FACING THE
CHALLENGE OF STAFF RETENTION IN FINANCIAL INSTITUTIONS IN CAMEROON: THE
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT PRACTICES’ DEGREE OF INTEGRATION
Emmanuel Nwahanye 1
1 Senior
Lecturer of Management, Department of Management Sciences, University of Buea,
Cameroon, PO Box 63 Buea. Email: nwahanye@yahoo.fr
|
|
ABSTRACT |
Keywords: HRM practices; Degree of integration; Employee
Retention; Perceived Turnover Rate;Financial Institutions; Cameroon. |
|
Although human resource
management (HRM) practices have proven fundamental to face staff retention
issue, this does not indicate how leaders must take concrete action to be
effective against employee turnover. Should they apply these practices to all
staff and without discrimination? This study aims to contribute to this
limitation of previous studies. The data used were collected through
questionnaires from 73 managers and 292 employees of 73 financial
institutions operating in Cameroon. The results matched from the Ordered
Logistic Regressions show that in the context of Cameroonian financial
institutions, recruitment, communication, performance appraisal, training and
career management practices need to be highly integrated (that is to say
applied to any staff) face with the retention’ challenge. Organisation of
work and induction practices need to be sufficiently integrated (that is to
say, applied to 2 or 3 professional categories). The study recommends to
business leaders to integrate these practices in terms of their contribution
to employee loyalty issue. Publisher All
rights reserved. |
INTRODUCTION
In the area of human resource management (HRM),
employee’s loyalty which is defined as a set of measures to reduce the
attrition of employees (Peretti, 2001) is an important issue and therefore a
major concern for most organisations and the scientific community. Indeed,
uncontrolled turnover rate can have serious consequences for companies (Mobley,
1982). Companies have also realized that "the faithfullness of the
employee can bring a competitive advantage" (Colle, 2006, p. 6). Today,
this challenge is not to dismantle. Retention remains a current topic even in
times of economic crisis as demonstrated by the results of the exploratory
study of Giraud, Roger and Thomines (2012).
Its link with HRM is a consequence of the interest in
the study of turnover at the organisational level. A critical analysis of the
literature relating thereto shows interest in the integration of HRM practices
in staff retention process. The integration of HRM practices is the
formalization or the application thereof within the company. Two logics are
observable in the literature: some studies only measure the presence or absence
of practices (Renaud and Morin, 2010; Mudor and Tooksoon, 2011); while others
by cons are focusing on the level of implementation or the extent of practices
(Lacoursière et al., 2005; Chrétien et al., 2005; Nwahanye, 2015). On the
labour economics viewpoint, measuring the extent seems more advisable than the
mere presence of a HRM practice. From a psychological point of view, the effect
would be due to the extent of the practice, or the employee satisfaction with
regard to this practice. In addition, as Chrétien et al. (2005) highlight in
the context of Small and Medium Size Enterprises (SMEs), "if we admit that
the mere presence of HRM practices can be a competitive advantage for SMEs, it
can withstand a fortiori that the more we extend their application, the more we
withdraw positive effects" (p.114). This study adopt
such logic.
Overall,
even though in terms of theoretical models of turnover (Price, 1977; Neveu,
1994) and the results of some studies, we can assume that HRM practices promote
retention, one question remains: what degree of integration of HRM practices
to retain staff? Indeed, the mere presence of a HRM practice or its
application to a limited number of individuals, seems not to be an absolute
guarantee of improvement of all behaviours with regard not only the precepts of
the social exchange theory that rely on individual behaviour, but also the
differing of interests and needs. In addition, although HRM practices have
sometimes proven negatively related to turnover, this does not indicate how
leaders must take concrete action to be effective facing this phenomenon. This
study aims to shed light on this issue through the appreciation of the
importance of the degree of integration of certain HRM practices in staff
retention process. Its results will contribute to the definition of strategic
tools against turnover in organisations. To achieve this goal, we talk in
sections 2 and 3, the theoretical framework on which we rely in this study. The
methodology and results of an empirical survey of 73 financial institutions of
various sizes operating in Cameroon are then presented in sections 4 and 5.
THE DEGREE
OF INTEGRATION OF HRM PRACTICES, A STAFF RETENTION VECTOR: AN EXPLANATION
THROUGH THE SOCIAL EXCHANGE THEORY
The link between the degree of integration of HRM
practices and employee retention can be explained through the social exchange
theory that has become over time an important theoretical framework on which
many researchers rely to justify the establishment of a long-term relationship
between the organisation and its employees. Overall, social exchange is based
on a number of social rules where mutual gain goes far beyond simple economic
exchange "efforts against wage" (Abraham, Renaud and Saulquin, 2015,
p.21). On the one hand, the organisation seeks to retain its staff as he is a
specific human capital, holder of a skill that provides a competitive advantage
(Becker, 1964). On the other hand, the staff is committed to the organisation
(faithfulness) in exchange for an immediate or deferred monetary recognition
and / or not monetary. If his expectations are not met, he may reconsider his
commitment prospecting external opportunities of employment or lowering his
involvement at work. The social exchange is therefore based on a hope of return
and mutual trust between the two parties. Each expects from the other concrete
actions. This suggests that an organisation that issues favorable signals or
treats its staff well will create in them the desire to reciprocate, which will
culminate in a higher engagement and consequently an increase in retention
(Eisenberger et al., 2002).
