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Purpose The purpose of this research was to test whether employees’ perceptions of an organization’s human resource management (HRM) practices impact their job embeddedness and, in turn, employee retention in information technology and its related industry (IT/ITES) Materials and Methods The current study used job embeddedness, a relatively new construct, to investigate its mediation effect on the relationship between employee retention and six areas of human resource practices: compensation, training and development, performance appraisal, growth opportunities, supervisor support, and job security, focusing on the IT/ITES industry. A survey questionnaire was administered to IT/ITES employees in India during the coronavirus disease-2019 (COVID-19) pandemic, leveraging technology, social media platforms, and the researcher’s connections in the industry. Correlation analysis, regression analysis, and the PROCESS method were used for data analysis. Results The study found that job security, growth opportunities, performance appraisal, and supervisor support strongly influenced job embeddedness, while compensation, training, and development had a moderate but significant impact. Growth opportunities and supervisory support were crucial in enmeshing employees and influencing their intention to stay. Compensation is vital, as employees who are not appropriately compensated after training are more likely to switch jobs. Organizations must focus on monetary benefits, ensure competitive compensation packages, and link training and development to enhanced performance appraisals and growth opportunities. Job embeddedness mediated the relationship between HRM practices and employee retention, implying that these practices may not significantly impact retention unless they create fit, links, and sacrifices that embed employees in the organization. Conclusion The dimensions of HRM practices that impact job embeddedness were identified as competitive pay, avenues for growth opportunities, relationships with managers, and employment stability, summarized by the acronym Competitive Pay, Avenues for Growth and Appraisal, Relationship with Managers, Employment Stability (C.A.R.E).
Keywords: Human resource management practices; Job embeddedness; Employee retention; Information technology; India
“ What makes people stay?” is a key question that always challenges researchers and practitioners. Much has been written and spoken about the needed interventions to retain employees in the workplace, but this question continues to haunt us. It continues to top the list of the CEO’s leadership and managerial priorities. Given that workplace dynamics are ever-evolving, employee retention is not merely a metric that alerts the human resources (HR) de partment to take action when indicators are bad. It is a competitive advantage and a key differentiator for companies that pay close attention to it. The variety of problems encountered with volun- Original Research 2024 by Chaturvedi T. This is an open-access article distributed under Creative Commons Attribution 4.0 International License (CC-BY 4.0 DEED)
The purpose of this research was to test whether employees’ perceptions of an organization’s human resource management (HRM) practices impact their job embeddedness and, in turn, employee retention in information technology and its related industry (IT/ ITES)
The current study used job embeddedness, a relatively new construct, to investigate its mediation effect on the relationship between employee retention and six areas of human resource practices: compensation, training and development, performance appraisal, growth opportunities, supervisor support, and job security, focusing on the IT/ITES industry. A survey questionnaire was administered to IT/ITES employees in India during the coronavirus disease-2019 (COVID-19) pandemic, leveraging technology, social media platforms, and the researcher’s connections in the industry. Correlation analysis, regression analysis, and the PROCESS method were used for data analysis.
The study found that job security, growth opportunities, performance appraisal, and supervisor support strongly influenced job embeddedness, while compensation, training, and development had a moderate but significant impact. Growth opportunities and supervisory support were crucial in enmeshing employees and influencing their intention to stay. Compensation is vital, as employees who are not appropriately compensated after training are more likely to switch jobs. Organizations must focus on monetary benefits, ensure competitive compensation packages, and link training and development to enhanced performance appraisals and growth opportunities. Job embeddedness mediated the relationship between HRM practices and employee retention, implying that these practices may not significantly impact retention unless they create fit, links, and sacrifices that embed employees in the organization.
The dimensions of HRM practices that impact job embeddedness were identified as competitive pay, avenues for growth opportunities, relationships with managers, and employment stability, summarized by the acronym Competitive Pay, Avenues for Growth and Appraisal, Relationship with Managers, Employment Stability (C.A.R.E).
Human resource management practices; Job embeddedness; Employee retention; Information technology; India.
tary exits has an impact on operational costs, revenue, productivity, company culture, and customer experience, all of which end up compromising an organization’s growth and profit. The need to spot early on what makes an employee stay in an organization is non-negotiable.
Human resource management (HRM) is responsible for designing and managing talent management practices in an organization. HRM practices play a pivotal role in shaping employee retention strategies within organizations. An effective HRM approach encompasses a range of initiatives designed to attract, develop, and retain talent, fostering a positive and engaging workplace culture. Additionally, HR departments often serve as a bridge between employees and management, addressing concerns, promoting open communication, and ensuring that the organizational culture aligns with the expectations and aspirations of the workforce. In essence, human resource management practices are instrumental in building a work environment where employees feel motivated, supported, and inclined to stay, thus significantly contributing to successful employee retention efforts.
The purpose of this research was to answer the ques tion, “What makes people stay?” The study aimed to investigate if employees’ perceptions of their organization’s human resource practices influence their job embeddedness (JE) and, consequent ly, employee retention within the information technology and related services industry (IT/ITES). The current study used JE, a relatively new construct, to investigate its mediation effect on the relationship between employee retention and six areas of human resource practices: compensation, training and development, per formance appraisal, growth opportunities, supervisor support, and job security, with a focus on the IT/ITES industry. JE refers to the collective factors that discourage an individual from leaving their current employment. People can become “embedded” in their jobs as a result of various forces.1,2 Job embeddedness is a combination of three factors: fit, links, and sacrifice, 3-6 and this combined force keeps individuals from leaving their jobs. Each of these factors is explained below: 1. Fit to an organization was defined as the degree perceived in how compatible an employee feels to the job he or she is performing and the company he or she belongs to. Fit denotes an employee’s perceived compatibility or comfort with the organization and the work environment.
