (SEM) to test the hypothesis.
The reliability of the scales was determined by Cronbach’s alpha (CA) test. The validity of the measurement scales was found to be significant, with values of 0.895 for C, 0.926 for ER, 0.897 for OCB, and 0.931 for TL. Adequate CR or internal consistency reliability measured in the present study ranged between 0.923 and 0.948 (equal or above 0.7, as suggested by Bagozzi and Yi, 1988 ; Hair et al., 2011 ). Moreover, the present study met the threshold of convergent validity (AVE) of at least 0.50 ( Fornell and Larcker, 1981 ; Chin, 1998 ; Table 2 ).
According to scholars, the HTMT, to assess multicollinearity within the data, should not be higher than 0.9 ( Gold et al., 2001 ; Teo et al., 2008 ). The study met the standard, as results were found in the range of 0.343 to 0.736 ( Table 3 ). The discriminant validity results are presented in Table 4 , which shows a significant value of 0.84 for C, 0.879 for ER, 0.842 for OCB, and 0.886 for TL. Moreover, the results show that TL has a positive correlation with OCB (0.533), TL and ER (0.557), and OCB and ER (0.457); communication and TL, OCB, and ER have positive correlations with values of 0.59, 0.659, and 0.547, respectively.
HTMT (heterotrait–monotrait ratio).
C | ER | OCB | OCB*C | TL | |
ER | 0.597 | ||||
OCB | 0.736 | 0.49 | |||
OCB*C | 0.616 | 0.253 | 0.685 | ||
TL | 0.643 | 0.596 | 0.591 | 0.471 | |
TL*C | 0.527 | 0.353 | 0.567 | 0.658 | 0.572 |
Discriminant validity (latent variable correlation and square root of AVE).
C | ER | OCB | TL | |
C | ||||
ER | 0.547 | |||
OCB | 0.659 | 0.457 | ||
TL | 0.590 | 0.557 | 0.553 |
This study measured collinearity and common method bias issues through the VIF. VIF is defined as the reciprocal of tolerance. As suggested by the scholars Kock (2015) and Hair et al. (2011) , this study was considered bias-free with no values equal to or lower than 3.3 ( Table 5 ). Furthermore, Harman’s single factor test (suggested by Podsakoff et al., 2003 ) indicated that the maximum variance that is explained by a single factor is 38.4%. Henceforth, we conclude that this dataset does not suffer from common method bias ( Kock, 2015 ).
Structured model results.
ER | 0.418 | 0.413 | 0.274 | 0.065 | ||
OCB | 0.504 | 0.501 | 0.024 | 0.309 | 2.268 | |
C | 0.104 | 2.152 | ||||
OCB*C | 0.055 | 1.855 | ||||
TL | 0.131 | 1.661 |
According to previous studies, R 2 measures the model’s predictive power ( Sarstedt et al., 2014 ). The value of 0.418 indicates that 41.8% of variations in ER occurred because of independent variables (0.75 = substantial, 0.5 = moderate, and 0.25 = weak, as suggested by Henseler et al., 2009 ; Hair et al., 2011 ). Additionally, Cohen (2013) noted that the values of 0.02, 0.15, and 0.35 represent small, medium, and significant effects, respectively. If the value of f 2 is <0.02, it indicates that there is no effect. The results of the study shown in Table 5 show that there was an effect.
Predictive relevance is an indicator of the model’s out-of-sample predictive power or predictive relevance given by Stone and Geisser’s Q 2 value ( Geisser, 1974 ; Stone, 1974 ). In the SEM, Q 2 values larger than zero for a specific reflective endogenous latent variable indicate the path model’s predictive relevance for a particular dependent construct. The results of this study show medium predictive importance (0.02 = small, 0.15 = medium, and 0.35 = immense, as suggested by Geisser, 1974 ; Stone, 1974 ).
Standardized root mean square residual is the absolute measure of fit, and a value of zero indicates the perfect fit. SRMR is defined as “the root mean square discrepancy between the observed correlations and the model-implied correlations.” The results show a significant value of 0.065 ( Table 5 ), and if the value of SRMR is less than 0.08, it is generally considered a good fit ( Hu and Bentler, 1998 ). This study satisfies and ensures the goodness of fit.
This study conducts the PLS-SEM to test the theoretical model. The findings show (H1) that TL had a positive and significant direct impact on OCB (β = 0.169, t = 4.737, p < 0.000). The direct effects of TL on ER (H2) were also positive and significant (β = 0.356, t = 6.479, p < 0.000). Similarly, the direct impact of OCB or ER (H3) was positive and significant (β = 0.179, t = 2.203, p = 0.033). OCB as a mediator (H4) had a positive and significant direct impact on the relationship between TL and ER (β = 0.030, t = 2.169, p = 0.000). Similarly, the impacts of communication as moderator on the relationship of TL and ER (H5), OCB, and ER were found to be positive and significant (β = 0.183, t = 5.035, p = 0.000), and H6 was noted to be negative but statistically significant (β = −0.181, t = 3.373, p = 0.001) ( Table 6 and Figure 2 ). The results were also supported by previous studies ( Jiang et al., 2017 ; Khokhar and Zia-ur-Rehman, 2017 ; Majeed et al., 2017 ; Olendo and Muindi, 2017 ; Cofie, 2018 ; Maaitah, 2018 ; Mittal and Kaur, 2018 ; Sulamuthu and Yusof, 2018 ).
Hypothesis constructs.
Effects | Relations | β | Mean | SD | -value | -value | Decision |
H1 | TL → OCB | 0.169** | 0.168 | 0.036 | 4.737 | 0.000* | Supported |
H2 | TL → ER | 0.356** | 0.359 | 0.055 | 6.479 | 0.000* | Supported |
H3 | OCB → ER | 0.179** | 0.177 | 0.081 | 2.203 | 0.033* | Supported |
H4 | TL → OCB → ER | 0.030** | 0.029 | 0.014 | 2.169 | 0.000* | Supported |
H5 | TL*C → OCB | 0.183** | 0.184 | 0.036 | 5.035 | 0.000* | Supported |
H6 | OCB*C → ER | −0.181** | –0.183 | 0.054 | 3.373 | 0.001* | Supported |
Partial Lease Square SEM model.
Figure 3 shows the interaction of communication on the relationship between ER and OCB. The lines on the graph show that if there is highly effective communication in SMEs, the moderation effect of communication will be higher, and the ER will be increased by OCB. Similarly, the Figure 4 shows the moderation effect in the relation of OCB and TL. ER will be increased in SMEs with effective communication.
Interaction diagrame of C between ER and OCB.
Interaction diagrame of C between OCB and TL.
The present study proposed and examined a mediation model of how TL impacts ER and a moderation model of how communication impacts the relationships of TL, OCB, and ER. Consistent with this study’s predictions, the TL has a positive and significant effect on ER through the mediation of OCB. Specifically, TL enhances ER and OCB through compelling vision, goal achievement, problem solving, and training and development. This study also examined the complex moderation process of TL’s influence on OCB and OCB’s influence on ER.
