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HRM Practices and Employees' Retention: The Perspective of Job

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 ISSN: 2321-8819 (Online)
Asian Journal of 2348-7186 (Print)
Impact Factor: 1.498
Multidisciplinary Studies Vol.4, Issue 5, April 2016

HRM Practices and Employees’ Rentention:

The Perspective of Job Embeddedness Theory
Palwasha Bibi, Faizuniah Binti Pangil & Johanim Binti Johari
School of Business Management,
UUM College of Business 06010 Kedah, Malaysia

Abstract: In the current study several HRM practices (performance appraisal, promotional opportunities
and job security) have been suggested to explain its impact on employees retention. Previously, other studies
have endeavored to consider the impact of HRM practices and employees retention but their results are
mostly conflicting, therefore further investigation is needed. Moreover, mediating effect of job embeddedness
on the relationship between HRM practices and employees retention has been suggested to be investigated.
Furthermore, the use job embeddedness theory may help to better understand the relationship.
Keywords: Employees retention, HRM practices, Job embeddedness theory.

1.0 Introduction (Khan, 2010). Moreover, Huselid (1995) found

evidences that HRM practices enhance employees‟
The most precious asset to an institute is its
retention. Similarly, Rathnaweera (2010) and
employee, so retaining employees in their jobs is
Kwenin, Muathe & Nzulwa (2013) also found that
necessary for all organizations (Ng‟ethe, Iravo &
HRM practices significantly affect employees
Namusonge, 2012). Employees‟ retention is
retention. Furthermore, job embeddedness theory
considered as vital source of achieving competitive
(Mitchell, Holtom, Lee, Sablynski, & Erez 2001)
edge in the market place (Walker, 2001). Employee
also provides a basis for linking HRM practices
retention is a process through which employees are
and employees retention, employees working in an
motivated to stay in the organization (Griffeth &
organization are more embedded when they feel
Hom, 2001). Employees‟ retention is one of the
that HRM practices are favorable and they are
main objectives for all institutions, since the
getting fair outcomes. Hence, embedded employees
expenditure of training and placement of potential
are more probable to show positive job outcomes,
employees is very costly (Abbasi & Hollman,
such as good retention and performance.
2000). Most of the studies have revealed that
employees retention is a crucial issue for In particular, this study will endeavor to contend
organizations, thus these organizations use how HRM practices are theoretically significant in
different methods to retain employees. improving employees retention, thus adding to the
current literature on the part of HRM practices in
Nowadays, most of the organizations are facing the
employees retention. Moreover, proposing the
problem of employees‟ retention (Ghansah, 2011).
impact of HRM practices, this study offers
According to Zaffane (1994), employees‟ retention
theoretical clarification on the part of job
always had been an important problem for
embeddedness in mediating the association
organizations. Retaining the competent employee
between HRM practices and employees retention.
has become a big challenge for HR managers as
This paper additionally explains that the past
according to Harris (2007), competent employees
studies conducted on the role of HRM practices in
have luxury of choice in the global market.
influencing employee retention have conflicting
Employing competent staff for the job is important
results, proposing that further research is needed to
for an organization but retaining them in their jobs
clarify better the relationship. Furthermore, the
is more essential (Ghansah, 2011). As replacing an
possible operation of Job embeddedness as
old employee with a new one increases operational
mediator may strengthen the relationship.
costs in the form of new employees‟ training and
filling vacancies. Even though retention has been 2.0 Literature Review
measured through financial figures many times, it
can also be measured through the combination of
some factors (Ramlall, 2003). 2.1 Job Embeddedness
HRM practices are known as of key importance Job embeddedness is a new approach to
among several factors that have been suggested to understanding retention as embedded employees
be helpful in retaining employees. Organizations choose to remain employed despite any attitudinal
must use proper HRM practices i.e. performance issues or dissatisfiers (Mitchell et al, 2001b). Job
appraisal, promotional opportunities and job embeddedness is defined as Job embeddedness has
security in order to enhance employees retention been defined as “the combined forces that keep a