2. Links to the organization are defined as how connected an em ployee feels to other people, teams, or organizations. Links can be thought of as strands that connect employees with their work, team members, supervisors, and other colleagues with whom they work. The greater the number of links, the stronger the web, and therefore, the more tightly the individual is bound to the job and organization.
3. Sacrifice to the organization was defined as the perceived cost of physical or psychological convenience sacrificed when leaving a current job. It captures the perceived costs of material or psychological benefits that may be forfeited by leaving a job. The more employees give up on leaving, the more difficult it will be for them to break employment with the organization.
It was hypothesized that the sum total of these three dimensions, i.e., fit, links, and sacrifice of JE, mediates the impact of perceptions of human resource practices on retention. When an organization’s human resource practices really care about, appreciate, and invest in employees, employees should be more embedded in the organization.
The outcome of this research was that it indicated JE as an answer to retaining employees within an organization. The study revealed a connection between JE and employees’ intention to remain with their organization. Job embedding accounted for approximately 59% of the variance in employee retention. Con sidering the nature of social sciences research, this represents a substantial and significant proportion of the explained variance. Furthermore, HRM practices may not have a high impact on retention in isolation, but JE mediates the relationship. An organization’s retention strategy should incorporate human resource management practices that foster a sense of connection and belonging for employees, as well as psychological convenience. When these factors are sacrificed, it can negatively impact an employee’s desire to remain with the company. The Competitive Pay, Avenues for Growth and Appraisal, Relationship with Managers, Employment Stability (C.A.R.E.) model, which explains the human resource management factors that make employees embedded in an organization, thereby leading to retention, especially in the IT/ITES sector, was a result of this research.
Competitive pay or compensation serves as a hygiene factor to impact the fit between the individual and the job, as well as represent a sacrifice that must be experienced if the employee chooses to take the employment elsewhere. Competitive pay, or compensation, was closely linked with training and development. It was observed that employees who were not appropriately compensated after their training were more likely to switch to another job. Since the skills of employees have improved after training and development initiatives, they are likely to be paid more. Properly compensating employees after training and development can be helpful in retaining employees. In the corporate world, the popular notion has been that compensation may not be the sole predictor of employee retention. While it holds, the importance of financial gains and incentives can no longer be undermined.
Employment Stability C R A E Avenues for Growth and Appraisal [A] Growth opportunities and appraisal of performance significant ly impact JE and, in turn, retention. When employees favorably perceive growth opportunities provided by their organization, it significantly impacts their fit in the organization and, in turn, retention. When an organization has a policy to build an internal talent pipeline, employees will set their sights more deliberately on opportunities for professional growth in the context of the organization versus looking elsewhere. This further represents a sacrifice that must be experienced if the employee chooses to take employment elsewhere. Furthermore, training and development need to have a growth- and appraisal-related outcome attached to them for them to serve as an effective retention strategy.
impacts the links that employees create within an organization and, in turn, retention. The current research has indicated that employees do not leave their organization, but they leave their managers. Hence, the way that a supervisor or manager deals with their team members impacts the embeddedness and, in turn, the retention of employees. When employees favorably perceive supervisory support in their organization, it significantly impacts their engagement in the organization and, in turn, retention. High supervisory support can help employees better fit and align with their jobs and organizations. Under these circumstances, the intangible losses, such as trust and encouragement, incurred by leaving the organization tend to be prohibitively high. Therefore, healthy and favorable supervisory support establishes the fit, link, and sacrifices for em ployees that embed them in an organization.
Employment stability, or job security, significantly impacts JE and, in turn, retention. Furthermore, it represents a sacrifice that must be experienced if the employee chooses to take employment elsewhere. When employees feel a sense of stability, it tends to increase their JE and eventually retention.
As part of the literature review, approximately 163 academic papers were studied. The keywords used to find research papers were HRM Practices, JE, employee retention (ER), information technology (IT), and India. The academic papers were accessed from Journal Storage (JSTOR), British Psychological Society (BPS) Ex plore, the BPS/Wiley journal collection, Elton B. Stephens Company (EBSCO’s) Psychology and Behavioral Sciences Collection, EBSCO Discovery Service, and Google Scholar. The approximate time range for the accessed papers ranges from 1991 to 2021. It was observed that while employee retention has been extensively studied, the studies lack comprehensiveness in explaining a framework. Moreover, it was observed that the literature may benefit from having an indicative model for employee retention. It was observed that the previous research studies have not focused on a framework that explains the “why” of employee retention, and therefore, it was hypothesized that the theory of JE will help achieve the same.