First, the findings extend the research of TL. This study confirms that the ability of the leaders to articulate a compelling vision, skills at expressing confidence in goal achievement, innovative perspectives on problem solving, spending time on the training and development of the team, and specifically having a strong sense of purpose ( Bass and Avolio, 1995 ) impact OCB ( Rodrigues and Ferreira, 2015 ; Ismaeelzadeh et al., 2016 ; Saif et al., 2016 ; Majeed et al., 2017 ; Cofie, 2018 ) and ER ( Amankwaa and Anku-Tsede, 2015 ; Khan, 2015 ; Jiang et al., 2017 ; Maaitah, 2018 ). This study illustrates the complexity of the relationship between OCB and ER. Results show that employees of SMEs express genuine courtesy toward coworkers, even under the most tiring business or personal situations, which helps to enhance OCB. Moreover, this study elaborates that if employees willingly help coworkers, defend the organization’s name, and express loyalty toward the organization, ER increases ( Pickford and Joy, 2016 ; Olendo and Muindi, 2017 ; Mittal and Kaur, 2018 ).
Second, the results suggest that OCB has a decisive mediation role between TL and ER. The results show that transformational leaders can help increase ER more effectively if employees exhibit OCB ( Jiang et al., 2017 ; Khokhar and Zia-ur-Rehman, 2017 ). This study has examined that communication, including the importance (to employees) of moving upward in the organization, the streams of information they communicate to their immediate boss, and their feelings about how their boss can help their career growth. This study has uniquely examined the effects of communication as a moderator between the relationships of TL, OCB, and ER. Unlike other studies, this study reveals the positive impacts of OCB as a mediator in TL and ER. The primary implication of this study is the crucial mediating role of OCB and the moderating component of communication; these findings contribute significantly to the existing literature.
This study offers a few practical implications on how TL facilitates the increase in ER. Specifically, it is essential to understand that the traits of TL develop skills in managers to retain employees. SMEs should train leaders to develop TL characteristics in them. Accordingly, leaders should try to implement the skills of TL such as developing a compelling vision for employees, focusing on goal achievement, having problem-solving techniques, having a sense of purpose, and spending time on the training and development of the team to enhance ER.
Furthermore, leaders should pay attention to develop OCB in subordinates. Importantly, when leaders want to increase OCB, they should practice traits of TL to help and support the employee in achieving their goals, practice different problem-solving methods and train employees to enhance OCB. Moreover, leaders should not neglect the importance of communication with their employees to communicate the responsibilities clearly, to listen to the problems and issues in task performance, and to manage them accordingly.
This study has a few limitations associated. First is the time limit bounded to obtain the maximum number of responses. This study is based on cross-sectional data, and more longitudinal studies are required to develop in-depth knowledge and to capture the relationships between variables as well as to check for differences in results if longitudinal data are used instead of cross-sectional data. The data for this study were gathered from 505 employees of SMEs in China, the sample size can be increased, and comparative analysis of the same model in private and public sector organizations can be checked. Moreover, the present study is exclusively focused on SMEs in China. Applying these results to different cultural contexts and populations may require appropriate alterations. Future research may include the study of other mediating variables, such as job satisfaction, deviant workplace behavior, and supervisor conflicts. Furthermore, there are multiple approaches to analyzing the relationships between the direct and indirect paths of the model.
Ethics statement.
This study was carried out in accordance with the recommendations of the Ethical Principles of Psychologists and Code of Conduct by the American Psychological Association’s (APA). All participants gave written informed consent in accordance with the Declaration of Helsinki. The protocol was approved by the employee’s council of the participating organizations as well as the ethics committee of Jiangsu University, Zhenjiang. The patients/participants provided their written informed consent to participate in this study.
HT, SI, and MK: conception and design of the study. SA, SI, and FA: acquisition of data and data analysis. MK and HT: performed the analysis. FA, SQ, and SI: drafting the manuscript. SA and MK: critical revision of manuscript.
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Funding. This work was supported by the National Social Science Foundation of China (14BGL024): Research on the open innovation mechanism and promotional policy of small and medium-sized enterprises from the perspective of Network Embeddedness, and the National Natural Science Foundation of China (71774071): Research on low carbonization transition path of high carbon industry in China based on knowledge spillover of global value chain.
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Factors affecting employee’s retention: integration of situational leadership with social exchange theory.
Sketching on the Social Exchange Theory (SET), the present study aims to investigate the direct relationship between training and development, work environment, and job satisfaction with employee retention. The contingent role of transformational leadership was also analysed under the Situational Leadership Theory (SLT). Accordingly, we collected data from 287 employees of SMEs in northern China by employing a convenience sampling approach, exhibiting a response rate of 57.40 percent. The Partial Least Square-Structural Equation Modelling (PLS-SEM) analysis was then run to test the proposed hypotheses. The findings revealed a significant positive impact of training and development, work environment, and job satisfaction on employee retention. However, no moderating effect of transformational leadership was indicated on their direct relationship. This study has enriched the literature on employee retention and the leadership arena. To the best of the authors’ knowledge, there is no prior evidence concerning the study’s integrated relationship of the continuous variables. The implications and limitations were finally expressed at the end of this manuscript.
Employee retention is intricate in a competitive market, albeit vital for the long-term competitive advantage and organisational success and longevity ( Das and Baruah, 2013 ; Arachchillage and Senevirathna, 2017 ; Kaur, 2017 ; Mahan et al., 2018 ; Paul and Vincent, 2018 ). The current COVID-19 situation has seen employee retention emerge as the core problem for organisations across the globe ( Karatepe and Olugbade, 2017 ; Yousaf et al., 2019 ). Low employee retention results in various issues, that is, increased training and recruitment cost, insufficiently skilled employees, and disruption to organisational operations ( A’yuninnisa and Saptoto, 2015 ; Ping et al., 2021 ). Due to these circumstances, small and medium enterprises (SMEs) view employee retention as highly complex and uncertain ( Park et al., 2019 ; Tian et al., 2020 ).
In China, SMEs are the driving force of its social and economic development ( Hadj, 2020 ; Hui, 2021 ), though they are presently finding it hard to operate at their full efficiency. This situation is exasperated by the COVID-19 pandemic, limited resources, low anti-risk capabilities, and diminished production scale ( Zhanjie et al., 2017 ). These SMEs face bankruptcy and employee retention ( Hui, 2021 ) due to adverse market conditions and economic uncertainty ( Yu X. et al., 2019 ). China possesses approximately 770 million people in its workforce ( Zhang and Chen, 2019 ), albeit maintaining the most significant global average turnover rate, that is, 18% ( Friedman and Kuruvilla, 2015 ; Yu X. et al., 2019 ). Hence, practitioners and academicians continuously report the severity of employee turnover in China ( Karatepe and Olugbade, 2017 ; Afsar et al., 2018 ).
High employee turnover weakens employees’ commitment and sets up negative perceptions of organisations ( Hadj, 2020 ). Privately owned enterprises in China reported a 20% turnover rate, while state-invested enterprises and foreign-invested enterprises displayed 8% and 15%, respectively. Such staggering employee turnover is a pressing issue for Chinese SMEs as they grapple with managing employee retention ( Zhang and Chen, 2019 ; Hu, 2021 ). Thus, practical managerial tools must be employed to alter employees’ behaviours ( Choi and Peng, 2015 ). Given these points, it is imperative to investigate the underlying factors to enhance employee retention, considering the scarcity of research in China ( Hom et al., 2017 ; Yousaf et al., 2019 ; Li et al., 2021 ).
