INTRODUCTION

EmployeeRetentionisanimportantaspectofhumanresourcemanagement
(HRM).ImprovementinemployeeretentionisessentialtoreduceHRMpractices
costandoverallgrowthoftheorganization.Thischapterexplainstheoverallview
ofthestudy.Especially,itcontainsbackground,problemstatement,purpose,
significance,limitations,delimitationsandproposedorganizationofthestudy.
BackgroundoftheStudy
Todaywearelivinginadynamicworld.Advancementofinformation
technologyhasbroughttocentrestagetheimportanceofhumanresource,more
thaneverbefore(JyothiandVenkatesh,2006,p.1).Inacompetitivescenario,
effectiveutilizationofhumanresourcehasbecomenecessaryandtheprimarytask
oforganizationsistoidentify,recruit,andchannelcompetenthumanresourcesinto
theirbusinessoperationsforimprovingproductivityandfunctionalefficiency
(Ibid).Qualified,motivated,andexperiencedhumanresourcesarealsoessentialin
economicliberalizationandglobalizationera.
Humanresourcemanagementisthemostexcitingareainthefieldof
management.Theresponsibilityofrecruitingandselectingtherightpersonforthe
organizationisHRMdepartment.Sincepeopleconstitutethecornerstoneofany
organization,assumesnervecentreinmostorganizations.Thisisthescienceof
managingemployee/workforcesinanorganization.Itensuresrightpersonatright
placeatrighttime.Italsoprovidestraininganddevelopmentopportunitiesfortheir
efficientperformance(Khadka,2009,p.2).HRMdevelopspracticeswhichfoster

teamworkandflexibilityandmakestheemployeesfeelthattheyarevaluedand
theircontributionisessentialforthedevelopmentandgrowthoforganization.
Aswathappa(2005)definesHRMasthesetofprograms,functions,and
activitiesdesignedandcarriedoutinordertomaximizebothemployeesaswellas
organizationaleffectiveness(p.5).Itisalsoaprocess,whichconsistsofthe
acquisition,development,motivation,andmaintenanceofhumanresource
(DeCenzoandRobbins,2005,p.36).Ittreatsemployeesastheessentialmeansof
realizingorganizationalobjectivesratherthanmereobjectives(Jyothiand
Venkatesh,2006,pp.23).Itfocusesonengenderingcommitmentamong
employeesbywinningtheirhearts(Ibid).
HumanresourceisacrucialaspectofHRM.Especiallykeyortalent
employeesaredestinyoftheorganization.Theretentionofthoseemployeesisoneof
thesignificantissuesofcontemporarycontext.Employeeretentionistheabilityofthe
managementtoretainitsemployeesforalongerperiodoftime.Itneedsfavorable
policiesandpractices,whichletthekeyemployeessticktoanorganization.
Organizationsinvestalotofresourcesforemployeestomakethemableor
corporateready.Highemployeeturnoverratioorflyawayoftalentemployeeisthe
greaterlossoftheorganization.Itcanbeaproblembecauseofincreasedrecruiting,
selection,andtrainingcostsandworkdisruptions(RobbinsandCoulter,p.343).

Newstrom(2007)statesexcessiveemployeeturnovercanhaveseveral
negativeeffectsonanorganization.Theyinclude:

Separationcosts(existinterviewtime,separationpay,unemployment
taxincrease)

Training costs for few new employees(both orientation and skill

development instruction; both formal and informal learning
experiences)

Vacancycosts(temporaryhelporovertimepay;productivitylossand
servicedisruption)

Placementcosts(attracting,screening,andrelocatingnewhires)

Morale effects (loss of friendship, concerns about personal job loss

duringdownsizing)(p.210).

Poorcompensationandbenefits,negativeworkenvironment,frustration,
constantfrictionwiththeirsuperiorsorothermembers,unfairtreatment,lackof
recognition;challengingjob;jobsecurity;motivation;andopportunityforcareer
development,andrtc.arethemaincausesofleavingorquittingjobbyemployees.
Thus,organizationshouldaddressthesethingsintimetoretaintheirkeyemployees.

Isuggestthefollowingaspectswhileattemptingtoretainemployees:(i)
planningahead,(ii)clarityinjobrequirements,(iii)identifyagoodsourceof
recruitment,(iv)screeningandinterview,(v)providechallengingwork,and(vi)
focusoncompensationandworkingconditions.

EmployeeretentionisanimportantfunctionofHRM.Retainingfunction
comprisestheactivitiesof(i)rewardingemployeesforperformingtheirjob
effectively;(ii)ensuringharmoniousworkingrelationbetweenemployeesand

managers;and(iii)maintainingasafehealthyworkenvironment(Cascio,2006,p.6).
Cascio(2006)alsosuggestsfairtreatmentofemployees,opencommunication,face
tofaceresolutionofconflict,promotionofteamwork,respectforthedignityofeach
individual,andpayincreasesbasedonmeritareessentialtoretainemployees(p.8).

