USING MOTIVATIONAL STRATEGY AS PANACEA FOR EMPLOYEE RETENTION AND TURNOVER IN SELECTED PUBLIC AND PRIVATE SECTOR ORGANISATIONS

IN THE EASTERN CAPE PROVINCE OF SOUTH AFRICA

By

SAMUEL, OLORUNJUWON MICHAEL

Submitted in fulfillment of the requirements for the degree of

MASTER OF COMMERCE IN INDUSTRIAL PSYCHOLOGY

In the faculty of

MANAGEMENT AND COMMERCE

Of the

UNIVERSITY OF FORT HARE

SUPERVISOR: MR. C. CHIPUNZA

SEPTEMBER, 2008

DECLARATION

I declare that USING MOTIVATIONAL STRATEGY AS PANACEA FOR EMPLOYEE RETENTION AND TURNOVER IN SELECTED PUBLIC AND PRIVATE SECTOR ORGANISATIONS IN THE EASTERN CAPE PROVINCE OF SOUTH AFRICA is the authors original work and has never been submitted by the author or anyone else at any university for a degree. All the sources that I have used or quoted have been indicated and acknowledged by means of complete references.

_________________________________________

SAMUEL, OLORUNJUWON MICHAEL 05 SEPTEMBER, 2008

ii Acknowledgements

This dissertation would not have been successful had it not been for the immense contribution of some people. In this regard, I would particularly like to gratefully acknowledge the following:

Mr. Crispen Chipunza, my supervisor for his encouragement, support and guidance. Dr. P. O Adebola for facilitating my study at the University of Fort Hare. Dr. & Mrs. F. B Lewu for your wonderful support and unparallel hospitality. Mr. Wale Fatoki, my coach and very good friend for his friendship, frank advice and financial assistance. Prof. Anthony Okoh for your inspiration, brotherly advice and love. Sola Alege for his financial support to my family while I was away. Messrs Patrick Igonor and Akin Odeyemi for providing statistical and data analysis for this dissertation. The organisations and employees who participated in this study. My jewel of inestimable value, Bose. Thanks for being there for me always and for keeping the home front while I was away in foreign land. I will forever love you.

iii My lovely children, Damilola & Ayodeji for your understanding and endurance during my absence. Lastly and most importantly to God Almighty, the author and finisher of my fate for His abiding faith, provision and the grace to complete this dissertation.

iv

DEDICATION

I dedicate this project to my family Bose, Damilola and Ayodeji who missed my love and absence while the programme lasted.

v
TABLE OF CONTENTS Declaration i

Acknowledgements ii Dedication iv Table of Contents v List of figures xii List of Tables xiv List of Annexure xv Abstract xvi

CHAPTER ONE INTRODUCTION, PROBLEM STATEMENT AND OUTLINE OF THE STUDY

1.1 Introduction 1 1.2 Problem statement 6 1.3 Objectives of the study 9 1.4 Research hypothesis 10 1.5 Significance of the study 10 vi 1.6 Delimitation of the study 11 1.6.1Size of the organisation 12 1.6.2 Type of organisation 12 1.6.3 Geographical demarcation 12 1.6.4 Units of analysis 12 1.6.5 Subject of evaluation 13

1.7 Definition of key concepts 13 1.8 Outline of the dissertation 14 1.9 Concluding remarks 15

CHAPTER 2 AN OVERVIEW ORGANISATIONS OF EMPLOYEE RETENTION AND TURNOVER IN

2.1 Introduction 16 2.2 Definition of employee retention 17 2.3 Definition of employee turnover 19 2.4 A global overview of employee retention and turnover 21 vii 2.4.1 Retention and turnover in South Africa 25

2.5 Factors influencing retention and turnover in South Africa 30 2.5.1 Global economic influence on retention and turnover 30 2.5.2 National economic influence on retention and turnover 33 2.6 Relationship between recruitment sources, retention and turnover 35 2.7 Reasons for employee turnover 42 2.8 Costs associated with turnover 49 2.9 Measuring employee turnover 55 2.10 Turnover as cost benefits to organisations 58 2.11 Concluding remarks 61

CHAPTER 3 STRATEGIES FOR MANAGING EMPLOYEE RETENTION AND TURNOVER IN ORGANISATIONS

3.1 Introduction 63 3.2 Management of retention and turnover by public and private Sector organisations 64 viii 3.2.1 An overview of employee retention strategy 65 3.2.2 Policy approach by government in public sector organisations 71 3.3 Motivational strategies 75 3.3.1 Goal setting technique 77 3.3.2 Training, education and development opportunities 79 3.3.3 Career growth and promotion opportunities 83 3.3.4 Management style 85 3.3.5 Compensation and other financial benefits 90

3.4 Job satisfaction 94 3.4.1 Measuring job satisfaction 99 3.4.2 Herzberg (1959) two-factor theory and job satisfaction 102 3.5 Theoretical framework of employee motivation 105 3.5.1 Expectancy theory (Vroom, 1964) 106 3.5.2 The Hierarchy of Needs theory (Maslow, 1943) 111 3.6 Concluding remarks 113

ix CHAPTER 4 RESEARCH METHODOLOGY 4.1 Introduction 114 4.2 Research design 114

4.3 Research strategy 117 4.4 Target population 118 4.4.1 Sample frame 118 4.5 Sample 120 4.5.1 Sample size 121 4.6 Sampling error 123 4.7 Sampling procedure 124 4.8 Data collection 127 4.8. 1 The research questionnaire 128 4.8.2 Description of the research questionnaire 129 4.8.3 Reliability testing of the questionnaire 130

4.8.4 Administration of the questionnaire 131 x 4.9 Statistical analysis 133 4.10 Concluding remarks 135

CHAPTER 5 DATA ANALYSIS, RESULTS AND DISCUSSIONS 5.1 Introduction 136 5.2 Demographic results of respondents in the public sector organisations 136 5.3 Demographic results of respondents in the private sector organisations 139 5.4 Reliability of the questionnaire 143 5.5 Testing of hypothesis 144

5.6 Presentation and discussion of results 146 5.7 Concluding remarks 163

xi CHAPTER 6 CONCLUSIONS, RECOMMENDATIONS, LIMITATIONS AND DIRECTION FOR FURTHER RESEARCH 6.1 Introduction 164 6.2 Conclusions 167 6.3 Recommendations 167 6.4 Limitations of the study 172 6.5 Direction for further research 172 6.6 Concluding remarks 173

List of references 174 Annexure 196

xii List of figures Figure 1: Gender distribution of respondents in the public sector organisations 136 Figure 2: Age distribution of respondents in the public sector organisations 137 Figure 3: Highest educational qualification of respondents in the Public sector organisations 138 Figure 4: Employment duration of respondents in the public sector organisations 138

Figure 5: Position of respondents in the organisation 139 Figure 6: Gender distribution of respondents in the private sector organisations 140 Figure 7: Age distribution of respondents in the private sector organisations 140 Figure 8: Highest educational qualification of respondents in the private sector organisations 141 xiii Figure 9: Employment duration of respondents in the private sector organisations 142 Figure 10: Position of respondents in the organisations 142

xiii

List of tables Table 5.1: Cronbachs alpha results 143

Table 5.2: Levels of significance between the overall variable and intrinsic motivational variables. 144 Table 5.3: Levels of significance between the overall variable and extrinsic

motivational variables 146

xiv List of Annexure Annexure A: Research questionnaire for top employees 196 Annexure B: Cross tabulation table for intrinsic variables 199 Annexure C: Cross tabulation table for extrinsic variables 212

xv

ABSTRACT USING MOTIVATIONAL STRATEGY AS PANACEA FOR EMPLOYEE RETENTION AND TURNOVER IN SELECTED PUBLIC AND PRIVATE SECTOR ORGANISATIONS IN THE EASTERN CAPE PROVINCE OF SOUTH AFRICA

By

SAMUEL, OLORUNJUWON MICHAEL

SUPERVISOR

MR. C. CHIPUNZA

FACULTY

MANAGEMENT AND COMMERCE

DEPARTMENT

INDUSTRIAL PSYCHOLOGY

DEGREE

MASTER OF COMMERCE

Retention of skilled employees has become strategic and critical to sustainable competition and effective service delivery among organisations in the ever changing world of work. Globalisation has tremendously enhanced mobility of

xvi skilled individuals, thereby accelerating the rate of employee turnover in organisations. This phenomenon has dramatically changed human resource practice in the area of attracting skilled employees into the organisation and most importantly, retaining them. Given the high costs of turnover and its destructive tendency, it has become imperative for managers to identify retention variables that constantly motivate and influence the decision of valuable employees to have a longer tenure in an organisation.

The present study looked at the extent to which intrinsic and extrinsic motivational variables were used by managers to influence retention and reduce turnover of key employees in both public and private sector organisations. Participants were selected from management and non-management employees. The total sample of the study comprised 145 respondents 54 management and 91 non-management employees. A questionnaire, measured on a Likert Scale was used to collect data from respondents. The result showed that employees in both the public and private sector organisations were motivated to a very large extent by a combination of intrinsic and extrinsic factors. Motivational variables such as training and development, recognition/reward for good performance, a competitive salary package and job security ranked amongst the most important variables that motivate employees to remain in an organisation. Most private sector employees were undecided on the extent to which management used

xvii

identified motivational variables to influence their retention in the organisation. This suggests that most private sector organisations might not have feasible retention policies. Similarly, employees in public sector organisations are significantly motivated by financial variables than those in the private sector organisations. The results of the study are discussed against the background of employee retention and turnover in organisations.

CHAPTER 1 INTRODUCTION, PROBLEM STATEMENT AND OUTLINE OF THE STUDY

1.1 Introduction The South African labour-market suffers from a dearth of skilled manpower and a continuous brain drain (Kinnear & Sutherland, 2001: 15) suggesting that South African organisations are under pressure to retain available talent. The retention of talent has however become a major challenge to human resource practitioners since; according to Harris (2007: 2) talented job candidates in the global skills market have the luxury of choice. This is affecting South African organisations since they have to compete not only with one another but with organisations abroad. The situation has tremendously increased competition for talent in South Africa with many organisations going to great length to retain their best employees. Competition has therefore put skilled employees who are already in short supply under pressure as they are being attracted by more than one organisation at a time with various kinds of incentives. According to Doke (2008: 26) many newly qualified South African graduates are drawn to foreign shores with the promise of better remuneration, wider scope and more opportunities, leaving organisations hard pressed to fill their vacancies with the right candidates.

Concurring with Doke (2008: 26), Litheko (2008: 26) states that migration of suitably qualified South Africans abroad is making recruitment an onerous task in South Africa, because the majority of job candidates are perceived to be

unsuitable for the majority of vacancies at professional and technical levels. Research findings by Hale (1998) cited in Ramlall (2003: 63) reveals that almost all public and private sector employers in South Africa are experiencing difficulty in attracting and retaining new employees.

The changing labour market has brought about an unprecedented labour turnover. According to Cappelli (2000: 103) strategic poaching of competitor organisations key employees has become an acceptable practice among employers nowadays. Friedman, Hatch and Walker (1998) as cited in Aron (2001: 15) report that the notion of a permanent employee has become a thing of the past. In the changing world of work; Lee (2001: 8) argues that the psychological contract between employer and employee has changed

fundamentally and long term commitment to an organisation is no longer guaranteed by either party. Retention of talented employees continues to be a big problem for a large number of employers thereby constantly challenging HR practitioners to formulate innovative strategies that will not only attract talent, but equally retain them in order for these employees to help in achieving organisational goals and objectives. According to a study of HR professionals in the United States of America (reported by Mello, 2006: 572), over 75% of those surveyed reported that retention of talented employees was the top human resource problem they confronted. Similarly, Harris (2008: 22) asserts that the biggest challenge facing the South African breweries is the retention of critical skills. The main reason for the failure to retain these talented employees can be

attributed to the inability of organisations to apply correct motivational strategies in addressing the problem of retention and turnover.

The issue of employee motivation in contemporary organisations has become so dynamic that managers have to appraise and re-appraise their motivational strategies on an on-going basis. According to Czakan (2005: 8), motivational variables used to attain retention in the past may no longer be appropriate to motivate talented employees to remain thereby increasing the rate of turnover. Scarcity of skilled manpower in the South African labour market is also contributing to the retention problem. For example, Schalkwijk (2000: 5) found that the South African health sector, particularly the nursing profession, is badly affected by employee turnover as scores of professional nurses seek alternative employment or leave the country in search of lucrative work overseas. A study conducted by the Centre for Health Policy at the University of the Witwatersrand, South Africa, in April, 2005 estimated vacancy rates for nurses in public hospitals and clinics in the Limpopo Province at 22.6% and 26.5%, respectively. PonnKekana, Blaauw, Tint, Monareng and Chege (2005: 54) report that a high percentage of nurses working in public hospitals in South Africa are demotivated and already considering quitting their jobs.

The problem of employee turnover is not peculiar to the health sector alone. Mengel (2001:32) reports that more than half of Information Technology (IT) organisations in South Africa carried over vacant positions from 1998 to 1999 in

respect of Information Technology professionals. The IT professionals, after acquiring some work experience, leave South Africa for more lucrative jobs overseas. The reasons often given by these professionals for quitting their jobs include poor working conditions, lack of career growth, poor salary incentives, and general lack of motivation from employers. These are motivational issues which can be managed by individual organisations in order to reduce the high rate of employee turnover which, according to Schreuder and Theron (2001: 28) has become prevalent in both public and private sector organisations with the attendant costs.

High

employee

turnover

is

costly

to

both

the

individual

organis-

ation and the national economy. Research findings in the United States of America by Ramlall (2003: 12) indicate that the total cost of employee turnover is about 150% of an employees annual salary. The cost of filling job vacancies, lost productivity from vacant jobs and the cost of training new employees increase operational costs. Dess and Shaw (2001: 446) argue that turnover incurs significant cost, both in terms of direct costs (i.e. replacement, recruitment and selection, temporary staff, management time) and indirect costs (i.e. morale, pressure on remaining employees, costs of learning, product/service quality, organisational memory and the loss of social capital). All these costs are usually a feature of involuntary turnover. Organisational managers can reduce these costs by adopting appropriate motivational strategies in order to retain competent employees, thereby reducing the turnover rate.

In order to succeed in attracting and retaining talented employees, South African organisations have to consider the needs of their organisations and those of the individuals, as well as the environment in which they operate. According to Schalkwijk (2000: 5), organisations have to develop strategic reward

programmes that incorporate pay and employee benefits as well as consideration for the individual employees personal growth and development. These represent some of the personal needs and career aspirations of employees which must be considered by employers in order to retain and motivate them to help in achieving organisational goals. Dess, Lumpkin and Eisner (2008: 119) concur that productive employees place professional development and personal enrichment (financial and otherwise) above an organisations loyalty. These arguments are consistent with the positions of Mengel (2001: 32) and Davidson (2001: 4) who listed critical factors to employee retention to include career growth opportunities, learning and development, exciting and challenging work, a good boss, fair pay and benefits, and recognition for work well done. One of the challenges faced by the managers of human resources in South Africa today lies in the development and retention of competent employees. Czakan (2005: 8) alludes to this assertion in submitting that the core of the problem remains the strategic imperative to attract and retain talented employees who will make the difference in service delivery and profit maximisation.

Schreuder and Theron (2001: 28) contend that the retention of talented employees by employers is imperative because the organisations competitive

advantage is often dependent on the specialised knowledge and skills possessed by these employees. Given the mobility nature of talented employees, retaining them becomes a matter of concern to employers since, in the view of Arkin (2001: 28) and Buckingham (2000: 45), their leaving means a loss to the organisation of its intellectual capital or intangible assets.

The above discussion has provided a background to the problem of employee retention and turnover among public and private sector organisations including those in South African, and the challenges posed to employers. Managers are therefore saddled with the responsibility of addressing the problem through the designing and implementation of appropriate retention strategies that are capable of reducing turnover to a manageable proportion.

1.2 Problem statement World-wide the competition by organisations for talented employees is on and South Africa is no different. In todays highly competitive business environment, the dynamics of talent have become a key differentiator for most businesses. Highly competent employees are migrating from South Africa overseas for better paid jobs. When these employees migrate, they sometimes move with their clients assets and this affects investment in South Africa. According to Gillingham (2008: 17), emigration is having an adverse effect on the private banking industry, with some highly skilled employees opting out and some clients moving their assets offshore. Farrel (2008) reported by Gillingham (2008: 17)

states that..Foreign banks tend to target the very best employees in South African private banks who accept employment from offshore banks. Losing frontline employees who have established good relationships with their clients is of particular concern. Organisations must not only attract the right candidates but must also ensure their retention in order for these employees to make a difference in the realisation of organisational goals. Hendricks (2006: 9) notes that employees with scarce skills are in great demand by the South African government and are becoming difficult to source. When these categories of employees are eventually sourced, they become even more difficult for government to retain. It is not only the government that is finding it difficult to retain highly skilled employees; private sector managers also admit that one of the most difficult aspects of their jobs is the retention of key employees in their organisations.

It becomes problematic for organisations when the rate of replacement rises over time especially when highly skilled employees are involved. The real challenge to HR managers therefore lies in devising ways of retaining employees in order to reduce the rate of turnover and the associated costs. Dess (2008: 119) concurs in stating that hiring and developing the best employee will be unproductive if organisations cannot provide the working environment and intrinsic and extrinsic rewards to retain their best and brightest. Employee retention has therefore become a practical guide for managers in order to retain their talented employees and avoid spiraling costs that are usually associated with turnover.

Indeed, retention practices have posed enormous challenges to managers considering the shortage of qualified manpower in the South African labour market. Managers in both public and private sector organisations have to devise innovative means of retaining high performing employees in their pool in order to avoid frequent recruitment which is costly and time consuming. According to Brown (2006: 2), the lack of proper retention strategies is having an adverse effect on South African organisations, as replacing key employees is distruptive, expensive, time consuming and may even threaten the sustainability of an organisation. The implication thereof is such that South African organisations may not be able to favourably compete in the global market place if the phenomenon is not properly addressed. Research by P-E Corporate Services (2001: 1) estimate the rate of voluntary turnover of skilled employees in South Africa to be at 63%, involuntary turnover, 22% and others, such as death, retirement and pregnancy, at 15%.

The reasons often cited for voluntary turnover by employees revolve around the inability of employers to motivate them properly to remain. Thus, according to Ponn-kekana et al. (2005: 20), some of the reasons include a lack of promotion, insufficient pay, work overload, and some other motivation related issues such as opportunities for training and development, job insecurity, work autonomy and a lack of recognition of good performance. In the light of such evidence, there is a need to establish the extent to which managers in the South African organisations are using appropriate motivational strategies to retain employees.

Such a step will help managers in the identification of reliable and sustainable retention programmes and practices that can effectively reduce turnover in both public and private sector organisations. The present study is therefore aimed at identifying and establishing the extent to which managers in selected public and private sector organisations are applying these motivational strategies. In view of the foregoing, the fundamental question that is addressed by this study therefore is: To what extent are intrinsic and extrinsic motivational variables being used in influencing retention and reduction of turnover of employees in both public and private sector organisations?

1. 3 Objectives of the study The research was aimed at achieving the following objectives: 1. Identify and establish the key intrinsic and extrinsic motivational variables being used by selected public and private sector organisations in retaining their employees;

2. Determine the extent to which the identified intrinsic and extrinsic motivational variables are influencing employees retention and turnover in public and private sector organisations and, the selected

3. Make recommendations to management of the selected public and private sector organisations on how to effectively retain employees and reduce turnover.

1.4 Research Hypothesis The research hypothesised that:

Intrinsic and extrinsic motivational variables are not significantly used to influence employees retention and turnover in either the public or private sector organisations.

1.5 Significance of the study Not many empirical studies have been conducted in the past to provide managers with a sustainable remedy to the problem of retention and turnover particularly in the South African context. Birt, Wallis and Winternitz (2004: 25) assert that South African organisations are characterised by market-driven turnover with difficulty in retaining employees that are considered core to the purpose and continual success of these organisations. These organisations are facing a huge challenge in determining the factors that are instrumental in minimising turnover amongst talented employees. The present study will identify and establish key motivational variables that most influence retention in both the public and private sector organisations.

Some costs are associated with employee turnover which are often ignored by managers. Because some of these costs are not expressed directly (for example, lost productivity, organisational memory, customer defection, employee morale), managers do not often consider them as detrimental to the growth of the organisation. Sherman, Alper and Wolfson (2006: 22) assert that these costs are hard to quantify and may be more damaging to an organisation than the direct costs. The present study will highlight some of these costs in order for managers

to appreciate the essence of motivating and retaining talented employees on an on-going basis.

The outcome of the study will significantly advance the frontier of knowledge and add to the existing academic literature on retention and turnover particularly in the context of South African organisations. The findings will also be useful in the formulation of effective retention policies and in reviewing existing ones. It is believed that the results of the study will inspire other researchers to investigate further areas that are not covered in this study.

1.6 Delimitation of the study The purpose of demarcating a study is to make it more manageable and to this end, the proposed research was limited to selected public and private sector organisations in the Eastern Cape Province of South Africa.

1.6.1 Size of the organisation The selected organisations in the study had an estimated employee population of about 1800 and as in other organisational settings; they have a hierarchical structure (top, middle, and lower levels of management and other operational employees). This helped in identifying various levels of employees that constituted the research elements in this study.

1.6.2 Type of the organisation The study was limited to selected public and private sector organisations in the Eastern Cape Province of South Africa. Available literature indicates that these categories of organisation are also experiencing employee turnover and retention problems.

1.6.3 Geographical demarcation The data for the study was limited to the selected organisations in the Eastern Cape Province of South Africa, particularly the East London and Bisho areas.

1.6.4 Unit of analysis The study was limited to top level management and operational employees (i.e. line managers and lower level employees) within the selected public and private sector organisations. Management is responsible for providing strategic plans which Bryson (2004: 120) describes as plans that establish an organisations overall objectives, and seek to position the organisation in terms of its environment. This level of management formulates broad policies (including human resource) upon which other levels of management operate. This category of employees will be requested to answer structured questionnaires that solicit information on which motivational variables are being used to influence and manage employee retention and turnover in their organisations. Nonmanagement employees are responsible for production and task implementation. These category of employees in most organisations, constitute the highest

population of the workforce. Information will be sought from them in respect of the effectiveness of the motivational variables being used by their managers to influence their stay in the organisation.

1.6.5 Subject of evaluation The subject of evaluation in this study can be broadly divided into the following areas: An overview of employee retention and turnover in organisations. Strategies for managing employee retention and turnover in organisations.

1.7 Definition of key concepts Motivation Defined by Riggio (2003: 184) as a force that serves three functions: It energises or causes people to act, it directs behaviour toward the attainment of specific goals; and it sustains the effort expended in reaching those goals. Strategies According to Web definition, www.web-strategist.comstrategies are group of activities to produce outputs required to achieve planned outcomes.

Employee turnover The ratio of the number of workers replaced in a given time period to the average number of workers (Free dictionary by Farlex).

Employee retention Ways of managing and retaining talented employees using innovative retention programmes (Phillip & Connell, 2002: 1).

Public sector Part of the economy that provides basic government services (government departments, parastatals, provincial and

municipality). (www.investorwords.com).

Private sector According to Web definition, is that part of the economy which is controlled or owned by private individuals, either directly or through stock ownership. That portion of the economy that is composed of businesses, excluding government.

1.8 Outline of the dissertation Chapter 1: Introduction, problem statement, and outline of the study.

Chapter 2: An overview of employee retention and turnover in organisations.

Chapter 3: Strategies for managing employee retention and turnover in organisations

Chapter 4: Research methodology.

Chapter 5: Results and discussion.

Chapter 6: Conclusions, recommendations, limitations and direction for future research.

1.9 Concluding remarks This chapter has provided a general background to the study and emphasises the challenges of retaining available skilled employees. The chapter also highlighted the damaging impacts of high rate of turnover on both public and private sector organisations and the issue of costs. Factors that delimit the study were also discussed. The next chapter will provide a general overview and factors that influences retention and turnover in South Africa and some other countries in the world.

CHAPTER 2

AN

OVERVIEW

OF

EMPLOYEE

RETENTION

AND

TURNOVER

IN

ORGANISATIONS,

2. 1

Introduction

Chapter one has provided a general background and put the problem of employee retention and turnover in perspective. The chapter also stated the objectives, hypotheses, significance and the delimitations of the study. The general content of the study were also highlighted. The chapter served as the background for understanding the research problem.

The aim of this chapter is to provide a broad definition of retention and turnover and present a general overview of the subject in different countries of the world. Reasons for employee turnover as well as turnover as cost benefit are also discussed. The chapter also sets the basis for a comprehensive analysis of the costs that are usually associated with turnover while various methods of calculating and measuring retention and turnover are examined.

The section below will define and give a general understanding of employee retention and turnover in organisations.

