Depending on the size of the organization, the industry, and the type of employee, turnover averages between 10 to 20 percent annually, exception to this some industries like retail, hospitality, and healthcare- trending higher. Smart organizations make retention a priority, given the significant investments inherent in recruiting and training, not to mention the impact high turnover has on customer service, productivity and employee morale.

In a hypercompetitive environment, organisations need people possessing requisite skills, capabilities, expertise and knowledge. They require talent in order to deliver excellent results. But unfortunately talent is a scarce resource in the present day world and changing environment is also directly affecting employee/ employer relationships. The scarcity factor (manpower) virtually compelling most of the companies to invest heavily in talent management efforts at all levels as replicating a high quality, highly engaged workforce is nearly impossible.

The process of Talent Acquisition in Banks has undergone transformation at different stages of their life cycles. In the pre-nationalisation era the acquisition of talent was largely through the process of references from existing employees, customers, relatives, regulators etc. The nationalisation of 14 major commercial banks in July 1969 led to more structured forms of recruitments which were guided by the Government guidelines and Banking Services Recruitment Boards (BSRBs). But the BSRBs were not fully equipped in the art of talent assessment and they outsourced the talent assessment activity to Institute of Banking Personnel Selection (IBPS) who had acquired good skills in carrying out the talent assessment exercise. In a challenging environment which is dominated by several career options at higher end of the employees, the talent retention becomes an uphill task and it is true for Indian PSBs too.

Organization Culture:

Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations. The research suggests that there are seven primary characteristics that, in aggregate, capture the essence of an organizational culture (Robbins S P, Judge T A and Sanghi Seema, 1995)- (1) A degree of innovation and risk taking, (2) Attention to details, (3) Outcome orientation, (4) People orientation, (5) Team orientation, (6) Aggressiveness and (7) Stability.

Organizational culture reflects the values, belief and attitude of its members. Organisational culture evolves slowly over time. Unlike vision and mission statements, they are not usually written down, but are soul of an organization (Slocum, Hellriegal 2008). Organizational culture exists on several levels, which differ in terms of visibility and resistance to change. Just like peeling an onion, the least visible or deepest level of organization culture is that of shared assumptions. Organizational culture facilitates the acceptable solution to know the problems, which members learn, feel and set the principles, expectations, behaviour, patterns, and norms that promote high level of achievements. (Marcoulides and Heck, 1993; Schein, 1992).

PURPOSE OF THE STUDY:

Banking industry is at a critical juncture where the talent migration is bound to occur as banks have been losing their talented manpower to various other sectors like Information Technology, IT enabled services, consultancy firms, BPOs, KPOs etc. It is therefore important for the talent acquirers in the banks to align themselves with the business planning and development strategy of the bank. In the above background the study designed to explore the main retention factors and strategies for private sector-bank employees in Delhi and NCR. The paper attempts to deepen understanding about employees’ satisfaction in private banks.

LITERATURE REVIEW:

The loss of talented employees may be very detrimental to the company’s future success. Insufficient information about employees’ performance may result in adverse selection by them (Grossman and Hart 1986). The better employees may move to other organizations for better opportunities. The coworkers who cannot improve their positions are more likely to stay. This is especially possible when due to inadequate information outstanding performance is not rewarded. Non productive and productive workers end up receiving the same or nearly the same compensation and package of perks because of management moderating variables were identified. Kerr and Slocum (1987) and Kopelman and colleagues (1990) argued that the variation in employee retention across organizations may be related to organizational culture values. Those authors suggested that an organization's cultural values influence its human resource strategies, including selection and placement policies, promotion and development procedures, and reward systems. Different strategies result in psychological climates that foster varying levels of commitment and retention among employees working in different organizations. Kerr and Slocum (1987) reported that some organizations have cultures that emphasize values of teamwork, security, and respect for individual members. These values foster loyalty and long-term commitment to the organizations among all employees, regardless of their job performance. Other organizations have cultures that emphasize personal initiative and individual rewards for accomplishing specific work objectives. These values foster an entrepreneurial norm whereby the organization does not offer long-term security and the employees do not promise loyalty. They suggested that weaker performers would soon leave such a culture, and stronger performers would stay in order to "exploit the organization until better rewards could be gotten elsewhere". Consequently, employee retention rates may be uniformly high for both strong and weak performers in some organizational cultures but in other’s inability to distinguish talented employees from the rest of the labour force in the organization.

