ABSTRACT
In the current competitive business atmosphere, industry is facing plenty of challenges notably obtaining the proper employees and retaining them. This research studies has been conducted on BIG5 Construction Company to highlight importance of the non-financial rewards in terms of their effectiveness as well as efficiency. The purpose of this study was to seek out the effects of varied non-financial reward practice on employees’ retention. The assorted independent dimension includes recognition, training, work life balance and physical work environment. Both primary and secondary data source were used, primary data were collected form 315 respondents through questionnaires selected using stratified random sampling. A Descriptive and explanatory research design has been applied in this study. Questionnaire contents were adopted from past research and Paul E. Spector employee recognition program handbook. The adopted questionnaires were measured on a five point likert scale used to collect data from respondents; spss version 20 software has been used to analyze the data for descriptive and inferential statistics. The result of the study shows that among the non- financial reward practice, training and physical work environment have a positive and significant effect on employee retention but recognition and work life balance have positive relation but insignificant. Furthermore the variables employed in the model explain 60% of the variation in employee retention also the beta coefficient in the multiple regression analysis shows that non-financial reward studied had a positive influence in bringing a variation in employee retention. The result from the descriptive analysis revealed that the respondents low agreement on the non-financial reward practice studied, this implies that the practice of these rewards of companies in the park were inadequate to retain their employees. The study suggest that companies should have to give mush emphasize on non-financial reward practice to retain their employee. This research will be supportive and fruitful for HR managers in industrial sector by coming up with a good compensation package to retain their competent employees.
Index Terms- recognition, training, work life balance, physical work environment, Employees Retention
CHAPTER ONE
INTRODUCTION
1.1. Background Of The Study
Many organizational theorists widely accepted that from the resource of an organization human resource is the most important one because things are done through people. The success, profitability and competitiveness of an organization depend heavily on the attraction, motivation and retention of key employees. The longer employees stay in their organizations the more these knowledge, skill and ability appreciate as employees learn and acquire new skills and knowledge to add to the human capital of the organization. Many researcher agrees that it costs an organization more to hire new employees than to maintain an existing one. Considering this it is important to focus on factors that affect retention of key employees in an organization. This is because that retention helps an organization to prevent the loss of competent employees from an organization as this could have adverse effect on productivity and profitability (Samuel & Chipunza, 2009).
Retention is about keeping those employees who are producing the results which the organization desires (Frank, Finnegan & Taylor, 2004). Employee retention is a technique adopted by businesses to maintain an effective workforce and at the same time meet operational requirements (Mita, M., Aarti K. and Ravneeta, 2014). This study aimed at to examine the effect of non-financial reward practice on employee retention. And the importance of non-financial reward is to reward employees for their extra ordinary job performance using different opportunities and motivate them to stay long. Non-financial reward are non-monetary/non cash reward and it includes autonomy in their job and participation in decision making, assigning challenging duties, improving working conditions, recognizing good work through small gifts, letters of appreciation, plagues, tickets to restaurant, providing some services for the employees, organizing social activities in the work place (Kovach, 1999).
So for an organization to be successful, productive and competent it should work more on retaining productive employees. Retaining productive employees requires a lot of input that forces them to stay long. From those inputs non-financial reward is the most important one that determines an employee decision whether to stay or leave an organization (kovach,1999).
As it is manipulated in many human resource and organization behavior literature nonfinancial reward practice play a great role in retaining employees. Creative use of personalized non-monetary rewards reinforces positive behaviors and improves employee performance and retention (Ryan et al, 2000). To perform at their best, workers must feel welcomed, valued, and appreciated and Non-monetary rewards help companies address these relationship needs (Leena Thampan, 2013).
1.2. Statement Of The Problem
The long-term success and performance of an organization is dependent on its ability to retain the best employees (Das & Baruah, 2013). When employees leave, organization will face with both direct and indirect costs. Decreasing employee turnover has the potential to lead to significant cost saving for organizations as hiring new workers involves significant training and orientation expenses (Cho, & Lewis, 2012).and Most researcher agrees that non-financial reward plays a great role in retaining employees (Tan, 2009). Studies by (Aktar, Sachu & Ali, 2012) find out, many organizations are suffering from high turnover rates and down falls because they do not apply non-monetary rewards that may only need little effort. Added to this, Employees may not only look on monetary rewards as key factors to their stay but may also look at other factors relevant to personal development, career management and even the working environment (Nienaber, 2011; Snelgar, 2013 & Bhengu & Bussin, 2012).
Responding to today’s workplace demands means amongst other things that organizations need to understand the preferences and needs of employees and offer more than just a good pay check (Nienaber, 2009). additionally, (Odell, 2005) study found out that non-cash reward programs would work better than cash in such cases as reinforcing organizational values and cultures, improving teamwork, increasing customer satisfaction and influencing specific behaviors among employees. In another research by (Thumbra, (2010) suggests that non-financial rewards have the potential to improve the competitiveness of organizations in attaining and retaining the services of talented people.
The practices of nonfinancial reward practice in Nigeria in the industrial sector are not given much consideration, this cases high rate of turnover of employees in BIG5 Construction Company. BIG5 Construction Company is a park which experiences high rate of employee turnover according to the company quarterly employee turnover reports an average of 5% amount of employee leave the park from the month September to November and an average of 8% amount of employee leave the park from the month December to February ( companies turn over report, 2017) also an average of 11.53% amount of employee leave the organization from the month march to May and an average of 14.07% amount of employee leave the industrial park from the month June to august (companies quarterly turnover report, 2018). And this clearly shows that the park is experiencing high rate of turnover of employee which increased from month to month and the turnover rate signals there is retention problem.
