Impact of Organizational Culture on Employee Retention: A Theoretical Perspective

Abstract

Organizational Culture: People join or get associated with various organizations in their lives. Every organization has a culture. Culture matters as we experience its effects on performance every day. The complexity of environmental changes forces firms to monitor the culture of their organization regularly by a variety of methods to gain a truer picture for their development process. An organization’s culture is reflected by what is valued, the dominant managerial and leadership styles, the language and symbols, the procedures and routines, and the definitions of success that make an organization unique. The noteworthy models contributed in the context of organizational culture have been discussed. These models facilitate us in understanding/ being aware of the current status of the culture of an organization in a meaningful and productive way so that one can create, change and influence the direction of organizational culture. Employee Retention: Corporate leaders are facing employee retention issues as the most critical workforce management challenge due to the shortage of skilled labor both in terms of continuing globalization and technological innovation, economic growth and employee turnover. Hence, every organization tries to retain a key, positive, talented, competent, skilled, trained, experienced, high potential staff for the organization's success, competitiveness and above all its survival. The biggest factor in attracting and most importantly retaining key employee is culture. The level of congruence between an organization’s culture and employees’ value preferences can predict employee retention and turnover. An organization nurtures and maintains conducive environment that guarantees the employees’ stay in the organization. It is important for employees to feel like they are part of a team, need a connection to the vision and direction of the organization and their co-employees, need ways of working better together, which ultimately lead to more collaboration. Purpose: This paper presents a theoretical perspective of organizational culture and employee retention, the most commonly used organizational culture models, the relationship between organizational culture and employee retention.