Available online at www.ajms.co.in 41

HRM Practices and Employees‟ Rentention: The Perspective of Job Embeddedness Theory.

person from leaving his or her job” people can job embeddedness and improve retention (Bergiel,
become stuck or “embedded” in their job as a result Nguyen, Clenney and Taylor, 2009). Thus, this
of various forces (Yao et al., 2004, p. 159). study considered job embeddedness as mediator to
Mitchell et al, (2001b) described embeddedness as better understand the relationship between HRM
being intertwined in a web that is often difficult to practices and employee retention.
exit. The more enmeshed workers are, the more
Moreover, Job embeddedness theory (Mitchell,
probable they are to stay in their current position.
Holtom, Lee, Sablynski & Erez, 2001) also
Job embeddedness theory, as introduced by supports this phenomenon by arguing that
Mitchell et al, (2001) offers a method of employees working in an organization are more
discovering why people stay in an organization. embedded when they feel that HRM practices are
This study focuses the Mitchell et al, (2001b) job favorable and they are getting fair outcomes.
embeddedness theory, which differs from other Hence, embedded employees are more probable to
employment models because it focuses on retention show positive job outcomes, such as high retention
rather than turnover. Job embeddedness represents and better performance (Mitchell et al, 2001).
a unique perspective of non-affective behaviors Therefore, this study proposes the following:
that are strong predictors of employee retention
Proposition 4: Job embeddedness will mediate the
(Sun, Zhao, Yang, & Fan, 2011). The core
relationship between HRM practices (performance
assumption of the theory is embedded employees
appraisal, promotional opportunities and job
have less intention to leave their current jobs
security) and employees‟ retention
(Mitchell et al., 2001). Furthermore, the theory of
job embeddedness is also known as the theory of 2.2 Employees Retention
employees retention. In addition, staff working in
an organization is more embedded when they feel The problem of low retention is not new. The
scholarly debate on the employee retention
that HRM practices are favorable, decisions are
stemmed from 1900s when scholars and
made honestly, performance is evaluated fairly, and
psychologists begin to identify various reasons that
their jobs are secured, they are highly embedded in
their jobs. affect employee‟s level of interest in their job and
possible opportunities (Rowland & Ferris, 1982). It
Previously, it has been described that proper HRM has always been a challenge for employers.
practices exhibited by an organization must be able Employees retention is a process through which
to enhance employees retention (Raihan, 2012). employees are motivated to stay in the organization
However, previous studies by Mobley, Griffeth, for longer period of time (Hom & Griffeth, 1995).
Hand, and Meglino (1979); Eisenberger et al, Similarly, Giri (2008) defined employee retention
(2002) and Fairris (2004) found a weak significant as the techniques employed by the management to
relationship between HRM practices and help the employees stay with the organization for a
employees retention. Which suggests that the longer period of time. Employees are considered as
possible operation of job embeddedness as the most valuable asset of all organizations as they
mediator may strengthen the relationship between provide competitive advantage to an organization,
HRM practices and employees retention. In therefore, retaining them in their job is essential
accordance with Baron and Kenny's (1986) (Ng‟ethe, Iravo & Namusonge, 2012). Employee
assertion, the mediator function of a third variable, retention is essential for an organization (Ghansah,
that represents the mechanism through which the 2011). Prior studies disclosed that switching an old
predictor variable influences the criterion variable. employee with a new one rises operational costs in
Therefore Job embeddedness is expected to explain the form of (i.e. recruitment, replacement,
and strengthen the relationship between the HRM selection, management time, loss of social capital
practices and employees retention. and costs of learning (Dess & Shaw, 2001)
Several studies have examined the mediating role Numerous researchers have done work to show the
of job embeddedness on the relationship between importance of employees‟ retention. Van-
LMX and outcomes like turnover intention, job Knippenberg (2000) argued that employees can get
satisfaction, and actual turnover (Harris, wheeler to be more faithful and stay in the institute when
& kacmar, 2011), ethical climate and performance they distinguish themselves inside a group and add
outcomes (Karatepe, 2013) and work engagement to the contribution as a group. According to Fitz-
and job outcomes (Karatepe & Ngeche, 2012). enz (1990) there are a few components that impact
Thus, the literature shows that no study has been employees‟ retention which need to oversee
done on mediating effect of job embeddedness on compatibly (i.e. rewards & compensation, training
the relationship between HRM practices (e.g. & developments, job security, organization justice,
performance appraisal, promotional opportunities culture, supervisor support and work environment
& job security) and employee retention. Thus, it is etc). Some researchers identified that HRM
important to identify the HR practices that create practices (i.e. compensation, training &
this equilibrium and embed employees in the social developments, job security, organization justice,
exchange (Tanova et al, 2008). Unfortunately, little and work environment) reduce turnover,
research has explored how HR practices encourage