Organisations are currently discussing varying strategies and practices to preserve their employees ( Tanwar and Prasad, 2016 ; Bibi et al., 2018 ). Employee retention is a process through which employees are influenced to stay with their organisations for a longer period ( Hom and Griffeth, 1995 ). Generally, employees are easy to retain, provided they see a good match with their employer ( Umamaheswari and Krishnan, 2016 ). Extent literature concluded the significant role of various elements in relation to employee retention, such as intrinsic and extrinsic motivation factors ( De Sousa Sabbagha et al., 2018 ), job promotion ( Woodall et al., 2017 ), and bonus ( Chinyio et al., 2018 ). Others include organisation commitment ( Perreira et al., 2018 ), compensation ( Colson and Satterfield, 2018 ), and knowledge sharing ( Agarwal and Islam, 2015 ). This list can be extended to peer support, organisational culture, and work-life balance ( Deshwal, 2015 ; Ombanda, 2015 ).
Notably, career development opportunities, benefits and rewards, and psychological factors are deemed vital for employee retention ( Bibi et al., 2018 ; Lyman et al., 2020 ). Academicians and practitioners have developed a consensus about the crucial role of human resource management in developing this idea ( Deshwal, 2015 ; Tian et al., 2020 ). Drawing on the basis of Social Exchange Theory (SET), this study aims to examine the direct effect of training and development, work environment, and job satisfaction on employee retention among China’s SMEs.
The leaders in an organisation commonly initiate change, execute, and interconnect with the desired results ( Bass and Avolio, 1996 ; Bass and Riggio, 2006 ). In essence, employee retention is also not possible without effective leadership ( Covella et al., 2017 ). In the last few years, numerous leadership styles have been examined concerning employee retention, such as laissez-faire, instrumental, transformational, and transactional leadership ( Antonakis and House, 2014 ; Iqbal, 2016 ). Transformational leadership highly impacts employee commitment in contrast to transactional leadership ( Deichmann and Stam, 2015 ). These leaders are highly concerned about real-time problems and establish new benchmarks, develop understanding, shape employees’ behaviours, and accomplish organisational objectives ( Middleton et al., 2015 ; Tian et al., 2020 ; Iqbal et al., 2021a ).
Transformational leadership comprises four dimensions, that is, individual consideration, intellectual stimulation, idealised influence, and inspirational motivation. The first dimension, individualised consideration, is the extent to which leaders understand and prioritise the team member’s needs. Meanwhile, intellectual stimulation is the extent leaders offer support and encourage employees to generate innovative ideas beneficial to delivering optimum performance. Moreover, inspirational motivation provides necessary support to the employees, enabling them to pursue organisational goals. The final dimension, idealised influence, encourages practical examples of a leader exhibiting innovative thinking, faith, pride, uprightness, interest, effective communication, and trust ( Bass and Riggio, 2006 ).
Employees in China prefer leaders who exhibit transformational leadership attributes in the form of role models, non-use of abusive power, selflessness, and centring on employees’ well-being ( Su et al., 2019 ). Hence, transformational leadership has become one of the most crucial roles in the organisational success of China’s SMEs ( Lin and Sun, 2018 ). The current pandemic has resulted in economic uncertainty, environmental challenges, and the suitability of transformational leadership. Therefore, the Situational Leadership Theory (SLT) is applied to investigate its moderating role in the proposed relationship of training and development, work environment, and job satisfaction with employee retention.
Numerous contributions are made in this study concerning the theory and literature. First, the study developed the SET by revealing the direct impact of work environment, job satisfaction, training, and development on employee retention. Second, the insights on the conditional role of transformational leadership were elaborated in the context of SLT. The literature presented conflicting results and lacked clear explanations of the relationship’s nature of antecedents with employee retention ( Abeysekera, 2007 ; Haines et al., 2010 ; Mangi et al., 2011 ; Ahmad et al., 2017 ). In this context, further studies are recommended to better comprehend the training and employee retention relationship ( Bibi et al., 2018 ). Given these points, this study enriches the empirical evidence, specifically regarding the direct connection of training and development, work environment, and job satisfaction with employee retention. The final contribution included the literature on employee retention from the perspective of China’s SMEs.
Theoretical background.
The SET is widely applied to unravel the employer–employee relationship, especially in the employee turnover and retention literature ( Coyle-Shapiro and Conway, 2005 ; Gopalan et al., 2020 ). According to this theory, a person, who benefits from someone, feels obligated to repay that person through positive behaviours and devotion. Furthermore, this theory postulates that employees deliver their optimum performance upon achieving support and perceiving value from their employers ( Eisenberger et al., 2001 ). Hence, the theory is used to investigate the employees’ behaviour, enabling organisations to enforce certain HRM practices and igniting unique social exchange relationships.
From the SET perspective, employee retention can be induced by training and development offered by employers, which facilitate mutual benefits and create reciprocated obligations. This phenomenon occurs because individuals and organisations are involved in exchange relationships ( Raihan, 2012 ). Employees perceive responsibility to repay their employers upon providing a conducive working environment. This repayment may derive in the form of increased loyalty, commitment, and stay for a long time ( Settoon et al., 1996 ). Simultaneously, their job satisfaction and proper behavioural responses will increase, owing to the perception of fulfilling emotional needs ( Iqbal and Hasnah, 2016 ; Latorre et al., 2016 ; Iqbal et al., 2017 ; Rubel et al., 2021 ) and improving employee retention ( Rubel et al., 2021 ). Therefore, the current study posits that job satisfaction and work environment followed by training and development are positively related to employee retention.
A specific type of leadership is required to tackle the distinct needs and current challenges of a particular environment. Hence, according to the SLT, a single leadership style is insufficient for every situation ( Hersey and Blanchard, 1969 ). In this case, effective leadership, that is, transformational leadership, emerges as a promising idea and is applicable across diverse fields. This concept facilitates the concept of adapting to varying circumstances and work environments ( Hersey and Blanchard, 1969 ). In the context of employee retention, an environment must be structured where they feel empowered, valued, and connected to their employers ( Ohunakin et al., 2019 ; Frye et al., 2020 ); thus, this leadership style is consistent with these requirements ( Kim and Park, 2020 ). Consequently, this leadership style enhances the employees’ capability and reshapes the organisational image in the marketplace ( Mwita and Tefurukwa, 2018 ; Singh et al., 2020 ). Drawing on the SLT, the current research claims the moderating role of transformational leadership on the relationship of training and development, work environment, and job satisfaction with employee retention.
Training and development with employee retention.
Training and development is the degree to which training within the organisation is offered to the employees to foster their skills ( Delery and Doty, 1996 ). As an overarching HRM practice, it is often considered a broad collection of activities that refer to continual learning and developing general job and career-related skills ( Boon et al., 2011 ). Furthermore, training is the fundamental source of competitive advantage and employee retention ( Umamaheswari and Krishnan, 2016 ; Yamin, 2019 ). Training and development intensify the social exchange relationship between the employee and their employer ( Dysvik and Kuvaas, 2008 ), offering employees valuable abilities, skills, and knowledge ( Fletcher et al., 2018 ). This idea elicits obligations within employees to repay the organisation ( Koster et al., 2011 ).
