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International Journal of Accounting & Business Management

www.ftms.edu.my/journals/index.php/journals/ijabm

Vol. 3 (No.1), April, 2015 ISSN: 2289-4519 DOI: 10.24924/ijabm/2015.04/v3.iss1/50.80

This work is licensed under a Creative Commons Attribution 4.0 International License.

Research Paper

Influence of Human Resource Management practices on Employee Retention in Maldives Retail Industry

Mariyam Imna

School of Accounting and Business Management FTMS College, Malaysia

Imnamariyam@gmail.com

Zubair Hassan

School of Accounting and Business Management FTMS College, Malaysia

Zubai7@gmail.com

Abstract

This study seeks to establish the influence of human resource management practices on employee retention. A questionnaire was developed based on pas literature and a pilot test was done to test the normality, reliability and validity of the scale. The independent variables to measure human resource management practices include career and development, training and development, performance appraisal, reward and compensation, and health & safety. The dependent variable used in this research is employee retention. The study adopted descriptive and explanatory research design. Also this study used a cross sectional survey methods using a survey questionnaires containing 30 items with Likert Scale (Disagree -1 and 5 for Agree). The sample of 254 employees from 14 retail outlets in Male’ (capital city of Maldives) were selected using convenient sampling. The collected data was analysed using descriptive means and regression via SPSS.20. This study found that three human resource practices such as career development, reward and recognition, and health and safety have a positive and significant impact on employee retention. This research did not find any significant influence of training and development nor performance appraisal on employee retention. However when training and development is linked with career development, there is a positive and significant influence on employee retention. Also when performance appraisal is linked with reward and compensation there is a positive and significant influence on employee retention. Though this study included only 14 retail organisations, future studies may include larger sample by conducting the research on more organisations including tourist resorts, particular only tourism industry . The future studies may compare differences based on socio-demographic profile and might examine the similarities and difference of HR practices in different sectors in Maldives.

Key Terms: Human Resource Management Practices, Career and Development, Training and development, Performance Appraisal, Reward and compensation, Health and Safety, Employee Retention, Retail Sector, Maldives

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1. Introduction The influence of human resource management (HRM) practices and policies on employee retention is an important study in the fields of human resource management. Organizations have witnessed the importance of human resource management practices on employee retention (Singh, 2010). The purpose of this research paper is to analyze the factors influencing employee retention due to the human resource management practices implemented by the organizations in Maldives retail industry

1.1. Research Background

Many researches were done on this field in the past. Most of the recent studies were carried out in developing countries (Tangthong, et al., 2014; Johari, et al., 2012; Shahzad, et al., 2013). Among them, a large number of studies were carried-out in Asia followed by a handful of studies in Europe and limited studies were done on other developing countries (Boxall, et al., 2003; Ghazali, et al., 2008; Rana, et al., 2009; Singh, et al., 2010; Akter, 2012; Bal, et al., 2014). Many research in the field HRM were done on Bangladesh, Pakistan, Malaysia, Thailand and India (Abdullah, et al., 2009; Thite & Russell, 2010; Mahmud & Idrish , 2011; Hassan, et al., 2013; Tangthong, 2014). But since this research is constructed on Maldives there are no official publications carried out on this context as of now, however there are handful of studies conducted on other topics mainly concentrating on the Maldives tourism industry ( (Ministry of Tourism , Arts and Culture Republic, 2011; Shakeela, 2010).

More specifically most of the past research that explored the influence of HRM practices on employee retention were focus on Banking, Hospitality & Tourism, Retail, IT and telecommunication sector (Mensah, 2010; Chalkiti & Sigala , 2010; Reddy & Chandra, 2011; Janjua & Gulzar , 2014; Janani, 2014). Likewise among these studies a broad range of researches were conducted on the retail sector in India and Malaysia (Tay, 2011; Puri, 2013; Bhatla & Pandey, 2014; Sultana, 2014). This could be due to the fast growth of Indian retail sector that has expanded by 10.6 percent with in 2010 -2011 and it was expected to grow up to $ 750-850 billion by 2015 (Sultana, 2014). Similarly the retail business in Malaysia has contributed 13 percent of the countries gross domestic product with RM 334 billion in sales and the retail sector is accepted as one of the main pillars of economy (Tay, 2011). Though this industry has attracted a lot of researchers in the past and produce a vast literature of this field. However, again it seems there is no formal research publication in Maldives retail sector in examining the influence of human resource management on employee retention.

In past many aspects of human resources management were covered and discussed in detail. The most common cited practices of HR practices includes recruitment, reward and compensation, performance appraisal, training and development, career development, health and safety and supervisor support (Osemeke, 2012; Hong, et al., 2012; Okeudo & Cmilt, 2012; Omolo, et al., 2013; Fauzi, et al., 2013; Malik, et al., 2011; Rubel & Hung, 2013). Moreover, it was revealed that the most effective human resource management practices in the retail industry are performance appraisal, training and development, reward and compensation, career development, health and safety (Ming, et al., 2012; Tay, 2011; Puri, 2013). Past research shows a strong correlation between human resource management practices on employee retention. This is because by following appropriate human resource management practices the employee are felt appreciated, satisfied, motivated, more engaged with training which will improve the performance and encourage the employee to retain (Amin, 2013; Hoekstra, 2011).