Employee retention has been a major challenge for or ganizations, especially in the IT/ITES sector. 7 The academic de bate on employee retention dates back to the 1900s, when scholars and psychologists began identifying factors affecting employees’ interest in the job and possible opportunities. 8,9 Retention is de fined as an organization’s voluntary effort to create an engaging environment for long-term employee commitment. 10 It involves motivating employees to stay with the organization for an extended period11-14 and continuing the employment of talented individu als.15 Retaining high-performing and capable employees is essen tial, as they provide a competitive advantage. 16,17 Effective reten tion management has become a source of competitive advantage in dynamic environments, as increased retention leads to reduced employee turnover.18,19 Human resource management (HRM) practices play a pivotal role in employee retention. 20-22 Past researchers have indicated that compensation plays a significant role in the retention of employees. It has a pivotal role in attracting and retaining employees, especially those who are high performers or bring a unique skillset that is either not easy to find or is largely indispensable to the organization.23 For instance, compensation is an important determinant of retention in the Indian IT/ITES sector. 24 Few researchers argue that a competitive compensation package helps in the retention of employees, irrespective of their performance and skills. Organizations with high compensation packages tend to retain employees better and create a culture of excellence. 25-27 When employees feel that their compensation is at par with industry standards and they are paid fairly, it leads to a cordial relationship between the employers and the employees. 28,29 Furthermore, researchers have indicated that compensation plays a pivotal role in the retention of employees and commitment. 29-34 Contrary to this, a few researchers have argued that while compensation is an important factor for employees, it may lead to satisfaction but not necessarily lead to employee retention. 35-38 It is recommended that only pay be sufficient to retain employees. A low-pay package would drive employees outside the organization, but it is not necessary that a high package bring and keep the employees in the organization.39,40 Irrespective of the extent of impact that compensation has on employee retention, compensation is one of the key leading human resource management practices when studying employee retention.23,41,42 Hence, it was included in the current study. Investment in employees’ training and development is considered to be an important factor in employee retention. Training and development is a structured approach aimed at cultivating and enhancing employees’ skills, abilities, and knowledge with the ultimate goal of improving organizational effectiveness. 43 Training is defined as a process through which organizations provide skill-based and updated knowledge to their employees to enhance efficiencies.44 Research has indicated that it is an important de terminant of employee retention. 23,32,41,45-54 It is indicated that providing training and development opportunities is a sign of organizations’ commitment to their employees. 55 In the Training Magazine, it is highlighted that investment in training leads to the retention of employees.44 Several organizations deploy training and development opportunities as an employee retention strategy. 56-59 It was found that organizations where employees spent approximately 59% of their time on formal training had lower turnover rates as compared to higher turnover rates where employees spent approximately 18% of their time on formal training. 60 Moreover, organizations have recognized that comprehensive training and development opportunities serve as important factors of attraction and retention for technological employees in the computerized economy.30,61 Although there is a significant positive relationship between training and development and employee retention, it was also observed that training and development contribute only 7% to employee retention.62 When training and development opportuni ties are combined with other factors, such as compensation, their impact on retention is found to be more significant. Research has given an interesting perspective. It was observed that if employ ees are not appropriately compensated after their training, they are more likely to switch to another job. The assumption is that after training, the skills of employees have improved, and hence they would like to be paid more. If employees are properly compensated by the organizations after their training and development, then it would be helpful in retaining employees.63 Moreover, employees’ satisfaction with the training and development opportunities may contribute to the extent that such practices promote skill enhancement, which is why they are valued and may not necessarily lead to retention, especially in Indian call centers and Indian companies at large.64,65 Furthermore, who sponsors the training tends to have an impact on the intention to stay. One study concluded that if the training and development opportunities are wholly sponsored by the employees and their families, such employees are more likely to look out for other job opportunities. 57 Elias66 found that women who received employer-provided and job-related training had a lower probability of transition, but for men, training made no significant difference to the intention to stay.41 Greene et al67 concluded that, in aggregate, training has on average no impact on mobility or intention to stay.41 Irrespective of the extent of impact that training and development has on employee retention, it is one of the key leading human resource management practices when studying employee retention.23,31,32,41,42,63,64 Hence, it was included in the current study.
Performance appraisal is defined as evaluating employ ees’ performance in order to facilitate their career growth by looking at employees’ total involvement in the organization in terms of their internal characteristics and their working capability. 68 Performance management, or an appraisal mechanism, ensures achieving organizational goals in an efficient and effective manner. It entails activities such as joint goal-setting, continuous progress review, frequent communication, feedback, and coaching for improved performance, the implementation of employee-development programs, and rewarding achievements.69 In the corporate world, it is often treated as a mechanism to reward and recognize employees. It is crucial that employees perceive the practice of performance appraisals as fair and objective. They must feel that they are appropriately and fairly rewarded for the work they have delivered, without any partiality or favoritism. Researchers have identified reward as one of the important factors in retaining employees. If the employees are attached to an attractive and fair reward sys tem, their stay in the organization will be longer. 23,70-74 When an organization has an effective policy of promoting from within, its talented employees will set their sights more deliberately on opportunities for professional growth in the context of the organization rather than looking elsewhere.75,76 Employees tend to demonstrate a higher intention to stay with the organization when they feel that their capabilities, efforts, and performance contributions are fairly recognized and appreciated.77 Effectively managing employee performance is a useful approach to fostering employee engagement and commitment towards the organization. This practice enhances the likelihood of employees remaining with the company for an extended period of time. 78 While performance-related reward continues to be an important factor in retaining employees, other aspects of performance appraisal have not been identified as a predominant factor but are an equally important dimension in retaining employees, especially in the Indian ITES sector. 20,24,65,79 The significant impact of performance management on employee retention has not been observed consistently in the ITES sector, with its extent of impact varying between organizations.74 Reward and recognition associated with performance appraisal are per ceived to be more effective and an imperative retention strategy for the IT sector. 