employee retention in banking industry of nepal1
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indian banking employee retentionTRANSCRIPT
EMPLOYEE RETENTION IN BANKING INDUSTRY OF NEPAL
Ph.D. Thesis Proposal
Submitted To
Singhania University
Faculty of Management
Rajasthan, India
By
Sherjung Khadka
Roll No. 2011051172
November, 2011
TABLE OF CONTENTS
TABLE OF CONTENTS
ABBREVIATION
KEY TERMS
CHAPTER I: INTRODUCTION 1-9
Background of the Study 01
Problem Statement 04
Purpose of the Study 05
Significance of the Study 05
Research Questions 06
Conceptual Framework 06
Limitations and Delimitations of the Study 07
Proposed organization of the Study 08
CHAPTER II: LITERATURE REVIEW 10-18
CHAPTER II: RESEARCH METHODOLOGY 18-33
Research Philosophy 18
Research Design 19
Population and Sampling Techniques 22
Procedures of Data Collection 23
Tools and Techniques of Data Analysis 24
Reliability and Validity 26
Ethical Issues 28
References 29
ABBREVIATION
HRM= Human Resource Management
HR= Human Resource
FCS= Federal Civil Service
SBI= State Bank of India
IT= Information Technology
UAE= United Arab Emirates
SCB= Standard Chartered Bank
KEY TERMS
Employee turnover
Retention strategies
HR practices
Job satisfaction
Performance
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CHAPTER I
INTRODUCTION
Employee Retention is an important aspect of human resource management
(HRM). Improvement in employee retention is essential to reduce HRM practices cost
and overall growth of the organization. This chapter explains the overall view of the
study. Especially, it contains background, problem statement, purpose, significance,
limitations, delimitations and proposed organization of the study.
Background of the Study
Today we are living in a dynamic world. Advancement of information
technology has brought to centre stage the importance of human resource, more than
ever before (Jyothi and Venkatesh, 2006, p. 1). In a competitive scenario, effective
utilization of human resource has become necessary and the primary task of
organizations is to identify, recruit, and channel competent human resources into their
business operations for improving productivity and functional efficiency (Ibid).
Qualified, motivated, and experienced human resources are also essential in economic
liberalization and globalization era.
Human resource management is the most exciting area in the field of
management. The responsibility of recruiting and selecting the right person for the
organization is HRM department. Since people constitute the cornerstone of any
organization, assumes nerve centre in most organizations. This is the science of
managing employee/workforces in an organization. It ensures right person at right
place at right time. It also provides training and development opportunities for their
efficient performance (Khadka, 2009, p. 2). HRM develops practices which foster
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teamwork and flexibility and makes the employees feel that they are valued and their
contribution is essential for the development and growth of organization.
Aswathappa (2005) defines HRM as the set of programs, functions, and
activities designed and carried out in order to maximize both employees as well as
organizational effectiveness (p. 5). It is also a process, which consists of the
acquisition, development, motivation, and maintenance of human resource (DeCenzo
and Robbins, 2005, p.36). It treats employees as the essential means of realizing
organizational objectives rather than mere objectives (Jyothi and Venkatesh, 2006, pp.
2-3). It focuses on engendering commitment among employees by winning their
hearts (Ibid).
Human resource is a crucial aspect of HRM. Especially key or talent
employees are destiny of the organization. The retention of those employees is one of
the significant issues of contemporary context. Employee retention is the ability of the
management to retain its employees for a longer period of time. It needs favorable
policies and practices, which let the key employees stick to an organization.
Organizations invest a lot of resources for employees to make them able or
corporate ready. High employee turnover ratio or flyaway of talent employee is the
greater loss of the organization. It can be a problem because of increased recruiting,
selection, and training costs and work disruptions (Robbins and Coulter, p.343).
Newstrom (2007) states excessive employee turnover can have several
negative effects on an organization. They include:
Separation costs (exist interview time, separation pay, unemployment tax
increase)
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Training costs for few new employees(both orientation and skill
development instruction; both formal and informal learning experiences)
Vacancy costs (temporary help or overtime pay; productivity loss and
service disruption)
Placement costs (attracting, screening, and relocating new hires)
Morale effects (loss of friendship, concerns about personal job loss during
downsizing) (p.210).