1.2. Research Rational

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Human resource management practices is a topic that have been covered by a large number of researchers world wide for decades to analyze the relationship between HR practices on employee retention (Qureshi, 1994; Fey, 2000; Jones, et al., 2010; Waiganjo, et al., 2012; Tangthong, 2014). A large number of empirical studies verify a positive relationship between human resource management practices on organizational performance mainly in relation to employee retention (Tangthong, 2014). Looking at the most recent findings among the studies conducted on this context training and development, health and safety, reward and compensation, career development, supervisor support, recruitment, performance appraisal, work and family balance and wage are some of the key practices that influence employee retention (Abeysekera, 2007; Malik, et al., 2011; Osemeke, 2012; Fauzi, et al., 2013). Furthermore training and development enhances job productivity, positive attitude of employee allowing to acquire superior knowledge, skills and abilities (Tangthong, 2014), likewise performance appraisal, reward and compensation motivates employees to stay focused and engaged (Tay, 2011), while career development and supervisor support increase the employees organizational loyalty and reduce the negative thoughts towards the organization (Merchant, 2013). On the other hand if human resource management practices are not implemented properly in an organization there are several negative impacts. An organization with proper human resource management practices enjoys the firm’s sustainable growth that will maximize the economic opportunities in order to meet the organizational goals (Yi, Nataraajan & Gong, 2011). Similarly more significantly related to this research will retain employees and improve their performance (Singh & Jain, 2014). Furthermore human resource management is an approach to develop highly committed and capable workface additionally accountable for retaining skilled employees therefore with these approaches it is evident that one of the primary sources of competitive advantage for an organization is employee (Saha & Gregar , 2012). Hence organizations without proper human resource management practices will invest often more on attracting and recruiting employees that fits for the organization, train them to align with the overall culture and strategy of the organization which will incur higher costs (Moon & Li, 2012). Employee retention today has become a global issue. According to Hay Group, the global employee turnover rate will experience the severest escalation with in 2014 and by 2018 more than 49 million employees will leave their present jobs compared to 2012 making it a total number of 192 million employees worldwide (HayGroup, 2013). Specifically Asia Pacific will be experiencing an average turnover rate of 24% during 2013-2018 (Haygroup, 2013). Similarly, employee retention and HR practices becomes very vital as Maldivian industries recently had experienced a number of incidents employees striking for their demands and needs during operational hours in the Hotel premises (Haveeru Online, 2013). Mainly the cause for the strikes were low service charge, fail to provide pay raise, uneven benefits, promotions, accommodation, food, racism and discriminatory pay against local staff (Haveeru Online, 2013). In addition to that based on a report from Human Rights Commission of the Maldives the “ Rapid Assessment of Employment in Maldives ’’ highlighted that government was unable to train Maldivians to match the needs of growing industries along with the growth of economy in Maldives (Human Rights Commission of the Maldives, 2009). Nevertheless now the Ministry of Human Resources, Youth and Sports, Republic of Maldives is supporting the citizens by providing scholarships through national and international programs (Cambridge Trust, 2014). Since this research is based on Maldives retail industry there are no official publications made on this industry, however a handful number of studies are conducted on the Hospitality and tourism industry of Maldives that generates the highest revenue for the country (Shakeela, 2010; Shakeela, et al., 2011; Ministry of Tourism , Arts and Culture, 2011). Nevertheless retail industry is studied among some of the developing countries such as India, Malaysia and within few European countries (Johari, et al., 2012; Fauzi, et al., 2013; Bhatla & Pandey, 2014; Singh & Jain, 2014). Therefore this study will be contributed to analyze the human resource management factors influencing employee retention in Maldives retail industry. This will allow

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future researches to determine the importance of focusing on certain areas where very limited documentation has been processed. Also the findings of this study can support organizations to come up with appropriate strategies to improve retention and employee performance through human resource management practices in Maldives Retail Industry.

1.2 Research Aims and Objectives The main research aim of this study is to evaluate the influence of human resource management practices on employee retention in Maldives Retail Industry. The objectives derived are as listed below:

To examine the effect of career development on employee retention. To examine the effect of practicing performance appraisal on employee retention. To examine the effect of training and development on employee retention. To examine the effect of reward and compensation on employee retention. To examine the effect of adopting health and safely in organizations on employee

retention.

This paper is organised as follows: first part is discussed above. Second part is the theoretical framework and research hypothesis development. Third part discusses the research design and methodology, data collection procedures and process. Fourth part presents the results and discussion. Final part is conclusion and recommendation, and implication for further research

2. Literature Review Definition of Human Resources (HR) Practices Beginning with Beer (1985) a professor of business administration, Emeritus at the Harvard Business School defines human resource management as one of the main management activities involved in making decisions and all actions that affect the nature of the rapport between the employees and organization. Also human resource management is defined as a strong term used to define the policies, philosophy, practices and procedures interrelated in managing people with in an organization (Guest, 1997). Furthermore human resource management is defined as all the activities related in managing the workplace and employees in the organizations (Boxall, 1996). According to Armstrong the term Human Resource and Human Resource Management has been fundamentally replaced with Personal Management, which is the process of managing employees and their needs in organizations (Armstrong, 2006). More recently HR management is defined as planning; recruitment and selection; performance and reward management; employee well-being; training and development and employee relation to achieve the organizational objectives through their individual contribution (Armstrong & Taylor, 2014)

Critical Review of Key HR Theories Hard and Soft approaches of HR Hard and Soft versions of human resource management are two of the most widely adopted models. According to this framework in the soft version the employees are measured as an additional value to the organization bearing in mind employees require training and

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development with careful management to develop the quality, commitment and flexibility while in the hard version employees maximum potential is used for the benefit of the organization and employees are considered as a tool to achieve the organizational goals (Truss, et al., 1997; Dainty, et al., 1998; Ihuah, 2014). Even though this framework specifies insights on employees no human resource management practices other than training and development was discussed. Due to the paradox and opposing views of this model according to academicians (Storey, Salaman and Billsberry 2005; Guest, 1997) the models are not appropriately explored and questions were raised about the value and the relevance of the models (Truss, et al., 1997). Likewise this particular model is not relevant to this research because based on the existing studies there are more than training and development required to achieve the organizational goals through human resource management practices (Ming, et al., 2012; Tay, 2011; Puri, 2013). Harvard Framework This approach is referred as the soft and developmental humanism oriented framework accepted by various academicians and implemented by several organizations is designed for the over-all organizational perspective of human resource management choices that can effect the long-term well being of employees and organizational effectiveness (Ehnert, 2009). This framework was developed after examining the demand for a more comprehensive, broader framework that also provides strategic perspective in the present emerging working environment in order to manage the requirements under pressure to manage employees for long term accepting employees as a potential asset (Mirzaei, et al., 2013). Nevertheless this framework was the first to emphasize that human resource management is for line managers (Armstrong, 2006). Harvard framework mainly addresses on congruence, competence, cost-effectiveness and commitment that widens the context of human resource to incorporate employee influence (Tabibi, et al., 2011). Although this framework has covered a large extent of human resource practices and it needs more development in future with the concepts because the model lacks on explaining how the four policies are influenced by the stakeholder and the classified environment of how it will work in the long term affects of strategic human resource management (Agyepong, et al., 2010). Similarly this model is not significant for this study as it speaks of only two main dimensions discussed in this study that are reward systems and employee well-being.

Michigan Model This model made one of the first explicit statements of the human resource management concept known as the matching model leaning more towards the hard approach in comparison to the Harvard framework (Ehnert, 2009). Concerning the motives of this model employees are managed at a lower cost in order to achieve high profit for the organization by neglecting the nature of employees and their influence on strategic planning, besides this model doesn’t allow to intergrade the current concerns of work life balance into discussion (Ivo, 2006). According to this model the available human resources must be in line with the jobs and priority is given more to the business strategy (Cakar, et al., 2003). In comparison to the models discussed earlier this model reviews four main generic human resource management practices the appraisal, selection, rewards and development (Armstrong & Taylor, 2014a). Despite this model addresses some of the key human resource practices that enhance employee retention with it’s similarities to the Harvard framework the model is criticized because of the narrow perspective it has got on achieving the organizational goals and the limitation it contributes towards the importance on human resource (Harvey & Peter, 2010). The Guest Model