14 It was interesting to observe that monetary benefits relating to compensation, training and development, and performance appraisal continued to be the common thread in employee retention. Irrespective of the extent of the impact that performance appraisal has on employee retention, it appeared to be an important predictor; hence, it was included in the current study. Growth opportunities in an organization imply that em ployees are empowered to take on higher responsibilities and that clear career growth paths are defined for them. Providing growth opportunities in the form of career advancement within the organization impacts attrition and retention.23,41,71,73 Research has shown that employees’ intention to leave organizations is reduced based on the opportunities provided for growth and career advancement. Lack of such opportunities, closely linked to training development and promotions are the main reasons for high-performing, talent ed employees to leave organizations.80 Furthermore, in Indian or ganizations, career advancement (growth opportunities) has been consistently ranked as a key factor in retaining employees, 23,65 although it may not be a predominant factor.24 It may be fair to say that growth opportunities and supervisory support go hand-in-hand. Supervisory support serves as an important factor in retaining employees. The relationship between supervisor and employee plays a pivotal role in employees’ inten tion to stay. The human faces of the organization are supervisors.23 It is suggested that employees’ perceptions regarding organization are significantly related to their relationship with the supervisor. 81 If the relationship between a supervisor and an employee is based on open and transparent communication, where an employee can discuss personal problems without fear, is not discouraged when mistakes are made, and can freely share opinions, then employees 4 Original Research | Volume 9 | Number 1 | are more likely to stay with the organization. Therefore, having a good supervisor-employee relationship leads to a reduction in an employee’s turnover intentions and makes them more engaged with the organization. 82 Most of the researchers have alluded to employees leaving organizations because of the supervisors or leaders and not so much the job. 71,83 Similarly, a relationship was found between the leadership approach adopted by the supervisors and employee turnover and retention. 84 Skilled and talented employees may easily find a good job, position, and workplace elsewhere; however, the most effective way to retain these talented employees is to enhance leader or supervisor support.85 Organizations must therefore groom supervisors to support their employees and to build a work environment where workers want to stay.7 Responsible leadership and supervisor-employee relationships have been identified as a predominant factor in retaining employees even in the IT/ITES sector, both globally and in India.14,24,29,65,86-90 In summary, both growth opportunities and supervisor support play a vital role in an employee’s intention to stay in organizations at large, and, hence, these two variables were included in this study. Over and above the human resource management practices mentioned earlier, how an employee perceives their job se curity in an organization can serve as a determinant of employee retention. It was observed that job life span, or job security, is the variable that requires the most attention for improvement from a perspective of retention strategy. In the absence of this required attention, it will continue to result in attrition, especially in the IT industry.21,83,91 Furthermore, job security was considered to be a crucial factor in enhancing employees’ organizational attachment, which in turn impacts retention. 21,91 Contrary to this, it was observed that job security may not be considered by a majority of employees as a significant reason to stay in the job. 64 However, since job security was seen as an important factor in influencing not only employee retention but also JE (the following sections will capture this), this variable was retained in the current study as an independent variable.
For over a century, there has been a preoccupation with why em ployees quit,12,13 and scholars have often neglected the aspect of why employees stay, presuming that the reasons for leaving are the opposites of the reasons for staying. 6 Over a period of time, researchers have challenged this prevailing wisdom, arguing that the psychology of staying differs from that of leaving and that their reasons can differ. 4 For instance, one may leave because of low remuneration but not necessarily stay for the sake of good remuneration (instead staying for the camaraderie of one’s coworkers). Hence, Mitchell et al4 postulated the concept of “JE” to represent factors that constrain people from leaving. Since its inception, this theory has caused a paradigmatic shift, redirecting scholars towards identifying forces inducing incumbents to stay in varied work roles and settings.
JE has been defined as “the combined forces that keep an individual from leaving his or her job. “People can become stuck or “embedded” in their job as a result of various forces”.1,2 It offers a method of discovering why people stay in an organization. The underlying assumption of the theory is that embedded employees have less intention of leaving their current jobs. Therefore, it is popularly known as the theory of employee retention.
Mitchell et al4 identified three prime embedding factors: (1) fit for a job or community; (2) links (social ties) to workplace or community constituents; and (3) sacrifice, job or community amenities, or benefits relinquished by leaving. Fit refers to the degree to which an individual’s personal values, career goals, and future plans fit or align with the organization’s culture, experience, and career realities at work. Off-the-job fit means fitment with preferences for the general culture of the location of the residence, including weather, amenities, the political and religious environment, and the arts.92 On the job, links refer to formal and informal connections and support among individuals, colleagues, work groups, super visors, and the organization as a whole. Off-the-job links refer to the connections in a social and familial web, including non-work friends, spousal employment, groups, and community organiza tions.92 On the job, sacrifice implies what the person would sac rifice if he or she left the organization. Perceived costs of leaving the organization include giving up on colleagues, perks, projects, job stability, and advancement. Off-the-job sacrifice refers to what the person would sacrifice if he or she left the community. Per ceived potential of loss of desirable community attributes, including school quality, neighborhood safety, and feeling of belonging.92 In the present study, the focus was on studying whether employee perceptions of human resource management practices influence their JE. Since human resource management practices take place within an organization, only on-the-job dimensions of JE were the focus.
When an organization’s human resource practices really care about, appreciate, and invest in employees, employees should be more embedded in the organization. 3 Furthermore, studies have shown that progressive and performance-enhancing human resource management (HRM) practices such as empowerment, self-managing teams, developmental opportunities,93 performance monitoring, and contingent pay94 may increase JE. Several studies have examined the mediating role of JE on outcomes like turnover intention, job satisfaction, and actual turnover, 95,96 ethical climate and performance outcomes, and work engagement and job out comes.97 It is seen that job-embeddedness as a mediator helps in better understanding the relationship between HRM practices such as performance appraisal, promotional opportunities, supervisory support, job security, and employee retention.96,98-101 Moreover, JE theory also supports this phenomenon by arguing that employees working in an organization are more embedded when they feel that HRM practices are favorable and fair.
