Module Code: MNP046

Research Methods B

Individual Assignment

Research Proposal

Presented to:
Module leader
Nick Scott

Presented by:

Syed Ali Arshad

ID: 06055211
Submission Date: 11.01.2008
1. Introduction

Nowadays employee turnover is increasingly high in under developing countries

especially in Pakistan which has become emerging market for multinational companies.
Recently a number of global companies in telecommunication, banking and retail sector
have entered in a big way resulting in creation of employment opportunities and scares of
human resources. There is a short fall of skilled workers, IT professionals, engineers and
highly qualified people in Pakistan and it has become increasingly difficult for
organizations to retain their technical and professional staff.

Reed (2001) claims

Every worker is five minutes away from handing in his or her notice, and 150 working
hours away from walking out of the door to a better offer. There is no such thing for life
and todays workers have few qualms about leaving employers for greener pastures
The average permanent job in the UK lasts six years.
(cited in Armstrong M. 2006 p 397)

A human resources consultant comments while organizations have perfected

sophisticated techniques for managing capital investments, suppliers and the production
and flow of goods and services, their capabilities in managing people seriously lag.
(DiRomualdo T, 2007).

Todays service economy is based on talent pool which constitutes the firms competitive
advantage. Knowledge workers when seen as firms resources are highly complex and
cannot be compared to other physical resources like buildings or equipments.

If employers want to retain their skilled work force and key contributors they need to
consider what they want. That is what is of utmost importance to them. Their can be
variety of reasons, for one employee it may be a career opportunity, for others it may be
salary and benefits and for several it may be job satisfaction. As all humans are not
alike their needs may differ. If Employers strive to reduce staff turnover they need to
investigate factors influencing exit and retention of their employees.

1.1 Purpose

This paper presents authors research proposal for MBA dissertation at London
Metropolitan University.

The purpose of the dissertation is to explore and analyze factors influencing retention and
to provide guidelines for formulating retention strategies to gain sustainable competitive
advantage.
Organizational Context

Asia Petroleum limited (APL) is the owner and operator of an 80 KM furnace oil pipeline
providing Fuel oil to Pakistans largest Power plant HUBCO. Incorporated in 1995, APL
is a joint venture of four firms Pakistan State Oil Company (PSO), Asia Infrastructure Ltd
of Hong Kong (AIL), VECO USA and Independent Petroleum Group (IPG) of Kuwait.
The company is based at Karachi with its head office in the city and pumping station at
Pipri 50 KM away from the city. The pumping station is equipped with the state of the art
SCADA system in the control room and having strength of 90 employees. (The
organization chart is attached in appendix A). The annual turn over of the company is 14
million approximately. The board of governors constitutes representatives of the share
holders with chairman from Asia Infrastructure Ltd and managing director from PSO.
The state owned company PSO holds 49% shares and remaining 51% shares are owned
by AIL, IPG and VECO. Besides owners Lenders also have a representative observer in
the board of directors. The company is responsible for operations and management of the
pipeline with an annual budget of 1 million O&M cost.

The problems at Asia Petroleum Limited

The company faces reoccurring problems in retention of its key skilled workers and
engineers at the head office and pumping station.

During communications with general manager technical of APL, he showed his growing
concerns about exit of key skilled professionals leaving the organization and joining other
firms. He said people now a days do not signup job for life, their priorities are changing, I
dont blame them since every person have the right to opt for best. The major problem is
when people are leaving they are leaving along with their subordinates and coworkers.
That is a big problem for us, if an entire department is leaving; there is something wrong
with organization itself. People are our key resources and our service heavily depends
upon their availability. We need to consider our weakness and strengths and revise our
retention strategies since we are a small organization with limited resources compared to
global firms and multinationals,

Why it interests me

While working with Asia Petroleum Ltd., I remember an instance where the organization
was faced with turnover of three employees of their instrumentation departments a
manager and two technicians looking after SCADA System the nerve system of their
control room. The company suffered potential downtime due to unavailability of
specialists in that particular department. It took company more than two months and
considerable efforts to get new engineers to work. The company has to bear financial
burden for outsourcing the service to third party and human resources department
invested crucial man hours in negotiating and recruiting new candidates. Recent research
shows that irrespective of the size of the organization, attracting high caliber workers and
retaining them are the two most critical people management issues faced by the
organizations across the world today. Working in HR department of Asia Petroleum Ltd.,
and closely observing employee retention issue further developed my interest in this
research topic.

