International Journal of Management and Business Studies Vol. 19, n.2, pp.77-84 ISSN 1380-1171
Success of Employee Retention Practices Adhered by the Parcel Service Sector with Special Reference to Tamil Nadu N. Sumathi ∗ Dr.S.Parimala1 Abstract Roads continue to constitute the most significant component of India’s Logistics Industry, accounting for 60 percent of total freight movement in the country. A majority of players in this industry have been small entrepreneurs running family owned businesses. This study aims to analyse the success rate of Employee Retention Practices adhered by the Parcel Service Sector (Parcel Services) in Tamil Nadu. The study applied Judgmental & Convenience Sampling Techniques for selection of the sample. The researchers have adopted judgmental sampling technique for defining the entire population of Surface Transport Operators (parcel service operators) in Tamil Nadu. The elaborate survey result reveals the fact that only 44.30 respondents’ have express intention to stay back in their current job for a long tenure. Whereas, 55.70 per cent of the sample respondents’ have opined that they expect search for new job in the future. Thus, it could be concluded that most of the employees’ working in Parcel Service Firms do not prefer to shift from their current job to other job in want of good salary package, but, they are passionate to take up more challenging job, want for Career Advancement, Expectation for work-life balances and liking for stress free work environment forces them to search for new or alternative job. The Parcel Service Providers in particular and Logistics Service Providers in large must take these issues very serious and should provide a real-time work experiments to their employee and opportunities to express individual ability, so that they can feel pride and motivated to work in an organisation for long tenure. EERP Classifications: JKK72, 5EM03, D5SDW Key Words: Success of Employee, Retention Practices, Parcel Service Sector Introduction The Transport and Logistics Sector are fundamental to the development of a country, especially in India where it is estimated to provide employment to 45 million people. Roads continue to constitute the most significant component of India’s Logistics Industry, accounting for 60 percent of total freight movement in the country. A majority of players in this
industry have been small entrepreneurs running family owned businesses. Given their small scale and limited investment capability, most of their investments have been focused on short term gains - direct and immediate impact on the top line / bottom line of the business being the key decision criterion. As a result, investments that pay off in the longer term, such as those in manpower development, have
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Assistant Professor (Senior Grade), Department of Administration, (Result Analysis Wing), Amrita School of Engineering, Amrita Vishwa Vidyapeetham, Coimbatore Tamil Nadu, India. E-mail:
[email protected] 1 Dean, Department of Commerce, Shri Nehru MahaVidhyala College of Arts and Science Coimbatore, Tamil Nadu, India.
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Success of Employee Retention Practices Adhered by the Parcel Service Sector with Special Reference to Tamil Nadu
been minimal historically. Also, these businesses are typically tightly controlled by the proprietor and his / her family and as such, making it unattractive for professionals. Poor working conditions, low pay scales relative to alternate careers, poor or non-existent manpower policies and prevalence of unscrupulous practices have added to the segment's woes creating the image of the segment that holds few attractions for those seeking employment5. Thus, it could be rightly stated that the Transportation, Logistics, Warehousing and Packaging Sector is considered an unattractive career option and fails to attract skilled manpower and also in retaining the essential manpower. Statement of the Problem Employee retention is a point of pride, reducing turnover is a key goal, and improving employee satisfaction is important at the end. Ironically, some trucking companies are not aware of the benefits of equipping their employee both in term of monetary, provision of nonmonetary benefits and also in ensuring job security, thus, these factors help them in retaining their employees’ or on the other hand some of the Logistics Service Providers, those have certain regulated HR policies and organisation culture, fail to realise that these factors certainly determines the retention of employee for long tenure. Object of the Study This study aims to analyse the success rate of employee retention practices adhered by the Parcel Service Sector (Parcel Services) in Tamil Nadu. Hypothesis of the Study H1: Demographic, Socio-economic status and Job profile of an employee significantly influence their intention to stay in an organisation. H2: Demographic, Socio-economic status and Job profile of an employee significantly influence their intention of turnover from the current job.
