impact of motivation on employee retention thesis

Examining employee retention and motivation: the moderating effect of employee generation

Evidence-based HRM

ISSN : 2049-3983

Article publication date: 18 April 2022

Issue publication date: 20 September 2022

This study explored moderating effects of employee generations on factors related to employee retention and motivation in the workplace.

Design/methodology/approach

The authors developed a survey instrument and collected the survey data via Amazon Mechanical Turk. After filtering out bad responses, the authors ended up with 489 sample cases for this study. The authors used structural equation modeling for data analysis.

Evidence showed that only transformational leadership was significantly related to retention of Generation X employees and only work–life balance had a significant relationship with intrinsic motivation. For Generation Y employees, transformational leadership was the only factor affecting their retention while both transformational leadership and autonomy showed significant impacts on their intrinsic motivation. Generation Z employees reported that only transformation leadership affected their retention while transformational leadership, corporate social responsibility and autonomy were significantly related to their intrinsic motivation in the workplace. All three generations showed statistical significance between intrinsic motivation and employee retention.

Practical implications

This study could help business practitioners increase employees' work motivation and retention.

Originality/value

First, our results revealed interesting similarities and differences between generations in terms of the factors that affected employees' retention and motivation. Second, this study proved that employees' generation affects the impacts of transformational leadership, CSR, autonomy, WLB and technology on their motivation and retention in the workplace. Third, the results of our study also showed that employees of different generations are intrinsically motivated by different factors, proving the importance of considering generational differences in motivation literature.

• Employee generation
• Generational differences

Lee, C.C. , Lim, H.S. , Seo, D.(J). and Kwak, D.-H.A. (2022), "Examining employee retention and motivation: the moderating effect of employee generation", Evidence-based HRM , Vol. 10 No. 4, pp. 385-402. https://doi.org/10.1108/EBHRM-05-2021-0101

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

1. Introduction

For the past several decades, employee retention has been an important topic to both scholars and practitioners because employees, the most valuable assets of an organization, are the ones who add to its value, quantitatively and qualitatively ( Anitha, 2016 ). Therefore, employers have taken steps to ensure that employees stay with the organization for as long as possible ( Alferaih et al. , 2018 ). Doing so is challenging because the workforce is becoming more confident and demanding due to changes in markets and demographics ( Anitha, 2016 ). A disengaged workforce leads to higher turnover rates that increase the costs of recruiting and selecting new employees ( Malinen et al. , 2013 ).

The objective of this study is to examine the moderating effects of employee generations on factors related to employee retention and motivation in the workplace. In doing so, this study makes a significant contribution to literature in several ways. First, although there have been numerous studies on factors that affect employees' retention such as a manger's leadership style (e.g. Khan and Wajidi, 2019 ), a firm's commitment to corporate social responsibility (e.g.  Valentine and Godkin, 2017 ), autonomy (e.g. Kim and Stoner, 2008 ), work–life balance (e.g.  Koubova and Buchko, 2013 ) and technology (e.g. Haar and White, 2013 ), there are no studies that have examined the effect of these five factors on employee retention and the underlying mechanism of these relationships. Second, few studies have examined effects of these five factors on different generations of employees – Gen X, Gen Y (also known as the Millennials) and Gen Z. Studies have focused on certain generations such as Gen Y (e.g. García et al. , 2019 ) or Gen X (e.g. Westerman and Yamamura, 2007 ), but no studies have been conducted to understand the different effects of the five factors on employee retention spanning three different generations. According to the US Bureau of Labor Statistics (2021) , while 40% of the 2020 American workforce comprises Gen X and 44% of Gen Y, Gen Z represented 15% of the American workforce. This indicates that Gen Z has also become an important generation to consider when examining generational differences of employee retention. Finally, no studies have reported the effects of these variables on retaining employees from these various generations during the pandemic. Retaining employees is a challenge at the best of times, but it has become even more challenging during the pandemic. A recent survey of working age people in various industries found that about 40% of respondents expressed strong intention to quit their current job in the next three to six months ( De Smet et al. , 2021 ).

2. Literature review and hypotheses

2.1 employee generations.

Based on the generational theory originated from the work of Mannheim (1970) , generations refer to groups of individuals (i.e. cohorts) born in the same period, sharing similar historical events and social experiences. This means that a cohort of individuals who shared common historical and social experiences are more likely to share similar characteristics, attitudes and behaviors ( Strauss and Howe, 1991 ). Given that the main objective of this study is to examine generational differences in effects of leadership styles, corporate social responsibility, autonomy, work–life balance and technology on intrinsic motivation and employee retention, we will use the generational theory as our theoretical framework to develop hypotheses in the next sections.

2.2 Effects of leadership across generations

Transformational leadership is defined as transforming the values and priorities of followers and motivating them to perform beyond their expectations ( Kark et al. , 2003 ). Concurrently, Wilkesmann and Schmid (2014) reported that one characteristic of strong leaders is the ability to motivate and influence people. Motivation was also found to be a complex act that had several factors involved. Employees, who were proactive both at work and in their personal lives, were positively affected by both their employer's leadership style and ability to foster a team and showed stronger motivation ( Felfe and Schyns, 2014 ; Khan and Wajidi, 2019 ). Gerhold and Whiting (2020) explored the motivations of employees over several generations, from Boomers to Gen Z, and the leadership skills that inspired them. They found no significant differences among generations. Rather the differences were driven more by an employee's stage of life and career than age. They reported that leadership fundamentals were a constant. These fundamentals, building strong teams, providing feedback and understanding employees' motivations, were multi-generationally relevant skills. In addition, Diskiene et al. (2019) found that the relationship between a leader's emotional and social intelligence and an employee's motivation to work was undeniable, although there was some variance depending on the latter's age. Interestingly, younger workers relied less on their leader's emotional stability to motivate them than older, more experienced workers.

The generation of employees will moderate the effect of leadership on their intrinsic motivation in the workplace, such that transformational leadership is more positively related to the workplace motivation of younger generation employees.

The generation of employees will moderate the effect of leadership on employees' retention in the workplace, such that transformational leadership is more positively related to the workplace retention of younger generation employees.

2.3 Effects of corporate social responsibility across generations

The generation of employees will moderate the effect of CSR on employees' intrinsic motivation in the workplace, such that greater CSR is more positively related to the workplace motivation of younger generation employees.

The generation of employees will moderate the effect of CSR on employees' retention in the workplace, such that a CSR policy is more positively related to the retention of younger generation employees.

2.4 Effects of autonomy across generations

The generation of employees will moderate the effect of autonomy on employees' motivation in the workplace, such that greater autonomy in one's job role is more positively related to the workplace motivation of younger generation employees.

The generation of employees will moderate the effect of autonomy on employees' retention in the workplace, such that greater autonomy is more positively related to the retention of younger generation employees.

2.5 Effects of work–life balance across generations

The generation of employees will moderate the effect of WLB on employees' motivation in the workplace, such that greater WLB is more positively related to the workplace motivation of a younger generation of employees.

The generation of employees will moderate the effect of WLB on employees' retention in the workplace, such that greater WLB is positively related to the retention of a younger generation of employees.

2.6 Effects of technology across generations

The generation of employees will moderate the effect of technology on employees' motivation in the workplace, such that more technology is more positively related to the workplace motivation of younger generation employees.

Companies competent with IT knowledge, objects and entrepreneurship had better chances of attracting loyal prospects and retaining their employees, especially those of Gen Z ( Haar and White, 2013 ). In addition to attracting employees, digital communication created two-way channels of dialogue and helped employees understand how their roles were helping the company. This increases possible retention rates ( Kick et al. , 2015 ).

The generation of employees will moderate the effect of technology on employees' retention in the workplace, such that more technology is more positively related to the retention of younger generation employees.

2.7 Motivation and retention

Employees' intrinsic motivation is positively related to their retention in all generations.

3.1 Sample data and questionnaire

The definition of generations in terms of the birth year varies across studies. As a compromise, we used the middle value. Thus, for the purpose of this study, three generations (Gen X, Y and Z) are defined based on the age as of August 2020. Specifically, Gen X is between 40 and 55 years old; Gen Y is between 25 and 39 years old; and Gen Z is between 18 and 24 years old. We created a survey questionnaire with the items that measured our variables and posted it on Google Forms. To take the survey, we required members of Amazon's Mechanical Turk to be employed and ages 18–55 years old. The survey was first run for a week in the third week of April 2020 and received 570 responses. We deleted 9 responses due to repeat responses and 24 due to multiple missing values, which reduced the total number of valid responses to 537. Furthermore, 48 responses were deleted due to poor response quality. Poor responses were identified using items that were reverse coded. After removing the poor responses, we were left with 489 useable and valid sample cases for this research. Regarding the sample size per each generation group, Gen Z is 120 (24%), Gen Y is 278 (56%) and Gen X is 91 (18%).

3.2 Measures

Our participants indicated their responses to all items on a 7-point Likert-type scales, ranging from 1 (strongly disagree) to 7 (strongly agree). Note that Cronbach's alpha for all variables exceeded the 0.70 cutoff value ( Greco et al. , 2018 ), indicating that all of the variables were reliable and could be used in the analysis. Examples of each item for each category are in Table 1 .

3.2.1 Retention

We used three items from Armstrong-Stassen and Schlosser (2008) to measure the employees' intention to remain with their company.

3.2.2 Transformational leadership

We used the Vera and Crossan (2004) 12-item scale to assess transformational leadership, consisting of four dimensions – charismatic leadership, inspirational motivation, intellectual stimulation and individual consideration.

3.2.3 Corporate social responsibility

We chose items from Woo (2013) to measure, which assessed five dimensions of CSR: environment, human rights and labor issues, product responsibility, society and economics. We excluded the product responsibility category because of low factor loading problems.

3.2.4 Autonomy

We used three items from Hackman and Oldham (1976) to assess autonomy.

3.2.5 Work–life balance

To measure this variable, we used five items from Brett and Stroh (2003) .

3.2.6 Technology

To measure this variable, we picked three items from Nambisan et al. (1999) .

3.2.7 Intrinsic motivation

We used items from Grant (2008) to measure intrinsic motivation.

3.3 Analytical models

In this study, we created three analytical models to test our hypotheses that examine the generational differences in the relationships between five independent variables and three dependent variables. The first model was the intrinsic motivation model in which intrinsic motivation was the dependent variable and transformational leadership, CSR, autonomy, WLB and technology were the independent variables. Y 1 = β 0 + β 1 X 1 + β 2 X 2 + β 3 X 3 + β 4 X 4 ( w h e r e   Y = I n t r i n s i c   M o t i v a t i o n ;   X 1 = T r a n s f o r m a t i o n a l   L e a d e r s h i p ;   X 2 = C o r p o r a t e   S o c i a l   R e s p o n s i b i l i t y ;   X 3 = A u t o n o m y ,   X 4 = W o r k - L i f e   B a l a n c e ;   X 5 = T e c h n o l o g y )

The second model was the retention model in which retention was the dependent variable and the five independent variables were the same as the first model. Y 2 = β 0 + β 1 X 1 + β 2 X 2 + β 3 X 3 + β 4 X 4 ( w h e r e   Y 2 = R e t e n t i o n ;   s a m e   f o r   X 1   t o   4 )

The third model examined whether intrinsic motivation affects retention. Retention was the dependent variable and intrinsic motivation was an independent variable. Y 2 = β 0 + β 1 Y 1 ( w h e r e   Y 2 = R e t e n t i o n ;   Y 1 = I n t r i n s i c   M o t i v a t i o n )

Figure 1 describes our analytical models with the results. When conducting three analytical models, we used a subsample analysis instead of a two-way interaction design to examine generational differences in the relationships as we hypothesized. This method allows us to compare the impact of each independent variable on dependent variables among different generations of employees. This approach is preferable because it reduces the possibility that noise will be introduced into the model ( Stone-Romero and Anderson, 1994 ).

4.1 Descriptive statistics and correlations

Table 2 summarizes descriptive statistics for the variables used in our study.

