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EFFECTS OF HUMAN RESOURCE PRACTICES ON EMPLOYEE TURNOVER IN
THE FLOWER INDUSTRY
Background information
Currently, retention of valuable employees is a global challenge. Managers and top level
authorities are constantly confronted with the issue of retaining employees, and there is a
wealth of evidence that worldwide, retention of skilled employees has been of serious
concern to managers in the face of ever increasing high rate of employee turnover (Samuel &
Chipunza, 2009). In recent years, the focus of research on HR has shifted from study and
relationship of individual HR practices on business performance to entire HR system and its
influence on employee turnover (Khan, 2010).
Human Resource practices (HRP) have been defined in several aspects. Schuler and Jackson
(1987) defined Human Resource practices as a system that attracts, develops, motivates, and
retains employees to ensure the effective implementation of organizational objectives and the
survival of the organization and its members. Besides, HR practices are also conceptualized
as a set of internally consistent policies and practices designed and implemented to ensure
that a firm’s human capital contribute to the achievement of its business objectives (Delery &
Doty, 1996). Likewise, Minbaeva (2005) viewed HRP as a set of practices used by
organization to manage human resources through facilitating the development of
competencies that are firm specific, produce complex social relation and generate
organization knowledge to sustain competitive advantage. Against this backdrop, we
concluded that HRP relate to specific practices, formal policies, and philosophies that are
designed to attract, develop, motivate, and retain employees who ensure the effective
functioning and survival of the organization.
The notion of modern Human Resource practices has become an increasingly used way of
referring to high levels of delegation of decisions, extensive lateral and vertical
communication channels, high reward systems, often linked to multiple performance
indicators, and other practices that either individually or in various bundles are deployed to
achieve high levels of organizational performance (Teece, 2007; Colombo & Delmastro,
2008). Following Foss et,.al (2011) the Human Resource practices considered in the literature
involve: delegation of responsibility, such as team production; knowledge incentives, such as
profit sharing, individual incentives and incentives for knowledge sharing; internal
communication, encouraged for instance by practices related to knowledge sharing or job
rotation; employee training, both internal and external; and recruitment and retention, such
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as internal promotion policies). It can be noted that the first three classes of practices are
typically included as modern Human Resource practices in the literature (Teece, 2007), while
the latter two classes in a stylized fashion can be considered traditional Human Resource
practices.
Employee retention is an increasingly important challenge for organisations as the age of the
knowledge worker unfolds (Lumley et al, 2011). Presently the employee market belongs to
employees, because talented candidates in the global job skills market have the luxury of
choice (Harris, 2007). Cascio (2006) also affirms that the costs associated with recruiting,
selecting, and training new employees often exceed 100% of the annual salary for the
position being filled. Thus, every turnover of skilful employees comes at a cost and the
combined direct and indirect costs associated with one employee leaving ranges from a
minimum of one year’s pay and benefits to something more substantial. Also, when
knowledgeable employees leave an organisation, the consequences go far beyond the
substantial costs of recruiting and integrating replacements. Consequently, most employers
are seeking better ways to manage turnover in order to retain valued human resources as well
as sustain competition and high performance. Indeed several factors contribute to employee
turnover or retention and researchers have proposed different theories on what motivates
employees to stay or leave an organisation.
Organisations undertake several functions (such as accounting, marketing, research and
development), however, managing human resource is one of its key functions. There has been
immense realisation of the impact of strategic use of HR practices and visionary
organisations are setting the pace to leverage this aspect for competitive advantage (Khan,
2010). According to Bratton and Gold (2009), HR is a strategic approach to managing
employment relations which emphasizes that leveraging people’s capabilities is critical to
achieving competitive advantage, this being achieved through a distinctive set of integrated
employment policies, programmes and practices. Thus, effective Human Resource practices
can be the main factor accounting for the success of an organisation. Human Resource
practices can also be used to elicit some positive behavioural outcomes as well as advance
the skills and abilities of employees.
