EMPLOYEE RETENTION IN BANKING INDUSTRY OF NEPAL

Ph.D. Thesis Proposal

Submitted To Singhania University Faculty of Management Rajasthan, India

By Sherjung Khadka Roll No. 2011051172 November, 2011

TABLE OF CONTENTS

TABLE OF CONTENTS ABBREVIATION KEY TERMS CHAPTER I: INTRODUCTION Background of the Study Problem Statement Purpose of the Study Significance of the Study Research Questions Conceptual Framework Limitations and Delimitations of the Study Proposed organization of the Study CHAPTER II: LITERATURE REVIEW CHAPTER II: RESEARCH METHODOLOGY Research Philosophy Research Design Population and Sampling Techniques Procedures of Data Collection Tools and Techniques of Data Analysis Reliability and Validity Ethical Issues References 1-9 01 04 05 05 06 06 07 08 10-18 18-33 18 19 22 23 24 26 28 29

ABBREVIATION HRM= Human Resource Management HR= Human Resource FCS= Federal Civil Service SBI= State Bank of India IT= Information Technology UAE= United Arab Emirates SCB= Standard Chartered Bank

KEY TERMS Employee turnover Retention strategies HR practices Job satisfaction Performance

CHAPTER I INTRODUCTION

Employee Retention is an important aspect of human resource management (HRM). Improvement in employee retention is essential to reduce HRM practices cost and overall growth of the organization. This chapter explains the overall view of the study. Especially, it contains background, problem statement, purpose, significance, limitations, delimitations and proposed organization of the study.

Background of the Study Today we are living in a dynamic world. Advancement of information technology has brought to centre stage the importance of human resource, more than ever before (Jyothi and Venkatesh, 2006, p. 1). In a competitive scenario, effective utilization of human resource has become necessary and the primary task of organizations is to identify, recruit, and channel competent human resources into their business operations for improving productivity and functional efficiency (Ibid). Qualified, motivated, and experienced human resources are also essential in economic liberalization and globalization era. Human resource management is the most exciting area in the field of management. The responsibility of recruiting and selecting the right person for the organization is HRM department. Since people constitute the cornerstone of any organization, assumes nerve centre in most organizations. This is the science of managing employee/workforces in an organization. It ensures right person at right place at right time. It also provides training and development opportunities for their efficient performance (Khadka, 2009, p. 2). HRM develops practices which foster

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teamwork and flexibility and makes the employees feel that they are valued and their contribution is essential for the development and growth of organization. Aswathappa (2005) defines HRM as the set of programs, functions, and activities designed and carried out in order to maximize both employees as well as organizational effectiveness (p. 5). It is also a process, which consists of the acquisition, development, motivation, and maintenance of human resource (DeCenzo and Robbins, 2005, p.36). It treats employees as the essential means of realizing organizational objectives rather than mere objectives (Jyothi and Venkatesh, 2006, pp. 2-3). It focuses on engendering commitment among employees by winning their hearts (Ibid). Human resource is a crucial aspect of HRM. Especially key or talent employees are destiny of the organization. The retention of those employees is one of the significant issues of contemporary context. Employee retention is the ability of the management to retain its employees for a longer period of time. It needs favorable policies and practices, which let the key employees stick to an organization. Organizations invest a lot of resources for employees to make them able or corporate ready. High employee turnover ratio or flyaway of talent employee is the greater loss of the organization. It can be a problem because of increased recruiting, selection, and training costs and work disruptions (Robbins and Coulter, p.343).

Newstrom (2007) states excessive employee turnover can have several negative effects on an organization. They include: Separation costs (exist interview time, separation pay, unemployment tax increase)

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Training costs for few new employees(both orientation and skill development instruction; both formal and informal learning experiences)

Vacancy costs (temporary help or overtime pay; productivity loss and service disruption)

Placement costs (attracting, screening, and relocating new hires) Morale effects (loss of friendship, concerns about personal job loss during downsizing) (p.210).

Poor compensation and benefits, negative work environment, frustration, constant friction with their superiors or other members, unfair treatment, lack of recognition; challenging job; job security; motivation; and opportunity for career development, and rtc. are the main causes of leaving or quitting job by employees. Thus, organization should address these things in time to retain their key employees.