4.2 Measurement model

To evaluate the fit of our measurement model, we conducted a series of confirmatory factor analyses (CFA). We used several fit indices such as chi-square ( χ 2 ) values, the Comparative Fit Index (CFI), the Root Mean Square Error of Approximation (RMSEA) and the Standardized Root Mean Square Residual (SRMR). As shown in Table 3 , the results of CFA suggest an excellent fit ( χ 2  = 757.41, p  < 0.01; CFI = 0.95, RMSEA = 0.06, SRMR = 0.07) for our hypothesized seven-factor model ( Hooper et al. , 2008 ). In addition to our focal seven-factor model, we further assessed the fit of alternative models. The results proved that the hypothesized seven-factor model fits the data significantly better than the other possibilities.

Several statistical indictors were used to assess the reliability and the convergent and discriminant validity of our constructs. As shown in Table 4 , composite reliability (CR) estimated our constructs to be from 0.885 to 0.946, which were all above the threshold value of 0.7 ( Fornell and Larcker, 1981 ). Therefore, internal consistency was validated. Convergent validity of the constructs was also acceptable. All estimated factor loadings were significant at p  < 0.001, and all estimates are above 0.6 and most estimates are above 0.7. Furthermore, average variance extracted (AVE) for all constructs are above 0.5, the acceptable threshold level ( Fornell and Larcker, 1981 ). Given that the AVE for each construct was greater than the squared correlations between two constructs ( Fornell and Larcker, 1981 ), discriminant validity of the constructs was achieved. Hence, these results provided support for using the seven constructs as reliable and distinctive variables in our analysis.

4.3 Test for the potential common method bias

Given the nature of our data using a single source of information, we tried to control for common method bias with both procedural and statistical remedies. In terms of procedural remedies, we ensured respondent anonymity, provided a guidance with detailed instruction, added reversed items and minimized the length of the survey following guidelines provided by Podsakoff and Organ (1986) . In terms of statistical remedies, we conducted Harman's single-factor test to examine potential common method bias ( Harman, 1967 ; Podskoff and Organ, 1986 ). Our results of the Harman's single-factor test indicated that the single factor accounted for 43.37% of the total variance, not exceeding 50% ( Podsakoff and Organ, 1986 ). Thus, common method bias does not appear to be an issue in this study.

4.4 Testing hypotheses using structural equation model

The results of the testing using structural equation modeling showed that the hypothesized model yielded an excellent fit ( χ 2  = 2,194.49). In order to further assess the validity of the hypothesized model, we tested a more parsimonious model that removed the direct paths from the independent variables to retention. This would be an alternative model. According to the principle of model parsimony, an alternative model would fit the data better if the χ 2 value of the hypothesized model did not drop significantly. If the χ 2 value of the hypothesized model dropped significantly, however, the hypothesized model would fit the data better. Although the alternative model also yielded an excellent fit ( χ 2  = 2,316.78), our hypothesized model provided a significantly better model fit compared to the alternative model (Δ χ 2  = 122.29). Table 5 presents a summary of the fit indices for the hypothesized and alternative models.

Consistent with H1a , the effects of transformational leadership on the employees' intrinsic motivation were different among the generations. They were significant for Gen Y ( β  = 0.50, p  < 0.01) and Gen Z ( β  = 0.37, p  < 0.01), but not for Gen X ( β  = 0.18, n.s. ), supporting H1a . Although transformational leadership had a significant effect on all employees' retention ( β  = 0.30, p  < 0.01 for Gen X; β  = 0.33, p  < 0.01 for Gen Y; β  = 0.29, p  < 0.01 for Gen Z), the effects were not different across generation groups. Therefore, H1b was not supported.

Consistent with H2a , CSR was positively and significantly related to employees' intrinsic motivation for Gen Z ( β  = 0.23, p  < 0.05), but not for Gen X ( β  = 0.03, n.s. ) or Gen Y ( β  = −0.02, n.s. ). However, the effects of CSR on employees' retention were not significant in any of the generation groups ( β  = 0.03, n.s. for Gen X; β  = 0.03, n.s. for Gen Y; β  = 0.02, n.s. for Gen Z), failing to support H2b .

Supporting H3a , autonomy was positively and significantly related to employees' intrinsic motivation for Gen Y ( β  = 0.28, p  < 0.01) and for Gen Z ( β  = 0.24, p  < 0.05), but not for Gen X ( β  = 0.18, n.s. ). H3b was not supported because autonomy did not have a significant impact on employees' retention in any of the generation groups ( β  = 0.01, n.s. for Gen X; β  = 0.01, n.s. for Gen Y; β  = 0.01, n.s. for Gen Z).

Hypotheses 4a proposed that the effect of WLB on employees' intrinsic motivation would be more significant to younger generations while Hypothesis 4b proposed that the effect of WLB on employees' retention would be more significant to younger generations. The results revealed that WLB was positively and significantly related to employees' intrinsic motivation for Gen X ( β  = 0.42, p  < 0.01), but not for Gen Y ( β  = 0.04, n.s. ) and Gen Z ( β  = 0.05, n.s. ). However, WLB did not have a significant effect on employees' retention in any of the generation groups ( β  = 0.01, n.s. for Gen X; β  = 0.04, n.s. for Gen Y; β  = 0.02, n.s. for Gen Z). H4a was not supported because the effect of WLB on intrinsic motivation was not significant among younger generations, Gen Y and Gen Z. In addition, H4b was not supported because no significant difference was found among the three generations.

Hypotheses 5a and 5b proposed that the effect of technology on employees' intrinsic motivation ( H5a ) and their retention ( H5b ) would differ by generation. However, technology had no significant effect on employees' intrinsic motivation in any generation groups ( β  = 0.08, n.s. for Gen X; β  = 0.07, n.s. for Gen Y; β  = 0.05, n.s. for Gen Z). Furthermore, technology had no significant effect on employees' retention in any generation groups ( β  = 0.03, n.s. for Gen X; β  = 0.05, n.s. for Gen Y; β  = 0.04, n.s. for Gen Z). Based on these findings, neither H5a nor H5b was supported.

Hypothesis 6 proposed that employees' intrinsic motivation would be positively related to their retention in all generations. Our findings supported this contention ( β  = 0.54, p  < 0.01 for Gen X; β  = 0.48, p  < 0.01 for Gen Y; β  = 0.49, p  < 0.01 for Gen Z).

5. Discussion

5.1 theoretical contributions.

The results of this study provided several theoretical contributions to management literature. First, our results revealed interesting similarities and differences between generations in terms of the factors that affected employees' retention and motivation. For Gen X employees, transformational leadership was significantly related to retention and only WLB had a significant relationship with their intrinsic motivation. For Gen Y employees, transformational leadership was also the only factor affecting their retention, while both transformational leadership and autonomy had a significant impact on their intrinsic motivation. Finally, for Gen Z employees, only transformation leadership also mattered for their retention while transformational leadership, corporate social responsibility and autonomy were significantly related to their intrinsic motivation. For all three generations, there was a statistically significant relationship between intrinsic motivation and employee retention.

Second, this study proved that employees' generation affects the impacts of transformational leadership, CSR, autonomy, WLB and technology on their motivation and retention in the workplace. As motivating and retaining employees becomes more challenging and workforces become more diverse in terms of generation, understanding generational differences in employee motivation and retention becomes a very important topic to explore. Only a few studies looked at generational differences in either employee motivation ( Andrade and Westover, 2018 ) or employee's retention ( Roman-Calderon et al. , 2019 ) and no studies have examined the different effects of transformational leadership, CSR, autonomy, WLB and technology on employee motivation and retention spanning three different generations.

Third, the results of our study also showed that employees of different generations are intrinsically motivated by different factors, proving the importance of considering generational differences in motivation literature. However, our results did not provide empirical support for generational differences in retaining employees. Interestingly, only transformational leadership significantly affected employees of all generations. This finding would emphasize the critical role of leadership in retaining employees regardless of their generation.

5.2 Practical implications

The retention of an employee, especially younger generation employees, is pivotal in ensuring that organizations will be able to maintain sustained competitive advantages during the period of the pandemic since many companies have been experiencing serious younger generation employee retention issue. For instance, major retail companies, such as Target and Walmart, have been confronted with challenging managerial decisions because of the workforce shortage and have been forced to decrease their operation hours. To resolve this challenge, many companies have tried to increase the retention rate of their employees, especially those of the younger generation, by offering competitive financial and non-financial packages such as signing bonuses, healthcare benefits and/or opportunities for a college education. Despite all these endeavors, many companies have still been experiencing serious employee retention problems, which they have never experienced before. The findings of this study could be highly useful for organizations that are experiencing serious employee retention issues, many of whom are younger generation employees who are quitting their jobs during the pandemic.

First, these findings suggest reasons why so many organizations have had a challenging time managing low employee retention rates by showing that the impact of major factors (transformational leadership, CSR, autonomy, WLB and technology) on employee retention could vary depending on an employee's generation. For instance, our study's findings show that organizations actively implementing CSR policies may positively affect the retention of younger generation employees relative to older generations by intrinsically motivating younger generation employees more. Therefore, organizations should consider generational differences in employee motivation and retention when implementing employee retention strategies since an effective strategy for one employee generation may not be effective (or even harmful) for another employee generation.

Second, these results illustrate that employee retention is not a simple function, but rather a result of interactions between employee motivation and the specific generation. For instance, for Gen X, even though job autonomy does not directly affect employee retention, job autonomy still plays a crucial role in affecting employee retention by affecting employee motivation. Therefore, organizations should take care of factors affecting employee motivation as well because employee motivation works as a significant pathway to boost employee retention.

5.3 Limitations and future research directions

While the study advances our understanding in these areas, it has several limitations that future studies could explore. First, given that our study was a cross-sectional study with all responses collected from a single period, strong causality arguments cannot be made. Considering that our study collected the sample during the period of pandemic, it would have been a more interesting study if we deployed a longitudinal design because longitudinal data would have allowed us to examine how our independent variables affected employee motivation and retention as employee worked through the pandemic. Future studies should implement longitudinal design by collecting samples at different time points to provide greater insight into the causality argument as well as into the impact of the pandemic. Second, although this study examined the impact of employee motivation on employee retention as a significant pathway, we didn’t test the mediating effect of employee motivation on employee retention. Further studies could be done to investigate the mediating effect of employee motivation on employee retention in the context of different employee generations. Furthermore, regarding employee generation as a moderator, even though we used sub-sample design to examine the moderating impact of an employee's generation on employee motivation and retention, further studies could test the effect of the interaction between our independent variables and employee generation. Third, future studies could extend our study by examining whether our findings could change depending on the industry (e.g. retail, manufacturing) as well as firm characteristics (e.g. size). For instance, stronger impact of CSR on employee motivation in Gen Z may not exist in the financial industry wherein competitive environment and culture dominates.

Research framework

Summary of measure

Means, standard deviations and correlations of the variables

Summary of the reliability and the convergent and discriminant validity of constructs

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Assessment of the Role of Motivation on Employee Retention in Higher Learning Institutions: A Case of the Institute of Accountancy Arusha

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The effect of motivation on employee engagement in public sectors: in the case of North Wollo zone

• Abriham Ebabu Engidaw   ORCID: orcid.org/0000-0002-5081-5668 1  

Journal of Innovation and Entrepreneurship volume  10 , Article number:  43 ( 2021 ) Cite this article

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The purpose of this study was to examine the effect of intrinsic and extrinsic motivation on employee engagement in public sectors. To meet this purpose, a quantitative and qualitative study survey was conducted and the researcher used an explanatory survey research design. The study was used both primary and secondary sources of data. The target population for this study was selected four city administrative office employees including all kebeles office employees and as a sample size, 349 questionnaires were filled and collected from these employees. The study used proportionately stratified with simple random sampling because to collect the relevant data and to give equal chance for all employees. Later on, statistical package for social science (SPSS) was used to the required test of inferential statistics; including reliability analysis, bivariate correlation, analysis of variance (ANOVA) test, and multiple regression analysis. The finding of the study revealed that extrinsic motivation was considered more significant than intrinsic and there was a positive significant relationship between intrinsic and extrinsic motivations with employee engagement. From the results, it was also concluded that the relationship and effect of extrinsic motivation were stronger on employee engagement as compared to intrinsic motivation. As a recommendation, the organizations should find which ways are able to motivate employees, what drives them, then making sure they utilize appropriate motivational techniques with each employee. Managers should also endeavor to communicate the organization’s purpose to employees. Finally, the organizations should take steps to incorporate the vision of employees for the organization with its own vision.