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This model is inspired by the Harvard framework is a fusion of both soft and hard approach of human resource management (Janssens & Steyaert, 2009). In 1997 Guest claimed about the need for a proper theory that emphasizes on three main characteristics 1: Human resource 2: Performance 3: and finally a theory on how both could be related. Consequently after exploring theories such as strategic contingency theory and AMO theory while observing for eight years on the dispute of the three fundamental characteristics the link between human resource and performance still remained uncertain (Paauwe & Boselie, 2005). According to this model organizations can achieve high employee performance, stronger problem solving, reduce employee turnover, achieve greater goals and improve cost in an effective manner by adopting a coherent strategy of human resource practices properly integrated with the business strategy (Marsden, 2002). Guest’s model was found a successful human resource management model in a wider academic level with critical researchers such as Karen Legge having several difficulties in producing counter text towards the model (Harley & Hardy, 2004). With the main seven policies recruitment selection and socialization, manpower flow, reward systems, appraisal, training and development, communication systems, and organizational job design this model is relevant to the study because this model is exceptionally different from the traditional personal management models emphasizing more on the strategic management (Guest, 1997). In addition to that with this model the aim of the study could be achieved as it improves employee performance retaining employees Literature ‘Gap’ As earlier mentioned, very few studies were done on Maldives. Also handfuls of research were officially published on Maldives, especially on HR practices and its issues, challenges faced in recent years. The table 1 below shows the research done on Maldives and related industries. Most of these studies are done on the tourism industry. As of now there seem no published official studies is done on exploring the influence of human resource management practices on employee retention in the retail industry of Maldives. Moreover a handful of human resource practices are discussed such as wage, working time, safety and health and training. The table 2 below provides a summary of the studies on the human resource context in the retail industry. According to these studies some of the key human resource practices are working condition, reward system, recruitment, performance appraisal, career planning, training and development.

Table 1: Related studies done in Maldives

Researcher (s) Industry Variables Discussed

Ministry of Tourism and Civil Aviation (2008)

Tourism Industry Average salary, Foreign employees, Local employees

Human Rights Commission of the Maldives (2009)

Employment in Maldives

Wages, Working time, Occupational safety and health, Social security, Maternity protection

Shakeela , Ruhanen and Breakey ( 2011)

Tourism Industry Social, Human resources, Economic, Religion

Najeeb (2013) Tourism Industry HR actors, HR implementation, HR practices

Ministry of Health and Gender (2014)

Health Sector Trained local employee in the health sector

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Table 2: Related studies done in Retail Industries in other parts of the world

Researcher (s) Variables Discussed

Teck-Hong and Waheed (2011) Motivation, Job satisfaction, Working condition, recognition, reward scheme

Tay (2011) Decision making, training program, fair rewards

Reddy and Chandra (2011) HR practices, employee satisfaction

Akter (2012) Employee satisfaction, reward system

Ming, Ziviak and Ljubicic (2012) Salary, employee turnover

Puri (2013) Emerging retail trends

Larsen Consultant (2013)

Employee satisfaction in the work place, other career paths, insufficient compensation, frustration with management

Bhatla and Pandey (2014) Attraction, retention, knowledgeable human resource

Sultana (2014) Recruitment, selection, performance appraisal, training and development, compensation, career planning

Conceptual Framework

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Figure 1 – Conceptual Framework of HR practices and employee retention Source: Researcher’s own development

Career Development and employee retention One of the main critical issues organizations facing today is to retain their employees (Allen, 2010). Career development is one of the main human resource characteristics that provide the opportunity for employees to continuously be a part in the diverse activities in the organization that develops employees (SHRM, 2012). Career development activities includes succession planning (Broadbridge,2007), talent management (SHRM, 2012), leadership development (Day & Harisson 2007), structured career management and self-assessment (Baruch & Peiperl, 2000). The outcome of succession planning were development for further growth, work shadowing, job rotation within the organization and promotion leading to employee retention(Broadbridge,2007). Similarly structured career management improves the employee’s organizational commitment and behavior (Baruch & Peiperl, 2000) resulting further employee retention. Also self-assessment enables to establish commitment to perform better in the organization and enriches the skills of functioning in the work place (Baruch & Peiperl, 2000). Therefore this research assumes that

H1: Improved career development practices have a significant and positive influence towards employee retention.

Training and Development and employee retention In the present economy training and development is among one of the key human resource management practices which leads to skills, abilities, superior knowledge, positive attitude and behavior of employees resulting the organization in profit (Tangthong, et al., 2014). Among them there are several different types of trainings and development methods. This

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includes on-the job training, off-the job training, job rotation, coaching &mentoring, and employee development. On-the-job training improves work efficiency, develops interest in work, gives satisfaction and reinforces the commitment towards the organization leading to employee retention (Hanif, 2013). Also off-the-job training causes employees pay more attention to the particular training activities, learn new skills and knowledge without distractions paying the complete focus on the training (Elnaga, & Imran, 2013). This result employee commitment and retention. Job rotation enables employee to enrich their skill set and has positive effect on employee motivation and retention (Kaymaz, 2010). Coaching and Mentoring is considered to be one of the effective training and development method. This method enables one-to-one consultation. This process develops high performance of employees speeding up the settling process in the organization and increasing the productivity (Ameeq & Hanif, 2013) enabling employee stay in the organization for a longer period of time. Further more employee development activities has a significant and positive impact motivation, loyalty and employee retention (Sinha & Sinha, 2012). Therefore the following hypothesis is formulated H2: Increasing training and development opportunities has a significant and positive influence on

employee retention Alternatively, recent research found that combined effect of training and development along with career development opportunities have a significant influence on employee retention (Juhdi, Pa'wan & Hansaram, 2013)). These employees are motivated to train themselves in order to enhance their career opportunities and develop themselves (Heathfield, 2008). This cause employee to be motivated and retain in the organization. Mostly employees are not much interested in training and development if that training is not linked with career development (Ramlall, 2003). Therefore the following hypothesis is formulated

H3: The combined effects of training and development along with career development opportunities have a significant and positive impact on employee retention.

Performance Appraisal and Employee retention Performance appraisal is a process of evaluating employee’s performance on the assigned tasks to facilitate further career development; it is mainly the communication between the employee and management (Hong, et al., 2012). Some of the key components of performance appraisal are employee feedback, communication, goal setting, performance evaluation, and periodic review. Employee feedback approach helps in shaping the behavior and improves learning that drives the performance and retention (Kasemsap, 2015). Similarly communication system motivates the employee to willingly participate in the appraisal process (Agbola et al, 2011).leading to a positive outcome of employee retention. The goal setting process enables employee to stay more focus and stay in the organization if the set goal is meaningful and challenging. This motivates employees to meet the set organizational objectives in a timely fashion (Fulk, Bell & Bodie, 2011). Also performance evaluation contributed to employee retention as it gives the confidence to employees that the organization is committed to accomplish the needs and development of employee that enhances performance (Yi, Nataraajan & Gong, 2011). Lastly the period review allows the organization to identify the lack of ability, lack of effort and progress by the employee often that can minimize the problems improving the performance (Pulakos, Hanson, Arad, & Moye, 2015) resulting employee retention. Therefore the following hypothesis is formulated: H4: Effective performance appraisal has a significant and positive influence on employee retention.

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In contrast, many research finding shows that performance appraisal is meaningless if it is not linked with some reward. This reward could be an intrinsic or extrinsic reward. If reasonable rewards are not linked with performance appraisal, it would not improve performance in long-term or retain the employee (Lawler III, 2003). Another study shows that when performance appraisal outcomes were not linked with reward and recognition, employees tend to feel demotivated and intends to leave or were not willing to participate in appraisal process (Daoanis, 2012). Therefore the following hypothesis is also formulated

H5: If performance appraisal and reward recognition are combined, there is a significant and positive impact on employee retention.