Jyothi and Venkatesh (2006) suggest the following aspects while attempting to retain employees: (i) planning ahead, (ii) clarity in job requirements, (iii) identify a good source of recruitment, (iv) screening and interview, (v) provide challenging work, and (vi) focus on compensation and working conditions (pp. 94-95).

Employee retention is an important function of HRM. Retaining function comprises the activities of (i) rewarding employees for performing their job effectively; (ii) ensuring harmonious working relation between employees and managers; and (iii) maintaining a safe healthy work environment (Cascio, 2006, p.6). Cascio (2006) also suggests fair treatment of employees, open communication, faceto-face resolution of conflict, promotion of teamwork, respect for the dignity of each individual, and pay increases based on merit are essential to retain employees (p.8).

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This study examines and analyzes the employee retention in banking industry of Nepal. A bank is a financial institution that accepts deposits through different kinds of accounts and lends those deposits either directly or indirectly. Banking industry is generally a highly regulated and reliable industry of Nepal.

The history of banking industry is not long in Nepal. It was started from 1937 AD. There are one central bank, thirty one commercial banks and eighty seven development banks in Nepal (www.nrb.org.np).This study covers six (or19.35%) commercial banks. They are: Standard Chartered Bank Nepal Limited, Nepal Investment Bank Limited, Nepal SBI Bank Limited, Bank of Kathmandu Limited, Nepal Credit and Commerce Bank Limited, and Kumari Bank Limited.

Problem Statement

Retention of best, talent, and most desirable employees is a key challenge to organization. HRM department should take a deep concern in their employee turnover rate because it incurs direct and indirect expenses. Costs of employee turnover seriously impact on organizational performance and growth.

Employee retention is one of the big challenges to the organizations. In order to attain corporate goals organizations have to retain their key employees. Thus, issues relating these have been drawing the attention, like - Do banks apply fair HR practices to retain their key employees? Is there problem of high employee turnover in banking industry? Do Are banks practicing motivational efforts to retain their talents? Is there talents poaching practice in the banking industry of Nepal? Are employees satisfied with their present job? And are banks applying employee retention strategies.

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In general, at present, not only in Nepal, around the world, the organizations have been facing retention as a big challenge. With this objective this study has proposed to see the reality in the banking industry of Nepal. Purpose of the Study The primary purpose of the study is to explore employee retention in the banking industry of Nepal. The specific purpose of the study is to examine and analyze the employee turnover, HR practices and their relation with employee retention; and strategies for employee retention. Significance of the Study Retention of key employee is the main function of management. Retention refers to the methods employed by the management to convenience the key employees stay with the organization for a longer period of time. Since key employees are the brain of organization, retention of such employees should be the major concern of the management. This study (i) contributes knowledge industry, especially in the field of retention of key employees, (ii) fulfills the gaps of previous studies, in the case of Nepal the researcher could not find any research or study, thus it would be the first study, (iii) shows relationships between employee retention and HR practices likehiring practices, compensation and benefits, participative management, training and development, opportunity for growth, motivation, etc. and (iv) faces the dramatically increasing complexity. Changing environment, increasing size of organization, increasing inventory level of employees, rules and procedures are the main cause of increasing complexity. Talent employees are required to manage such complexity. Thus, the study on employee retention is very important. -5-

Research Questions The research questions of this study are as follows: RQ No.1. What is the employee turnover rate in banking industry of Nepal? RQ No. 2. What are the HR practices, which promote the employee retention in an organization? RQ No. 3. How the HR practices are related to employee retention? RQ No. 4. What are the strategies, which have been applying by the banks to retain their employee? Conceptual Framework Qualitative research should be based on clear conceptual framework, which outlines the possible courses of action. Thus, this is the foundation on which the study is conducted or established. The conceptual framework of the study can be depicted in the following figure. Human Resource Management

HR practices Hiring practices Compensation and benefits Job security Participative management Training and development Opportunity for growth Motivation

Retention strategies Improving hiring practices Providing career development opportunity Positive culture Succession planning Implementation of team management Flex time and benefits

Positive

Satisfactory

Employee retention Figure No. 1-1: Diagram of conceptual framework of the research -6-

