A study of attrition of employees of organized retail sector in Lucknow and Kanpur city

Synopsis
Submitted to CMJ University for the registration of the topic for Doctor of Philosophy in the faculty of Management
Session
(2012-14)

Submitted by
Tripti dwivedi 210/21 A Aga meer deorhi Bawarchi tola, chowk Lucknow Triptidwivedi123@gmail.com

Supervised by
Dr. Vikram Singh Bisen Director ITM School of Management, Lucknow

TABLE OF CONTENTS

1) Introduction 2) Development of retail sector 3) Employee attrition 4) Literature review 5) Rationale of the study 6) Research methodology 7) Research design 8) Sequence of activities 9) Tentative Chapter scheme 10) Bibliography

page 3 page 5 page 7 page 9 page 12 page 13 page 14 page 16 page 17 page 18

INTRODUCTION

Organized retailing, in India, refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. The Indian retail sector is highly fragmented, consisting predominantly of small, independent, owner-managed shops. At the macro level factors such as rising disposable income, dominance of the younger population in spending, urbanization, shift of the traditional family structure towards the nuclear family are buttressing the organized retail growth in India. Being considered as a sunrise sector of the economy, several large business houses are entering the retail industry under multiple modern retail formats. These include the publicly traded supermarkets, corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Some examples are:

Future Groups-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, E-Zone etc. The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction, Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets, Croma. Reliance Retail-Formats: Reliance MART, Reliance SUPER, Reliance FRESH, Reliance Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance Autozone, iStore Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores

Process of organized retailing

Development of retail sector

India's retailing industry is essentially owner manned small shops. In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the industry, and these were present only in large urban centers. India's retail and logistics industry employs about 40 million Indians (3.3% of Indian population). Until 2011, Indian central government denied foreign direct investment (FDI) in multibrand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process. In November 2011, India's central government announced retail reforms for both multibrand stores and single-brand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such as WalMart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple. The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus. In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. Indian government continues the hold on retail reforms for multi-brand stores. In June 2012, IKEA announced it has applied for permission to invest $1.9 billion in India and set up 25 retail stores. Fitch believes that the 30 percent requirement is likely to significantly delay if not prevent most single brand majors from Europe, USA and Japan from opening stores and creating associated jobs in India. On 14 September 2012, the government of India announced the opening of FDI in multi brand retail, subject to approvals by individual states. This decision has been welcomed by economists and the markets, however has caused protests and an upheaval in India's central government's political coalition structure. On 20 September 2012, the Government of India formally notified the FDI reforms for single and multi brand retail, thereby making it effective under Indian law. Before 2011, India had prevented innovation and organized competition in its consumer retail industry. Several studies claim that the lack of infrastructure and competitive retail industry is a key cause of India's persistently high inflation. Furthermore, because of unorganized retail, in a nation where malnutrition remains a serious problem, food waste is rife. Well over 30% of food staples and perishable goods produced in India spoils because poor infrastructure and small retail outlets prevent hygienic storage and movement of the goods from the farmer to the consumer.

Retail is one of the highly manpower intensive industries. With tremendous growth rate in Indian retail industry, the present scenario depicts a high demand for manpower to match the scope of rollout plans of various players in the near future. It is estimated that 8 million people will be required in organized retail by 2011 (Pant 2007). This gives a clear indication of the extent of human resources required to support the growth of retailing in India. As it is an emerging sector, there are not many employees with long and relevant experience. According to Team Lease, India's leading staffing company, the retail industry has nearly 70 per cent attrition (Deccan Herald Report 2008). Attrition is the highest for entry-level, front-end staff but tapers off as one climbs higher. Youngsters join the retail industry at lower salaries, get some experience and then move on to better jobs or back to education. The work pattern of retail industry requires employees to put in long hours of work which generally cause fatigue and lower motivation among employees. There is increasing work pressure, in particular from work overload, time pressures and deadlines, staff shortages and turnover rates and long working hours. Many retail companies are struggling to come out of this situation by emphasizing on the career path in their organizations through strong human resources initiatives, trying to create emotional bond with employees, using retention tools like raising salaries, offering incentive-based targets etc. They have realized that effective retail store management depends on motivated, satisfied and loyal employees who will be productive, maintain work schedules, and develop tenure with the firm. In order to motivate, keep satisfied and productive employees, retail store managers must know which dimensions of the job are most important and most satisfying to employees. .