2. 2 Definition of employee retention Retention is a voluntary move by an organisation to create an environment which engages employees for long term. According to Chaminade (2007: 1), this attachment relationship should be durable and constant and link the employee to the organisation by common values and by the way in which the organisation

responds to the needs of the employees. The main purpose of retention is to prevent the loss of competent employees from the organisation, which could have an adverse effect on productivity and service delivery. Also, retention allows senior and line managers to attract and effectively retain critical skills and high performing employees. This is achieved by providing these managers with information on retention and retention strategies that will ensure that the goals and objectives of the organisation are realised.

Creating a retention strategy means placing the employees needs and expectations at the centre of the organisations long-term agenda in order to ensure the professional satisfaction of the employee and create a trusted relationship. In this stable relationship, the employee remains in the organisation by personal choice based on free will and considered decision. Retention of employees is crucial to the overall success of any organisation. Brown (2006: 2) notes that the lack of proper retention strategies is damaging South African organisations severely, as replacing key employees is disruptive, expensive,

time consuming and may even threaten the sustainability of an organisation. Talented and high performing employees should be encouraged to remain in the organisation by designing retention policies that will provide individual employees with opportunities to demonstrate their skills and ensure that they are matched with the right jobs. Such retention policies should, in the view of Nyoka (2006: 2) also include strategies that will enable employees to balance their work life demand with their family life by establishing family friendly policies and enabling

flexible work arrangements to accommodate essential personal commitments. With such effective retention policies in place, managers are able to keep the employee turnover at a manageable rate.

It is imperative for organisations through the employment process, to attract quality employees to the organisation. However, it is more important for managers to device strategies with which to retain these talented employees in the service of their organisations in order for employers to benefit from the investment already made in them. Employee retention is one of the most critical issues facing organisational managers as a result of the shortage of skilled manpower, economic growth and high employee turnover. Phillips and Connell (2002: 1) state that employee retention involves being sensitive to employees needs and demonstrating the various strategies in meeting those needs. These strategies, according to Czakan (2005: 8) include career growth and development, competitive compensation benefits, opportunities for training and supportive management. Apart from the strategies mentioned above, employers should use a flexible approach to encourage retention and this approach should consider a number of value-adding components. Such components, Brown (2006: 2) contends include mentoring/coaching, opportunities for skill and career development, as well as flexibility around the frequency and size of performance rewards and incentives. The whole process of retention is to ensure that employees are retained in the organisation, especially employees with valued or

needed skills or experience in a scarce/critical field (where recruitment is difficult).

2.3 Definition of employee turnover Employee turnover occurs when employees leave their jobs and must be replaced. The world web dictionary defines employee turnover as the ratio of the number of workers that had to be replaced in a given time period to the average number of workers (www.wordnet-princeton.edu). The Chartered Institute of Personnel and Development (2007:1) defines employee turnover as the ratio comparison of the number of employees an organisation must replace in a given time period to the average number of total employees. In their own definition, Abassi and Hollman (2000: 305) define turnover as the rotation of employees around the labour market; between firms, jobs and occupations; and between the states of employment and unemployment. Turnover, according to Iverson and Pullman (2000: 980) can be classified as voluntary (to include withdrawals out of volition) or involuntary (to include layoffs and dismissals). Voluntary turnover often results in departing employees migrating, in most cases, to competing firms, creating a more critical situation since their transferred knowledge can be used to gain competitive advantage. Turnover is a costly expense and a huge concern to employers and must be avoided. High turnover represents a considerable burden on human resource and line managers, who are constantly having to recruit and train new employees.

Given the intense search for talent by various organisations the world over, the above background to the context of retention and turnover present a number of challenges to HR practitioners and top management. The core of these challenges revolves around the inability of organisations to retain high performing employees. These challenges require that top management, in consultation with the human resources managers, formulate and implement a comprehensive strategic retention programme that will attract and retain talented employees. Such programmes should take into consideration variables such as base pay and other financial incentives, career growth and development, training and skills development, a good working environment, the recognition of good performance and others. Smit and Cronje (2002:344) consider some of these variables as crucial in rating organisations. These have helped these organisations in retaining high caliber employees and also in maintaining low turnover rates.

The following section provides a general overview of retention and turnover as applicable in different parts of the world.

2.4 A global overview of employee retention and turnover In the United Kingdom (U.K), the Chartered Institute of Personnel and Development (2007: 1) reports that the overall turnover rate for the U.K. in the year 2006 was reported as 18.1%. Turnover rates vary from sector to sector with

the highest level of turnover (22.6%) found in the private sector organisations with the public sector having an average turnover rate of 13.3%. In the United States of America (USA), Smith (2007:1) argues that businesses spend over USD200billion annually recruiting and replacing their employees. In the healthcare sector in USA for example, a report by Sellgren, Ekvall and Tomson (2007: 169) estimates that the turnover rate would reach a level of 29% in year 2020. Gustafson (2002: 106) shows that the hospitality industry in the USA and elsewhere is experiencing a labour shortage with the attendant high rate of turnover. Kaufman (1998: 54) forecasts a considerable current and future shortage in the supply of information technology (IT) professionals in the USA. A jobs forecast by Computerworld (1998: 1) estimates that there were 350 000 vacant IT jobs in the USA in 1998 with a forecast of 1.3million more IT professionals needed in the next decade with a turnover rate of 13% or higher. This suggests that turnover would continue to be a problem in the years ahead.

To reduce the ever increasing turnover rates, organisations must understand and put in place the right strategies to retain these professionals. According to Lockwood and Anari (1997: 252) the following factors were listed as crucial retention strategies for IT professionals in the USA and U.K in the order of importance: Money (base salary plus bonus and stock options); the chance to learn new skills (i.e. those that the market values); the reputation of the organisation in technology; and working conditions (e.g. physical, colleagues & boss, casual dress). On retention strategies that were particularly successful in

maintaining a low turnover rate, one of the solutions suggested was an increase in salary. A Computerworld (1998: 1) survey found that the majority of IT professionals admitted to having left their former organisations for more money, while a little above half of these professionals left for career advancement. Common practice suggests that most people need a vacation break to prevent job stress and burnout. Furlonger (1997: 3) reports that Scandinavian and European organisations typically offer more vacation benefits and three day weekend mini-vacations than their USA counterparts. This practice attracts scarce skilled professionals (who attach importance to work-life leisure) to organisations in Scandinavia and Europe, now that the international labour market has become a global unit.

Khatri (2001: 154) asserts that employee retention and turnover are at an all time high in Asia thereby posing a great difficulty to HR management. A widely held belief is that employees have developed bad attitudes due to the labour shortage. Employees are believed to job-hop for no reason, or even for fun. Hewitt Associates (2006: 1) found that public and private sector organisations in China, Hong-Kong, India, Japan, Korea, Malaysia, the Philippines, Singapore, and Thailand experienced 14% and 16% turnover rates in year 2004 and 2005, respectively. The possibility of the rate increasing is high as Asias dynamic growth agenda collides with the demographic trends of an ageing population and an immediate need to attract more skilled employees. The effect of a rising turnover rate is already manifesting as it is now easier than before for employees

to move from one organisation to another thereby increasing the complexity and costs of retaining the right employees in an organisation.

Many reasons have been given for the high rate of turnover in Asia and one of these reasons according to a study by Hewitt (2006: 1) is inequity in compensation. The report noted that many organisations are already losing their employees to organisations that are offering higher salaries. The study listed limited growth opportunities and role stagnation as other reasons for high rates of turnover. A very effective retention strategy adopted by Asian organisations is the ability to raise base pay above the market rate. Organisations are also increasingly providing the opportunity to teach their employees new skills and providing favourable work-life balance in their bid to retain key employees. The banking and finance sector in Asia recorded the greatest turnover of 25%, which, according to Hewitt (2006: 1), was brought about by stable economies, growing markets, and increased retail investor confidence. The outsourcing sub-sector which has recorded unprecedented growth in recent years also recorded a 23% rate of turnover in 2006 while the manufacturing sector recorded the lowest rate of 11%. Employee retention is critical to the long-term health and success of any organisation; however, it is becoming increasingly difficult for organisations in Asia to attract, motivate and retain key employees. Turnover rates are still on the rise, and as the search for talent becomes more intense each year, it is becoming increasingly important for organisations to ensure they keep the right employees in place to drive future business success.

Retention variables for New Zealand employees, according to Boxall, Macky and Rasmussen (2003: 198) are multidimensional. They include variables such as interesting work, which was rated as the strongest factor in attracting and retaining employees in both public and private sector organisations. The research outcome by Boxall, Macky and Rasmussen (2003: 198) shows that employees expect management should make personnel decisions based on merit and also demonstrates that extrinsic rewards (such as pay, promotion & job security) play a role in both employee retention and turnover management. The research further suggests that management lend support to the idea of good relationships with co-employees and supervisors.

From the foregoing, it is evident that retention and turnover have become global problems that are posing great challenges to HR practice in both the public and private sector organisations. Turnover rates differ from country to country and from sector to sector with a worrisome indication that turnover rates will continue to rise in the years ahead. Changing demographics are affecting the labour pool the world over as there are few skilled job candidates from which to hire. Societal norms are also changing, where loyalty to one employer is no longer to be taken for granted. Managers across public and private sector organisations are faced with the increasing need to retain current employees in order to position their organisations to be more attractive to talented job applicants.

2.4.1 Retention and turnover in South Africa One of the biggest challenges being faced by Human Resources practitioners in South Africa is the management of retention and turnover in their organisations. In a Deloitte and Touche Human Capital survey (as cited in Bennett, 2003: 1) of major South African organisations, human resources managers reported three major challenges that confront HR practice. These challenges include dealing with the new role of HR, the performance of their organisations, and employee retention. The report specifically mentioned retention as the biggest single concern confronting HR practice in South Africa. Turnover is facilitated in South Africa by two major factors that are peculiar to the economy. Firstly, the large scale emigration of highly skilled professionals (commonly referred to as brain drain) as a result of perceived increasing macro social problems. According to P-E Corporate Services (2000: 1) the high crime rate in South Africa and the perceived declining standards in certain social services are some of the factors that encourage the present above average levels of emigration of highly skilled employees. Deloitte and Trouche (as cited in Bennett, 2003: 1) reveal that 21% of the turnover of executives in various organisations surveyed in South Africa was as a result of emigration. The second factor, according to the report by Bennett (2003: 1) is the implementation of the Employment Equity Act, Act of 1998, which was introduced in terms of The Affirmative Action Policy. The Act compelled employers to fill a certain percentage of their workforce with employees from the previously disadvantaged race/groups (i.e. the blacks, Indians, coloureds and white women). This policy creates a lot of vacant

positions for black professionals, who are already in short supply. Concurring with Bennett (2003: 1), Maisela (2001: 53) confirms that many South African organisations are experiencing a high turnover of black executives who are constantly poached by competitor organisations. These black executives are often used to win tenders from government departments and parastatals. Van As (2001: 43) points out that the implementation of the Employment Equity Act, Act of 1998 has forced organisations to balance their employment portfolio thereby providing skilled blacks with the opportunity to hop from one job to another.

The turnover rate in South Africa has been on the increase in the recent past. A report by P-Corporate Services (2001: 15) indicates that key employee turnover is running at a historically high level in South Africa with the turnover rate rising from 7% in 1997 to 14% in 2001 and is now estimated at 15%. Research findings by the Hay Group, as reported by Sherman, et al.( 2006:22) confirm this trend, stating that employee turnover has been on the increase in South Africa with the turnover rate surging by more than 25% in the last five years. This increase in turnover has resulted in the loss of high performing employees and this has put intolerable strain on workflow management in various organisations. Harris (2007: 7) attributes the present poor service delivery by public sector organisations to a shortage of high performing employees who have either migrated abroad or has been poached by private sector organisations. Apart from poor service delivery, high employee turnover is also associated with

spiraling costs which have increased tremendously the overhead expenses of organisations.

Some of the costs that are usually associated with high employee turnover include replacement costs such as advertisements, recruitment agency fees, employee training and development. Sherman et al. (2006: 22) argue that apart from the above mentioned direct costs, there are indirect costs which organisations incur when an employee leaves. These indirect costs include goodwill, lost sales, lower productivity, work overload, and customer defection. These costs are hard to quantify and may be more damaging to an organisation than the direct costs. Potter (2003: 2) concurs with this by identifying three primary elements of turnover costs. These are the costs of recruiting job applicants (such as advertising, the screening of applicants, personnel search, brokerage, relocation expenses); vacancy costs, which are a temporary loss of productivity occasioned by the voluntary withdrawal of an employee, and thirdly, the enormous costs of training new employees. All these costs impact negatively on service delivery and the profitability of any organisation thus making retention practice a compelling task for managers in order to reduce these costs.

Research findings in the United States of America by Larsen (2003:10) contend that it costs an organisation about 150% salary equivalents to replace a professional or technical employee. It also costs a 6 months wage equivalent to replace a casual employee. This report is consistent with similar research

findings in South Africa by Sherman et al. (2006:22) which state that each professional who voluntarily withdraws costs the organisation an equivalent of 18 months salary and hourly employees costs a half year salary. These enormous financial and non financial costs associated with employee retention and turnover can be avoided by organisational managers through the application of correct motivational strategies.

Bagraim (2001:2) argues that it is not enough to know the need of skilled employees, what is important is the ability of management to meet these needs. Meeting these needs requires implementing and evaluating retention practices on an on-going basis. A study conducted by Kinnear and Sutherland (2001:19) in South Africa found the following motivational factors very important to retention practice: Skill development, financial rewards, recognition, challenging work, and freedom to act independently. These findings concur with a related research by Lanyon (2007:43) which rated interesting work, good working conditions, promotion and growth, and money among other factors as essential motivators for employee retention. It is therefore important for HR managers to improve constantly on these motivational variables in order to enhance retention practice. This will also reduce the rate at which high net worth employees withdraw from their organisations.

The conclusion that can be derived from the literature reviewed above is that retention and turnover are a global phenomenon. Although the rates of turnover

differ from country to country and from sector to sector, the retention attraction suggested by different studies appears to have employee motivation as a common denominator. While interesting work appealed to employees in New Zealand, employees in Asia and IT professionals in USA and U.K rated higher salary as a major retention variable. Professionals in South Africa consider a combination of career advancement, pay and opportunity to learn new skills as critical to their retention. The variation in retention priorities suggests that a comprehensive retention strategy that combines various motivational variables that appeal to individual employees should be employed to address the problem of a high rate of turnover. HR managers in South Africa and other parts of the world should design competitive retention packages that are capable of reducing the present level of brain drain in the economy. It is however important for managers to have a thorough understanding of the reasons often given by employees for quitting their jobs. Only then can they design appropriate retention strategies that will reduce the incidence of turnover.

Having examined retention and turnover in South Africa and other parts of the world, the next section will discuss factors that influence retention and turnover in South Africa.

2.5 Factors influencing retention and turnover in South Africa Kampt (2006: 1) submits that some factors interact separately or collectively to facilitate turnover and make retention management difficult for HR managers in

South African organisations. These influencing factors are broadly divided into global, national, and organisational.

2.5.1 Global economic influences on retention and turnover Commenting on the participation of South Africa in the global economy, Thomas (2002: 237) remarks that the demise of formal policies and structures of apartheid and the inception of the government of national unity in 1994 has resulted in South Africa emerging from a position of isolation to a position where it now competes in the global marketplace. According to Burmeister (2007: 18), the increased international capital flows that characterised globalisation have led to increasing global flows of migrant labour. As a consequence, many countries are competing in the international labour market to attract and retain skilled employees. This has badly affected the South Africa labour market, with professionals and other skilled employees from all sectors of the economy migrating to advanced economies in Europe, and America. With increased employee mobility in an increasingly shrinking global village, people are able to transfer their skills to the highest bidder or the location they find most attractive. South Africa has a reputation for being an excellent place for nurturing talent, so its managerial ranks are constantly being poached by the worlds leading organisations. As a result, a number of corporate leaders have gone from South Africa to top jobs in large international organisations such as BMW, DaimlerChrysler, Unilever, Siemens and many others. This practice has further depleted

the pool of available black executives, with a high probability that those presently available would soon be poached, thereby increasing the high rate of turnover.

The brain drain is not limited to the business sector alone. The medical and allied profession is worse hit with medical doctors, nurses, radiographers and other medical related professionals leaving South Africa daily to take up jobs abroad. Research findings reported by Volgvartz (2004: 1) show that the number of nurses registered by the British nursing council from South Africa, Botswana, Malawi, Nigeria, Kenya, Zambia and Zimbabwe has increased since 1999. As a result, more than 60% of nursing positions remain unfilled in these countries. Williams (World Health Organisation representative in Malawi) as reported by Volgvartz (2004: 1) states that the nurses who are to hold the situation together at hospitals are all leaving. The report states further that sub-Saharan African countries need at least 620,000 nurses to be able to tackle the severe health emergencies prevailent in these countries. Between 1999 and 2000, the United Kingdom officially registered 1,460 migrating nurses from South Africa; the figure for 2000 2001 is very much higher (www.ukglobalhealth.org.). Burmeister (2007: 23) asserts that globalisation has intensified the search for skilled employees as innovative, internationally experienced individuals are sought after as competition becomes increasingly global. Burmeister (2007: 23) further argues that globalisation has accelerated skills transfer across national borders and limited the ability of countries to manage their human resources independent of international norms.

Taking advantage of its participation in the global labour market however, the South African government is set to recruit medical doctors from Tunisia to fill vacant positions in its hospitals. According to the South African Department of Health as reported by Simao (2007: 1), arrangements have been concluded to recruit 1,000 Tunisian medical doctors to work in South Africa. Almost a third of the posts for public sector health care professionals are unfilled. In a separate arrangement, a number of Cuban medical doctors are already working in South Africa as employees of the Cuban government. Simao (2007: 1) also reports that plans are underway by the South African government to recruit back South African doctors and nurses who migrated to Britain and Canada by persuading these professionals to return home. Under the occupation-specific dispensation policy of the government, about R5.3 billion has been set aside for increasing salaries and recruitment of another 3,000 health employees over the next three years. About R4.5 billion of this amount is for better pay as one of the reasons cited for skill migration from South Africa is poor pay. Skilled labour migration abroad is also costing the South African government a huge amount of money. According to McClelland (2002: 167), the South African brain drain is costing the government about US$5billion annually and this need to be urgently addressed. The global job market provides international job opportunities that cause the brain drain from which the receiving countries benefit mostly. However, not all turnovers result from job opportunities abroad; some respond to the performance of the national economy thereby facilitating job mobility within local organisations.

2.5.2 National economic influence on retention and turnover The South African economy has been in an upward phase of the business cycle since 1999 - the longest period of economic expansion in the countrys recorded history. McClelland (2002: 167) asserts that the annual economic growth rate averaged 3.5%. This is a radical appreciation from the pre-1994 era with an average growth rate of less than 1%. This economic growth has, however imposed a lot of challenges on retention practices and turnover management by HR managers. One of these challenges is the frequency of recruitment and turnover rate of skilled employees within a pool of depleted labour market and the attendant costs. With acute shortage of skilled manpower in a rapidly growing economy, the competition for the few available skilled employees becomes intense among organisations and this provides opportunity for job hopping amongst skilled employees. Czakan (2005: 8) states that worldwide, the search for skilled employees is on and South Africa is not exempt. With over 40,000 vacant positions in government departments and parastatals, and about 67,000 in Gauteng province alone, job hopping among skilled employees is inevitable as alternative employment opportunities continue to exist.

P- E Corporate Services (2007:1) report that employee turnover within South African organisations has surged to about 12% across all job categories, with the Gauteng province running at 14%. The South African Reserve bank review (as cited in P-E Corporate Services, 2007: 1) shows that job hopping costs South

Africa more than R25billion a year. Emphasising the turnover rate amongst employees, McGlaham (2006: 6) remarks that the mobility rate is such that a young employee entering the work force after graduation can expect to have an average of twelve different jobs by the time such employee attains the age of 40 years. This is consistent with the position of Quintin (cited in Fiona, 1999: 2) who states that, when you get to the managerial positions, there are very few black South Africans because they are poached and job-hops six times within a short period of time. In a research conducted by the Human Sciences Research Council (HSRC) and reported by Lucas (2003: 7) 56% of black graduates in South Africa had changed jobs since entering the labour force and the reason commonly given for this frequent labour turnover is promotion to a higher job level, while others cited higher earnings. With an annual economic growth rate of 3.5% and coupled with active participation in the global economy, it is expected that job openings in South Africa will continue to abound and this will encourage employees with critical skills to frequently move from one job to another thereby making retention and turnover management a difficult task for managers. Research findings by the Harvard Business School (2000) and cited in Birt et al. (2004: 29) indicate that, despite the high levels of current commitment to both the organisation and the job, the phenomenon of market-driven turnover is paramount amongst high performing employees. The research further states that employees base a decision to leave on the availability of better external employment offers. According to Muchinsky, Kriek and Schreuder (2002: 208), skilled employees in organisations are experiencing continuance commitment

rather than affective commitment. Varner and Fila (2000) cited in Birt et al. (2004: 29) explain that with continuance commitment, employees base their decision to remain with the organisation on perceptions of other available opportunities as well as the cost of leaving the organisation rather than on a more emotional attachment to the organisation as is found in affective commitment

Having established the influence of both international and national economies on retention and turnover initiatives in South Africa, it is equally necessary to look at recruitment sources as they generally affect retention and turnover. This will assist HR practitioners in organisations and recruitment agencies to craft retention strategies around recruitment techniques.

2. 6 Relationship between recruitment sources, retention and turnover Employee retention stems from the employment process. Three employment processes (recruitment, selection & placement) predetermines the effectiveness of retention strategy. For employee retention to be successful, it has to be linked positively to the processes and practices of recruitment and the sources from which job candidates are recruited. Recruitment practice and empirical research suggests that employees may differ in their propensity to quit depending on the source from which they are recruited. Two rather different approaches to recruitment identified by Wanous (1975) as cited in Raub and Streit (2006: 279) are the traditional approach which suggests that the ultimate goal of recruitment is to attract a maximum number of applicants to the recruiting organisation. In the

traditional approach, providing incomplete or even biased information about the job and/ or the organisation may be an acceptable means for reaching this goal. The other approach is the realistic approach which suggests that a realistic job preview whereby recruiters provide balanced and honest information about both the negative and positive aspects of the job and the organisation is undertaken.

The traditional approach was criticised by researchers such as Wanous (1975, 1978) cited in Raub and Streit (2006: 279) who hypothesised that its benefits in terms of attracting a large number of candidates may be more than outweighed by its negative consequences for the selection and retention of those candidates. Following Wanouss criticism, many HRM scholars like Raub and Streit (2006: 279) posit that an unrealistic presentation of job-related information may lead to a rude awakening when newly hired employees discover the reality of the job. The larger the gap between what has been promised during recruitment and what the employees experience during their first weeks and months on the job, the higher the propensity to quit. The resultant effect is that the new appointees will be frustrated, dissatisfied, and unproductive and in the end they may quit rapidly.

Similarly, Lee (2006: 1) proposes two mediators to recruitment theory as they affect turnover. These are the realism with which the candidate comes into the job and the job-fit, i.e. the extent to which the employee feels that the job accords with his/ her personality, ability and so on. Lee (2006: 1) contends that if various

recruitment sources can be found to have different realism and job-fit, and these in turn affect turnover, then retention strategies can be crafted around these recruitment techniques.

Griffeth, Hom, Fink, and Cohen (1997: 27) explain that the recruitment source in which an employee enters a job may impact significantly upon work outcomes, including turnover. Broadly speaking, recruitment sources can be divided into two types, namely internal and external. According to Lee (2006: 3), internal sources denote employees who are sourced from within the organisation while external sources provide employees who come from the outside. External sources include candidates sourced through advertisements in various media, public or private employment agencies, campus recruiting, internet applications, walk-ins, and head-hunted candidates. Internal sources include promotions or demotions (vertical moves), internal job postings (horizontal moves), employee personnel records, intranet advertisements and referrals. Empirical evidence (Lee, 2006: 3) indicates that internal candidates are expected to provide better outcomes than external candidates. In the case of turnover, Lee (2006: 3) proposes that internal candidates are less likely to quit (or will stay for longer period) than externally recruited employees.

A large number of empirical studies have confirmed that realistic recruitment does indeed lead to a reduction in turnover. Dean and Wanous (1984), Phillips and Meglino (1987) cited in Raub and Streit (2006: 280) explain that realistic

recruitment does not mean that recruiters should communicate positive information only. Indeed, a combination of both reduction (i.e. negative) and enhancement (i.e. positive) previews seems to work best. The message source seems to play an important role in employee turnover. According to Colarelli (1984) cited in Raub and Streit (2006: 281), information received from job incumbents is perceived as more credible than information from other sources. This has been theorised to lead to more realistic impressions of the job, thereby providing favourable work outcomes.

