Adoption of Proper HRM Practices: A Technique for Retaining Employees and Increasing Firm Performance?

Abstract

This study has been developed to endeavor the relationship between seven Human Resource Practices (job analysis, recruitment & selection, adequate job training facilities, opportunities for career development, compensation & benefit, managerial relationship with employees and degree of employee participation in decision making) and their tentative impact on employee retention and firms’ performance. The research was carried out with a sample size of 200 non-managers and 50 top level managers of 25 public and private corporate firms in Bangladesh. Data have been collected through a detailed structured questionnaire from the respondents. Judgment sampling method has been used to recruit the respondents. Results after careful statistical analysis revealed a very interesting and unusual conclusion. It indicated that there is a positive but insignificant relationship between job analysis, management-employee relationship and participation in decision making with employee retention. The other four independent variables, recruitment & selection, job training facilities, career development and compensation & benefit have negative relationship with employee retention. Among them, job training and compensation & benefit has strong negative relationship with employee retention. On the other hand, job analysis, management-employee relationship and participation in decision making have positive relationship with firm performance. Among them, management-employee relationship has significant and participation in decision making process insignificant positive effects on firm performance.