Training and development programmes deal with the employees’ skills and competencies, enabling them to positively respond to various challenges the organisations face ( Rhee et al., 2014 ). Moreover, positive dispositions of employee growth can be achieved via motivation and modifying their skills or attitude toward organisational effectiveness ( Gope et al., 2018 ; Yamin, 2019 ; Khan et al., 2021 ). These skills and competencies are vital for their managerial positions and professional growth ( Schuler and Tarique, 2012 ; Ambrosius, 2018 ). Past studies have found a positive relationship between training and development with commitment ( Ahmad et al., 2017 ), employee performance ( Sinha et al., 2010 ), and job satisfaction ( Bibi et al., 2018 ). Others include employee retention ( Lee, 2005 ), employee commitment ( Ahmad et al., 2017 ), and employees’ intentions to stay ( Chew and Chan, 2008 ). Therefore, the hypothesis H1 is postulated as follows:
H1: Training and development significantly and positively influence employee retention.
The working environment concerns the availability of a conducive workplace ( Edgar and Geare, 2005 ) and is defined as the degree to which employees consider the workplace physically safe. Employees can share their views on their surroundings with their mutual consideration with organisations by assessing the environment ( Lewin et al., 1939 ; Li et al., 2022 ). Some examples of work environment indicators include supervisor support ( Stirpe and Zárraga-Oberty, 2017 ), physical working conditions ( Richards et al., 1994 ), social worker support ( Haggins, 2011 ), and helping behaviours during decision-making ( Subramaniam and Mia, 2001 ). Notably, a study found a significant relationship between work environment and employee retention ( Al-Hamdan et al., 2017 ).
Organisational rules and regulations encompass the work environment, affecting employee retention ( Yam et al., 2018 ). Consequently, an exceptional working environment increases trust among employees, which is useful for employee retention ( Candela et al., 2015 ; Ede and Rantakeisu, 2015 ). The positive energy motivates employees to accomplish their professional goals effectively, enhancing their commitment to the organisation ( Mangi et al., 2011 ; Umamaheswari and Krishnan, 2016 ). The perception of the working environment can either positively or negatively impact specific employees’ job outcomes, such as commitment, participation, and intention to stay ( Gunaseelan and Ollukkaran, 2012 ). Given these points, the discussion above drives the development of hypothesis H2:
H2: Work environment significantly and positively influences employee retention.
Job satisfaction concerns employees’ evaluations of their jobs based on perceptions by comparing their actual job outcomes with desired ones ( Schleicher et al., 2011 ). The concept is defined as a positive state where employees share their feelings about their job ( Locke, 1976 ), ranging from moderate- to low-level satisfaction ( Locke, 1976 ; Quigley et al., 2007 ). Furthermore, the idea is considered a causal factor that promotes intentions to stay with the organisation because it is a pleasant psychological state. In this case, individuals perceive content with their work ( Fletcher et al., 2018 ). Therefore, job satisfaction fosters the social exchange between employers and employees, where satisfied employees exemplify positive experiences. This experience is supported by the social exchanges between the employee and the organisation, reinforcing their intentions to stay with the organisation ( Koster et al., 2011 ).
Employees from varying organisations, industries, and geographical locations exhibit different levels of job satisfaction ( AbuAlRub et al., 2009 ). However, job satisfaction positively affects employees’ intentions to stay irrespective of industries and region ( AbuAlRub et al., 2009 ). For instance, a multi-level study found that job satisfaction is positively related to the employees’ intentions to stay in the united kingdom (UK) ( Fletcher et al., 2018 ). Moreover, meta-analytic evidence has demonstrated that those who are satisfied at work are more likely to retain their employment ( Fishbein and Ajzen, 2011 ); therefore, the hypothesis H3 is proposed on the basis of SET as follows:
H3: Job satisfaction significantly and positively influences employee retention.
Transformational leadership is considered highly effective in driving employee retention ( Kossivi et al., 2016 ; Amankwaa et al., 2019 ), in which the leaders initiate, execute, and interconnect change with the desired outcomes ( Bass and Riggio, 2006 ). This form of leadership influences employees by altering their perceptions, views, ambitions, and moral standards ( Bass and Avolio, 1996 ). Transformational leaders also offer an ideal approach to employees and exhibit the attributes of significant faith, effective communication, uprightness, trust, and innovative thinking ( Tian et al., 2020 ). These leaders promote intellectual stimulation, idealised influence and inspirational motivation, and individualised consideration. In addition, leaders can facilitate employees by understanding their issues and creating a psychologically safe environment through individualised consideration ( Iqbal et al., 2021b ).
Transformational leaders are viewed as role models and counsellors who encourage them to participate in organisational activities. Supervisor support, training, information accessibility, and counselling lead to higher employee retention ( Ooi et al., 2021 ) and higher employability ( Matsuo, 2021 ). Furthermore, healthy communication positively influences the work environment ( Denton, 2011 ) via sharing of innovative ideas and intellectual stimulation, an indicator of open communication. This approach culminates in improved work that enhances talent management ( Perlow and Kelly, 2014 ). Moreover, open communication and improving resource management in employee allocation ease employees’ adaptation to new work environments ( Castrogiovanni et al., 2011 ).
Organisational support in the form of supervisor support, rewards, and favourable working conditions are vital to stimulating organisation-related outcomes, that is, reduced withdrawal behaviours and commitment ( Rhoades and Eisenberger, 2002 ; Gillet et al., 2022 ). Supervisor support is critical to replenish employee physical and psychological resources to increase their retention probability ( Kalliath and Kalliath, 2014 ). Furthermore, transformational leaders affect employees’ behaviour resulting in high employee retention ( Sow et al., 2016 ). Leaders can develop a reward system within their organisation which is highly effective in retaining employees ( Adekanbi, 2016 ). They must also ensure sufficient resources to employees following the organisational goals. Moreover, shared vision is directly related to the employees’ engagement ( Boyatzis et al., 2017 ) and continuous improvement ( Fardazar et al., 2015 ; Iqbal and Piwowar-Sulej, 2022 ). This leadership style presents a shared vision and elaborates the underlying reasons, enhancing their participation and involvement in decision-making. Previous studies found that transformational leadership negatively impacts employees’ turnover intention ( Maaitah, 2018 ) but positively affects their knowledge base ( Fletcher et al., 2018 ). For instance, a positive impact of various factors on employee retention, that is, idealised influence, inspirational motivation, individualised consideration, and intellectual stimulation ( Jiang et al., 2017 ). Therefore, the following hypotheses, H4, H5, and H6, are proposed:
H4: Transformational leadership significantly moderates the training and development—employee intentions relationship.
H5: Transformational leadership significantly moderates the work environment—employee intentions relationship.
H6: Transformational leadership significantly moderates the job satisfaction—employee intentions relationship.
With reference to the above discussion, the hypothesized model is drawn as shown in the below Figure 1 .
Figure 1. Research framework.
Context, sample, and data collection.
In China, organisations face fierce pressure to retain employees due to the shortage of skilled and talented employees ( Fu et al., 2020 ). Statistically, 44% of the top management in organisations operating in China view this issue as a critical barrier to employee retention ( Mashiah, 2021 ). China’s manufacturing makes up two-thirds of SMEs ( Zhu et al., 2012 ; Iqbal et al., 2021c ; Xuecheng et al., 2022 ), where most operate in the northern region. Therefore, this study focuses on the SME employees in this region. Moreover, this study requires a minimum of 185 responses based on the sample-item ratio ( Hatcher and O’Rourke, 2013 ). Online survey forms were structured to collect data, comprising six sections that measure various factors. The factors include training and development, work environment, job satisfaction, employee retention, transformational leadership, and respondents’ demographics.