Proper HRM practices help the organization achieve its goal successfully.102 To retain the highly competent and skilled employee, which constitutes the majority of the population in the IT/ITES industry, HRM practices are and will continue to be de ployed. Most HRM strategies are focused on employee satisfac tion and retention, as HR is the main dynamic asset in an institute, which helps in achieving competitive advantage in any business.103 Thus, positive perceptions of employees about the HRM practices of an organization make them embedded or stuck in the organization.4 To date, JE has been shown to predict both intentions to leave and voluntary turnover.3,98,104,105 Thus, the question of whether employee perceptions of human resource practices influence JE and retention needs to be answered. There are a number of factors that have been posited to affect employee retention.
The intent of this study is not to provide a comprehensive analysis of all those factors but to advance and apply current research by examining those relationships empirically with JE and, in turn, retention, with a focus on the IT industry. For this reason, a few other HRM practices, such as work-life balance, working hours, organizational culture, and well-being, have not been considered in this study. This study focuses on six important HRM practices that have been studied both in the context of JE and employee retention. Furthermore, the identified six human resource practices (compensation, training and development, performance appraisal, growth opportunities, supervisory support, and job se curity) seem to be more tangible and actionable in nature. The intent of the researcher was to focus on those practices where a change can be introduced in a shorter span of time as opposed to focusing on aspects like work-life balance and culture, where changes typically need to be made at a mindset level.
The review of the literature suggested that although employee retention was extensively studied in the past, these studies lacked comprehensiveness in explaining a framework. The literature may benefit from having a model that determines the impact of human resource practices on employee retention. Moreover, the theory of JE may help to better understand the relationship. Previous research studies have examined the role of JE in select industries and roles across the globe, such as hospitality,97,106,107 airlines,108 IT construction Son109 and accountants.104 A review of the existing literature indicated that there are rarely studies that have been done on the mediating effect of JE on the relationship between six HRM practices (compensation, training and development, performance appraisal, growth opportunities, supervisor support, and job security) and employee retention in the IT/ITES industry within India. Therefore, the current study focuses on this phenomenon.
A five-point Likert-type self-administered questionnaire was de veloped for this particular study. The questionnaire was inspired by previous research studies and ready-to-use surveys.4,110-116 Additionally, the researcher has leveraged her domain expertise in the fields of psychological assessments and organizational psychology. The researcher has more than a decade of work experience and has applied the same to create the items of this survey.
The survey questionnaire was given to employees working in the IT/ITES sector. The eligibility criteria for any respondent to participate in this study were clearly mentioned in the form. There were largely two criteria: a) The participant should work in a technology (IT/ITES) or its related industry; and b) The participant should be an Indian or an international working employee in India.
During the time of this research, the world was hit by the coronavirus disease-2019 (COVID-19) pandemic. Therefore, the researcher decided to leverage technology, social media platforms, and her own connections in the IT/ITES industry to gather responses on the survey questionnaire. The survey questionnaire was created on Google Forms.
To establish the validity of the survey questionnaire, internal consistency and reliability were calculated. The internal consistency reliability for the items in the variable research ranged from α=0.66 to 0.90. Therefore, the items used in the survey for each scale were measuring what they were intended to measure. This implied that the responses received on this survey were accurate and could be considered for the purpose of analysis. Table 1 summarizes the internal consistency of all the scales.
The research had 65 participants as a final sample. As per the various metrics calculated, this was a representative and accurate sample. For example, a 10.23% margin of error at 90% desired confidence level was considered, i.e., in this case, there was a 90% chance that the real value would be within ±10.23% of the measured surveyed values. This was a minor variation from the initial estimated sample size (a minimum of 69 respondents). Further more, as a best practice, it is purported that if the research has a relational or correlation survey design, the sample size should not be <30.119,120 The central limit theory suggests that a group of 30 or more members selected from a given population would be normally distributed.121 Lastly, the internal consistency values further support that the sample size of 65 provides reliable results.
Seven hypotheses were created in this study. These were:
There is a significant relationship between employees’ perceptions of HRM’s practice of compensation, JE and retention of employees in the IT industry in India (p<0.05).
Job embeddedness 0.80 6 Retention 0.66 2 Compensation 0.78 3 Supervisor support 0.70 3 Training and development 0.90 3 Performance appraisal 0.83 3 Growth opportunities 0.76 3 Job security 0.70 3 6 Original Research | Volume 9 | Number 1 | Hypothesis 2 (H2) There is a significant relationship between employees’ perceptions about HRM practices of training and development, JE and retention of employees in the IT industry in India (p<0.05).
There is a significant relationship between employees’ perceptions of HRM practice, performance appraisal, JE and retention of employees in the IT industry in India (p<0.05).
There is a significant relationship between employees’ perceptions of HRM’s practice of growth opportunities, JE and retention of employees in the IT industry in India (p<0.05).
There is a significant relationship between employees’ perceptions of the HRM practice of supervisory support, JE and retention of employees in the IT industry in India (p<0.05).
There is a significant relationship between employees’ perceptions of HRM’s practice of job security, JE and retention of employees in the IT industry in India (p<0.05).
Job embeddedness mediates the relationship between human resource management practices (cumulative of all six practices) and employee retention in the IT industry in India (p<0.05).
Correlation analysis (Table 2), regression analysis (Tables 3, 4 and 5), and the PROCESS method specifically for mediation analysis (Figures 1 and 2) were conducted to test the hypotheses. All the hypotheses were retained, and the generalizability of the model was established as well.