Employee attrition:
Employee attrition is the rate at which organizations and/or company's hiring and fire employees to either represent their firm or leave their firms. It it also referred to the employee turnover rate. Attrition Rate (%) = Number of resigned for the month/(Total Number of employees of the month + Number of Employees joined for that month - Number of Employees got resigned)*100 Attrition means a reduction or decrese in numbers, size or strength of employees Employee Attrition rate is same as Employee Turnover Rate... That is the ratio of the number of workers that had to be replaced in a given time period to the average number of workers in the company

Attrition in retail:
Over the last few years, India has been experiencing a revolution in the retail market. Indian retail industry has been growing at a tremendous rate with numerous new players entering the market. India's retail sector enjoys many enabling conditions viz. favorable demographics, rising consumer incomes, real estate development especially with the emergence of new shopping malls, availability of better sourcing options both from within India and overseas, and changing lifestyles. All these factors facilitate to bring the Indian consumers closer to their counterparts in more developed markets. Retail sector today has attracted every major industrial house in India besides multinational retail giants lured by the enormous potential the one billion plus population offers in terms of market. The HR function in all service sector organizations like retailing is one of the pillars of success. Proper manpower planning, recruitment, motivation and retention would be essential to maintain operational smoothness and consistent service to the customers. So far, the HR factors in retail management are largely ignored (Aneja 2006).The issues of employee motivation, satisfaction and evaluation of his/her productivity were neither discussed nor investigated in retail sector. Consequently, with the coming of organized retail sector to India in a big way, there are several pertinent questions which haunt this industry in its infancy. There are concerns with regard to availability of trained manpower. There are debates on best ways to keep the existing workforce motivated and committed, controlling turnover, cultural issues affecting the workforce management peculiar to India and the extent to which compensation determines employee turnover. As the retail industry continues to grow, employee satisfaction and retention is likely to remain a challenge. As a result, steps which can be taken by retail industry for recruiting, 7

training, retaining, motivating, and engaging employees for enhanced productivity need due deliberation. Within retail, the emerging sectors would be food and grocery, apparel, electronics, e-commerce, fashion and lifestyle. "The upcoming areas within retail are luxury, super specialty stores/ malls, and renewed emphasis on high streets. Unfortunately, malls have become expensive affairs for most of the retailers. Therefore, a huge investment and emphasis has been laid down on e-tailing or online stores that has wider reach and are economically viable," says Darlie Koshy, DG and CEO, Institute of Apparel Management. Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP. The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people.

Key Trends

An overwhelming 65% of HR professionals feel that managing attrition is a shared role. 30% of the respondents opine that it is HR that is primarily responsible to manage attrition. Employees tend to leave at a higher rate in the first 2 years. A substantial percentage of employees leave within the 2 months. The higher the qualification, the more likely the employee is to leave. Males are more likely to leave than females. Single employees more likely to leave than those who are married. Employees with an Urban Background more likely to leave than those from rural backgrounds. Employees in the age group 25-30 most likely to leave.

