EFFECT OF HUMAN RESOURCES MANAGEMENT PRACTICES ON EMPLOYEE RETENTION IN PRIVATE ORGANIZATIONS

CHAPTER ONE

INTRODUCTION

1.1         Background of the study

Business organizations are facing aggressive competition from all over the globe . Practices of human resources management plays a vital role in the achievement of any organization’s goals and it also helps to maintain the competitive advantage. For achieving organizational goals, the relationship of organizational HR practices with Organizational employee retention is very important. This cutthroat competition among organizations not only results in better production but also improves the work efficiency of human capital. Indifferent business organizations, competitors try to copy the different resources of successful organizations like technology, but human capital is an asset, which cannot be easily imitated. As the competition is increasing day by day employee retention becomes the top priority of organizations.

For achieving competitive advantage the efficient workforce and HR practices are very important in organization, because it plays a fundamental role in achieving an inventive and high-class products/ services.HR practices in organization gained bigger attention over the last years due to its effective impact on employee retention. Employee retention can be defined as “Organizations any voluntarily action which can create such a convincing environment which can help to retain workforce for a long term. According to Eskildesn and Nussler (2000) the organizations fails, when they do not give prioritize importance’s to their workforce retention .Most of the organizations do not pay more attention on staff retention because it cost more. This consists of both direct and indirect cost .First of all because of employee turnover, when the organization hire new staff, market rate salary should be given to them, which would be more than the previous staff, cost of hiring will also be another cost. These costs come under direct cost, and the indirect cost is less productivity, lack of customer satisfaction, loss of intellectual capital and above all negative impact on reputation of the organization. It is understood that good HR practices helps to minimize employee turnover. HR practices are basically the organizational activities which are helping to manage the team of human resource and ensure that the workforce is engaged to fulfil the organization’s goals.Therefore this study seeks to examine the effect of Human resources management practices on employee retention in private organization.

1.2         Statement of the problem

In this era, the business environment of organizations is highly volatile and many challenges are faced by organizations in the form of acquisition and keeping human resource. Human resources are sustainable competitive advantage of any company because of their valuable and scarce capabilities. An organization depends upon many factors, but the most vital factor that affects the organization performance is its employee which plays an important part in their success.However over the years, it has been noticed that many organizations have not been able to get the best out of their employee’s as a result of ineffective human resources practices. HR practices has their direct impact on employee’s behaviours and attitudes, which has a major effect on organizational outcomes. Basically HR practices and policies reflect the strength of relationship between employee’s and management.Also research has indicated that HR practice and effective corporate strategies works side by side and can lead to high preservation of its most precious assets- the employees.Hence it is upon the premise that this study seeks to examine the effect of Human resources management practices on employee retention in private organizations.

1.3         Objective of the study

the main objective of this study is to examine the .Effect of Human resources management practices on employee retention in private organizations. Specifically the study seeks

1. To examine the nature of human resources practices

2. To investigate the importance the importance of human resources practices in a private organization

3. To to determine the effect of human resources practices on employee career development and employee retention.

1.4         Research Hypothesis

The research is guided by the following research question

HO1: Human Resources practices does not have have any significant importance in private organization

HO2 : There is no significant effect of human resources practices on employee career development and employee retention.

1.5         Significance of the study

Findings from the study will be relevance to manager and stakeholders of private organization.This research work will offer a better understanding on the relevance of human resources practices on employee’s retention and career development with the aim of achieving organizational goals and productivity. The study will enlighten professional Human Resource Managers working with organizations on the need to employ the best best practices so as to get the best out of their employees and reduce employee turnover. The study will contribute to the general body of knowledge and serve as a reference material to  student and other researchers in this field.

1.6         Scope of the study

The study borders on the effect of Human resources management practices on employee retention in private organizations. The study is however limited to selected private organizations in Abuja.

1.7       Limitation of the study

The following factors poses to be a limitation during the course of this research

Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8       Definition of terms

Human Resource Management: Human resource management is the strategic approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives.

Employee Retention: Employee retention refers to the ability of an organization to retain its employees.

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