Weaver and Yancey (2010) in a related study investigated the impact of dark leadership on
organizational commitment and turnover among 80 employees working for a manufacturing
company. Results indicated that dark leadership (narcissistic, compulsive leader, paranoid
leader, co-dependent leader, passive-aggressive leader) were found to be inversely related to
the workers’ affective commitment to the organization and to the workers’ intent to remain
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with the organization. Jaskyte (2004) assessed changes in employees’ perceptions of
leadership behaviour, job design and organizational arrangements and their job satisfaction
and commitment. It was hypothesized that employees’ perceptions of organizational
arrangements, job characteristics, and leadership behaviour would be related to their job
satisfaction and commitment. The result showed that employees’ perceptions of leadership
behaviour were important predictors of job satisfaction and commitment (Jaskyte, 2004).
Akroyd, Jackowski and Legg (2007) conducted a related study to determine the predictive
ability of selected organisational leadership, work role and demographic variables on
organisational commitment. They gathered data from 3000 full time radiographers. The
participants were surveyed by mail regarding their commitment to their employers,
leadership within the organisation that employ them, employer support and demographic
information. Radiographers were found to have only a moderate level of commitment to their
employers. Among the factors that significantly affected commitment of the radiographers’
were educational level, perceived level of organisational support, role clarity and
organisational leadership.
Akintoye (2000) asserts that money remains the most significant motivational strategy.
Although there is some school of thought that claims payment is not a direct determinant of
job satisfaction, yet pay does extrinsically motivate the employees from the economic
perspective. Additionally, working environments can also be a contributor to employee
turnover (Buzzle, 2010). An appropriate environment is important in influencing the
employees to contribute good performance. The employees will prefer to work in an
environment which is suitable for them. Retirement of experienced employees is also a
cause of the turnover (Enotes, 2010). The company may incur high turnover costs and
significant loss in productivity. Furthermore, work stress experienced can also create
turnover (Softworks, 2008). Work stress may causes employees become less motivated
and committed, which may result in lower quality performance and productivity. Based on
the empirical researches, (Zaman, 2011; Qureshi et al.,2010; Hashim, 2011) most tested
extrinsic reward variables are pay, bonus, benefits and promotions and intrinsic variables are
recognition, career advancement, responsibility and learning opportunity. Therefore the
current research focused to identify the effect of the above extrinsic and intrinsic variables on
employee performance.
Casper and Buffardi (2004) have suggested that (WLB) work-life balance benefits are
universally appealing and foster the perception that the organisation was supportive of
employees’ personal needs. Also employee engagement serves as a route to business success
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and is achieved when organisations and employees value each other. WLB is vital for
individuals’ wellbeing, organisations’ performance and a functioning society (Grady et
al.,2008). Family and work are the most important elements of everyone’s life. Any
competing demands of work and family life cause conflict and negatively affect the
wellbeing of workers. Findings from the literature review show that conflicts caused by
interference between work and family activities lead to lower family life satisfaction and
work satisfaction and are negatively related to WLB (Kalliath & Monroe, 2009).
Therefore, good WLB and wellbeing can be achieved when there is no role conflict, and
when people are satisfied with their work and family roles. Grady et al. (2008) argue that
apart from an increasing female workforce and two-income households, the Irish employee
force is ageing. This could lead to higher demands for more flexible working arrangements
for employees with eldercare and childcare responsibilities.
Employee turnover is considered to be one of the persisting problems in flower industry
(Armstrong, 2009). In particular it involves quality employees who have worked for the
organization for many years, high performers and experienced and loyal individuals (Somaya
and Williamson, 2008). Flower farms are important to the Kenyan economy because apart
from creating employeement, they are among the principle earners of foreign exchange for
the country. However the state of HRP and employee turnover has remained unclear as
imperical studies in the area are scurs and not well documented. This study therefore
attempted to establish the relationship between human resource practices and employee
turnover by providing an understanding on how the two concepts influence each other
especially in regard to how flower industry are managed in Kenya.
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