Poor compensation and benefits, negative work environment, frustration,
constant friction with their superiors or other members, unfair treatment, lack of
recognition; challenging job; job security; motivation; and opportunity for career
development, and rtc. are the main causes of leaving or quitting job by employees.
Thus, organization should address these things in time to retain their key employees.
Jyothi and Venkatesh (2006) suggest the following aspects while attempting to
retain employees: (i) planning ahead, (ii) clarity in job requirements, (iii) identify a
good source of recruitment, (iv) screening and interview, (v) provide challenging
work, and (vi) focus on compensation and working conditions (pp. 94-95).
Employee retention is an important function of HRM. Retaining function
comprises the activities of (i) rewarding employees for performing their job
effectively; (ii) ensuring harmonious working relation between employees and
managers; and (iii) maintaining a safe healthy work environment (Cascio, 2006, p.6).
Cascio (2006) also suggests fair treatment of employees, open communication, face-
to-face resolution of conflict, promotion of teamwork, respect for the dignity of each
individual, and pay increases based on merit are essential to retain employees (p.8).
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This study examines and analyzes the employee retention in banking industry
of Nepal. A bank is a financial institution that accepts deposits through different
kinds of accounts and lends those deposits either directly or indirectly. Banking
industry is generally a highly regulated and reliable industry of Nepal.
The history of banking industry is not long in Nepal. It was started from 1937
AD. There are one central bank, thirty one commercial banks and eighty seven
development banks in Nepal (www.nrb.org.np).This study covers six (or19.35%)
commercial banks. They are: Standard Chartered Bank Nepal Limited, Nepal
Investment Bank Limited, Nepal SBI Bank Limited, Bank of Kathmandu Limited,
Nepal Credit and Commerce Bank Limited, and Kumari Bank Limited.
Problem Statement
Retention of best, talent, and most desirable employees is a key challenge to
organization. HRM department should take a deep concern in their employee turnover
rate because it incurs direct and indirect expenses. Costs of employee turnover
seriously impact on organizational performance and growth.
Employee retention is one of the big challenges to the organizations. In order
to attain corporate goals organizations have to retain their key employees. Thus,
issues relating these have been drawing the attention, like - Do banks apply fair HR
practices to retain their key employees? Is there problem of high employee turnover in
banking industry? Do Are banks practicing motivational efforts to retain their talents?
Is there talents poaching practice in the banking industry of Nepal? Are employees
satisfied with their present job? And are banks applying employee retention strategies.
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In general, at present, not only in Nepal, around the world, the organizations
have been facing retention as a big challenge. With this objective this study has
proposed to see the reality in the banking industry of Nepal.
Purpose of the Study
The primary purpose of the study is to explore employee retention in the
banking industry of Nepal.
The specific purpose of the study is to examine and analyze the employee
turnover, HR practices and their relation with employee retention; and strategies for
employee retention.
Significance of the Study
Retention of key employee is the main function of management. Retention
refers to the methods employed by the management to convenience the key
employees stay with the organization for a longer period of time. Since key
employees are the brain of organization, retention of such employees should be the
major concern of the management.
This study (i) contributes knowledge industry, especially in the field of
retention of key employees, (ii) fulfills the gaps of previous studies, in the case of
Nepal the researcher could not find any research or study, thus it would be the first
study, (iii) shows relationships between employee retention and HR practices like-
hiring practices, compensation and benefits, participative management, training and
development, opportunity for growth, motivation, etc. and (iv) faces the dramatically
increasing complexity. Changing environment, increasing size of organization,
increasing inventory level of employees, rules and procedures are the main cause of
increasing complexity. Talent employees are required to manage such complexity.
Thus, the study on employee retention is very important.
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Research Questions
The research questions of this study are as follows:
RQ No.1. What is the employee turnover rate in banking industry of Nepal?
RQ No. 2. What are the HR practices, which promote the employee retention
in an organization?
RQ No. 3. How the HR practices are related to employee retention?
RQ No. 4. What are the strategies, which have been applying by the banks to
retain their employee?
Conceptual Framework
Qualitative research should be based on clear conceptual framework, which
outlines the possible courses of action. Thus, this is the foundation on which the study
is conducted or established. The conceptual framework of the study can be depicted in
the following figure.