Indeed, since the work of Levinson (1965), it has
often shown that the individual tends to personify the actions of the
organisation, so that he interprets the organisational acts such as HRM
practices as potential signs of support and interest toward him. It should be
noted here that in the context of the social exchange theory, perceived
organisational support occupies a very important place in the process of
retaining an individual. This support describes how the employee feels that his
organisation considers his efforts, enhances his personal investment and
contributes to his professional well-being, this through the HRM practices that
promote the quality of his work environment (Eisenberger et al., 2002). It
develops in the employee a sense of belonging, confidence and commitment to the
company. Supported employees therefore tend to stay longer in the organisation
given the principle of reciprocity which wants them to feel indebted to their
organisation. In other words, the perception of organizational support improves
employee retention. This has also been shown by some researchers like Paillé,
Grima and Bernadeau (2013), Dawley, Houghton and Bucklew (2010), Johnson and
DeConnick (2009) and Rhoades and Eisenberger (2002). The results of their
analysis reported a negative relationship between perceived organisational
support and the intention to leave.
In
total, we assume from this theory that the perceived organisational support by
the employee due to organisational acts (HRM practices) applied to him improves
his organisational commitment, which promotes retention. Thus, the more this
support is perceived by a large number of employees (that is to say, HRM
practices are applied to a large number of employees), the more their loyalty will
be guaranteed. However, employees are more amenable to increased
personalization of HRM practices and greater freedom in work as already noted
by Colle (2006) in a preliminary work on his doctoral thesis, then organisations
may have difficulties in meeting each employee aspirations, which would
undermine the objective within the framework of loyalty. In short,
organisations could apply a practice to a large number of employees without
improving staff retention rate.
A CRITICAL LITERATURE REVIEW AND
RESEARCH
HYPOTHESIS
In almost all developed turnover models (Price, 1977;
Neveu, 1994; Steers and Mowday, 1981), the contribution of HRM practices in
staff retention can be observed. Empirically, most of authors who treated staff
turnover showed that HRM practices significantly reduce staff turnover (Arthur,
1994; Huselid 1995; Batt, Colvin and Keefe, 2002; Lacoursière et al. 2005;
Chrétien et al., 2005; Renaud and Morin, 2010; Mudor and Tooksoon, 2011; Anvari
and Amin, 2011; Fabi, Lacoursière and Raymond, 2012; Nwahanye, 2015). However,
of these only few studies have focused on the degree of integration of HRM
practices or the intensity of HRM (Lacoursière et al., 2005; Chretien et al.,
2005; Fabi et al, 2012; Nwahanye, 2015). Majority have focused on the presence
or absence of a practice (Renaud and Morin, 2010) or a system of practices
(Batt et al., 2002). If for some authors the mere presence of the practice
seems to be a major asset, it cannot be a guarantee to the extent that the
company is a collective economic agent that brings together people with very
different aspirations. Thus, the application of a practice to only one category
can have a negative effect on the behaviour of others. In addition, from a work
psychology viewpoint, the effect should be the result of the integration
intensity of a practice or of employee satisfaction with regard to this
practice.
The results matched from studies that handled the
degree of integration are mixed. Chrétien et al. (2005) in their study of 48
project management companies showed that only the level of implementation of
the selection practice negatively affects the turnover rate of these companies.
The level of implementation of the job analysis practice rather increases staff
turnover rate. The influence of the implementation’s level of other practices
was not significant (training, performance appraisal, career planning,
induction, incentive compensation, etc.). In their study of 233 manufacturing
SMEs employing between 6-405 employees listed in the Research Laboratory of the
database on the Performance of Companies (LaREPE), Lacoursière et al. (2005)
showed that the extent of practices related to the dissemination of information
is negatively correlated with voluntary turnover rate of employees of these
SMEs. The contribution of the extent of other practices seems insignificant
(recruitment, performance appraisal, training, job descriptions, etc.).