Reward and Recognition and employee retention Reward and compensation are the forms of tangible benefits and financial returns that an employee receives, however with the emerging economy and the present work environment the rewards and recognition takes in different forms. These include performance based rewards, employee recognition, non-monetary incentives, extrinsic rewards, and intrinsic rewards. Performance based pay improves employee performance in addition to motivating and engaging employees (Nazir, et al., 2013) causing to improve employee retention. In employee recognition process, employees are praised which is a key essential as employees seek the need to be valued and respected. This process increases individual productivity, loyalty, retention and high employee satisfaction (Danish & Usman , 2010). Non-monetary incentives attract, motivate and retain competent human resource in the organization (Fogleman & McCorkle, 2013). Extrinsic rewards increases the level of employee performance and satisfaction also found as a strong factor for employee motivation (Saeed, et al., 2013). Intrinsic rewards were found to be a sustainable source of motivation for employees (Saeed, et al., 2013). However according to studies extrinsic rewards are more positive and stronger in relation to intrinsic rewards (Edirisooriya, 2014) in retaining employees. Therefore the following hypothesis is formulated

H6: There is significant and positive impact of reward and recognition on employee retention. Health and Safety and employee retention Maintaining Employee well being and providing a safe working environment is one of the main human resource management practices because it is directly related to the organizational performance, individual well-being, profit and the service provided to the customers through the employees while contributing to the success of the organization (Mearns & Reader, 2008). Health and safety practices include workplace health and safety, occupational health programs, health and safety training, health and safety management, and health and safety inspection. By implementing proper health and safety standard in the workplace improves the performance of the organization through employees by avoiding and reducing costs related disabilities, accidents, absenteeism and illness (Gaceri, 2015). This result more employee retention. Similarly occupational health programs allows organizations to minimize the stress level of employees with higher productivity, less absence to work improve staff determination (Armstrong, 2006) causing to reduce labour turnover. Health and safety training among employees provided special courses to deal with the health and safety areas to be careful and have safety problems. This builds the confidence and commitment of the employee towards and organization (Armstrong, 2006) resulting further improvement in employee retention. Also safety and health management helps the organization to reduce costs, reduce risk in for employees at the workplace increasing their productivity because this practice motivates employees and keeps them in good health (Health and Safety Executive, 1997) thereby reducing labour turnover. Health and safety inspection prevents injury illness and property dame in the workplace and builds a positive health and safety culture, which enhances employee

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productivity, commitment and performance (Armstrong, 2010) causing to reduce labour turnover. Therefore the following hypothesis is formulated

H7: Improved health and safety practices in the workplace have a positive and significant influence

on employee retention.

3. Research Design and Methodology

Research Paradigm There are four research paradigms, which include positivism, post-positivism, interpretivism, and pragmatisms. The table below shows the difference in each of these paradigms.

Table 3: Comparison of Research Paradigms

Source: adopted from Wahyuni (2012)

For this research study, positivism paradigm is applied because post – positivists attempts to rectify the causal relationship, experimenting the phenomena and uses a correlation study that leads to the methods that produce quantitative data (Scotland, 2012). Therefore by following this paradigm the researcher is able to select variables, observe and interpret the findings and moreover able to analyze the impacts of the human resource management practices influence on employee retention in the Maldives retail industry. Most of the times the result findings conducted using this paradigm are accepted (Chui, 2015). With this research paradigm the researcher is able to accurately describe the human resource management practices in Maldives and rectify the influence it has on employee retention in retail industry.

Research Methodology This research study used quantitative method for data collection. Because this method allows testing theories and hypotheses, collect large number of data, which is more appropriate to answer the question, similarly this method is more objective and reliable yet not influenced

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by the personal opinion of the researcher in representing the phenomena. This method allowed researcher to restructure complex problem to a limited number of variables and supports understating the predictors of the result (Creswell, 2013). Also this method enabled to explain and test theory unlike qualitative method where the researcher is not aware of the important variables to examine and the data collection is sensitive and flexible to the social context (Gravetter & Forzano, 2015). Primary Research is adopted as there is no formal and reliable data currently available on this research topic in the research context. Also primary research provides satisfactory results and is appropriate for intensive investigations, similarly the target issues are addressed; the interpretation of data is more effective, addresses the specific research issues, the data collected is decent and the researcher has greater control (Rønsen & Smith, 2014).

Research Questionnaire

According to Goulding (2005) there are three ways to design target question - to use questions already exist in other established questionnaires, adapt questions already used in other questionnaires or design new. Since this is the first research of it’s kind in Maldives the questionnaire was newly designed and pilot testing was done before it was distributed among the participants. The questionnaire for this study consisted of total 30 questions that were developed based on main 5 independent variables and 1 dependent variable, each variable consists of 5 questions. The questionnaire has both classification and target questions. It had two sections in it, Section A consists of gender, age, job position, marital status, length of employment, salary range, department and qualification, Section B included the target questions. Since majority of the respondents preferred to remain anonymous identification question was kept voluntary not necessary .The questionnaire was formatted in English language, kept simple and easy to answer with a likert scale of 5 so that the response rate could be increased. Those are 1- strongly agree, 2- agree, 3- neither agree nor disagree, 4- disagree and 5- strongly disagree.

Table 4: Questionnaire development

HR practices Key variables Sources

Career Development Opportunities

Success planning Broadbridge(2007)

Talent Management SHRM (2012)

Leadership Development Day & Harisson (2007)

Structured Career Management Baruch & Peiperl (2000)

Self-Assessment Baruch & Peiperl, 2000)

Training and Development

On the Job Training Hanif (2013)

Off the Job Training Elnaga, & Imran (2013)

Job Rotation Kaymaz (2010)

Coaching and Mentoring Ameeq & Hanif (2013)

Employee Development Sinha & Sinha (2012)

Performance Appraisal

Employee Feedback Kasemsap (2015)

Communication Agbola et al (2011)

Goal Setting Fulk, Bell & Bodie (2011)

Performance Evaluation Yi, Nataraajan & Gong (2011)

Periodic Review Pulakos, Hanson, Arad, & Moye (2015)

Reward and Recognition

Performance based rewards Nazir, et al. (2013)

Employee recognition Danish & Usman (2010)

Non-monetary rewards Fogleman & McCorkle (2013)

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Extrinsic rewards Saeed et al (2013)

Intrinsic rewards Saeed et al (2013)

Health & Safety

Workplace Health and Safety Mearns & Reader (2008)

Occupational Health Programs Gaceri (2015), Armstrong (2006)

Health and Safety Training Armstrong (2006)

Health and Safety management Health and Safety Executive (1997)

Health and Safety Inspection Armstrong(2010)

Employee Retention

Employee satisfaction Akter (2012)

Talent retention SHRM (2012)

Supervisor Support Osemeke (2012); Hong, et al. (2012); Okeudo & Cmilt (2012); Omolo, et al (2013)

Employee Engagement Tay, 2011

Organisational Commitment Baruch & Peiperl (2000)

Source: Adopted from various sources

Pilot Testing of questionnaire Pilot testing was conducted using structured questionnaire in order to make sure that the participants understand the question and understand it in the similar way. The importance of pilot testing is that it helps the researcher to find out if the questions make the respondents uncomfortable, helps to identify if changes are required in the language used in the questionnaire giving the researcher to be able to understand the time it take to complete the survey in real time (Jacob & Furgerson, 2012). Also pilot test allowed the researcher to ensure the scale is reliable and normal. Also reliability test (Cronbach’s Alpha) was conducted to test internal cocnistency. The items that show less than 0.7 were modified or removed and then the new questionnaire was distributed.