Literature by Taylor (1993) as reported in Lee (2006: 21) argues that a realistic approach is proposed to lead to better outcomes for four reasons: Firstly, applicants are better able to deal with the negative aspects of the job in a mental sense. The formation of realistic expectations means dissonance and the resultant dissatisfaction are not experienced. Secondly, candidates will have had time to formulate actual strategies for dealing with negative aspects of the job. Thirdly, the honesty inherent in revealing the less desirable aspects of the job may improve trust between employer and employee, leading to greater loyalty, commitment and retention. Finally, an element of realism enables candidates to decide for themselves whether the job meets their needs and requirements. Thus, the realistic approach leads to self-deselection of unsuitable candidates out of the recruitment system, probably reducing costs due to early exit, dismissal and so on. Lee (2006: 20) explains that it is generally considered desirable to inject a certain level of realism into the recruitment process. Some

recruitment sources are inherently more conducive to realism, as the applicant is given different information depending on where she or he comes from. For example, internal candidates may have more information about the job merely by having had the opportunity to observe their colleagues performing the job. With such job related information at the disposal of job candidates, turnover would be reasonably reduced because prospective employees would have decided whether they want to accept the job or not during recruitment process.

It is crucial to attribute great importance to providing realistic information about the job and the organisation; and to this extent, HR practitioners or recruitment agencies must be familiar with the working conditions in the organisations they are recruiting for. Raub and Streit (2006: 283) stress that recruiters must be honest about the job-related information they give to job candidates at interview level. For example, when recruiting candidates for a manufacturing organisation, recruiters must be willing to disclose details about certain hazards that are associated with the manufacturing process such as industrial accidents, polluted working environment, and the general work context. The general work context may be characterised by long working hours, restrictive overtime regulations, and several limitations to the number of days off. This information may assist job applicants to decide if these working conditions fit into their career aspiration and help their decision making process on whether to accept or reject the job offer.

A study by Raub and Streit (2006: 284) reveals that recruiters tend to avoid outright negative or threatening information. For instance, many recruiters do not disclose possible sanctions to candidates in case of breach of contracts. Some organisations, for example have contract clauses such that penalise an employee who quits the job before the end of the first contract period (usually three months), such employees are often required to bear the costs of their relocation expenditure and may be blacklisted, thereby virtually excluding them from future employment opportunities with the same organisation. Hendricks (2006:8), for example, points to the provisions of the South African Public Service Regulation, Resolution 3 of 1999 which allows for relocation fees to be paid to new recruits abroad to enable them relocate to South Africa. This is done to enable the government to attract scarce skills from outside the country and to encourage essential skills candidates to take up appointment with government. However, some aspects of the Act require that employees who leave before completing 12 months of service, lose their service bonus and also, that employees who are paid relocation fees but resign before completing 12 months of service pay back the costs incurred in relocating them. Most often, these conditions of employment are not disclosed to job applicants until they get on board.

The literature reviewed above has demonstrated how retention initiatives can be built around recruitment policy. It is evident that internally recruited employees have the tendency to stay longer in the organisation than external recruits

because they (internal recruits) are already accustomed to the environment and the working conditions in the organisation and might, over time have resolved to build a lasting career in the organisation. Employee retention should be linked with an effective recruitment and selection process. HR practitioners and recruitment agencies, while recruiting job candidates for their organisations, should consider job previews as an integral part of the recruitment process. Job previews, when honestly conducted, have the potential of reducing early turnover of employees since such employees would have had firsthand knowledge of what the job entails and the conditions of service, particularly the base salary and other financial incentives during the job preview. Though realistic recruitment and job-fit approaches provide an important element for both job satisfaction and employee retention, they must be combined with other motivational variables to form a comprehensive retention strategy that can reduce high turnover rates effectively.

2. 7 Reasons for employee turnover Many reasons explain why employees withdraw from an organisation especially in an economy where skills are relatively scarce and recruitment is costly, or where it takes several months to fill vacant positions as the present situation in the South African public sector. Employees voluntarily resign their appointments in organisations for various reasons which can be classified into two: pull and

push factors. The pull factors, according to Sherratt (2000: 38)

include the

attraction of a new job especially in a growing economy (like South Africa) with many job opportunities, or resignation by employees from an organisation to go into private business. In such cases, it is the availability of alternative jobs that attracts an employee to withdraw from a particular organisation. Sherratt (2000: 38) also explains that the push factor may be dissatisfaction with the present job that motivates an employee to seek alternative employment elsewhere. Sometimes, it is a mixture of both the pull and push factors. However, some reasons for leaving are entirely explained by domestic circumstances outside the control of any employer, as is the case when employees relocate with their spouses or partners.

Recent research by the British Chartered Institute of Personnel and Development (2006: 1) shows that push factors are a great deal more significant in most resignations than most managers appreciate. The research contends that it is relatively rare for people to leave jobs in which they are happy, even when offered higher pay elsewhere. Research conducted by the Hay group and reported by Sharman et al. (2006: 22) reveals that about one third of the millions of employees surveyed worldwide plan to quit their jobs within two years. The research further reveals that in the last five years, employee turnover has surged dramatically and this is attributable to various factors some of which are discussed hereunder.

The performance of the national economy is one of the most commonly identifiable reasons why employees quit their jobs. In a period of economic boom, it is a common practice for upwardly mobile professionals to hop from one job to another. Sibiya (2007: 14) reports that the number of job vacancies in the Gauteng Province of South Africa rose from about 47 000 in the year 2002 to about 67 000 2006; representing an increase of about 42.5% in four years. Ntuli (2007: 22) confirms this report, estimating the number of unfilled vacant positions in government departments and parastatals as indicated by the South African Civil Service Commission to be 40 000. Harris (2007: 3) indicates that there were 5863 private-sector vacancies advertised in June, 2007 in the various media in South Africa. This, according to Sibiya (2007: 14) represents a 28% increase from the first quarter, confirming again a growing economy and indicating an overall increase in the demand for skills in the private sector. Economic growth provides a good ground for turnover among skilled employees both in public and private sector organisations since some of these new positions provide better incentives and indeed translate to promotion. Sibiya (2007: 14) is supported by Mueller and Price (1983) as cited in Iverson and Pullman (2000: 982) that the availability of jobs outside the organisation enhances job mobility and that the supply and demand created by the job market either restricts or enhances the movement of employees. Therefore, the greater the job opportunities, the greater the tendency for voluntary turnover.

One important push factor that leads to early turnover of new employees is the unrealistic expectations and general lack of knowledge by many job applicants about the nature of the job at the time of employment. Schultz and Schultz (2006:243) state that unrealistic expectations cause many employees to resign their appointments soon after taking up a new job. Many job applicants have unrealistic expectations about their dream jobs but get disillusioned when such expectations are dashed by their employers. Some employers attract job applicants with unrealistic and non-existent conditions of service during interviews. However, when these new employees get on board and the conditions of service promised by the employers are not fortcoming, such employees immediately update their resumes and quit for other jobs. The British Chartered Institute of Personnel and Development (2006: 2) notes that a great deal of employee turnover consists of people resigning or being dismissed in the first few months of employment. This is due to poor recruitment and selection decisions, both on the part of the employee and employer. Expectations are high during the recruitment process, leading applicants to compete for and accept jobs for which they are mostly not suited. Organisations do this in order to ensure that they fill their vacancies with sufficient numbers of well qualified candidates as quickly as possible. However, over the longer term, the practice becomes counter- productive as it leads to costly but avoidable turnover and the development of a poor reputation in the local labour market.

According to a study by the Chartered Institute of Personnel and Development (2006: 2) in the United Kingdom (UK), there are factors that are specific to the individual that can influence early turnover. These include both personal and trait-based factors. Personal factors include changes in family situation, a desire to learn a new skill or trade, or an unsolicited job offer. In addition to these personal factors, there are also trait-based or personality features that are associated with turnover. These personality traits are some of the same characteristics that predict job performance and counter- productive behaviours such as loafing, absenteeism, theft, substance abuse on the job, and sabotage of employers equipment or production. Most environmental contributors to turnover can be traced to management practices. Turnover tends to be higher in environments where employees feel they are taken advantage of, feel undervalued and inadequately compensated. Management practices that promote inequity, inefficiency and lack of foresight and ability to provide purposeful leadership will encourage skilled and professional employees to leave the organisation. Kinnear and Sutherland (2001: 17) further argue that skilled employees need space to act independently and freedom to plan and execute work the best way they choose. This requires progressive organisational leadership which allows for independent judgment by employees. Managers can help to address this by removing organisational policies that restrict innovative thinking and practice within the organisation.

Certain jobs have peculiar characteristics that contribute to turnover. According to Lanyon (2007: 45) some jobs are characteristically more attractive than others. Someone who enjoys travelling long distances will find sales job attractive while a personality with a strong ability to convince others through argument may find satisfaction in advocacy jobs. However, if these personalities engage in jobs with characteristics other than those peculiar to them, they may not find job satisfaction, which will lead to turnover. Sherratt (2000: 38) posits that there is turnover that is demographically specific, particularly for women who are balancing significant work and family duties at the same time. Employees may choose to leave an organsation instead of sacrificing their other interests and responsibilities in order to make the job work out. Some women elect to quit their jobs after the birth of a child, rather than simply take maternity leave while some relocate with their spouses. These factors translate into higher turnover rates for women in most organisations.

Although money may not be the most important consideration in the turnover intent of some skilled employees, nevertheless, money remains an important factor in turnover decisions. Kinnear and Sutherland (2001: 17) argue that skilled employees in South Africa need to earn a competitive package and also have the opportunity of earning performance based bonuses. They want their efforts to be rewarded and to have a fair share of the organisations success in monetary terms. This argument also reflects the outcome of a research finding by Patron (2004: 21) who found that, although money may no longer be the most important

motivator among career professionals, nevertheless, it remains a good combination in the retention equation. In a similar research conducted by Consumer Insight Agency (cited in Cruz, 2006: 24) it was found that the black talent in various organisations want to earn enough money in order to start their own businesses and become Chief Executive Officers (CEO). Kinnear and Sutherland (2001: 17) also contend that black professionals in South Africa want to be constantly challenged, gain skills across a broad range of disciplines and to this extent, quit jobs that do not offer them opportunity for such personal growth.

In their effort to retain critical employees, various organisations have shifted their attention to determining the variables that impact most favourably on the retention of core employees. The Towers Perrin study (cited in HR Focus, 2003: 3) shows that variables that motivate talented employees to remain in an organisation are a mixture of both intrinsic and extrinsic factors such as performance-based pay, employee stock ownership, and profit-sharing bonuses. Others include meaningful and challenging work, good supervisors, and development opportunities. Birt et al. ( 2004: 28) note that variables such as the need for organisational provision of resources to help employees cope with stress, attention to the physical work environment (in terms of facilities, office space, storage space, and car park), and the negative effect of corporate politics are also critical to employee retention practice. Managers should incorporate these factors in their retention policies and review their effectiveness from time to time as employees needs are dynamic and changes over time.

In view of the foregoing, it is evident that a rapidly growing economy that is characterised by shortage of skilled manpower as we presently have in South Africa will certainly create a lot of retention and turnover challenges for HR practitioners. They have to be innovative and proactive in developing strong recruitment and retention policies that will position their organisations as employers of first choice. Such retention policies should be checked for both internal and external equities to ensure fairness in the system. Organisations should be open and reasonably disclose issues such as working conditions, pay structure, opportunities for career development and other conditions of employment to job applicants during job previews. This will assist prospective employees to make up their minds on whether they want to accept a job offer from the organisation rather than getting on board only to discover a gap between the reality in their employment terms and their career goals. When this happens, employees feel dissatisfied with their jobs and subsequently leave the organisation.

Empirical evidence has shown that all the factors enumerated above act individually or collectively to inform an employees decision to quit or remain in an organisation. Over time, money is considered as the most critical determinant of turnover. However, that assumption has changed. The new breed of professionals and highly skilled employees now place other factors such as career growth, skills development and training opportunities in the fore of

motivational variables that determine which organisation to work for. For organisations to attract and retain quality employees, these variables must be evaluated and integrated into an effective employee retention programme of the organisation. It is thus important for organisations to first of all recognise what motivates an individual employee before a meaningful retention practice can be developed.

The concepts of retention and turnover are closely related to costs and no meaningful evaluation of the subject will be complete without examining both direct and indirect costs that are usually associated with the two. The following section will discuss costs that are usually associated with retention and turnover in organisations.

2.8 Costs associated with turnover In their analyses of turnover costs, Schultz and Schultz (2006: 242) conclude that employee turnover is costly for organisations. Every time an employee quits, a replacement must be recruited, selected, trained, and permitted time on the job to gain experience. Phillips and Connell (2003: 1) concur and enumerate the costs of turnover to include, recruiting costs, selection and or employment costs, orientation costs, training costs, lost wages/salaries, administrative costs, lost productivity, loss of human capital, and customer satisfaction issues.

It is important for management to know why employees, particularly high performing employees resign from the organisation. The common way of investigating employees resignation is by conducting an exit interview which also is another cost to the organisation. The reason given by Phillip and Connell (2003: 1) for such interview is to investigate the reasons for the employees withdrawal. If the reasons given by the employee suggest inadequacies on the part of the organisation (for example, inadequate salary, inequity, poor promotion, etc.) management can review the issue and this will help the organisation in the formulation of retention policies that adequately provide for the shortcoming. In conducting an exit interview, some costs are involved and they must be taken into consideration when calculating turnover costs. Bliss (2007: 1) lists these costs to include the time of the person conducting the interview and the administrative costs involved in processing the resignation letter, including stationery and printing. Before a recruitment process is initiated, a job analysis is necessary to determine the job content of the vacant position. A job analysis expert will have to be consulted to evaluate outstanding work and job requirements of the vacant position. These costs also represent turnover costs and must be considered.

In South Africa, the Employment Equity Act (Act of 1998) and the South African Labour Law provide that a vacant position be publicly advertised before it is filled. Advertisement costs are enormous and constitute a huge loss to organisations especially when many positions are involved. It becomes even more expensive

when the services of recruitment agencies are employed as they usually charge between 20-30% of annual compensation of the recruited employee

(www.collegegrad.com). This could translate to a huge amount when an executive search is concerned. Other recruitment related costs include employee referral, internet posting, and pre-employment tests to help assess candidates skills, abilities, aptitude, values, and behaviours. Related to these costs as suggested by Bliss (2007: 1) are the selection of applicants, conducting of interviews, preparation of candidates assessment, employment offer, and notification of successful, and sometimes, unsuccessful candidates too.

Having completed employment process, orientation programmes are conducted for new employees in order to familiarise them with the work environment and other employees. Orientation materials such as organisation products, souvenirs, computers and other materials are involved. After orientation, new employees are assigned to departments where they are trained for the effective performance of their duties. This involves supervisors and other departmental employees who put in their time in training the new employees. All these attract costs and must be taken into consideration when calculating turnover costs because they represent productivity losses. Training and re-training of employees constitute one of the most crucial aspects of management in both the public and private sector organisations. According to Choo and Bowley (2007: 341) new employees normally undertake on- the- job training, and in some cases, they are sent abroad to acquire a specialised skill.

These costs are enormous and when a highly trained employee resigns without justifying these huge training expenses, organisations stand to lose all the investments already made. Long serving employees are normally entitled to gratuity, severance packages, and such benefits as those that will continue to be paid for a lifetime (such as, life pension, medical and child education). These are unproductive expenses to the organisation and such expenses may hinder the growth of an organisation. Certain indirect costs are equally involved when an employee quits and these, according to Sutherland (2004: 40) include the knowledge, skills and contacts that the departing employee takes out of the organisation. These attributes are, in most cases, lost to a competitor organisation that may use this to gain a competitive advantage.

Some strategically placed or long serving employees, due to the position they occupy in an organisation, become accustomed to some customers/clients who deal directly with them. In the course of their business relationship, these customers/clients repose much confidence and loyalty in these individual employees rather than the organisation. When such an employee leaves, especially for a competitor organisation, they quit with these customers/clients whose confidence and loyalty they have won over time. Organisations spend a huge amount of resources to retain other customers/clients who may want to also quit.

Organisations also suffer productivity loss when an employee quits. When a new employee is hired and trained, Bliss (2007: 1) estimates such employees contribution to the productivity level at 25% for the first 2-4 weeks of employment. Productivity loss is therefore 75% of the new employees full salary. For example, if a new employee is hired and placed on a monthly salary of R20000; the organisation will be losing the sum of R15000 as productivity loss every month because the new employee is not adding full value to the organisation yet. This will however improve progressively between weeks 5-12 when the employee will be contributing 75% productivity level thereby reducing productivity loss to 25% of the new employees full salary during the period. While the new employee is undergoing on-the-job training, the supervisor and other employees in the department will be involved in bringing the new employee to speed. The supervisor and the other employees time will be lost in the process; this lost time must be quantified in monetary terms. It is also expected that the new employee, in the course of on-the-job training, will make mistakes which may lead to damage to equipment, disrupt production, or delay a delivery schedule. Such mistakes must be expressed in monetary terms and treated as part of turnover costs to the organisation. A substantial cost is incurred in productivity when a management employee quits; such an employee will no longer be available to guide and direct departmental employees who are responsible to the departed manager.

In organisations where sales persons are employed with a sales territory allocated to them, lost sales in respect of these category of employees is calculated as dividing the budgeted sales revenue for the particular sales territory into weekly amounts (Bliss (2007: 1). The weekly amount is multiplied for the number of weeks the sales territory is vacant, including training time when the vacancy is subsequently filled, until the new sales representative begins to add value to the organisation. For non-sales employees, the revenue per employee is calculated by dividing the total organisational revenue by the average number of employees in a given year. It does not matter whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide a defined set of responsibilities that are necessary for revenue generation. To calculate lost revenue when an employee quits, the number of weeks the position is vacant is multiplied by the average weekly revenue per employee.

In view of the above analyses, Bliss (2007: 1) concludes that the costs and negative impact of employee turnover on organisations can be significant. Sherman et al. (2006: 22) also concur by stating that direct and indirect costs associated with turnover include the cost of advertisement, vacancy costs- which are a temporary loss of productivity occasioned by the voluntary withdrawal of an employee. Apart from the above mentioned direct costs, there are also indirect costs which include loss of goodwill, lost sales, and customer defection. Given the high costs of turnover and its negative impact on running a business, a well

thought-out programme designed to retain employees must be put in place by managers in order to reduce unnecessary turnover.

It is clear from the above discussion that turnover costs constitute a huge threat to the survival of any organisation. Indirect costs such as knowledge, skills and customer defection are more destructive to an organisation than direct costs because the latter constitute a formidable weapon for competitor organisations with which to gain trade secrets and competitive advantage. This is particularly true in a situation where an organisation is losing employees to direct competitors or where customers have developed a relationship with individual employees as is the case in many professional services organisations. Meanwhile, many organisations do not have the expertise to determine or calculate the rate of turnover in their organisations. It is therefore important for managers to keep statistical records of retention and turnover for the purpose of human resource planning and formulation of retention policy. The next section will focus on commonly used formulae for measuring employee retention and turnover.

2.9 Measuring employee turnover The Chartered Institute of Personnel and Development (CIPD) in the United Kingdom developed a simple and most common way of measuring employee turnover. The method, according to the CIPD (2007: 1) is to measure the number of leavers in a period as a percentage of the number employed during the same

period, usually on a quarterly or annual basis. This is sometimes called the separation rate (SR). This is expressed as follows:

Number of leavers

x 100 = separation rate

Average number working

The CIPD (2007:1) further states that, unless there are special circumstances such as a sudden large increases in the size of the workforce, the average number working is usually taken to be the number working at the start of the period added to the number working at the end, the total is then divided by two. For instance, if there are 210 workers at the start of the period under study, 222 at the end of the period, and 72 leavers during the period, then the separation rate therefore, is: 72 210 + 222 x 100 = 33. 3% 2

This simple index is useful in comparing one organisations employee turnover with that of a local employers, or with that of the industry as a whole. A crude turnover method involves most organisations simply tracking their crude turnover rates on a month by month or year by year basis. The formula is simply calculated as:

Total number of leavers over period Average total number employed over period

x100

The total figure includes all leavers, even people who leave voluntarily, dismissal, redundancy or retirement. The weakness of this method is that it does not distinguish between categories of employees, e.g. by length of service, or whether turnover was voluntary or involuntary.

It is also important for organisational practitioners to take a record of the retention rate for experienced employees. This is also referred to as the stability index (SI) and is calculated as:

Number of staff with one or more years in service Number employed a year ago

x 100

The stability index formula stated above is consistent with the one devised by the CIPD which is calculated as follows:

Number of employees with one years service (or more) now x100 = S. I Number of employees one year ago

For instance, if 160 current employees have been employed for one year or longer, and the total number of employees a year ago was 250, the stability index is: 160 x 100 = 64% 250

The stability index is most useful in comparisons over a period or with other similar organisations. Measuring employee retention rate and the costs of turnover to the organisation is vital in building a business case for thorough and effective recruitment and retention initiatives. This costing can be a part of performance appraisal ratings especially for line managers and gain top management support for employee management activities. However, it is not all turnovers that attract costs to the organisation; some are indeed beneficial and cost effective as discussed in the next section.

2. 10 Turnover as cost benefit to organisations A recent study by the United Kingdom Chartered Institute of Personnel and Development (2007:2) reveals that not all turnovers are harmful to organisations. Some turnovers impact positively and are cost effective. This happens mostly whenever a poor performer is replaced by a more effective and efficient employee. According to Mello (2006: 569), turnover allows the organisation to hire new employees with more current training who are not locked into existing ways of doing things. Fresh ideas from outsiders can be crucial to organisations

that have become stagnant and are in need of innovation. Turnover can also lower the average tenure of employees and translate into lower payroll expenses. Mello (2006: 569) further contends that turnover may allow the organisation to find an even better performer than the employee who left, possibly at a lower salary. The UK based Braun Consulting (2005: 1) suggests that managing turnover in terms of keeping it low just for the sake of having a low rate is not necessarily the most profitable practice for organisations. Instead of managing turnover and giving equal value to all employees, the effort should be geared towards certain categories of employees rather than across the board. For example, some employers do not reward managers for keeping turnover low; rather, they reward them for keeping turnover low for high performing employees. Braun Consulting (2005: 1) also reveals that employees in some organisations are divided into three categories such as: the top 20%, the middle 60%, and the bottom 20%. (The 20/60/20 approach). With this approach, retention efforts of managers are directed at the top 80% of employees while there are no retention goals for the bottom 20%. Many of those in the bottom 20% may leave and be replaced by a new group of employees, some of whom may turn out to become high performers.

Braun Consulting (2005:1) affirms that some organisations are now moving towards semi-annual or even quarterly reviews to speed up the process of terminating low performers who cannot meet the performance target of the organisation. This will allow for the recruitment of new talent, and cost savings

through the resetting of salaries and other financial benefits. In some cases, employers must replace old skills with new ones as technology or the customer base changes, or for a different demographic mix or a better distribution of age groups. As employees at the high end of the pay structure leave, cost savings are typically seen when a new persin is employed at a lower rate. Another area of cost savings is in employee benefit programmes such as health care premiums which are age related. Hale (1998: 50) estimates the total benefit costs for older employees to be generally around 20% higher than those of younger employees. Braun Consulting (2005: 3) argues that too much recruitment and training costs employers money, so does a workforce stacked with stale managers and unmotivated employees. However, it must be noted that these research findings will be apply better in an economy with static labour markets and low quit rates rather than in an emerging economy such as South Africa with high job openings and acute shortage of skilled manpower.

Some employees are difficult to replace when they leave due to the acute scarcity of their skills and their expertise. Retention strategies for such employees might involve additional career development opportunities, incentive compensation that rewards high performance, or innovative benefits that are tailored to the needs of the employee. Accordingly, Mello (2006: 569) suggests that back-ups should be developed by the organisation for employees who would be difficult to replace. The strategy for managing turnover involves keeping high performers rewarded through innovative compensation and recognition and

reward programmes while engaging HR planning to ensure that as few employees as possible occupy positions that will make them difficult to replace.

Insights from the above discussion present a clear departure from the traditional thinking among managers about whether organisations should consider turnover as a serious personnel issue. To them, turnover is harmful and must be avoided at all costs. However, recent thinking in organisational development suggests that not all turnover is harmful to the organisation; indeed, for organisations to constantly retain a vibrant and resourceful employee portfolio, regular employee purges must be effected to replace redundant employees with more productive ones. It is equally important for organisations to perfect a workable succession plan especially for employees with scarce skills and whose positions would be difficult to fill in case of a sudden withdrawal by such employees.

2.11 Concluding remarks The above chapter explained retention and turnover and presented a global overview and the South African perspective on the subject matter. The influence of global and national economies on retention and turnover in South Africa were also discussed along with the relationships between recruitment sources, retention and turnover. Some factors have been identified to be responsible for employee turnover. These factors (pull and push), and their effects on retention and turnover were discussed. The chapter gave a comprehensive evaluation of costs that are usually associated with turnover and provided various methods

that are used in the calculation and measurement of turnover costs and rates respectively. The chapter concluded by discussing the positive side of turnover in reducing costs and how in some cases it is initiated by employers to rejuvenate the workforce.

