Polytechnic University of the Philippines

College of Business Administration

Human Resources Development Management
Sta. Mesa, Manila
________________________________________________________________

ANALYSIS OF DIFFERENT FACTORS THAT AFFECT EMPLOYEE RETENTION IN

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES COLLEGE OF BUSINESS

ADMINISTRATION

A Research Proposal Submitted to

Cresilda M. Bragas

College of Business Administration

In partial Fulfillment

of the Requirements

in Fundamentals of Research

Group 3:

Natividad, Mark
Castro, Patrick
Villanueva, Venus Margarette
Dela Cruz, Graciella
Giron, Christian
Celeste, Dianne
 CHAPTER ONE
The Problem and Its Background

Introduction

Employee retention has become a major concern for corporates in the current scenario.

Individuals once being trained have a tendency to move to other organizations for better

prospects. Lucrative salary, comfortable timings, better ambiance are some of the factors which

prompt an employee to look for a change. According to (MSG Experts 2008), employee

retention refers to the techniques employed by the management to help employees to stay with

the organization for a longer period of time. Employee retention strategies go a long way in

motivating the employees so that they stick to the organization for the maximum time and

contribute effectively. Since efforts must be taken to ensure growth and learning for the

employees in their current assignments and for them to enjoy their work.

To manage top talent it requires a constant balance between the human aspirations and

the strategic and financial needs of the businesses (Hughes and Rog, 2008). Employee

retention is a technique adopted by the businesses to maintain an effective workforce at the

same time meets operational requirements. People related issues for example compensation

benefits, hiring, administration, organization development, employee motivation, wellness and

safety, communication, performance and training are dealt by it (Taplin et al., 2007). HR

practices in an organization are used for talent acquisition that is recruitment, selection, training

and development, reward management and performance appraisal. Human resource

Management handles people, workplace environment and culture in a strategic manner. Today

Employee retention is the top priority of organizations due to increasing competition. It is an

efficient and productive advance towards the employee management who are considered to be

the greatest assets of the company (Devi, 2009).

Critical analysis of workforce trend points to an impending shortage of highly-skilled

employees who possess the requisite knowledge and ability to perform at high levels,

(Rappaport et al., 2003) meaning, organizations failing to retain high performers will be left with

an understaffed, less qualified workforce that ultimately hinders their ability to remain

competitive. High rates of employee turnover can lead to lower work productivity, when the rate

of employee turnover increases it is a sign of poor employee retention program (Ingram, 2009).

Strategic ways for retaining top talent in the organization is by helping high potential

employees have cross functional job and work related satisfaction, involvement in decision

making, encouraging and implementing their ideas, helps in career development and relevant

training (Hay, 2010). Therefore, it is important that employers give employees the opportunity to

develop and learn (Herman et al., 2005) such that the workers maintain their capacities as

effective employees, resist redundancy and are retained by their companies.

Given that employee retention has proven to be important for the functioning of the

company, the factors influencing employee retention is a must to be tackled so that they have

the ability to ensure that their employees will keep on working for them in order to maintain their

competitive advantage. A special interest is taken in employees learning; this learning has a

strong positive effect on retention (Echols et al., 2007). If the employees feel they arent learning

or growing, they feel they are not remaining competitive with their industry peers for promotion

opportunities and career advancement (Rodriguez, 2008). Once top employees feel they are no

longer growing, they begin to look externally for new job opportunities. Workers who have more

experiences at a certain company will be more aware of the companys policies, goals and how

to fulfill their roles in company.

 Polytechnic University of the Philippines (PUP) is the first Polytechnic University that is

notable for charging the lowest tuition among all universities in the Philippines (wikipedia.com).

The school was established to meet the demands of needed businessmen and businesswomen

for government service and private employment. In this big institution, employee retention is

important to keep the organization competitive and profitable, thus making quality service in

establishing good image for the benefit of the whole University.

Having and retaining skilled employees play an important role in this process, because

employees knowledge and skills has become the key for companies to be economically

competitive (Bernsen, 2009). Every organization must treat their employees as an edge and not

means to an end because they add value to the organization.

Statement of the Problem

The research deals with the different factors affecting Employee Retention of Polytechnic

University of the Philippines College of Business Faculty Members

Specifically, it attempted to answer the following questions:

1. What are the common factors affecting employee retention among PUP CBA faculty

members?
2. How do the following factors affect the employee retention of the respondents?
2.1 Fair and Equitable Treatment
2.2 Opportunity for Growth and Development
2.3 Competitive Compensation Package
2.4 Rewards and Recognition
2.5 Organization Environment
2.6 Talent and Skill Utilization
3. How do these factors affect the university specifically, at the College of Business

Administration?
4. What are the programs that can suggest by the faculty members of College of Business

to Polytechnic University of the Philippines?

Significance of the Study

This study determines the different factors affecting employee retention and how do

these factors affect the CBA faculty members.