Target Population, sample size and sampling method The target population for the proposed research question consists of employees working in the retail industry of Maldives. Provided in the official website of National bureau of statistic; Ministry of Finance and Treasury updated as of year 2000 the employed population from both sexes in the sales and service industry is 6567 employees (National Bureau of Statistics, 2014). Therefore 30 organizations were approached considering the time to complete the research, and among those 14 of the organizations responded with positive response in allowing their employees to participate. The study is a cross – sectional research and therefore primary sample was used. This is a form of quantitative sampling, which is normally used, in descriptive research (Cho & Park 2013) where the researcher collects sample from a random group of people. A total of 280 questionnaires were distributed and a total of 263 questionnaires were returned. However, among these returned questionnaires some of the questionnaires were excluded because it was incomplete which means 254 completed questionnaires were used (sample size is 254). The respondents were employees currently working in the retail industry. The sampling techniques used to select employee for this survey is convenient sampling method. It is difficult to use simple probability sampling as most of the staff are not based in the office, but in different locations. Therefore once the company grant the permission, researcher approaches any employee who are available in the office. As researcher is not directly involve in

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data collection process, it minimise the biasness and influence on any employee. Once the procedure is explained and when respondent gave the consent, then the questionnaire was given and requested to complete it as truthfully as they can. The completed questionnaires were collected after 2 weeks followed questionnaire distribution to the respondents, following up and reminding the respondents on the dead line for collection.

Table 5: Number of participation in each company

Ethical Considerations Before the questionnaire was being distributed to the respected companies, they are well-informed by the researcher as to conduct a questionnaire survey with the employees of their companies. After the permission was granted by the respected companies, a research letter by FTMS College is delivered to the selected companies as to further confirm with them the conduct of the survey and it is strictly for academic purpose. Attached with the questionnaire is the participant consent form where each participant was asked to sign as they are agreed to take part in this research voluntarily. The collected data are kept confidential that do not contained any specific information except some demographic questions such as name, age group and so on. Each company has given a permission letter allowing this research to be conducted at their companies.

Data Analysis Plan In order to analyze the data the descriptive statistics of the questionnaire were acquired from SPSS in order to find out the normality of the questionnaire based on the skewness and the kurtosis statistics. Next the researcher run the reliability test, validity test, correlation, regression and find out the sample adequacy using the SPSS in order to analyze the data collected for the findings of the study. This enabled the researcher to find out whether the respondents agree if or not human resource practices influence employee retention in Maldives retail industry.

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Research Limitations This study has several limitations. First, the target population to collect data is limited. Second, the cost involved to cover the entire target population is a huge amount. Furthermore the researcher to personally visit Maldives and collect data was another challenge as the research is not a funded research. Therefore among 200 inhabited island in Maldives with 80 islands operating as resort hotels the study was focused only on the capital city Male’. This is because according to the world fact book 1/3 of the population of Maldives that is approximately 103, 693 out of 345,023 of Maldives population is based in the capital city Male’. Therefore most of the businesses are successfully operated in the capital city. Third and the biggest challenge is the time constraint

4. Results and Discussion Demographic Analysis The study engaged 254 employees from 14 organizations in Maldives. Majority of the respondents were female 56.7%, male 110%. Most of the employees are aged between 18 23rd -45 years constituted 37% followed by aged group 26-35 years with 34%. 91% of staffs were professional level staff while 9% only represents secretary level staff. The detailed table 2 illustrated the information about respondents.

Table 6: Socio-demographic Profile of the Participants

Variable

Frequency Percent Cumulative Percent

Age Group 18-23 106 41.7 41.7 24-29 86 33.8 75.5 30-35 47 18.5 94.0

36 and above 15 6.0 100 Gender Female 144 56.7 56.7

Male 110 43.3 100 Marital Status Single 134 52.8 52.8

Married 108 42.5 95.3 Divorce 12 4.7 100

Length of service 0-6months 44 17.3 17.3 6months – 1 year 40 15.7 33

1-2 years 55 21.7 54.7 >2 years 115 45.3 100

Monthly Income Mrf 4000-6000 99 39.0 39.0 Mrf 7000-8000 67 26.4 65.4

Mrf 9000-11000 50 19.6 85.1 >Mrf 12000 38 15.0 100

Job Position Executive 24 9.4 9.4 Junior 121 47.6 57 Others 54 21.3 78.3 Senior 55 21.7 100

Department Administration 26 10.2 10.2 Customer Service 121 47.6 57.8 Human Resource 15 5.9 63.7

Others 92 3.6 9.5 Education Level Bachelors 23 9.0 9.0

High. Second 91 35.8 44 Masters 5 2 46 Others 26 10.2 56.2

Secondary 109 42.9 99.1

Normality of data distribution

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In order to measure the data normality the statistical significance of skewness and kurtosis are two important indicators. Normality is most of the times referred to the shape of the data collection (Koizumi, 2013). The two key indicators for normality testing, skewness demonstrates if the shape is balanced while the other indicator kurtosis allows identifying if the curve is peaked or flat. Also it was suggest that too much variation from the normal distribution can cause negative impact during the data analysis (Zygmont & Smith , 2014). In multivariate analysis the data normality is ensured if the absolute value is with in (<0.1) or (<. 001) (Khine, 2013). The skewness of this data set is seen between 0.70 to - 0.80, indicating that the skewness of this data set is in acceptable range falling under the suggested value. However the kurtosis indicated three questions (Q8, Q16, Q17) greater than -1.00, but suggesting the rest is on an acceptable range. Also it is important to note that these three questions were found to be normal during the pilot testing. Since the greater value for those three questions indicated in kurtosis is varying with a very slight difference, the data set is suggested normal and further reliability testing was conducted.