The company will benefit by incorporating findings from research in their Human
resource planning and it will be of strategic Interest to Asia Petroleum limited.

Literature Review

Human resource management is essentially about matching human resource to the

strategic and operational needs of the organization and their full utilization. It is related
not only with maintaining the number and quality of staff required but also with selecting
and promoting people who fit the culture and the strategic requirement of the
organization.

CIPD Recruitment, retention and turnover survey 2007 reports that highest levels of
turnover are found in private sector organizations (22.6%). The impact of turnover is
widely considered to have direct and indirect costs on organizations financial resources.
Another CIPD survey carried out in 2005 established that the average cost per leaver was
4625. The high turnover of skilled workers and managers from an organization is
alarming bell for organization and may force organization to review its reward policies
and HR strategies.

Researchers identified push and pull factors for resignation or exit of employees from
organizations. They identified Pull factors such as attraction of new job or prospect
period outside workforce where as likely push factors may be dissatisfaction from present
job or relocation of family or spouse which is outside the control of employer. At times it
can be a mixture of both pull and push factors. Recent research strongly suggests that
push factors play more significant role than pull factors.

Hay group survey of 330 companies in 50 countries revealed that pay is not the major
factor underlying employee dissatisfaction but the most likely reason to leave is failure of
managers to take employees career development seriously. The report also identified that
many leave their jobs because of poor manager employee relation. The survey found that
this is the second highest factor for reason to leave. The third factor is for dissatisfaction
of employees is lack of clear direction on part of management. (Hay M. 2002)

(Chien & Wu, 2003; Sattler & Sohoni, 1999) argues that high-tech industry such as
semiconductor industry comes across more difficulties in acquiring human capital
compared to other due to unusual characteristics including complex and highly uncertain
manufacturing processes, short product life cycles and low yield problems thus, the
quality of their human resource is very crucial in increasing their competitiveness.
(Cited in Chien C, Chen L 2008)

Appleyard and Brown (2001) on the basis of gathered date from semiconductor
manufacturers in the United States, Asia, and Europe found that engineers play important
and growing roles in creating high-performance semiconductor factories. Therefore high-
technology companies, often suffer from high turnover rates and difficulties in recruiting
the right talents. In order to attract good applicants, companies provide attractive
compensation and welfare benefits. However, despite the willingness of many companies
to do all that they can to recruit the best people, they usually have difficulties at the
selection stage in predicting which applicants would have better work performance and
would have longer service time after they are hired.
(Cited in Chien C, Chen L 2008)

Therefore, selecting the right engineers who can demonstrate the best performance and
who will stay with the company for a long time is of great urgency for every high-
technology company.

In summary most common reasons for leaving are pay, better prospects, job security,
opportunity, skill development, better work conditions, employee manager relationship,
bullying or harassment, personal reasons like illness, pregnancy or relocation of family or
spouse. Exit interviews can be helpful in outlining specific reasons for dissatisfaction of
employees.

Benson and Brown (2007) show that there is substantial research in the field on
antecedents of commitment but that it has not been recognized in the HRM literature.
Morrow (1993) shows that factors such as age, tenure, education, job satisfaction and job
security are consistent antecedents of commitment. This statement indicates that
employee commitment levels vary depending on different factors, and should therefore
not be treated as a homogeneous group (Benson & Brown, 2007).

Peter Drucker (2003) argues that knowledge workers often know more about their job
assignments than the manager does trying to manage them. This is often why they are
considered to be so valuable to a knowledge firm. If the manager would know more, then
the knowledge worker would not be a valuable resource to the firm. The manager could
replace the worker and transfer his knowledge to another person. Drucker also describes
knowledge workers as executives if, by virtue of their knowledge they contribute to
organizational performance and its capacity to obtain results.

We are living in a knowledge society, where supply of knowledge will determine the
success of firms. Furthermore Tushman and OReilly (1996) state that knowledge
workers within a firm will increasingly determine its survival which makes it imperative
to retain them as they are the key contributors to the firms competitive strength. (Herling
& Provo, 2000) asserts that human resources cannot assist in creating competitive
advantage unless the firm adopts a strategic perspective of knowledge.

