Employee Benefits Management – Part 2

Employee Benefits

Relationship between Employee Benefits Management and Employee Retention

Objectives of the Study

This study on the review of literature on retention initiatives undertakes the following objectives:

  • To find out the various research works that have been done in the area of Relationship between employee benefit management and retention. It is to highlight the various factors which affect retention initiatives in an organization.
  • To explore the relationship between employee benefits management and retention with job satisfaction leading to employee retention.


The study is descriptive in nature and only secondary data have been used in it. The secondary data consists of books and various research journals.

Employee Retention

It also refers to the hierarchical arrangements and practices utilized as a part of the organization to keep key workers from leaving the association. Employee retention is the exertion by a business to keep attractive employees with a specific end goal to meet business targets (Frank et al., 2004 cited in Natalie et al., 2011) [5].

E-Retention is keeping the capable well-performing employees in the organization for a longer period to achieve competitive advantage. As per Berry and Morris ([6], p. 2,) retention is a continuation of the employment of the employees, particularly high- caliber and productive employees.

Employee retention in an organization relies upon the way the organization maintains its HRM practices to discuss the issues and requests of its employees. However, retention is multi-dimensional a factor of an organization’s human resource policies which begins with recruiting the right people in the organization and to stick them with the organization’s business portfolio (Freyer, 2014 cited in Madiha et al., 2009 cited in Fatima, 2011) [5] (p 9).

In addition, the authors discussed a range of retention strategies, including bonuses, promotions, and personal communication from top managers. They also discussed whether retention bonuses should be tied to performance and offer suggestions for implementing performance-based rewards.

The idea of employee retention begun during the 1970s and mid-1980s while people and organizations are unaware of the importance of keeping the potential employees and its advantages to the organization. Before that, as usual, people join the organization to earn to meet their daily needs; they stay longer time in the organization and even for their work life.

However, job mobility and voluntary job changes made an evolution in many industries as the employees found themselves with the problem of employee turnover.

So, the management of the organizations critically evaluated and developed employee retention as a management tool to retain the potential employees in the organization (Mckeown, 2004, cited in [7], p. 297-298).

However, the fundamental reason for employee retention is to prevent them capable workers from leaving the organization as this could affect the services offered by the organization (Chiboiwa, 2009, cited in [8], p.83).

Staff turnover is vital for any organization. It has a direct impact on the smooth running, productivity, performance and long-term sustainability of the organization. As such, employee retention should be the primary focus of the organization to maintain a strategic distance from the unpredictability and high cost of selecting an expert and qualified workforce to the organization.

Addition to this, when competent employees leave the organization, there are movements of the customers towards those employees who are loyal to those employees, this result to the organization loss of both employees and the customers.

In addition, high turnover has an impact directly and indirectly to the reputation, image, productivity and sustainability of the organization. On a few occasions, subordinates who are loyal to the leaving employee may leave the organization as well.

Therefore, employee retention needs to be considered more important than hiring a new employee. According to Sunderji [10], it is the presence of de-motivators (job dissatisfaction) and the absence of motivators (no job satisfaction) that cause employees to jump from the ship.

He derived his conclusion based on Fredrick Herzberg’s (1968) two-factor theory. Herzberg identified two factors, i.e. the motivating factors and satisfying factors.

The main conclusion he made with the application of this theory to employee turnover is that if the employees are motivated and satisfied with their jobs, they have no intention or no reason to jump into another ship.

Sunderji [10] further suggested the following as reasons for employees leaving their jobs: (1) The top two motivators leading to job satisfaction were a sense of achievement, and recognition for the achievement; (2) The top two de-motivators leading to job dissatisfaction were bureaucratic and unfair company policies and administration, and poor supervision; and (3) Salary is an extrinsic factor; therefore, an average or generous salary did not lead to job satisfaction; rather, it leads to no job dissatisfaction.

Relationship between Employee Benefits Management and Employee Retention – Part 1

Relationship between Employee Benefits Management and Employee Retention – Part 3

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