The Effect of Employee Retention to Productivity in Small Business Enterprises

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This study explored the effect of employee retention strategies to productivity of small businesses. Based on previous literature, employee retention management is an important tool in ensuring that companies are able to retain their best workers and hence contribute to their competitive advantage.

Small businesses however do not have the resources to offer the same kind of retention strategies that large companies do and hence have to contend with basic retention measures like a competitive salary, profit sharing, flex time, day care provisions and fringe benefits. In the previous studies on company productivity as it relates to employee retention has been measured in terms of turnover rates. This study is therefore one of the few wherein employee retention was investigated as it directly impacts company performance through its sales.

The study used a document research approach, wherein daily sales for a period of two weeks was tabulated and subjected to statistical manipulation, while the presence or absence of the identified employee retention strategies was given weighted scores. The results of the study have indicated that the presence of employee retention strategies significantly affected the rate of productivity or sales of the company wherein the group that had the identified retention strategies had higher sales than the company that did not have retention strategies.

However the direct link between employee retention strategies and productivity has not been established wherein one cannot say that a company with complete retention management approach would have increased productivity. The findings of the study support the assumption that the presence of employee retention strategies would indicate better performance while the absence of it would lead to poor performance.

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