It is hoped that this would make the human resource department to be aware of the

importance of employee retention and what are the factors of it that they can work on for the

betterment of the organization. This study benefits the College of Business faculty member of

PUP with factors from them that will suggest their satisfaction while staying in the organization.

To the University, this study is for the improvement of the retention programs

implemented for the CBA Faculty member and for the strategic and competitive aspect of the

organization

To the Faculty of CBA, this study will show how vital to them in the University in regard

with the programs that will help retain them in the organization therefore increasing their morale

as well.

To the future researcher, this study will help supply basic knowledge and additional ideas

about the employee retention in PUP.

All in all, this study informs everyone the value of retaining good employees and to be

more aware how the factors of employee retention are the key to job satisfaction and motivation.

Scope and Delimitation

 This study enumerates the common factors affecting employee retention. It determines

how the following factors affect the respondents. Furthermore, it states how these factors affect

the University as well as the programs can suggest by faculty members of College of Business

to Polytechnic University of the Philippines. The respondents of this study include selected

faculty members that are chosen randomly.

However this study does not discuss the causes of these determined factors as well as

how these factors affect the student and the Universitys academic stature.

Hypotheses

H1. Fair and equitable Treatment, opportunity for growth and development, competitive

compensation Package, rewards and recognition, organization environment, talent and skill

utilization has a significant effect on employee retention.

H2. Employee Retention Programs have significant effect in the organization specifically in the

College of Business Faculty Members.

Conceptual Framework
Theoretical Framework

Employee motivation theories attempt to create models to understand what motivates

people to push their performance at work. Managers familiarize themselves with a range of
motivational theories, employing a mix of different approaches depending on the situations
they find themselves in and the types of employees they supervise. Effective employee
motivation can increase employees' productivity and loyalty; failing to put these theories into
place can lead to increased employee turnover.

The theory of Douglas McGregors Theory X and Theory Y which is also used to study
General Dynamics of Employee Turnover (Lorsch, J. and Morse, J.2001). This study represents
two opposing ends of the motivation spectrum. Theory X puts forth the premise that employees
are inherently averse to work and must constantly motivate from external sources. Theory Y
puts forth the idea that employees can be internally motivated at work, finding fulfillment in
striving to obtain goals that use their skills and experience.
In relation, researchers determine that neither Theory X nor Theory Y is inherently
better than the other. Rather, the appropriate theory depends on the work setting and specific
employees you are dealing with. Applying the wrong theory in your workplace can disappoint,
confuse and aggravate employees, leading to increased employee turnover. A group of
employees that sees self-motivation and autonomous decision-making as important, for
example, is not likely to stick around in a work setting that includes strict supervision at all
times.

This inquiry also relied on Management by Objectives or MBO which was developed by
Peter Drucker. It is also used to study the Emerging Trends in Employee Retention Strategies in a
Globalizing Economy: Nigeria in Focus (Nwokocha and Iheriohanma 2012). This theory indicates
the premise that employees are more motivated by goals and objectives that they had a hand in
setting. Rather than dictating instructions, quotas and goals from above, managers following an
MBO philosophy include employees in strategic decision-making whenever possible, especially
in decisions that directly affect employees' daily routines.
As applied to this study, this theory holds a direct effect to employee retention. Failing to
put this approach into action can cause you to lose some of your brightest and most self-
motivated employees. Not all employees truly care to set work-related goals for themselves and
function just fine in more autocratic settings. The most innovative and internally driven
employees, though, are more likely to leave a job that provides little or no opportunity for
strategic input.

Another theory which has a bearing to this study is J. Stacey Adams' Equity Theory which
explains the relational satisfaction in terms of fair or unfair distribution of resources within
interpersonal relationships. It is also used in the study of Designing for Knowledge Worker
Retention & Organization Performance (Nelson, K. and McCann, J.E. 2009).This theory is applied
through its great effect on factors of employee retention. If an employee feels underpaid, then
that employee will experience hostility towards the organization and perhaps co-workers, which
may result in the employee's diminished performance.

Employees, especially those who exert effort and stay longer for the company want to be
appreciated and rewarded, not necessarily with money, but by openly acknowledging their
achievements and contribution to the attainment of organizational goals and objectives. These
theories were guides in proving that there were existing theories that supports our chosen
study.

Definition of Terms

Attrition- a reduction in the number of employees or participants that occurs when

people leave because they resign, retire, etc., and are not replaced

Career Advancement- is one of the most important element of employee retention at a

company and an especially powerful employee motivator.

Compensation- payment for doing the job (e.g. Salary)

Employee Engagement- is a workplace approach designed to ensure that employees

are committed to their organizations goals and values, motivated to contribute to
organizational success, and are able at the same time to enhance their own sense of
well-being

Job Satisfaction- a happy or pleased feeling because of something that you did or
something that happened to you

Remuneration- an amount of money paid to someone for the work that a person has
done

Retention- the act of keeping someone

Turnover- the rate at which people leave a place, company, etc., and are replaced by
others.