A high degree of organization performance is related to an organization, which has a strong culture with well integrated and effective set of values, beliefs and behaviors (Cameron and Quinn, 1999; Deal and Kennedy 1982; Denison, 1990; Juechter and Fisher, 1998; Kotter and Heskett, 1992). However, many researchers noted that culture would remain linked with superior performance only if the culture is able to adapt to changes in environmental conditions. Furthermore, the culture must not only be extensively shared, but it must also have unique qualities, which cannot be imitated (Lewis, 1998; Lim, 1995; Ouchi, 1981; Pascale and Athos, 1981). Several empirical studies have supported the positive link between culture and performance (Calori and Sarnin, 1991; Gordon and DiTomaso, 1992: Kotter and Heskett, 1992). Moreover, there are recent studies done by Chatman and Jehn (1994), Denison and Mishra (1995) and Kotter and Heskett (1992), have contributed significantly to the field of culture and performance studies whereby culture is being treated as variable for a specific research purpose. For example, Denison and Mishra (1995), utilizing a more rigorous methodology, discovered that cultural strength was significantly correlated with short-term financial performance. Schneider (1990) also found that the organizations focuses clearly on the cultures are more successful. It is because focused cultures provide better financial returns, which include higher Return on Investment (ROI), higher Return on Assets (ROA) and higher Return on Equity (ROE). The finding of a study also has been reported that industry moderates the link between corporate culture and performance (Gordon and Christensen, 1993). These findings have advanced understanding of the determinants and performance effects of corporate culture. But they go away unreciprocated the applicability of existing results across national boundaries. There are some other aspects of corporate culture which may enhance performance in one national setting, but they may not be effective, and may even be dysfunctional, in another (Chow, Kato and Merchant, 1996; Lincoln and Kalleberg, 1990; Steers, 1989). Thus, one of the main reasons for the common popularity and interest in the study of organizational culture is due to the argument or assumption that certain organizational cultures lead to superior organizational performance. The problem of keeping talented members of the work force is further complicated because of bounded rationality (Simon 1976). It is another result of asymmetric information where both the manager and the employee, does not know the information for which to ask from the employee and the employee does not know what to provide. Therefore, productive workers cannot distinguish themselves from nonproductive coworkers.

Outstanding employees may leave an organization because they become dissatisfied, under paid or unmotivated (Coff 1996), and while trying to retain employees within the organization they may present other challenges as well like demand for higher wages, not complying organization practices, do not interact well with their coworkers or comply with their managers’ directions. Besides these problems, asymmetric information or lack of information about the employees’ performance may complicate an organization’s endeavor to retain productive employees. Without adequate information an organization may not be able to distinguish productive workers from non-productive ones. Employees often may take credit for the successes and deflect failures to other employees. This is known as a moral hazard problem. In many instances companies may reward or punish employees for an organization outcome for which they had no impact (Kerr 1975).

Studies have proposed that the cost of replacing lost talent is higher, as much as 70 to 200 percent of that employee’s annual salary (Kaye, 2000). Study describes costs as in “…advertising and recruiting expenses, orientation and training of the new employee, decreased productivity until the new employee is up to speed, and loss of customers who were loyal to the departing employee”. The costs and expenses mentioned above open another area of concern which is productivity. When high level of employees' turnover existed, a very high cost is associated with large numbers of employees who have not accomplished full productivity. This cycle continues with very few employees performing at maximum productivity.

Even if an organization is fortunate enough to retain talented employees, the company may still have to cope with agency costs resulting from them and their colleagues. When information about an employee’s activities is difficult to gather, the employee may be motivated to act in his own interest which may diverge from the interest of the organization. This divergence of interests results in costs to the organization in the form of excessive perquisite consumption, shirking of job responsibilities and poor investment decision making.

Numerous studies have explained the importance of high employees’ involvement and ways to enhance their retention (Arthur 1994; Huselid 1995). Flexible work schedules and assistance programs need to be considered, however, only a small share of the workforce takes advantage of them. Earlier studies indicated that young employees are more interested in payment, advancement opportunities and time off. Such differences may reflect stages in the career plan or deeper generation differences. Additionally, there are often gender differences within demographic groups; e.g., young female may want different things from what young male want (Beck 2001).