Research Design Theoretical reviews and discussions on HR practices are grouped into five categories like: Persons’ Organisational Fit, Remuneration, Reward & Recognition System, Opportunities for Training & Career Development and Challenging job opportunities. These HR practices are considered as basic determinants of employees’ retention in an organisation for a long period or it may also influence employees’ to search for better alternatives that lead to employee attritions. In the current research work nine determinants are discussed on the bases on HR practices, employees’ commitment towards an organisation and their intention to stay or leave a work place. Research Methodology The current study is both explorative and descriptive in nature. The study applied Judgmental & Conveniences Sampling Techniques for selection of the sample. The researchers have adopted Judgmental Sampling Technique for defining the entire population of Surface Transport Operators (parcel service operators) in Tamil Nadu. And researchers also applied convenience sampling techniques for the collection of primary data. The respondents’ are approached with the support of the surface transportation associations and groups references. In this study only voluntary respondents’ were included in the survey. In Tamil Nadu there are 12 large size surface transport companies in operation. Of these 12 companies, seven companies operate throughout the state and five companies operate in seven districts. The seven firms that operate throughout Tamil Nadu are selected as research population. Due to the vast spread of these seven Transportation Service Providers and difficulties encountered by the researchers in the data collection, sample population was restricted to 7.5 per cent of the total workers working in these seven 78
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companies. The sample population of the study consists of 650 respondents in middle and low cadres. Results and Discussion The empirical study consists of 52.30 per cent male and 47.70 per cent of female employees’. Out of 650 employees’ participated in the survey 47.69 per cent of employees’ aged between 21-39 years and 27.39 per cent of sample populations’ are degree holders. It was ironic to infer that only 9.23 per cent of the sample population have 10-15 years of services experiences to their credit. It is evident from the survey that 42.80 per cent of employees’ monthly income ranges between `.10000 to `.20000. Employee Turnover is an important factor in a small business's bottom line. Replacing employees can affect business' productivity expenses and overall performance. The empirical data analysis indicates that majority i.e., 55.70 per cent of the sample respondents’ have opined that they expect search for new job in the future. Whereas, the rest of the 44.30 respondents’ have said that they plan to work in the present job for as long as possible. Prefer to Work for Long Term , 44.30 Look for a new job in future, 55.70
The above table infers the primary reasons stated by the employees’ for shifting from one organization to the other. From the data analysis it has been observed that, majority of the employees have opined that they prefer to move from one
salary/monetary benefits, it is ranked in first place with an average of 7.16. Followed by, the sample respondents’ have said that some individuals have a tendency to get bored in a short span so they prefer to shift from one job to the other, it is ranked in second place with mean score of 6.23. On an average 6.09, 5.84 and 5.74 of sample subjects have stated that unrealistic expectation of employees’, lack of recognition and lack of challenges or growth are some of the reasons that force employees’ for shifting from one organization to the other. Similarly, the sample respondents’ have said that they move from one organization to other as they lack faith in management/supervisor as they do not provide opportunity for self-growth and lack of trust in senior manager. Further, it has been observed stressful work environment and low job satisfaction also influences in employees attrition. It has been found that poor work-life balances also force employees’ movement from one organization to other. The study aims to draw an introspective analysis, whether the socioeconomic status of the sample employees’ influences their decision to stay or leave their current job and tested. H1: Demographic, Socio-economic status and Job Profile of an employee significantly influence their intention to stay in an organisation. The data indicates in the above table shows that probability value of ANOVA at 5 per cent level establishes good relationship between the variables tested. Therefore, the hypothesis framed stands accepted and it concluded that the close association between the demographic, socio-economic status and job profile of an employee significantly influence their intention to stay in an organisation. H2: Demographic, Socio-economic status and job profile of an employee significantly influence their intention of turnover from the current job. 79
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Success of Employee Retention Practices Adhered by the Parcel Service Sector with Special Reference to Tamil Nadu
organization to the other in want of higher Table: 1 Primary Reasons stated by the Employees’ for Shifting from One Organization to the other Sl. No. Reasons Sum Mean 1. Salary / Monetary Dissatisfaction 4653 7.16 2. Bored with routine work 4049 6.23 3. Unrealistic expectation from the job 3959 6.09 4. Lack of Challenges or growth 3730 5.74 5. Lack of Recognition 3795 5.84 Loss of faith in management / supervisor for providing 3685 6. 5.67 opportunity for self-growth 7. Lack of trust in senior manager 3324 5.11 8. Stressful work Environment 3228 4.97 9. Overall low job satisfaction 3230 4.97 10. Poor Work-Life balances 3177 4.89 Source: Primary Data
Rank 1 2 3 5 4 6 7 8 8 10
Table: 2 Result of ANOVA Test Association between Demographic, Socio-Economic status and Job Profile of an Employee’s Intention to Stay in an Organisation Problems
Gender