In their study, where respondents were asked for each
HRM activity, if it was accessible to them (yes / no), Fabi et al. (2012)
showed that the supply of HRM practices (leadership, communication,
participation, selection, training and development, compensation and benefits)
does not help to explain directly the intention to leave. The results are
significant at the 10% level, which does not completely eliminate their
influence according to the authors. However, these HRM activities contribute
significantly to job satisfaction, and through it to the organisational
commitment of employees, which has the effect of significantly reducing the
intention to leave. Thus, indirectly HRM practices are proving to be powerful
levers for managing any organisation wishing to retain his employees. Finally,
Nwahanye (2015) showed that the intensity of HRM practices related to
recruitment, induction, training, organisation of work, career management, job
security and incentive compensation was linked negatively to voluntary turnover
rate (this directly and / or indirectly). Only the intensity of the
communication practice was not significant.
Though
interesting, the results of these studies do not appreciate clearly the
importance of the degree of integration of HRM practices in reducing staff
turnover. In fact, it is still difficult from the analysis carried out to give
the appropriate degree of implementation for each practice. This is justified
by the methodological approaches used in these studies. We think that to be
able to identify the different levels of integration favorable for more
retention, it is best to apply as data analysis technique, the ordered logistic
regressions. However, in view of the theoretical framework and the results of
some studies, we think that integrating each HRM practice at the highest level
would be beneficial in staff retention process. Thus, we postulate:
Hypothesis: The higher the degree of integration of
HRM practice, the lower the voluntary staff turnover rate.
This proposal is tested for all HRM practices adopted
in the context of this study.
RESEARCH
METHODOLOGY
Data
Data used were gathered through questionnaires from
managers and employees of 73 financial institutions (8 banks and 65 independent
micro-finance) operating in Cameroon. Beyond the significance of these
companies in financing the economy, the decision to work on them is justified
primarily by the observable homogeneity in terms of technology and capital that
oblige institutions of the same category to count on their human resources to
stand out. Furthermore, in recent years staff retention is a major concern for
Cameroonian organisations which have devoted attention in June 2012 at the
first conference of the University of Interpatronal Group of Cameroon (GICAM)
and National Days of Management.
Initially, the target population consisted of all
banks and independent micro-finance having at the time of data collection at
least 3 years of existence. For reasons of cost and geographical remoteness,
only part of these institutions was under investigation and therefore
constitutes our sampling frame. Overall, 12 banks and 114 micro-finances met
the set criteria, which is a total of 126 institutions. Of the 126
institutions, only 103 (10 banks and 93 microfinance) agreed to participate in
the study. At the end, 73 actually participated, yielding a 70.87% response
rate. Refusal to participate is related mainly to the distrust of behaviour
that characterizes some business leaders in the use of collected data. These
business leaders treat researchers as spies on behalf of other structures.
Added to this is the absence of some general managers during the data
collection phase.
In
each institution, one manager and four employees were subject to the
questionnaires. Managers were subjected to the questionnaire integrating the
degree of integration of HRM practices and the level of turnover. The employees
were subjected to the questionnaire integrating employee job satisfaction
related to the HRM practice. In light of the information sought in the
questionnaire "Structure" only two officials were targeted: the
general manager or the personnel manager given their mastery of the studied
aspects. Regarding the selection of employees in the institution, to ensure the
informational diversity, we opted initially for stratified by
socio-professional category. Thus, one employee was selected by
socio-professional category. Note that in the companies’ reports of activities
codified by the National Institute of Statistics (NIS) of Cameroon, the
occupational categories are generally divided into four groups: senior
management; senior technicians; technicians and supervisors; then maneuvering.
Secondly, we took into account the gender diversity in the 4 employees’
selection process. Three men and a woman were investigated by institution.
According to the General Census of Businesses (2009), women represent less than
a third of staff employed and run only one out of four companies.
Variables
and their Measures
Degree of
integration of HRM practices
Defined
in this study through the number of socio-professional categories concerned by
the practices, the degree of integration of HRM practices is measured by a
composite index inspired of Asselin (2002, p.25) from the double factorial
Multiple Correspondence Analysis (MCA). The choice of this procedure of Index
computation seems more appropriate than the summation of scores of items used
in the majority of studies in strategic HRM (Chrétien et al., 2005; Lacoursière
et al., 2005). Although the summation method is based on additive effects
assumptions of different HRM practices on performance (Delery, 1988) and
nullability of indices obtained (Liouville and Bayad, 1998), it ignores the
weight of each variable in the study and its disparity as the MCA method.
Specifically, respondents were asked 36 questions covering eleven dimensions of
HRM (Recruitment, induction, training, organisation of work, performance
appraisal, communication and information, career management, job security, HR
planning, accountability and employee involvement). Each question had two
parts. As a first step, the respondent specified whether the activity was integrated
(Yes / No). If yes, then he had to indicate his degree of integration (1 =
little integrated, 2 = fairly integrated, 3 = highly integrated). This gives a
total Likert scale of 4 points ranging from 0 (nonexistent practice) to 3
(highly integrated practice). This degree of integration is based on the number
of socio-professional categories concerned by the practices: one category
corresponds to "little integrated", two to three categories
corresponds to "fairly integrated" and more than three categories corresponds
to "highly integrated". The resulting scores are used to construct
the integration indices of HRM practices.
