A Study on Employee Engagement and its importance for Employee Retention in IT industry in India 1 Dr. Sanjeevani Gangwani, 2 Dr. Rajendra Singh, 3 Ms. Khushbu Dubey, 4 Dr. Pooja Dasgupta 1 Professor, 2 Head, 3,4 Asst. Professor 1 Medicaps Institute of Management Indore, 2 School of Commerce DAVV, Indore. 3,4 Indore Institute of Law, Abstract An organization s capacity to manage employee engagement is closely related to its ability to achieve high performance levels and superior organizational results (Greenberg, 2004). Engaged employees will stay with the organization, be an advocate of the organization and its products and services, and contribute to the bottom line organizational success. Also, engaged employees normally perform better and are more motivated. Greenberg (2004) claims that there is a link between employee engagement and profitability. Employee engagement is critical to any organization that seeks not only to retain valued employees, but also increase its level of performance. Keywords : Employee Engagement, Employee Retention, Productivity, Introduction Employee retention has become a serious and complex problem for all organizations. Managing employee retention and keeping turnover rate below target and industry norms is one of the most challenging issues facing organizations (Phillips & Connell, 2003).Employee Engagement plays an important role to retain employees. By employee engagement, employees feel that they are important for an organization.vazirani (2007) states that engagement is important for managers to cultivate due to the fact that disengagement or alienation is central to the problem of workers lack of commitment and motivation. Worthless work is often associated with apathy and detachment from one s work. He further points out that an organization s capacity to manage employee engagement is closely related to its ability to achieve high performance levels and superior organizational results. Employee engagement is the degree to which an employee is cognitively and emotionally attached to his work and organization. It reflects in the level of identification and commitment www.ijaetmas.com Page 80
an employee has towards the organization and its values. An engaged employee is aware of the business context, and works as a team member to improve performance of the job for the benefit of the organization. Engaged employees are concerned about the future of the organization and are willing to invest discretionary efforts for the organization. Hewitt Associates ( 2006 ) defines employee engagement as those who say speak - positively about the organization, stay desire to be an effective member and strive - continue to perform beyond minimal requirements for the organization. Engaged employees are more profitable, productive, focused, have fun and less likely to leave the company because they are engaged.employees, too have a choice. They can choose, in the first place, whether or not to be attracted into the organization-and, having arrived, they can decide whether or not their job continues to interest them sufficiently to stay in it and develop it. Some employees rarely move beyond a transactional relationship, but many require something more from their jobs- a sense of self-worth and of being valued, and an opportunity to build their career growth.employee engagement is closely linked to employee turnover, customer satisfaction, loyalty, productivity, safety and profitability criteria (Harter, Schmidt and Hayes 2002). Literature Review- According to the study of PriyadarshniNidan (2016) with organization going global and tapping new markets, it has become essential to give the organization its competitive edge by nurturing and retaining the top talent that is human resources. Retaining the highly skilled workforce has become a key concern for many organizations in good as well as bad times provided the importance of these human resources to company s success and survival. Thus employee engagement determines the association of person with the organization. This exploratory research studies impact of employee engagement on employee productivity and motivational level of employee in Retail sector. This sector providing more opportunities for job enhancement but retaining employee are one of the most challenging issues for the retail industry, because of high turnover and low performance. Understanding what drives employee engagement illuminates the path leaders can take to enhance employee retention in their organizations. The findings and recommendations of this study are for retail sector in general. It would help them to perform better and ready to take more responsibility. JyotiNaid (2016) This paper aims to identify employee engagement strategies adopted by the organized retail sector of Nagpur to curb the attrition rate among the staff members. The study focuses on identifying if the employee engagement strategies influence both the gender differently. The key variables associated with employee engagement are intrinsic and extrinsic rewards. These rewards instill a feeling of commitment and satisfaction among the employees thereby resulting in employee retention. The results obtained from the study that both intrinsic and extrinsic rewards influence males and females working in the retail sector of Nagpur. www.ijaetmas.com Page 81
Neelam Lal et al (2013) worked on Employee Engagement via Talent Management. She studied innovative practices of TATA Motors Pune for adopting Employees Engagement through Talent Management. They correlated Employees Engagement and Job Satisfaction with Talent Management Practices. Vishal Gupta and Sushil Kumar (2013) Impact of performance appraisal justice on employee engagement: a study of Indian professionals Performance appraisal is one of the most important human resource management practices as it yields critical decisions integral to various human resource actions and outcomes. The purpose of this study is to explore the relationship between perceptions of performance appraisal fairness and employee engagement in the Indian business context. Schmidt, F. and Marson, B. (2012) studied two factors which were distinguished for employee engagement: Employee Satisfaction (which is the level of contentment or happiness a person assigns to: a) attributes of their job/position, b) their organization, and c) the general or overall way they feel about their employment) and Employee Commitment(that implies how the pride people feel for their organization as well as the degree to which they: a) intend to remain with the organization, b) desire to serve or to perform at high levels, c) positively recommend their organization to others, and d) strive to improve the organization s results). Objectives of the Research The primary objective of this study was to investigate the impact of employee engagement on employee retention in IT industries in India. Research Methodology This study is primarily a descriptive and analytical study. The study is undertaken on the employees of IT industry in India. Sample Size: Total 500 employees were selected from IT industry in India. Source of Data: Questionnaire technique is used to collect primary data from the targeted respondents. H 01 : Increased Employee Engagement does not result into higher Employee Retention. H 02 : Increased Employee Engagement results into higher Employee Retention. www.ijaetmas.com Page 82