The next chapter discusses the various strategies that can be used by organisations in managing retention and turnover. Issues relating to employee motivation, job satisfaction and selected theories of motivation as they relate to retention and turnover will be examined.

CHAPTER 3

STRATEGIES FOR MANAGING EMPLOYEE RETENTION AND TURNOVER IN ORGANISATIONS

3 .1 Introduction The last chapter examined various definitions of retention and turnover and presented a global as well as a South African perspective of the two concepts. Influences that motivate retention and turnover in South African organisations were discussed together with the relationships between recruitment sources as they affect retention and turnover. The chapter also discussed factors that initiate turnover among employees. Costs that are related to turnover were evaluated together with methods being used in measuring and calculating turnover rates. Turnover is not totally bad for organisations and it can be used by employers to save costs and inject new employees with fresh ideas into the workforce. Information revealed by the literature reviewed in this chapter will assist managers in both the public and private sector organisations in South Africa in formulating good retention policies.

The present chapter examines strategies that can be used in managing retention and turnover in public and private sector organisations and the various motivational variables that are involved. Two motivational theories (Vroom, 1964 Expectancy theory & Maslow, 1943 Hierarchy of needs theory) as cited in Riggio (2003:193) will be reviewed in the chapter to provide a theoretical base for the

present study. Job satisfaction/dissatisfaction as a predictor of turnover intentions is examined while the two-factor theory (Herzberg, 1959) as cited in BassettJones and Lloyd (2005: 929) which is widely used as job satisfaction model is also reviewed.

3.2

Management of retention and turnover by public and private sector organisations in South Africa

High performing employees are critical in for South African organisations to achieve effective service delivery and successfully attain their goals and objectives. In order to achieve these goals and objectives, both the public and private sector organisations in South Africa have devised various strategies and policies with which to enhance retention practices that will assist them in retaining key employees to drive service delivery. These strategies include various legislations by government to make the public service attractive to talent and also device strategies to retain these talented employees. The private sector managers are also designing and implementing retention strategies that position their organisations as employers of choice. However, a general overview of retention strategies will be examined before discussing some of the policies and legislations that have been put in place by the government to manage employee retention and turnover.

3.2.1 An overview of employee retention strategy

Retention strategies are attempts by organisations to reduce the incidence of turnover. Retention strategies should be viewed by top management as part of its strategic responsibility given the realisation that the long-term loyalty of highly skilled employees to an organisation is no longer the norm considering the high mobility rate of skilled employees. This is as a result of the myriad of job opportunities that are opened to them. Top management and HR practitioners should therefore have a long-term plan with the realisation and the acceptance of the changing labour market for highly skilled employees as the cornerstone of all retention strategies.

While the government is enacting legislations that are aimed at promoting good retention practices in its departments and parastatals, private sector

organisations are also devising retention strategies that will not only attract critical skills and high performers, but also retain them for optimal utilisation. Branch (1998: 104) contends that the objective of retention strategies should be to identify and retain committed employee for as long as is mutually profitable to the organisation and the employee. It is widely accepted that skilled employees contribute greatly to organisational success and indeed make the difference in service delivery and overall organisational performance. Good HR practice therefore demands that organisations put in place retention policies that will attract and encourage talent to stay. The Corporate Leadership Council in the United States of America (1998: 108) concurs that, as market pull increases and retention costs climb, expectations should shift from indefinite retention to a

posture of retaining talent incrementally longer. The report further states that organisations should also focus on capturing the intellectual capital of the organisation to reduce the impact of turnover.

Loss of organisational memory can disrupt operations and increase costs of employee training and development. In order to protect itself against the disruptive loss of skilled employees, Olivera (2000: 810) suggests that each organisation needs to capture its knowledge on a continuing basis and not merely try to transmit it once an employee is about to quit. By this time such an employee is unlikely to feel a commitment or loyalty to the organisational goal. Storing and using stored knowledge/experience effectively can buffer the organisation against the disruptive effects of turnover. Similarly, Capelli (2000: 106) suggests the need to store organisational memory that employees would otherwise take with them when they leave. In some cases, high performing employees do not quit organisations with their knowledge and expertise alone, they quit with some valuable customers/clients who, in the course of their employment, have established confidence and loyalty in the individual employee rather than the organisation. To avoid such a scenario, the Corporate Leadership Council (1998:108) recommends that a retention strategy that includes the inevitable loss of talent must include other mechanisms for reducing the impact of talent turnover. One of these mechanisms is to ensure customer retention. Bendapuli and Leone (2001: 106) suggest that a range of systems must be put in place to ensure that, in the event that a high performing employee leaves,

especially those who have strong relationships with customers/clients, the loyalty and patronage of the customer must be kept. Capelli (2000: 106) offers other solutions to minimising the impact of turnover via organisational design options such as outsourcing, job standardisation, and cross training through job rotation.

Turnover can also be controlled through an effective and sustainable retention policy that builds in an efficient recruitment practice. Such practice enables job candidates with a high turnover tendency to be identified and avoided through recruitment process. In this regard, Ettore (1997: 49) canvasses for strategic staffing which is a combination of how to keep high potential employees and those who are critically important and capable, while hiring new ones who are not likely to leave quickly. In a Harvard University study reported by Mengel (2001: 8), it was revealed that nearly 80% of employee turnover is due to hiring mistakes. To avoid these mistakes, Handfield-Jones (2000: 80) believes that increased honesty during the hiring process will bridge the expectation gap that often results in turnover of skilled employees. According to Milkovich and Boudreau (1997) cited in Sutherland (2004: 40), realistic job previews in the hiring process can reduce turnover by 9%. Line managers should be involved in the job preview process since they understand the job conditions better than the HR practitioners. Welch (2001: 38) also suggests that one way of ensuring that managers take more responsibility for retention is by increasing their involvement in the selection processes.

Another approach to the formulation of a realistic retention policy is by conducting exit interviews and root cause analyses. Dibble (1999) as cited in Sutherland (2004: 41) emphasises that exit interviews are an important part of the retention cycle and need to be taken more seriously. Dibble emphasises further that exit interviews are a good feedback mechanism for organisations trying to install change, particularly change in retention patterns. According to Momana cited in Harris (2008: 22) the information from exit interviews is passed on to executives in different areas to come up with retention strategies that better suit their areas. The (USA) Corporate Leadership Council survey (2002: 88) found that 70% of all information from exit interviews can be used to benefit the organisation but only 13% of such information is ever acted upon. Branch (1998: 102) argues that organisations are aware they are losing good employees, but they do not know who is leaving, or why, or even where they are going. This is where an honestly conducted exit interview becomes very useful. The Harvard Management Update (USA) (2001: 4) posits that the root cause analyses should be used as opposed to the exit interview data which is fraught with subjectivity, time and validity problems. A root cause analysis involves continuous probing of a departing key employee on why they are leaving until root causes are uncovered. Branch (1998: 102) also supports the practice of interviewing departed key employees six months after departing. This, according to Branch (1998: 102) will provide more accurate exit information than at the point of departure.

The desirability, validity and reliability of exit interviews have come under criticism with some authors arguing that departing employees do not usually give the true reason they are withdrawing from an organisation for fear of unfavourable reference reports from their managers. Others contend that exit interviews should be conducted by managers other than those who will give reference reports on these employees. Critics of exit interviews suggests that a root- cause analysis will remove the biases associated with exit interviews. The concern, however, is that managers cannot be sure that information given by departing employees as a result of persistent pressure actually represents the real reasons they are leaving since there are no ways of determining the validity and reliability of such data. Again, the availability and willingness of departed employees to respond to exit interviews six months after resignation can also not be guaranteed since these employees no longer have obligatory loyalty to their former employers. An emerging strategy in retention management is that retention devices should not be aimed at all categories of employees but rather at critical ones. Woodruffe (1999) as cited in Sutherland (2004: 41) asserts that roles in an organisation should be separated into core and periphery. The core roles are vital and those employees in this category must be retained at all costs, while those employees in peripheral roles can come and go as they are more easily replaced. Capelli (2000: 110) strongly recommends that only key employees should have retention goals while recommending three retention categories as: those employees that the organisation will want to keep indefinitely; those with specific skills that are

currently in short supply; and those that are in easy-to-fill jobs where investment in retention is not required. Bussin (2002: 13) suggests that key employees who have high value to the organisation or are at high risk of leaving should be identified and then targeted for special retention strategies such as specialised salary structure. Having considered retention strategies that organisations can adopt to retain key employees, it becomes obvious that none of these strategies on its own can guarantee the continuous loyalty of talent because of the high mobility nature of this category of employees. Availability of alternative employment especially in a growing economy that is characterised by a skills shortage like we have in South Africa also facilitates the mobility rate of such employees. Rather than attempting to develop a retention strategy that will seek to keep key employees perpetually, organisations should rather put in place a strategy that will retain talented employees for optimal utilisation as long as is mutually profitable to the organisation and the individual employee. It is imperative for organisations to develop a comprehensive retention programme that will keep key employees until such a time when they would have justified the huge investment made in them by their employers. Managers should also utilise these employees optimally in order for them to contribute meaningfully to the successful realisation of organisational goals and objectives.

3.2.2 Policy approach by government in public sector organisations The South African government has put in place policies and legislations that would enable managers in the public sector organisations to retain critical employees and attract others to join the public service. Hendricks (2006: 8) name such policies and legislations as the Public Service Regulations, 2001 (part VC3) and (part 111 section D): Employment Equity Act (Act 53 of 1998); and Skills Development Act (Act 97 of 1998). Section 3(5) and, 7(3) of the Public Service Regulations, 2001 gives heads of departments the responsibility to ensure that human resources are managed effectively. Departments can deploy and use employees in ways that will improve their chances of keeping them. The laws and policies governing employment allow for changes to normal practices when these are necessary to find or keep people with scarce skills. For example, Section 37(2) of the Employment Equity Act, 1998 and the Public Service Regulations, 2001(Chapter1, part V111F & G) allow for employees to be rewarded either financially or otherwise for good performance and valuable suggestions or improvements. The salary and/ or salary level for a post can be set at a higher notch or level than usual if necessary to recruit or retain an employee with scarce skills. This can be effected through Chapter 1, part VC. 3 of the Public Service Regulation, 2001.

The Public Service Regulation, 2001 (Chapter 1, part V11 C 2.5) allows departments to deploy employees to other posts horizontally if this addresses their career development expectations. According to the Public Service Co-

ordinating Bargaining Council (PSCBC) Resolution number 7 of 2000, employees can be granted special leave for developmental purposes. This can be in the form of paid or unpaid leave, depending on the department. Public Service Regulation, 2001 (Chapter 1, part 1X) enjoins departments to provide employees with ongoing access to training that supports their work performance and career development. Bursaries can also be granted to employees to improve their levels of education. The PSCBC Resolution 3 of 1999 allows for a once off amount to be paid to recruits from abroad for their relocation costs to South Africa. This is done to the enable the government source for scarce skills from outside the country.

Provisions of Chapter 1, part V111F of the Public Service Regulation Act (2001) are aimed at managing turnover in public sector organisations. The provision stipulates that employees who leave an organisation before completing 12 months of service will lose their service bonus. Also, employees who resign their appointments before completing 12 months of service and were paid money for relocating will have to pay back the costs incurred. The regulation also provides that employees serve at least, 12 months in a rank before qualifying for assessment for pay progression. The above legislations by the government are aimed at retaining key employees in the public service and making frequent turnover difficult and unattractive in order to achieve efficiency in service delivery.

Legislation is one approach to the problem of retention by the government especially in public sector organisations. Private sector organisations are also devising strategies and policies to attract and retain quality employees. Such strategies, according to Hendricks (2006: 8) should focus on the skills required by an organisation at a particular time. Secondly, such strategy should be informed by the availability and demand for a particular skill within an organisation and in the broader labour market. Such policies should also be supported by senior management within a clearly defined framework of authority, execution and role responsibility. Lastly, such a policy should be implemented through collaboration between line managers and the human resources department. Policies must be based on a sound human resource strategy and execution plan. HR practitioners should take steps that will enhance good retention practices and position their organisations as employers of first choice.

Apart from managing retention and turnover using legislation, Hendricks (2006: 8) identifies necessary steps that managers can adopt for an effective retention programme. One of the steps, according to Hendricks (2006: 8) is the analysis of employee mobility and turnover trends using the following information: assessment of employee morale and conducting an exit interview. Job candidates who turned down employment offers should also be interviewed to elicit why such applicant(s) turned down the offer. If, for example the reason given for leaving involves inadequate base salary and other financial incentives, it implies that the organisation is paying below market rate. The possibility exists

that many more candidates (particularly those with scarce skills) will continue to turn down job offers from the organisation and for others who are already in the organisation to leave. Accurate records of employee statistics should be kept and this should include retention and turnover rates, particularly those of key employees who voluntarily quit. Their retention rate can be calculated using the stability index formula developed by the Chartered Institute for Personnel Development, UK as discussed in chapter 2 of this study. Statistical records of recruitment frequency, information from exit interviews and those who turned down job offers will assist the organisation in conducting an HR audit and provide useful input in the formulation of an effective retention policy.

The next step identified by Hendricks (2006: 6) is to identify skills to be retained. It is not all employees skills that are needed by the organisation. Some skills might become obsolete due to change or advancement in technology, diversification in customer base or product line thereby rendering employees who cannot adapt to the new trend redundant. Employees in this category should be identified and retrenched in order to reduce overhead costs and allow for the recruitment of fresh candidates with the relevant skills. Employees with relevant and critical skills should also be identified in consultation with line managers and classified into scarce, valued and high risk categories. This classification should form the retention goals for each category of employees.

Lastly, Hendricks (2006: 6) suggests that monitoring and evaluation mechanisms should be identified right at the start of the programme and should be part of the retention strategy. Such mechanisms should include periodic assessment of turnover within a targeted skills or occupational class. Movement of skills within the sector should be constantly assessed and monitored. The impact of a retention strategy should also be assessed and comprehensively evaluated over longer periods. The steps discussed above will provide organisational managers with the necessary tools in formulating an effective and realistic retention strategy. The section below evaluates some motivational variables that are useful in designing an effective retention strategy that will enhance turnover management in organisations.

3.3 Motivational strategies Motivation is defined by Robbins (1998: 206) as the willingness to exert high levels of effort toward organisational goals, conditioned by the efforts ability to satisfy some individual needs. According to Steers and Porcter (1983) as cited in Riggio (2003: 84), motivation is a force that serves three functions: It energises or causes people to act; it directs behaviour toward the attainment of specific goals; and it sustains the effort expended in reaching these goals. If employees perceive that their best interests are closely linked to that of the organisation they work for, they will possibly be motivated to remain in that organisation. To achieve this linkage therefore, managers have the responsibility of devising

strategies that will align the interest of the organisation to that of employees in order to retain them.

Strategies, according to the Web online dictionary, are a group of activities to produce outputs required to achieve planned outcomes. Strategies usually comprise several activities and outputs. Motivational strategies, in the context of the present study include motivational variables that will combine and interact to attract and motivate an employee to remain and consider his/her organisation as an employer of choice. Organisations like Accenture, Alexander Forbes, Deloitte & Touche, Eli Lilly (SA) (Pty) Ltd, and Coronation Fund Managers have been mentioned in the past as some of the best organisations to work for in South Africa. According to Smit and Cronje (2002: 344) the organisations mentioned above were evaluated using motivational variables such as employee education, training and development, career growth, and also for working atmosphere and environs. These are critical motivational variables that can sustain retention. Apart from the aforementioned motivational factors, there are other factors that enhance retention practice and they include goal setting technique,

management/ leadership ability and style, job advancement, cutting edge technology, salary and other financial benefits. Some of these variables will be evaluated in the present study in relation to employee retention and turnover.

3.3.1 Goal setting technique Davidson (2001: 5) asserts that one of the strategies adopted by leading organisations in the area of top employee retention include instituting goal setting, performance measurement, and skill development programmes to ensure that employees always know where they stand. According to Latham (1984), Locke (1968) cited in Staw (2001: 54), goal setting is the idea of assigning employees a specific amount of work to be accomplished - a specific task, a quota, a performance standard, an objective, or a deadline. This will enable an employee to know his/her level of contribution to organisational goals. Riggio (2003: 193) and Staw (2001: 54) argue that for employees to be motivated, goals must be clear, specific, attainable, and wherever possible, quantified. Goals should have two main characteristics - they should be specific and not vague. For example, increase sales by 10% rather than try to increase sales. Secondly, there should be a time limit for goal accomplishment, like cut costs by 3% in the next six months. Riggio (2003: 194) in concurring with Staw (2001; 54) contends that goals should also be challenging and yet, attainable. If accepted, difficult goals lead to better performance than easy goals.

Furthermore, Staw (2001: 54) states that whether goals are set participatively or assigned, the support of the supervisor is crucial. Supervisors must assist subordinates to achieve tasks with the necessary expertise and the needed technology. Supportive supervisors do not use goals to threaten subordinates. Employees get feelings of pride and satisfaction from the experience of reaching

a challenging but fair performance goal. Staw (2001: 62) posits that success in attaining a goal also reinforces acceptance of future goals and assist in retention.

However, DeCenzo and Robin (2007: 256) argue that employees resist goals for lack of confidence, ability and knowledge. Similarly, employees resist goals when there are no internal benefits such as personal pride, or external rewards like money, promotion, or recognition in attaining a goal. In order to overcome the factors identified by DeCenzo and Robin (2007: 256) regarding goal resistance by employees, Staw (2001: 63) suggests that organisations should conduct training to raise employees level of skill and self confidence. It is also important to allow subordinates to participate in goal setting and offer monetary bonuses or promotion, recognition, and time-off for reaching goals. This is consistent with the position of Ramlall (2004: 52) who proposes that supervisors must introduce support elements such as money, equipment, time, help as well as freedom to their subordinates in order to attain goals. Managers must ensure that organisational policies do not impede goal attainment. Employees must equally be provided with feedback on the degree to which they are attaining or falling short of their goal in order to adjust the level of effort or strategy accordingly. Goal attainment should be a critical aspect of the performance appraisal system. According to DeCenzo and Robin (2007: 256) performance appraisal must convey to employees how well they have performed on established goals. It is also desirable to have these goals and performance measures mutually set between the employee and the supervisor. Without proper two-way feedback

about an employees effort and its effect on performance, management runs the risk of decreasing the employees motivation. It is envisaged that goal setting techniques, when combined with other motivational strategies such as those discussed below will provide organisations with a good mix retention strategy.

3.3.2 Training, education and development opportunities In todays competitive global market, Wan (2007: 297) argues that the only strategy for organisations to improve workforce productivity radically and enhance retention is to seek to optimise their workforce through comprehensive training and development programmes. To accomplish this undertaking, organisations will have to invest vast resources to ensure that employees have the information, skills, and competencies they need to work effectively in a rapidly changing and complex work environment. Wan (2007: 298) therefore suggests that it is important for organisations to invest in their human resource or human capital development, which, in general terms, is the process of helping employees become better at their tasks, their knowledge, their experiences, and add value to their lives. The main method of achieving this is through training, education, and development. Smith (1992) as cited in Wan (2007: 298) defines training as a planned process to modify attitudes, knowledge or skill behaviour through learning experience to achieve effective performance in an activity or range of activities. The Web Online dictionary defines training as activities or deliverables designed to enable an end user to learn and use new processes, procedures, systems and other tools effectively and efficiently in the performance

of their work. According to Schermerhorn, Hunt and Osborn (2004: 109), training is a set of activities that provides the opportunity to acquire and improve jobrelated skills. In addition to initial training, training to improve employees skills is important in order to enhance employees performance in the organisation. The purpose of training in the work context is to develop the abilities of the individual and to satisfy the current and future manpower needs of the organisation.

Smith (1992) as cited in Wan (2007: 298) defines development as the growth of realisation of a persons ability, through conscious or unconscious learning. Smith (1992) also defines education as activities which are aimed at developing the knowledge, skills, moral values and understanding required in all aspects of life, rather than a knowledge and skill relating to only a limited field of activity. Employees consider training, education and development as crucial to their overall career growth and goal attainment and will be motivated to remain and build a career path in an organisation that offers them such opportunity.

Training comes in different dimensions and can take the form of on or off- the job methods. On-the job (internal) training techniques include mentoring, selflearning, and attaching an employee to learn a new skill under a colleague or a superior. Organisations also organise in-house training for their employees where they are specifically trained on the job requirements peculiar to the organisation. Off-the job (external) training techniques include seminars, workshops, lectures, and case studies that are conducted outside the premises

of the organisation. Many organisations encourage their employees to add value to themselves through acquisition of additional education by approving study leaves with or without pay or through part-time studies. Such programmes are usually conducted by institutions of higher learning. Thomas, Lashley and Eaglen (2000: 336) report that low levels of training give rise to high levels of employee turnover and that the provision of good training has a positive effect on employee retention. This assertion might have informed the decision of the Old Mutual Investment Group in South Africa to provide a variety of skills, leadership and personal development programmes to its employees. According to the organisations 2002 Annual Report, R89million was spent on training, representing 6.7% of payroll. Specific training programmes are also put in place by the organisation to grow actuarial and accounting skills among black employees.

Organisations enrich their Human Capital asset and the quality of their operations through training and development. Studies by Pate and Martin (2000: 150) and Oosterbeck (1998: 266) show that organisations that are committed to employee training are realising the rewards of increased skill-sets, motivation, higher productivity and knowledge transfer of their employees. In particular, Acton and Golden (2003: 138) note that job-related training increases an employees ability to perform job-related tasks. Banakus, Yavas, Karatepe and Avci (2003: 278) report that organisations that provide training send a strong signal to employees regarding management commitment to their retention and

customer service. Training employees has also been found, in studies by Strasser, Cotton and Tittle (1986) as cited in Choo and Bowley (2007: 341), to result in facilitating the updating of skills, increasing professionalism and increasing employee commitment and satisfaction. A related study by Burke (1995) as cited in Choo and Bowley (2007: 341) found that participation in internal and external training is beneficial to organisations and their employees, and these make employees feel better about remaining in the organisation. Research by Choo and Bowley (2007: 341) reveals that training and development ranked amongst the highest retention factors mentioned by employees. The research also confirms that opportunities for training and development improve employee skills to work with up-to-date technologies. Lack of job-related skills and out dated technologies will jeopardise efficiency and result in early turnover. Providing employees with quality training through external programmes will equip them with new skills required to operate the latest technology or simply an opportunity to refresh existing skills.

While internal training is important and can be valuable in some areas of development; external training can add interest and promote interpersonal relationship among employees across the industry and beyond. In todays employee-driven labour market, the provision of training is important in order to retain existing employees as well as attract new recruits. Managers have the responsibility of providing assistance to help their subordinates identify the training and development needs. Training and development should be a

continuous process with periodic review and managers giving employees the necessary feedback. Choo and Bowley (2007: 316) state that a thorough understanding of the job scope and career path is necessary to help managers and employees identify human capital development needs that are essential for career advancement within the organisation. These are instrumental in keeping employees on the right track in the development of their careers. This, according to Choo and Bowley (2007: 316) will not only reduce turnover, but will also help in succession planning, as employees would stay if there is a well defined career progression within the organisation.

3.3.3 Career growth and promotion opportunities Career minded employees consider career growth and development as a crucial deciding factor in their decision to remain in an organisation or leave. Where career growth and development cannot be guaranteed, employees leave for alternative employment. Choo and Bowley (2007: 315) argue that providing employees with internal job opportunities is a means of demonstrating that they can realise their career goals inside rather than outside of the organisation. Choo and Bowley (2007: 315) further argue that career growth help employees to plan for the future and to be better equipped with the right skills in order to remain competitive. In a related literature, Agho (1998: 1007) states that opportunities for mobility within organisations are determinants of employee satisfaction. As vacancies occur, employees must be given equal opportunity and necessary encouragement to apply alongside external candidates for higher positions within

the organisation. When employees have the opportunity to be promoted, they tend to build their career life around the organisation because they know that they can achieve their career goals within the organisation and this can inform their decision to remain. Managers should also focus on helping employees progress in their career and encourage their professional development. Inexperienced young employees who are unable to get on with their jobs are likely to leave the organisation for another job which they consider offers better prospects. This would be a loss to the organisation as these young employees may have the potential to make significant contributions to the organisation in the long run.

An emerging concept in career development is the mentor-mentee system. Orpen (1997: 53) defines mentoring as the process whereby managers provide informal assistance and support to particular subordinates on an individual basis, to help them in their efforts to be successful within the organisation. Successful professionals who have made their marks in their various careers are encouraged to adopt young and up-coming professionals as mentees in order to groom and help them build and achieve their career goals. This practice is common in some of the organisations that have been mentioned in the past as organisations of choice in South Africa. They include organisations like Accenture, Deloitte and Trouche, Coronation Managers, Alexander Forbes and others. Young professionals are attached to more experienced managers who help them develop realistic career goals and motivate them through guidance,

counseling as well as putting the mentees through the technical aspects of the job. Mentormentee development programmes foster good working and interpersonal relationships and motivate the mentee to remain with his/her mentor in the organisation. These successful mentees eventually adopt the management styles of their mentors and this often leads to successful management succession.