Introduction

An unmotivated employee is likely to put little effort into work tasks, produce work of lower quality, avoid the workplace, and even exit his or her job if given the opportunity to do so. On the other hand, motivated employees are likely to willingly take on tasks, produce work of high quality, and be creative, persistent, and productive. Employees motivation has two forms, intrinsic and extrinsic. Intrinsic motivation arises from the intrinsic value of the work for the individual (for example, its interest value), whereas, extrinsic motivation arises from the desire to obtain some outcomes (for example, as rewards) that are apart from the work itself (Amabile, 1993 ). Each and every person in an organization is motivated in a different manner. Workers’ motivation depends on many intrinsic and extrinsic factors like interesting work, job appreciation, satisfaction, stress, job security, promotion and growth, rewards, work environment, punishment and recognition etcetera (Palaniammal, 2013 ).

The main purpose of these motivating factors is to create an environment where people are willing to work with zeal, initiative, interest, and enthusiasm, with a high personal and group satisfaction, with the sense of responsibility, loyalty, and confidence to achieve their personal as well as organizational goals (Palaniammal, 2013 ). Research has shown that there is a difference in strength between intrinsic and extrinsic motivation on their relationship and impact on employee engagement. Khan ( 2011 ) concluded that the relationship and impact of extrinsic motivation were stronger on employee engagement as compared to intrinsic motivation.

According to Shuck ( 2010 ) employee engagement is an individual employee’s cognitive, emotional, and behavioral state directed toward desired organizational outcomes. Recently, Rice ( 2012 ) defined engagement as full employee engagement represents an alignment of maximum satisfaction for the individual with a maximum contribution for the organization’s success. The focus of all definitions was on two things, employee satisfaction and contribution to organizational success.

According to different researchers’ study results, employee motivation can be used to engage employees in their work in the organization. Beyond motivation, to achieve success in today’s highly competitive environment many organizations have identified the need to engage their workforce. Habte ( 2016 ) concluded that managers perceive intrinsic motivation have a larger influence on the psychological aspects of employee engagement than extrinsic motivation. This supports the idea stated by Berl and Williamson ( 1987 ) but still contradict with the finding of Iqbal and Khan. When we see the above research findings: the study conducted by Khan ( 2013 ) is contradicted with the findings of Habte ( 2016 ), Thomas ( 2009 ) and Khan ( 2011 ).

This study was carried out in four selected city administration office employees in order to know and explain the effect of motivation on employee engagement. Basically, the researcher is initiated to conduct this study because based on his observation and preliminary investigation there is a problem of employees being motivated and engaged in public sectors and the other reasons are first there is the inconsistency of previous findings relating to this topic, second as the researcher’s knowledge there are few studies conducted directly related to this topic specifically in our country Ethiopia. So this study can try to fill these gaps. Based on the above research problems the researcher developed the following research questions:

Objectives of the study

General objective.

The main objective of this study was to identify the effect of motivation (intrinsic or extrinsic) on employee engagement in public sectors in the case of selected zones.

Specific objectives

To explain the effect of intrinsic motivation on employee engagement in selected city administration employees.

To describe the effect of extrinsic motivation on employee engagement in selected city administration office employees.

To identify which motivation factor (intrinsic or extrinsic) more significantly affects employee engagement in the organization.

To examine the effect of overall motivation on employee engagement.

Literature reviews

• Employee engagement

Employee engagement is defined as “harnessing of organizational members selves to their work roles; in engagement, people employ and express themselves physically, cognitively and emotionally during role performance”, In other words, “individual involvement and satisfaction as well as enthusiasm for work” Andrew ( 2012 ).

According to Kahn ( 1990 , 1992 , cited in Saks, 2006 ) job engagement means worker should be psychologically available during the performance of the organizational role.

The organization is totally dependent on their employees; therefore, they need to be engaged in their jobs. Engagement in the organization’s jobs enables employees to make operations successful, as it runs with the mutual commitment of organizations and employees. When organization employees will engage, they will use their potential to drive high performance (provide better services and attract maximum customers). Engage employees are more dedicated and helping to maximize the organization’s productivity. They are more likely to consider themselves as an employer. Therefore, organizations should pay attention to the employee engagement concept. Otherwise, it can be the biggest threat to the organization’s success. If the organization’s management is not interested in engaging employees, consequently it would lead to unsatisfactory beneficiaries and lose their customers (Andrew & Sofian, 2012 ).

From the theories and literature discussed above the researcher identified two broad motivation factors called intrinsic and extrinsic motivation and these motivation factors are also identified as an independent variable because they have an effect on the dependent variable, employee engagement, in one way or another.

• Intrinsic motivation

According to Berl and Williamson ( 1987 ) intrinsic motivation is defined as the doing of an activity for its inherent satisfactions rather than for some benefits. Intrinsic motivation can be defined as the motivation to perform an activity in order to experience the pleasure and satisfaction inherent in the activity. They also further stated intrinsic motivation focuses on factors inside the individual which are based on personal needs. Employees get intrinsic reward directly from the job they perform, job satisfaction, interesting work, job appreciation, or the sense they help a client, Intrinsic motivated workers employ in a job because of their own interest in it and enjoy the job due to search for new solutions for business challenges and are more likely to burn up energy to identify problems and find innovative solutions.

From the Khan ( 2013 ) findings, they concluded that managers perceive intrinsic motivation as generally having a larger influence on the psychological aspects of employee engagement. They found that extrinsic motivation is of importance to employee engagement, though to a lesser extent psychologically but rather as a part of the total package that is offered to the employee by the organization and the manager. Habte ( 2016 ) concluded that managers perceive intrinsic motivation have a larger influence on the psychological aspects of employee engagement than extrinsic motivation. This conclusion leads to the next research hypothesis development on this research:

Hypothesis 1

Intrinsic motivation has a positive significant effect on employee engagement.

• Extrinsic motivation

Extrinsic motivation is defined as a construct that pertains whenever an activity is done in order to attain some separable outcome and refers to doing an activity simply for the enjoyment of the activity itself, rather than its instrumental value (Deci & Ryan, 2008 ). Or it can be the rewards offered to employees as an encouragement to engage in a behavior/task in which they cannot employ or “an employee is inner-directed, is interested or fascinated with a task and engages in it for the sake of task itself” (Zhang, 2010 ). When organizations wanted to fulfill a task from employees, they deal with monetary rewards and other tangible benefits. It referred to extrinsic rewards in motivational language. Management should know what motivates their workers and manipulate motivational techniques based on employees ’s desires. This would help organizations to recognize, educate and retain creative and productive employees for their engagement. For organizations to be better products and to have efficient performance, both extrinsic and intrinsic reward systems should be introduced. The purpose of explaining motivation (extrinsic, intrinsic) is to identify which motivation affects and has a relation with job engagement. Employees consider both important factors for their job motivation but some employees consider it more in line with extrinsic than intrinsic and vice versa (Zhang, 2010 ).

The study of Khan ( 2013 ) also concluded that the relationship and impact of extrinsic motivation were stronger on employee engagement as compared to intrinsic motivation. Thomas ( 2009 ) saying about intrinsic motivation at work stated that intrinsic rewards become more important and more prevalent in the workplace today. The above review leads to the following research hypothesis:

Hypothesis 2

There is a positive significant effect relationship between extrinsic motivation and employee engagement.

Overall motivation and employee engagement

Khan ( 2013 ) conducted research on the relationship between work motivation (intrinsic and extrinsic) and employee engagement on Allied Bank of Pakistan. The finding of the study revealed that there is a positive relationship between intrinsic motivation and employee engagement, and extrinsic motivation and employee engagement. Four intrinsic factors namely interesting work, job appreciation, satisfaction, and stress, and four extrinsic factors namely job security, good wages, promotion and growth, and recognition were identified as important factors for engagement. The study concluded that there is a positive relationship between intrinsic motivation and employee engagement, and extrinsic motivation and employee engagement. Furthermore, it is also concluded both intrinsic and extrinsic motivation has a strong positive impact on employee engagement.

Aworemi ( 2011 ) conducted research on the motivational factors of employees and their influence on employee engagement Nigeria and Marginson ( 1991 ) conducted research on academic salaries: will award restructuring make a difference in employees’ engagement? And many researchers raised many issues and get different findings of motivational factors for employee engagement. By considering these reviews the researcher developed the next hypothesis:

Hypothesis 3

There is a positive significant effect relationship between overall motivation and employee engagement.

Empirical literature review

Khan and Iqbal ( 2013 ) study concluded that there is positive relationship between intrinsic motivation and employee engagement, and extrinsic motivation and employee engagement. Furthermore, it is also concluded both intrinsic and extrinsic motivation has strong positive impact on employee engagement. The study also concluded that the relationship and impact of extrinsic motivation was stronger on employee engagement as compared to intrinsic motivation.

Bergstrom and García ( 2016 ) studied the influence of intrinsic and extrinsic motivation on employee engagement in private and public organizations. However the study focused on the perceptions of managers “not employees”. From the findings study they concluded that managers perceive intrinsic motivation as generally having a larger influence on the psychological aspects of employee engagement. They found that extrinsic motivation is of importance to employee engagement, though to a lesser extent psychologically but rather as a part of the total package that is offered to the employee by the organization and the manager. Thomas ( 2009 ) saying about intrinsic motivation at work, stated that intrinsic rewards become more important and more prevalent in the workplace today.

Habte ( 2016 ) concluded that managers perceive intrinsic motivation have a larger influence on the psychological aspects of employee engagement than extrinsic motivation. This supports the idea stated by Bergstrom and García ( 2016 ) but still contradict with the finding of Iqbal and Khan.

Michael ( 2008 ) conducted study on using motivational strategy as solution for employee retention and turnover in both public and private sector organizations in South Africa and the researchers used training and development, recognition, reward, a competitive salary package and job security as motivational factors. Kassa ( 2015 ) in his research on motivation and its effect on employee retention in Ambo Mineral Water Factory, stated that employees are highly motivated with reward motivational factors and are less motivated with interesting work and training and development and working environment motivational factors.

Owusu ( 2012 ) conducted research on the effects of motivation on employee performance of commercial bank in Ghana and the researcher used salary, fringed benefits, promotion, and loans as motivational factors. Pessaran and Tavakoli ( 2011 ) conducted research on identifying the employees’ motivation of Parsian hotels in Tehran and the study used salary, security, working condition, status, achievement, recognition, growth and advancement, work itself and responsibility as motivational factors.

Conceptual framework

After reviewing the relevant concepts and theories of motivation (intrinsic, extrinsic) and employee engagement mentioned in this chapter, the conceptual framework of the study has been developed as shown in the following figure (Fig. 1 ).

Research methodology

To achieve this study’s purpose, the researcher has used an explanatory survey research design, and also quantitative and qualitative study survey was employed. Standard close-ended questionnaires were used as a survey tool. The study was used both primary and secondary sources of data. The target population for this research was four city administrative office employees including all kebeles office employees and 349 questionnaires were collected from employees. The study used proportionate stratified with simple random sampling because to collect the relevant data and to give equal chance for all employees.

Since the organization under the study has four city administrations in different area. The sample was drawn from all city administrative offices proportionally as follows (Table 1 ).

After the proper data collection, coding, and organization, the study data were analyzed using descriptive and inferential statistics. Under the descriptive statistics, mean and standard deviation are used and bivariate correlation was used to see whether the independent variables (intrinsic motivation and extrinsic motivation) have a relationship with the dependent variable (employee engagement). To determine the effect of independent variables (intrinsic motivation and extrinsic motivation) on the dependent variable (employee engagement) multiple linear regression analyses were used.

Measurements of variables

The independent variables for this study are intrinsic motivation and extrinsic motivation whereas the dependent variable was employee engagement. The researcher used standardized close-ended and some open-ended questionnaire instruments for collecting the primary sources of data. Questionnaires concerning employee engagement used are adapted from Gallup’s 12 standard questionnaires on the other hand questionnaires regarding intrinsic and extrinsic motivation is adopted from Khan ( 2013 ) Five-point Likert-Style rating scale was deployed in order to know the employees level of agreement on the effect of motivation (intrinsic and extrinsic) and employee engagement. The questionnaire has three parts; the first part is about demographic variables, the second part was about intrinsic and extrinsic motivation, and the last part also about employee engagement. Intrinsic and extrinsic motivation have 8 items each and employee engagement had 12 items and both are used five-point Likert scale ranging from strongly disagree (1) to strongly agree (5).