Literature review:
Employee turnover is a much studied phenomenon. There is a vast literature on the causes of voluntary employee turnover dating back to the 1950s. By developing multivariate models that combine a number of factors contributing to turnover and empirically testing the models researchers have sought to predict why individuals leave organizations. Many studies are based on only a small number of variables which often only explain a small amount of variability in turnover? Another criticism of turnover studies is that they do not adequately capture the complex psychological processes involved in individual turnover decisions. (Bluedorn, 1982; Kalliath and Beck, 2001; Kramer et al., 1995; Peters et al., 1981; Saks, 1996) have attempted to answer the question of what determines people's intention to quit by investigating possible antecedents of employees intentions to quit Firth et al. (2004). Manu et al. (2004) argue that employees quit from organization due economic reasons. Costly et al. (1987) points out that a high labor turnover may mean poor personnel policies, poor recruitment policies, poor supervisory practices, poor grievance procedures, or lack of motivation. All these factors contribute to high employee turnover. Griffeth et al. (2000) noted that pay and pay-related variables have a modest effect on turnover. Their analysis also included studies that examined the relationship between pay, a persons performance and turnover. The reason so much attention has been paid to the issue of turnover is because turnover has some significant effects on organizations (DeMicco and Giridharan, 1987; Dyke and Strick, 1990; Cantrell and Saranakhsh, 1991; Denvir and McMahon, 1992).Many researchers argue that high turnover rates might have negative effects on the profitability of organizations if not managed properly (Hogan, 1992; Wasmuth and Davis, 1993; Barrows, 1990). Hogan 1992 A recent study of turnover by Box all et al (2003) in New Zealand confirmed the view that motivation for job change is multidimensional and that no one factor will explain it. However, over time there have been a number of factors that appear to be consistently linked to turnover. An early review article of studies on turnover by Mobley et al (1979) revealed that age, tenure, overall satisfaction, job content, intentions to remain on the job, and commitment were all negatively related to turnover (i.e. the higher the variable, the lower the turnover). In 1995, a meta-analysis of some 800 turnover studies was conducted by Hom and Griffeth, which was recently updated (Griffeth et al, 2000). Their analysis confirmed some well-established findings on the causes of turnover. These include: job satisfaction, organizational commitment, comparison of alternatives and intention to quit. As are a number of other factors where the evidence on the link to turnover is less conclusive. 9

As Mobley et al (1979) pointed out, at an aggregate level the relationship between economic factors such as employment levels or job vacancies and turnover has been well established. At an individual level, the labor market approach emphasizes expected utility and rational economic choice among employees and the perceived availability of alternative job opportunities. The relationship between alternatives and turnover on an individual level has been researched widely since March & Simons 1958 seminal work on ease of movement. Much of the subsequent research focused on the link between job satisfaction, perceived alternative opportunities and turnover. Later, researchers began to focus on the role of both actual and perceived opportunities in explaining individual turnover decisions. Subsequent research has indicated that actual alternatives are a better predictor of individual turnover than perceived opportunities. Research on the impact of unemployment rates as a proxy for actual opportunities in employee turnover revealed that unemployment rates affected the job-satisfaction/turnover intent relationship but not actual turnover (Kirschenbaum & Mano-Negrin, 1999). They concluded that macro level analysis predicted turnover patterns but perceptions of opportunities did not. This point was reinforced in their study on medical centers in various locations used measures of perceived and objective opportunities in internal and external labor markets. The authors concluded that objectives opportunities were a better set of explanations of actual turnover behavior than either perceived internal or external labor market opportunities. Nevertheless, while actual alternatives appear to be a better predictor of turnover, there is also well-established evidence of the link between perceived alternatives and actual turnover. In their most recent meta-analysis, Griffeth et al (2000) confirmed that perceived alternatives modestly predict turnover. Much of the empirical research on turnover is based on actual turnover, although some studies are based on intentions to quit. Apart from the practical difficulty in conducting turnover research among people who have left an organization, some researchers suggest that there is a strong link between intentions to quit and actual turnover. Mobley et al (1979) noted that the relationship between intentions and turnover is consistent and generally stronger than the satisfaction-turnover relationship, although it still accounted for less than a quarter of the variability in turnover. Much of the research on perceived opportunities has been found to be associated with intentions to leave but not actual turnover (Kirschenbaum & Mano-Negrin, 1999). One of the possible reasons is that intentions do not account for impulsive behavior and also that turnover intentions are not necessarily followed through to lead to actual turnover.