3.3.4 Management style One of the critical roles of management is to create a work environment that will endear the organisation to employees. It also includes influencing these employees decision to be committed and remain with the organisation even when other job opportunities exist outside the organisation. Studies by Maertz et al. (2003: 111) and Maertz and Griffeth (2004: 668) emphasise the importance of pay, work organisation and work conditions in shaping job satisfaction and retention. Taplin and Winterton (2007: 6) pursue in detail the specific role of managers who influence employees attitudes directly and indirectly through work structure. Managers have the responsibility to structure the workplace and provide employees with an environment that enables them resist external attractions such as higher pay in other organisations. Apart from providing an exciting working environment, Taplin and Winterton (2007: 8) further submit that the salient feature of a low turnover organisation in an industry where high turnover rates are the norm is a style of management that is considerate of work/family issues. Such a management style also provides requisite levels of

training and support for employees to meet their performance (and earnings potential) and is based upon open communication. All these facilitate employee attachment to their leaders and the organisation as a whole.

One retention strategy that engages management attention is work autonomy. In contemporary organisations, Amar (2004: 97) observes that managers are busy removing controls in the form of organisational policies that create hurdles, obstacles, and barriers in the way of employees creativity in their jobs. While it is true that management has to place controls to guide and monitor activities in the organisation, Amar (1998: 98) contends that management must also recognise that controls can, and mostly do go against motivation and impede creativity. This is consistent with the position of Kinnear and Sutherland (2001: 17) who emphasise the need for skilled employees to be given space to act independently and freedom to plan and execute work the way they choose. The removal of structures and beuracracies which hinder employee freedom can help retention practice in organisations with high turnover resulting from the application of rigid organisational policy. Amar (2004: 97) submits that reduced or a lack of control can free employees and give them a sense of empowerment. For instance, the biggest motivator of the younger generation of employees, according to Amar (2004: 97) is a lack of control on them. This frees their minds and allows them to engage in activities that bring about innovation. In some organisations, management extends the lack of control concept to dress and behaviour codes (Hays, 1999: 46) which also extends to work flexibility.

A study by Taplin and Winterton (2007: 8) reveals reasons why most employees remain with their various organisations despite better employment opportunities elsewhere. The study observed that it is imperative for management to introduce initiatives that ease work/family conflicts (flexible working hours, ignoring occasional lateness, providing transportation for employees) and systematic attempts to solicit information from employees about potential domestic concerns. The study further noted that management should maintain open communication in order to identify problems before they disrupt operation and result in avoidable turnover. Cross-training of employee is crucial to enable other employees stand in for absent colleagues. These management behaviours are considered a commitment to employees by management.

Managers have the responsibility of stimulating the work environment to achieve efficiency and create attraction for employees. Taplin and Winterton (2007: 8) show in their research the importance of management responding appropriately to employees needs and complaints. The research also reveals that many employees remain with their organisations as a result of the pleasant social atmosphere that exists in the organisation. This social atmosphere includes a friendly and happy environment reminiscent of a family. Most employees find such work environment and management disposition attractive and this makes it difficult for them to leave. This is supported by Cappelli (2000: 108), Mitchell, Holtom and Lee (2001: 98) who argue that social friendships at work act as drivers for employee retention. Similarly, Rolando (2000) as cited in Ferreira

(2008: 76) posits that a fat salary is down the list of things that the modern employees are looking for. The things that make people really are not money and short-lived experiences of happiness; the most important things are engagement, relationships with other people and finding purpose and meaning in ones life. In reporting the reaction of employees during their research, Taplin and Winterton (2007: 8) found that the management was always there whenever the employees had problems thus enhancing the employees commitment to the organisation. Employees in the study agreed that they were satisfied with their jobs and described their work as generally interesting, challenging, and of high standard that demanded a whole range of skills.

Similarly, in a Deloitte and Trouche survey, Conradie (2008) cited in Ferreira (2008: 78) reports that the single most important factor that elongates employees stay in an organisation is management style the quality of the relationship an employee has with his or her immediate manager. Sherman et al. (2006: 8) also found in their research that the majority of employees in the organisations surveyed planned to remain with their organisations at least for the next five years because of the prevailing culture of management care. In todays supply constrained labour environment, as presently witnessed in South Africa, it is important for managers to integrate employees work and family life and create a sustainable social environment in the organisation that will bond employees and management together. This contemporary management style is fast

replacing the autocratic style of management which sees employees as mere economic tools that must be exploited to achieve organisational goals.

Empirical evidence by Taplin and Winterton (2007: 11) showed that managers in high turnover organisations believe that employees are not to be trusted; that they are expendable and therefore turnover is somewhat inevitable. Management in these organisations is always reluctant to invest in new employees other than minimal training assistance and do not place any importance on the work/family life of employees. In a study by Sherman et al. (2006: 8), between 60% and 70% of the workforce believed that their managers did not assist them in developing their career ambitions. This neglect on the part of management was found to be driving employees to quit in their thousands, and this cost organisations millions of rands per year (turnover costs).

Given the huge costs associated with turnover, it is important for HR practitioners to adopt a pro-active managerial approach that views turnover as a costly, disruptive but avoidable work phenomenon that impact negatively on service delivery and profitability. Management should recognise retention practices that structure work to facilitate maximum earnings for employees, especially new ones who should also be extensively trained and motivated in order to enlist their commitment to the organisation. This will reduce turnover intentions. Managers should identify each employees potential and skill and assign them jobs that are commensurate with their skills and potentials in order to make work pleasurable.

Top management should evolve policies and practices that encourage employees to approach their supervisors freely whenever they run into problems, whether work or family related. It is imperative for managers to establish a good working relationship with employees in order to create room for effective two-way communication. This, according to Taplin and Winterton (2007: 14) is a good retention strategy that must be encouraged by managers. Such approachable management, combined with sympathetic supervision and good interpersonal relations clearly help in labour retention. Such behavior by management reflects genuine concern for creating an effective work environment based on information sharing, incentive pay, training and skill development, and relative job security. Most of these factors according to Taplin and Winterton (2007: 14) are sources of sustained competitive advantage through people. Good management practices also entail that salary and other financial benefits for employees are set at market or above market values in order to gain a competitive advantage. These are discussed in the section that follows.

3.3.5 Compensation and other financial packages The remark of Kinnear and Sutherland (2001:17) that employers should not be deceived that money doesnt matter in retention strategy any longer is very instructive. This remark emphasises the importance of money in attracting, motivating and retaining quality employees in the organisation. Kinnear and Sutherland (2001: 17) further remark that skilled employees in South Africa are achievement oriented and want their achievements rewarded with money. Locke

(1980) cited in Tietjen and Myers (1998: 227) reviewed four methods of motivating employees toward improved performance as money, goal-setting, participation in decision making, and job redesign. Locke (1968) found that money was overwhelmingly the most important motivator. Robbins (1983) as cited in Meudell and Rodham (1998: 128) suggests that money can be considered to act as both a scorecard which enables employees to assess the value the organisation places on them in comparison to others, and as a medium of exchange in that an individual can purchase whatever he/she needs. However, a lot of controversies have surrounded the use of money as the utmost variable in employee motivation and retention.

In a comparative analysis, organisational practitioners observe that in organisations experiencing turnover, compensation was the most common reason given for leaving. However, in organisations with low turnover, compensation was not the reason for staying instead, most employees stayed because of intrinsic reasons such as job satisfaction and good relationships with their managers and other employees (www.reliable surveys.com). This suggests that the cause of dissatisfaction is not the same thing that determines satisfaction on the job. This assertion is consistent with both Herzbergs and Maslows theories of motivation, which propose that compensation and other financial benefits satisfy only lower level needs, but motivation and satisfaction result from higher needs being met. Amar (2004: 96) argues that money has not remained as good a motivator as it was in the past. The efficiency of money as a motivator

of skilled employees is quite low. Hays (1999: 48) advises that if managers reward performance with only money, they will be losing the substance of retention because there are other more powerful ways of motivating quality employees and these include freedom and flexibility in the organisation. It can be argued that the use of money as a motivator in the skilled labour environment would depend on how it is deployed. For employees to be effectively motivated, Karp, Sirias and Arnold (1999: 45) propose that the bulk of rewards that organisations offer their employees should be expanded to include non-financial incentives. These incentives should include issues such as work/life benefits, training and development opportunities, promotion and autonomy.

Birt, Wallis and Winternitz (2004: 29) disclose that challenging and meaningful work, advancement opportunities, high manager integrity, and new

opportunities/challenges rank among the highest variables that are considered important to the retention of South African talent. These are intrinsic rather than extrinsic factor thus supporting Herzbergs (1968) theory of motivation which states that motivation is internally-generated, and not externally-stimulated. It is upon this distinction that Herzberg restated the utility of his earlier theory where he classified money as a dissatisfier. In their own argument, Kohn, Lee and Lawrence (1985) as cited in Meudell and Rodham (1998: 128) conclude that pay schemes produce only temporary compliance and are ineffective at producing long-term attitudinal and behavioural changes. They stressed further that rewards merely motivate individuals to seek more rewards and can undermine

intrinsic interest in the job which is then perceived as being merely a means to an end an expensive and short-term motivator. Amar (2004: 96) contends that the practice of using money to motivate performance and redirect behaviour appears to have limited application in contemporary retention practice. However, while money cannot be totally discountenanced as a motivator, the attention of managers should be redirected at rewarding performance using commissions, performance bonuses, merit pay, incentive schemes, and others rather than raising salaries across the board. In designing retention programmes, managers should, therefore, identify the needs of individual employees and tailor a compensation package towards those needs rather than applying or imposing a package that will not be valued by employees no matter how costly it may appear.

The above section articulated a practical working relationship between various motivational strategies that can assist in retention and turnover management. There is no one motivational strategy that can sustain any meaningful retention practice. It is therefore imperative for top management, HR practitioners and line managers to consider a combined strategy that will produce a comprehensive and effective retention initiative. Organisations should focus their attention on intrinsic rather than extrinsic factors in designing and implementing retention policies since motivation comes from within and not from outside. This however does not suggest that extrinsic factors such as money should not be a prominent consideration in the motivation and retention mix.

No retention mix will be effective without incorporating the job satisfaction element which has been acknowledged over time as an important indicator of turnover decisions. The next section will therefore look at job satisfaction and its measurement together with the related theory of job satisfaction.

3.4 Job satisfaction Job satisfaction has long been recognised as an important variable in explaining turnover intentions. Certain factors are responsible for job satisfaction/ dissatisfaction which are a determinant of employee retention or turnover. However, the inability of managers to identify these factors has led to a high rate of turnover in organisations. Riggio (2003: 215) describes job satisfaction as consisting of the feelings and attitudes one has about ones job including all aspects of a particular job, good and bad, positive and negative, which are likely to contribute to the development of feelings of satisfaction or dissatisfaction or turnover intentions. This is consistent with Schermerhorn, Hunt and Osborn (2004: 100) who formally defined job satisfaction as . the degree to which individuals feel positively or negatively about their jobs. It is an attitude or emotional response to ones tasks, as well as to the physical and social conditions of the organisation.

Job satisfaction or dissatifaction is predicated upon certain organisational factors and does not exist as an abstract phenomenon. These factors revolve around the work itself or the environmental and human aspect of the organisation. Results of

a study by Groot and Brink (1999: 347) found that employees are highly satisfied with the content of the job, flexible work arrangement and interpersonal relationship amongst employees. On the other hand, employees are dissatisfied with the workload, number of hours they work, and the supervisor. The findings by Groot and Brink (2000: 347) show that both intrinsic and extrinsic variables are important determinants of job satisfaction/ dissatisfaction. The research however concludes that intrinsic factors motivate employees more significantly than extrinsic factors. The research conclusion by Groot and Brink (2000: 347) represents one of the objectives of the present study which sought to determine the extent to which intrinsic and extrinsic variables influence employees retention in their organisations.

According to Saari and Judge (2004: 395), job satisfaction can be an important indicator of how employees feel about their jobs and a predictor of work behaviours such as absenteeism and turnover. It shows the extent to which employees like their work and this informs an employees decision to belong that is, to join and remain a member of an organisation. Managers can then assume that employees who are satisfied with their jobs are more likely to remain with the organisation longer than those that are dissatisfied with their jobs. Managers should therefore device ways of determining the level of job satisfaction among employees, especially high performing employees, in order to predict and prevent their turnover. Managers should investigate employee withdrawal behaviours such as lateness, preventable industrial accidents,

sabotage and drop in employee productivity. These are symptoms of dissatisfaction among employees which should be addressed before they result in turniover. Porter and Steers (1991) as cited in Hwang and Kuo (2006: 255) argue that the extent of employee job satisfaction reflects the cumulative level of met worker expectations; that is, the extent of employees expectation that their job will provide a mix of features such as pay, promotion, or autonomy, and for which each employee has certain preferential values. When the accumulation of unmet expectations becomes sufficiently large, Pearson (1983) as cited in Hwang and Kuo (2006: 255) concludes that there is less job satisfaction and greater possibility of withdrawal behaviour.

It is a generally accepted assumption that nearly every employee seeks satisfaction in their work. Jepsen and Sheu (2003: 165) also posit that if a person becomes engaged in work that matches his/her occupational choice, such an employee is likely to experience job satisfaction. According to Locke (1976) cited in Tietjen and Myers (1998: 227), there are three interactive causes of employee turnover which are: physical-economic (physical working conditions), social (supervision and cohesive work groups), and nature of work (mentally challenging tasks and work-related variables). Absence of these interactive variables in a work situation will result in job dissatisfaction which facilitates turnover. Motivational variables as an important component of job satisfaction, which, in effect is a predictor of turnover are further emphasised by Agho (1997:1020). Agho (1997: 1020) states that the determinants of employee

satisfaction are working with friendly people, fair rewards, opportunities for mobility within the organisation, and working for supervisors who actively assist their subordinates to address job-related problems. These are intrinsic and extrinsic variables that influence employees decision to quit or remain in an organisation at a particular time. Spector (1997: 28) shares the same view by stating that popular job satisfaction instruments include facets such as rewards (pay, benefits), other people (co-workers, supervisors), the nature of the work itself and the organisation. These are extrinsic (hygiene) factors which, according to Herzberg must be present in the job. Even though they do not motivate, they nevertheless make employees to be happy and satisfied with their employers thereby enhancing retention. Research findings by Groot and Brink (2000: 347) however did not support Herzbergs hygeine theory. Apart from the content of the job, Groot and Brink (1999: 347) found that other factors that determine overall job satisfaction are, in order of importance: satisfaction with co- employees, satisfaction with the supervisor, and satisfaction with early retirement arrangement (job security). These are dissatisfiers, according to Herzberg but which have been found by Groot and Brink (1999: 347) as high determinants of job satisfaction.

Literature by Goldfarb Consultants (1999: 12) lists the top five most important factors to be those that have more to do with interpersonal relationships (i.e. quality of decision makers, communication and relations between managers and employees). Others are the atmosphere in the organisation (i.e. ethic, level of

innovation and physical environment) and a sense of personal achievement (i.e. personal growth opportunities and level and range of responsibility). However, survey findings by the Society of Human Resource Management (SHRM) in the USA (reported in Wan, 2007: 298) differs considerably from the list provided by Goldfarb Consultants (1999: 12). The top five factors in attaining job satisfaction, according to the SHRM are compensation/pay, benefits, job security, flexibility to balance life and work issues, and feeling safe in the work environment. In another research, Lermusi (2006:1) found that meaningfulness of work and job variety are two areas that employees value while HR emphasises the relationship with the supervisor and the recognition that management gives regarding job performance. In their research report, Balkin and Gomez- Mejia (1990) as cited in Wan (2007: 301) emphasise that compensation systems are likely the key factors that can elicit and reinforce behaviours such as performance and turnover. Similarly, Peccei (2004: 21) argues that job satisfaction is high if employees feel that they have a good wage-effort bargain and feel that, on the balance, they are well paid for what they do. The arguments canvassed in the various literature reinforce the importance of money as a key determinant of job satisfaction and employee retention especially in developing and underdeveloped economies in Africa.

The literature reviewed above shows inconsistencies in rating the top variables that stimulate job satisfaction. While Goldfarb Consultants (reported by Pohlmann, 1999: 12) suggest interpersonal relationship, work atmosphere,

personal achievement, and other factors, the Society for Human Resource Management, USA, Peccei (2004: 1), and Heathfield (2006: 2) rank pay, benefits, job security, flexibility to balance life and work issues, and safety work environment as most important. The disparities in ranking can be attributed to the social- economic and cultural environment in which these research studies were conducted. What motivates an employee in America or Britain, for example, may differ considerably from that of employees in Africa. Over time, the spate of strikes embarked upon by labour unions in Africa centred on money. The general strike that was embarked upon in June, 2007 by the Coalition of South African Trade Unions (COSATU) was essentially on the need for a salary increase for employees. Similarly, the Nigerian Union of Teachers (NUT) in Nigeria declared an industrial action in July, 2008 to force the federal government to increase teachers pay because, according to the teachers, their take home pay could no longer take them home. Reasons often given for labour migration from South and indeed other African countries to developed economies relate to better remuneration. Retention will be enhanced and rate of turnover reduced if managers are able to identify properly and apply variables that determine job satisfaction amongst employees.

3.4.1 Measuring Job satisfaction Job satisfaction relates to emotion and attitude and this makes it difficult to measure. Most instruments designed for measuring job satisfaction consists of items such as pay, working condition, and relationship with supervisors and co-

employees. However, Ostroff, Scarpello and Vandenberg (1993) as cited in Riggio (2003: 215) contend that variables such as pre-employment expectations, individual personality characteristics, and the fit between the organisation or job and the employee may also affect employee satisfaction. These variables are not included in job satisfaction survey instruments thereby affecting the degree of validity and reliability of such instruments. Job satisfaction measure can assist managers in identifying possible cause(s) of problems within an organisation. An organisation witnessing a high rate of turnover, for instance, may assume the cause to be inadequate salary, but may discover that the problem persist after increasing salary without recourse to a job satisfaction measure. Management may spend time and resources on a problem that does not exist. Job satisfaction is difficult to measure because it is mediated by the perception of individual employees as different employees may perceive the same job differently. In concurring with this assertion, Gardner and Pierce (1998: 48) argue that it is these individual perceptions that determine whether or not an employee is satisfied with the job or not. For example, improving the working environment may affect satisfaction for some employees but not for others, because not everyone is dissatisfied with the work environment.

Another major obstacle in the measurement of job satisfaction is the reliance on respondents self-reports. Employees may intentionally fail to report their true feelings about the job as happens during exit interviews where departing employees, in most cases, do not give true reasons for leaving the organisation

for fear of getting bad reference reports. Strategies for measuring job satisfaction include interviews, group meetings, rating scales and questionnaires. Riggio (2003: 218) however suggests that employee anonymity may help employees to be more candid than in a face-to-face interview. It has been suggested that meetings and interviews can provide rich information because interviewers can ask follow-up questions, or request further explanation or clarification to answers. In addition, biases and ambiguous items that employees may interprete differently may seriously damage the validity of a questionnaire on job satisfaction measure.

Many organisations design their own interviews, scales or surveys to measure employee job satisfaction. These can be designed to measure specific issues relevant to each organisations employees, but their results may be difficult to interprete. One of the problems inherent in self developed scales is that such scales may not be reliable or valid. It is also costly to engage experts in survey development and measurement techniques. It takes quite a bit of research, according to Riggio (2003: 219) to establish the reliability and validity of a job satisfaction measure. It is very difficult to know what a particular rating or scoring means since there are no standard of comparison. Because of these problems in creating and interpreting in-house job satisfaction measures, many organisations use standardised, published surveys. These are cost effective and provide normative data that permit the comparison of ratings with those from similar groups of employees in other organisations that have completed the survey. A

job satisfaction measure also allows organisations to discover whether the job satisfaction levels of their employees are low, high or in the normal range as compared to employees in other organisations. The practice enables researchers to investigate the various organisational factors that cause job satisfaction or dissatisfaction in order to put corrective measures in place to forestall turnover.

3.4.2 Herzberg (1959) two factor theory and job satisfaction One of the earliest researchers in the area of job redesign as it affects motivation was Herzberg (1959) cited in Bassett-Jones and Lloyd (2005: 929) who formulated the two-factor theory. The theory attempts to explain satisfaction and motivation in organisations by stating that satisfaction and dissatisfaction are driven by different factors (i.e. motivation and hygiene factors) respectively. Motivators are those aspects of the job that make people want to perform and provide people with satisfaction. These motivators are considered intrinsic to the content of the job and include variables such as achievement, recognition, the work itself, responsibility, advancement, and growth. Conversely, dissatisfying experiences, called hygiene factors, largely results from extrinsic, non-job related factors such as company policies, salary, co-worker relations, and supervisory styles. Herzberg argues that eliminating the causes of dissatisfaction (through hygiene factors) would not result in a state of satisfaction; instead, it would result in a neutral state. Satisfaction (and motivation) would occur only as a result of the use of intrinsic motivational variables.

The concept of the present study is essentially to use motivational variables as a strategy for retention and turnover in organisations. The two-factor theory therefore provides useful guides in identifying variables (intrinsic factors) that truly motivate an individual employee and give them satisfaction on their jobs. One of the motivators, according to Herzberg, is the job itself. Managers can enrich an employees job by effecting basic changes in the nature of jobs to allow for increased challenges and responsibility, opportunities for advancement, personal growth, and recognition. Managers must however pursue extrinsic factors in order to maintain peace and industrial harmony in their organisations. Some of the major causes of industrial actions in organisations include insufficient pay and poor working conditions. Even though they dont motivate employees, managers must put these variables in place in order to make employees happy and avoid job disruption and withdrawal from the organisation.

While Herzbergs model has stimulated much research like Locke (1976) cited in Tietjen and Myers (1998: 227), researchers have been unable to prove reliably empirically the workability of the model. House and Wigdor (1967) cited in Graham and Messner (1999: 196) critised Herzbergs original formulation of the model which they described as a methodological error. Second, raters are required to evaluate behaviours of respondents, which may result in rater contamination. Third, Herzbergs research lacked a measure of overall satisfaction and finally, situational variables were not treated in defining the relationship between satisfaction and productivity. Nedler and Lawler (1979) cited

in Graham and Messner (1999: 196) contend that Herzbergs theory does not consider individual differences, conversely predicting all employees will react in an identical manner to changes in motivation/hygiene factors. Second, Herzbergs model does not specify how motivation/hygiene factors are to be measured as is done in job satisfaction. Finally, Nedler and Lawler (1979) criticized Herzbergs model for prescribing that there is one best way of doing work.

Regardless of the criticisms of Herzbergs theory, it has made a significant contribution to the discussion of job satisfaction. Managers will find the model useful in the area of job enrichment using intrinsic factors. Industrial relations practitioners will also find the knowledge of the theory helpful in identifying extrinsic factors that may not necessarily motivate employees to greater performance, but bring about industrial peace and harmony in the organisations. One of the challenges of the theory that the critics of Herzberg did not resolve is designing a measuring instrument for motivator and hygiene factors as we have in job satisfaction. Organisational development practitioners may consider this gap as a challenge to develop a measuring instrument in this regard.

Besides Herzbergs theory, motivation as an essential tool in directing employee behaviour also received attention from different authors of content theories which managers need to understand. This will enable them to utilise appropriately the substance of these theories to achieve the desired retention and turnover results.

Relevant theories of motivation are reviewed as they relate to this study in the following section.

3.5 Theoretical framework on employee motivation Research into work motivation was an off-shoot of the early management theories pioneered by Taylor (Scientific School, 1900s), and Fayol (Human Relation Movement, 1930). The Scientific School, according to Smit and Cronje (2002: 250) views people as production tools with which to accomplish tasks, and as basically lazy and do not like work. They have to be coerced to work, and motivating them is a matter of external stimulation. The human relations movement however suggests that people must be treated with respect and are motivated to work well for the sake of the work as well as for the social and monetary benefits they receive, and that their motivation is internally stimulated. From these pioneering schools of thought emerged the early and contemporary motivational researchers and theorists such as Maslow (1954), Vroom (1964), Herzberg (1959), Alderfer (1972), McClelland (1961), and Locke (1976). Others include McGregor (1960), Adams (1965), Porter and Lawler (1961) as cited in (Smit & Cronje, 2002: 356; Staw, 2001: 44) and many other great contributors to the theories of work motivation.

The present study uses three of these theories (Maslow, 1954; Herzberg, 1959; and Vroom, 1964) to support the issues of retention and turnover in organisations.

3.5.1 Expectancy theory (Vroom, 1964) Vrooms 1964 Expectancy theory is presently considered by Smit and Cronje (2002: 356) as well as Staw (2001; 44) as the most comprehensive, valued and useful approach to understanding motivation. Kreitner and Kinicki (1999: 227) and Smit and Cronje (2002: 356) posit that the theory holds that people are expected to behave in ways that produce desired combinations of expected outcomes. They further state that people will act according to (1) their perception that their efforts will lead to certain performance and outcome and (2) by how much they value the outcome. Thus, employees effort will lead to performance, and performance will lead to rewards. Rewards may be either positive or negative; the more positive the reward, the more likely an employee is to be motivated. On the other hand, the more negative the reward, the less likely an employee is to be motivated.