JE Ret CO SS TD PA GO JS Job 0.80 6 Job embeddedness 0.80 6 0.80 6 6 Embeddedness (JE) 1 0.726** 0.404** 0.567** 0.443** 0.573** 0.582** 0.592** Retention (Ret) 0.726** 1 0.405** 0.503** 0.604** 0.441** 0.514** 0.443** Compensation (CO) 0.404** 0.405** 1 0.304* 0.622** 0.490** 0.486** 0.302* Supervisor Support (SS) 0.567** 0.503** 0.304* 1 0.440** 0.535** 0.672** 0.553** Training Development (TD) 0.443** 0.604** 0.622** 0.440** 1 0.640** 0.652** 0.530** Performance Appraisal (PA) 0.573** 0.441** 0.490** 0.535** 0.640** 1 0.741** 0.397** Growth Opportunities (GO) 0.582** 0.514** 0.486** 0.672** 0.652** 0.741** 1 0.548** Job Security (JS) 0.592** 0.443** 0.302* 0.553** 0.530** 0.397** 0.548** 1 Note: Job embeddedness (JE), Retention (Ret), Compensation (CO), Supervisor Support (SO), Training and Development (TD), Performance Appraisal (PA), Growth Opportunities (GO) and Job Security (JS). Significance level=**p<0.01, *p<0.05 T able 3. Provides the Model Summary of the Regression Analysis (Critical Values are Highlighted in Bold)
Adjusted R Square Std. Error of the Estimate Change Statistics Durbin-WatsonR Square Change F Change df1 df2 Sig. F Changeb 1 0.750a 0.563 0.549 0.58124 0.563 39.959 2 62 0 1.929 aPredictors: (Constant), JE, HR; bDependent Variable: RET T able 4. Summary of ANOVAa Model Sum of Squares df Mean Square F Sig.
T otal 47.946 64 aDependent Variable: RET; bPredictors: (Constant), JE, HR T able 5. Table of Coefficientsa Model Unstandardized Coefficients Standar dized Co-efficients T Sig. Collinearity Statistics B Std. Error Beta T olerance VIF (Constant) 0.550 0.377 1.459 0.150 HR 0.282 0.125 0.254 2.253 0.028 0.553 1.809 JE 0.639 0.130 0.556 4.925 0.000 0.553 1.809 aDependent Variable: RET (Retention)
Specifically, based on the output of mediation analysis, it was seen that there was a stronger relationship between independent (X) and mediating variables (M) and dependent (Y) and mediating variables (M). The relationship between the independent (X) and dependent variable (Y) was slightly less. To establish a significant indirect effect through a mediator variable, the significance value must be above zero or a positive value.
Further, to ensure the significant indirect effect of the mediator(s), the bootstrap upper and lower values must be above zero or positive.122 It was observed that the indirect effect of X on Y (when JE) is a mediating variable) is significant because all the bootstrap variables are >0. To calculate the proportion of effect, we used the formula: Indirect effect of X on Y Proportion of effect= ×100 Total effect of X on Y 0.4127 = ×100 0.6951 =59.37% This implies that the proportion of the total effect of HRM practices on retention that operates indirectly is 59.37%, and conversely, the proportion of the total effect of HRM practices on retention that operates directly is 40.63%. This further confirmed that HRM practices in isolation cannot impact retention; JE will play a significant role (Figure 1).
Model 4 is used to conduct mediation analysis on PRO- CESS. Figure 2 shows the output of the PROCESS procedure deployed on the SPSS program.
In the current study, as per the results, there was a significant, moderately positive relationship between employees’ perceptions of HRM practices of compensation, JE, and retention of employees in the IT industries in India. This was in alignment with previous research studies. It was found that compensation and an effective compensation system had a positive relationship with employee retention.31,32 There were a few studies that indicated that compensation showed an inverse relationship between high relative pay, pay satisfaction, and employee turnover.123,124 Moreover, JE focuses on why people stay and describes the feeling of being enmeshed 8 Original Research | Volume 9 | Number 1 |
Figure 2. Output for PROCESS Procedure ************************PROCESS Procedure for SPSS Version 4.1 ****************************** Written by Andrew F. Hayes, PhD. www.afhayes.com Documentation available in Hayes (2022). www.guilford.com/p/hayes3 ****************************************************************** Model: 4 Y: RET X: HR M: JE Sample Size: 65 ******************************************************************* OUTCOME VARIABLE: JE Model Summary R R-dq MSE F df1 df2 p 0.6688 0.4473 0.3187 50.9805 1.0000 63.0000 0.0000 Model Coeff se t p LLCI ULCI Constant 1.0704 0.3404 3.1447 0.0025 0.3902 1.7506 HR 0.6461 0.0905 7.1401 0.0000 0.4653 0.8269 Standardized coefficient Coeff HR 0.6688 ********************************************************************** OUTCOME VARIABLE:
0.7504 0.5631 0.3378 39.9592 2.0000 0.0000 Model Coeff se t p LLCI ULCI Constant 0.5499 0.3769 1.4589 0.1496 -0.2036 1.3034 HR 0.2824 0.1253 2.2534 0.0278 0.0319 0.5329 JE 0.6388 0.1297 4.9246 0.0000 0.3795 0.8981 Standardized coefficients HR 0.2544 JE 0.5560 ***************************TOTAL EFFECT MODE********************************* OUTCOME VARIABLE:
0.6263 0.3922 0.4625 40.6600 1.0000 63.0000 0.0000 Model Coeff se t p LLCI ULCI Constant 1.2336 0.4100 3.0086 0.0038 0.4142 2.0530 HR 0.6951 0.1090 6.3765 0.0000 0.4772 0.9129 Standardized coefficients HR 0.6263 Continue...