We adopted a convenience sampling approach for data collection, considering China’s time and financial constraints and current COVID-19 restrictions. The present study is cross-sectional in design, where data are collected at a specific time from the employees. The online survey link was disseminated via 500 email addresses with the assistance of the human resource department. Accordingly, 287 responses were received, which is sufficient, indicating a response rate of 57.40%. Furthermore, a gentle reminder was included during data collection to increase the number of responses. In this study, we also marked it mandatory to check against each item in the online survey form, ensuring no missing values in the dataset.
We adopted measurement scales of four continuous variables in the current study. Previous studies have reported reduced quality and high cognitive ability required to collect data using a high Likert scale ( Cummins and Gullone, 2000 ; Iqbal et al., 2020 ). Therefore, a 5-point Likert scale was employed, ranging from 1 = strongly disagree to 5 = strongly agree. Delery and Doty (1996) have defined training and development as the degree to which organizations offer training to employees to foster their skills. We adopted the 4-item scale from Delery and Doty’s (1996) study to measure training and development. For example, one item is “We receive formal development training which increases our promotion chances within the organisation.” Similarly, Bibi et al. (2018) used an identical scale in the context of Pakistan and found it highly reliable (α = 0.918). In this study, the Cronbach’s alpha value of this scale is 0.719.
The work environment is defined as the degree to which employees perceive the availability of a safe and conducive workplace ( Edgar and Geare, 2005 ). Subsequently, 4-measurement items were adopted from Bibi et al.’s (2018) study to assess the work environment. For instance, one item is “We always feel safe working here in this environment.” In the current study, the Cronbach’s alpha value of this 4-item scale is 0.928. Meanwhile, job satisfaction is defined as the pleasurable emotional state emerging from the job appraisal as facilitating the accomplishment of one’s job values ( Locke, 1976 ; Zhang M. M. et al., 2016 ). In this case, we adopted a 3-item scale from Cammann et al.’s (1979) study to measure job satisfaction. An example of this item is “In general, I like working here.” This scale was utilised by Zhang L. et al. (2016) , who found it highly reliable (alpha = 0.870). Accordingly, the Cronbach’s alpha value in this study for the 3-item scale is 0.921.
Transformational leadership is defined as those who have idealised influence, intellectual stimulation, inspirational motivation, and individualised consideration. We adopted 20 items of the Multifactor Leadership Questionnaire (MLQ) to analyse transformational leadership. This analysis was related to the four items, namely intellectual stimulation, idealised influence, inspirational motivation, and individualised consideration. A sample of the item is “my leaders give me tasks with enthusiasm.” A previous study ( Ohunakin et al., 2019 ) indicates high reliability where Cronbach’s alpha values of its four dimensions were between 0.88 and 0.92. In this study, the Cronbach’s alpha values are in the range of 0.875–0.918.
Employee retention is defined as the effort by an organisation to keep desirable employees to fulfil business objectives ( Frank et al., 2004 ; Govaerts et al., 2011 ). We adopted six items ( Govaerts et al., 2011 ) to measure employee retention, for example, “I love working for this company.” The present study’s measurement scale was highly reliable, that is, Cronbach’s alpha = 0.794, aligning with Khalid and Nawab’s (2018) findings.
In this study, the research framework is complex due to its prediction-oriented feature and the presence of independent variables, dependent variables, and moderators. Therefore, partial least squares-structural equation modelling (PLS-SEM) was selected following Hair et al. (2020) . This approach is considered a proper analytical strategy compared to covariance-based structural equation modelling (CB-SEM) ( Ringle et al., 2020 ). The technique revolves around the assessment of the measurement model and structural model, though it requires prior evaluation of the former measurement.
Data screening.
Before analysis, data screening must be conducted, which concerns missing values, outliers, data normality, and common method bias. We ensured the absence of missing values in the current dataset by marking mandatory against each measurement item in the online survey form. Moreover, univariate outliers and multivariate outliers were investigated through Z-score and the Mahalanobis distance test. Accordingly, three responses were removed in the univariate outlier because of the Z-score values greater than 3.29 ( Tabachnick and Fidell, 2007 ). Meanwhile, the Mahalanobis distance test revealed that the P -value of 15 cases is less than 0.001, a clear indicator of multivariate outliers; therefore, the 15 responses were excluded from the dataset.
The normality was assessed based on the skewness and kurtosis values, and in this study, the skewness values of all continuous variables extend from −1.307 to 1.531, which are within ± 3. However, the kurtosis values fall out of the ± 3 range ( DeCarlo, 1997 ), and thus, the data are not univariate normal. The Mardia’s coefficient skewness 0.005 and kurtosis values (β=172.761,ρ < 0.005) confirmed the multivariate normality. Nevertheless, the PLS-SEM does not require data normality; hence, non-normal distribution is not an issue. Next, we applied Harman’s single factor test and the correlation matrix procedure to examine the common method bias. Harman’s single factor test revealed that a single factor only counts for 39.41% < 0.50% of the total variance ( Podsakoff et al., 2012 ), confirming no issues with method bias. The correlation matrix exposed that no single correlation between continuous variables is greater than 0.90 ( Bagozzi et al., 1991 ); thus, the current study is free from common method bias. We have also examined the model fit of hypothesized model based on two-index strategy recommended by Hu and Bentler (1999) . In the present study, hypothesized model was found fit based on comparative fit index (CFI) (0.96 > 0.95) and standardised root mean square residual (SRMR) (0.049 < 0.09) ( Hu and Bentler, 1999 ), as compared to alternative models.
The present study is dominated by male participants ( n = 176, 61.32%), where most participants ( n = 109, 37.98%) fall between the ages of 25 and 35, followed by 85 between 36 and 45. The most significant number of participants ( n = 144, 50.17%) in current research possessed a bachelor’s degree and nine participants (3.14%) with PhDs. Finally, more than 50% of the participants ( n = 153) acquired 5–10 years of working experience, while nine participants with more than 20 years of professional experience.
In this study, the mean values of training and development ( M = 4.145), work environment ( M = 4.334), job satisfaction ( M = 4.322), and employees’ retention ( M = 4.167) were found significant. Notably, job satisfaction and employee retention values were higher than those reported by a previous study among employees of multi-national enterprises (MNEs) in China ( Zhang M. M. et al., 2016 ). Regarding four dimensions of transformational leadership, idealised influence ( M = 4.132) has the highest mean value. This result is followed by inspirational motivation ( M = 4.121), individualised consideration ( M = 3.973), and intellectual stimulation ( M = 3.670). Moreover, the current descriptive analysis revealed that participants seek more idealised influence than other dimensions of transformational leadership in Chinese SMEs. In other words, a leader’s ability to exhibit high morality, ethics, and personality enables the realisation of high performance within organisations.
The measurement model analysis examines the construct reliability and validity, in which the former is assessed with reference to its indicator and internal reliability. This study revealed that all indicator loadings are more significant than 0.50 and less than 0.944, which are deemed acceptable. An item has sufficient indicator reliability provided its factor loading is more significant than 0.50 ( Chin, 1998 ). Moreover, we examined the construct reliability based on Cronbach’s alpha and composite reliability values. A construct has acceptable reliability, provided its Cronbach’s alpha or composite reliability value is greater than 0.70 ( Sarstedt et al., 2019 ).
