Article on employee retention & attrition

Influential Factors towards Employee retention and Employee Attrition
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Influential Factors towards Employee Retention and Employee Attrition- An Analytical Survey
among the Executives of Matrasses Industry, Bangalore
Author
Sivaji Samireddi
Final year MBA Student
HKBK College of Engineering, Bangalore
E-Mail: shivajisamireddii@gmail.com
Co-Author
Dr. S. Syed Ahamed
Faculty- MBA Department
HKBK College of Engineering, Bangalore
E-Mail: syedahamedsuban@gmail.com

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Abstract
Retaining the talented employees is a challenging task for an organization, since human
resources is considered as the asset and they need to be given higher priority in terms of making
them to be getting engaged and committed towards their overall organisational goals. Attritio n
also inevitable to the organization due to several reasons, it creates an unhealthy environment
where employee feel unrecognised and unsecured. These concerns have insisted the researcher
to undertake a study on the influential factors, which determine both the aspects. It was carried
out with the sixty executives of matrasses industry, Bangalore by adopting purposive sampling
technique. The factors were identified and analysed through factor analysis with the help of
SPSS. Several factors intervening the subject were critically examined and suggested various
measures to the employees happy and for their retention.
Key Words: Employee retention, attrition, engagement, satisfaction.

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Introduction
Retaining the qualified and competent employee is a challenging task for every
organization (Crispen Chipunza, 2009). Employee turnover comes while employee leaves their
present jobs (Varaprasad Goud, 2014). Successful employee retention will lead to a good
organization revenue, production and growth. By using some strategies organisations can gain
successful employee retention, such as Providing training and development programmes to
employees to improve their potential, allow more responsibilities for the employees to make
decision, provide more chances to create goals. Employee satisfaction will increase employee
retention and employee dissatisfaction creates high attrition (Waleed Hassan, 2013). These are
the strategies helpful, for organizations to achieve successful retention (Omer Cloutier, 2015).
HR professionals should take care of work-related policies, flexible time, proper performance
appraisal, worker participation programmes and skill development programmes (Dr.Mita
mehta, 2014). It is necessary for the organization to retain their employees and they should
understand how to make the employee to be retained in an organisation (Waleed Hassan, 2013).
HR professionals should establish career development opportunities and training to satisfy
employees and to retain them. The factors like career advancement, work atmosphere, and
work life balance are the influential determinants in retaining the employee (Waleed Hassan,
2013). They have to provide opportunities for promotions and skill development to improve
employee potential otherwise they will likely take a decision to leave the organization (Waleed
Hassan, 2013). It is a big challenge for many organizations to reduce turnover. Turnover rates
are increasing in every organization because of unsatisfied employees due to several reasons
(Hlaganipai Ngirande, 2014). Retention of qualified employee has become a difficult work for
superiors (Michael O.Samuel, 2009). Lack of proper compensation system, poor recognition,
no training and development, lack of job security, no promotional measures are the reasons for
employee turnover in the company (Goud, 2014). It will affect the organizations as a result of
voluntary turnover. It is very difficult to organizations to retain its potential employees for long
time. If organization unable to retain its employees, it is critical to organization to capitalize on
human assets (Terera, 2014). it is very difficult task to an organization to retain its talented
employees for longer time. (Muhammad Hassan, 2011). There must be a good career outlook
in an organisation to retain the existing employees for long period of time (Hassan, 2011).
These general things are giving several dimensions to the domain that we have taken to explore
the study. Here, the researcher has made an attempt to identify the important factors which
influence employee retention and attrition. Studying these issues would be very much