The study was aimed at analyzing the effect of motivation on employee engagement at selected city administration offices. The dependent variable employee engagement and independent variables extrinsic and intrinsic motivation mean score was comparatively moderate. This points out that the greater part of respondents has a minor agreement on all measures. And also it shows that there was not a problem of multi co linearity, normality, and linearity in the study variables.

Based on the Table 2 result, the Pearson product-moment correlation analysis result showed that there is a moderate positive and significant relationship between intrinsic motivation and employee engagement at .329 and sig .000. This implied if the intrinsic motivation for the employees is increased it will also increase their engagement level. Lower employee intrinsic motivation will also lower their engagement level. The results of bivariate correlation confirmed that there is a moderate positive significant relationship between extrinsic motivation and employee engagement at .444 and sig level of .000. This implied if the extrinsic motivation for the employees is increased it will make significant positive changes in employee engagement. By lowering employee extrinsic motivation, employee engagement will also be lower. The study result showed that there was a moderate positive relationship between overall motivation and employee engagement. Also, extrinsic motivation had a more moderate positive relation with employee engagement as compared to intrinsic motivation.

Table 3 multiple regression analysis results portray that R square is .252 and adjusted R square is .248. This implied that 24.8% variation in employee engagement is explained by motivation in selected city administrations. In addition, the significance value of F statistics indicates a value .000 and it was less than p  < .05 so that it means the model was significant enough.

Also based on Table 4 result, multiple linear regression analysis results also confirmed that intrinsic motivation has a positive significant effect on employee engagement with the unstandardized Beta value of (.249, sig. level .000). As a result, the regression coefficient clarifies the average amount of change in employee engagement was affected by a unit of change in intrinsic motivation.

Regression analysis results also confirmed that extrinsic motivation had also a moderate positive significant effect on employee engagement. Since the beta value is .389 with a significance level of .000. Also, the result of extrinsic motivation showed it had a more moderate positive significant effect on employee engagement as compared to intrinsic motivation.

Furthermore, regression analysis was used to find out the effect of motivation on employee engagement. The result of the model summary from regression analysis indicated that overall motivation has a moderately positive effect on employee engagement. As a result, the regression coefficient clarifies the average amount of change in employee engagement was affected by a unit of change in motivation. The finding of the study indicated that intrinsic motivation has a highly significant effect on employee engagement compared to extrinsic motivation.

Based on open-ended questions feedback in the mentioned offices promotion and other related benefits are based on the strength of relationship with administers, there is a high shortage of working materials, there is no clear authority and responsibility delegation, no attractive work environment, no clear plan is prepared, fairness problem, high workload with unsatisfactory incentive and salary, there is the unnecessary intervention of managers at work, even superiors are not punctual and their incompetency/low problem-solving ability, some employees are hired on the unrelated job with their profession. Additionally, payments are not delivered on time, availability of hostile attitude, no motivational packages are available in those offices, customers’ poor discipline and others are things leading to be demotivated at their work and other related problems are available on those offices.

Comparison of the result of this study with the result of previous researches

As mentioned in the literature reviewed, the study of Christian et al. ( 2011 ) and Chalofsky and Krishna ( 2009 ) suggested that there was link between work engagement and motivational factors. Kahn ( 1990 ) and May et al. ( 2004 ) also relate employee engagement to motivation. Fairlie ( 2011 ) and Macey and Schneider ( 2008 ) pointed out that an investigation is required to find the link between work motivation and employee engagement. Thomas ( 2009 ) saying about intrinsic motivation at work, stated that intrinsic rewards become more important and more prevalent in the workplace today. Habte ( 2016 ) concluded that managers perceive intrinsic motivation have a larger influence on the psychological aspects of employee engagement than extrinsic motivation. Hence the finding of this study also supports these previous findings and also it contradicted with Habte ( 2016 ) finding.

Conclusions of the study

The study also examined the effect of intrinsic and extrinsic motivation on employee engagement. Four hypothesis questions were tested to answer the research question and fulfilled the research purpose. To achieve this objective, a quantitative and qualitative study survey was conducted and the researcher used an explanatory survey research design. A Standard close-ended questionnaire was used as a survey tool. The study was used both primary and secondary sources of data. The target population for this study was selected four city administrative office employees including all kebeles office employees) and as a sample size, 349 questionnaires were filled and collected from these employees. The study used proportionately stratified with simple random sampling because to collect the relevant data and to give equal chance for all employees. Later on, statistical package for social science (SPSS) software was used for the required test of inferential statistics; including reliability analysis, bivariate correlation, analysis of variance (ANOVA) test, and multiple regression analysis. From the findings of the research, it is concluded by answering the research questions and there is a significant positive relationship between intrinsic motivation at .329 and sig .000 and employee engagement and there is a positive significant relationship between extrinsic motivation and employee engagement at .444 and sig level of .000.

Findings of multiple regressions analysis portray that that intrinsic motivation has a positive significant effect on employee engagement with the unstandardized Beta value of (.249, sig. level .000). As a result, the regression coefficient clarifies the average amount of change in employee engagement was affected by a unit of change in intrinsic motivation. So that the decision rule in this research’s first hypothesis is to accept the alternative hypothesis.

Intrinsic motivation has a positive and statically significant effect on employee engagement at (Beta value of .249, sig. level .000). So the decision is to accept the alternative hypothesis and reject null hypothesis.

And also the regression analysis results confirmed that extrinsic motivation had also a moderate positive significant effect on employee engagement. Since the beta value is .331 with a significance level of .000. Also, the result of extrinsic motivation showed it had a more moderate positive significant effect on employee engagement as compared to intrinsic motivation. Based on the above study result the decision is to accept the alternative hypothesis and reject the null hypothesis of hypothesis two.

There is a positive significant effect relationship between extrinsic motivation and employee engagement at the beta value of .331 with a significance level of .000. So the decision is to accept the alternative hypothesis and to reject the null hypothesis.

When we test hypothesis three, the study revealed that there exists a positive significant relationship between both intrinsic and extrinsic motivation and employee engagement. There was also sufficient evidence to conclude that in addition to these relationships successful motivational factors (intrinsic and extrinsic) had positive effects on employee engagement in selected city administration office employees. Hence, for the management to stimulate employees' motivation and also to improve the level of staff works engagement, greater efforts must be placed on the two perceived motivating factors. In addition, as the open-ended question result, there is a low motivation with weak employees’ engagement at work in those offices. So the decision is to accept the alternative hypothesis.

There is a positive significant effect relationship between overall motivation and employee engagement. The decision is to accept the alternative hypothesis and to reject the null hypothesis.

Limitation of the study

In this study, the independent variables, intrinsic and extrinsic motivations were explained only 24.8% of the variation in employee engagement, but the other 75.2% were explained by other factors that were not included in this study. So, future studies could examine the rest variables which can explain the variation in employee engagement.

The study was only focused on four city administration office employees. Therefore, future researchers relating to this topic should assess in a wider and larger scope to include other private organizations and increase the generalizability of the study.

Besides this study, a comparative study could be done to know what the difference is available in different sectors relating to this topic. And another limitation is the research variable taken is subject to the understanding and knowledge of the researcher.

Recommendations

Recommendations for policy and practice.

The study result shows that employees of selected city administrations were motivated by both extrinsic and intrinsic motivations but they were more motivated by intrinsic motivation factors than extrinsic ones. So the management of those offices should give relevant attention to these factors to stimulate the employee’s engagement while developing and or revising strategies and policies for their organization.

The management and policymakers of selected city administrations should use rigorous efforts in encouraging employees intrinsic and intrinsic motivation for better work engagement by creating an attractive work atmosphere and satisfaction, provide appreciation for good performers, moreover the management should also increase employees extrinsic motivation by creating job security, provided promotion and growth, benefits, and good salary, give appropriate reward and recognition for employees, provide opportunities to some form of ownership, as well as increased responsibility and authority.

The organization should find which ways are able to motivate employees, what drives them, then making sure they utilize appropriate motivational techniques with each employee. Managers should also endeavor to communicate the organization's purpose to employees. Finally, the organizations should take steps to incorporate the vision of employees for the organization with his or hers own vision. This will motivate employees to engage and contribute to the organization’s goals.

These offices should give a fair promotion and other related benefits, solve the shortage of working material problems, should set clear authority and responsibility delegation, create an attractive work environment, clear work plan to be prepared, minimize workload and make satisfactory incentive and reward based on their performance, avoid the unnecessary intervention of managers at work, solve unpunctuality problem and could improve managers skill by developmental programs to make them more experienced, some employees are hired on the unrelated job with their profession so review and correct this issue are better. Additionally, payments should to deliver on time, motivational packages should present in those offices, and also to increase employees engagement the office should facilitate short term and long term work-related training, perform periodic performance appraisal, make supervision and control at work, reduce time management problems and unpunctuality, prepare benefit package and equal reward systems, better to make decision makings more participative and open to motivate employees or to create a sense of ownership, should give induction pieces of training when new entrants have joined the office, minimize the availability of corruption and unethical activities, work to keep rule and regulations, try to solve the shortage of office facilities, better to make a fast decision, and other related problems should be solved on those offices.

Generally, selected city administrations should communicate with employees regarding how looks like their motivation and engagement, which things should be fulfilled and the organizations management could assess more factors that are most important to increase employees engagement at work and it should make important corrective actions, it will make employees more engaged, strengthen their relationship with the university as well as it will make employees more motivated and loyal to the organization.

Implications of the study

Theoretical implications.

This study can contribute to the existing literature in employees motivation, their engagement at work and effective human resource management and identifies the ways to satisfy/motivate these employees’ to increase organizational performance. Basically my findings are aligned with those of other scholar’s works relating to this topic and are important to show/provide interesting and recent perhaps promising areas to work on under the recent world.

Practical implications

The actual result of the paper also provide recommendations for public organizations on how to be more competitive through managing their employees, motivating them and also through resilience and renewal different human resource management strategies, and the researcher has also gave relevant recommendations for policymakers and other concerned bodies as shown in above.

Suggestion for future study

The research was conducted from employees’ perspective only by using employees’ engagement. It should be interesting to consider from the perspective of managers by using managers engagement.

The researcher conducted more of quantitative study; deep qualitative study could also be adopted to validate the results of this study. Employees of government organizations and none government organizations may motivate indifferent way, hence it should also be interesting to study from perspective of employees of government organizations.

From the findings of the study it is concluded that the model which included intrinsic motivation (IM) and extrinsic motivation (EM) explained only 25.2% of the variance of employee engagement the rest 74.8% may be due to the other variables which were not included in this study and left for further study.

Availability of data and materials

Not applicable.

Abbreviations

Statistical package for social science

Analysis of variance

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Engidaw, A.E. The effect of motivation on employee engagement in public sectors: in the case of North Wollo zone. J Innov Entrep 10 , 43 (2021). https://doi.org/10.1186/s13731-021-00185-1

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In the today’s competitive environment, employee retention is a challenge faced by many industries. This work aims to identify the factors that influence employee retention. This is done using employees’ feedback and various computational techniques. A survey is conducted within multiple sectors to collect data. The questionnaire is divided into two parts: the first part includes demographic information, whereas the second part contains questions pertaining to employees’ job description and their satisfaction. The questions on the second portion are based on theories like Herzberg’s duality theory, expectancy theory, social cognitive theory, and sociocultural theory. These theories are further linked with factors like motivation, recognition and reward, bullying and work harassment. Later, the frequent items mining technique from the domain of data mining is utilized to identify the frequent factors from an employee perspective toward better retention rates. A test is also conducted to ensure the reliability of the data. The obtained results indicate it to be 87% reliable. A comparison between two frequent items mining methods indicates four times quicker performance of the k Direct Count and Intersect (kDCI) method in identifying key retention aspects from the data. A tool is utilized for analysis of variance (ANOVA) and exploratory factor analysis (EFA) tests to find factors crucial for retaining employees. The result identifies that work environment, reward and recognition, work performance, supervisory support, and income have high impact on employee retention.