Table 1 shows that the Cronbach’s alpha values of various items are greater than 0.70. These items comprise training and development (0.719), work environment (0.928), job satisfaction (0.921), employees’ retention (0.794), and individualised consideration (0.889). Other items include idealised influence (0.918), inspirational motivation (0.875), intellectual stimulation (0.882), and transformational leadership (0.885). Similarly, the composite reliability values of these variables are greater than 0.70 (see Table 1 ). Hence, it is evident that all the continuous variables exhibit acceptable construct reliability.
Table 1. Factor loadings, reliability, AVE, and mean values.
Construct validity is formulated on the convergent and discriminant validity, where a construct has sufficient acceptable convergent validity provided its factor loadings are greater than 0.70. Furthermore, its average variance extracted (AVE) must be higher than 0.50 ( Hair et al., 2020 ). The items of all continuous variables must possess factor loadings greater than 0.70 (see Table 1 ). The AVE values of multiple items revealed values higher than 0.50, that is, training and development (0.541), work environment (0.823), and job satisfaction (0.864). Others include employee retention (0.576), individualised consideration (0.706), idealised influence (0.712), inspirational motivation (0.669), intellectual stimulation (0.692), and transformational leadership (0.677) (see Table 1 ).
Based on the above results, all continuous variables possess acceptable convergent validity. We employed Fornell–Larcker Criterion to examine the discriminant validity of the variables. This method confirms the discriminant validity of a variable provided that the square root of its AVE is greater than its inter-constructs correlation values ( Henseler et al., 2009 ). Table 2 indicates that the square root of AVE of all variables is greater than their inter-constructs correlation values; hence, these variables exhibit acceptable discriminant validity.
Table 2. Fornell–Larcker criterion.
The structural model analysis revealed that training and development significantly influence employee retention (β=0.824,ρ < 0.05) ( Table 3 ). In essence, one unit change in training and development brings 82.40% variations in employee retention, and thus hypothesis H1 is supported. Notably, the findings indicated the significant positive impact of the work environment on employee retention (β=0.274,ρ < 0.05), supporting hypothesis H2. Meanwhile, job satisfaction significantly influences employee retention (β=0.824,ρ < 0.05) (see Table 3 ). In other words, there is a 20% change in employee retention among SME employees in China for one unit change in job satisfaction, supporting hypothesis H3.
Table 3. Hypotheses testing.
The effect of its interaction terms with training and development, work environment, and job satisfaction were estimated. This approach was conducted to examine the moderating effect of transformational leadership. In this case, the interaction term of transformational leadership with various dimensions does not significantly influence employee retention in SMEs in China. The dimensions include training and development (β = −0.081,ρ=0.233 > 0.05), work environment (β=0.021,ρ=0.856 > 0.05), and job satisfaction (β=0.078,ρ=0.101 > 0.05) (see Table 3 ). Therefore, moderation hypotheses H4, H5, and H6 are rejected.
The current study examined an essential topic in organisational behaviour: what factors are vital to foster employee retention in SMEs? Accordingly, a research framework was proposed and empirically tested based on the SET to analyse the impact of multiple dimensions (training and development, work environment, and job satisfaction) on employee retention. Similarly, the conditional effect of transformational leadership was analysed based on this relationship. Current findings confirmed the positive connection among the three dimensions of employee retention. However, the contingent role of transformational leadership was not supported by the proposed relationship. Only three direct hypotheses are supported in this study, and the findings are elaborated below.
The SET was applied in this study to propose the positive relationship of the three dimensions with employee retention. The data analysis purported the significant positive relations of training and development with employee retention among SME employees in China; therefore, supporting hypothesis H1. This finding aligned with previous studies ( Zheng, 2009 ; Umamaheswari and Krishnan, 2014 ; Bibi et al., 2018 ). Past studies reported a positive impact of training and development on employee retention in Pakistan’s universities ( Bibi et al., 2018 ) and Indian ceramic industries ( Umamaheswari and Krishnan, 2014 ). A similar observation can be found in the hotel industry of Bangladesh ( Rubel et al., 2021 ) and multinational enterprises in Asia ( Zheng, 2009 ).
A study among millennial employees in Bangladesh concluded a significant positive effect of green training and development on employee retention ( Islam et al., 2022 ). Meanwhile, training and development reported a significant indirect impact on employee retention through ethical climate ( Yamin, 2019 ) and employee engagement ( Fletcher et al., 2018 ). Another study reported a negative link between the practices of perceived human resource management and turnover intention among SME employees ( Reese et al., 2009 ). Deng (2018) similarly claimed that family business retains migrant workers by fostering training and development programmes. Therefore, organisations must carefully design and implement these programmes to increase employee retention.
The current research indicated a positive relationship between work environment and employee retention. The results supported this proposition, resulting in the acceptance of hypothesis H2, aligning with previous findings ( Pek-Greer and Wallace, 2017 ; Frye et al., 2020 ; Wu et al., 2020 ). Other studies echoed the current study’s results. For instance, the work environment was positively related to employee retention among generation Y ( Frye et al., 2020 ). Meanwhile, a qualitative study in Singapore suggested that a supportive work environment strongly predicts employee retention in its education sector ( Pek-Greer and Wallace, 2017 ). In China, the work environment indirectly influences employee turnover through workplace violence ( Wu et al., 2020 ) and India’s organisational engagement ( Kundu and Lata, 2017 ). Other studies supported the positive impact of the work environment on the employee turnover intention in China’s health sector ( Wan et al., 2018 ; Wu et al., 2020 ).
This study proved the significant positive effect of job satisfaction on employee retention based on hypothesis H3, leading to its acceptance, parallel to previous findings ( Tanwar and Prasad, 2016 ; Frye et al., 2020 ). A study found that job satisfaction positively affects employee retention in hospitality ( Frye et al., 2020 ). Meanwhile, a qualitative study among IT industry employees showed that employer branding vis-à-vis job satisfaction strongly determines employee retention ( Tanwar and Prasad, 2016 ). On a similar note, Liu et al. (2010) confirmed that job satisfaction is a strong predictor of employee retention in China’s health centres. Zhang M. M. et al. (2016) similarly supported this positive relationship among Chinese employees working for multinational enterprises. In the service industry, the aforementioned three dimensions are viewed as vital factors in promoting employee retention ( Mohanty and Mohanty, 2016 ).
The present study introduced the moderating effect of transformational leadership on the relationship of the three dimensions with employee retention. A transformational leader is anticipated to significantly moderate the training and development-employee retention relationship, though the findings do not support this proposition. Hence, H4 is rejected. In this context, there is no prior study on leadership as a moderating variable on the link between training and development with employee retention. However, a study suggested a green creativity climate as the potential moderator of the green practices-employee retention link among millennial employees ( Islam et al., 2022 ).
The moderating role of transformational leadership on the work environment-employee retention relationship was not supported. This result is a clear indicator of the rejection of hypothesis H5. Similarly, there is no study regarding leadership as a contingent variable on the work environment-employee retention association. Thus, the current study offers strong empirical contributions to the field of training and development followed by the work environment. Meanwhile, job satisfaction possesses substantial weightage in employee retention, and this relationship relies on the organisational climate ( Sips et al., 2015 ). The current research established the conditional effect of transformational leadership on the job satisfaction-employee retention link.