The top reason for talent attrition is “external inequity of compensation”. 27 percent of the employees in their exit interviews mentioned compensation as primary reason whereas limited career opportunities and role stagnation are stated as top two reasons for low retention. (Ramaiya, Bhas) Thus, despite the fact that there is general agreement about the importance of competitive compensation for employee retention (Ramlall, 2003), there is also a growing consensus that high or even generous compensation will not independently guarantee that an organisation will be able to keep its key employees. Talent engagement is necessary to retain an employee as disengaged employee disturbs the system and multiply the dissatisfaction levels in organisation which results in decreased motivation, high talent turnover and diminished performance (Jeswani and Souren, 2008). Their research mentions that raising and maintaining employee engagement is in the hands of an organisation and requires a perfect blend of time, effort, commitment and investment to craft a successful endeavor.

RESEARCH OBJECTIVES:

The present study is expected to bridge a gap in the literature for empirical research focusing on employee's retention in Private sector banks operating in Delhi and NCR. For the practical contributions, this study is expected to provide new solutions and evidence on the talent retention techniques for human resource managers. The main research objectives can be summaries as follows:

1. To identify the organization culture and benefit factors responsible for employee retention in Banks;

2. To understand the strategies adopted by the selected banks in retaining employees;

3. To propose measures for strengthening employee retention in Banks.

RESEARCH METHODOLOGY:

To accomplish the aforementioned research objectives, the data was collected through self-administered questionnaires. The questionnaire used in the study was added and developed some factors through interviews with private sector bank employees by visiting different banks. By referring to the literature review on this topic, many items in the organizational culture and retention strategies sections of the survey were adapted. The primary aim of this study was to explore the factors that affect private sector workforce. To achieve this purpose the respondents were asked to rate the degree of importance and level of agreement with a number of statements related to: Organizational Culture factors, Benefits factors and Retention strategies.

STUDY POPULATION AND SAMPLING:

In convenience sampling approach, the researcher selected Delhi and NCR (Noida, Gurgaon and Faridabad) to distribute the questionnaire, where most of the private sector banks operate. A total of 300 surveys were distributed in equal numbers to the private banks of these cities. From a total of 300 questionnaires distributed, 257 were returned, out of which 250 were usable (valid and completed), thereby yielding a response rate of about 83 percent, a response rate considered sufficiently large for statistical reliability and generalization.

METHODS:

The responses obtained were analyzed using SPSS V.20. To ascertain which of the private sector workforce retention factor criteria are perceived as more or less important, the data were analyzed using descriptive statistics and factor analysis. These techniques were deemed to be appropriate for this particular analysis because the main purpose of this research is to explore the main determinants of existing employee retention.

DATA ANALYSIS AND RESULTS:

The sample of 250 respondents consists of 44 percent male and 56 percent female, and their average age was 35. The following table represents the demographic factors:

Table1: Demographic Factors

Demographic Factors

Frequency

Percent

Gender

Male

Female

Total

110

140

250

44.0

56.0

100.0

Age

Between 18-25 years

More than 25-less than 35 years

More than 35-less than 45 years

More than 46-less than 55 years

Above 55 years

112

13.6

44.8

32.0

7.2

2.4

Years of Service

Between 0-5 years

Between 6-10 years

Between 11-15 years

Between 16-20 years

Over 20 years

100

16.8

15.2

25.6

2.4

Source: Primary Data

A. Organisation Culture:

This section represents the respondent’s level of agreement and disagreement with a number of statements related to Organisation culture on a scale of 1 to 5, where 1 is strongly disagree and 5 is strongly agree. Comparison of responses of each group for each statement can be found in table 2.

The table-2 represents good percentage of agreement indicating team leaders in banks discussed development plans with employees half yearly, have employee participation and team leaders empowerment culture, banks have a career development program that helps employees’ to become more aware of and responsible for their career graph. Most of the banks had a culture that recognizes and values diversity. Good percentage reflects the sense of openness and trusts between employees and their banks, so does a feeling of community in the workplace, which creates a sense of commitment and belonging. Closely linked to community in the workplace is the concept of trust and openness, trust culture include supporting activities that create personal connections, such as after-hour get-togethers and departments caring for employees during life crises, which reasons that the more employees realize what they would be giving up if they leave an organization, the more likely they are to stay. This clearly indicates that this type of culture allows employees to participate more in the decisions that affect them through additional responsibilities that provide creative challenges such as career ladders and creation of specific work groups to solve departmental problems. This fosters private sector bank employees’ development and reinforces the link between the department and employees by demonstrating the value of the organisation for them and their abilities.