Age Educational Qualification Length of Employment Monthly Income
Management Level Type of the organization Size of the organization
Source
Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total
SS 14.857 147.297 162.154 12.945
DF 4 645 649 4
MS 3.714 .228
F
Sig
16.265
.000
5.360
.000
10.194
.000
5.196
.000
1.952
.100
11.970
.000
6.719
.000
16.100
.000
3.236
389.431
645
.604
402.375
649
-
66.215
4
16.554
1047.379
645
1.624
1113.594
649
-
50.773 1575.787 1626.560 5.748 474.953 480.702 17.182
4 645 649 4 645 649 4
12.693 2.443 1.437 .736 4.295
231.458
645
.359
248.640
649
-
11.526
4
2.882
276.599
645
.429
288.125
649
-
37.258
4
9.314
373.156
645
.579
410.414
649
-
Level of significance: 5 percent 80
International Journal of Management and Business Studies
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Table: 3 Result of ANOVA Test: Association between Demographic, Socio-Economic status and Job Profile of an Employee’s Intention of Turnover Problems
Gender
Age Educational Qualification Length of Employment Monthly Income
Management Level Type of the organization Size of the organization
Source
Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total
SS 4.464 157.690 162.154 40.396
DF 4 645 649 4
MS 1.116 .244 10.099
361.979
645
.561
402.375
649
-
F
Sig
4.564
.001
17.995
.000
.794
.529
8.949
.000
17.402
.000
3.297
.011
4.311
.002
7.827
.000
-
5.455
4
1.364
1108.139
645
1.718
1113.594
649
-
85.524 1541.036 1626.560 46.825 433.877 480.702 4.982
4 645 649 4 645 649 4
21.381 2.389 11.706 .673 1.246
243.658
645
.378
248.640
649
-
7.502
4
1.875
280.623
645
.435
288.125
649
-
18.999
4
4.750
391.414
645
.607
410.414
649
-
Level of significance: 5 percent Table: 4 KMO and BARTLETT'S Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx. Chi-Square DF Sig Level of Significance: 5 per cent
.925 4.159 36 .000
Table: 5 Cumulative Factors Influencing the Employee Retention in an Organisation Variables Initial Extraction 1.000 .991 Organizational Fit 1.000 .989 Remuneration 1.000 .931 Opportunities 1.000 .967 Challenging 1.000 .945 Working Environment 1.000 .954 Leadership Practices 1.000 .932 Relationship With Superiors 1.000 .866 Organizational Polices 81
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Success of Employee Retention Practices Adhered by the Parcel Service Sector with Special Reference to Tamil Nadu
Communication System The data indicates in the above table shows that probability value of ANOVA at 5 per cent level establishes good relationship between the variables tested. Therefore, the hypothesis framed stands accepted and it concluded that the close association between the demographic, socio-economic status and job profile of an employee significantly influence their intention of turnover from the current job. Factor Analysis Technique has been applied to find the underlying dimension (factors) of HR & Organisational Practices influencing the Employees’ Retention in Parcel Service Providers operating in Tamil Nadu. In the present study, Kaiser-MeyerOlkin (KMO) Measure of Sampling Adequacy (MSA) and Bartlett's test of Sphericity were applied to verify the adequacy or appropriateness of data for factor analysis. In this study, the value of KMO for overall matrix was found to be excellent, since the KMO score is above.50 (.925) and Bartlett’s test of Sphericity was highly significant (p< 0.05). Bartlett’s Sphericity test was effective, as the chi-square value draws significance at five per cent level. The results thus indicated that the sample taken was appropriate to proceed with a Factor Analysis Procedure. Besides the Bartlett’s Test of Sphericity and the KMO Measure of Sampling Adequacy, Communality values of all variables were also observed. In order to provide a more specific interpretation of the results, 9-item scale was then Factor analyzed using the Principal Component Method with Equamax rotation with Kaiser Normalisation. Factor loadings are used to measure correlation between variables and the factors. A loading close to 1 indicates strong correlation between a variable and the factor. While a loading closer to zero indicates weak correlation. Unrooted solutions of factor loading are not suitable
.984 variables generally tend to load on multiple factors. Factor analysis attempts to identify underlying variables, or factors, that explain the pattern of correlations within a set of observed variables. Factor analysis is often used in data reduction to identify a small number of factors that explain most of the variance observed in a much larger number of manifest variables. In the current study Rotation Factor analysis is performed to measure the association between factors influencing the employees’ retention of various organisations. The significance of relationship between the variables is depicted in Table: 5 Four factors extracted together account for 95.102 percent of the total variance (information contained in the original 9 variables). This is very good, because authors are able to economize on the number of variables (from 9, researchers have reduced them to four underlying factors), while the data lost only about 4.898 percent of the information content (95.102 percent is retained by the four factors extracted out of the 9 original variables). Since the idea of Factor Analysis is to identify the factors that meaningfully summarize the sets of closely related variables, the rotation phase of the factor analysis attempts to transfer initial matrix into one that is easier to interpret. Equamax Rotation Method is used to extract meaningful factors. Four factors were identified as being maximum percentage variance accounted. The variable X4, X5, X6 and X7 are grouped as factor I and it accounts for 27.842 per cent of the total variance. The variable X1, X3, X6 and X8 constitute the factor II and it accounts for 23.556 per cent of the total variance. The variablesX1, X4 and X9 are grouped as factor III and it accounts for 22.490 per cent of the total variance. The variables X2 and X3 are grouped as factor IV and it accounts for 21.212 per cent of 1.000
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for interpretation purpose since the
the total variance.