Figure No. 1-1: Diagram of conceptual framework of the research
Human Resource
Management
HR practices
Hiring practices
Compensation and benefits
Job security
Participative management
Training and development
Opportunity for growth
Motivation
Retention strategies
Improving hiring practices
Providing career
development opportunity
Positive culture
Succession planning
Implementation of team
management
Flex time and benefits
Satisfactory Positive
Employee retention
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Human resource management is concerned with managing people in the
organization. This ensures right people at right place at right time. The individuals
who work in the organization are employees. They play a crucial role in operating and
controlling activities. They are the destiny of the organization.
Employee turnover is the major problem of most organizations. Factors like-
compensation and benefits, quality of work life, relationship with supervisor or peer,
after retirement benefits plan, job performance, etc. play a significant role in
employee turnover. Management should identify these factors to make them positive
or favorable and should apply appropriate strategies to retain employees.
Hiring practices, compensation and benefits, job security, participative management,
training and development, growth opportunities, etc. are the main components of HR
practices which help to retention of employee. The organization should recognize
these components and should apply suitable strategies to retain their key employees.
Limitations and Delimitation of the Study
Although this study focuses on HR practices for employee retention, it is
acknowledged that this study has some limitations and there is enough room for
further study. The major limitations and delimitations of this study are as follows:
Limitations
The research will be based on following limitations:
Firstly, the random sample will be drawn from the list of commercial banks of
Nepal. Results from studies on a specific industry may have limitations to
generalizing to other banks, finance companies and other sectors of the economy and
vice-versa.
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Secondly, this study is based on available information from secondary and
primary sources. Accuracy of the study will depend on provided information but
adequate attention is given to reliability and validity of the research.
Finally, the use of self-report questionnaires may limit ability to draw
conclusions about the casual nature of the relationships (Vlachos, 2008, p.94).
Delimitations
The research will be based on following delimitations:
Firstly, this study covers only commercial banks of Nepal especially foreign
joint venture and national private banks to make precise to the research. Respondents
are chosen from the sample banks, who are working at present.
Secondly, the study covers only ten years period i.e. 2001 to 2010. The
conclusion will be based on study period.
Finally, the research is based on exploratory cum descriptive design.
These limitations and delimitations proof that there is sufficient room for
further research. Further research can clarify other aspects of the HR practices and
their impact on organizational effectiveness. Further research may be on quantitative
design in employee retention of banking industry in Nepal.
Purposed Organization of the Study
This study has been organized into seven chapters. Each chapter devoted to
some aspects of HR practices to employee retention under the study organizations.
The rationale behind this kind of organizations is to follow a research methodology
approach.
The first chapter contains introduction of the study, which consists of
background of the study, problem statement, purpose of the study, significance of the
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study, limitations and direction for further research and proposed organization of the
study.
The second chapter contains literature review. It shows overall scenario of the
employee retention as well as its evidence in the world. It consists of review of
empirical studies, research articles, thesis or dissertations.
The third chapter contains research methodology, which consists of research
philosophy, research design, population and sampling techniques, sources of data,
procedures of data collection, tools and techniques of data analysis, reliability and
validity; and ethical issues.
The fourth chapter contains employee turnover, which consists of employee
inventory, succession planning, causes of leaving job, and strategies of new hiring.
The fifth chapter contains HR practices to retain employees. This chapter
examines and evaluates different HR practices adopted by the different banks to retain
their key employees and relation of HR practices with employee retention.
The sixth chapter contains strategies of retention. This chapter consists of
employee retention strategies, which have been applying th banks of Nepal.
The last or seventh chapter of the study contains summary, conclusion, and
recommendations.
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CHAPTER II
LITERATURE REVIEW
Literature review shows the overall scenario of the employee retention as well
as its evidence in the world. The reviewed research articles, thesis or dissertations,
etc. were received from friends, national and international libraries, journals,
publications of banking industry and websites. A review of those studies will be
important in order to develop an approach that can be employed in this study.
Why do employees leave organizations?
There may be various reasons for leaving organizations. McCann (2004) finds
out some reasons of leaving organization, which are: basic financial needs not met
lack of competitive salary, poor benefits, poor communication, negative work
environment, lack of recognition, unfair treatment, lack of challenging job, lack of job
security and life conflicts.