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1 Introduction

Human resource is generally the most valuable asset for an organization. Skilled human recourses enable an organization to excel and achieve its objectives efficiently [ 1 , 2 ]. To classify an employee as skillful, her experience acts as a key indicator in addition to other basic credentials [ 3 ]. Organizations prefer to retain their existing skilled employees by offering multiple perks and benefits [ 4 ]. They also try to attract skilled resources using similar measures. At times, such skilled resources are attracted by the competitor organizations. This results in the issue of employee retention [ 5 ]. The issue is dependent on the country’s culture, its economic growth, the number of companies operating in public/private sectors and the availability of skilled human resource [ 6 ]. Interestingly, today`s corporate sector has seen an increased number of employees leaving the previous job to find better opportunities [ 7 ]. Organizations facing this challenge need to adopt new strategies and identify factors to motivate their skilled resources. Human resource (HR) departments maintain an employee retention policy for this task. Such policies are highly dependent on the data from their current staff, organization’s functions, and other previous experiences. Identification of key factors that influence employee retention is an important research undertaking. These factors do depend on the study domain. Previous studies have suggested multiple reasons for an employee to leave an organization. These can be low current pay, competitor offering better career opportunity, organization’s environment, organization’s culture or employees being bullied by the coworkers. On the contrary, an organization can also ask its employees to leave their job due to poor performance, attitude issues or financial crises. All this results in affecting overall health of an organization since new human resource needs to be evaluated, hired, trained, and transferred the domain knowledge. Therefore, skilled employee retention is crucial to many organizations. If an organization fails to retain its current employees, they must invest a considerable amount of money for training new employees again and over again.

Most of the organizations strive to keep their employees satisfied to reduce their turnover rate. Loosing skilled and experienced workers reduces organization's productivity and profitability. Previous studies [ 8 , 9 ] show that to keep “employee happy,” organizations should consider some key factors like knowing the employee well, creating an interactive, innovative, and cultural environment that indirectly keeps reminding your employees to stay loyal to their organization, offering reward, and recognizing best performers. Providing workers with a better leadership also works well in retaining the staff [ 9 ]. Few of the rapidly growing sectors like telecom, information technology and higher education need to know the key factors specific to them that can assist in retaining skilled work force. The work presented here deals with this issue by utilizing computational techniques and the emerging concepts of data mining. The key aim of this study is to find the factors that can increase employee retention in various working sectors. This work uses frequent items mining (FIM) techniques from the domain of data mining to identify factors that commonly exist together to influence employee retention. Finding frequently occurring items in a transactional database is an active research problem. The problem is commonly known as market basket analysis. The applications of finding frequently occurring items range from core computer science problems to a range of multidisciplinary areas of research. The aim of market basket analysis is to find all items in a dataset that occur together above a certain frequency [ 10 ]. Later, these frequently occurring patterns are analyzed to find associations between various factors. This study is based on following research questions.

RQ1: Which factors do the computational techniques identify as crucial for retaining employees and what is the relationship between those factors across multiple sectors in the developing countries?

RQ2: Which demographic and organizational environmental factors influence employee retention across multiple sectors in the developing countries and how these factors rank against each other?

To address the abovementioned questions, this research uses a qualitative approach. The research questions are answered through a questionnaire in this work. A survey was distributed in the major cities of Pakistan such as Karachi, Lahore, Rawalpindi, and Islamabad. The survey questions were built based on the factors such as recognition and reward, advancement and growth, relationship with supervisors, work conditions, income, ethical behavior, organizational satisfaction and commitment, bullying and work harassment. These factors helped to identify the features and their correlation for employee retention. The data analysis was divided into six stages: These include (a) loading raw data from the survey forms to a text file, (b) analysis of data through one-way ANOVA, (c) identification of correlating factors through frequent items mining (FIM), (d) analysis of data through exploratory factor analysis (EFA), (e) analysis of data through Pearson correlation (PC), and (f) analysis of data through regression analysis (RA). The association rule mining technique, which is preceded by the FIM method, is used to analyze and interpret the data. The ARM is a tool that identifies the frequently occurring factors in the responses with other features. The Statistics Package for Social Science Software (SPSS) is also used to analyze the data. One-way ANOVA is used to see a significant difference in data, and the EFA is used to interpret the variables. The Pearson correlation is used to observe the correlation between independent and dependent variables, and regression analysis is used to study the impact of independent variables on the dependent ones. A combinational approach is applied to the data that helps in analyzing the responses.

1.1 Present work aim and motivation

The employee retention is a growing problem in today's modern world, and it needs to be solved using various retention strategies to improve the employees' turnover rate. There is a demand for skilled workers in areas such as hospitals, software industry, universities, banks, and many other emerging sectors. However, unfortunately, the number of qualified employees at times remains low. Organizations are therefore in a need to find ways to reduce their turnover rate. This study aims to determine the factors that can reduce such organizational problems. Specifically, the task here is to determine what factors are used for higher employee retention in various organizations. This study is focused to find the features that influence employee retention and the relationship between independent factors and employee retention. The findings will be useful for many organizations to enhance their retention strategies. This work is motivated by the employees’ perspective rather than the organizational point of view. Therefore, the finds of this work are based on the data collected from various mid- to early-career individuals instead of taking the decisions-makers’ perspective.

The rest of the paper is organized as follows. Section  2 contains a detailed literature review on employee retention and other important factors for the same. Section  3 lists the methodology utilized in this work. Section  4 contains the results obtained. Section  5 lists the policy implications. Finally, Sect.  6 concludes this work and also mentions a few of the further research directions.

2 Related work

This section covers the previous work on employee retention. The section is organized factorwise where the previous work on each factor that can help retain employees is described. The section also contains relevant theories that can help build a conceptual framework for this or other such studies. Previous studies have shown the following factors that influence employee motivation to continue working with the same organization, working environment, organization commitment, reward and recognition, work performance, supervisor support, and income.

2.1 Working environment

The working environment is a factor in an organization where employee tends to show their positive abilities and leadership skills. Authors in [ 11 ] suggest that a positive working environment can have good impact on the employees. They state that different organizations may have dissimilar working environment depending on the clients the organization deals with. Ritter et al. [ 12 ] suggest a working environment that includes a culture where it involves good communication between co-workers, leadership style, and professional growth. In retaining employees, one needs to have a healthy working environment. The good working environment requires an appreciation for others, a strong relationship between colleagues, and no harassment [ 13 ]. Christmas et al. [ 14 ] suggest retaining an employee with good professional skills by improving the organization’s working environment. In order to improve their working environment, organizations should facilitate their employees and provide them necessary equipment that can help the organization in better management. The work in [ 15 ] presents a study on employee engagement. Their aim is to find correlation between purpose and joy in a work environment among the managers and their employee engagement. The domain of study is medical profession, and the data are collected from nurses. The authors use Cronbach's alpha to gauge internal consistency in a population sample. The obtained results do not find any significant correlation between nurse manager meaning and joy in their work and the employee engagement. Their study is limited to a specific set of individuals, and the same method if applied to a different dataset may yield diverse results. The work in [ 16 ] presents a study on employees’ perception on formulation of human resource policies. They also cover the implementation of various human resource retention plans in their work. The focus domain of their work is the hospitality industry. The data in their work are primarily obtained through personal interviews of employees in a specific region within a few cities.

2.2 Organization commitment

Studies have shown that employees with higher commitment stay with the organization for a longer period, whereas those having low commitment leave the organization during early stages. The employees with higher commitment also desire to stay in the organization and work hard with a positive attitude. Previous work identifies that organization's commitment is related to employees’ turnover. Higher rate of commitment level of the organization results in lower turnover. Bashir et al. [ 17 ] represented three dimensions of organizational commitment. Affective commitment is the sense of attachment toward the organization and relation with employee’s characteristics, work performance, and structure of the organization [ 18 ]. For example, an employee stays in the organization because she knows their value in the organization [ 19 ]. Continuance commitment is the realization of a cost that is related to the organization [ 20 ]. For instance, employees will stay in the organization because they know if they leave, they have to face a higher risk of not getting a new job [ 18 ]. The normative commitment deals with an emotional feeling of employees [ 17 ].

2.3 Reward/recognition and work performance

The terms reward and recognition have high impact on employee retention. These factors are used by organizations to motivate their employees. A reward is given by the organizations to the employees for their best performance, which keeps them motivated. The work in Silbert et al. [ 21 ] suggests that organizations can offer reward in the form of cash, bonuses, promotion, recognition, or announcing a worker as an employee of the month, offer trip, and other benefits. According to the authors, organizations present reward to employees so that they keep giving their best performance. Such organizations believe that reward and recognition keep employees motivated for future performance. It is important that employee should think that their perceptions are valued by the organization when they are rewarded.

Work performance is another factor that has an impact on employees and the organization. It is a critical factor for retaining employees. Reviewing the performance of employees can help both the organization and the employees. Employees can be assisted by telling them where they stand in the organization and what are their strengths and weaknesses. In a few cases where employees are highly talented, an increased pay or other benefit does not motivate them; however, performance appraisal does. The organization implies factors like performance appraisal, leadership, reward and recognition, training, and development in order to keep employees motivated to work harder .

2.4 Supervisor support

Supervisor support is defined as a relationship between employees and managers, and it is a factor that has huge impact on the employee retention. The employees tend to stay in an organization when they have good communication skills and strong support from supervisors. When employees have a supportive environment that increases their ability and comfort level of working, they tend to produce excellent results. The authors mention that an organization should be a place where the employee tends to stay. For this, the supervisors should be trained so that they can build a comfortable working environment for the staff [ 22 ]. A study suggested that improved employee’s performance results in a tendency to improve the capabilities of their work [ 23 ].

2.5 Income-related benefits

The work in [ 24 ] stated that employees and supervisors are motivated to work effectively when they are paid and provided with other benefits. There are a number of reasons for employees to be dissatisfied with a job. In addition to an individual’s domestic issues, income is one of the reasons when employees feel dissatisfied [ 25 ]. To improve retention strategies, organizations should periodically increase income scales and other benefits such as good working environment, leadership skills, the workload that employee can bear, and flexible timings. Deery et al. [ 26 ] find other factors such as flexibility in work, learning, and training, provision of resources to employees and reward system to improve employee retention. Gevrek et al. [ 27 ] explore the Schadenfreude effect in employee retention. They study five different salary rises in their work. Their study is based on a dataset constructed over a period of five years by obtaining data from university employees. The obtained results suggest that a one-time, small increase in compensation does not influence employee retention. The work in [ 28 ] aims to identify the retention strategies that have an actual effect on the employee turnover. They present a procedure to build an uplift model for testing the effectiveness of the different strategies for the task at hand. Their uplift model is based on a machine learning classifier, i.e., random forest. It is used for personal treatment learning estimation.

2.6 Bullying and work harassment

Bullying is considered as one of the serious problems at the workplace. Studies conducted worldwide identify increased bullying factor in organizations [ 29 ]. There are direct negative effects of bullying. It is stated that violence in the workplace also increases the factors such as bullying, workplace harassment, and emotional abuse [ 30 ]. The work in [ 31 ] examines the correlation between workplace bullying and high-performance work practices (HPWPs). They also suggest a few possible solutions. The obtained results suggest a positive effect of HPWPs on employee well-being. They also observe that reduced role conflict has an influence of HPWPs and less bullying. A limitation of their work is reliance on single-source, self-reported data. This may have caused biased views.