Human resource management is concerned with managing people in the organization. This ensures right people at right place at right time. The individuals who work in the organization are employees. They play a crucial role in operating and controlling activities. They are the destiny of the organization. Employee turnover is the major problem of most organizations. Factors likecompensation and benefits, quality of work life, relationship with supervisor or peer, after retirement benefits plan, job performance, etc. play a significant role in employee turnover. Management should identify these factors to make them positive or favorable and should apply appropriate strategies to retain employees. Hiring practices, compensation and benefits, job security, participative management, training and development, growth opportunities, etc. are the main components of HR practices which help to retention of employee. The organization should recognize these components and should apply suitable strategies to retain their key employees. Limitations and Delimitation of the Study Although this study focuses on HR practices for employee retention, it is acknowledged that this study has some limitations and there is enough room for further study. The major limitations and delimitations of this study are as follows: Limitations The research will be based on following limitations: Firstly, the random sample will be drawn from the list of commercial banks of Nepal. Results from studies on a specific industry may have limitations to generalizing to other banks, finance companies and other sectors of the economy and vice-versa.

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Secondly, this study is based on available information from secondary and primary sources. Accuracy of the study will depend on provided information but adequate attention is given to reliability and validity of the research. Finally, the use of self-report questionnaires may limit ability to draw conclusions about the casual nature of the relationships (Vlachos, 2008, p.94). Delimitations The research will be based on following delimitations: Firstly, this study covers only commercial banks of Nepal especially foreign joint venture and national private banks to make precise to the research. Respondents are chosen from the sample banks, who are working at present. Secondly, the study covers only ten years period i.e. 2001 to 2010. The conclusion will be based on study period. Finally, the research is based on exploratory cum descriptive design. These limitations and delimitations proof that there is sufficient room for further research. Further research can clarify other aspects of the HR practices and their impact on organizational effectiveness. Further research may be on quantitative design in employee retention of banking industry in Nepal. Purposed Organization of the Study This study has been organized into seven chapters. Each chapter devoted to some aspects of HR practices to employee retention under the study organizations. The rationale behind this kind of organizations is to follow a research methodology approach.

The first chapter contains introduction of the study, which consists of background of the study, problem statement, purpose of the study, significance of the -8-

study, limitations and direction for further research and proposed organization of the study.

The second chapter contains literature review. It shows overall scenario of the employee retention as well as its evidence in the world. It consists of review of empirical studies, research articles, thesis or dissertations.

The third chapter contains research methodology, which consists of research philosophy, research design, population and sampling techniques, sources of data, procedures of data collection, tools and techniques of data analysis, reliability and validity; and ethical issues.

The fourth chapter contains employee turnover, which consists of employee inventory, succession planning, causes of leaving job, and strategies of new hiring. The fifth chapter contains HR practices to retain employees. This chapter examines and evaluates different HR practices adopted by the different banks to retain their key employees and relation of HR practices with employee retention. The sixth chapter contains strategies of retention. This chapter consists of employee retention strategies, which have been applying th banks of Nepal. The last or seventh chapter of the study contains summary, conclusion, and recommendations.

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CHAPTER II LITERATURE REVIEW Literature review shows the overall scenario of the employee retention as well as its evidence in the world. The reviewed research articles, thesis or dissertations, etc. were received from friends, national and international libraries, journals, publications of banking industry and websites. A review of those studies will be important in order to develop an approach that can be employed in this study. Why do employees leave organizations? There may be various reasons for leaving organizations. McCann (2004) finds out some reasons of leaving organization, which are: basic financial needs not met lack of competitive salary, poor benefits, poor communication, negative work environment, lack of recognition, unfair treatment, lack of challenging job, lack of job security and life conflicts. Howard and et al. (2007) conducted a research and they identify the following reasons for employee turnover: Lack of growth opportunities, better career opportunity elsewhere, insufficient compensation, did not find work interesting, insufficient rewards/ recognition, did not feel efforts where appreciated, job was not what was expected, poor fit with the organizational culture, external factors, job left too little time for personal life, skills/abilities not a good match for the job, felt unfairly treated/discriminated against, job changed focus or scope overtime, poor relationship with the manager, the economy changed, making a move people, and poor relationship with coworkers (p. 29).