The theory argues that an individuals work motivation is determined by the elements that are herewith discussed. Expectancy (effort- performance relationship). Expectancy is the belief of an individual that a particular level of effort will be followed by a particular level of performance. For an example, expectancy will be high when a sales person is sure that he/she will be able to sell more units (performance) of a product if he/she works overtime (effort). Expectancy will be low if the sales person is convinced that, even if she/he works overtime, more units will not be sold. High expectations generally attract high motivation than low expectations do. Instrumentality (performance reward

relationship) refers to the degree to which an individual believes that a certain level of performance will lead to the attainment of a desired outcome. Instrumentality will be high if the sales person believes a bonus will be paid if more units are sold and low if no bonus will be paid even after selling more units. Valence (reward personal goal relationship) is the value or importance that an individual attaches to various work outcomes. For motivation to be high, employees must value the outcomes they will receive for their performance (Smit & Cronje, 2002: 357: Schultz & Schultz, 2006: 228). Managers must link performance to reward in order to encourage high performing employees and also to motivate employees that are under performing.

Individual employees come to an organisation with different needs and expect that the organisation through its structures will meet those needs. When such expectations are constantly met, the employee feels secure and builds a career path around the organisation. When valence is static or low, as in the public service where salaries are fixed irrespective of an individuals contribution to work outcome, productivity and morale are low. This partly explains why public sector managers are finding it difficult to attract high performing job candidates to their organisations while those already in their employment are leaving for the private sector. The specific assumptions in the expectancy theory as identified by Lawler, Kuleck, Rhode, and Sorenson (1975) provide a clear prediction for turnover. Individual employees decide the level of effort they want to put into the job and whether to remain or quit the organisation. These decisions are based on

the fulfillment of an employees expectation and when these expectations are not met by the organisation, the individual employee sets in motion a turnover process by searching for alternative employment.

The expectancy theory remains relevant in present day organisational management as it is important for managers to figure out what outcomes each employee values. Managers must determine what kind of outcomes/rewards have valence for individual employees. This, according to Lawler et al. (1975) cited in Ramlall (2004: 58) can be revealed by structured questionnaires, by observing employees reaction to different situations or rewards, or by asking what kind of rewards individual employees want or kinds of career goals they have. Managers must specify the kinds of behaviours they want and back them up with adequate valences in order to motivate high performing employees to remain.

Vroom also argues that outcomes should be large enough to motivate significant behaviour. There must be equity in the organisations reward system. Good performers should get more desired rewards than average or poor performers and other employees in the organisation should know about it in order to motivate them to higher performance also. According to Kreitner and Kinicki (1998: 227) equity in this case must be differentiated from equality where all are rewarded equally with no regard to performance. A system of equality is guaranteed to produce low motivation. A common practice in most organisations

today is to reward employees through pay structure by seniority rather than performance. Managers both in the public and private sector organisations should integrate this aspect of the Expectancy theory into their reward system as a way of motivating innovative and high performing employees. That is, employees should be rewarded based on performance rather than the scoring method in the appraisal form with ratings on cleanliness, honesty and other traits. Group influence on individual employees motivation and performance should not be over sighted by managers. Managers should recognise the importance of group dynamics as both formal and informal groups are powerful and potent sources of desired outcomes for individuals. Groups can provide or withhold acceptance, approval, affection, skill, training, needed information, assistance and other necessary tools that can make individuals accomplish goals. They are a powerful force in the total motivational environment of individuals. Managers must therefore be trained to appreciate the influence of groups on individual employee behaviour.

Within an organisation, immediate supervisors should create, monitor and maintain the expectancies and reward structures which will lead to good performance. Supervisors should motivate subordinates by defining clear goals, setting clear reward expectancies, and providing the right rewards for different employees. Management has the responsibility to provide supervisors with an awareness of the nature of motivation as well as the tools (control over organisational rewards, skill in administering those rewards) in order to create

positive motivation. The Expectancy theory as simplified by Staw (2001: 44) also suggests that individual employees should be allowed to choose the type of rewards they prefer since different people have different needs and valences. Effective motivation must come through the recognition that not all employees are alike and that organisations need to be flexible in order to accommodate individual differences. This implies the building in of choice for employees in many areas, such as reward systems, fringe benefits, job assignments and others. Individual employees should be allowed to choose the fringe benefits they want, rather than those imposed by the organisation which may not be attractive to the employee no matter how expensive they may appear.

The Expectancy theory provides a strong background for HR practitioners in the design and application of organisational rewards. Employees should equally

have the opportunity of deciding the type of reward they prefer rather than a general application since individuals are motivated by different valences. Rewards can be made optional thereby giving an employee the opportunity to decide the type of reward that gives maximum valence within a variety of rewards with the same value. For example, where a reward for long service in an organisation is an all expenses paid holiday abroad. Such awards should come with an option of commutment to cash which may be more valuable to the employee than a holiday abroad. Reward systems should be designed with input from individual employees whose needs vary according to socio-cultural, psychological, environmental and economic backgrounds.

3.5.2 The Hierarchy of Needs theory (Maslow, 1943) Maslows hierarchy of needs theory remains one of the best known approaches to employee motivation. Maslow hypothesised that within every human being there exists a hierarchy of five needs as follows: Physiological hunger, thirst, shelter, sex, and other bodily needs. Safety security, protection from physical and emotional harm. Social affection, sense of belonging, acceptance, and friendship. Esteem internal factors such as self-respect, autonomy and

achievement; and external factors such as status, recognition, and attention. Self-actualisation the drive to become what one is capable of becoming like personal growth, achieving ones potential and self-fulfillment.

According to Maslow, as each of these needs becomes substantially satisfied, the next need becomes dominant. Champagne and McAfee (1989) as cited in Ramlall (2004: 60) suggest some potential ways of satisfying employees needs as follows: Physical needs employers can build cafeteria and drinking fountains. For security needs, employers should provide economic solution through wages and salaries, fringe benefits, retirement benefits, and medical benefits, and physiological solution through the provision of job descriptions, good working conditions, heating and ventilation, and a rest period. To provide a solution for social needs, organisations must encourage social interaction, create a team spirit, facilitate outside social activities such as social club membership,

and allow participation in trade unions. To satisfy esteem needs, managers should design challenging jobs, use praise and awards, delegate responsibility, give training and encourage participation in decision making. Self-actualisation should be satisfied using executive training, provide challenges, and encourage creativity.

Ramlall (2004: 63) suggests that in order to motivate employees to higher productivity and reduce turnover, organisations must devise programmes or practices that are aimed at satisfying emerging or unmet needs. Management should also implement support programmes and focus groups to help employees deal with stress, especially during more challenging times. Various organisations today organise wellness programmes for their employees to keep them fit and make them feel that their employers show concern about their state of health. Kreitner and Kinicki (1998: 120) also suggest that managers take time to understand that employees have different need categories, appreciate that some needs take priority over the others and devise means of solving them. Managers should appreciate equally the importance of employee growth and self actualisation. It is becoming increasingly important for managers to create a proper climate in which employees can develop to their fullest potential. Failure to provide such a climate would, in the opinion of Ramlall (2004: 54) increase employee frustration and result in poorer performance, lower job satisfaction and increased withdrawal from the organisation.

Maslows hierarchy of needs theory provides a useful guide for managers toward motivating and retaining their employees. In order for organisations to be able to retain high performing employees, managers should ensure that key employees enjoy satisfaction with their jobs as job satisfaction/ dissatisfaction is known to be positively related to retention and turnover.

3. 6 Concluding remarks This chapter discussed various strategies that can be used by organisations in the management of retention and turnover. Existing legislations by the South African government to enhance retention practices in the public sector organisations were also discussed. Both public and private sector organisations design programmes and policies which they use to attract and retain quality employees who will help in achieving organisational success. Motivation constitutes an important strategy in this regard. The way and manner in which motivational variables can be combined to produce a good retention programme that will reduce turnover in organisations was discussed to conclude the chapter. The next chapter discusses the methods used in carrying out this research.

CHAPTER FOUR

RESEARCH METHODOLOGY

4.1 Introduction Chapter three presented a general overview of retention strategies and the various legislations and policies that are put in place by the government in order to attract, retain and manage turnover in various organisations. Motivational variables that can be used by organisations to retain high performing employees were discussed. The chapter also reviewed relevant theories of motivation that were used to support the discussion on retention and turnover in organisations.

The present chapter discusses the methods used in carrying out the present study. Research issues such as the design, population, sample, sampling procedure, research questionnaire, and statistical analysis are presented.

4.2 Research Design The term research design and research methodology are often used interchangeably even by researchers to mean the same thing. The two terminologies are however different. According to Mouton and Prozesky (2005: 74) a research design is a plan or a blue print of how a researcher intends to conduct a study. This involves plans for data collection, the instrument for

gathering information, how information gathered would be processed and analysed to give meaning to a research finding. Ghauri and Gronhaug (2005: 56) state that a research design should be effective in producing the wanted information within the constraints put on the researcher. Such constraints include time, budget, and skills. Similarly, Blanche, Durrheim and Painter (2006: 36) define research design as a strategic framework, a plan that guides research activity to ensure that sound conclusions are reached.

The essence of research a design is to guide the researcher on the type of data to collect, how to collect process and analyse them in order to answer the research problem(s). A research design can be descriptive, exploratory or causal. Research methodology on the other hand describes how something will be done. Ghauri and Gronhaug (2005: 108) describe research methodology as a systematic, focused and orderly collection of data for the purpose of obtaining information from them, to solve or answer a particular research problem or question. They are rules or systems which show how the researcher has obtained his/her findings thereby enabling others to examine and evaluate it. Research methodology is therefore wider in scope and it encompasses the research design. It provides the general direction for the research and a logical conclusion or solution to a research problem.

Research design can be quantitative or qualitative. The present study used the quantitative research design which Strauss and Corbin (1990) cited in

Shaughnessy and Zechmeister (1997: 22) describe as studies whose findings are mainly the product of statistical summary and analysis. The main feature of quantitative research is the heavy reliance of the researcher on data analysis to arrive at findings or conclusions. Numbers are assigned to the properties in the phenomena to represent their qualities. Qualitative research on the other hand is also referred to by Shaughnessy and Zechmeister (1997: 22) as that research which produces research findings that are not arrived at by statistical summary or analysis and lack quantification altogether. They are most commonly obtained from interviews and observations and can be used to describe individuals, groups or social movements.

Shaughnessy and Zechmeister (1997: 22) locate the main difference between quantitative and qualitative researches in the procedure rather than quality. In qualitative research, findings are not arrived at by statistical methods or other methods of quantification. Qualitative research is mostly characterised by masses of data much of which may be irrelevant to the study whereas quantitative research is usually associated with numbers which possess specific characteristics which make them very useful for analytical purposes. Ghauri and Gronghaug (2005: 204) view quantitative research as an efficient way to represent information and meanings. Rubin (2005: 145) notes that qualitative research allows for in-depth, more open and detailed study of selected issues while quantitative research is more generalised. Follow-up questions can be asked during interviews or focus groups in qualitative research whereas

quantitative research does not provide respondents with such an option. In quantitative research, Ghauri and Gronhaug (2005: 204) further noted that analyses are conducted through the use of diagrams and statistics unlike in qualitative research which uses conceptualisation.

The choice of a quantitative research design for this study was informed by its primary strengths because, according to Blanche et al. (2006: 132) the findings are generaliseable and the data are objective. Ghauri and Gronhaug (2005: 109) also assert that a quantitative research design is more scientific than a qualitative research design.

4.3 Research Strategy The survey research strategy was used for the present study. Ghauri and Gronhaug (2005: 124) refer to surveys as a method of data collection that utilises questionnaires or interview techniques for recording the verbal behaviour of respondents. Mouton and Prozesky (2005: 236) also describe survey research strategy as involving the administration of questionnaire to a sample of respondents selected from some population. Survey research is especially appropriate for descriptive research of this nature. In descriptive research, the research problem, according to Ghauri and Gronhaug (2005: 58) is structured and well understood as demonstrated in chapter one of this study. The problem to be resolved through the research process is clear from the onset. This is in

contrast to causal research which equally structures the problem under research but focuses on cause-and-effect problems (Ghauri & Gronhaug, 2005: 58).

The survey is an effective tool to get opinions, attitudes and descriptions as well as getting cause-and-effect relationships. Ghauri and Gronhaug (2005: 125) describe surveys and questionnaires as among the most popular data collection methods in business and social science research. Surveys are chiefly used in studies that have individual people as the units of analysis. Although Mouton and Prozesky (2005: 232) note that surveys can also be used for other units of analysis such as groups or interactions, some individual persons must serve as respondents or informants. Mouton and Prozesky (2005: 232) contend that the survey research strategy is probably the best method available to the social scientist interested in collecting original data for describing a population too large to be observed directly. Mouton and Gronhaug (2005: 126) reveal that in surveys, a review of earlier research and literature is important to determine what kind of questions to be included in the questionnaire. Surveys are used to understand behaviours of employees with regard to motivation, job satisfaction, grievances among other phenomena. The present study used the survey strategy in order to understand and evaluate the extent to which motivational variables are being used to influence employee retention and turnover in both public and private sector organisations.

4.4 Target Population Asika (2000: 39) defines the population of a research as all conceivable elements, subjects or observations relating to a particular phenomenon of interest to the researcher. A research population according to Ghauri and Gronhaug (2005: 147) relate to the total universe of units from which the sample is to be selected. The target population of the present research comprised all employees in the selected (2) government departments in Bisho representing public sector organisations and selected (2) manufacturing organisations in East London representing private sector organisations. The two public sector organisations had a total population of 1490 employees while the private sector organisations had a total population of 310 employees.

4.4.1 Sample Frame Sample frame, according to Mouton and Prozesky (2005: 174) is the actual list from which the final people are selected. This is the specific list of all members of the population from which the sample will be ultimately selected. The organisations surveyed for this study consisted of two government departments and two private sector organisations with an employee number of 1490 and 310, respectively. The sample frame consisted of employees who had served in the organisations for a period of, at least, one year.

4.5 Sample Bless and Higson-Smith (2000: 86) define a sample as a sub-set of a population which must have properties which make it representative of the whole. Similarly, Bryman and Bell (2003: 93) refer to samples as the population that is selected for investigation. Samples involve collecting information from a portion of the larger group, and on this basis, infer something about the larger group (population). A representative sample is crucial to quantitative research and must reflect the population accurately so that inferences can be drawn. Shaughnessy and Zechmeister (1997: 136) argue that the ability to generalise from a sample of the population depends critically on the representativeness of the sample; otherwise, the sample becomes biased. Mouton and Prozesky (2005: 170) describe a sampling bias to mean that those selected are not typical or representative of the larger population they have been chosen from. This could be as a result of overrepresentation of some segment of the population or the exclusion or underrepresentation of a significant segment. Shaughnessy and Zechmeister (1997: 136) contend that a sample will be representative of the population from which it is selected if the aggregate characteristics of the sample closely approximate those same aggregate characteristics in the population.

4.5.1 Sample Size The main concern in sampling is representativeness. Another concern mentioned by Blanche et al. (2006: 49) is the sample size. The sample should be large enough to allow inferences to be made about the population. A very small

random sample, Blanche et al. (2006: 49) note may be quite unrepresentative, and the same is true for a large non random sample. Sample size is determined in part by practical constraints such as the number of the population, finance and the time available. Struwig and Stead (2001: 118) provide some factors that should be taken into consideration when deciding on a sample size:

The basic characteristics of the population A small sample will be sufficiently representative in a homogenous population. In such a case, a sample of one respondent would be enough to measure the characteristics of others. Conversely, a large sample will be required in a heterogeneous population. The researcher should therefore enlarge the sample in a heterogeneous population and contend with a small sample size where the population has the same characteristics.

Objective(s) of the research The objective(s) of the research play(s) a role in deciding the sample size that produces the right quality and quantity of information needed. Thus, in drawing a sample, the researcher must ensure that the characteristics of the population are well represented in order to make meaningful inferences.

Data analysis, credibility, time and financial constraints Time and financial constraints often limit the sample size to a manageable proportion even though a larger size is recommended. Struwig and Stead (2001:

118) suggest a sample size of 150 200 regardless of the study population provided a correct and reliable sampling procedure has been followed. This also allows for a meaningful statistical analysis.

Non response factor This, according to Bryman and Bell (2003: 93) occurs whenever some members of the sample refuse to cooperate, cannot be contacted or cannot supply the required data. When the non response rate is high, it is recommended that a larger sample size be used.

Statistical precision Research designs that are less concerned with statistical accuracy (e. g. qualitative, interpretative, exploratory etc) typically do not draw large or random samples. However, the right size of the sample must be amenable to mathematical calculation especially in the case of random sampling techniques.

Sample size on the basis of judgment Previous researches provide a researcher with an empirical and comparative benchmark upon which the researcher can base his/her judgments. The sample size previously used by a researcher can serve as a guide as to the sample size that will be adequate for the purpose of a research. The sample size of the present study comprised of 94 employees from two public sector organisations

and 51 employees from two private sector organisations. The sample size was determined by the researcher using simple random sampling method.

4.6 Sampling error Errors are always associated with using sample properties to estimate population parameters. A repeated random sample of the same population size may likely give a somewhat different sample. A sampling error is therefore defined by Bryman and Bell (2003: 93) as the difference between a sample and the population from which it is selected even though a probability sample has been selected. Mugo (2007: 3) identifies the two types of sampling errors as non sampling and sampling errors. Non sampling errors occur when respondents give different interpretations to questions, definitional difficulties and inability of respondents to remember information on the subject matter. A sampling error on the other hand occurs when estimates are derived from the sample rather than the population. Samples are selected by chance and any member of the population has the chance of being selected. Samples would therefore never be the same and would always produce some degree of differences even when the same questionnaire and instructions are given, the results would still be different. Sampling errors cannot be completely eliminated but can be minimised by researcher.

4.7Sampling procedure Sampling procedure according to Blanche et al. (2006: 133) refers to the process of selecting elements to be observed. Ghauri and Gronhaug (2005: 146) broadly divide sampling procedure into probability and non probability sampling. Probability sampling is a sample that has been selected using random selection so that each unit in the population has a known chance of being selected for the sample. That is, each element in the sampling frame has an equal and independent chance of being selected for the sample. The aim of probability sampling is to keep sampling error to a minimum. This aspect of probability sampling procedure permits statistical inferences. Blanche et al. (2006: 134) give examples of probability sampling to include systematic sampling, stratified sampling, cluster and simple random samplings.

In systematic sampling, Blanche et al. (2006: 135) note that after a random start, the nth element is selected and thereafter, every other nth element is systematically selected on the list to be included in the sample (sampling interval). The list can be a register of all employees of an organisation. For example, the sampling interval of a sample of 1200 out of a sample frame of 12000 is calculated as 12000/1200 = 10. Therefore, after selecting the first element randomly, every other 10th element is selected until a sample of 1200 is achieved. Struwig and Stead (2001: 116) give one of the disadvantages of this method to include a situation where a faulty member appears after a certain interval; this can lead to a defective sample. The method is however easy to

understand and apply but a complete sampling frame is required and this may be costly to obtain especially in a geographically dispersed population.

Stratified sampling involves dividing a population into a mutually exclusive and exhaustive subset whereby a simple random sample of units is chosen independently from each subset (Ghauri & Gronhaug, 2005: 150). The advantage of stratified sampling is that every part of the population (i.e. every stratum) gets a better representation. There is a smaller sampling variation which means that more stable results in repeated samples would be obtained as against using simple random sampling. Cluster sampling is mostly used when a large population is involved and a sampling frame is not available. The population in cluster sampling (Ghauri & Gronhaug, 2005: 151) is divided into mutually exclusive subsets and then a random sample of the subsets is selected. The major advantage of cluster sampling is that a complete frame of the sampling unit is not required as in simple random sampling thereby minimising costs. However, the method can yield poor precision if there is large variation between clusters in the variables to be examined.

Blanche et al. (2006: 139) define non probability sampling as any kind of sampling where the selection of elements is not determined by the statistical principle of randomness. Examples of non random sampling include convenience, purposive and snowball sampling. In convenience sampling, the researcher uses volunteers who are willing and available to participate in the

research. This is most useful in a homogeneous population. This method is economical and does not require the population list. The main disadvantage is that variability and bias of estimates cannot be measured or controlled. In purposive sampling, dependence is not only on availability and willingness to participate, but on cases that are typical of the population are selected. For example, to recruit participants in an HIV/aids campaign, health professionals in clinics, hospitals, NGOs can be contacted for willing participants in the study. The researcher in the above example may even ask to be directed by the participants to their professional colleagues. This process of gradually accumulating a sufficiently large sample through contacts and references is described by Blanche et al. (2006: 139) as snowball sampling. The advantages of purposive and snowball sampling methods is that they are economical and do not require a list of the population.

From the above discussion, probability sampling procedure using simple random sampling appears to be the most popular method used by researchers because it allow generalisation to the population. The present study used the probability sampling procedure using simple random sampling method because of its merit over other sampling procedures.

4.8 Data collection Data collection is the process of gathering relevant information about the subject from research participants. According to Martins, Loubster and Van Wyk (1999:

90), the data gathering process may vary from relatively simple observation at a specific location to an extensive survey of large corporations across the world. Various methods used in data gathering, especially in the social sciences and business include questionnaires, interviews, focus group discussions and observation of participants (www.answers.yahoo.com). Each of the methods of data collection has its own, unique advantages and disadvantages. Some of the advantages of the questionnaire method include cost efficiency, easy administration and easy analysis especially in a quantitative study. The present study used the questionnaire method of data collection because of its numerous advantages and its ability to yield the most satisfactory range of reliable data. Questionnaires are most suitable in a quantitative study such as the present one.

4.8.1 The research questionnaire Vogt (1993) cited in Blanche et al. (2006: 484) defines a questionnaire as a group of written questions used to gather information from respondents and it is regarded as one of the most common tools for gathering data in the social sciences and business. A questionnaire usually consists of a number of measurement scales and elicits demographic information from respondents. According to Struwig and Stead (2001: 89) questions asked in questionnaires come from a review of available literature on the subject matter and interviewing people. Ghauri and Gronhaug (2005: 127) suggest that the questions and design of the questionnaire should be adapted to the educational levels and background of the respondents.

A questionnaire has its advantages and shortcomings. Answers international (www.answers.yahoo.com) states that questionnaires are easier to administer thereby making it possible to reach a large population. The costs of printing and distributing questionnaires are also affordable for researchers. Questionnaires are also easy to analyse especially in quantitative studies. With questionnaires, the researcher has a written record of peoples responses. Most questionnaires do not require the identity of respondents thereby encouraging honest opinions from them. A researcher is able to design questionnaires in a way that will simplify analysis (e.g. Likert scale format, open or closed ended format, multiple choice and others). On the other hand, a questionnaire requires some level of expertise to develop. Some respondents may not be honest in their answers thereby distorting the overall findings of the study. Also, some respondents may not fully understand some aspects of the questions while some may misinterpret the question as the researcher may not be around to clarify or respond to respondents queries. Another setback to survey questionnaire is that participation on the part of respondents is voluntary so many people may refuse to complete the questionnaire while some may not return completed questionnaires. A poor return rate can negatively affect the findings of the research. Open ended questions may generate a large volume of data that can take a long time to process and analyse.

4.8.2 Description of the research questionnaire A survey questionnaire was used to collect data from respondents in the present study. The research questionnaire was divided into two sections comprising of 23 questions. Section A sought demographic information from respondents. Section B comprised questions that enabled respondents to evaluate the extent to which the management was using selected motivational variables to influence employees retention in the organisations. The items were measured on a (5) point Likert scale with anchors, strongly agree (5), Agree (4), Neutral (3), Disagree (2), Strongly disagree (1). The questions were developed by the researcher from reviewed literature. The questions were short and simple to understand in line with the recommendations of Blanche et al. (2006: 490) that a short and simple questionnaire is preferred because it yields a high response rate.

4.8.3 Reliability of the questionnaire Shaughnessy and Zechmeister (1997: 127) refer to reliability as the ability of an instrument to produce similar results at different times with the same group of respondents. The reliability of the scales used in the study was measured using Cronbachs alpha. Struwig and Stead (2001: 133) describe Cronbachs alpha as a measurement of how well a set of items measure a single one-dimensional talent construct. When data have a one-dimensional structure, Cronbachs alpha will usually be low. According to Nunnally (1978) as cited in Struwig and Stead (2001: 133), for consistency to be present, the alpha must be above 0.7, but not

higher than 0.9. The Cronbachs alpha result for the questionnaire used in collecting data for the present study was 0.85 thus confirming the reliability of the research questionnaire.

