THE ANALYSIS ON THE IMPACT OF HUMAN RESOURCE PRACTICES ON EMPLOYEE RETENTION

Abstract

In this modern era of globalization, most of the human resource management still face difficulties retaining employees in the organization, especially valuable employees. This is due to fierce competition in the industry and the existence of new competitors who enter the industry with multiple strategies of human resource practices. This study aims to identify the relationship between human resource practices and employee retention which consists of training and development, compensation, performance management, recruitment, and selection. About 130 questionnaires were distributed to the respondents in one organization with 100% returned. The data was analysed by using SPSS software. The findings from Pearson correlation analysis, indicate that there was a positive and significant relationship between human resource practices and employee retention. From the results obtained, it was found that the highest correlation of independent variables was compensation. Then, it was followed by training and development, recruitment, and selection while the lowest relationship was performance management. Most of the respondents agreed that good human resource practices can help them to stay for a longer time in the organization. After the regression analysis was conducted, it was found that only two out of four independent variables which are compensation, and training and development have influenced on employee retention. Therefore, it was recommended for the organization to carefully strategize their human resource practices to retain valuable employees from leaving the organization and keep them staying in the organization for a longer period to contribute to the success of the organization. For future research, the study should collect the data from wider audience to make it more generalizable.