However, the present findings do not support hypothesis H6, contradicting Sips et al.’s (2015) findings. The underlying reasons are due to the leaders’ direct role in developing organisational climate rather than their immediate effect on job satisfaction. Moreover, another study revealed that servant leaders indirectly influence employee retention through job satisfaction ( Hassan et al., 2021 ). In Nigeria, a significant positive effect of various elements was found on employee retention in universities. These elements include idealised influence, inspirational motivation, intellectual stimulation, and individualised consideration ( Ohunakin et al., 2019 ).
The current study aimed to investigate the direct effect of factors such as job satisfaction, working environment, and training and development on employee retention in China. This study also intended to examine the moderating role of transformational leadership in the relationship between job satisfaction, working environment, and training and development on employee retention based on cross-sectional data collected from employees in manufacturing SMEs in China. The current empirical findings confirm that all three factors such as training and development, job satisfaction, and the working environment significantly influence employee retention. Among these three variables, training and development have the highest positive effect on employee retention. Yet, present statistical findings do not support the moderating effect of transformational leadership on the relationship of job satisfaction, working environment, and training and development with employee retention.
The present study significantly contributed to the extension of the theory. First, the literature is enriched by offering empirical support on the integrated understanding of the three dimensions and employee retention. Furthermore, extant literature provided contradicting findings on the relationship between the three dimensions. However, the role of transformational leadership as the conditional variable in their relationship is still missing. Second, this study augments the SET by examining the effect of training and development, work environment, and job satisfaction on employee retention. Third, the SLT is extended by providing evidence on the non-significant moderating role of transformational leadership, specifically the correlation of the three dimensions on employee retention.
The current research offered several recommendations for practitioners and policymakers. Extant literature claims that employee retention is a significant challenge for SME employees in China. In this case, the current work emphasises the three dimensions critical to enhancing employee retention within China’s SMEs. The present findings found that training and development is the most crucial element which increases employee retention within organisations. Chinese SMEs may, therefore, plan their training and development programme more effectively based on their employee’s needs.
China’s SMEs should design training and development programmes that parallel their employees’ career growth. However, previous findings focused on offering training programmes related to company-specific skills rather than general skills. Accordingly, general skills enable employees to effectuate professional opportunities outside the parent organisations. Therefore, these SMEs must evaluate their programmes and perform changes concerning their company-specific skills. Equally important, the top management should employ specific strategies to foster a conducive workplace to improve the work environment and cope with employees’ burnout. Such strategies may include special counselling sessions for stress-induced employees and enforcing flexible work schedules.
The management should centre on developing the work environment, ensuring satisfied employees, establishing open communication, and fostering ideas while offering peer support. Moreover, practitioners should work on the proper fund allocation to develop a positive work environment. The current study reported a significant positive effect of job satisfaction on employee retention. Hence, the human resource and departmental managers are advised to make incremental changes, spurring employee satisfaction, that is, providing a fair salary, rewards, and incentives to their employees. Nevertheless, the moderating effect of transformational leadership does not appear significant in retaining employees for SME management in China.
Based on the above, it is proven that transformational leaders are highly effective in designing an empowered and meaningful work environment. For instance, this form of leadership offers individualised consideration and idealised influence, stimulates intellectually, and motivates inspiration. Thus, practitioners and managers should evaluate the development of leadership. Specifically, in China’s SMEs, policymakers, and managers must critically assess the leadership development programmes in their organisations.
The current study possesses several limitations despite the significant theoretical and practical contributions. First, this study was conducted in the northern region of China, hence, increasing the generalisation in the context of China. Moreover, the sole focus on China SMEs may not provide comprehensive information on other emerging and developed economies. Therefore, future studies can enrich the quantitative findings by assessing other developing countries, such as Pakistan and India. The survey form was distributed through the human resource management department, decreasing the chance of randomly distributing the survey form to employees. This situation will hinder the generalisation issue further, especially in a broader population.
Second, this study subjectively measured all continuous variables, and such measurement might influence the presence of common method bias. Practitioners and academicians face extreme difficulty in collecting objective data from organisations. Thus, future endeavours could overcome these limitations by adopting improved research design and employing a qualitative approach to unravel the causal relationship. Third, a direct connection was found between the three dimensions with employee retention. The upcoming research must then investigate the potential mechanisms of these relations. Finally, the current study provided multiple shreds of evidence about the non-significant moderating role of transformational leadership; thus, further examinations must be made on the conditional part of other leadership styles, such as sustainable and servant leadership.
The original contributions presented in this study are included in the article/supplementary material, further inquiries can be directed to the corresponding author.
All authors listed have made a substantial, direct, and intellectual contribution to the work, and approved it for publication.
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
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Keywords : compensation, staff retention, working environment, job satisfaction, sustainable leadership
Citation: Xuecheng W, Iqbal Q and Saina B (2022) Factors Affecting Employee’s Retention: Integration of Situational Leadership With Social Exchange Theory. Front. Psychol. 13:872105. doi: 10.3389/fpsyg.2022.872105
Received: 09 February 2022; Accepted: 08 June 2022; Published: 11 July 2022.
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*Correspondence: Bai Saina, [email protected]
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International Journal of Management, Technology, and Social Sciences (IJMTS), 6(2), 121-132. ISSN: 2581-6012. 2021
12 Pages Posted: 11 Dec 2021
Srinivas University
Poornaprajna College
Shree Devi Institute of Technology, Mangaluru, 574142, India
University of Technology and Applied Sciences
Date Written: September 30, 2021
Background/Purpose: Human sources are those who make the group of workers of a company. It's also recognized via manpower, skills, labour, employees, etc. Human Resource department of a business enterprise performs human useful resource control. It entails various elements of the employment consisting of compliance with labour regulation and employment standards, management of worker benefits, and various other sports related to recruitment and choice of the employee. Worker retention is regarding the efforts with the aid of which employers try and retain the personnel in their team of workers. Retention turns into the strategies in place of the final results. Preserving the worker for long duration of time is known as retention. Retention strategies of the organization need to have the capacity to attract and hold their staff. Organizational effectiveness refers to a company's ability to achieve the goals it sets out to achieve. It's far the performance of the organization, group or an organization to fulfill its goal. Six Sigma is a methodology that makes a specialty of improving the overall efficiency of a business process. Objective: This work is carried out at Dinesh Foods, Kannur. Dinesh foods are a subsidiary unit of Kerala Dinesh Beedi Workers Co-op Society. The objective of this study is to observe and to recognize how worker retention facilitates in growing the organizational effectiveness of Dinesh Foods. It additionally assists to investigate diverse retention techniques followed and also the employee turnover within the unit. This work investigates the worker retention is a device for increasing the organizational effectiveness. Design/Methodology/Approach: For the purpose of study the data was collected through primary and secondary source. Questionnaire was distributed among the workers for collecting necessary data for the study, financial statement of the company to study about the financial stability of the organisation and annual report of the company. Findings/Results: This research is done to find out whether the employee retention in the organisation helps in improving the organisational effectiveness. Varies conditions applied for the hypothesis and it can be proved that the employee retention is a tool for increasing the organisational effectiveness. Based on the analysis, findings and suggestions Dinesh Foods, Kannur can give more concentration towards retaining the employees in the organisation as it is important in any organization. Conclusion: This study focusses on whether employee retention is a tool for improving the organisational effectiveness. It is found that the employee retention is a tool for improving organisational effectiveness and employee retention helps in increasing the productivity.