Overall,
for every practice, the integration index of an institution is:
(1)
with
-
HRMPIIi
= = HRM Practice Integration Index
-
K = total number
of categorical variables
-
number of
categories of variable k
-
= the weight (normalized first axis score obtained by
MCA) of category of the
variable k.
-
= binary variable (0/1) taking the value 1 when the
institution i has the category and 0
otherwise.
In summary, the value of the index of integration of
HRM practice for a financial institution i is the average of the normalized
scores of categorical variables. The weight of a category is the average of the
normalized scores of units of the population in that category. Indices obtained here are consistent for 8 dimensions of the 10
applicable, with Cronbach’ alphas above the generally acceptable threshold of
0.7 (See Appendix 1).
For
Ordered Logistic Analysis purposes, a recodification of the index obtained was
made and the following measures were adopted: [0 - 0.5 [= nonexistent practice
(0); [0.5 - 1.5 [= little integrated practice (1); [1.5 - 2.5 [= fairly integrated
practice (2) and [2.5 - 3] = highly integrated practice (3).
Staff
Retention
Staff
retention is assessed in this study by the voluntary turnover, which is the
form of turnover targeted by retention. It is the decision of an employee
leaving his organisation. Faced with the impossibility of obtaining adequate
information for all institutions, this variable usually measured by annual
voluntary turnover rate (Renaud and Morin, 2010) is captured here by the score
of the perceived level of turnover rate made by the managers questioned.
Overall, there appears to be no objective standard of turnover level (low or
high). Respondents were asked to indicate on a 5-point Likert scale, the level
that best matches the voluntary turnover rate of their institutions (1 = very
high; 2 = high; 3 = average; 4 = low; 5 = very low). This assessment relies
heavily on benchmarks predefined by the company (results of previous years,
sectoral statistics, etc.). For the purposes of Logistic analysis, this
variable was recoded to make it dichotomous: scores 1, 2 and 3 were recoded 1
while scores 4 and 5 were recoded 0.
Control
Variables
To
account for companies’ specificity and their heterogeneity, four control
variables were added to the study: union presence, age of institution,
institution’s size and the satisfaction index generated by HRM practices. We
think that the presence of certain HRM practices and their degree of
integration may vary depending on these variables. Also, these variables appear
to have strong links with staff retention.
Ø
Union Presence
An analysis of the literature shows that unionized
companies have a high retention rate (Renaud and Morin, 2010; Batt et al.,
2002; Huselid, 1995; Cotton and Tuttle, 1986), unionization decreases intention
to leave (Abraham Friedman and Thomas, 2008; Campbell, 1997) and turnover rate
(Lincoln and Kalleberg 1996). As part of this study, union presence is a
dichotomous variable that takes the value 1 if union presence proved and 0
otherwise (reference).
Ø
Age of the institution
Several
studies have shown the importance of the age of the company in reducing staff
turnover (Guthrie, 2001; Arthur, 1994). In general, the variable age of
business is expressed by the number of years of operation of the institution.
For analytical purposes, this variable is divided into four points: less than 5
years (reference), between 5 and 10 years, between 10 and 15 years, over 15
years.
Ø
The Institution's Size
Some
studies have shown that there was a link between firm size and turnover (Min,
2007; Lacoursière et al., 2005; Lincoln and Kalleberg, 1996; Campbell, 1997).
Our study being conducted among banks and micro-finance, the size is measured
dichotomously 1 if the financial institution is a bank (considered large) and 0
if it is a micro- finance (reference).
Ø
Job Satisfaction
Widely
regarded as a key variable in most staff turnover models, job satisfaction is
an essential vector of staff retention (Wright and Bonnet, 2007). Several
studies have found a negative relationship between job satisfaction and
indicators of turnover (Green, 2010; Lee, Phelps and Beto, 2009; Amah, 2009).
We capture job satisfaction by the index of satisfaction by practice. In the
questionnaire addressed to employees, they were asked their level of
satisfaction using a 4 points Likert scale (0 = not at all satisfied; 1 =
little satisfied; 2 = fairly satisfied; 3 = very satisfied) on the
implementation of each of the HRM activities related to the practice. For an
institution i, the satisfaction index corresponds to the average of the
employee satisfaction indices by institution. These are calculated using the
computation procedure developed by Asselin (2002). In total the satisfaction
indicator for a given institution is:
(2)
with
Ø
= Index of job satisfaction by practice for an
institution
Ø
= Index of job satisfaction by practice for an
employee
Ø
N = number of
employees responding in the institution i.