in an organization. One of the study findings indicated that compensation tends to have a positive relationship with JE. 3,123 While there was a significant positive correlation, the strength of the relationship was moderate. This implies that compensation may not be a predominant factor in embedding and retaining employees. For instance, a study indicated that although compensation may serve as a determinant for employee retention, it may not be a key factor in retaining an employee. Other factors, such as organiza tional culture and work-life integration, affect employees’ decisions to stay in the BPO-ITeS sector.24 One study indicated that employers who based their retention on compensation were vulnerable to the possibility that their competitors may offer better pay and thus lure away employees. 24 Similarly, it was also believed that “money gets employees at the door, but it doesn’t keep them there. ”38 Moreover, a plausible explanation for compensation not being a predominant factor can be attributed to the time at which the data was collect ed. As indicated earlier, during this research, the COVID-19 pan demic hit us. Along with the other sectors, the information technology sector was severely affected. Massive layovers and pay cuts were witnessed. From a psychological lens, while the employees who lost their jobs were dealing with the loss, others who managed to have their jobs were grateful about having a job even with reduced pay. At that time, sustainability and well-being probably took precedence over compensation. Research shows that trends redefining modern retention strategies go beyond the traditional salary and benefits package and compensation, 39 thereby supporting the results of this study. Hence, the current study concluded that competitive pay serves as a hygiene factor to embed and retain employees. Organizations need to ensure that compensation is competitive as it can serve as a hygiene to impact the fit between the individual and the job, as well as represent a sacrifice that must be experienced if the employee chooses to take employment elsewhere.
Concerning training and development, this study found that it has a strong positive relationship with employee retention. This means that when an organization focuses on the development of employees who are aligned with their needs, they are likely to stay with the organization. This is in alignment with other stud ies that state that training and development are important deter minants of employee retention. 23,32,41,48 Interestingly, training and development have a positive but moderate relationship with JE. It implies that it may not be a key determinant in embedding em ployees in their jobs. While this seems a little contradictory, it is partly consistent with previous research studies that provide conflicting results on the impact of training on employees’ intentions to be embedded in the job. 3,104 Training and development deepen employees’ sense of attachment to the organization and therefore enhance retention. However, training and development opportu nities may or may not improve the fit between the individual and job, as well as represent a sacrifice that must be experienced if the employee chooses to find employment elsewhere. Another study in the IT industry also alluded to the fact to the fact that training and development did not emerge as a significant retention strategy across a few Indian IT firms. 14 Well-trained IT professionals may perceive that attractive opportunities and high demand from out side may outweigh their work fulfillment and sense of obligation from within, and this could explain why training and development may not be a strong predictor of JE. However, this requires further empirical confirmation. In alignment with the literature review, in the current study, it was observed that compensation, training, and development are significantly related to each other. It was observed that if employees were not appropriately compensated after their training, they were more likely to switch to another job. The assumption is that after training, the skills of employees have improved, and hence they would like to be paid more. If employees are properly compensated by the organizations after their training and development, then it would be helpful in retaining employ ees.63 Moreover, training and development are found to be significantly related to performance appraisals and growth opportunities. Therefore, training and development in isolation may not prove to be an effective retention strategy in the IT/ITES industry. According to Kuvaas,125 and Bibi et al98 it is believed that an appropriate performance appraisal process can serve as a tool to retain employees in an organization. In the current study, per formance appraisal has a moderate impact on employees’ intention to stay; however, it has a strong positive impact on JE. This implies that when employees feel that appraisal decisions are made objec tively and fairly, they are more likely to be stuck in the organiza - *********************TOTAL, DIRECT, AND INDIRECT EFFECTS OF X ON Y*************************** Total effect of X on Y Effect se t p LLCI ULCI c_cs 0.6951 0.1090 6.3765 0.0000 0.4772 0.9129 0.6263 Direct effect of X on Y Effect se t p LLCI ULCI c’_cs 0.2824 0.1253 2.2534 0.0278 0.0319 0.5329 0.2544 Indirect effect(s) of X on Y:
JE 0.4127 0.1082 0.2004 0.6308 Completely standardized indirect effect(s) of X on Y:
JE 0.3719 0.0958 0.1790 0.5604 ...Continued 10 Original Research | Volume 9 | Number 1 | tion,4,98 but this may not serve as a key determinant in retaining employees. The findings of the current study are in alignment with previous research where performance appraisal was an important but not a predominant dimension in influencing an employee’s intention to stay.14,24,104 Based on the experience of the current study’s researcher, it was observed that during the pandemic, the majority of organizations across industries did not engage in performance appraisals due to the uncertainties in the economic environment. This could be a plausible explanation for performance appraisal not emerging as a major factor in predicting retention. However, this requires further empirical confirmation. In a nutshell, a favorable performance appraisal approach as perceived by employees motivates them to develop a sense of attachment to their organization but may not necessarily influence their decision to stay. The current study, in line with previous research, has demonstrated that employees’s intention to leave organizations is reduced based on the opportunities provided for growth and career advancement. Lack of such opportunities, closely linked to training and development and promotions, are the main reasons for high-performing, talented employees to leave the organization.80 Among human resource practices, growth opportunities have a strong positive impact on JE and retention. In the current study, growth opportunities implied that employees are empow ered to take on higher responsibilities and that clear career growth paths are defined. It would be a sacrifice for employees to leave an organization that emphasizes growth opportunities. Moreover, growth opportunity means that employees are empowered and encouraged to reach their potential, which should lead them to better fit their jobs and the organization. Thus, employees would be more embedded in their jobs. This is in sync with previous research studies,3,31,32,42,104 that indicated that when an organization has a policy to build an internal talent pipeline, employees will set their sights more deliberately on opportunities for professional growth in the context of the organization versus looking else where.41,76,80,126 Therefore, it may be fair to assume that avenues for growth (growth opportunities) serve as a critical parameter in both embedding and retaining employees.