Table 2: Organizational Culture Factors

S. No	Organizational Cultural Factors	Strongly Disagree (% )	Disagree (%)	Neutral (%)	Agree (%)	Strongly Agree (%)
1.	Team leaders in my workplace sits with employees and discuss their development plans every half yearly.	4	5.6	24.8	28.0	37.6
2.	Employees are often given the opportunity to be part of task groups and assignments outside their core job responsibilities.	2.4	22.4	24.0	33.6	17.6
3.	My bank has a career development program that helps employees’ become more aware of and responsible for their own career progression.	0	12.8	16.8	41.6	28.8
4.	Working on a new project or assignment is an open process with few barriers.	2.4	16.8	36.0	29.6	15.2
5.	Team leaders communicate effectively with employees.	4.8	3.2	32.0	32.8	27.2
6.	The bank where I work has a culture that recognizes and values diversity.	4.8	4.8	31.2	26.4	32.8
7.	There is an environment of openness and trust in my bank.	4.8	7.2	24.8	24.0	39.2
8.	Employees in my bank are treated with fairness and respect.	16.0	16.8	12.8	18.4	36.0
9.	Team leaders spend a good deal of time listening to employees' ideas.	4.0	10.4	29.6	21.6	34.4
10.	Team leaders have a style that empowers people to take responsibility and authority.	8.0	17.6	15.2	36.0	23.2

Source: Primary Data

B. Benefits:

In this section respondents were asked to rate the benefits factors on a scale from 1 to 5, where 1 is not very important and 5 is very important. The mean values and standard deviation of the responses are illustrated in Table 3:

Table 3: Survey Responses – Benefits

S.No	Benefits Factors	Mean	S.D
1	Salary and Monetary compensation	4.75	.534
2	Leave benefits (including vacation, sick, personal, paid holidays).	4.52	.656
3	Retirement plan	3.87	1.098
4	Health and other benefits (health insurance, vision, dental, prescription).	4.18	.865
5	Deferred compensation.	4.22	.822
6	Employee assistance program.	3.98	.950

Source: Primary Data

The salary and compensation were rated as the most important with means of 4.75 and S.D 0.534, followed by leave benefits (4.52) and deferred compensation (4.22). The item with the lowest mean rated as least important by bank employees were retirement plans (3.87) and Employee Assistance programmes (3.98).

C. Strategies:

The next section of the questionnaire was based upon the responses related to retention strategies which were being used in banks and the importance of each strategy to the employees and its availability to them. Results for this section are summarized in Table 4:

Table 4: Survey Responses- Strategies

S.No	Organisational Retention Strategies	Mean	S.D
1.	Alternative Work Schedule	3.32	1.112
2.	Voluntary Reduction in Work Schedule	3.22	.864
3.	Telecommuting/Work at Home.	3.00	1.276
4.	Wellness Programs	3.72	1.017
5.	Mentoring and coaching	3.72	1.017
6.	Job Rotation and New Assignments	3.82	.919
7.	Help with career planning	3.96	1.019
8.	On site day care	3.83	1.119
9.	Rewards and recognition	4.43	.776
10.	Employee Suggestion Program	4.08	.925
11.	Education opportunities	4.16	.945
12.	Training opportunities - job related	4.28	.980
13.	Annual Performance Appraisal	4.41	.771

Source: Primary Data

The three strategies which were rated as most important by bank employees are Rewards and recognition (4.43), Annual Performance Appraisal (4.41), and Training opportunities (4.28), whereas Telecommuting/work from home (3.00), Voluntary reduction in work schedule (3.32) and Alternative work schedule (3.22) were rated as least important. The importance of education and training benefits is not surprising since workforce of private sector emphasize on growth and development through a variety of training. Another reason for these results may be that the employees given these responses are mostly younger and in early phase of their career.

FINDINGS:

The HR Managers in the process of talent acquisition follow the talent assessment process and promise the prospective human resources about the talent development, career progression, job enrichment, challenging work environment and next generation leadership. This on the part of the HR managers becomes a component of talent acquisition, planning, sourcing, assessing, hiring and on-boarding of top talent. Over a period of time making people recommit their talents, energies and the spirit to re-build the institution would highly depend on keeping the promises made by the HR Managers at the time of recruitment. The reputation of the organisation is no longer considered enough by the candidates to get attracted to an employer. The aspirants for the employment today expect the various non-monetary responses from the employer.