There are several factors responsible for high rate of turnover of employees from those, unbalanced work life, unfair reward practice, lack of providing prestige and recognition for the work done well, working environment are among the most important one(employee exit interview report).
Very few studies are conducted In Nigeria, on this areas; Bazezew Minale (2017) conducted a study on the influence of non-financial reward practice on employee retention the case of united bank other research conducted by Elizabeth Dagne (2018) on examining the effect of Non-financial Rewards on Employee Retention: The Case of Berhanena Selam Printing Enterprise To the best of the researcher knowledge no research has been conducted on this topic on companies in BIG5 Construction Company, this clearly shows existence of knowledge gap in between non-financial reward practice and employee retention. And it creates researcher interest to study the effect that non-financial reward practice have on employee retention. Most researcher associate nonfinancial reward practice with recognition, job security, paternity leave, training and development, promotion, work life balance, work environment And this research was tried to examining the insight of the connection between nonfinancial reward practice and employee retention. In this study the following basic research question has been answered.
1.3 Research question
The following research question were answered by this research study
1. What are the current non-financial rewards practiced in the companies?
2. To what extent does a non-financial reward dimension affect employee retention in the companies in BIG5 Construction Company under study?
3. What is the level of employee retention in the companies in BIG5 Construction Company?
1.4. Objective Of The Study
This part deals on both general and specific objective
1.4.1. General Objective
The general objective of the study is to examine the effect of nonfinancial reward practice on employee retention the case of companies of BIG5 Construction Company.
1.4.2. Specific Objective of The Study
2. To assess the current non-financial reward practices implemented by Companies in the park.
3. To examine the effect of non-financial reward dimension on employee retention in the companies.
4. To assess the level of employee retention in the companies in BIG5 Construction Company.
1.5. Significance of the Study
This paper findings will be beneficial for the management of the companies of BIG5 Construction Company to gain knowledge of how their company effectively manage their non-financial reward structure in accordance with the perception of employees.it will also offer benefits of what reward structure to follow to get competitive advantage and also it will helps human resource department to identify which non-financial reward practice contribute more to retain valuable employees for a long time in the organization.
It will be beneficial to other private and public organization to devise their non-financial reward structure to remain competitive in the present day competitive business environment. Finally it will also be beneficial for academician and researcher who may be able to find a useful research gaps on related topics to be studied through providing necessary information required.
1.6. Scope of the Study
The scope of the study was limited to study the effect of non-financial reward practice on retention of employee in companies in BIG5 Construction Company and it covers only companies’ operating in BIG5 Construction Company other sectors has not been included in this study. It was also cover nine month period of study and methodologically the scope of the study was delimited to operating employees because those are employees showing high rate of turnover.
1.7. Limitation Of The Study
In conducting this research the researcher were faced with challenges and limitations like lack of organized documents, time frame, and also uncooperative response form respondents at the time of questionnaires distribution and collection.in spite of all these constraints the researcher tried to come up with a thorough research which will provide solution for the study areas. Because much of the non-financial reward variables work more for professionals the researcher employed only four of them this can also be a limitation in generalizing the result of the study
1.8. Operational definition of terms
Employee retention: is the overall strategy or ability of an organization to retain its best employees and hence maintain a lower turnover (MBAskool business dictionary). Employee retention also can be defined as the ability of holding the talented and valuable employees within the organization from leaving their job for a longer period of time than the competitors (Johnson, 2000).
Recognition: Communication between management and employees which rewards them for reaching specific goals or producing high quality results in the workplace. Recognizing or honoring employees for this level of service is meant to encourage repeat actions, through reinforcing the behavior you would like to see repeated (BD business dictionary).
Training: is a program that is designed to increase the technical skills, knowledge, efficiency, and value creation to do any specific job in a much better way. (MBA skool business dictionary).
Work Life Balance: is a method which helps employees of an organization to balance their personal and professional lives. Work life balance encourages employees to divide their time on the basis on priorities and maintain a balance by devoting time to family, health, vacations etc along with making a career, business travel etc. It is an important concept in the world of business as it helps to motivate the employees and increases their loyalty towards the company (MBA skool business dictionary).
Physical Work Environment: is an environment aspect consists of different elements such as heating, ventilation, the quality of the air, noise level, lighting and ergonomics of the furniture (Rantanen, 2013).
Career Advancement is Career Development is a unique and lifelong process for each individual of managing learning, work, and transitions in order to move forward and participate effectively in work and society (career development institute, 2017).
Job Autonomy is the degree to which the job provides substantial freedom, independence, and discretion to the individual‟ in work content, the method for accomplishing the work, and the pace at which work is accomplished (Armstrong 2010).
1.9. Organization of the study
This thesis paper is organized in to five chapters, the first chapter were consists background of the study, research question, objectives (general and specific), significance, scope, limitation and organization of the study. The second chapter explains literature review; the researchers analyzed different theoretical and empirical literature and develop conceptual frame work for the study. The third chapter explains methodology of the study, research design, data type and source, method of data collection, target population of the study, sample size determination, sampling technique, validity and reliability test, variable specification and technique of data analysis. Chapter four explains analysis and interpretation, data’s were analyzed tested and interpreted based on statistical result. Chapter five outlines major finding, conclusion and possible recommendation, it is the final chapter in which the findings of the research has been evaluated and measured against the research objectives. It would also consists of recommendations on how non-financial rewards practice may best be applied in order to achieve the desired goal of employee retention, as well as researchers suggestions about future research in study area would be presented.
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