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Many studies have reported a significant association between organizational commitment and turnover intentions (Lum et al, 1998). Tang et als (2000) study confirmed the link between commitment and actual turnover and Griffeth et als (2000) analysis showed that organizational commitment was a better predictor of turnover than overall job satisfaction. Allen & Meyer (1990) investigated the nature of the link between turnover and the three components of attitudinal commitment: affective commitment refers to employees emotional attachment to, identification with and involvement in the organization; continuance commitment refers to commitment base on costs that employees associate with leaving the organization; and normative commitment refers to employees feelings of obligation to remain with the organization. Put simply, employees with strong affective commitment stay with an organization because they want, those with strong continuance commitment stay because they need to, and those with strong normative commitment stay because they feel they ought to. Allen and Meyers study indicated that all three components of commitment were a negative indicator of turnover. In general, most research has found affective commitment to be the most decisive variable linked to turnover. Job satisfaction The relationship between satisfaction and turnover has been consistently found in many turnover studies (Lum et al, 1998). Mobley et al 1979 indicated that overall job satisfaction is negatively linked to turnover but explained little of the variability in turnover. Griffeth et al (2000) found that overall job satisfaction modestly predicted turnover. In a recent New Zealand study, Boxall et al (2003) found the main reason by far for people leaving their employer was for more interesting work elsewhere. It is generally accepted that the effect of job satisfaction on turnover is less than that of Organizational commitment.
This is a real fact that most insurance workers are working under tension and due to stress no one can perform their optimum work according to their ability. In a recent study upon the female workers working in Insurance sector, it has been observed that the occupational stress totally disturbs the life of subjects at workplace as well as at their home. Stress affects the interactions and dealing with the friends, relatives, family members and the customers (Singh , Singh and Monga,2012). Kulshreshtha and Kumar (2005) advised the employers to realize those many variables that determine an employees stay at a company. The employees motivating factors are not only the hygiene factors like salaries alone, they also search for other softer rewards like a challenging job, clarity of work, catering to training needs, etc.

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Rationale of the study:

This study defines the factors responsible for high attrition rate in organized retail sector. The study focuses on various factors of attrition and their management in organized retail sector. This study shows the impact of various factors on high attrition rate in growing organized retail sector.

Objective of the study

The objective of this study is to reveal the key factors that impact attrition, so that organizations may be able to address the problem at the root level and improve retention. Objectives can be listed as follows:
1. To identify and rank the factors of attrition in retail based on accumulative literature review and secondary data. 2. To explore and analyze the dimensions of attrition in retail based on primary data collected from field survey.

Scope of the study:

This study focuses on the factors of high attrition rate in organized retail sector. This study will be done to know the factors responsible for high attrition rate of employees in organized retail sector around Lucknow and Kanpur city. A questionnaire will be prepared for this purpose and will be surveyed accordingly.

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RESEARCH METHODOLOGY
The Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic research for pertinent information on a specific topic. In fact, research is an art of scientific investigation. Research is an activity and as such the term should be used in a technical sense. Research comprises defining and redefining problems, formulating hypothesis as suggested solution, collecting, organizing and evaluating data: making deductions and reaching conclusions and at last testing the conclusions to determine whether they fit the formulated hypothesis. Redman & Mory has defined Research as a systematized effort to gain new knowledge. The success of any research or study calls for the development of most efficient plan for gathering the needed information therefore a properly defined research methodology is a pre- requisite for carrying out a successful research, which in turn demands very clear objectives. Hence, a research methodology is like a vehicle by which one can finish the journey of getting the desired output for a particular problem. It comprises the process and procedure to be adopted to complete the research task. Thus, Research Design is a conceptual plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance.

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RESEARCH DESIGN
This is particularly significant in the light of increasing competitions & growing size, which makes the task of choosing the best course of action difficult for any business enterprise. It is imperative that any type of organization in the present information coupled with tools of analysis for making sound decisions which involved minimum risk. Exploratory method of research was chosen for it helps the collecting summarizing, analyzing interpreting & presenting data with new ideas & in effective manner. The goal of exploratory research is to gather data from primary & secondary sources and to study the nature of problem & to suggest possible solution for problem/come up with new ideas.

NATURE OF THE RESEARCH

The Research is exploratory in nature. The chief purpose of exploratory research is to reach a better understanding of the research problem. This includes helping to identify the variables which should be measured within the study. When there is little understanding of the topic it is impossible to formulate hypotheses without some exploratory studies. This genre of research simply allows the marketer to gain a greater understanding of something that s/he doesnt know enough about. For example, just because we know that 3G phones exist, it doesnt necessarily mean that we understand how they work. Exploratory research can help in this instance. Differing mainly in design from descriptive research, exploratory research is used principally to gain a deeper understanding of something. The design is far more flexible and dynamic than that of descriptive research.