Howard and et al. (2007) conducted a research and they identify the following
reasons for employee turnover: “Lack of growth opportunities, better career
opportunity elsewhere, insufficient compensation, did not find work
interesting, insufficient rewards/ recognition, did not feel efforts where
appreciated, job was not what was expected, poor fit with the organizational
culture, external factors, job left too little time for personal life, skills/abilities
not a good match for the job, felt unfairly treated/discriminated against, job
changed focus or scope overtime, poor relationship with the manager, the
economy changed, making a move people, and poor relationship with co-
workers’’ (p. 29).
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What are the methods/strategies of employee retentions?
Retention of key employees is essential for organizational success. Trulson
(2007) suggests following five methods: “maintaining staffing levels, implementing
team management, updating recruitment/screening process, addressing compensation
issues, and professional development programs’’ (p. 1). Similarly, HR-Focus (2004)
suggests “career advancement’’.
Howard and et al. (2007) mention following thirty two methods of retention:
“Link pay and performance, succession management program, career
planning services, employee retention as a corporate objective,
organization’s vision/mission, training and development opportunities,
improving compensation, specialized retention plans, new-hire orientation,
monetary rewards, employment brand, openness in communication,
performance management system, mentors/coaches for new hires, selection
practices, internal studies, increased managers’ accountability for retention,
educate managers on how to retain employees, tracing the impact of
retention, benefits packages, team-building activities, non-monetary
rewards, benchmarking, stock options, rotational assignments, exit
interviews, employee involvement in decision making, flexible work
schedule, virtual office/telecommuting, special employee services, relaxed
dress code, and job security’’ (p. 22).
Trulson (2007) states following seven recommendations on his research
study as retention strategies: “Implement team based management style,
encouraging employee involvement, use committee to address major issues
and initiatives; employ friendly schedule; examine and improve the
recruitment and screening process; training and certification program;
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improved salaries and benefits; community relations program to provide
recognition, and institute a professional development program’’ (pp.34-36).
Gberevbie (2010) suggests ten strategies of employee retention. They are as
follows: “Payment of monthly salaries to employees, relatively good
monthly salary and allowances, provision of car, housing and furniture loan
facilities, health insurance scheme, job security, regular promotion, health
care services to employees’ families, maternity leave with full pay for
female employees and regular training of employees’’ (p.6).
Gberevbie (2010) revels that “there is no significant relationship between
respondents’ job status and their views on strategies for employee retention
and performance in the FCS of Nigeria’’ (p. 9). Gberevbie (2010) states that
“out of the 108 respondents sampled, 97 or 89.81 percent agree that strategies
for employee retention of the FCS of Nigeria are inadequate to retain
competent workforce for enhanced performance’’ (p. 9). Kaiser and Hawk
(2001) revel technical training was the highest rated retention practice.
Howard and et al. (2007) revel following factors or drivers promoting
retention and employee satisfaction: “A good manager, opportunity for
accomplishment, recognition for individual contributions, great company
leadership, a creative or fun work place culture, a compatible work
group/team, opportunities to learn and grow, an organization you feel proud
to work for, interesting work, opportunities for advancement, benefits,
employee autonomy, balance between work and personal life, compensation,
promise of stability/job security, employee lifestyle support, variety in the
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work, flexible work conditions, opportunity for expatriate assignments, and
amount of vacation/annual leave’’ (p.29).
Is there relation between job satisfaction and employee retention?
Job satisfaction is a set of favorable or unfavorable feeling and emotions with
which employees view their work (Newstrom, 2009, p. 204). It is pleasurable feelings
that result from the perception that a job fulfills or allows for the fulfillment of its
holder’s important job values (Cascio, 2007, p. 680). Job satisfaction is an attitude
rather than a behavior, it’s an outcome that concerns many managers because satisfied
employees are more likely to show up for work and stay with an organization
(Robbins and Coulter, 2006, p.343).
Job satisfaction is a general attitude toward an individual current job and
organization that encompasses the feeling, beliefs, and thoughts about the job (Bitsch
and Hogberg, 2004, p. 2).
Herzberg’s Motivational factors and hygiene factors promote job satisfaction.
Lack of self-fulfillment, receive little recognition on the job, or experience continual
conflicts with a supervisor or peer etc. lower the employee satisfaction and raise rates
of employee turnover (Newstrom, 2007).