2.7 Factors that improve retention

There are a few other factors that can improve employee retention. These have been identified by an assortment of research contributions. Past work states that retaining talented employees should be the organization's primary focus. In their work, health, success and safety are correlated with retaining the employees. The studies in [ 32 ] and [ 33 ] identified some strategies for retaining employees and improving employee productivity by including factors in organizations such as appreciating employee on a good performance, mentoring, management, morale, and employee development training. Work in [ 34 ] identifies factors such as leadership skills, utilization of skill, compensation, safety and security and professional success to improve employee retention. A study [ 35 ] conducted in five companies of India on hundred managers and staff concludes that the factors such as income, training possibilities and careful selection of employee improve job satisfaction and commitment. It also has an influence on retaining employees. Another study on middle managers of Nigeria concludes three factors: compensation, advancement growth and affiliation, to be the reason to stay within the organization [ 36 ]. A research on hotel employees discovered that employee tends to stay in an organization for a longer period if they are satisfied with their job and the environment of the organization. The communication has always been a factor through which one can understand the employees better. Studies have shown that poor communication between co-workers leads to a poor employee retention. The economic circumstances and market forces in the world have an impact on the employee’s decision to stay or leave an organization. The certainty of an employee leaving a job and finding another job is when economic conditions are better. A research study found that the better the economic surroundings, the higher are the chances for an employee to leave the organization. Somewhat similar work that utilizes computational methods [ 37 , 38 , 39 , 40 , 41 ] to predict customer churn can be seen in past works. Similar computational methods [ 42 ] can be utilized to predict the retention period of a particular employee in an organization. However, for this, the historical data related to the employee and the company will be required to train the model.

2.8 Employee retention factors in the developing countries

Compensation is considered to be a key factor to retain employees in the developing countries. In this context, the work in [ 43 ] presents a case study of Hong Kong and China. The data are collected from 704 respondents to identify the important compensation components by various organizations. The study also identifies the six most important compensation components from an employee perspective. In Hong Kong, these five factors are salary, merit pay, end-year bonus, annual leaves, mortgage loan, and profit sharing, whereas for China the first three factors are the same as those for the Hong Kong and the remaining three include housing provision, overtime allowance, and individual bonus. This suggests that the employee retention factors vary between various countries and economies. Lall et al. [ 44 ] evaluate the analytical framework of the globalization–employment relationship in the developing countries. The focus of their study is on the manufacturing sector employees. It is observed in the study that globalization may cause an outflux of the talent pool from the developing/underdeveloped countries to the developed nations. Lowell et al. [ 45 ] present a report on the impact of high-skilled mobility from the developing countries. The report focuses on eight countries, namely Bulgaria, South Africa, Argentina, Uruguay, Jamaica, India, Philippines, and Sri Lanka. They identify four issues yet to be researched about. First is to evaluate the particular channels of impact generated by highly skilled emigration. Second is to study the range of feedback effects on the total emigration impact. Third and fourth are how high-skilled migration increases country trade and the need for documentation. Bhatnagar et al. [ 27 ] present talent management strategies for employee retention in a developing country, i.e., India. The author finds that low factor loadings indicate low engagement scores at the beginning of the career. However, high factor loadings at intermediate stages of employment are indicative of high engagement levels. A key finding is that good engagement results in higher retention in the developing countries. The work in [ 46 ] utilizes a new Cultural Intelligence (CI) measure to empirically study the evidence on several key antecedents of CI across five countries. The measure is named as Business Cultural Intelligence Quotient (BCIQ). This or a similar measure can be adopted for employee retention.

Based on the abovementioned literature survey, the conceptual framework developed for the current study is demonstrated in Fig.  1 . As evident from this literature review, a detailed study that identifies key employee retention factors and correlates them with each other using a computational technique for the developing countries is needed. This work aims to bridge this gap.

Conceptual framework of the proposed work

3 Methodology

This section describes the methodology used to collect and analyze the data. Moreover, the section also describes the research design, area and population selected for the study, its sampling procedure/size, and the data collection procedure. This work presents a quantitative research that will answer questions asked from multiple organizations. The queries are related to factors such as work environment, work performance and motivation, organization commitment, and satisfaction, reward and recognition, income, supervisors support and bullying, and work harassment.

3.1 Research design

For the current research study, a quantitative research mechanism is carried out via questioner distribution to a targeted population. The responses were measured through the statistical instrument. Quantitative research is to be carried out for a huge number of population, and they are tested by mathematical and statistical instruments. On the contrary, qualitative research is not appropriate for this research study as qualitative research deals with data related to observation and a specific style. It does not statistically describe findings. The exploratory research answers the “why” and “how” questions, whereas descriptive research focuses on four Ws, namely “what,” “where,” “when,” and “who.” Therefore, the exploratory research methodology is also not applied here because of the close-ended nature of the questioner.

3.2 Theoretical framework

The concept of employee retention falls under the theoretical framework of leadership, motivation theory and practice. The theoretical framework of this research is specifically based on the work of Latham [ 47 ]. Latham’s theory not only provides a chronological history of motivation theory and practice, but also presents an “insider view” on leadership and motivation. He presents six distinct eras of how motivation theory and practice has evolved over the past 110 years. The first era, according to Latham, presents the birth of behavioral theory in management and motivation. Industrial and Organizational (I/O) psychologists in this era were not interested in studying inner motivations and considered money to be the primary motivator at the workplace. The second era is marked with the trend of measuring the impact of attitudes on work and employee motivation. This era placed emphasis on the decision-maker and revealed the importance of identifying variables in building theoretical frameworks. The first and second eras are deemed obsolete for the current research due to their unidimensional approach toward measuring employee motivation. However, both these eras are fed into the proposed work indirectly. In the third era, the focus turned toward assessing and forecasting factors that influence employee motivation. This era had the strongest impact on organizational practices in the developing countries. The fourth era introduced the notion of scientific theories and methods in leadership and motivation research. The present research is based on the leadership and motivation theories of the third and the fourth era due to their relevance in the developing countries. According to Latham, we are currently in the fifth era and this period is marked with putting the practitioner at the center and devising frameworks that proactively and holistically aid in taking well-informed decisions. However, the sixth era is the era of the future. Latham predicts that the future of leadership and motivation theory will take deeper roots in psychology and consider the emotions and beliefs of employees. This research aims to provide crucial lessons for practitioners in the fifth and sixth eras.

3.3 Geographical zones

This study is carried out in four major cities of Pakistan, namely Karachi, Lahore, Rawalpindi, and Islamabad. The choice of these sites is made based on their population and availability of larger number of public and private organizations. Karachi is one of the biggest business hubs and also has many other service-oriented companies. Lahore is one of the known cities of the Punjab province, the populationwise largest province of Pakistan, where people are struggling to be retained in their organization, and most of the research data were collected from this zone. Islamabad, which is the capital city of Pakistan, has many organizations, and data were also collected from here. Figure  2 shows an overview of the general research design.

Overall research design

3.4 Population of the study

For this study, the target group was all categories of sectors where we could get a significant number of employees. This was done to analyze the factors which are generally applicable to all possible working classes instead of focusing on just any particular group. The organizations in which this study is carried out are large appliances venders, corporate sector, schools, universities, banking sector, government organizations, hotel industry, information technology companies, hospitals, professional engineers, and telecommunication sector.

3.5 Sampling size and data collection

The sample size is an illustration which tells about the targeted population in the research. To carry this research, a target of 1000 was set and 853 responses were received. However, to achieve more responses, the targeted population could have been increased. For the current study, enough samples were received, i.e., 85.3% turnout rate; therefore, the target was not further increased. Figure  3 lists an overall summary of the data collected. Both primary and secondary methods were used for data collection. It is important for the researchers to test the result of hypothesis, and it is also important to collect data through secondary methods to save time.

Summary of the collected data

3.5.1 Primary data collection

Primary data collection is a method of collecting genuine data. Questioners are the primary data source in this research. These were developed based on existing theories on employee retention. The collected data help to analyze patterns through FIM technique and Statistical Package for the Social Sciences (SPSS). Questioners are the best way to gather data, and it is the most effective and efficient mechanism through which one can measure various factors. This study was conducted on many individuals in diverse organizations. Firstly, all forms were distributed in multiple organizations and within one-month the forms were returned. The data were recorded in a Microsoft excel sheet for further process. Moreover, data analysis was performed through FIM and SPSS.

3.5.2 Secondary data collection

Secondary data collection method was used for reviewing theories and literature from many sources such as research papers, articles, and thesis reports. These sources were used to relate the factors that influence employee retention and learn employee retention strategies.

3.6 Hypothesis

Properly formalized hypothesis enables to guide the research toward appropriate simulation and experiments in order to answer key research questions. For this study, seven initial hypotheses were formed. These are listed as follows:

H1: Better work environment will result in higher employee retention.

H2: Higher organizational commitment results in higher employee retention.

H3: Increase in reward and recognition system results in higher employee retention.

H4: Increase in the individual’s work performance results in increased employee retention.

H5: Higher support and supervision by managers result in higher employee retention.

H6: Increase in employee income results in increased employee retention.

H7: Higher rate of bullying and work harassment results in lower employee retention.

3.7 Research instrument

When large amount of data is needed for a study, a survey seems the most effective way to do the needful. The questionnaire for this study was designed using Google forms Footnote 1 , and also a few instances were printed in the hard copy. The survey form was divided into two sections: the first section asked for the demographic information such as gender, age, experience (overall), experience (with the current organization), organization name, organization category, and monthly income range, whereas the second section asked for the factors affecting employee retention. Moreover, the second section was comprised of 54 questions and these questions were measured by a five-point Likert scale ranging from one to five, where 1 showed strongly agree, 2 showed agree, 3 indicated neutral, 4 showed disagree, and 5 showed strongly disagree. The questions contained in the survey are listed in “ Appendix .”

A few constraints and problems were faced while conducting this study. Some companies refused to fill the survey because they thought that the survey was a bit lengthy and it will take their time. Few did not return the required number of forms requested from them. There were a very few people who did not understand English. For such individuals, questions translated into their local language were used.

4 Results and findings

This section presents the experiments conducted and their results. These experiments are mainly conducted using SPSS as a tool and FIM as a data mining technique. The demographic profile utilized here includes gender, age, overall experience, experience with the current employer, marital status, and income. The experiments are conducted mainly to answer the following questions.

Using computational techniques, which factors are crucial for retaining employees and what is the relationship between those factors across multiple sectors in developing countries?

Using computational techniques, what is the impact of motivation, recognition and reward, advancement and growth, commitment and satisfaction, work environment, individual’s performance, support and supervision by managers, employee income, bullying and work harassment on employee retention across multiple sectors in developing countries?

How do these factors improve the organization’s overall environment and increase the rate of retaining employees?

4.1 Demographic profile

Getting key information about the respondents is important before drawing conclusions about any finding. For the current study, 36% of the participants were female and 64% were male. For this study, age was categorized into five ranges: less than 20 years, between 20 and 30 years, between 30 and 40 years, between 40 and 50 years, and greater than 60 years. According to this categorization, the highest response was obtained from the 20–30-year bracket, whereas the second highest response was from 30–40 category. Based on experience, the highest number of responses came from those who had work experience of less than five years and the lowest number of responses was from individuals having work experience greater than 10 years. Among the respondents, 45.6% were single and 54.1% were married. The highest response rate, i.e., 17.5%, was from the individuals working in the higher education sector. From the salary perspective, maximum responses were from those having annual income between 4329 and 8658 USD and the lowest response rate was from those respondents who had an annual income greater than 16,500 USD.

4.2 Factor analysis

This study focuses on various factors such as working environment, organization commitment, reward and recognition, work performance, supervisor support, income, bullying, and work harassment for employee retention. Table 1 lists the mean, standard deviation, and significant difference between male and female respondents using one-way ANOVA for the employee retention factors. When both male and female were asked about the working environment in their organization, the mean for males was 1.75 and for females, this was 2.10. This indicates that male agrees on working environment to be important for employee retention, whereas females neither agree nor disagree. There was no significant difference between male and female considering organization commitment. Considering this factor, the mean for male participants is 2.52 and for female it is 2.55 indicating their disagreement. The reward and recognition factor has a significant difference. The male participants have a mean of 2.00, and females have a mean of 2.34 which lies in the agreeing range. The factor work performance has a significant difference where the mean value for males is 2.45 indicating their agreement and females have a mean of 2.90 that shows they neither agree nor disagree. When questions related to the supervisor’s administration were asked, the results indicate no significant difference between males and females. For the factor of income, there is a significant difference observed in the male and female groups, where the mean for men is 2.44 and for women it is 3.21, indicating their disagreement.