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Table 7: Normality of data distribution and scale Source: SPSS generated

Scale Reliability

N Mean Std. Deviation Skewness Kurtosis

Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error

Q1 254 2.41 1.137 .699 .153 -.208 .304

Q2 254 2.61 1.045 .700 .153 .017 .304

Q3 254 2.74 1.082 .222 .153 -.688 .304

Q4 254 2.81 1.140 .216 .153 -.757 .304

Q5 254 3.06 1.028 -.309 .153 -.490 .304

Q6 254 3.15 1.109 .026 .153 -.938 .304

Q7 254 2.51 1.165 .591 .153 -.382 .304

Q8 254 2.88 1.244 .084 .153 -1.052 .304

Q9 254 2.15 .993 .875 .153 .564 .304

Q10 254 3.00 1.254 .085 .153 -.952 .304

Q11 254 2.55 1.112 .653 .153 -.194 .304

Q12 254 2.50 1.106 .708 .153 -.086 .304

Q13 254 2.37 1.066 .668 .153 -.137 .304

Q14 254 2.50 1.257 .599 .153 -.587 .304

Q15 254 2.69 1.232 .360 .153 -.801 .304

Q16 254 2.92 1.327 .132 .153 -1.125 .304

Q17 254 2.68 1.365 .328 .153 -1.131 .304

Q18 254 2.27 1.048 .672 .153 -.043 .304

Q19 254 2.42 1.138 .593 .153 -.275 .304

Q20 254 2.60 1.072 .536 .153 -.094 .304

Q21 254 2.47 1.054 .593 .153 -.041 .304

Q22 254 3.07 1.120 .005 .153 -.611 .304

Q23 254 3.37 1.088 -.127 .153 -.709 .304

Q24 254 3.04 1.034 .302 .153 -.609 .304

Q25 254 3.30 1.091 -.083 .153 -.670 .304

Q26 254 2.35 1.113 .773 .153 .021 .304

Q27 254 2.33 1.133 .745 .153 -.094 .304

Q28 254 2.42 1.212 .595 .153 -.525 .304

Q29 254 2.54 1.201 .437 .153 -.576 .304

Q30 254 2.56 1.230 .463 .153 -.586 .304

Valid N (listwise)

254

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For this research reliability is measured using Cronbach’s Alpha and inter-item correlation. Cronbach’s alpha measures the internal consistency, while the inter-item correlation addresses the correlation between individual items that should exceed or be greater than 0.3 (Hassan & Diallo, 2013). Cronbach’s alpha coefficient is widely used to measure reliability, if the Cronbach’s alpha value is 0.70 it ensures the reliability of the internal consistency of the questionnaire (Ringim, et al., 2012).

Table 8 – Reliability Statistics for the whole scale

Pilot Test (sample of 20) Actual Sample of 254

Cronbahc’s Alpha 0.933 0.956

Cronbach's Alpha Based on Standardized Items 0.933 0.956

Source: SPSS generated

The constructs for this research has a standardized Cronbach’s alpha of 0.956 and according to Flynn, Schroeder and Sakakibara (1994) the Cronbach’s alpha range between 0.60 to 0.99 for the variables of the questionnaire used for research indicates that the instrument is reliable (Ringim, et al., 2012). Also based on the Table 9, the Cronbach’s Alpha for the variables show high reliability, therefore the instrument has excellent reliability in terms of internal consistency. The items that has a lower reliability score during the pilot test has been modified or replaced with another item has shown high internal consistency proving that the final questionnaire and scale has a high reliability.

Table 9 – Reliability Statistics for each Variable

Variables Number of

Items

Cronbach’s Alpha

(N=254)

Cronbach’s Alpha (Pilot Test)

(N=20)

Career Development 5 0.886 0.883

Training and Development 5 0.769 0.530

Performance Appraisal 5 0.854 0.620

Reward and Compensation 5 0.809 0.551

Health and Safety 5 0.858 0.822

Employee Retention 5 0.931 0.911

Factor Analysis

Table 10 – Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 13.276 44.254 44.254 13.276 44.254 44.254

2 2.083 6.942 51.196 2.083 6.942 51.196

3 1.813 6.043 57.239 1.813 6.043 57.239

4 1.213 4.044 61.283 1.213 4.044 61.283

Extraction Method: Principal Component Analysis. Source: SPSS generated

As shown in Table 10, from the initial eigenvalues, the % of variance for the first component is 44.254%, the second component is 6.9%, and the third component is with 6.04%. The fourth compoment is 4.044%. Therefore, total of 4 components possess an eigenvalue ˃1 rule (Williams, Onsman and Brown, 2010). Also this indicates that scale is more unidimensional. Further to this component matrix (Vari-max) is analyzed to identify the factors.

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Table 11 – Rotated Component Matrix

Q. No

Component

PA and RC

Employee Retention

CD and TD

Health and Safety

Q11 0.716

Q12 0.699

Q14 0.682

Q17 0.611

Q29 0.813

Q30 0.796

Q26 0.786

Q27 0.78

Q28 0.77

Q6 0.759

Q3 0.671

Q5 0.651

Q25 0.786

Q23 0.769

Q22 0.76

Q24 0.753

Eigen Value 6.997 2.684 12.296 6.911

Cumul. Var % 18.53 33.97 48.977 61.283

Source: SPSS generated

The analysis of Eigen values and the scree plot for human resource practices suggested four factors among the five components used in the instrument. The total variances obtained by the 4 factors for the dependent factor (Employee Retention and Performance) were 61.3%. In order to retain the dimensions, Eigen value should be 1.0 or must exceed 1.0 (Hassan, 2014). Therefore all the components used in the construct are more than 1.0 and cumulative variance for all the items included in the construct exceeded 61 %. Therefore all the items are retained under each variable.

Component 1 – (Q-11, Q-12, Q-14, Q-17): For the first component with the listed 4 questions`, in the factor analysis grouped Performance Appraisal (PA) and, Reward and Compensation RC) as one factor. The Eigen value obtained for this component is 6.997 with a cumulative variance of 18.53%.

Component 2 – (Q-29, Q-30, Q-26, Q-27, Q-28): For the second component with the listed 5 questions, in the factor analysis obtained is Employee Retention (ER) with an Eigen value of 2.6846 with a cumulative variance of 33.97%.

Component 3 – (Q-6, Q-3, Q-5): For the third component with the listed 3 questions, in the factor analysis grouped Career Development (CD) and, Training and Development (TD) as one factor. The Eigen value obtained for this component is 12.296 with a cumulative variance of 48.977%.

Component 4 – (Q-25, Q-23, Q-22, Q-24): For the fourth component with the listed 4 questions, in the factor analysis obtained is Health and Safety (HS) with an Eigen value of 6.911 with a cumulative variance of 61.283%.

Therefore based on the results extracted from the factor analysis using component matrix (vari mix) the data set is explained by 4 factors, which this study will be analyzing further. The combined two factor is well justified in the literature review as training and development linked

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with career development has a better chances in motivating staff to stay longer with the organization. Similarly performance appraisal linked reward and recognition has much more significant impact on employee retention than stand alone. Thus this study has conducted further analysis to test the component matrix and the proposed original conceptual framework to test the hypotheses.