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What are the methods/strategies of employee retentions? Retention of key employees is essential for organizational success. Trulson (2007) suggests following five methods: maintaining staffing levels, implementing team management, updating recruitment/screening process, addressing compensation issues, and professional development programs (p. 1). Similarly, HR-Focus (2004) suggests career advancement. Howard and et al. (2007) mention following thirty two methods of retention: Link pay and performance, succession management program, career planning services, employee retention as a corporate objective,

organizations vision/mission, training and development opportunities, improving compensation, specialized retention plans, new-hire orientation, monetary rewards, employment brand, openness in communication, performance management system, mentors/coaches for new hires, selection practices, internal studies, increased managers accountability for retention, educate managers on how to retain employees, tracing the impact of retention, benefits packages, team-building activities, non-monetary rewards, benchmarking, stock options, rotational assignments, exit interviews, employee involvement in decision making, flexible work schedule, virtual office/telecommuting, special employee services, relaxed dress code, and job security (p. 22). Trulson (2007) states following seven recommendations on his research study as retention strategies: Implement team based management style, encouraging employee involvement, use committee to address major issues and initiatives; employ friendly schedule; examine and improve the recruitment and screening process; training and certification program; -11-

improved salaries and benefits; community relations program to provide recognition, and institute a professional development program (pp.34-36).

Gberevbie (2010) suggests ten strategies of employee retention. They are as follows: Payment of monthly salaries to employees, relatively good monthly salary and allowances, provision of car, housing and furniture loan facilities, health insurance scheme, job security, regular promotion, health care services to employees families, maternity leave with full pay for female employees and regular training of employees (p.6). Gberevbie (2010) revels that there is no significant relationship between respondents job status and their views on strategies for employee retention and performance in the FCS of Nigeria (p. 9). Gberevbie (2010) states that out of the 108 respondents sampled, 97 or 89.81 percent agree that strategies for employee retention of the FCS of Nigeria are inadequate to retain competent workforce for enhanced performance (p. 9). Kaiser and Hawk (2001) revel technical training was the highest rated retention practice. Howard and et al. (2007) revel following factors or drivers promoting retention and employee satisfaction: A good manager, opportunity for accomplishment, recognition for individual contributions, great company leadership, a creative or fun work place culture, a compatible work group/team, opportunities to learn and grow, an organization you feel proud to work for, interesting work, opportunities for advancement, benefits, employee autonomy, balance between work and personal life, compensation, promise of stability/job security, employee lifestyle support, variety in the

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work, flexible work conditions, opportunity for expatriate assignments, and amount of vacation/annual leave (p.29).

Is there relation between job satisfaction and employee retention?

Job satisfaction is a set of favorable or unfavorable feeling and emotions with which employees view their work (Newstrom, 2009, p. 204). It is pleasurable feelings that result from the perception that a job fulfills or allows for the fulfillment of its holders important job values (Cascio, 2007, p. 680). Job satisfaction is an attitude rather than a behavior, its an outcome that concerns many managers because satisfied employees are more likely to show up for work and stay with an organization (Robbins and Coulter, 2006, p.343).

Job satisfaction is a general attitude toward an individual current job and organization that encompasses the feeling, beliefs, and thoughts about the job (Bitsch and Hogberg, 2004, p. 2). Herzbergs Motivational factors and hygiene factors promote job satisfaction. Lack of self-fulfillment, receive little recognition on the job, or experience continual conflicts with a supervisor or peer etc. lower the employee satisfaction and raise rates of employee turnover (Newstrom, 2007).

Hom and Griffeth (1995) state satisfied employees have lower level of turnover while dissatisfied employees have higher levels of turnover. Nadeem Malik conducted a research on Job Satisfaction Factors of Faculty Members at University of Balochistan and reveals:

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Demographic factors such as age, academic rank, and degree no significant impact on job satisfaction.

Work Itself was the most motivating aspect. Working condition was the least motivating aspect. Job motivators and hygiene characteristics were moderately or substantially related to overall job satisfaction.

The factors work itself and advancement explained the variability among faculty members overall job satisfaction. (pp. 4-5).