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significant for those organizations and similar entities to understand clearly about what factors
actually influence the employee towards retainment of their present job and what remedial
measures would be helpful in retaining them and how can the level of attrition could be avoided
and in what way the employees made to be loyal, engaged and committed towards their job.
The main intention of this study is providing measures and suggestions to retain the existing
and qualified employees in an organization.
LITRATURE REVIEW
Bhatnagar, (2007) their study has stressed on employee engagement, which revealed that good
level of employee engagement that results successful retention. Employees should be treated
as partners in the business that will help the organization to get more productive and profitable.
Goud, (2014) emphasized the employee retention and retaining the talented personnel is
difficult for the company since replacing the employee is costly. Hassan, (2011) Organization
cultural values effects the relationship between the job performance and retention. In this study
researcher says employees seek to change their jobs for high salary’s offer, recognition,
authority and for to gain more knowledge. Waleed Hassan, (2013) it focuses on the training,
types of training employees are main factors to retain employees in the organisation. Here the
researcher advised that the employees are more concerned about rewards and supervisory
support. Job training is a good strategy for the employee retention. Terera, (2014) Due to
competition for shortage of skills, the attraction and retention of good employees has emerged
as the biggest challenge in companies, this is to establish the relationship between the job
satisfaction and employee retention and to establish relationship between rewards and
employee retention. Managing attrition is proving to be a biggest task to many organizations.
Organizations suffer very high costs as a result of unnecessary turnover. Chipunza, (2009)
Worldwide, retention of talented employees has been of critical concern to managers in the
face of ever-increasing high rate of employee attrition. this is about how the retention and
reduction of employee’s turnover influenced by intrinsic and extrinsic motivational variables
in both private and public sector organisations. The main reason of retention is to control the
turnover of potential employees from the organisation as this could have effect on productivity.
Atif Anis, (2011) employers used different strategies for the retention of employees such as
training and development, good work environment, compensation, etc. The main prominence
is on compensation packages after employee training and development practices for retention
process. Ankit Laddha1, (2012) Employee retention is a way in which the employees are
supported to remain with the organization for the long period of time. A good knowledge

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employer should know how to retain its skilled employees. Most of the employees feel that
they are worth more than what they are actually getting salary. Employees are likely to leave
because of stress and frustration. Ramlall, (2003) the location of the company and its
compensation package were the most usual factors for not leaving the company and lack of
challenges and authority were the most common factors for turnover of the organization.
Supervisor are willing to pay more to retain their critical employees rather than to reducing
productivity and profitability. Omer Cloutier, (2015) High employee attrition increases cost
effective in resources, recruiting, and time consuming when backfilling the open positions.
Burden to the organization for recruiting a new employee. Mita mehta, (2014) It is not only
necessary to have the good and the most skilled employees but it is similarly necessary to be
able to retain them for long period in the organisation. Organizations with good will, way of
life, organization values, competitive salary and benefits package for its employees can also
reduce in attrition. Sheridan, (1992) The difference between the retention rates of strong and
weak performers will seriously base on the cultural values of an organization, after having
external cause effects of labour market factors and employee gender. Adhikari, (2009) The IT
industry is not all about bulk pay packages, foreign tours, famous training programs and coding
on a computer. It is also about long work hours, sleepless nights, boring work, stressing
deadlines lead to attrition. A clear career development path should be shuttled out in front of
the employees, so that they can choose to develop with the company. Jessica Sze-Yin Ho,
(2010) younger generation workers generally are interested to work hard only if they perceive
their performance is appreciated properly.
Methodology
The study was conducted among the executives of Matrasses companies which are
located in Chandapura industrial Estate, Bangalore. The study was proceeded as a descriptive
research and purposive sampling was determined to finalise the sample size. The executives
were selected from selective departments like Accounting and Finance, Sales and Marketing,
Human Resources, Logistics and Supporting team. The data was collected from the
respondents by distributing a structured questionnaire. There are sixty executives were
interviewed from different companies and they were eagerly participating and responding to
the questionnaire. The questionnaire was designed by including the variables related to
employee retention and attrition. Where the respondents were given option to rate their choices
based on Likert`s rating Scale, ranging from Highly Agree to Highly disagree and it was coded