4.8.4 Administration of the questionnaire Different methods of administering questionnaires are open to a researcher. According to Shaughnessy and Zechmeister (1997: 141) questionnaires can be administered through postal mail, telephone interviews, internet or self administered. Whatever method the researcher uses places a responsibility on the researcher who bears the costs of getting the questionnaires across to the respondents. Each of these methods also has its strengths and weaknesses. For example, Shaughnessy and Zechmeister (1997: 141) give some of the disadvantages of the postal mail to include a low response rate because some respondents may be too busy or not interested enough in the study to return a completed questionnaire. The questionnaire must be completely self explanatory because the respondent may not be able to seek clarifications from the researcher. As a result of response bias, the typical return rate estimated by Shaughnessy and Zechmeister (1997: 144) is only 30%. Costs of postage can also be a problem to the researcher.

In telephone administration, a possible selection bias exists as respondents are limited to those who have a telephone. Apart from this, there is a limit to how long respondents are willing to stay on the phone and respondents may respond

differently when they are talking to a faceless interviewer. There is also the problem of costs especially for a student researcher. The Self administered questionnaire which is the most popular amongst student researchers, requires the respondent to be literate. It also requires some form of reasoning as the researcher may not be available to make clarifications when respondents are responding to the questionnaires (www.ukmi/nhs.uk). However, self

administered questionnaires are known to have a high return rate since the researcher, in some instances, personally distributes the questionnaire to respondents. In some instances also, the researcher can distribute the questionnaires through a responsible unit of the organisation (e.g. the human resources department). In either of the cases, the researcher or the HR employee can follow up constantly to make sure respondents return the questionnaires.

The computer assisted electronic method of administering questionnaire is fast becoming popular among researchers. The major setback of this method is a response bias as respondents will be limited to people who have access to computers and are computer literate. Internet facilities are available mainly in urban areas and many people who have access to internet facilities may not want to spend their money responding to questionnaires more especially when there are no direct benefits to be derived. The method is however fast and anonymity of respondent is better assured. This encourages respondents to be as honest as possible when responding to the questions. Internet method

enables the researcher to collect information from any part of the world within a short time and limited costs (www.ukmi/nhs.uk).

The questionnaires in this study were self administered. The researcher, with the help of employees from the HR departments of the participating organisations randomly administered the questionnaires to employees who had served in the organisations for a period of one year or more. The researcher explained all questions on the questionnaire to the HR employees who in turn explained them to the respondents. Several follow up telephone calls were made by the researcher to the HR employees who assisted in administering the

questionnaires. A total of 300 questionnaires were administered to respondents as follows: 200 questionnaires were distributed to respondents in the two public sector organisations while 100 were distributed to respondents in the two private sector organisations. The difference in the number of questionnaires that were administered in the two sectors was based on the population size of the organisations. A total of 145 that is, 94 and 51 completed questionnaires were returned by respondents in both the public and private sector organisations, respectively, thus giving a return rate of 48.33%. The return rate of 48.33% achieved in the present study is adequate in line with the 30% estimated return rate recommended by Shaughnessy and Zechmeister (1997: 144).

4.9 Statistical analysis The main objective of data analysis is to, according to Blanche et al. (2006: 52) transform information (data) into a meaningful form in order to answer the original research question(s). Data analysis procedure can be divided into two: quantitative and qualitative techniques. Qualitative data analysis uses subjective judgment based on non-quantifiable information like the intuition of the researcher. On the other hand, quantitative data analysis relies exclusively on the analysis of numerical or quantifiable data (www.answers.com). Blanche et al. (2006: 188) state that a quantitative data analysis transforms data statistically to help the researcher to describe the data more succinctly and make conclusions about the characteristics of populations on the basis of data from samples. A quantitative data analysis technique was used for the present study since the research design was quantitative.

The Statistical Package for Social Sciences (SPSS) was used in analysing the data. The Chi-square test of association was used in testing the hypothesis of the study. The Chi-square test, according to Martins et al. (1999. 342) applies to nominal data and is concerned with whether the differences between an observed set of frequencies and a theoretically expected set of frequencies are significant. The statistical method was used to examine the association between the variables in the data. All the tests were carried out at alpha level of 0.05 significance. Altman (1996: 112) states that the Chi-square statistic is suitable for randomly selected samples provided the samples are not biased. A critical

assumption for a Chi-square is independence of observations, that is, the response of one participant does not affect the choice of the second participant.

4.10 Concluding remark The present chapter discussed the methodology used in answering the main research question and testing research hypotheses. A quantitative research design was used and the research strategy was also discussed. The reliability of the questionnaire and sample procedure was discussed. The next chapter presents the data analysis and interpretation of results.

CHAPTER 5

DATA ANALYSIS, RESULTS AND DISCUSSION

5.1 Introduction Chapter four discussed the design and methodology of the present study. The research population, sample size and sampling procedure were discussed. The chapter also described the research questionnaires and the method used in administering them. The present chapter presents the data analysis, research findings and discussions of the research findings.

5.2 Demographic results of the respondents in the public sector Demographic results of the respondents are presented below using frequency distribution charts:

35% 65%

Male

Figure 1: Gender distribution of the respondents

Figure 1 above shows that 33(35%) of the respondents were males while 61(65%) were females.

60 50 40

30 20 10 0 18-25 26

55

19

25-40 Age

40-55

Figure 2: Age distribution of the respondents Figure 2 indicate that 24(26%) of employers who participated in the study were between the ages of 18 25, 52(55%) falls between 25 40 years of age while 18(19%) of the respondents were between 40 55 years of age. No employee above 55 years of age participated in the study.

60 50

56

40 30 20 10 0 Postgraduate 1st degree Diploma Others Educational qualification 15 8 25

Figure 3: Highest educational qualification of respondents As shown in Figure 3, 14(15%) of the respondents had postgraduate degrees, 52(56%) had first degrees, 20(22%) had diplomas while 7(8%) of the respondents had qualifications that are below diploma certificates.

3%

Years in service
43%

1--5 6--10
54%

above 10

Figure 4: Duration of employment of the respondents

40(43%) of the respondents had between 1 5 years working service, 51(54%) had worked between 6 10 years, while 3(3%) had served their organisations for more than 10 years.

41% 59%

Management Non management

Figure 5: Position of the respondents in their organisations Figure 5 illustrates that 38(41%) of the respondents occupied top management positions while 55(59%) of the respondents occupied other positions in the organisations.

5.3 Demographic results of the respondents in the private sector As in the public sector organisations, demographic results in the private sector organisations were presented using descriptive statistics. Frequency distribution was used to generate percentages and the demographic information is presented below:

45% 55%

Male Female

Figure 6: Gender distribution of the respondents Figure 6 above shows that 28(55%) of the respondents in the private sector were males while 23(45%) were females.

80 70 60 50 40 30 20 10 0 18-25 25-40 Age in years 40-55 14 18 68

Figure 7: Age distribution of the respondents

Figure 7 indicates that 7(14%) of the respondents were between the ages of 18 25; 35(68%) were between the ages of 25 40 while 9(18%) were between the ages of 40 55.

2%

27% 30% Educ.qualificati ons Postgrad 1st degree Diploma 41%

Figure 8: Highest educational qualifications of the respondents

As shown in Figure 8, 14(27%) of the respondents had postgraduate qualifications, 21(41%) had first degrees, 15(30%) had diploma certificates while only 1(2%) of the respondents had other qualification.

Percentage

80 70 60 50 40 30 20 10 0

74 24 2 1--5 6--10 Years Above 10

Figure 9: Duration of employment of the respondents

38(74%) of the respondents in the private sector had 1 -5 years of working experience, 12(24%) had 6 10 years working experience while only 1(2%) had above 10 years of working experience.

31%

Management Non Management

69%

Figure 10: Position of the respondents in the organisations

Figure 10 shows that 16(31%) of the respondents occupied management positions while 35(69%) of the respondents were non management employees.

5.4 Reliability of the questionnaire The reliability of both the public and private sector scales were measured using the Cronbachs alpha. Cronbachs alpha is used as a measure of the reliability of a psychometric instrument. According to Wikipedia online dictionary, Cronbachs alpha measures how well a set of items or variables measures a single unidimensional latent construct. Cronbachs alpha is not a statistical test; rather, it is a coefficient of reliability (i.e. consistency). For consistency to be present, Nunnally (1978) as cited in Struwig and Stead (2001: 133) recommends that the alpha must be above 0.7, but not much higher than 0.9. The result of the Cronbachs alpha used in measuring how well each items in the scales correlates with all others shows that the alpha was high. The results of the reliability of the scales used in this study are presented in Table below:

Table 5.1: Cronbachs alpha results Scale Various Employees Reliability 0.85 Number of items 19

Results in Table 5.1 show that the scale was reliable with a Cronbach alpha of 0.85.

5.5 Testing of Hypothesis

Research hypothesis: Intrinsic and extrinsic motivational variables are not significantly used to influence employees retention and turnover in either the public or private sector organisations.

Pearson Chi-Square was used to test the levels of significance of each of the intrinsic and extrinsic motivational variables in relation to employee retention and turnover in both public and private sector organisations. The results are presented in Tables 5.2 and 5.3 respectively.

Table 5.2: Levels of significance between the overall variable and intrinsic motivational variables.

Motivational variables

Public Sector p-value x value

2

Private Sector p-value x value

2

Sense of belonging to the organisation

0.04 9.91 0.02 12.23

Freedom for innovative thinking

0.00 15.35 0.03 9.16

Provision of health & wellness programmes

0.00 14.18 0.61 1.81

Setting performance target for

4

Subordinates
0.13 7.07 0.00 20.52

Job security Training & development

0.04

8.15

0.04

9.90

opportunities Recognition/reward for good

0.02

11.41

0.03

10.59

performance Promotion based on performance

0.10

7.76

0.00

19.81

8 9 10 11 12 Work autonomy Mentoring Challenging/interesting work Participation in decision making

0.28 0.98 0.42 0.03

5.08 0.41 3.90 11.09

0.05 0.56 0.00 0.03

7.44 3.02 20.54 10.71

0.08

8.27 5.46

0.79 0.04

1.71 9.90

13

Flexible work arrangement

0.24

P<0.05 level of significance

Table 5.3: Levels of significance between the overall variable and extrinsic motivational variables.

Motivational variables

Public sector
2

Private sector
2

p-value x value p-value x value

Salary package Performance

0.00

22.99

0.25

4.03

2 3

bonus/commission Good terminal benefit/pension

0.72

2.11

0.00

39.93

0.00

94.00

0.98

0.19

4 5

4 5

Cutting-edge technology Interpersonal relationships

0.06

9.19

0.00

13.13

0.06

9.01

0.56

2.98

P<0.05 level of significance

5.6 Presentation and discussion of results The results in Table 5.2 show that the following intrinsic motivational variables significantly influence retention amongst employees in both public and private sectors organisations:

The Chi-square value for training and development in the public sector is X(4) = 11.41 with an associated p-value of 0.02 while the private sector

has a Chi-square value of X(4) = 10.59 and a p-value of 0.03. The result provides strong evidence of an association between training and development and employee retention.

Training and development opportunity strongly influenced retention amongst employees in both public and private sector organisations. For employees to be effective in the performance of their jobs, they must be constantly trained and developed. Employees perceive investment in their training and development by employers as a strong sign of commitment on the part of management to retain them. Some of the best organisations to work for in South Africa, according to Smit and Cronje (2002: 344) use training and development as one of the major retention strategies. Some of these organisations include Deloitte and Trouche Corps, Alexander Forbes, Eli Lilly (SA) (Pty) Ltd and others. Hay (2001: 15) found that lack of training and development of employees skills was the largest determinant of turnover.

Existing literature is however not consistent with the position stated by Smit and Cronje (2002: 344). For example, Bussin (2001: 15) argues that training and development of employees can indeed facilitate their early turnover instead of reinforcing their retention. Accordingly, Bussin (2001: 15) states that Ironically, providing employees with the latest development opportunities raises their market value and that this may in turn lead to increased turnover. The findings of the present study can also be explained in terms of the importance attached to

employee training and development by the South African government. South Africa has developed one of the most comprehensive national skills development systems in the world with legislations and policies put in place to enhance employee training and development. Such legislations and policies include the Skills Development Act (Act 97 of 1998); the Skills Development Levies Act (Act 9 of 1999); the National Skills Development Strategy (2000) amongst others. The Sector Training and Education Agencies (SETA) were also established to monitor and enforce workforce training and skills development in various organisations in South Africa. Notwithstanding Bussin (2001: 15) argument, investment in employees training and development remain a strong retention factor.

A sense of belonging to the organisation in the private sector has a Chisquare value of X(4) = 12.23 and an associated p-value of 0.02. The variable has a Chi-square value of X(4) = 9.91 and an associated p-value of 0.04 in the public sector. The result also provides strong evidence of association between encouraging a sense of belonging in the organisation and employee retention.

The result of the present study shows that a sense of belonging to the organisation significantly influenced retention in both public and private sector organisations. A sense of belonging is an internal push that is predicated upon the ability of the organisation to provide an employee with job satisfaction and a

friendly working environment. Management should create a work environment in which employees feel free and are treated with dignity in order for them to be affectively attached to the organisation. People who identify with and are more committed to the mission and values of the organisation are likely to stay even when better job opportunities exist elsewhere. Managers should create a friendly work environment, a good public image and an organisational culture with a sound financial base that will hold them out as one of the best organisations to work for. Such a corporate image presents an effective tool in attracting and retaining talent.

There is also strong evidence of an association between job security and employee retention. In the public service, job security has a Chi-square value of X(4) = 8.15 and an associated p-value of 0.04 while the private sector has X(4) = 9.90 and an associated p-value of 0.04.

One important retention variable that significantly influenced retention in both public and private sector organisations is job security. Employees place great importance on their jobs because it provides them with the source of income with which socio-economic stability and psychological well-being are achieved. Regardless of the importance attached to job security by employees as reflected in the result of the present study, existing literature provides a contrary view. Some literature argues that job security at present has a different valence to different generations of employees. Supporting this assertion, Amar (2004: 97)

posits that job security is not a retention antecedent for the new generation of skilled employees. Their expectations in the organisation do not include longterm employment. They see job security as a positive feedback of their labour market worth and therefore look for a daily proof that their work matters. In this way, skilled employees create for themselves a sense of security every day, meaning that, if they are doing a good job, they are secure, if not with their present employers, then with another one. Notwithstanding the position of the reviewed literature, job security will continue to be a crucial motivation and retention driver, particularly in under-developed and developing economies like South Africa with high incidence of poverty.

Challenging/interesting work in the public sector has a Chi-square value of X(4) = 11.09 and an associated p-value of 0.03 while the private sector has a Chi-square value of X(4) = 10.71with an associated p-value of 0.03. The result provides strong evidence of an association between challenging/interesting work and employee retention.

Challenging and interesting work was found to have a significant influence on retention and turnover in the present study. The finding concurs with the argument of Herzberg (1954) that motivators are those aspects of the job that make people want to perform and provide employees with satisfaction. According to Herzberg, challenging and interesting jobs should be designed in such a way that boredom is removed. Job characteristics should be able to arouse

employees motivation to take on the job because it is exciting, satisfying, or personally challenging. Hackman and Oldman (1980) as cited in Ramlall (2004: 57) stress that employees will experience internal motivation from their jobs when that job generates three critical psychological states. Firstly, the employee must feel personally responsible for the outcomes of the job. Secondly, the work must be experienced as meaningful by the employee. This is where the employee feels that his/her contribution significantly affects the overall effectiveness of the organisation. The third aspect deals with the employee being aware of how effective he/she is in converting effort into performance. The various job characteristics discussed in the reviewed literature must have been experienced by employees in the organisations that were surveyed in the present study, hence, the result.

Freedom for innovative thinking in the public sector has a Chi-square value of X(4) = 15.35 and an associated p-value of 0.00. The variable has a Chi-square value of X(4) =9.16 and an associated p-value of 0.03 in the private sector. The result also shows strong evidence of an association between freedom for innovative thinking amongst employees and their retention in the organisations.

Table 5.2 shows that the following intrinsic motivational variables significantly influence retention in one of the sectors without a corresponding influence on the other sector:

Provision of health and wellness programmes significantly influenced retention in the public sector at a Chi-square value of X(4) = 14.18 and an associated p-value of 0.00. Retention in the private sector was not significantly influenced by this variable with a Chi-square value of X(4) = 1.81 and an associated p-value of 0.61.

Organisations are beginning to realise that their employees wellbeing impact on productivity as well as influence employees decision to quit or remain in the organisation. The philosophy behind employee wellness, according to Harris (2008: 2) is to view employees as complex individuals who are most productive when they are well physically, mentally and even financially. Gyms at work and healthy canteen food are some of the ways to address physical wellbeing. Wellness programmes, in recent times have been expanded to include issues such as financial wellness of employees. Wyborn (2008) reported in Harris (2008: 2) note that financial wellbeing programme is an integral part of a total wellness programme because financial worries often lead to psycho-social and other health problems. Indebtedness can lead to absenteeism, low morale and in some cases result in early resignation in order to enable the employee have access to his/her pensions. Although health and wellness programmes are in reality becoming a popular practice in public and private sector organisations, the result of the present study suggest otherwise in the private sector organisations.

Employees in the private sector were significantly influenced by setting performance targets for subordinates with a Chi-square value of X(4) = 20.52 and an associated p-value of 0.00. The variable has no significant influence in the public sector with a Chi-square value of X(4) = 7.07 with an associated p-value of 0.13.

The use of goal setting technique as a retention strategy is becoming more popular among private sector organisations. Davidson (2001: 5) asserts that one of the strategies adopted by leading organisations in the area of top employee retention involve instituting goal setting, performance measurement, and skill development programmes to ensure that employees always know where they stand. This practice enables individual employees to assess their contribution to the attainment of the organisational goal. High performing employees can use this technique as a basis to negotiate for higher salaries or accelerated promotion while employers also can increase overall productivity using the technique. Public sector organisations may not be motivated by this technique due to the bureaucratic nature of the sector which is characterised by fixed salary incremental rate and promotion based on seniority.

Recognition/reward for good performance significantly influenced retention in the private sector at a Chi-square value of 19.81 and an associated pvalue of 0.00 while the variable did not significantly influenced retention in

the public sector at a Chi-square value of X(4) = 7.76 and an associated p-value of 0.10 in the public sector.

Recognition and reward for good performance was seen in the present study as having significant influence in retaining private sector employees. Employees, especially those with esteem and self-actualisation motives want to be appreciated and rewarded, not necessarily with money, but openly

acknowledging their achievements and contribution. The finding in the present study is supported by a similar research finding in South Africa, Zambia, Italy, and Israel by Herzberg as cited in Bassett-Jones and Lloyd (2005: 933). Herzberg used the research findings to argue robustly that motivation is based on growth needs and as a result, individuals do not require incremental incentives to drive internal motivation. Accordingly, motivation is founded upon satisfaction derived from a sense of achievement, recognition for achievement, responsibility and personal growth. Forrest (1999: 46) notes that a critical retention motivation for key employees is the visible appreciation of their contribution to the organisation and respect for their skills.

Management should, as part of its organisational culture, institutionalise the practice of appreciating and rewarding individual employees with outstanding performances that are above set standards or when valuable suggestions translate to increased productivity or profitability. A lack of such an organisational culture may inhibit the retention of such high performers. Research findings by

Johnson (2000: 60) show that two thirds of respondents admitted that lack of appreciation was the major factor in driving them to leave their organisations. Recognition and reward for good performance did not however have a significant influence on retention in the public sector. Public sector managers may not consider this variable as a serious retention strategy since the Public Service Regulations, 2000 (Chapter 1, part V111F & G) allow for employees to be rewarded financially for good performance and valuable suggestions. Public sector employees with growth need may therefore not be motivated by this variable.

Performance based promotion significantly influenced retention in the private sector at a Chi-square value of X(4) = 7.44 and an associated pvalue of 0.05. The variable did not significantly influenced retention in the public sector at a Chi-square value of X(4) = 5.08 and an associated pvalue of 0.28.

Performance- based promotion is another variable with significant influence in retaining private sector employees. This important retention variable strangely did not significantly influenced public sector employees. Promotion or lack of it is one of the intrinsic variables that are generally acknowledged as a predictor of retention and turnover. Choo.and Bowley (2007: 315) posits that providing employees with internal job opportunities is a means of demonstrating that they can realise their career goals inside rather than outside of the organisation.

Organisational structure should be designed in a way that promotes upward mobility of high performing employees without inhibiting factors such as seniority. The practice in contemporary organisations, particularly the private sector, is such that high performing employees agreed with their immediate supervisor on set goals upon which their performance assessment will be based. Once these goals are achieved, the employee is promoted rather than queuing in seniority based promotion system. The result of the present study regarding performance based promotion may have been informed by this practice.

In the private sector, mentoring has a Chi-square value of X(4) = 20.54 and an associated p-value of 0.00 to show a significant influence while the public sector has a Chi-square value of X(4) = 3.90 and an associated pvalue of 0.42 which does not show significant influence.

Another variable that significantly influenced retention in the private sector without a corresponding influence in the public sector is mentoring. Mentoring is defined by Orpen (1997: 53) as the process whereby managers provide informal assistance and support to particular subordinates on an individual basis, to help them in their efforts to be successful within the organisation. Mentoring is an emerging management practice and is more prevalent in the private sector. This might have explained why the variable has significant influence in the private but not the public sector. However, the practice is spreading across both public and

private sectors as part of an organisation-wide initiative to reduce the turnover of productive employees and to encourage succession planning in organisations.

A flexible work arrangement influenced retention in the private sector at a Chi-square value of X(4) = 9.90 and an associated p-value of 0.04 without a corresponding influence in the public sector with a Chi-square value of X(4) = 5.46 and an associated p-value of 0.24 in the public service.

The following intrinsic variables did not show significant influence on retention either in the public or private sectors:

Work autonomy with a Chi-square value of X(4) = 0.41 and an associated p-value of 0.98 and Chi-square value of X(4) = 3.02 and an associated pvalue of 0.56 in both the public and private sectors respectively.

Participation in decision making did not have significant influence on retention in the public sector at a Chi-square value of X(4) = 8.27 and an associated p-value of 0.08 and in the private sector with a Chi-square value of X(4) = 1.71 and an associated p-value of 0.79 in the private sector.

Participation in decision making and work autonomy were found not to have significant influence on retention in both public and private sector organisations.

Public sector organisations are bureaucratic in structure and decisions are, most often taken by the management board (and in some cases by government). Established rules, regulations and procedures are strictly followed and employees operate within those rules, regulations and procedures without having inputs in the decision making process. Although the decision making process in the private sector structure is not totally bureaucratic, strategic decisions are mostly taken by top management while lower level managers take tactical decisions. Tasks are designed by top management for employees to execute without an opportunity for employees to work independently. The result of the present study is consistent with the views of Hellriegel; Jackson; Slocum; Staude; Amos; Klopper; Louw, and Oosthuizen (2006: 384) who state that in bureaucratic organisations, top managers take responsibility for making decisions, directing operations, and achieving organisational goals. Employees are treated as simply another factor in production, along with capital and equipment. They often perform routine tasks that give them little opportunity to share in decision-making and execute tasks independently.

The results presented in Table 5.3 show that the following extrinsic motivational variables influenced retention significantly in only one sector rather than in both.

Salary package significantly influenced retention in the public sector at a Chi-square value of X(4) = 22.99 and an associated p-value of 0.00. The variable has a Chi-square value of X(4) = 4.03 and an associated p-value

of 0.25 in the private sector meaning that the variable did not have any significant influence on retention.

Performance bonus/commission has a Chi-square value of X(4) = 39.93 and an associated p-value of 0.00 showing a significant influence on retention in the private sector. The variable however did not significantly influenced retention in the public sector at a Chi-square value of X( (4) = 2.11 and an associated p-value of 0.72.

The results also show that terminal/pension benefits have significant influence on retention in the public sector at a Chi-square value of
x2

(4) =

94.00 and an associated p-value of 0.00 without a corresponding significance in the private sector at a Chi-square value of X(4) = 0.19 and an associated p-value of 0.98 respectively.

The use of financial benefits such as base pay, performance bonuses and commissions and retirement benefits as motivational and retention variables have generated a lot of academic debates. While some scholars regard money as a primary motivator, others consider it as the least effective among motivation and retention variables. The position expressed above is reflected in the findings of the present study which showed mixed results. While financial consideration significantly influenced retention in the public sector, it did not do so in the private sector unlike variables such as training and development opportunities which

significantly influenced retention in both sectors. In emphasising the use of money as a critical driver of retention in organisations, Kinnear and Sutherland (2001: 17) argues that managers should not be deceived that money no longer matters in retaining employees any longer. Kinnear and Sutherland (2001: 17) further argue that employees in South Africa want their achievements rewarded with money.