Asian Journal of Multidisciplinary Studies, 4(5) April, 2016 42

HRM Practices and Employees‟ Rentention: The Perspective of Job Embeddedness Theory.

absenteeism and help to increase employee Prior scholars and practitioners have attempted to
retention (Arthur, 1994; Delaney & Huselid, 1996). probe more about HRM practices but very few
scholars have underscored that how these practices
It has been obtained from the literature that
can assist employee to be remain part of
although, employees retention has been studied
organization (Allen et al, 2003). In the area of
previously, but these studies lack
human resource management, the impact of HRM
comprehensiveness in explaining the antecedents of
practices on performance at individual, group or
employees retention as mostly focusing on
organizational level, is a vital issue. Little research
different determinant rather than HRM practices.
has been carried out on psychological processes
Moreover the theory of job embeddedness
through which HRM practices impact attitudes and
((Mitchell et al., 2001) may help to better
behaviors of employees (Zhang and Agarwal,
understand the relationship. Therefore, this study
2009). Therefore, there is dearth of knowledge of
will explain how HRM practices are important in
how these HRM practices effect perceptions of
enhancing employees retention, thus contributing
employees, their states of mind, behaviors, their
to the existing literature on the role of HRM
attitudes and their thinking and how they respond
practices in employees retention.
to the practices (Deery, 2002).
2.3 Human Resource Management Hence, this study will fill the gap in body of
practices knowledge by including the six main HRM
practices in this study (i.e. compensation, training
HR management is a new term used for „personnel
and development, performance appraisal,
management‟. As Dessler (2007) stated that
promotional opportunities, supervisor support and
„human resource management‟ is the new version job security).
of personnel management because of fast
technological changes in social values and working 2.2.3 Performance Appraisal
climate. Torrington and Hall (1998) differentiated
The idea of performance is not absolutely new; it
between personnel management and human
has been using since hundreds of years. Khan,
resource management, that personnel management
(2007) and Mazhar-ul Haq (1977) argued that
is manpower oriented while human resource
performance appraisal initiated at the time of
management is recourse oriented. Though,
islam‟s second Caliph Hazrat Umar Farooq (634-
according to Guest (1997) human resource
644 AD/13-23 AH), as the Caliph set the criteria
management is a form of personnel management
for the individuals and then assessed their output
that is concerned about issues of employees related
performance compared to their given job. Prowse
to excellence commitment and flexibility.
and Prowse, (2009) expressed that formal records
Numerous scholars have been explained HRM about have been found in mid 1800s in Robert
practices in different ways. According to Qureshi, Owens organization with respect to performance in
Akbar, Khan, Sheikh, & Hijazi (2010), HRM New Lanark. While some scholars connected it to
comprises procedure and practices for employees and Taylors pioneering and Motion studies time at
including for the employees that includes the beginning of 20th century. Amid 1920-1940
remuneration, performance appraisal, training and this system got more concern and attention.
development, recruitment and selection. Similarly,
Performance appraisal can be defined as the basic
according to Mondy and Noe (2005), HRM
HRM function such as evaluation of employees‟
practices are policies and strategies executed by an
performance periodically to improve the utilization
organization to make sure employees work
of human resources within the organization
efficiently to achieve the organizational goals. In
(Raihan, 2012). Due to usefulness of Performance
the current rapidly growing global market, human
Appraisal (PA) as a managerial decision tool, it
resource management practices play significant
represents a central function of human resource
part in retaining employees, the most important
management and has remained an important issue
asset of the organization (Qureshi et al, 2010).
of investigation among organizational researchers
According to Frederickson (1986), proper HRM (Dulebohn & Ferris, 1999). Waldman, Bass, and
practices help the organization to achieve its goals Einstein (1987) argued that performance appraisal
successfully. In order to retain the highly helps the organization in enhancing and measuring
competent and skilled employee, HRM practices performance of employees. According to Kuvaas
are being used (Byrne, Miller & Pitts, 2010). Most (2006) an appropriate performance appraisal
of the HRM strategies are focused on employee system is used as a tool for, developing, retaining
satisfaction and retention as HR is the main and motivating employees in the organization.
dynamic asset in an institute which helps in Moreover, from the perspective of job
achieving competitive advantage in any business embeddedness theory (Mitchell et al., 2001),
(Gul, Akbar & Jan, 2012). Thus, positive organization feel that decisions are made honestly
perceptions of employees about the HRM practices and performance is evaluated fairly, they are more
of an organization make them embedd or stuck in likely to be stuck in the organization. Thus, stay for
the organization ((Mitchell et al., 2001). longer period of time with the organization.