6
from 5 to 1. The measures on employee attrition was taken and altered from a list of constructs
(Ramlall, 2003). The measures related to employee retention has made through reviews
(Muhammad Hassan, 2011).
Analysis and Results
Table No:4-KMO and Bartlett’s Test of Sphericity
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy.
.595
Bartlett's Test of
Sphericity
Approx. Chi-Square 418.145
Df 120
Sig. .000
Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy: The Kaiser-Mayer-
Oklin measure of sampling adequacy is an index to investigate the possibilities of factor
analysis. High values (between 0.5 and 1.0) implies factor analysis is fitting. Values below 0.5
indicates that factor analysis may not be suitable. The Kaiser-Mayer-Oklin Measure of
Sampling Adequacy value was 0.595 implies that the sample was adequate to assess the data
is suitable for factor analysis. The factor analysis can be considered as an appropriate measure
to test the correlation matrix. Bartlett’s test of Sphericity is statistic test to investigate the
hypothesis that the variables are not correlated in the population. The Bartlett’s Test of
Sphericity was tested trough chi-square value having significant at 0% level of Significance
(Gaurav Jaiswal). Here the principal component analysis is performed to analyse the maximum
number of factors that will account for maximum variance. The number of variables has been
decided on the basis of Eigen value of the statements. As per this, the factors with eigen value
more than 1 is retained and other factors are not considered for this analysis.
Table No: 2-Total Variance Explained of Employee Retention
Compon
ent
Initial Eigenvalues Extraction Sums of Squared
Loadings
Rotation Sums of
Squared Loadings
Total % of
Varianc
e
Cumula
tive %
Total % of
Varianc
e
Cumulati
ve %
Total % of
Varia
nce
Cumula
tive %
1 3.750 23.435 23.435 3.750 23.435 23.435 2.309 14.43
4
14.434
2 2.819 17.622 41.056 2.819 17.622 41.056 2.246 14.03
5
28.469

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3 1.847 11.544 52.600 1.847 11.544 52.600 2.181 13.63
4
42.102
4 1.422 8.887 61.487 1.422 8.887 61.487 2.067 12.91
6
55.019
5 1.223 7.645 69.132 1.223 7.645 69.132 1.949 12.18
2
67.201
6 1.107 6.917 76.049 1.107 6.917 76.049 1.416 8.848 76.049
7 .856 5.348 81.398
8 .628 3.927 85.325
9 .565 3.530 88.855
10 .543 3.392 92.247
11 .354 2.212 94.459
12 .259 1.616 96.075
13 .207 1.296 97.371
14 .162 1.012 98.383
15 .145 .908 99.291
16 .113 .709 100.00
0
It is understood from the above table No 2 that the eigen value greater than 1.0 results for six
statements being extracted. The Extraction sum of squared loadings provides the variance
associated with the statements that have retained. Component 1 account for a variance of
23.34% and component 6 is account for 76.04%.
Table No: 3- Rotated Component Matrixa of Employee Retention
Component
1 2 3 4 5 6
Company Vision & Mission -.020 -.318 .316 .173 -.068 .695
Competitive salary package
-.172 .884
-
.052
.084 .034
-
.071
Job security
.112 .868 .251
-
.265
.095 .015