Study clearly shows that private sector banks provide numerous benefits and attractive facilities. Some are negotiated benefits and some are optional, vary by banks and bargaining units. Prior literature shows that HRM practices in compensation and reward sharing can lead to reduced manpower, improve the quality work and better financial performance. (Arthur, 1994, Delaney and Huselid 1996, Huselid 1995 and MacDuffie 1995, and Allan 1991). The findings of this study assist literature as it indicated that incentive compensation is one of the best methods which are used to reduce the problems surrounding the effort to retain employees. Incentive pay motivates the employees to stay in the organisation. Competitive wage payment also encourages the employee to comply organisational practices. In addition to using pay incentives to reward the employee for reaching company goals and demonstrating loyalty to the organisation, efforts can be made by the organisation to improve job satisfaction. This may also increase the number of talented employees who stay in the company. Incentive pay may consist of cash bonuses for employees upon reaching pre determined goals. The bonus is normally tied to accounting measures and many times specifically to the employees’ job area. Some compensation benefits that provided by private sector banks is not being specific enough to truly motivate the employee to work hard (e.g. retirement plan). The result of this study indicates that private sector banks should improve retirement plan as to motivate employees and reduce costs and retention problems. Employees’ clearly explain that in order to develop their retention intention, compensation plans should be as per employees’ expectations and should be enough to raise their satisfaction level. One possible way to reduce the shortcomings of each pay component is to offer them a combination of bonuses, extra compensation and salary. An adequate base salary may allows the banks to compete for talents in the labour market effectively including bonuses as a part of an employee’s compensation package off sets the problems of employee retention and also may motivate employees to focus on long-term relationship and high performance. The results of the study mentions that cash bonuses based on specific performance of the employee motivates the employees not to sit back and relies on other productive colleagues. This may be the reason that employees in many banks have complex pay packages.

SUGGESTIONS:

Although private sector workforce tends to think that satisfaction and retention are enhanced in similar ways, there were wide differences between how individual employee perceived the two concepts. The study found that banks are putting high efforts to attain and attract existed employees. Employees who rated high retention factors have good and long-term relationship with his banks, this explains the high percentage of why workforce has no intention to leave their present organization and have long-term career plan. Besides using compensation, retaining skilled employees may be accomplished through improving organization culture. Management can give autonomy to the capable employees in their job functions, and they can give them meaningful assignments as well. Manager should allow –partially- their employees to be involved in the decision making for their area of expertise. Better working conditions can also influence productive workers to exist in their organization and reduce their turnover. In addition to compensation, the study shows that offering training to these talented employees and allowing them to have the opportunities to develop their skills can also be utilized to improve employee satisfaction with the organization.

One retention strategy that the study argues is- importance to increase self actualization through education. Most of private sector banks reimburse tuition fees to employees; other banks use various other methods to support education in an effort to increase workforce job satisfaction. The researcher suggested that private sector banks may provides a week per year off for education to study and clear their exam. Another suggestion is to provide a day off every four weeks for education. These programs allow private sector workforce the opportunity to develop their skills and to bring new ideas and concepts back to the department. Finally, the current study has found that private sector workforce should work for a schedule that fits their needs. A department that offers a variety of schedules increases its appeal to a wide spectrum of staff. Both flexible and self-scheduling are significant ways to increase worker satisfaction. These methods go beyond simply letting an employee pick the schedule that is best for him from existing options. Private sector bank’s workforce wants jobs that accommodate their family needs and personal activities. The finding of the current study assisted by many finding who argue to minimize, if not eliminate, shift rotation and allow creative and flexible staffing arrangements that are tailored to meet staff needs. These innovative scheduling methods allow employees to adjust their work schedules to the rest of their lives, resulting in improved job satisfaction and job retention.

CONCLUSION:

HR Managers need to identify this human nature, recognize the same and put suitable strategies and practices in place to address the issue. It is an important aspect of HR Manager’s role to sell dreams to the new aspirants in the employment market to attract talents. But it is equally important to help those who join the organisation to realize those dreams. The promises made must be kept to retain the talent. To prevent the talent migration, we need to create the exit barriers which reflect a positive bias. Share of mind and share of opportunity go a long way to create partnership and relationship between the bank and its human resources. To achieve this, we must follow the formal and informal practices. Mentoring and role modeling are very strong informal practices used for growth and development of human resources. Re-skilling and harnessing the potential of the workforce must be a continuous process in the banks.

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Received on 02.01.2016 Modified on 25.01.2016

Asian J. Management. 2016; 7(2): 73-79.

DOI: 10.5958/2321-5763.2016.00011.1