Table 2 lists the results when considering all factors and grouping these by age. The results show the highest mean for bullying factor and work harassment, considering the age-group greater than 60. The work environment has the lowest mean, i.e., 1.41 for the age-group of 40–50, whereas the highest standard deviation of 1.672 is for the factor work performance considering participants having age less than 20 years. The lowest standard deviation is 0.840 for the factor work environment within the age-group of 40–50. A significant difference is observed for the factors of working environment, reward and recognition, supervisors support, and income within the various group of ages. As shown in Table 3 , all single and married respondents have the highest mean and standard deviation in bullying and work harassment factors and the lowest mean and standard deviation in working environment factor.

Table 4 lists the results grouped professionwise. The factor work environment here got the highest mean in the domain of medicine, and the lowest mean is obtained for the individuals working in telecommunication sector. The highest standard deviation is for hotel industry, while the lowest standard deviation is for the vender category. The organizational commitment has the highest mean value in the education sector (schools) and the lowest mean in the banking sector. However, the highest standard deviation is noted in government employees and the lowest standard deviation is observed in employees of the professional engineering companies. The reward/recognition being the third factor has the highest mean and standard deviation in hotel industry, and that has the lowest mean and standard deviation in telecommunication sector employees. The factor work performance has the highest mean in medicine sector and professional engineering, while it has the lowest mean in the field of education sector (schools). The highest standard deviation of work performance is observed in the hotel industry, and the lowest standard deviation is in the professional engineering sector employees. The highest mean and standard deviation of supervisor support are also for the hotel industry, and the lowest mean and standard deviation are that of the telecommunication department. The highest mean of income is observed in the telecommunication department, whereas the lowest mean is observed for the individuals working in the hotel industry. The income factor has the highest standard deviation in medicine domain and the lowest standard deviation in the government employee. The highest mean of the factor bullying and work harassment is observed in the education sector (schools), and the lowest mean is observed for the hotel industry. There is no indication of a significant difference in factors except for bullying and work harassment.

Table 5 lists the results grouped salarywise. The work environment factor has the highest mean between those respondents who earn more than 27,166 USD annually and the lowest mean for those respondents who earn between 8767 USD and 16,235 USD. The exploratory factor analysis is used here to uncover the underlying patterns. By applying EFA on two categories of experience, the results show that these factors can further be divided into three groups. Table 6 summarizes the results of this.

4.3 Hypothesis

To test the hypothesis formed in Sect.  1 , a correlation between various employee retention factors is computed (see Table 7 ) and the regression analysis is performed (see Table 8 ). Based on these, the formed hypothesis is either accepted or rejected.

4.3.1 H1: Better work environment will result in higher employee retention

The findings for hypothesis H1 indicate that the working environment is positively correlated with employee retention, which means a better working environment in an organization results in higher employee retention. The p value is less than 0.05 which means that there is a significant relationship between working environment and employee retention. The working environment`s B value is 0.294, which means that this factor has 29.4% of an impact on employee retention. The t value also shows that it has high impact on employee retention. Based on these results, H1 is accepted.

4.3.2 H2: Higher organizational commitment results in higher employee retention

The results in Tables 7 and 8 indicate that organizational commitment is slightly correlated with employee retention. The p value for this suggests that there is no significant relationship between organizational commitment and employee retention. The organizational commitment`s B value is 0.034, which means that this factor has 3.4% influence on employee retention. The t value also shows that it has low impact on employee retention. Therefore, H2 is rejected.

4.3.3 H3: Increase in reward and recognition system results in higher employee retention

The findings in Tables 7 and 8 for hypothesis H3 indicate that reward and recognition is positively correlated with employee retention. The p value for this is less than 0.05, which means that there is a significant relationship between reward/recognition and employee retention. For this factor, B value is 0.330, which means that this factor has 33% impact on employee retention. The t value also shows that it has a significant impact on employee retention. Therefore, this results in accepting H3.

4.3.4 H4: Increase in the individual’s work performance results in increased employee retention

The findings for hypothesis H4 indicate that work performance is positively correlated with employee retention. The p value is less than 0.05, which means that there is a significant relationship between work performance and employee retention. The work performance's B value is 0.311, which means that this factor has 31% of an impact on employee retention. The t value also shows that it has significant impact on employee retention. Based on these figures, H4 is accepted.

Accepted or rejected hypothesis

4.3.5 H5: Higher support and supervision by managers result in higher employee retention

The findings for hypothesis H5 in Tables 7 and 8 indicate that supervisor support is positively correlated with employee retention. The p value is less than 0.05, which means that there is a significant relationship between supervisor support and employee retention. The B value of supervisor support is 0.253, which means that this factor has 25.3% of an impact on employee retention. Therefore, H5 is accepted.

4.3.6 H6: Increase in employee income results in increased employee retention

The findings for hypothesis H6 indicate that income is positively correlated with employee retention. The p value of this factor is also less than 0.05, which means that there is a significant relationship between income and employee retention. The B value for income is 0.299, which means that this factor has 29.9% impact on employee retention. The t value also shows that it has high impact on employee retention. Based on these figures, H6 is accepted.

4.3.7 H7: Higher rate of bullying and work harassment results in lower employee retention

Finally, the findings for hypothesis H7 indicate that bullying and work harassment is slightly correlated with employee retention. The p value for this factor is not greater than 0.05, which means that there is no significant relationship between bullying and work harassment and employee retention. Therefore, H7 is rejected. Figure  4 pictorially represents the acceptance or rejection of the seven hypothesis.

4.4 Frequent items identification

The FIM technique [ 48 ] from the domain of data mining is utilized here to find factors that frequently occur together to influence employee retention. The FIM is used over transactional databases to find all those items that occur together above a certain frequency, known as the minimum support. In order to utilize FIM in this work, first all responses were converted in a database transaction format. Each row of the database represented all responses from a unique respondent. This formed a dataset with 853 records. Later, this dataset was partitioned into various categories to identify frequently occurring job retention factors for a specific group. This categorization was done for the following attributes: gender, marital status, overall experience, job description (organization), and income. Table 9 lists the results of this experiment. There are a number of algorithms available to extract the frequent items from a dataset. The output of all these algorithms is the same. However, they consume different amounts of execution time. From an application point of view, it does not matter which FIM algorithm is utilized as long as the dataset size is not extremely large. This work utilizes the AIM Footnote 2 (Another Itemset Miner) implementation of the FIM technique to extract patterns. For the sake of completeness, Fig.  5 shows a comparison of time consumed by AIM against another FIM algorithm, i.e., k DCI ( k Direct Count and Intersect) for various minimum support (minSup) values. The figure indicates that k DCI is quicker that AIM in finding the frequent itemsets.

Performance comparison between kDCI and AIM in finding frequent items

4.5 Reliability test

A reliability test was conducted before any other test to make sure that the data are reliable. The Cronbach’s Alpha test was performed for the reliability of the data, and results indicated that the collected data were 87% reliable. Table 10 lists the results of this. The value of Cronbach’s alpha ranges between 0 and 1. A Cronbach’s alpha value greater than 0.6 is considered reliable. As shown in Table 10 , the value obtained for the collected data is 0.874 indicating the reliability of the collected data.

4.6 Comparison

This section presents a qualitative comparison between the present work and past contributions regarding the identification of factors that influence employee retention. The comparison is based on seven factors, i.e., has the work considered multiple sectors, are the data mining methods utilized, is there the use of computational methods in drawing conclusions, what is the sample size, what is the geographic location of the study, is the study employee centric or organizational centric, and does the survey contain open-ended questions. The choice of comparison methods is made here due to their closeness to the task at hand and recency. Table 11 lists the quantitative comparison. It can be observed that the present work utilizes data mining methods and covers multiple domains as compared to the past works. Additionally, the majority of the past work utilizes the computational methods to gain insights about the employee retention. The table also indicates that the use of open-ended questions is rare while collecting the data. A few works have not mentioned their sample size; therefore, this field is left blank in the table.

5 Policy implications

Labor laws in many developing countries are at a nascent stage. Debates on employee rights, such as medical cover [ 49 , 50 ], provisions of sabbaticals, data protection, diversity management, investing in human resource through training and development programs, etc., are still isolated practices only functional in a handful of multinational organizations in the developing world. This research provided an in-depth understanding of the impact of demographics on employee retention across multiple sectors, which will enable policymakers to (a) develop retention strategies in the backdrop of severe competition, (b) improve organizational long-term sustainability, (c) improve organizational brand name through providing better working conditions to employees, and (d) understand the dynamics of employee retention across multiple sectors and industries.

Increased global competition has inevitably led to a severe competition in talent acquisition and retention. Organizations, today, are not only competing for customers, but also for employees. Thus, losing a resourceful human talent can be devastating for an organization. If an organization is facing quick turnover, this can adversely affect its long-term sustainability. Talented employees are not only hard to find; they exist in clusters. Therefore, if an organization loses a dissatisfied employee, a bad word-of-mouth gets spread about the specific organization, which may then find it extremely hard to attract talented employees. Conversely, if an organization has a low employee turnover, the organization shall be able to contest and survive in highly competitive markets, ensure long-term sustainability, and celebrate a good brand name.

For policymakers, this research provides the basis to understand and re-evaluate the systems and practices of motivation; recognition and reward; and advancement and growth, by placing a strong emphasis on organizational justice. Policymakers shall be able improve their decision making through this research by considering numerous variables, which may impact employee behavior, specifically retention. This work enables policymakers to systematically diagnose and comprehend organizational structures and communicational channels in light of employees’ relationship and authority dynamics with the supervisor, thus redefining organizational esprit de corps in the developing world across multiple sectors. Through this research, policymakers shall be able to decipher the complexities of work conditions and highlight aspects which contribute to or pose a challenge to employee retention. Policymakers are interested in developing customized policies for clusters of employees who have similar ethical behavior and income level. This research dived deep into how ethical behavior and income level impact employee retention and how policymakers should distinguish between employees of varying ethical behaviors and income levels. Another policy implication of this research is that it shall enable policymakers to develop policies and practices which place emphasis on organizational commitment and satisfaction. The results revealed a strong relationship between organizational commitment and satisfaction, and employee retention. Policies and practices addressing organizational commitment and satisfaction shall not only ensure that talented employees are retained in the organization, but shall also attract new and budding talent more effectively and efficiently. Finally, bullying and work harassment has become a serious concern for several organizations in the developing countries. Gender discrimination discourages several women in the developing countries to either quit or switch their workplace. Bullying, harassment and gender discrimination are not only severely unethical, but also bring the organization in the limelight for the wrong reasons. Thus, this research provides policymakers with the insight and tools to develop proactive policies to discourage bullying and work harassment and encourage fair and equal treatment of all employees.

In a nutshell, at a microlevel, this research delivers policymakers with the right variables and tools to assess the state of employee retention in an organization. At the macrolevel, however, this research provides an in-depth analysis of trends and patterns of employee retention across multiple sectors. The research sheds light on how policymakers can encourage organizations to improve employee retention through training and development programs, medical cover, sabbatical, flexible working hours, etc. Through these techniques, policymakers can benchmark best practices for employee retention. Moreover, this work highlighted which sectors are severely suffering from low employee retention, thus allowing policymakers to target specific sectors/industries on a high-priority basis.

Like any other research, there were a few limitations of this study. The aspect of training and development was not considered in this work. Another limitation was that few respondents thought that survey forms were too lengthy and even some organizations rejected to fill out these. This study was only limited to the boundaries of Pakistan. The findings may be different if applied to a different country or may vary if considered different demographic variables.

6 Conclusion

Retaining skilled employees has always been a major concern for any organization across the globe. Organizations spend a significant amount on their training and development programs for this purpose. This work presented computational methods to identify factors for employee retention using their feedback collected through a questionnaire. The focus here was to identify factors to improve employee retention strategies based on the computational methods. A survey was conducted mainly within four sectors, namely health care, business, academics, and banking sector, to collect the data. The survey was divided into two parts: the first part included demographic information and the second part contained questions pertaining to employees’ job description and their satisfaction. The questions on the second portion were based on theories such as Herzberg's duality theory, expectancy theory, social cognitive theory, self-determination theory, social bonding theory, and sociocultural theory. The findings showed that the factors such as work environment, organization commitment, reward and recognition, work performance, supervisor support, income and bullying and work harassment have an impact on demographic profile. When these factors were correlated with employee retention, the statistical tests illustrated that, except organization commitment and bullying, all variables were identified to be strongly linked with employee retention. These factors have tended to have a power through which organization can improve the working environment and facilitate not only their client but also the employees.