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Performance appraisal
.481 .427 .260
-
.053
-.086 .542
Management attitude towards employees
.183 -.099 .812 .011 .400
-
.120
Employee recognition & Appreciation .689 .010 .015 .361 -.443 .118
Welfare measures (Medical allowance’s,
Insurance, etc)
.294 -.109 .051 .841 .245
-
.033
Job Characteristic’s (skills needed for job,
challenges)
-.084 .038 .636 .515 .131 .134
Promotion Opportunities
.917 -.119
-
.026
.076 -.023
-
.008
Fair treatment by superior .625 -.149 .305 .298 .295 .175
Employee engagement activities (Team
outs, games, movies, etc)
.163 -.027 .334 .797 -.248 .063
Effective communication
.080 .113
-
.234
-
.038
.225 .721
Workers participation programmes -.213 .125 .075 .277 .650 .127
High quality working environment
.128 .094 .187
-
.139
.828 .033
Employee empowerment
-.325 .553
-
.107
.053 .428 .108
Proper compensation after Training &
Development
.046 .156 .754 .157 -.043 .053
After rotation is understood from the above table that the factor 1 is related with four
variables like (promotion opportunities, Employee recognition and appreciation, Fair treatment
by superiors and Performance appraisal), as a substitute of fifteen variables that have high
loadings on these variables. Factor 2 is related with four variables like (competitive salary and
package, job security, performance appraisal, employee empowerment), that has high loadings
on it. Factor 3 is correlated with 3 variables like (management attitude towards employees, job
characteristic’s (skills needed for job, challenges), proper compensation after training and
development) that has more loadings on this factor. Factor 4 is correlated with 3 variables like

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(welfare measures, job characteristic’s (skills needed for job, challenges), employee
engagement activities (team outs, games, movies, etc)) this factor is having high loadings on
it. Factor 5 is related with 5 variables (management attitude towards employees, Employee
recognition and appreciation, workers participation programmes, high quality working
environment, employee empowerment) it is having high loadings on it. Factor 6 is correlated
with 3 variables like (company vision and mission, performance appraisal, effective
communication) so finally it is having high loadings on it.
Table No: 4-Factors with Highest Loadings
Factor No Variables Values
Factor 1 Promotion Opportunities
Employee recognition & appreciation
Fair treatment by superiors
Performance appraisal
.917
.689
.625
.481
Factor 2 Competitive salary and package
Job security
Employee empowerment
.884
.868
.553
Factor 3 Management attitude towards employees
Proper compensation after training and development
Job characteristic’s (skills needed for job, challenges
.812
.754
.636
Factor 4 Welfare measures
Employee engagement activities (team outs, games, movies, etc)
.841
.797
Factor 5 High quality working environment
Workers participation programmes
.828
.650
Factor 6 Effective communication
Company vision and mission
.721
.695

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KMO and Bartlett's Test on Employee Attrition
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy.
.597
Bartlett's Test of
Sphericity
Approx. Chi-Square 229.417
Df 45
Sig. .000
Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy: The Kaiser-Mayer-
Oklin measure of sampling adequacy is an index to inspect the possibilities of factor analysis.
High values (between 0.5 and 1.0) implies factor analysis is suitable. Values below 0.5
indicates that factor analysis may not be suitable. The Kaiser-Mayer-Oklin Measure of
Sampling Adequacy value was 0.597 implies that the sample was satisfactory to assess the data
is suitable for factor analysis. The factor analysis can be considered as an appropriate measure
to test the correlation matrix. Bartlett’s test of Sphericity is statistic test to inspect the
hypothesis that the variables are not correlated in the population. The Bartlett’s Test of
Sphericity was tested trough chi-square value having significant at 0% level of Significance
(DR. Gaurav Jaiswal). Here the principal component analysis is performed to analyse the
maximum number of variables that will account for maximum variance. The number of
variables has been decided on the basis of Eigen value of the statements. As per this, the factors
with eigen value more than 1 is retained and other factors are not considered for this analysis.
Total Variance Explained on Employee Attrition
Compo
nent
Initial Eigenvalues Extraction Sums of
Squared Loadings
Rotation Sums of Squared
Loadings
Total % of
Varianc
e
Cumula
tive %
Total % of
Varianc
e
Cumula
tive %
Total % of
Varianc
e
Cumula
tive %
1 3.441 34.413 34.413 3.441 34.413 34.413 2.705 27.047 27.047
2 1.800 18.001 52.415 1.800 18.001 52.415 2.466 24.661 51.708
3 1.519 15.194 67.609 1.519 15.194 67.609 1.590 15.901 67.609
4 .889 8.886 76.495
5 .657 6.574 83.069
6 .557 5.566 88.635
7 .397 3.967 92.602
8 .350 3.495 96.097
9 .242 2.417 98.514