Higher job satisfaction reduces the rates of employee turnover. Thus job satisfaction and employee turnover have inverse relationship. The following figure displays the relationship between job satisfaction and employee turnover:

Is employee turnover universe problem?

Employee turnover problem is universe. It seems every way not only one region and industry. It badly affects employee morale, effectiveness of other employees and customer relationships.

Total annual turnover rates for non-farm occupation the year 2003 were at a rate 36.3 percent, when reviewing only private sector employees for the same years the rate was 43.5 percent while among public sector employees it was documented at 14.4 percent. Looking at the specific area Education and Health services an annual turnover rate of 27 percent was reported for 2003 while the Leisure and Hospitability Industry showed a 70.3 percent rate (BLS report, Cited from Trulson, 2004, p.10).

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Lyons and et al. (n. d.) There were no difference between military personnel and civilians with regard to turnover intentions. These differences were tested using a t-test. There were no differences between military or civilians on turnover intentions, t (159) = .88 p>.05.

What do the evidences say?

Pare and et al. (2000) conducted a survey of Canadian IT professional. This survey demonstrates that IT specialists retention pattern are strongly sensitive to HR practices that provide competence development. They (2000) revel procedural justice, information sharing, and work life policies practices must be considered as complementary means to achieve lower IT turnover rate (p.18).

Standard Chartered Bank conducted a survey and it concludes its report as engaging employees is crucial to retaining talent and while our annual survey shows excellent progress, we continue to invest in developing great managers who engage their teams. In 2008, we introduced a pilot to understand and address the root causes of employee turnover in the growth markets of India and the UAE. In India, employee attrition has reduced by seven per cent since the approach was introduced. (http://www.standardchartered.com/sustainability/great-place-to-work/employeeengagement/en/index.html).

Howard and et al. (2007) surveyed HR professionals and workers in China to find out why Chinese employees stay or leave-and what organizations can do to retain talent in China's burgeoning economy. The study reveals that:

38 percent of the HR professionals surveyed in China indicated that turnover in their organization had increased in the past 12 to 18 months; -15-

73 percent of employees had resigned from previous jobs, and 24 percent had already held three or more jobs, despite their relative youth. 22 percent said they were likely to leave their positions in the next year.

The top two turnover reasons were lack of growth and development opportunities with the current employer and the availability of better career opportunities elsewhere.

Compensation is overrated as a retention driver.

Theoretical Link

Retention has a relationship with motivation. Rate of employee retention can enhanced by applying motivation theory such as Maslows Hierarchy of Needs, Herzberg Motivator- Hygiene, Vrooms Expectancy Theory, and Staceys Equity Theory. Maslows Hierarchy of Needs theory that there is a hierarchy of five human needs: physiological, safety, social, esteem, and self-actualization (Robbins and Coulter, 2006, p. 393). This hierarchy of needs relates to retention of employees. Maslow classified the five needs into two blocks- higher and lower level. Social, esteem and self-actualization needs come under higher level. These are satisfied internally and higher relation with retention. Physiological and safety needs come under lower level. These are satisfied externally, they are crucial in employee retention, however must be addressed other HR practices.

Frederick Herzberg propounded a Motivation-Hygiene theory. Achievements, recognition, work itself, responsibility, advancement, and growth are motivators and supervision, company policy, relationship with supervisor, working conditions, salary,

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relationship with peer, personal life, relationship with subordinates, status, and security are hygiene factors (Robbins and Coulter, 2006, p.395). Motivators or intrinsic factors increase job satisfaction and reduce employee turnover and hygiene extrinsic factors create job dissatisfaction. Thus, employer must utilize positive reinforcement to maximize employee satisfaction and minimize employee turnover. Victor Vrooms Expectancy theory suggests that motivation depends on two things-how much we want something and how likely we think we are to get it (Griffin, 2000, p. 483). The following diagram summarizes the basic expectancy model (Griffin, 2000, p. 484):
Environment

Motivation

Efforts

Employee retentipon

Ability

Figure No. 2-1: Vrooms Expectancy Model based on Ricky W. Griffin J. Stacey Adamss Equity Theory is concerned with fairness and equality. Employee compares his or her jobs input-outcomes ratio with that of relevant others and then corrects any inequity (Robbins and Coulter, 2006, p. 403). Whenever employees perceive inequity, theyll act to correct the situation (Dittrich and et al., 1979). If they got success want stay present job. This theory emphasizes expected behavior of employees to retain them in the organization.