For
analysis purposes, the recodification made for the degree of integration of HRM
practices was also done at this level. In this study, the reliability of job
satisfaction scale is satisfactory for all HRM practices previously adopted
(See Appendix 1). The "not at all satisfied" modality is used as
reference in the regressions.
Data Analysis
Technique: Ordered Logistic Regressions
The
purpose of the approach is to search for the importance of the degree of
integration of HRM practices in employee retention process, and hence infer the
degree of integration for better staff retention. So in order to test the
proposal issued, ordered logistic regressions are performed for each HRM
practice accompanied by the control variables. The validation of this proposal
for any practice shows that the degree of integration of this practice in an
organisation is important in employee retention process.
RESULTS AND DISCUSSION
We
present alternately descriptive analysis and results of ordered logistic
regressions results for the main variables of the study.
Descriptive analysis of the Surveyed
Financial Institutions Profile
The
profile of the institutions surveyed revealed they are well established. They
have in their majority more than 5 years of existence (91.78%). Most have 5-10
years of existence (64.38%). Very few are unionized; only 30% allow their employees
to join a union. These are banks and some micro-finance with particular
managerial status. This can be explained by the desire of some leaders to avoid
collective agreements especially in matters of wage and integration of good
working conditions. These institutions have in their majority an average level
of integration of the various HRM practices globally acceptable. It should be
noted here that although established, these institutions are mostly still in
HRM conventional tools appropriation process. They present job satisfaction
indices by practice slightly above average (see Appendix 2). Finally, 44% of
institutions surveyed have an average turnover rate, 31% a high turnover rate
and 14% a very high turnover rate. Only 3% have a very low turnover rate, and
8% a low turnover rate. This is related to the fact that our sample is made of
89.1% of micro-finance considered by many young graduates as places of gaining
experience for good paying jobs. Table 1 below shows the statistical
characteristics of financial institutions in terms of integration of HRM
practices as current modes of management. This table provides the percentages
by modality, mean and standard deviation (SD) of HRM variables.
Table1.
Status of Financial Institutions regarding the integration of HRM practices (%)
HRM
Variables |
0 |
1 |
2 |
3 |
Mean |
SD |
Recruitment |
6.8 |
27.4 |
35.6 |
30.1 |
1.89 |
0.921 |
Induction |
6.8 |
20.5 |
34.2 |
38.4 |
2.04 |
0.934 |
Organization of work |
6.8 |
27.4 |
45.2 |
20.5 |
1.79 |
0.849 |
Communication and informati |
6.8 |
20.5 |
52.1 |
20.5 |
1.86 |
0.822 |
Performance appraisal |
20.5 |
27.4 |
17.8 |
34.2 |
1.66 |
1.157 |
Training |
20.5 |
52.1 |
20.5 |
6.8 |
1.14 |
0.822 |
Career management |
15.1 |
54.8 |
23.3 |
6.8 |
1.22 |
0.786 |
Job security |
42.5 |
23.3 |
19.2 |
15.1 |
1.07 |
1.110 |
0 for almost nonexistent; 1 for little
integrated; 2 for fairly integrated; 3 for highly integrated.
The
data indicate that most of the surveyed financial institutions integrate HRM
practices in their current business model, but this to an extent as
particularly specified by the standard deviation statistical measures.
Induction, recruitment, communication and organisation of work are practices
that seem most prevalent, with respective means of 2.04; 1.89; 1.86 and 1.79.
These practices are applied to at least two socio-professional categories in
more than 65% of financial institutions. In short, for almost all of HRM
practices, the average level of integration is greater than 1. Therefore,
withholding practices are applicable at least to one socio-professional
category in these institutions.
Ordered
Logistic Regressions Results
The results reported in Table 2 below show that apart
from job security practice, the degree of integration of different HRM
practices is paramount in staff retention process. Indeed, for most practices,
we observe that the more the level of integration increases, the more the
perceived voluntary turnover rate decreases. The significant results of control
variables are presented in Appendix 3.
Specifically, in terms of recruitment practice, we
observe that when applied to a single socio-professional category, this
practice increases the perceived turnover rate (coefficient = 4.214; p ˂
10%). By cons, when fairly integrated (that is to say, applied to 2 or 3
socio-professional categories), this practice reduces the perceived voluntary
turnover rate (coefficient = - 2.624; p ˂ 5%). This reduction in the
perceived turnover increases slightly when this practice is highly integrated.
In total, the importance of recruitment in the loyalty process increases with
the degree of integration. This confirms our hypothesis and position the high
degree of integration as the appropriate level of implantation. Therefore,
recruitment activities (structured tests, structured interviews and external
recruitment) when applied to all socio-professional categories impact the
psychology of new recruits and push them to reduce their opportunistic
behaviour. Indeed, the use of formal recruitment procedures for all positions
(tests, interviews, call for applications, etc.) enables organisations to
select and rely on applicants who are aware of the expectations and challenges
to take up during their careers, minimizing excessive turnover (Arcand, 2000).