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10 .149 1.486 100.00
0
Extraction Method: Principal Component Analysis
It is clarified from the above table that the eigen value greater than 1.0 results for ten variables
being extracted. The Extraction sum of squared loadings provides the variance associated with
the statements that have retained. Component 1 account for a variance of 34.413% and
component 3 is account for 67.609%.
After rotation is understood from the above table that the factor 1 is related with five
variables like (Lack of opportunities and training and development programmes to improve
knowledge and skills, if the job role not providing enough challenges and the opportunities to
improve more knowledge, if there is no growth in my career with in an expected time and with
better performance, If there is no job satisfaction for present job role, The inability of senior
Rotated Component Matrixa
Component
1 2 3
If the salary is not getting properly -.094 .020 .859
If the job role not providing enough challenges and the opportunities
to improve more knowledge.
.785 .146 .204
If there is no growth in my career with in an expected time and with
better performance.
.723 -.085 .415
If I am not rewarding fairly for my work performance or if there is no
proper performance appraisal
.213 .179 .683
Lack of ability of leaders to improve and sharing company’s vision
and developing employees to improve their skills
.311 .841 -.097
If there is no proper flexible working schedule even in reduced hour -.151 .834 .190
If the travelling distance is too long from home to work place .110 .822 .186
The inability of senior management to do right things for employee .604 .556 -.243
Lack of opportunities and training and development programmes to
improve knowledge and skills
.795 .127 .059
If there is no job satisfaction for present job role .619 .040 -.172

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management to do right things for employee) instead of nine variables that have high loadings
on these variables. Factor 2 is correlated with 3 variables which are like (Lack of ability of
leaders to improve and sharing company’s vision and developing employees to improve their
skills, if there is no proper flexible working schedule even in reduced hour, If the travelling
2distance is too long from home to work place) this factor having high loadings on it. Factor 3
is correlated with 2 variables they are like (If the salary is not getting properly, If I am not
rewarding fairly for my work performance or if there is no proper performance appraisal) this
factor also having high loadings on it.
Factors No: Variables Values
Factor 1 Lack of opportunities and training and development programmes to
improve knowledge and skills.
If the job role not providing enough challenges and the
opportunities to improve more knowledge.
If there is no growth in my career with in an expected time and with
better performance.
If there is no job satisfaction for present job role.
The inability of senior management to do right things for employee.
.795
.785
.723
.619
.604
Factor 2 Lack of ability of leaders to improve and sharing company’s vision
and developing employees to improve their skills
If there is no proper flexible working schedule even in reduced hour
If the travelling 2distance is too long from home to work place
.841
.834
.822
Factor 3 If the salary is not getting properly
If I am not rewarding fairly for my work performance or if there is
no proper performance appraisal
.859
.683
Conclusion and Discussion:
In this survey, we have examined the influential factors towards employee retention
and employee attrition among the executives of mattress industry using factor analysis, and
these two latent constructs are specified by Competitive salary package, Job security,
Performance appraisal, Employee empowerment, Proper compensation after training &
development. The results of the positive factor analysis show that Salary package and Job
security are two crucial factors for the Employee retention, while If the salary is not getting
properly and if there is no growth in career with in expected time with better performance are

13
two critical factors influencing the Employee attrition. One interesting observation was that
there is a strong positive correlation between the variables of Employee retention like a strong
positive relationship between Competitive salary and Job security (r=.738, ˂0.01) and relation
between Welfare measures and Job characteristics (r=.433, ˂0.01). There is a positive
correlation between the Employee retention and Employee Attrition. If on organization is not
paying properly compensation benefits after training and development there is a chance for
high rate of employee attrition, it will be burden and loss for organization if employees leaves
the company after the training and development. If company wants to retain its potential
candidates for long time period, they should reach the employee expectations.
References
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