Asian Journal of Multidisciplinary Studies, 4(5) April, 2016 43

HRM Practices and Employees‟ Rentention: The Perspective of Job Embeddedness Theory.

Previously, researchers Levy and Williams (2004) in Sri Lanka found that promotional opportunities
argued that developmental performance appraisal do not influence employees retention.
increases employees‟ perceptions of being valued
While the above studies have made significant
by the organization, and this positive perception in
contributions to the literature by demonstrating the
fact make them to stay for longer period of time
influence of promotional opportunities on
with the organization. Moreover, Kuvaas (2006)
employees‟ retention, however, it is worth to note
also prompted that performance appraisal has
that the findings of these studies are conflicting.
significant influence in enhancing employee
Further research is needed to better understand the
retention. However, Johari et al. (2012) found a
relationship in a more precise way. Therefore, this
non-significant relationship between performance
study proposes the following:
appraisal and intention to stay. Riaz, Ayaz, Wain
and Sajid (2012) argued that performance appraisal Proposition 2: Promotional opportunities will be
does not influence employees retention. positively associated with employees‟ retention.
While the above mentioned research studies have 2.2.6 Job Security
made significant contributions to the literature by
demonstrating the effect of performance appraisal It has been highlighted that job security is one of
on employees retention of compensation still it is the main HRM practices to retain employees and
enhance employees‟ performance (Chang & Chen,
worth noting that the findings of these studies are
2002). Job security refers to the degree to which
inconsistent hence more research is needed to
institutes offer stable positions for their employees
explain the relationship in a better way. Thus the
(Herzberg, 1968). Furthermore, it is the extent to
current study proposes the following:
which individual workforce expect to remain in the
Proposition 1: Performance appraisal will be job for longer period of time. It is one of the
positively associated with employees retention. prominent factors for commitment and retaining
the employees. Those employees who believe that
2.2.4 Promotional Opportunities
they will remain employed in the organization and
Promotional Opportunity refers to upward mobility will not lose their job are more committed and
in the organization. This is expressed as a future intend to stay for longer period of time with the
chance for advancement within the organization organization. In the same vein, this notion is also
(Raihan, 2012). Promotional opportunity makes the supported by job embeddedness theory (Mitchell et
employee satisfied and increases their level al., 2001). Hence, job security is one of the
intention to stay with the organization (Price, imperative factors which show the perception of
2001). Lack of promotion opportunity significantly individual employee about his/her job in the
affects employees‟ decision to stay with the organization (Conklin & Desselle, 2007).
organization (Miller & Wheeler, 1992) In fact,
Furthermore, both in the public and private sector
promotion to potential employees indicates that
organization job security found to have statistical
organization serves employees‟ career interest;
imperative effect on employee retention (Samuel &
while employees in return motivate themselves to
Chipunza, 2009). Similarly, Parnell and Crandall
serve the interest of the organization. Hence, job
(2003) also argued that job security significantly
embeddedness theory (Mitchell et al., 2001)
influences employees‟ retention positively. Min
postulates that a promoted employees feel that the