Sample Adequacy Test

The collected data set was tested to check the appropriateness for factor analysis and this depends upon the sample size. According to a study by MacCallum Windman, Zhang and Hong (1999) suggests that, if the communalities are lower the importance of the sample range increases. Similarly if all the communalities are > 0.5, specially for a sample (less than 300) it is perfectly adequate (Hassan, 2014). Therefore the sample size of 254 used in this research is good for a suitable factor solution, since all the communalities are 0.5 and above. Table 12 – Rotated Component Matrix

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.94

Approx. Chi-Square 5061.237

Bartlett's Test of Sphericity df 435

Sig. .000

Source: SPSS generated

The Kaiser-Meyer-Olkin (KMO) a method used to measure sample adequacy refined that index further 0.90s is marvelous, 0.80s is meritorious, 0.70s is middling, 0.60s is mediocre, 0.50s is miserable and below 0.50 is unacceptable (Anastasiadou, 2011). In this study, the value of KMO for Human Resource Management practices, the whole construct is 0.940 suggesting the factor analysis is reliable and statistically significant because it is 0.90 and above.

Descriptive Statistics The mean and standard deviation from descriptive statistics are used to analyse the data. The average or mean is the most popular measure of central tendency (Thompson, 2009). The usage of means to explain a dataset must be bounded to ratio and interval level data (Thompson, 2009). The mean is more affected by the allocation of the values than is the median and it is more responsive to outliers (Thompson, 2009). Among the five HR practices to retain employees, the mean statistics of health and safety (HS) is the highest (M=3.08, Std=0.899) indicating that most employees perceived that this is the most often practice HR activities in the organization. The second highest mean value is scored by training and development (TD) and career development (CD), both scored a mean value of 2.74 indicating that both TD and CD are commonly practice in their organization to retain employees. Performance appraisal and reward and recognition scored a lower mean value of 2.52 and 2.54 respectively indicating that performance appraisal is the least HR practices in the organization out of five practices. Also overall all the data distribution are normal and valid.

Table 12- Descriptive Statistics

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Source: SPSS generated

In terms of Transformational Leadership, Intellectual Stimulation (IS) is with the highest mean of 3.535 (Std. Deviation= 0. .5285) among all the Transformational Leadership dimensions which indicates that majority of the respondents agreed that this dimension is the most vital and displayed leadership behaviour of Transformational Leadership. Next is the Idealised Influence (Behaviour) (IIB) with 3.522 (Std. Deviation= 0. .5074). Then followed by Idealised Influence (Attributed) (IIA) with mean of 3.518, (Std. Deviation=0.5357), Inspirational Motivation (IM) with mean of 3.514 (Std. Deviation=0.5401). Lastly is the Individualised Consideration (IC) with the mean statistics of 3.513 (Std. Deviation= 0. .5786). Correlation Analysis The below table 13, shows the correlation analysis generated on all constructs to determine Pearson’s Correlation coefficients with a two – tailed significance test. Human Resource Management practices such as Career Development (CD), Training and Development (TD), Performance Appraisal (PA), Health and Safety (HS), Reward and Compensation (RC), are considered as independent variables and Employee Retention (ER) is considered as the dependent variable. Correlation is measured the relationship between two or more variables. The correlation coefficients range from -1 to +1 representing perfect negative and positive correlation (Landau & Everitt, 2004). As a general rule of thumb the value should not exceed 0.75, similarly correlations of 0.8 or higher are suggested problematic (Ringim, et al., 2012). With reference to the above figure, the results show that all the dimensions of Human Resource Management Practices have strong relation with employee retention. Overall Human Resource Management Practices has positive and significant relationship with employee retention with a Pearson correlation coefficient of R= 0.573, 0.515, 0.495 and 0.515 respectively. This finding is similar to the previous similar research done in other contexts. For example in terms of career development we found a positive and significant relationship with employee retention. This is confirmed by previous studies such as Day (2007), SHRM (2012) and Merchant (2013). Also in terms of training and development the result is confirmed by previous researches such as Kaymaz (2010), Ameeq-ul-Ameeq & Hanif, (2013), and Tangthong (2014). Similarly the positive relationship between performance appraisal and employee retention are also similar to previous studies such as Tay (2011), Yi, Nataraajan & Gong (2011), Bhattacharyya (2011), Fulk, Bell & Bodie, (2011). Previous studies also confirms the relationship between reward and recognition and employee retention (Fogleman & McCorkle, 2013; Saeed, et al., 2013; Edirisooriya, 2014). Lastly, health and safety relations with employee relation is also confirmed by previous studies such as Armstrong (2010).

Table 13- Pearson’s Correlation Coefficient of HR practices and Employee Retention

Factors CD TD PA RC HS ER

CD 1 .670** .657** .598** .574** .573**

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.000 .000 .000 .000 .000

254 254 254 254 254

TD

1

0.633** 0.596** 0.519** .515**

.000 .000 .000 .000

254 254 254 254

PA

1

0.611** 0.484** .495**

.000 .000 .000

254 254 254

RC

1

0.450** .615**

.000 .000

254 254

HS

1

.515**

.000

254

ER

1

**. Correlation is significant at the 0.01 level (2-tailed).

Source: SPSS generated

4.7. Regression Analysis For this study, regression was performed to predict the impact of Human Resource Management Practices on employee retention based on five independent factors. The dependent factor for this study is Employee Retention Human Resource Management Practices and Employee Retention

Table 14 – Model Summaryb original model

Model R R

Square

Adjusted

R Square

Std. Error of

the Estimate

Change Statistics Durbin-

Watson R Square

Change

F

Change

df1 df2 Sig. F

Change

1 .690a .476 .465 .805 .476 45.014 5 248 .000 1.828

a. Predictors: (Constant), HS, RC, PA, TD, CD

b. Dependent Variable: ER

As refer to Table 14, the dependent variable is ER, and independent variables are HS, RC, PA, TD and CD. The figure (4.6) summary predicting the employee retention shows R as 0.690, R square as 0.476 and adjusted R square as 0.465, implicating that 46.5% of the variance of employee retention can be predicted by independent variables of health and safety, reward and compensation, performance appraisal, training and development and career development. However as a general rule of thumb a good fit is considered to predict minimum of 60% variation of the dependent variable (Zygmont & Smith , 2014). Therefore this model is considered to be a poor fit or not a ‘good fit’. However the autocorrelation of this regression is potentially high. Similarly the F test conducted for this study gives a value of 45.014, proposing the F value for this study shows that the regression model is significant

Table 15 – Beta Coefficients for Employee Retention

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Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig. Collinearity

Statistics

B Std. Error Beta Tolerance VIF

1

(Constant) -.217 .200 -1.084 .279

CD .220 .083 .192 2.659 .008 .407 2.459

TD .065 .087 .052 .753 .452 .448 2.230

PA .011 .077 .010 .146 .884 .459 2.180

RC .426 .073 .371 5.850 .000 .526 1.902

HS .253 .071 .206 3.556 .000 .627 1.594

a. Dependent Variable: ER

The following assumptions were made before the analysis of this table:

Dependent factor: Employee Retention

Y= ER (Employee Retention)

Independent factor: Human Resource Management Practices

X1=CD (Career and Development)

X2=TD (Training and Development)

X3=PA (Performance Appraisal)

X4=RC (Reward and Compensation)

X5=HS (Health and Safety)

C=Constant

Therefore the model should be

Y= B1X1+B2X2+B3X3+B4X4+B5X5 +C

The result shows that only three HR practices are significantly and positively influence employee retention where CD (0.192, p=0.008), RC (0.371, p=0.000) and HS (0.206 , p=0.000 ) as refer to Table 15. The Constant is not significant and negetive. None of the tolerance statistic from Table 15 shows that it is less than 0.20 (Menard, 2010), so it signifies that the variable is not greatly collinear with the rest of the predictor variables (Ualberta, n.d.). Therefore the empirical model (original) can be illustrated as follows

Y=0.192(X1)+0.371(X4)+0.206(X5)----------------------------------(1) This empirical model (original) indicated that changing 1 unit of X1(CD), X4 (RC) and X5(HS) while other things remain same, Y (ER) will change by 0.769 units. The other two factors including constant is excluded as these factors are not significant. Therefore based on the rotated component matrix results, only the factors grouped together and the questions under those components were tested again using the same data set for regression and to test further hypotheses set in previous sections.