Several authors have, however expressed dissenting opinions to the argument of Kinnear and Sutherland (2001: 17). Money, in the opinion of Amar (2004: 96) has been the obvious and most important outcome from employment and, until a couple of decades back, was the only outcome that employers offered to their employees. That practice has changed. The efficiency of money as a motivator of talent is quite low. In contemporary organisations, Hay (1999: 46) contends that if managers reward performance with only money, in many ways, they lose the retention war, because there are other more powerful motivators of talent, such as freedom and flexibility in the organisation. Concurring with Hay (1999: 46), Dess et al. (2008: 127) state that money cannot be ignored, but it shouldnt be the primary mechanism to attract and retain talent because employees who come for money will leave for money. The present study partly supports and partly rejects Herzbergs (1954) theory which classified money as a hygiene factor which does not motivate employees. The controversy surrounding the use of money as a strong retention factor will persist for a long time to come as most

labour union agitations in South Africa and other parts of Africa in recent times were motivated by increase in salary package.

Cutting-edge technology significantly influenced retention in the private sector at a Chi-square value of X(4) = 13.13 and an associated p-value of 0.00. The variable did not significantly influence retention in the public service at a Chi-square value of X(4) = 9.19 and an associated p-value of 0.06 in the public service.

Although cutting-edge technology did not significantly influenced retention in the public sector, the result (p<0.06) in the present study shows that the variable is crucial to retention in both sectors. Technology is an important motivator for talent and in some instances; employees may be more loyal to the technology than the organisation itself. According to Kinnear and Sutherland (2001: 17), organisations need to think of the return on investment in technology not only in terms of business profits but also in terms of attracting and retaining key employees. Organisations all over the world are placing high priority on technology in order to enhance their global competitiveness and South Africa is no exception.

Interpersonal relationship did not influence retention in both the public and private sectors at Chi-square values of X(4) = 9.01 and an associated p-

value of 0.06 and of X(4)= 2.98 and an associated p-value of 0.56 respectively.

Interpersonal relationships did not significantly influenced retention in the present study despite the fact that literature identified the variable as a basis for the creation of social capital in organisations. Many employees view working with friends as crucial to maximising their productive effectiveness and this can reduce significantly the decision to leave. For employees to satisfy their affiliation needs, Maslow (1954) theorised that managers must encourage social interaction, create a team spirit and facilitate outside social activities amongst employees. Likert (1961) cited in Hamer (2007: 300) suggests the principle of supportive relationships in agreement with Maslow (1954) that people value a positive response from others as this helps to build and maintain self-esteem. Interpersonal relationships among employees encourage friendship and create a less stressful environment, increase self-motivation and lead to employees enjoying their work and remaining with the organisation. With a good interpersonal relationship among employees, employees support one another emotionally and physically. Work overloads are shared and this support allows employees to do a job better, reduces the amount of pressure or stress on individual employees and thus makes jobs more manageable. The process of social integration and workforce diversity in South Africa after the Apartheid regime is on-going and may have accounted for the inconsistency in the finding of the present study and the reviewed literature.

The findings of the present study and the discussion thereof have substantially addressed the objectives of the study and provided answers to the fundamental research question. The results of the study could not totally accept or reject the hypothesis of the study as stated in chapter one. Both intrinsic and extrinsic retention variable items in the data collection instrument were found to have either significantly influenced, or did not significantly influenced retention in both the public and private sector organisations.

5.7 Concluding remarks The chapter aimed at analysing collected data, interpreting and discussing them against the background of the problem statement. The hypothesis of the study was tested and discussed. The next chapter presents the conclusions, recommendations, limitations and suggestion for further research directions.

CHAPTER 6

CONCLUSIONS, RECOMMENDATIONS, LIMITATIONS AND SUGGESTIONS FOR FURTHER RESEARCH DIRECTIONS

6.1 INTRODUCTION The rate at which employees enter and voluntarily withdraw from organisations has become a source of concern to HR managers given the damaging effect frequent turnover could have on organisations. In order to reduce the rate of turnover in organisations, the present study sought to identify motivational variables that managers could use in order to influence employees retention. The study covered two organisations each from both the public and private sectors in the Eastern Cape Province of South Africa.

The research problem revolves around the rate at which employees voluntarily quit their jobs and the inability of organisation managers to device means of retaining key employees. A significant amount of an organisations value is reposes in its employees and when these employees leave, they take this value away with them. Frequent employee turnover is costly to organisations and destructive to the attainment of organisational goals. Many organisations are not been able to identify properly the real reason(s) key employees leave. Most managers believe that increasing financial benefits of employees would motivate them to remain while others provide attractive working environment as a

retention strategy. The present study therefore sought to determine the extent to which selected motivational variables (Combination of intrinsic and extrinsic variables) were being applied and were influencing employees decision to remain or quit an organisation. Many contemporary studies still consider monetary reward as the best way of influencing employees retention. This has prompted many HR managers to tailor their retention policies around financial benefits without taking into consideration research findings which suggest that employees are better motivated by intrinsic rather than extrinsic values as revealed by Rolando (2000) in Ferreira (2008: 76).

The following research objectives and hypotheses were formulated to provide a guide for the study:

Objectives of the study The research was aimed at achieving the following objectives:

Identify and establish the key intrinsic and extrinsic motivational variables being used by the selected public and private sector organisations in employees. retaining their

Determine the extent to which the identified intrinsic and extrinsic motivational variables influence employee retention and turnover in public and private sector organisations, and, the selected

Make recommendations to management of the selected public and private sector organisations on how to effectively retain employees and reduce turnover.

Research hypothesis The research hypothesis formulated to provide a guide for the study was:

Intrinsic and extrinsic motivational variables are not significantly used to influence employees retention and turnover in either the public or private sector organisations.

Review of related literature discussed the concept of retention and turnover in organisations. The literature also presented a global overview and the South Africa perspective of the subject matter. Frequent turnover is associated with enormous costs, some of which managers ignore at the expense of their organisations. These costs were discussed in the literature review. Lastly, various motivational variables used by managers as retention strategies were discussed in the concluding part of the literature review. Evidence from previous research shows that most managers apply wrong retention strategies while others use retention programmes that are not comprehensive enough to motivate key employees to remain in their organisations.

6.2 Conclusions The findings of the study indicated the following:

That all employees in the selected public and private sector organisations were motivated to a very large extent by a combination of intrinsic and extrinsic factors. Motivational variables such as training and development,

recognition/reward for good performance, a competitive salary package and job security were the most important variables that motivated employees in the selected organisations. Employees in the public sector organisations did not have opportunity to earn performance bonuses/commissions. Public sector employees did not have autonomy in the execution of tasks and participation in decision making process. Recognition and reward for good performance did not motivate public sector employees in the selected organisations.

6.3 Recommendations In the global market place, organisations worldwide rely on their employees in order to compete favourably and gain competitive advantage. There is a growing need for public sector organisations in South Africa to improve on service delivery. To be able to do this effectively, managers in public sector organisations must device a practical means of retaining key employees whose expertise is critical to service delivery. One way of achieving this is to motivate these employees through comprehensive and proactive retention programmes. Private sector employers too must design retention strategies that can keep their talent

rather than losing these talented employees to overseas competitors in the global market. The following recommendations are suggested in view of the findings of the present study:

Retention policy in the public sector should incorporate some aspects of the private sector practices which encourage retention and enhance productivity. Such practices include the introduction of a performance based promotion system rather than the present situation in which employees are promoted based on seniority rather than performance. The practice can demotivate young, innovative and hard working professionals to leave for the private sector. Opportunity for public sector employees to earn performance bonuses should also be devised. This will encourage productivity and enhance retention.

Organisations should invest heavily in the education, training and development of their employees. Training and development appealed greatly to employees in both sectors and remain one of the best ways of retaining key employees. Employees performances are enhanced through training and development and this encourages retention especially in a programmed training system where the training programme is tailored towards employees career progression in the organisation. Some of these training programmes can be designed for self-actualisation in order to appeal to executive career officers who are no longer motivated by money

but by their status in society. Employee training is also an indication of management commitment to building a life-long relationship with the employees thereby influencing their turnover decisions.

Management in private sector organisations should encourage goalsetting technique and work autonomy in the execution of tasks by employees. This will provide a more objective performance appraisal method and present employees with challenging work opportunities and make employees more innovative and independent in the execution of their tasks.

Employees in public sector organisations are better influenced by salary package than those in the private sector as shown in the present study. In other words, public sector employees are better remunerated than their counterparts in the private sector. In order to avoid losing key employees to the public sector, private sector organisations must not only pay salaries and wages that are industry competitive, but those that equally compete with the public sector. This will create external equity and reduce turnover tendency among employees. Private sector organisations are profit oriented and they are therefore expected to pay their employees higher remunerations. Turnover of private sector employees will be facilitated if the public sector pays higher salaries than the private sector.

The present study found that sense of a belonging was one of the variables that significantly influenced retention in both public and private sector organisations. Managers in both sectors can improve on this by creating structures that make employees proud of and identify with the organisation. At organisational level, managers should build a respectable corporate culture and image that will position their organisations as employers of first choice where prospective and incumbent talent will be proud to work and build a long lasting career. Such structures include corporate social responsibility, ethical practices, employee welfare, and advancement of the general good and development of the larger society. At individual employee level, private sector organisations can encourage retention using the employee equity participation programme in the share holding of the organisation. Employees can be encouraged to buy shares in the organisation thereby making them shareholders. This would create confidence; enhance loyalty and a general sense of belonging in the employees thereby influencing their retention.

Health and wellness programmes were also found to have significantly motivated and influenced employees retention particularly in public sector organisations. The practice is becoming a strong motivational and retention variable that influences employees turnover decision. The design and maintenance of a work organisation that both supports the organisations objective and provides an environment that is safe and

healthy for its employees will certainly help in their retention. These programmes send a strong message to employees that management is interested in their health and well-being and those of their families. These programmes possess the potentials to reduce both work and family related stress in employees. This can be complimented with a medical insurance scheme and an in-house medical facility for employees. Health and wellness clubs can be established within the organisation with periodic activities. Apart from keeping employees fit in the performance of their jobs and providing them with a safe and healthy work environment; it also enhances social cohesion amongst employees and promote social capital.

Public sector retention strategies should encourage reward and recognition for deserving employees who served the public service with distinction. Such recognition and reward may come in the form of national honours conferred on such distinguished employees by the state rather than monetary reward.

6.4 Limitations of the study

The study used the Likert Scale questionnaire thus constraining respondents from expressing their own ideas differently from that of the researcher. The research was limited to organisations in the Eastern Cape Province. Organisations in industrialised and urban provinces were not surveyed due to financial and time constraints. This factor may therefore limit the extent to which the findings of the present study can be generalised.

The following research areas can be considered for study by other researchers in future:

6.5 Direction for future research

Future research can be carried out to determine the effect of demographics on retention and turnover in order to predict the turnover tendencies of various groupings in the organisation. The present study was limited to selected departments and the manufacturing sector. A comprehensive research that will encompass all spheres of the public service (provincial, municipal and local governments) and private sector industries may bring about a more generaliseable outcome. There is a relationship between skills shortage, retention and turnover. Research could be initiated to determine the effect of legislation (for

example The Employment Equity Act, 1998) as it affects the migration of South African professionals (especially the Whites) abroad. The questionnaire used in this research could be expanded and modified to develop a retention measuring instrument which can form the basis for developing retention programme for organisations.

6.6 Concluding remarks This chapter aimed at drawing conclusions in respect of the study and suggested ways by which managers can improve retention practice and reduce the rate of turnover in their organisations. The chapter also identified some factors that limited the scope of the study. Recommendations were made based on the findings of the study while suggestions for future research direction were provided

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Annexure A

Employee Retention and Turnover Questionnaire

Dear Respondent, My name is M. Olorunjuwon-Samuel. I am a postgraduate student in the Department of Industrial Psychology/Human Resources Management at the University Of Fort Hare. I am presently conducting a research in the area of employee retention and turnover in organisations.

You are kindly requested to complete the attached questionnaire as honestly as possible. The information being solicited from you is purely for academic purposes. All information provided by you will be treated confidentially; hence, your name and that of your organisation are not required. Your honest completion of this questionnaire will assist in generating information that will help organisations to improve on their retention and turnover management, enhance quality service delivery and improved productivity. Thanking you for your co-operation. Section A Demographic Information Please mark (X) as appropriate 1. Gender Male Female

2. Age (years) 18-25 25-40 40-55 55-65 Above 65

3. Highest educational qualification Postgraduate Degree Diploma Others

4. Present position in organisation

5. Years in service

Section B Please evaluate the extent to which the management use the Following motivational variables to influence your retention in the organisation

Item 1. Competitive salary package 2. Opportunity to earn performance bonus/commission/over time 3. Good training & development opportunities 4. Recognition and reward for good performance 5. Promotion based on performance 6. Opportunity to work independently 7. Up to date technology to perform my job

Strongly Disagree Neutral disagree 1 2 3

Agree 4

Strongly agree 5

1 8. Mentor who often advices me on my job 9. Challenging & interesting job opportunities 10. Participation in decision making

process 11. Encouraging good working relationship amongst employees 12. Provision of good terminal/retirement benefits 13. Flexible work arrangement 14. Setting performance target for all subordinates 15. Provision of health/wellness programmes for all employees 16. Conditions of employment that guarantee job security 17. Strong sense of belonging to this organisation 18. Freedom for innovative thinking in executing tasks 19. On the overall, I consider all the above items as motivational variables used by the management to influence my retention in the organisation 1 2 3 4 5

Thank you for your participation.

Annexure B

Strong sense of belonging to this organisation * retention in organisation * sector type

Crosstab Count retention in organization no yes 1 3 13 24 6 46 1 2 16 25 33 77

sector type private

Total 1 3 13 28 6 51 1 2 23 34 34 94

strong sense of belonging to this organization

strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

4 5

public

Total strong sense of belonging to this organization

Total

7 9 1 17

Chi-Square Tests Asymp. Sig. (2-sided) .016 .045 .420

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 12.227a 9.750 .649 51 9.907b 12.275 4.089 94

df 4 4 1

4 4 1

.042 .015 .043

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .10. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .18.

Freedom for innovative thinking in executing tasks * retention in organisation * sector type

Crosstab Count retention in organization no yes 1 1 20 4 5 1 2 5 5 4 17 16 9 46

sector type private

Total 2 20 20 9 51 1 2 21 40 30 94

freedom for innovative thinking in executing tasks Total freedom for innovative thinking in executing tasks Total

disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

16 35 26 77

Chi-Square Tests Asymp. Sig. (2-sided) .027 .019 .757

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 9.158a 9.928 .095 51 15.352b 12.109 6.871 94

df 3 3 1

4 4 1

.004 .017 .009

a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .20. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .18.

Provision of health/wellness programme for all employee * retention in organisation * sector type

Crosstab Count retention in organization no yes 1 3 2 18 2 18 7 5 46 1 1 2 7 9 13 4 27 1 29 17 77

sector type private

Total 4 20 20 7 51 2 9 22 31 30 94

provision of health/wellness programme for allemployee Total provision of health/wellness programme for allemployee

disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total

Chi-Square Tests Asymp. Sig. (2-sided) .613 .530 .270

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 1.807a 2.212 1.216 51 14.184b 14.179 9.478 94

df 3 3 1

4 4 1

.007 .007 .002

a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .39. b. 4 cells (40.0%) have expected count less than 5. The minimum expected count is .36.

Setting performance target for all subordinates * retention in organisation * sector type

Crosstab Count retention in organization no yes setting performance target for allsubordinates strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree 1 2 2 5 5 2 6 4 17 3 5 11 27 46 13 6 14 33 11 77

sector type private

Total 3 6 11 29 2 51 18 8 20 37 11 94

public

Total setting performance target for allsubordinates

Total

Chi-Square Tests Asymp. Sig. (2-sided) .000 .013 .150

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 20.519a 12.755 2.069 51 7.066b 8.814 4.832 94

df 4 4 1

4 4 1

.132 .066 .028

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .20. b. 4 cells (40.0%) have expected count less than 5. The minimum expected count is 1.45.

Conditions of employment that guarantee job security * retention in organisation * sector type

Crosstab Count retention in organization no yes conditions of employment that guarantee job security strongly agree disagree neutral agree strongly agree disagree neutral agree strongly agree 3 1 1 2 1 5 3 5 8 1 17 16 20 7 46 7 9 33 28 77

sector type private

Total 3 1 17 22 8 51 10 14 41 29 94

public

Total conditions of employment that guarantee job security Total

Chi-Square Tests Asymp. Sig. (2-sided) .042 .225 .985

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 9.900a 5.678 .000 51 8.145b 9.226 6.678 94

df 4 4 1

3 3 1

.043 .026 .010

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .10. b. 2 cells (25.0%) have expected count less than 5. The minimum expected count is 1.81.

Good training and development opportunities * retention in organisation * sector type

Crosstab Count retention in organization no yes 1 1 3 5 1 3 4 8 1 17 3 14 22 7 46 7 9 32 29 77

sector type private

Total 1 3 15 25 7 51 1 10 13 40 30 94

good training and development opprotunities

strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total good training and development opprotunities

Total

Chi-Square Tests Asymp. Sig. (2-sided) .032 .135 .204

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 10.590a 7.023 1.617 51 11.405b 11.798 8.684 94

df 4 4 1

4 4 1

.022 .019 .003

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .10. b. 4 cells (40.0%) have expected count less than 5. The minimum expected count is .18.

Recognition and reward for good performance * retention in organisation * sector type

Crosstab Count retention in organization no yes 1 1 1 9 2 25 12 5 46 1 1 1 4 10 5 33 6 33 17 77

sector type private

Total 1 1 10 27 12 51 1 2 14 38 39 94

recognition and reward for good performance

strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total recognition and reward for good performance

Total

Chi-Square Tests Asymp. Sig. (2-sided) .001 .018 .001

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 19.880a 11.956 10.365 51 7.758b 6.260 3.926 94

df 4 4 1

4 4 1

.101 .181 .048

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .10. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .18.

Promotion based on performance * retention in organisation * sector type

Crosstab Count retention in organization no yes 2 3 8 1 24 2 11 5 46 6 17 1 2 4 14 5 20 1 24 17 77

sector type private

Total 5 8 25 13 51 23 3 18 25 25 94

promotion based on performance Total promotion based on performance

disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total

Chi-Square Tests Asymp. Sig. (2-sided) .059 .093 .430

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 7.435a 6.427 .624 51 5.083b 6.156 3.594 94

df 3 3 1

4 4 1

.279 .188 .058

a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .49. b. 6 cells (60.0%) have expected count less than 5. The minimum expected count is .54.

Opportunity to work independently * retention in organisation * sector type

Crosstab Count retention in organization no yes opportunity to work independently strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree 1 3 1 5 2 5 7 3 17 2 4 13 16 11 46 1 7 23 30 16 77

sector type private

Total 2 5 13 19 12 51 1 9 28 37 19 94

public

Total opportunity to work independently

Total

Chi-Square Tests Asymp. Sig. (2-sided) .555 .373 .769

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 3.017a 4.255 .086 51 .411b .586 .027 94

df 4 4 1

4 4 1

.982 .965 .870

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .20. b. 4 cells (40.0%) have expected count less than 5. The minimum expected count is .18.

Mentor who often advices me on my job * retention in organisation * sector type

Crosstab Count retention in organization no yes 2 1 7 13 2 20 6 5 46 1 1 4 6 22 8 30 2 20 17 77

sector type private

Total 2 8 13 22 6 51 2 4 28 38 22 94

mentor who often advices me on my job

strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total mentor who often advices me on my job

Total

Chi-Square Tests Asymp. Sig. (2-sided) .000 .010 .018

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 20.544a 13.285 5.615 51 3.897b 4.477 .958 94

df 4 4 1

4 4 1

.420 .345 .328

a. 6 cells (60.0%) have expected count less than 5. The minimum expected count is .20. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .36.

Challenging and interesting job opportunities * retention in organisation * sector type

Crosstab Count retention in organization no yes 1 1 3 5 1 3 4 8 1 17 3 15 21 7 46 7 10 31 29 77

sector type private

Total 1 3 16 24 7 51 1 10 14 39 30 94

challenging and interesting job opportunities

strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total challenging and interesting job opportunities

Total

Chi-Square Tests Asymp. Sig. (2-sided) .030 .128 .225

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 10.713a 7.151 1.471 51 11.089b 11.547 8.321 94

df 4 4 1

4 4 1

.026 .021 .004

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .10. b. 4 cells (40.0%) have expected count less than 5. The minimum expected count is .18.

Participation in decision making process * retention in organisation * sector type

Crosstab Count retention in organization no yes participation in decision making process strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree 1 2 2 5 5 3 3 2 4 17 5 7 14 13 7 46 14 2 17 18 26 77

sector type private

Total 5 8 16 15 7 51 19 5 20 20 30 94

public

Total participation in decision making process

Total

Chi-Square Tests Asymp. Sig. (2-sided) .788 .583 .975

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 1.713a 2.852 .001 51 8.267b 6.761 3.039 94

df 4 4 1

4 4 1

.082 .149 .081

a. 6 cells (60.0%) have expected count less than 5. The minimum expected count is .49. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .90.

Flexible work arrangement * retention in organisation * sector type

Crosstab Count retention in organization no yes flexible work arrangement strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree 3 1 1 2 1 5 4 1 3 9 17 16 20 7 46 12 2 9 36 18 77

sector type private

Total 3 1 17 22 8 51 16 3 12 45 18 94

public

Total flexible work arrangement

Total

Chi-Square Tests Asymp. Sig. (2-sided) .042 .225 .985

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 9.900a 5.678 .000 51 5.460b 8.518 2.862 94

df 4 4 1

4 4 1

.243 .074 .091

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .10. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .54.

Annexure C

Opportunity to earn performance bonus/commission/overtime * retention in organization * sector type

Crosstab Count retention in organization no yes 4 1 27 19 4 strongly agree disagree neutral agree strongly agree 3 10 15 2 30 47 1 7 29 24 3 64

sector type private

Total 5 27 19 51 1 10 39 39 5 94

opportunity to earn performance bonus/commissio n/overtime Total opportunity to earn performance bonus/commissio n/overtime

neutral agree strongly agree

public

Total

Chi-Square Tests Asymp. Sig. (2-sided) .000 .000 .000

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 39.932a 23.038 17.489 51 2.112b 2.410 1.369 94

df 2 2 1

4 4 1

.715 .661 .242

a. 4 cells (66.7%) have expected count less than 5. The minimum expected count is .39. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .32.

Up to date technology to perform my job * retention in organization * sector type

Crosstab Count retention in organization no yes 1 1 7 2 27 13 4 47 1 2 6 6 16 31 6 26 30 64

sector type private

Total 1 8 29 13 51 1 2 12 47 32 94

up to date technology to perform my job Total up to date technology to perform my job

disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree

public

Total

Chi-Square Tests Asymp. Sig. (2-sided) .004 .059 .017

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 13.132a 7.458 5.719 51 9.192b 9.926 5.107 94

df 3 3 1

4 4 1

.056 .042 .024

a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .08. b. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .32.

Provision of good terminal/retirement benefit * retention in organization * sector type

Crosstab Count retention in organization no yes provision of good terminal/retirement benefit Total provision of good terminal/retirement benefit Total disagree neutral agree strongly agree disagree neutral agree strongly agree 1 2 1 4 8 38 47 86 1 15 20 11 47 1

sector type private

Total 1 16 22 12 51 1 8 38 47 94

public

Chi-Square Tests Asymp. Sig. (2-sided) .979 .965 .757

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value .193a .273 .096 51 94.000b 54.721 35.543 94

df 3 3 1

3 3 1

.000 .000 .000

a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .08. b. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .09.

Encouraging good working relationship amongst employee * retention in organization * sector type
Crosstab Count retention in organization no yes encouraging good working relationship amongst employee strongly agree disagree neutral agree strongly agree strongly agree disagree neutral agree strongly agree 1 2 1 4 2 4 12 22 7 47 3 1 10 40 32 86

sector type private

Total 2 5 14 23 7 51 3 1 14 43 33 94

public

Total encouraging good working relationship amongst employee

Total

4 3 1 8

Chi-Square Tests Asymp. Sig. (2-sided) .561 .505 .246

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 2.981a 3.328 1.345 51 9.011b 7.245 2.227 94

df 4 4 1

4 4 1

.061 .123 .136

a. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .16. b. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .09.

Competitive salary package * retention in organization * sector type

Crosstab Count retention in organization no yes competitive salary package strongly agree disagree neutral agree strongly agree disagree neutral agree strongly agree 1 7 5 7 20 1 3 11 7 9 31 2 12 48 30 92

sector type private

Total 1 4 18 12 16 51 2 12 49 31 94

public

Total competitive salary package Total

1 1 2

Chi-Square Tests Asymp. Sig. (2-sided) .258 .230 .089

sector type private

public

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Value 4.031a 4.314 2.890 51 22.989b 6.906 4.159 94

df 3 3 1

4 4 1

.000 .141 .041

a. 4 cells (50.0%) have expected count less than 5. The minimum expected count is .39. b. 7 cells (70.0%) have expected count less than 5. The minimum expected count is .02.