The result of the study confirms those obtained by Nwahanye (2015) and Chrétien
et al. (2005). It is opposite to that of Lacoursière et al. (2005), which
showed that this relationship was not significant.
Regarding induction practice, it should be noted that
although not significant when highly integrated, this variable reveals a
reduction in the perceived level of turnover, the more the level of integration
increases. It goes from 5.588 when this practice is little integrated to 3.148
when the practice is fairly integrated (a decrease of 2.44 can be observed).
Relying solely on the significant results, this practice should be applied in
the standards to two or three categories in order not to increase too much the
perceived turnover rate. This result reverses our research hypothesis. It is
justified by the fact that despite the importance of the induction, the first
contact of newly recruits with the internal environment of the financial
institution is generally mismanaged by young recruits, who often have
difficulties working under pressure in a very demanding sector as the financial
sector.
Regarding the organisation of work practice, although
only significant when fairly integrated, there is an increased level of
reduction in perceived turnover as this practice is integrated. This sets the
appropriate level of application of this practice to two or three
socio-professional categories. This result does not allow a validation of our
hypothesis. It is contrary to that obtained by Nwahanye (2015).
The Communication practice given the results
positively influences the perceived turnover rate whatever its degree of
integration. However, it should be noted that the more it is integrated, the
more positive influence is reduced, which shows the importance of the level of
implementation of this practice in staff retention process. Going from an
influence of 7.310 when little integrated to 6.939 when fairly integrated (fall
of 0.371) and to 4.925 when highly integrated (an additional decrease of
2.014). This result contrary to those of Lacoursière et al. (2005) and Nwahanye
(2015), allows us to confirm our research hypothesis. It is justified by the
fact that the more communication is effective (sharing of information) between
all links in the chain of command, the more the majority of employees tend to
feel more included in the management process and their confidence is
strengthened, which promotes their retention and loyalty toward the
organisation.
Performance appraisal practice for its part has a
significant negative influence only when it is highly integrated. Our
hypothesis is confirmed. This result is contrary to those of Chrétien et al.
(2005) and Lacoursière et al. (2005), for which the link between the extent of
performance appraisal and turnover rate although negative, was not significant.
It is in conformity with that of Nwahanye (2015). In sum, this result shows
that when all the staff believe that the performance
assessment rules are objective, they qualify the work environment as healthy
where favoritism, tribalism and other ills do not have access. This will have
as direct effect increasing the degree of loyalty to the financial institution,
which is favorable to a reduction in voluntary turnover. We must therefore
apply this practice to all socio-professional categories.
Table 2. Ordered Logistic regression results: effects
of the degree of integration of HRM practices on perceived voluntary turnover
rate
Variables |
Modalities |
Coef |
P-value |
95% Confidence Interval (Bootstrap) |
|
Lower terminal |
Upper terminal |
||||
Recruitment |
Ref: Practically
nonexistent |
||||
little
integrated |
4.214 |
0.073 |
-0.400 |
8.827 |
|
fairly
integrated |
-2.624 |
0.017 |
-4.770 |
-0.479 |
|
highly
integrated |
-2.655 |
0.003 |
-4.404 |
-0.906 |
|
Induction |
Ref: Practically
nonexistent |
||||
little
integrated |
5.588 |
0.005 |
1.719 |
9.457 |
|
fairly
integrated |
3.148 |
0.002 |
1.162 |
5.135 |
|
highly
integrated |
-2.566 |
0.131 |
-5.894 |
0.762 |
|
Organisation of work |
Ref: Practically
nonexistent |
||||
little
integrated |
-0.450 |
0.822 |
-4.363 |
3.463 |
|
fairly
integrated |
-1.510 |
0.046 |
-2.994 |
-0.026 |
|
highly
integrated |
-1.622 |
0.119 |
-3.659 |
0.416 |
|
Communication |
Ref: Practically
nonexistent |
||||
little
integrated |
7.310 |
0.000 |
4.088 |
10.533 |
|
fairly
integrated |
6.939 |
0.000 |
3.762 |
10.116 |
|
highly
integrated |
4.925 |
0.003 |
1.647 |
8.204 |
|
Performance appraisal |
Ref: Practically
nonexistent |
||||
little
integrated |
-0.631 |
0.455 |
-2.288 |
1.025 |
|
fairly
integrated |
-0.736 |
0.432 |
-2.573 |
1.101 |
|
highly
integrated |
-3.751 |
0.000 |
-5.660 |
-1.843 |
|
Training |
Ref: Practically
nonexistent |
||||
little
integrated |
3.258 |
0.000 |
1.687 |
4.829 |
|
fairly
integrated |
1.126 |
0.259 |
-0.827 |
3.078 |
|
highly
integrated |
-2.688 |
0.001 |
-4.257 |
-1.120 |
|
Career management |
Ref: Practically
nonexistent |
||||
little
integrated |
2.274 |
0.013 |
0.479 |
4.069 |
|
fairly
integrated |
-3.348 |
0.002 |
-5.510 |
-1.186 |
|
highly
integrated |
-25.014 |
0.000 |
-25.014 |
-25.014 |
|
Job security |
Ref: Practically
nonexistent |
||||
little
integrated |
1.398 |
0.100 |
-0.268 |
3.064 |
|
fairly
integrated |
2.373 |
0.014 |
0.474 |
4.272 |
|
highly
integrated |
-0.913 |
0.377 |
-2.938 |
1.113 |
Source:
extracted from various ordered logistic regressions results tables
The training practice in turn seems to positively and
significantly influence perceived turnover rate when little integrated. Even as
insignificant when fairly integrated, however, there is a decrease of the
coefficient that goes from 3.258 to 1.126. This influence is by cons negative
when highly integrated, which attests the importance of this practice in staff
retention process. This result confirms our hypothesis and shows the interest
of providing training to all staff regardless of their level within the
company. This result is contrary to those of Chrétien et al. (2005) and
Lacoursière et al. (2005) which showed that the level of implementation of this
practice does not affect in any case the turnover rate. It is consistent with
those of Nwahanye (2015) and Fabi et al. (2012).