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Table 16 – Model Summaryb (rotated matrix)

Model R R Square Adjusted R

Square

Std. Error of the

Estimate

Durbin-

Watson F Change

Sig. F

Change

2 .636a 0.404 0.397 0.80999 1.841 56.570 0.000

a. Predictors: (Constant), HS, PARC, CDTD

b. Dependent Variable: ER

The above table 16 shows that R is 0.636, R square is 0.404 and adjusted R is 0.397,

meaning that 39.7% of the variance of employee retention can be predicted by the independent variables (health and safety, performance and appraisal combined with reward and compensation, career development combined with training and development) suggesting that the model is not a good fit. Also Durbin – Watson analysis, the acceptable range suggested is between 1.5 and 2.5 (Bakon & Hassan, 2013), for this study with reference to table 16, the Durbin – Watson value is 1.841, which is a acceptable. Therefore the autocorrelation of this regression is potentially high. Similarly the F test conducted for this study gives a value of 56.570, proposing the F value for this study shows that the regression model is significant.

Table 17 – Beta Coefficient for Employee Retention(Rotated component Matrix)

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig. Collinearity Statistics

B Std. Error Beta Tolerance VIF

2

(Constant) .030 .202

.150 .881

CDTD .231 .080 .197 2.893 .004 .515 1.940

PARC .347 .066 .329 5.241 .000 .606 1.651

HS .260 .068 .233 3.833 .000 .646 1.548

a. Dependent Variable: ER

Multicollinearity is defined as the degree of correlation between the independent variables (Ringim, et al., 2012). Therefore, for this study Multicollinearity was examined between the independent variables for Tolerance test and Variance inflation. According to Hair et al; (2010), it is suggested that if Variance inflation factor exceeds 10 and the Tolerance value is lower than 0.10, it indicates the Multicollinearity has potential problem (Ringim, et al., 2012).

With reference to above Table 17, shows that Multicollinearity does not exist between

the independent variables, because VIF values are less than 10, similarly the Tolerance values are more than 0.10. These results indicate that this study does not have any Multicollinearity problem. Furthermore all the independent variables are strongly significant.

Refering to the Table 17 above, it is evident that three HR practices components

identified in Vari-Max component analysis has a significant and positive influence on employee retention. This also shows that the assumptions made in literature review, that combined effects of rewards and performance appraisal has a significant and positive impact on employee retention. This is confirmed by the findings of Lawler III (2003) and Daoanis (2012). Similarly the combined effect of training and development along with career development opportunities also has a significant and positive influence on employee retention as p value is less than 0.05. This is similar to previous studies such as Ramlall (2003). Therefore the following assumptions were made:

Y= ER (employee Retention) X5=HS (Health and Safety X6=CDTD (Career and training Development)

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X7= PARC (Performance appraisal and reward & compensation) C= constant Therefore the model derived from vari-max (rotated component) analysis is illustrated

as follows

Y=0.233(X5) +0.197(X6) +0.329(X7) ------------------------ (2) The model again shows that changing 1 unit of HS(X5), CDTD(X6), and PARC(X7),

positively to upwards will increase ER(Y) by 0.759 units. Therefore the following hypotheses are accepted and rejected

Table 18 – Analysis of Hypotheses

Hypotheses Beta Coefficient

Significant (P<0.05)

Decision

H1: Improved career development practices have a significant and positive influence towards employee retention

0.192

0.008 Significant

Accepted

H2: Increasing training and development opportunities has a significant and positive influence on employee retention

0.052

0.452 Not Significant

Rejected

H3: The combined effects of training and development along with career development opportunities have a significant and positive impact on employee retention

0.197

0.004 Significant

Accepted

H4: Effective performance appraisal has a significant and positive influence on employee retention.

0.010

.884 Not Significant

Rejected

H5: If performance appraisal and reward recognition are combined, there is a significant and positive impact on employee retention

0.329

0.000 Significant

Accepted

H6: There is significant and positive impact of reward and recognition on employee retention.

0.371

0.000 Significant

Accepted

H7: Improved health and safety practices in the workplace have a positive and significant influence on employee retention

0.206

0.000 Significant

Accepted

5. Conclusion and Recommendation The main purpose of this research is to examine the impact of human resource management practices on employee retention in Maldivian context. The following conclusions are derived from the findings

There is a positive and significant influence of career development on employee retention. Even though career development is not often practices among the organizations where samples were taken, it was perceived as one of the key factor that plays an important role in retaining employees in the organization. There is no significant influence of training and development on employee retention. This is evident in past research as well. Many research shows that if training and development only takes place without linking it to other rewards , especially career development, employees don’t see the value of training even though it increases productivity and overall performance. This research concluded that training and development combined or link with career development opportunities will retain employees in the organization. Similarly there is no significant influence of performance appraisal on employee retention. Again, this conclusion is contrary to many previous researches. However this

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conclusion is also similar to many previous research as cited earlier. In past many research shows that if performance appraisal is done without linking to rewards or compensation, it is not perceived as positive practice to stay in the organization rather it creates more conflicts and rifts between managers and employees. Therefore this research concludes that performance appraisal conducted by linking with reward and compensation have a significant and positive influence on employee retention. It is important to note that reward and compensation practices has significant and positive influence on employee retention. This is evident in many organizations. Reward and compensations are paid much more to those who are important or key players in the organization in order to keep them in the organization. However it is also important to note that this method alone may not be a sustainable method to retain staff. Therefore non-monetary and other reward and recognition methods should be employed to retain staff rather than focusing on monetary methods alone. Health and safety has appositive and significant influence on employee retention. This is the human resource practices that most often practices among the Maldivian organizations. This could be due to the legal factor or due to the employee pressure.

Therefore it is important to provide training and development with further career development plan, similarly practice performance appraisal by providing proper feedback on a timely manner so the employees could benefit with the rewards and compensation packages that comes when performed well. This will help the organization to save cost in recruitment. This study concludes, by adapting these human resource management practices in the organization talent can be retained and at the same time the organization can achieve the set goals being competitive and successful.

Further Research Direction: Since this study was conducted only in Male’, the capital city of Maldives further studies across the country is recommended. These future studies could also be focused on other industries and additionally explore employee performance based on the human resource management practices.

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