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Research Gap

There have been a number of valuable research studies on employee retention. McCann (2004), Howard and et al. (2007), Trulson (2004, 2007), HR-Focus (2004), Lyons and et al. (n. d.), Gberevbie (2010), Kaiser and Hawk (2001), Pare and et al. (2008), SCB (2008) etc. have conducted many researches in the field of HRM and employee retention. However, none of these studies provides a picture of the employee retention of banking industry of Nepal. Thus, this study attempts to fill this gap linking with international research studies.

CHAPTER III RESEARCH METHODOLOGY Research Methodology is a process of gathering, recording, analyzing, and interpreting the data. This chapter deals about research methodology used in this study. The basic objective of this study is to explore employee retention of sample banks and to find out the relation of retention and its components. For achieving the objective, the following research methodology shall be followed in the course of conducting the research. Research Philosophy Research is systematic, controlled, empirical, and critical investigation of hypothetical propositions about the presumed relations among natural phenomena (Kerlinger, 2007, p. 11). It is systematic and organized effort to investigate a specific problem that needs a solution (Sekaran, 1992). It is undertaken not only to solve a problem existing in the work setting, but also to add or contribute to the general body of knowledge in a particular area of interest to the researcher (Wolf and Pant, 2007, p. 5). -18-

Research has purpose/s. The possible purposes for doing research may be either one or more of the following (Kothari, 2008): (i) to get research degree along with its consequential benefits; (ii) to face the challenge in solving the unsolved problems, i.e., concern over practical problems initiates research; (iii) to get intellectual joy of doing some creative work; (iv) to provide service to society; and (v) to get respectability (p. 2). Management research method is a comprehensive guide to the design and conduct of research in management related disciplines such as organizational behavior, human resource management, industrial relations, and the general field of management (Tharenou, and et al., 2007, p. 1). It provides systematic research process and helps to solve management-related research questions. The basic criteria of good business/management research are as follows (Dubey, n. d.): Purpose should be clearly defined and common concepts be used. Statements should be short and direct, Underlining relevant parts for better emphasis, Pictures and graphs accompanying tables, Graphics and animations accompanying the presentation of the report, Procedure should be described in sufficient detail to permit another researcher to repeat the research for further advancement, keeping the continuity of what has already been attained (p. 8).

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Research Design

Research designs are plans and the procedures for research that span the designs from broad assumptions to detailed methods of data collection and analysis (Creswell, 2011, p. 3). It serves as a framework for the study, guiding the collection and analysis of the data, the research instruments to be utilized, and the sampling plan to be followed (Wolf and Pant, 2007, p. 92). It gives the answer of what, when, where, and how much. It is the conceptual structure within which research is conducted; it constitutes the blueprint for the collection, measurement, and analysis of data (Kothari, 2008, p. 31).

Research design is the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions and control variance (Kerlinger, 2007, p. 300).

There are three types of research designs. They are: qualitative, quantitative and blend of qualitative and quantitative or mixed. The researcher initially chooses methods based on the questions to be addressed, however, the questions, issues, and topics of the study may change as the researchers conception of the reality of the world being studied changes (Jacobs, 1987).

Research design shall be qualitative for this study. Qualitative research is a means for exploring and understanding the meaning individual or groups ascribe to a social or human problem (Creswell, 2011, p. 4). This is concerned with subjective assessment of attitudes, opinion, and behavior. Techniques used are focus group interviews, projective techniques, and depth interviews (Marie and et al. n. d., p. 4).

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Most popular research method in management is qualitative. This research involves the exploration and interpretation of the perceptions, opinions, and behavior of small samples of individuals (Wolf and Pant, 2007, p. 116).

Qualitative research methods typically include interviews and observations but may also include case studies, surveys, and historical and document analysis (Savenye and Robinson, n. d., p.1046). Ethnography, grounded theory, case studies, phenomenological research, and narrative research are qualitative strategies of inquiry (Creswell, 2011, p.13).