An
analysis of results related to career management practice shows that the more
it is integrated, the more it participates in staff retention process. Going
from a positive influence when poorly integrated (coefficient = 2.274; p ˂
5%) to a strongly negative influence when applied to more than three
socio-professional categories (coefficient = - 25.014; p ˂ 1%). Our
hypothesis is confirmed. Thus, the interest in all staff career appears as an
incentive to develop a spirit of belonging and therefore a brake on the massive
voluntary departure. The result thus obtained is contrary to that of Chrétien
et al. (2005), which showed that this relationship was not significant. It is
consistent with that obtained by Nwahanye (2015).
Unlike other HRM practices, although a negative sign
when highly integrated (but not significant), job security practice given the results
seems not to be important in employee retention process. Indeed, there is an
increase of its influence on the perceived turnover rate seen when going from a
little to a fairly degree of integration. This result contrary to literature,
and our expectations, joins those of Shaw et al. (1998), which showed that the
link between job security and the voluntary turnover rate was not significant.
It is contrary to that of Nwahanye (2015).
CONCLUSION
Based on the interest shown in recent years to staff
retention by business leaders and the scientific community, we seized the
opportunity to explore the importance of the degree of integration of HRM
practices in the employee retention process. The aim of was to determine the
most favorable degree of integration to staff retention. The results matched
from the ordered logistic regressions of data collected from 73 financial
institutions operating in Cameroon, showed that the more the degree of
integration of practices related to recruitment, communication, performance
appraisal, training and career management, is higher, the more the perceived
voluntary turnover rate of institutions decreases. Thus, these practices should
be applied to all socio-professional categories for the beneficial effects in
terms of loyalty to be at their best. HRM practices related to organisation of
work and induction seem more important in retention when they are fairly
integrated, that is to say, applied to two or three socio-professional
categories. Only the degree of integration of job security practice is
problematic.
The results of this study clearly showed that the
degree of integration of some practices is paramount in staff retention
process. So, to build with employees positive relationships in order to reduce
their intention to leave, companies need to ensure some equity in the
integration of HRM practices. They must expand training opportunities to all
socioprofessional categories, apply a uniform performance appraisal,
communicate with all staff and conduct recruitment on the same basis.
In
terms of managerial implications, this study provides to the leaders of
financial institutions valuable indication about the various HRM practices and
impacts that may arise from their application to certain categories and not
others. Thus, in the loyalty process, managers can integrate these practices in
terms of their contribution to the loyalty issue. The choice of categories to
implement the organisation of work and induction practices must be made
according to the company's ambitions.
Although the results of this study provide evidence of
the importance of HRM practices in employee retention processes, some of its
limitations are worth noting. First, the issued conclusions are based on a
limited number of companies. Then the study is cross-sectional data, which does
not take into account the dynamic effects one might observe with a longitudinal
study. Also, the recodification of the dependent variable for the purposes of
analysis might have caused the loss of information. Finally, the study is
conducted in the context of Cameroonian financial institutions, which may not
provide the same results in other sectors or even in other countries. Despite
these limitations, this research opens the way for further research. First, it
would be worthwhile to study several other HRM practices (compensation,
leadership, etc.) and the overall intensity of HRM. Second, we could extend the
study to other sectors (education, food, hotels, etc.). Third, it would be
interesting to identify the socio-professional categories to which it will
apply the practices having favorable degree of integration lower to maximum.