TABLE 1 (A) DESCRIPTIVE STATISTICS ON EMPLOYEE ENGAGEMENT &EMPLOYEE RETENTION Mean Std. Deviation Employee Retention 6.7020 1.15926 500 Employee Engagement 5.4840 1.35699 500 N TABLE 1 (B) CORRELATIONS ON EMPLOYEE ENGAGEMENT &EMPLOYEE RETENTION Pearson Correlation Sig. (1-tailed) N Employee Retention Employee Engagement Employee Retention 1.000.426 Employee Engagement.426 1.000 Employee Retention..000 Employee Engagement.000. Employee Retention 500 500 Employee Engagement 500 500 Above table shows the correlations and it is evident from this table that Pearson s correlation coefficient between Employee Engagement and Employee Retention is 0.426 which is significant since the significant value (p- value) 0.000 is less than 0.05. Therefore, we may conclude that there is significant association between Employee Engagement and employee retention. Furthermore, since the value of correlation coefficient r suggests a positive correlation, we can use a regression analysis to Model the relationship between the variables. TABLE 1 (C) MODEL SUMMARY B ON EMPLOYEE ENGAGEMENT &EMPLOYEE RETENTION Mo R R Adjusted Std. Change Statistics www.ijaetmas.com Page 83
del Squar e R Square Error of the Estimate 1.426 a.181.180 1.05006.181 R Square Change F Chang e 110.1 82 df1 df2 Sig. F Change 1 498.000 a. Predictors: (Constant), Employee Engagement b. Dependent Variable: Employee Retention TABLE 1 (D) ANOVA A ON EMPLOYEE ENGAGEMENT &EMPLOYEE RETENTION Model 1 Sum of Squares df Mean Square F Sig. Regression 121.490 1 121.490 110.182.000 b Residual 549.108 498 1.103 Total 670.598 499 a. Dependent Variable: Employee Retention b. Predictors: (Constant), Employee Engagement TABLE 1 (E) COEFFICIENTS A ON EMPLOYEE ENGAGEMENT &EMPLOYEE RETENTION Model 1 Unstandardized Coefficients B Std. Error Beta Standardized Coefficients t Sig. (Constant) 4.708.196 24.058.000 Employee Engagement.364.035.426 10.497.000 a. Dependent Variable: Employee Retention www.ijaetmas.com Page 84
FIGURE 1: HISTOGRAM ON EMPLOYEE ENGAGEMENT &EMPLOYEE RETENTION Over all model summary shows the value of linear correlation coefficient R=0.426, it is the linear correlation coefficient between observed and model predicted values of the dependent variable, Its large value indicates a strong relationship. R2, the coefficient of determination is the squared value of the multiple correlation coefficients. Adjusted R 2 =0.180, R 2 change is also 0.181 and these values are significant which shows that overall strength of association is moderately noteworthy. The coefficient of determination www.ijaetmas.com Page 85
R 2 is 0.181; therefore, 18.1% of the variation in employee retention is explained by Employee Engagement. ANOVA is used to exhibit model s ability to explain any variation in the dependent variable. ANOVA table exhibits that the hypothesis that all model coefficients are 0 is rejected at 1% as well as 5% level of significance which means that the model coefficients differ significantly from zero. In other words we can say that there exists enough evidence to conclude that slope of population regression line is not zero and hence, Employee Engagement is useful as predictor of employee retention. From the table of coefficients, the regression equation can be obtained as Employee Retention= 4.708 +.364*Employee Engagement The normal probability plot is obtained to test the assumption about the normality of residuals and it appears that the residuals are approximately normally distributed. Thus the assumptions for regression analysis appear to be met. CONCLUSION The purpose of this study was to analyze and interpret the data obtained from the research questionnaire.the study included an analysis of organizational factors impacting on employee retention. From the study it can be concluded that retention strategies are complex and are not easy to implement. In order for retention strategies to be effective, the employees, and their managers or supervisors need to be actively involved in the development and implementation of the strategies. Managers need to have a clear understanding of the needs, abilities, goals and preferences of the workforce. Compensation Management and Staff engagement play a very important role to retain employees in an organization.from the above discussion it can be concluded that compensation / remuneration constitutes the largest part of the employee retention process. Employees always have high expectations regarding their compensation packages. These packages vary for organization to organization. An attractive compensation package plays a critical role in employee retention. Employees want to be www.ijaetmas.com Page 86
paid well for the job they do, both for their self-esteem and as a practical means to living. The importance of compensation in employee retention depends somewhat on the type of job and industry. REFERENCE- 1. Greenberg, J., (2004). Increasing employee retention through employee engagement, Alphameasure Incorporated Publication, October, pp. 3. 2. Harter JK, Schmidt FL, Hayes TL (2002), ʹBusiness unit level relationship between employee satisfaction, employee engagement, and business outcomes: a meta analysisʹ, Journal of Applied Psychology, 87(2), 268 279 3. Hewitt Associates (2004), Hewitt Associates study shows more engaged employees drive improved business performance and return, Press Release, May 4. JyotiNaid (2016) Curbing Staff Turnover through Employee Engagement in the Retail Sector of Nagpur International journal of HRM and Research, vol 6 issue 3 pp. 29-40 2016-09-20 5. Kumar Alok & D. Israel (2012), Authentic Leadership & Work Engagement, The India Journal of Industrial Relations, Vol 47, No.3. 6. Neelam Lal, Ganraj S. Mane, (2013) Employee Engagement via Talent Management, BVDU, IMED, Pune. (Paper presented on 22.03.13 at Institute of Management and Entrepreneur Development, Pune). www.ijaetmas.com Page 87