Thisstudyexaminesandanalyzestheemployeeretentioninbanking
industryofmysore.Abankisafinancialinstitutionthatacceptsdepositsthrough
differentkindsofaccountsandlendsthosedepositseitherdirectlyorindirectly.
Bankingindustryisgenerallyahighlyregulatedandreliableindustryofmysore.

Thehistoryofbankingindustryisnotlonginmysore.Itwasstartedfrom
1937AD.Thereareonecentralbank,thirtyonecommercialbanksandeighty
sevendevelopmentbanksinmysore.Thisstudycoverssix(or19.35%)
commercialbanks.Theyare:sbi,hdfc,graduatescooperativebankltd,oriental
bankofcommerce,krishnarajacooperativebank.
ProblemStatement

Retentionofbest,talent,andmostdesirableemployeesisakeychallengeto
organization.HRMdepartmentshouldtakeadeepconcernintheiremployee
turnoverratebecauseitincursdirectandindirectexpenses.Costsofemployee
turnoverseriouslyimpactonorganizationalperformanceandgrowth.

Employeeretentionisoneofthebigchallengestotheorganizations.Inorderto
attaincorporategoalsorganizationshavetoretaintheirkeyemployees.Thus,issues
relatingthesehavebeendrawingtheattention,likeDobanksapplyfairHRpractices
toretaintheirkeyemployees?Isthereproblemofhighemployeeturnoverinbanking
industry?DoArebankspracticingmotivationaleffortstoretaintheirtalents?Isthere

talentspoachingpracticeinthebankingindustryofmysore?Areemployeessatisfied
withtheirpresentjob?Andarebanksapplyingemployeeretentionstrategies. In

general,atpresent,notonlyinMysore,aroundtheworld,theorganizationshave
beenfacingretentionasabigchallenge.Withthisobjectivethisstudyhas
proposedtoseetherealityinthebankingindustryofMysore.

PurposeoftheStudy
Theprimarypurposeofthestudyistoexploreemployeeretentionin
thebankingindustryofMysore.
Thespecificpurposeofthestudyistoexamineandanalyzetheemployee
turnover,HRpracticesandtheirrelationwithemployeeretention;andstrategies
foremployeeretention.
SignificanceoftheStudy
Retentionofkeyemployeeisthemainfunctionofmanagement.
Retentionreferstothemethodsemployedbythemanagementtoconveniencethe
keyemployeesstaywiththeorganizationforalongerperiodoftime.Sincekey
employeesarethebrainoforganization,retentionofsuchemployeesshouldbe
themajorconcernofthemanagement.
Thisstudy(i)contributesknowledgeindustry,especiallyinthefieldof
retentionofkeyemployees,(ii)fulfillsthegapsofpreviousstudies,inthecaseof
Nepaltheresearchercouldnotfindanyresearchorstudy,thusitwouldbethefirst
study,(iii)showsrelationshipsbetweenemployeeretentionandHRpracticeslike
hiringpractices,compensationandbenefits,participativemanagement,trainingand
development,opportunityforgrowth,motivation,etc.and(iv)facesthedramatically
increasingcomplexity.Changingenvironment,increasingsizeoforganization,

increasinginventorylevelofemployees,rulesandproceduresarethemaincauseof

increasingcomplexity.Talentemployeesarerequiredtomanagesuch
complexity.Thus,thestudyonemployeeretentionisveryimportant.
ResearchQuestions
Theresearchquestionsofthisstudyareasfollows:
RQNo.1.WhatistheemployeeturnoverrateinbankingindustryofMysore?
RQNo.2.WhataretheHRpractices,whichpromotetheemployeeretention

inanorganization?
RQNo.3.HowtheHRpracticesarerelatedtoemployeeretention?
RQNo.4.Whatarethestrategies,whichhavebeenapplyingbythebanks
toretaintheiremployee?
ConceptualFramework
Qualitativeresearchshouldbebasedonclearconceptualframework,which
outlinesthepossiblecoursesofaction.Thus,thisisthefoundationonwhichthe
studyisconductedorestablished.Theconceptualframeworkofthestudycanbe
depictedinthefollowingfigure.
HumanResource
Management

HRpractices
Hiringpractices
Compensationand
benefits
Jobsecurity
Participative
management
Trainingand
development
Opportunityforgrowth
Motivation

Retentionstrategies
Improvinghiring
practices
Providingcareer
development
opportunity
Positiveculture
Successionplanning
Implementationofteam
management
Flextimeandbenefits