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APPENDICES
Appendix 1 : Cronbach’s alpha
HRM practices |
HRM
integration Index |
Job
Satisfaction Index |
Number
of items |
Recruitment |
0.703 |
0.794 |
3 |
Integration |
0.835 |
0.764 |
3 |
Training |
0.705 |
0.717 |
6 |
Organisation
of work |
0.865 |
0.705 |
6 |
Performance
appraisal |
0.919 |
0.795 |
2 |
Communication
et information |
0.815 |
0.728 |
5 |
Career
management |
0.723 |
0.725 |
3 |
HR
planning |
0.524* |
0.722 |
2 |
Accountability |
0.666* |
0.643* |
3 |
Participation |
0.387* |
0.755 |
2 |
Job
security |
-** |
-** |
1 |
(*) Unreliable ; (**) Not calculable.
Appendix
2 : Behaviour of financial institutions for job
satisfaction (%)
0 |
1 |
2 |
3 |
Mean |
SD |
|
Satis_recruitment |
17.8 |
28.6 |
39.3 |
14.3 |
1.5 |
0.944 |
Satis_induction |
7.1 |
35.7 |
25 |
32.2 |
1.82 |
0.965 |
Satis_training |
10.8 |
0 |
89.2 |
0 |
1.78 |
0.621 |
Satis_organisation of work |
7.1 |
35.7 |
46.4 |
10.8 |
1.61 |
0.772 |
Satis_performance appraisal |
21.5 |
42.8 |
35.7 |
0 |
1.14 |
0.742 |
Satis_communication and information |
7.1 |
53.6 |
21.5 |
17.8 |
1.5 |
0.865 |
Satis_career management |
14.3 |
32.1 |
32.1 |
21.5 |
1.61 |
0.977 |
Satis_job security |
19.2 |
32.2 |
32.2 |
19.2 |
1.51 |
1.009 |
0 = not at all satisfied, 1= little
satisfied, 2= fairly satisfied, 3= very satisfied.
Appendix
3: Significant Results of other variables
DEPENDENT
VARIABLE : PERCEIVED TURNOVER RATE |
||||||
Independent variable |
Other predictor variables in the
regression model |
Coef |
P-value |
95% Confidence Interval (Bootstrap) |
||
Lower terminal |
Upper terminal |
|||||
Recruitment |
Union presence (yes) |
-1.856 |
0.083 |
-3.952 |
0.239 |
|
Institution
Age (between 5 and 10 years) |
-3.908 |
0.011 |
-6.912 |
-0.904 |
||
Job satisfaction (very satisfied) |
-5.387 |
0.002 |
-8.798 |
-1.976 |
||
Induction |
Union presence (yes) |
-2.596 |
0.005 |
-4.391 |
-0.800 |
|
Institution
Age (between 5 and 10 years) |
-6.500 |
0.001 |
-10.460 |
-2.540 |
||
Organisation of work |
Union presence (yes) |
-2.841 |
0.007 |
-4.890 |
-0.791 |
|
Institution
Age (between 5 and 10 years) |
-2.499 |
0.098 |
-5.459 |
0.461 |
||
Job satisfaction (very satisfied) |
-7.961 |
0.000 |
-12.378 |
-3.545 |
||
Communication
|
Institution size (Bank) |
-3.225 |
0.016 |
-5.843 |
-0.608 |
|
Union presence (yes) |
.859* |
0.019 |
0.301 |
3.417 |
||
Institution
Age (between 10 and 15 years) |
2.226* |
0.059 |
-0.087 |
4.539 |
||
Job satisfaction (poorly satisfied) |
-3.576 |
0.009 |
-6.255 |
-0.896 |
||
Performance appraisal |
Union presence (yes) |
-0.452 |
0.556 |
-1.956 |
1.053 |
|
Job satisfaction (poorly satisfied) |
-1.960 |
0.017 |
-3.572 |
-0.349 |
||
Training |
Union presence (yes) |
1.514* |
0.030 |
0.150 |
2.877 |
|
Institution
Age (Above 15 years) |
-1.917 |
0.090 |
-4.133 |
0.299 |
||
Job satisfaction (very satisfied) |
0a |
0.000 |
0.000 |
0.000 |
||
Career management |
Institution size (Bank) |
.553* |
0.002 |
2.035 |
9.071 |
|
Union presence (yes) |
-3.647 |
0.001 |
-5.702 |
-1.592 |
||
Institution
Age (between 5 and 10 years) |
-3.417 |
0.018 |
-6.239 |
-0.596 |
||
Job satisfaction (very satisfied) |
3.808* |
0.001 |
1.631 |
5.985 |
||
Job security |
Institution
Age (Above 15 years) |
-2.248 |
0.051 |
-4.510 |
0.013 |
* Opposites the expected signs.