Sampling Method
The sampling procedure will be according to convenience and judgment, and questionnaire well be used to gather primary data from respondents of Lucknow and Kanpur city.

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DATA COLLECTION
The collection of data is done from primary & secondary sources.

Primary Data These are sources from which data are gathered for a specific purpose or for a specific research project. The normal procedure is to interview some people individually or group to get a preliminary sense of how people feel about the topic in question and then develop a formal research instrument, debug it and carry it into the field. As far as this research is concerned primary data will be collected. It includes respondents who visit malls and organized retail showrooms (pantaloons, big bazaar, shoppers stop etc.), in Lucknow and Kanpur city , to analyze the relevant factors for attrition management.

Secondary Data The secondary data is also very useful and hence will be collected from the magazines, concerned websites, and important information published in any journals for my research.

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SEQUENCE OF ACTIVITIES:
Step 1: This step will be identification of the problem. In this step the main problem of the thesis work will be identified. It will take 0 to 4 months. Step 2: This step will be the review of . In this step previous work done before my study will be analyzed. It will take 4 to 12 months. Step 3: This step will be done in the form of pilot survey. For this purpose a questionnaire will be prepared and will be distributed accordingly. It will take 12 to 18 months. Step 4: This step will be done in the form of final survey. For this purpose around 500 copies of questionnaires will be prepared and will be distributed in organized retail showrooms in lucknow and Kanpur city. It will take 18 to 24 months. Step 5: This step will be in the form of final report. For this purpose data collected from the questionnaires will be analyzed and conclusion will be made. It will take 24 to 30 months.

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TENTATIVE CHAPTER SCHEME

Chapter 1: Introduction: In this chapter introduction about retailing and attrition , their types and examples will be given. Chapter 2: Present scenario, trend and scope of organized retail showrooms:

In this chapter current scenario , present situations and past tends and future scope will be defined. Chapter 3: Factors affecting attrition in retail sector: In this chapter factors which cause high attrition in retail sector will be discussed.

Chapter 4:

factors for managing attrition rate in retail sector: In this chapter factors for managing attrition rate in retail sector will be discussed in detail. Chapter 5: Findings & Data analysis: In this chapter data collected will be analyzed and will be shown in the forms of graphs and charts. Later on findings on the basis of data collection will be defined. Chapter 6: will be defined. Chapter 7: Bibliography: In this chapter references and annexure will be given. Conclusion: In this chapter conclusion, recommendations and suggestion

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BIBLIOGRAPHY Websites:
1).http://www.moneycontrol.com/news/cnbc-tv18-comments/attrition-hits-indian-retailsector-what-went-wrong_672169.html 2).http://www.wisegeek.com/what-is-employee-turnover.htm 3)http://www.moneycontrol.com/news/cnbc-tv18-comments/attrition-hits-indian-retailsector-what-went-wrong_672169.html 4).http://www.citehr.com/34950-attrition-management.html 5).http://www.employwise.com/hr-best-practices/34-managing-employee-attrition.html 6).http://www.answers.com/topic/attrition 7).http://articles.timesofindia.indiatimes.com/2012-06-25/news/32408603_1_retailsector-retail-industry-global-retail-development-index 8.)http://www.ficci.com/sector/33/Project_docs/Sector-prof.pdf

Books, Magazines and Journals:

The Economist December 2011 issue - Reform in India: Let Walmart in The Financial Times: How to open up Indias economy (2 December 2011) Report on Indian Retail, KPMG 2009 The Great Indian Retail Story - An Ernst & Young Report, 2007 2011 Retail Reform Commentary: Expected impact of FDI in Retail Ernst & Young India Viewpoint The Old Kings... And The New: Indian retail industry is evolving. A report that lists some of the evolution over last 20 years. http://www.idc-ri.com/getdoc.jsp?containerId=AP9140604T - IDC Retail Insights Report on Indian Retailing and Trends Report on the Indian Retail Industry, July 2012 - Dinodia Capital Advisors FDI in Multi Brand Retail Trade - The Journey, September 2012 - Dinodia Capital Advisors

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