Table: 6 Factor Analysis of Association between Factors Influencing the Employee Retention in an Organisation
Variables
Factors Plan to work at present job for as long as possible
X1- Organizational Fit X2- Remuneration X3- Opportunities X4- Challenging X5- Working Environment X6- Leadership Practices X7- Relationship With Superiors X8- Organizational Polices X9- Communication System Eigen Values % of variances Cumulative Level of Significance: 5 per cent
.569 .885 .694 .738 2.506 27.842 27.842
Findings and the Suggestions From the elaborate data analysis it has been observed that majority i.e., 79.23 per cent of the employees’ surveyed are blue collar employees and rest of the 20.77 per cent of the sample subjects are administrative staff. It has also been found that 51.20 per cent of respondents’ are working for national level service providers. Out of 650 respondents’ surveyed, 44.80 per cent of sample subjects’ are working in Large Scale Industries. The elaborate survey result reveals the fact that only 44.30 respondents’ have express intention to stay back in their current job for a long tenure. Whereas, 55.70 per cent of the sample respondents’ have opined that they expect search for new job in the future. Some of the primary reasons identified for the lack of employees’ loyalty towards their Organisation and their intention of search for new job are: • Individual mismatch with Person & Organisation Fit.
Certainly look for a new job in the near future
.535 652 .651 .792 2.120 23.556 51.399
Plan to stay in this job for at least two to three years
.690 .587 .927 2.024 22.490 73.889
Would hate a quit this job
.931 .642 1.909 21.212 95.102
better opportunities and take up challenging task. • Dissatisfaction with leadership practices, organisational Polices & Communication Systems. • However, it has been observed that the 44.30 per cent of the sample subjects have expressed satisfaction towards Remuneration Packages, Working Environment and Relation with Leaders, Colleagues & Subordinates. • Thus, it could be concluded that mostly of the employees’ working in Parcel Service Firms do not prefer to shift from their current job to other job in want of good salary package, but, they have passion to take up more challenging job, Want for Career Advancement, Expectation for worklife balances and liking for stress free work environment forces them to search for new or alternative job. The Parcel Service Providers in particular and Logistics Service Providers in 83
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Success of Employee Retention Practices Adhered by the Parcel Service Sector with Special Reference to Tamil Nadu
• Individual aspiration for search for serious and should provide a real-time work experiments to their employees and Opportunities to express individual ability, so that they can feel pride and motivated to work in an organisation for long tenure. Conclusion Logistics Service Providers operating in India, planning for the future should be giving close attention to why attrition is occurring in the preset. To ignore why people are leaving the organization is to ignore the organization’s greatest asset – its people. People are needed to accomplish the task, but people are more than just tasks they perform. They are dreams, hopes, ambitions, creativity and innovation. To recognize and cultivate these valuable assets is one of the surest ways to build an organization that leads rather than follows in domestic and global markets. Thus, Organizations should create an environment that fosters ample growth opportunities, Appreciation for the work accomplished and a friendly cooperative
large must take these issues very atmosphere that makes an employee feel connected in every respect to the organization. Retention plans are an inexpensive way of enhancing workplace productivity and engaging employees emotionally. Proficient employees keep the quality up and business operations run smoothly along with the cost saving in the longer run. References 1. Annual report 2011–12, Ministry of Road Transport and Highways (MoRTH);KPMG in India analysis. 2. Pankaj Chandra and Nimit Jain(2007), The Logistics Sector in India: Overview and Challenges, W.P. No.2007-03-07, Indian Institute of Management, Ahmedabad, India, March. 3. Sudha (2012), A Study on Retention Strategies In Retail Industry With Special Reference to Big Bazaar, International Journal of Logistics and Supply Chain Management, Volume 1, Issue .1.
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