From the extension point of view, there are many other factors that can be used for employee retention other than those utilized here. These may include training and development, medical cover, sabbatical and paid leaves, to name a few. This research can extend to multiple countries, and the effect of various cultures on the employee retention can be studied. The survey form can also have a few open-ended questions so that the investigation can better identify what an employee feels like when given an option to mention any factor of her choice.

Data availability

The data that support the findings of this study are available on request from the corresponding author. The data are not publicly available due to containing information that could compromise the privacy of research participants.

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Halim, Z., Maria, Waqas, M. et al. Identifying factors for employee retention using computational techniques: an approach to assist the decision-making process. SN Appl. Sci. 2 , 1612 (2020). https://doi.org/10.1007/s42452-020-03415-5

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DOI : https://doi.org/10.1007/s42452-020-03415-5

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The impact of leadership style on employee retention

The modern workplace is changing, and leadership style is becoming more and more important. It affects organizational dynamics, employee engagement, and, most importantly, talent retention. The environment at work and employee satisfaction can be greatly impacted by the way leaders engage with their teams, make decisions, and move their organizations ahead. Businesses are finding it more and more difficult to retain talented people, therefore it’s critical to comprehend the effects of various leadership philosophies.

This investigation’s clear thesis is that staff retention rates are significantly impacted by various leadership philosophies. Organizations may prepare themselves more effectively to create settings where talent flourishes and endures by exploring how each style encourages or impedes employee commitment and loyalty.

Table of Contents

Overview of leadership styles, linking leadership styles to employee retention, challenges and considerations, strategies for leaders, future trends in leadership and retention.

There are various forms of leadership styles that can be roughly classified, each with unique attributes and implications for managing a team. Let’s examine some of the major styles in more detail:

• Transformational leadership : Transformational leadership is typified by leaders who set high standards and foster a sense of unity among their subordinates. Characterized by their charisma and inventiveness, transformational leaders prioritize personal growth and organizational cultural transformation.
• Transactional leadership : To manage their teams, transactional leaders use a system of rewards and penalties. This approach is quite regimented, with a strong emphasis on tasks and organizational effectiveness. It is grounded in specific, short-term goals.
• Autocratic leadership : Autocratic leaders frequently make choices completely by themselves, with little to no involvement from their team. This approach may discourage innovation and lower employee happiness, but it can work well when prompt decision-making and explicit instructions are needed.
• Democratic leadership : In contrast to an autocratic approach, democratic leadership entails group decision-making with substantial team member involvement. This strategy encourages respect and a sense of belonging among team members, which may boost work satisfaction and retention rates.

Every leadership style has advantages and disadvantages, and the organizational setting and workforce composition can have a big impact on how effective a style is. It is imperative that leaders comprehend these dynamics if they hope to improve employee retention and cultivate a healthy work environment.

Leadership philosophies have a direct impact on the attitudes and work environment of employees. They are also a major element in job satisfaction and motivation, two important aspects of employee retention. For any organization hoping to keep a solid and dedicated workforce, it is imperative that executives understand the relationship between how they lead their teams and the ensuing effects on employee turnover.

Impact on motivation and job satisfaction

• Transformational leadership : Teams under the direction of transformational leaders typically exhibit high levels of motivation. The emphasis of this approach on creativity, the development of the individual, and a compelling vision can result in high levels of loyalty and job satisfaction. Employee dedication to the company is increased when they feel appreciated and a part of something bigger.
• Transactional leadership: Although this style of leadership is useful for attaining certain operational goals, it might not be able to continuously inspire all team members, especially those who are more motivated by invention and creativity than by rewards alone. Because of the more mechanical and less emotionally charged nature of the relationship between the leader and the employee, this style may result in average work satisfaction and moderate retention rates.
• Autocratic leadership : When employees perceive they have limited autonomy or say in decisions, they are likely to be less satisfied at work. Higher turnover rates may follow from this, particularly among highly competent employees who value autonomy and input in their work.
• Democratic leadership : By encouraging a collaborative workplace, this strategy typically boosts job satisfaction and staff retention. Workers are more likely to be dedicated to their work and less inclined to look for other employment if they believe their thoughts are respected.

Research and data on leadership styles and retention

Numerous studies demonstrate how various leadership philosophies affect retention rates:

• Transformational leadership and employee retention : A study published in “ Frontiers in Psychology ” found that transformational leadership positively impacts employee retention, mediated by organizational citizenship behavior and enhanced by effective communication. Transformational leaders who develop compelling visions and focus on team training significantly increase retention by fostering a supportive and engaging work environment .
• Turnover intentions and transformational leadership : Research in the “Administrative Sciences ” journal during the COVID-19 pandemic indicated that transformational leadership lowers employees’ turnover intentions by improving their performance. The study highlighted how transformational leadership encourages employees to perform better, making them more committed to their organizations and reducing their likelihood of leaving .

These studies show that via promoting a healthy work culture and raising individual performance, transformational leadership—which is distinguished by its inspiring and visionary approach—can greatly improve employee retention.

When trying to modify their leadership philosophies in order to increase employee retention, managers may run across the following difficulties:

• Resistance to change : Change may be met with resistance from both leaders and employees. It could be challenging for leaders to give up tried-and-true methods that have worked for them in the past.
• Mismatch with organizational culture: A leadership approach that is successful in one corporate culture might not be in another. In order to avoid upsetting the current culture and values and maybe decreasing employee satisfaction , leaders must manage them carefully.
• Diverse employee demographics : Today’s workforces are becoming more and more varied in terms of age, gender, ethnicity, and cultural background. It can be difficult to implement a one-size-fits-all strategy since a leadership style that works well for one group may not be as effective for another.

Role of organizational culture and employee demographics

The perception of leadership styles is greatly influenced by organizational culture, which can either strengthen or weaken initiatives aimed at increasing retention. While more hierarchical organizations may be more suited for transactional or authoritarian leadership styles, cultures that value openness and creativity may react better to democratic and transformational leadership styles.

The demographics of the workforce are also quite important. While older workers might value the security and predictability offered by transactional leadership, younger workers could choose transformational or democratic leaders who give greater feedback and empowerment.

In order to effectively modify their style of leadership, leaders might implement the subsequent tactics:

• Assessment and feedback : Evaluate the effects of their leadership style on a regular basis and ask staff members for input. This can assist in determining what is effective and what requires modification.
• Training and development: Participate in leadership development initiatives that highlight a range of styles to assist leaders become more flexible and receptive to the demands of their teams.
• Tailored approaches : Tailor leadership techniques and interactions to the requirements of various workforce demographic groupings. This could entail using various incentive strategies or communication philosophies based on the composition of the team.
• Employee engagement : Promote an environment where employees feel valued and encouraged to communicate freely by being personable and genuinely interested in their professional development and well-being .

New developments in leadership that may have an effect on staff retention include:

• Emphasis on emotional intelligence : The importance of emotional intelligence is shown by the fact that emotionally intelligent leaders are better able to comprehend and control both their own and others’ emotions, which improves relationships and reduces attrition.
• Increased focus on inclusivity : Leadership philosophies that prioritize equity, diversity, and inclusion are becoming increasingly crucial and have a big impact on employee retention.
• Technology integration : As remote work grows in popularity, leadership approaches that make efficient use of technology to manage teams and facilitate communication are becoming more and more important.

Strong effects of varying leadership philosophies on work satisfaction and organizational commitment can be shown in the retention of employees. By addressing the requirements of various employee demographics and promoting a positive organizational culture, transformational, democratic, and other adaptive leadership styles have been demonstrated to improve retention.

In order to better serve their teams and make sure that their methods are in line with both company objectives and employee expectations, leaders are urged to regularly assess and modify their management styles. Not only does this flexibility help, but it is necessary to keep a competitive advantage in the fast-paced workplace of today. A successful, devoted staff is promoted by improvements that leaders must proactively grasp and implement.

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Leveraging Non-Cash Incentives to Drive Employee Motivation and Productivity in SMBs 

• May 3, 2024 at 8:25 AM EDT
• By David Leeds, Tango

In the competitive landscape of small and medium-sized businesses (SMBs), the quest to cultivate a motivated, engaged and productive workforce is crucial for sustainable growth and success. According to a study by the Small Business Administration (SBA), employee turnover costs small businesses in the United States an estimated $11 billion annually.

This significant financial impact emphasizes the critical importance of retaining motivated and engaged employees to ensure the long-term sustainability and success of SMBs. While traditional cash incentives have long been the primary method to drive employee performance, there is a growing recognition of the significant impact of non-cash incentives in boosting motivation, improving retention rates, fostering loyalty and enhancing overall productivity within SMBs. 

Non-cash incentives encompass a wide range of rewards beyond monetary compensation, including experiences, recognition, professional development opportunities, flexible work arrangements and more. These incentives offer SMBs a versatile and customizable approach to recognizing and appreciating employees, catering to their diverse preferences, aspirations and motivations. 

Non-cash rewards provide SMBs a unique opportunity to motivate and inspire their workforce beyond financial rewards. Tailoring incentives to align with individual interests and career aspirations fosters a sense of purpose, fulfillment and personal growth among employees.

A significant 89% of employees report feeling more valued and appreciated by their employers due to non-cash incentives. This statistic emphasizes the importance of non-monetary rewards in enhancing employee satisfaction and engagement within SMBs. Whether through experiential rewards like professional development programs, wellness initiatives or personalized recognition ceremonies, non-cash incentives create a culture of appreciation and empowerment that drives intrinsic motivation and engagement. 

Employee turnover can be a significant challenge for SMBs, leading to increased recruitment costs, productivity losses and disruptions in workflow. Non-cash incentives play a crucial role in improving retention rates by creating a sense of belonging and investment in the company’s success. By offering unique experiences, exclusive perks and opportunities for growth and advancement, SMBs demonstrate their commitment to nurturing their employees’ long-term career development, thereby enhancing loyalty and reducing turnover.

Loyalty is a key driver of employee engagement and organizational success, particularly within SMBs where a strong sense of camaraderie and shared purpose is essential. Non-cash incentives contribute to fostering loyalty by recognizing and rewarding employees’ contributions in meaningful and personalized ways. Whether through public recognition programs, team-building activities or opportunities for professional networking and skill development, these incentives strengthen the bond between employees and the organization, fostering a culture of loyalty and commitment. 

Employee productivity is the cornerstone of SMBs’ success, directly impacting operational efficiency, customer satisfaction and financial performance. Non-cash incentives play a pivotal role in boosting overall productivity by creating a positive work environment, enhancing job satisfaction and inspiring peak performance.

A study by Gallup found that organizations with high employee engagement levels experience 21% higher profitability compared to those with low engagement levels. This data highlights the direct correlation between employee engagement, productivity and business success, emphasizing the significance of non-cash incentives in driving positive outcomes for SMBs. By offering incentives that align with employees’ interests, values and career goals, SMBs can unleash the full potential of their workforce, driving innovation, collaboration and excellence across all levels of the organization. 

These rewards offer SMBs a powerful tool to drive employee motivation, improve retention rates, foster loyalty and boost overall productivity. By leveraging the diverse range of non-monetary rewards available, SMBs can create a culture of appreciation, empowerment and engagement that drives sustainable growth and success in today’s competitive business landscape. Embracing non-cash incentives as part of a comprehensive employee engagement strategy is essential for SMBs looking to attract, retain and empower top talent in their journey toward long-term success. 

David Leeds is a seasoned executive and visionary leader with a passion for innovation and driving positive change in the rewards and incentives industry. With over two decades of experience, he has established himself as a respected authority in the field, known for his strategic acumen and commitment to delivering value to clients. As the CEO of Tango , a leading provider of digital rewards and payouts, Leeds spearheads the company’s mission to revolutionize how organizations engage and motivate their employees, customers and partners. Under his leadership, Tango has experienced significant growth and garnered industry recognition for its innovative solutions and customer-centric approach. With a focus on driving operational excellence and fostering a culture of collaboration and innovation, Leeds continues to lead Tango toward new heights of success in the rapidly evolving digital rewards landscape.

• Posted In: Executive ViewPoints , Loyalty , Workforce & Scheduling
• Tagged With: David Leeds , gallup , SMBs , Tango

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