Keywords: Human Resource, Organizational effectiveness, Business Enterprise, Employee Retention, Financial Stability.
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Several cross-border payments companies have recently surpassed $1bn in revenue – a major milestone for the industry. We compare these companies to identify shared factors and highlight current industry trends.
In recent years, multiple cross-border payments companies have surpassed $1bn in yearly revenue for the first time. This not only highlights the continued strength of the industry and the speed at which disruptors are growing, but also shows the impact of macroeconomic trends on some segments of the cross-border payments space.
Understanding how these businesses generate such high revenue every year provides useful insights to the space – both as case studies for industry peers and as a reflection of how wider factors, such as the pandemic and inflation, affect companies’ bottom lines. With this in mind, in this report we analyse companies that recently passed $1bn in yearly revenue to determine key trends, focusing on factors such as their age, focus and how they have managed to pass this milestone.
Several companies that operate in cross-border payments have been delivering more than $1bn in revenue for a long time. Western Union, Fiserv and PayPal delivered annual revenues of $4.4bn, $19.1bn and $29.8bn respectively in 2023, while MoneyGram achieved a total revenue of $1.3bn in 2022, the last year it reported earnings before going private. However, this report focuses on cross-border companies that have publicly reported revenues of over $1bn recently; are projected to surpass this figure soon; or are set to do so if they continue on their current growth trajectory.
In some cases where appropriate, we’ve broken out the specific revenues for certain companies that are relevant to cross-border payments. For example, in the case of Corpay, figures are related to its Corporate Payments segment, while for Euronet we have identified revenues specifically for its consumer money transfers segment (Ria, Xe).
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PDF | Employee Retention is a challenging concern of the organization. This study stressed on Employee Retention strategies. ... Research Paper: 7) Davies, D., Tay lor, R. and Savery, C. (2001 ...
Hence, practitioners and academicians continuously report the severity of employee turnover in China (Karatepe and Olugbade, 2017; Afsar et al., 2018). ... Third, a direct connection was found between the three dimensions with employee retention. The upcoming research must then investigate the potential mechanisms of these relations. Finally ...
Increasing levels of voluntary employee-quits affect the employee retention levels of firms. adversely, causing expensive costs to organizations, thus hindering their future success. 1.3 Problem ...
July 04, 2022. Steven Puetzer/Getty Images. Summary. According to Gartner, the pace of employee turnover is forecast to be 50-75% higher than companies have experienced previously, and the issue ...
Email: [email protected], [email protected], [email protected]. Abstract —This paper attempts to contribute to a holistic view concerning the practices and strategies adopted by ...
The main focus of this review paper revolves around how the structural attributes of the organizational networks have shaped an employee's turnover decision in the past and at present to demonstrate how the network theory has evolved, based on the identified network constructs formulate an employee retention conceptual model. Network ...
In the today's competitive environment, employee retention is a challenge faced by many industries. This work aims to identify the factors that influence employee retention. This is done using employees' feedback and various computational techniques. A survey is conducted within multiple sectors to collect data. The questionnaire is divided into two parts: the first part includes ...
1. Introduction. For the past several decades, employee retention has been an important topic to both scholars and practitioners because employees, the most valuable assets of an organization, are the ones who add to its value, quantitatively and qualitatively (Anitha, 2016).Therefore, employers have taken steps to ensure that employees stay with the organization for as long as possible ...
Talent management has been advocated as an important strategy to retain talented employees, but academic studies exploring their relationship are limited. Building on the Resource-Based View (RBV) theory and Social Exchange Theory (SET), the present article studies the relationship between talent management and employee retention.
Theoretical Background and Hypothesis. Past research has examined employees' behavior predicted by several factors, such as the creation of a positive organizational climate to stimulate safe work behavior in employees (Smith-Crowe et al., 2003).Employees' behavior, including OCB, was positively affected by the ethical climate through the social identity approach (Pagliaro et al., 2018).
Employee retention is considered as the heart of organizational success. It is defined as "A process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the objectives" (Singh & Dixit, 2011, p. 442).The basic aim of employee retention strategies and practices is twofold within the organizations.
The study found that retention is high among university research administrators and that perceived supervisor and upper management support were key motivational factors attributed to both retention and voluntary turnover intentions. Keywords: Retention, voluntary turnover intentions, motivation factors Introduction
New research on retention from Harvard Business School faculty on issues including how to use employee orientation to improve retention, the importance of investing in employees, and what it means that a company's best workers are more likely to show loyalty to their careers than the company. Page 1 of 20 Results. 09 Jul 2024.
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 4, No.3, 2012 145 Factors Affecting Employee Retention: A Comparative Analysis of two Organizations from Heavy Engineering Industry Chandranshu Sinha, (Corresponding Author) Amity Business School, Amity University Campus, F3 Block, Sector 125, Post Box - 503, Noida 201303 India
Research Methodology Context, Sample, and Data Collection. In China, organisations face fierce pressure to retain employees due to the shortage of skilled and talented employees (Fu et al., 2020).Statistically, 44% of the top management in organisations operating in China view this issue as a critical barrier to employee retention (Mashiah, 2021). ...
major purpose of this study is to identify and analyze the major determinant factors that affect employee retention. This research closely looked at the following broad factors: Health and wellness benefits, Personal Development, Compensation, Work life Balance, Top performer Recognition and Reward, superior-Subordinate ... paper elaborates on ...
Findings/Results: This research is done to find out whether the employee retention in the organisation helps in improving the organisational effectiveness. Varies conditions applied for the hypothesis and it can be proved that the employee retention is a tool for increasing the organisational effectiveness.
Together, these two areas of dissatisfaction make up 69% of the total reasons employees left their employer in 2023. That means four times as many people left their job due to "Engagement and ...
This research aims to understand the causes of employee turnover and retention strategies in an organization. Key research findings indicate that employees have several reasons to leave their ...
It explains work-life balance and associated terms researchers have used to study the concept. The chapter reviews research linking work-life balance to retention-related outcomes. It then discussed the role of formal and informal work-family support policies in improving work-life outcomes as well as retention-related outcomes.
The Retention Report, an annual publication by Work Institute, provides a comprehensive overview of trends in employee turnover. It aggregates sentiments from nearly 100,000 exit interviews across diverse industries. The interviews, conducted throughout the year by Work Institute, focus on generating qualitative feedback derived from open-ended ...
Fig 1: Strategies for Retentions. The Challenges to Employee Retention: Monetary dissatisfaction is one of the major reasons for an employee to look for a change. In the current scenario, Where ...
$1bn cross-border companies vary on employee numbers. Among companies that have surpassed $1bn in annual revenues recently, all of these had more than 1,000 employees in the year that they reached this milestone, according to the most recent figures available. However, companies have reached this milestone with a wide range of employee numbers.
The Job descriptiv e index (JDI; by Smith, Kendall an d Hulin) is a five-subscale measure of. employee job satisfaction. The five facets are 1) C ompensation, 2) Job content, 3) Promotion, 4 ...
In this particular research the researchers tried to research and observe the relationship between employee retention and job satisfaction in private banking sector in the context of Bangladesh.