Human capital theory is associated with the resource-based view of the firm as developed
by Braney (1991). This proposes that sustainable competitive advantage is attained when
the firm has a human resource pool which can not be duplicated or imitated giving them
uniqueness over their rivals. In defining resource based strategy we need to understand
what strategy is about Johnson and Scholes (1993) defined strategy as The direction and
scope of an organization over long term, which ideally matches its resources to its
changing environment, and in particular, to its markets, customers and clients to meet
stakeholders expectations.

Strategies determine the direction in which the organization is going in relation to its
environment. It is the process of defining intentions (strategic intent) and allocating or
matching resources to its opportunities and needs (resource based strategy). Business
strategy is concerned with competitive advantage.

Strategic HRM is an approach to making decisions on the intensions and plans of the
organization in the shape of policies, programmes and practices concerning the
employment relationship, resourcing, learning and development, performance
management, reward and employee relations. The concept of strategic HRM is derived
from HRM and Strategy. It takes the HRM model with its focus on strategy, integration
and coherence and combines key elements of strategy, strategic intent, resource-based
strategy, competitive advantage, strategic capability and strategic fit.

According to Hendry and Pettigrew (1986), strategic HRM has four meanings:

1. The use of planning;

2. A coherent approach to the design and management of personnel systems based

on an employment policy and manpower strategy and often underpinned by a
philosophy:

3. Matching HRM activities and policies to some explicit business strategy;

4. Seeing the people of the organization as a strategic resource for achievement of

competitive advantage.

Purcell (2001) draws attention to the implications for strategic HRM of the concept of
strategy as an emergent rather than a deliberate process.

Big strategies in HRM are most unlikely to come, ex cathedra, from the board as a fully
formed written strategy or planning paper. Strategy is much more intuitive and often
visible after the event, seen as emergent pattern of action. This is especially the case
when most of the strategy, as in HRM is to do with internal implication and performance
strategies, not exclusively to do with external market ploys.

(Armstrong M. 2006 P 116)

Retention strategies should be based on understanding the factors that affect them. For
youngsters 30 years or under career advancement is of prime importance. For mid-career
employees (age 31-50) job satisfaction and ability to manage their career is important.
Employees over 50 years will be seeking more secured jobs.
The specific factors that affect retention are:

company image;
recruitment, selection and deployment;
leadership- employee join companies and leave managers;
Performance recognition and rewards.

Attraction Strategies

The overall strategy should be to become an employer of choice. As Scarborough and

Elias (2002) put it: The recruitment of key individuals who will contribute significantly
to the value-creating capacity of the firm is crucial to success. Establishing brand image
of the organization, emphasizing employee branding that is how other people perceive it),
to become employer of choice, and to target recruitment and selection to get the sort of
people the organization needs.

This is an initial literature review for the submission and back ground building for
proposal. It will be comprehensively covered in the main dissertation upon approval of
this proposal.

Research questions

My intended research questions for this research dissertation are:

1. What is the relationship between job satisfaction and employee retentions?

2. What are the primary characteristics in a work-environment that will drive

employee satisfaction?

3. What are the factors influencing exit and retention of employees in small business
enterprise?

4. What is the role of employer branding in employee retention

5. What are the key strategic challenges of retention management?

Research Methodology

I am carrying this research with a positivist phenomenological paradigm. The study is a

qualitative, as well as a theoretical study where empirical findings and theories has been
compared. The intention of investigating and using the Asia Petroleum Limited as a case
company is to make the information from the theories more valid, and also the interest in
how talent management works in practice. Qualitative interviews will be conducted at
APL Head Office and plant both with supervisors and employees to get a broader view at
the phenomenon talent management.

Yin (1994) pointed three different categories of research; exploratory, explanatory and
descriptive. Exploratory research is performed when a problem is difficult to limit and
when there is little or restricted research on the topic. Where as descriptive research is
carried when studying a problem area with already existing theories or information. The
aim of this type of research is to develop careful descriptions of different patterns that
were found in the exploratory research. Finally explanatory research explanatory research
explains the causal relationships between cause and effect.