Qualitative research is a process that involves purposes, conceptual framework, research questions, methods, and validity. Following figure shows the relationship among the five components of research:
Conceptual Framework

Purposes

Research Questions Reliability & Validity

Methods

Figure No. 3-1: A model of qualitative research design (Wolf and Pant, 2007)

The rationales behind adopting qualitative research are as follow: firstly, this method uses open-ended questions that provide respondents the opportunity to respond in their own words rather than to choose from fixed responses or pre-fixed alternatives; secondly, the nature of research questions and unknown variables are the

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causes of the using this research method; and finally, I have experiences and interest in qualitative research.

Keeping in mind the above reasons, an exploratory research methodology shall be used in this study. Exploratory research is the systematic investigation of relationship between or among two or more variables. It gives emphasis for words rather than quantification in the collection and analysis of data. This research diagnoses a situation, screens the alternatives, and discovers the new ideas (Zikmund, n. d.).

The exploratory research may be conducted by one or more of three approaches: (i) examining existing literature, (ii) questioning knowledgeable individuals, and (iii) examining a few selected cases (Wolf and Pant, 2007, p. 336).

The relationship between HR practices and employee retention shall be explored and whatever relationship exists shall be described.

Population and Sampling Techniques

Broadly all the organizations constitute the population. Specifically, all the Nepalese organizations are the population of the research. More specifically all the Nepalese organizations in the banking sector constitute the population of the research. To be precise, all the Nepalese commercial banks are the population.

There are thirty two commercial banks in Nepal. The study covers six commercial banks three from foreign joint venture and three from national private. They are: Standard Chartered Bank Limited, Nepal Investment Bank Limited, Nepal

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SBI Bank Limited, Bank of Kathmandu Limited, Nepal Credit and Commerce Bank Limited, and Kumari Bank Limited.

This study will adopt the systematic random sampling technique to select these six banks from the list of thirty one commercial banks. The justification for this technique is based on the fact that it enables every subject in the sampling frame to have equal opportunity to be selected without bias in systematic manner (Ogbeide, 1997).

Procedures of Data Collection

Data collection is the crucial step of research. Data can be collected from various sources. Collected data should represent the real world of the subject matter as far as possible (Baker, 1994).

Data collection method should be systematic or step by step. The data collection steps include setting the boundaries for the study, collecting information through unstructured or semi-structured observations and interviews, documents, and visual materials, as well as establishing the protocol for recording information (Creswell, 2011, p. 178).

There are several techniques of data collection in qualitative research. Wolf and Pant (2007) state the following techniques of data collection: (i) Depth interviews (conversational, not structured), (ii) Opinion leader survey, (iii) Historical investigations, (iv) Focus groups studies through video conferencing, telephone, and on-line using e-mail, chat room, websites, etc., (v) Films, photographs, and video tapes, (vi) Field notes, (vii) Open-ended questions, (viii) Observations, (ix) Case studies, like single or cross-case analysis, and (x) Delphi technique (pp. 118-119). -23-

Qualitative data will be collected from primary and secondary sources of data. The primary data are those which are collected a fresh and for the first time and thus happen to be original in character (Kothari, p. 95). The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process (Ibid).

Keeping in mind the purposes of the research, both primary and secondary sources of data shall be used. The study will be used structured, semi-structured, and unstructured questionnaires and interviews, and observations to obtain primary information from respondents. In addition, I will use check lists, qualitative audiovisual materials and I will maintain diary to collect information.

Secondary data will be collected by visiting different libraries within and outside Nepal, procuring relevant documents from the concerned offices and authorities like- the concerned banks, Planning Commission Division, Nepal Stock Exchange office, Nepal Rastra Bank, Central Bureau of Statistics, Bankers Association etc., journals, websites and so on.

Tools and Techniques of Data Analysis

The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences (Kothari, 2008, p. 18). It involves preparing the data for analysis, conducting different analysis, moving deeper and deeper into understanding the data (some qualitative researchers like to think of this as peeling back the layers of an onion), representing the data, and making an interpretation of the larger meaning of the data (Creswell, 2011, p. 183).