Similar to growth opportunities, supervisory support was also positively related to JE and retention. This suggests that if employees feel that they can openly discuss their personal prob lems with their managers, are constantly encouraged by them even during adversity, and can freely share their opinions at work, it creates a safe environment, thereby leading to employees feeling enmeshed with the organization. This is in alignment with previous research studies that indicated that by being more open, providing guidelines, and fostering trust in and praise for employees, super visors can help employees better fit with their jobs.3,89,92,96,100,114,127,128 Moreover, under these conditions, the intangible losses, such as trust and encouragement, incurred by leaving the organization may be prohibitively high. This validates the belief that employ ees do not leave their organization but rather leave their managers.71,84,101,129 Therefore, the relationship with managers, i.e., the way that a manager or supervisor deals with their team members, impacts the embeddedness and retention of employees.
In reference to job security, it is seen that employees who believe that they will remain employed in the organization and will not lose their job are more embedded, committed, and intended to stay for a for a longer period of time with the organization. The findings of this study are consistent with previous research in which employment stability (job security) is positively related to JE and retention.130-133 Consistent with the findings of Mitchell et al4 JE in this study showed a strong relationship with employees’ intention to stay, as it explained roughly 59% of the variance in retention. Given the nature of social science research, this is an appreciable and significant amount of explained variance. While HRM practices (a combination of all six practices) are strongly related to retention, JE tends to play a significant role in employees’ intentions to stay. HRM creates the link, fit, and sacrifice that embed employees in their current organization and keep them from leaving it. Another lens through which to view this result is that human resource practices in isolation may not highly impact retention, but JE mediates the relationship. This also aligns with previous research studies.3,104 This suggests that organizations should focus on those human resources management practices that create a fit, link, and sacrifice for employees, which in turn impacts retention. Human resource management practices that make an employee feel connected to the job, create a sense of belonging, and provide psychological convenience that, if sacrificed, impacts an employee should be included in an organization’s retention strategy.
This study found that employees’ perceptions of HRM practices, namely, Job Security (Employment Stability), Growth Opportuni ties (Avenues for Growth and Appraisal), Performance Appraisal (Avenues for Growth and Appraisal), and Supervisor Support (in order of importance), influence JE. However, only HRM practices of training and development, growth opportunities, and supervisor support (in order of importance) influence employee intention to stay. It may be fair to say that growth opportunities (venues for growth) and supervisory support (relationships with managers) play a pivotal role in enmeshing employees in an organization and thereby influencing their intention to stay. It is critical to note that monetary benefits relating to compensation, training and devel opment, and performance appraisals continue to be the common thread in retaining employees. For a while now, in the corporate world, it was believed that compensation may not be a sole predictor of employee retention. While it holds true, the importance of financial gains and incentives can no longer be undermined. Based on the preliminary findings in the current study, it may be fair to assume that human resource management practices such as training and development, growth opportunities, and performance appraisal will prove to be a more effective retention strategy if they yield appropriate compensation growth. Therefore, the hy giene factor of pay (competitive pay), compensation, and financial incentives should be focused on, along with working toward building human resource practices that lead to JE. In addition, human resource management practices influence employees’ intention to stay, i.e., retention through organizational JE.
Due to the pandemic, one limitation of this study was the use of convenience sampling of employees working for IT/ ITES organizations. While the respondents are representative of several organizations, future research can obtain even more diversified samples to achieve better generalizability. This study included only six human resource management practices. Future research may focus on other factors such as work-life balance, psychological safety, and psychological well-being that have been much talked about in today’s new way of working and assess how these JE factors affect the relationship between these factors and retention. Another limitation of this study was the lack of academic literature. As indicated earlier, the study of JE and HRM practices is imperative. JE, as a retention construct, can play a pivotal role in retaining employees in India. The existing studies on JE are mostly restricted to the West, and the existing studies in India on retention are either generic or are mostly restricted to other industries. Rarely are there studies that evaluate the relationship between HRM, JE, and retention in India, especially in the IT/ITES context. This area was largely unexplored, and hence the reference information to draw parallels was limited. Therefore, on a few occasions, the researcher of this study has leveraged her own experience of 15 years to explain a few outcomes. The matter based on the researcher’s perspective can change depending on the researcher’s experience.
Despite these limitations, this study provides a new explanation for the relationship between HRM practices and em ployees’ intention to stay, specifically in IT/ITES organizations. The current research may serve as a guidance tool for business organizations and future researchers. This study will hopefully be a help for those who are willing to do further research on employee retention, as it provides information that JE has a greater impact on employee retention. Practitioners and researchers should focus on human resource management practices that lead to JE. Hence, the findings of the current study indicating that HRM practices create links, fit, and sacrifice for employees that make them embedded in their jobs and keep them from leaving the organization add significant value to the existing literature. JE is probably the answer to employee retention and should be the central point of atten tion. This is an important finding for organizations seeking ways of addressing employee retention. The findings in this study may serve as practical input for managers and leaders in an organiza tion. Organizations can look for several strategies and tactics from the critical HRM practices in order to build deeper links, make better fits, and create greater potential sacrifices for employees should they decide to look for or pursue other employment opportunities. Hence, based on the findings of this study, the C.A.R.E. model of JE and retention emerged.