(2007) again shows the job security as a most
organization value them thus, they are more likely
effective motivator for retaining employees. In line
to be stuck in the organization. Thus, stay for
with the previous findings, Conklin et al. (2007)
longer period of time with the organization.
found in their study of faculty survey that job
In literature, promotional opportunities considered security has been recognized as one of the core
to be one of the basic factors in employees‟ factors for faculty members to decide whether they
retention. According to Dockel, Basson & Coetzee will stay or leave.
(2006) promotion enhances employees retention in
From the above discussion it is projected that job
an organization. Billah (2009) and Eisenberger et
security might be a strong predictor of employees
al, (2001) found that employees feel more
retention. Furthermore, it is expected that job
comfortable and satisfied when proper promotional
security will enhance employees retention. Hence
and development opportunities are provided to
this study proposes the following:
them in the organization. Similarly, Morris, Yaacob
and Wood (2004) also argued that promotional Proposition 3: Job security will be positively
opportunities enhance employees‟ retention. associated with employees retention.
However, Fairris (2004) found the opposite result
and argued that the importance attached to 3.0 Proposed Research Framework
employee promotion is actually associated with Based on the above literature review, a proposed
lower retention, thus claimed there is negative research framework for this study illustrating the
relationship between promotion opportunity and mediating effect of job embeddedness on the
employees retention. Moreover, the study of relationship between HRM practices (performance
Abeysekera (2007) on leasing company employees appraisal, promotional opportunities & job

Asian Journal of Multidisciplinary Studies, 4(5) April, 2016 44

HRM Practices and Employees‟ Rentention: The Perspective of Job Embeddedness Theory.

security) and employees retention is presented in support for the job embeddedness theory across
Figure 1. various organizational settings, it is proposed that
this theory would provide an empirical support for
the mediating role of job embeddedness on the
relationship between HRM practices and
employees retention. Moreover, it is proposed that
Job embeddedness theory will also provide
empirical support for the mediating effect of job
embeddedness on the relationship between HRM
practices and job embeddedness.
4.0 Conclusion
This paper has presented a model on the mediating
effect of job embeddedness on the relationship
between HRM practices (performance appraisal,
promotional opportunities & job security) and
employees retention as presented in above figure.
The proposed study has a few basic implications
for enhancing employees retention. Firstly, if the
proposed model is validated, the finding will give
imperative understanding to practitioners and
Figure 1. Proposed Framework managers about the huge part of HRM practices in
increasing employees retention. Secondly, the
In explaining the mediating role of job mediating effect of job embeddedness on the
embeddedness on the relationship between HRM relationship between HRM practices and
practices (performance appraisal, promotional employees retention will help to explain that the
opportunities & job security) and employees use proper HRM practices will embed the
retention, the present paper proposes that the use of employees and help the organization to retain them.
proper HRM practices will make the employees
more embedded in their jobs which in turn will
enhance employees retention. Given the empirical

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