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Data analysis procedure of this research study would be according to the following model:

Raw Data

Organizing & Preparing Data for Analysis

Obtain General Sense (Depth, credibility, use of information)

Coding the Data

Themes

Interpreting the Meaning of Themes

Figure No. 3-2: Data analysis model (Creswell, 2011, p. 185) When primary data will be collected, they shall be systematically sorted. Since they are mainly the qualitative data, they will be converted into quantitative data using Likerts 5 scale model, ranging from best to the worst like 5 (strongly agree), 4 (agree), 3 (undecided), 2 (disagree), and 1( strongly disagree). Then they will be properly tabulated. -25-

Secondary data will be rearranged according to customary accounting principles. They will be tabulated in the systematic way. In order to analyze data, appropriate tools and techniques shall be used. Statistical tools like average, standard deviation, coefficient of standard deviation, correlation shall be used. Appropriate financial tools, like ratio analysis, shall also be used. SPSS program shall be extensively used to analyze and interpret data. Tables, charts, graphs, pie charts etc. shall be used whenever required to exhibit and analyze the data. Reliability and Validity Reliability is the degree of consistency between two measures of the same thing (Mehrens and Lehman, 1987). The measure of how stable, dependable, trustworthy, and consistent a test is in measuring the same thing each time is reliable (Worthen et al., 1993). It is the extent to which a test or any measuring procedure gives the same result on repeated trials in similar circumstances. Reliability refers accuracy and consistency measuring device. We can use suitable method for reliability of research. Wolf and Pant (2007) suggest the reliability of the measurement may be obtained by one of the three methods: (i) testretest or the repetition of the same measure; (ii) Alternative measurement forms or giving another form of the measure deemed to be equivalent, and (iii) Spilt-half or dividing a measurement into at least two equivalent parts (p. 153).

Gibs (2007) suggests following reliability procedures:

Check transcripts to make sure that they do not contain obvious mistakes made during transcription. -26-

Make sure that there is not a drift in the definition of codes, a shift in the meaning of the codes during the process of coding. This can be accomplished by constantly comparing data with the codes and by writing memos about the codes and their definitions.

For team search, coordinate the communication among the coders by regular documented meetings and by sharing the analysis.

Cross-check codes developed by the different researchers by comparing results that are independently derived. The researcher will follow above suggestions to make the study more reliable. Validity refers to whether a study measures or examines what it claims to

measure or examine (www.holah.karoo.net/reliabilityandvalidity.htm). It is truthfulness. Does the test measure what it purports to measure? Validity is the extent to which certain inferences can be made from test scores or other measurement (Mehrens and Lehman, 1987). It is the degree to which they accomplish the purpose for which they are being used (Worthen et al., 1993). There are three kinds of validity. They are as follows (Wolf and Pant, 2007): Content validation involves assessing the representativeness or sampling adequacy of the items contained in the meaning of the instrument. Construct validation involves understanding the meaning of the obtained measurements. Criterion-related validation involves inferring an individuals score or standing on some measurement, called a criterion, from the measurement at hand (p. 151).

The researcher will follow above validations to make the study more valid.

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Credibility, transferability, dependability and conformability (Trochim, 2008) are the elements of reliability and validity of the study. Credibility refers believable from the viewpoint of the participant in the research and transferability refers to generalized ability to other context. Similarly, dependability refers replicable ability of the research in other subjects and conformability refers the degree to which the result could be confirmed. Factors like- methods of data collection, tools and models of analysis, testing, interaction, response of respondents, bias of researcher etc. directly affect in the validity and reliability of the study. The study will take into account strictly these factors and will commit in testing and using relevant instruments and models. Trustworthy is essential in research. The keen attention will be given in the reliability and validity to make trustworthy study. Only trustworthy sources will be used in the course of action and the role of researcher will be mentioned in the study. Ethical Issues Pratt (2006) stated that, the main ethical debates in qualitative research revolve around the tensions between covert and overt research, and between the public's right to know and the subject's right to privacy. Clearly, some practices that might be extremely unobtrusive, such as observing through a one-way mirror, concealed taperecording or telephone-tapping are just not permissible - and might lead to criminal proceedings! Participant observation has, on occasions, been likened to spying or voyeurism. This study will fully considered the ethical matters of the organizations. The study will observe the non-negotiable value of honesty and fairness. Respect for persons will be maintained properly.

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