In light of above my dissertation can be described mainly as descriptive, however it will

also be exploratory and to some extent explanatory. This is based on the purpose of this
dissertation aims to provide a better understanding of the impact of pay, performance
management criteria, job satisfaction and management practices on APL choice of
strategy on retention of talent management.

Research methodology can be classified under two broad generic categories quantitative
and qualitative. Qualitative research emphasizes processes and meanings that are not
rigorously examined or even measured in terms of quantity, intensity, amount, or
frequency. Qualitative research method is based mainly on words as opposed to
quantifying when collecting and analyzing data. The qualitative research covers different
types of social research.

According to Holme and Solvang (1997) there are several specific criteria for qualitative
methodology such as indepth and description and understanding. Furthermore the authors
state that both the qualitative and quantitative approaches are aimed at creating a better
understanding of the society and to comprehend how individuals, groups and institutions
act and influence each other. Saunders, Lewis and Thornhill (2000) argue that it is
possible to use more than one approach to a research project, the authors argue that
exploratory, descriptive and explanatory research is not mutually exclusive as research
approach.

Role of the Researcher

Since I am an ex-employee of the organization and is not doing this research for financial
gain I will be doing this research from the academic point of view only. My position as a
researcher will only be for the purpose of academic theories validation and I will try to
keep it as independent and un-bias as possible. I will not influence my opinions over the
staff and employees of APL nor be influenced by views of staff. I will adhere to
professional ethics defined in ethics policy of London metropolitan university research
guide.
Validity

In order to validate my research instrument like questioner and interview I will be doing
an extensive literature review to explore theories, hypothesis, prepositions and constructs.

Interviews will be held in undisruptive environment and I will be only performing as

interviewer without involving my self into the argument with the interviewer. The
interviewee will be given complete freedom and confidentiality during the interview in
expression of his views.

Discussions will be held with line managers, workers and executives and consultation
will be done with my course supervisor for clarification of the issues relevant to research
study.

Constructs and scales will be used where ever possible.

A pilot interview will be held prior to main interviews in order to ascertain use of correct
language and capture interviewees responses and assure clarity and any ambiguousness
of dialect and language.

Generalisability

The outcome of research will beneficial to APL and available to other researchers for
reference and knowledge.

Reliability

Some common themes can emerge from this research and it is likely that some results
may not match with previous researchers findings.

Data collection

Prior permission will be obtained from employees and subjects before recording any data.
Subjects not comfortable with recording of the data will be assured that their data will not
be used in anyway and will be deleted from record.

Time

See attached schedule in appendix 1

Access

I have been assured access to the head office and plant by their general manager technical
with whom I have worked for more than five years.
References:

Armstrong Michael A Hand book of Human Resource Management Practice

Kogan Page 2006

Benson, John & Brown, Michelle (2007) Knowledge workers: what keeps them
committed; what turns them away. Work, Employment & Society. Vol. 21. No. 1.

CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT. (2007)

Recruitment, retention and turnover 2007. Survey report. London: CIPD. (Survey report).
Available at: http://www.cipd.co.uk/surveys

(Chien C, Chen L 2008) Data mining to improve personnel selection and enhance
human capital: A case study in high-technology industry SinceDirect
http://www.elsevier.com/locate/eswa accessed on 7 jan 2007

Diromualdo T (2007) Four Steps to Making Talent Management a Core Competence

Online at http://talentframework.com/content/view/40/64/access date 7 January 2007

Drucker Peter (2003) New trends in management. Executive Excellence. Vol. 20. No. 8.

Herling, Richard W. & Provo, Joanne (2000) Knowledge, competence, and expertise in
organizations. Advances in Developing Human Resources. Vol. 2. No. 1.

Hay Michael Strategies for survival in the war of talent

Career Development International; Volume: 7 Issue: 1; 2002 Research paper

Tushman, M. L. & C. A. OReilly. (1996) Winning Through Innovation. in Lee, Thomas

W. & Maurer, Steven D. (1997) The retention of knowledge workers with the unfolding
model of voluntary turnover. Human Management Resource Review. Vol. 7. No. 3.

Morrow, Paula (1993) The Theory and Measurement of Work Commitment. in Benson,
John & Brown, Michelle (2007) Knowledge workers: what keeps them committed; what
turns them away. Work, Employment & Society. Vol. 21. No.1.