Positive

Satisfactory
6

Employeeretention

FigureNo.11:Diagramofconceptualframeworkoftheresearch
Humanresourcemanagementisconcernedwithmanagingpeopleinthe
organization.Thisensuresrightpeopleatrightplaceatrighttime.Theindividuals
whoworkintheorganizationareemployees.Theyplayacrucialroleinoperating
andcontrollingactivities.Theyarethedestinyoftheorganization.
Employeeturnoveristhemajorproblemofmostorganizations.Factors
likecompensationandbenefits,qualityofworklife,relationshipwithsupervisor
orpeer,afterretirementbenefitsplan,jobperformance,etc.playasignificantrole
inemployeeturnover.Managementshouldidentifythesefactorstomakethem
positiveorfavorableandshouldapplyappropriatestrategiestoretainemployees.
Hiringpractices,compensationandbenefits,jobsecurity,participativemanagement,
traininganddevelopment,growthopportunities,etc.arethemaincomponentsofHR
practiceswhichhelptoretentionofemployee.Theorganizationshouldrecognize
thesecomponentsandshouldapplysuitablestrategiestoretaintheirkeyemployees.

LimitationsandDelimitationoftheStudy
AlthoughthisstudyfocusesonHRpracticesforemployeeretention,itis
acknowledgedthatthisstudyhassomelimitationsandthereisenoughroomfor
furtherstudy.Themajorlimitationsanddelimitationsofthisstudyareasfollows:

Limitations
Theresearchwillbebasedonfollowinglimitations:
Firstly,therandomsamplewillbedrawnfromthelistofcommercialbanks
ofMysore.Resultsfromstudiesonaspecificindustrymayhavelimitationsto
generalizingtootherbanks,financecompaniesandothersectorsoftheeconomy
andviceversa.

Secondly,thisstudyisbasedonavailableinformationfromsecondaryand
primarysources.Accuracyofthestudywilldependonprovidedinformationbut
adequateattentionisgiventoreliabilityandvalidityoftheresearch.
Finally,theuseofselfreportquestionnairesmaylimitabilitytodraw
conclusionsaboutthecasualnatureoftherelationships(Vlachos,2008,p.94).

Delimitations
Theresearchwillbebasedonfollowingdelimitations:
Firstly,thisstudycoversonlycommercialbanksofMysoreespecially
foreignjointventureandnationalprivatebankstomakeprecisetotheresearch.
Respondentsarechosenfromthesamplebanks,whoareworkingatpresent.
Secondly,thestudycoversonlytenyearsperiodi.e.2001to2010.
Theconclusionwillbebasedonstudyperiod.
Finally,theresearchisbasedonexploratorycumdescriptivedesign.
Theselimitationsanddelimitationsproofthatthereissufficientroomfor
furtherresearch.FurtherresearchcanclarifyotheraspectsoftheHRpracticesand
theirimpactonorganizationaleffectiveness.Furtherresearchmaybeon
quantitativedesigninemployeeretentionofbankingindustryinMysore.
PurposedOrganizationoftheStudy
Thisstudyhasbeenorganizedintosevenchapters.Eachchapterdevoted
to some aspects of HR practices to employee retention under the study
organizations. The rationale behind this kind of organizations is to follow a
researchmethodologyapproach.

Thefirstchaptercontainsintroductionofthestudy,whichconsistsof
backgroundofthestudy,problemstatement,purposeofthestudy,significanceofthe

study,limitationsanddirectionforfurtherresearchandproposedorganizationof
thestudy.

Thesecondchaptercontainsliteraturereview.Itshowsoverallscenarioof
theemployeeretentionaswellasitsevidenceintheworld.Itconsistsofreviewof
empiricalstudies,researcharticles,thesisordissertations.

Thethirdchaptercontainsresearchmethodology,whichconsistsof
researchphilosophy,researchdesign,populationandsamplingtechniques,
sourcesofdata,proceduresofdatacollection,toolsandtechniquesofdata
analysis,reliabilityandvalidity;andethicalissues.

Thefourthchaptercontainsemployeeturnover,whichconsistsofemployee
inventory,successionplanning,causesofleavingjob,andstrategiesofnewhiring.

ThefifthchaptercontainsHRpracticestoretainemployees.Thischapter
examinesandevaluatesdifferentHRpracticesadoptedbythedifferentbanksto
retaintheirkeyemployeesandrelationofHRpracticeswithemployeeretention.
Thesixthchaptercontainsstrategiesofretention.Thischapterconsists
ofemployeeretentionstrategies,whichhavebeenapplyingthbanksofNepal.
Thelastorseventhchapterofthestudycontainssummary,conclusion,
andrecommendations.