Hom and Griffeth (1995) state satisfied employees have lower level of turnover
while dissatisfied employees have higher levels of turnover. Nadeem Malik conducted
a research on Job Satisfaction Factors of Faculty Members at University of
Balochistan and reveals:
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Demographic factors such as age, academic rank, and degree no significant
impact on job satisfaction.
“Work Itself’’ was the most motivating aspect.
“Working condition’’ was the least motivating aspect.
Job motivators and hygiene characteristics were moderately or substantially
related to overall job satisfaction.
The factors work itself and advancement explained the variability among
faculty member’s overall job satisfaction. (pp. 4-5).
Higher job satisfaction reduces the rates of employee turnover. Thus job
satisfaction and employee turnover have inverse relationship. The following figure
displays the relationship between job satisfaction and employee turnover:
Is employee turnover universe problem?
Employee turnover problem is universe. It seems every way not only one
region and industry. It badly affects employee morale, effectiveness of other
employees and customer relationships.
Total annual turnover rates for non-farm occupation the year 2003 were at a
rate 36.3 percent, when reviewing only private sector employees for the same
years the rate was 43.5 percent while among public sector employees it was
documented at 14.4 percent. Looking at the specific area Education and
Health services an annual turnover rate of 27 percent was reported for 2003
while the Leisure and Hospitability Industry showed a 70.3 percent rate (BLS
report, Cited from Trulson, 2004, p.10).
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Lyons and et al. (n. d.) “There were no difference between military personnel
and civilians with regard to turnover intentions. These differences were tested using a
t-test. There were no differences between military or civilians on turnover intentions, t
(159) = .88 p>.05.’’
What do the evidences say?
Pare and et al. (2000) conducted a survey of Canadian IT professional. This
survey demonstrates that “IT specialists retention pattern are strongly sensitive to HR
practices that provide competence development’’. They (2000) revel “procedural
justice, information sharing, and work life policies practices must be considered as
complementary means to achieve lower IT turnover rate’’ (p.18).
Standard Chartered Bank conducted a survey and it concludes its report as
“engaging employees is crucial to retaining talent and while our annual survey shows
excellent progress, we continue to invest in developing great managers who engage
their teams. In 2008, we introduced a pilot to understand and address the root causes
of employee turnover in the growth markets of India and the UAE. In India, employee
attrition has reduced by seven per cent since the approach was introduced.’’
(http://www.standardchartered.com/sustainability/great-place-to-work/employee-
engagement/en/index.html).
Howard and et al. (2007) surveyed HR professionals and workers in China to
find out why Chinese employees stay or leave-and what organizations can do to retain
talent in China's burgeoning economy. The study reveals that:
38 percent of the HR professionals surveyed in China indicated that turnover
in their organization had increased in the past 12 to 18 months;
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73 percent of employees had resigned from previous jobs, and 24 percent had
already held three or more jobs, despite their relative youth. 22 percent said
they were likely to leave their positions in the next year.
The top two turnover reasons were lack of growth and development
opportunities with the current employer and the availability of better career
opportunities elsewhere.
Compensation is overrated as a retention driver.
Theoretical Link
Retention has a relationship with motivation. Rate of employee retention can
enhanced by applying motivation theory such as Maslow’s Hierarchy of Needs,
Herzberg’ Motivator- Hygiene, Vroom’s Expectancy Theory, and Stacey’s Equity
Theory.
Maslow’s Hierarchy of Needs theory that there is a hierarchy of five human
needs: physiological, safety, social, esteem, and self-actualization (Robbins and
Coulter, 2006, p. 393). This hierarchy of needs relates to retention of employees.
Maslow classified the five needs into two blocks- higher and lower level. Social,
esteem and self-actualization needs come under higher level. These are satisfied
internally and higher relation with retention. Physiological and safety needs come
under lower level. These are satisfied externally, they are crucial in employee
retention, however must be addressed other HR practices.
Frederick Herzberg propounded a Motivation-Hygiene theory. Achievements,
recognition, work itself, responsibility, advancement, and growth are motivators and
supervision, company policy, relationship with supervisor, working conditions, salary,
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relationship with peer, personal life, relationship with subordinates, status, and
security are hygiene factors (Robbins and Coulter, 2006, p.395). Motivators or
intrinsic factors increase job satisfaction and reduce employee turnover and hygiene
extrinsic factors create job dissatisfaction. Thus, employer must utilize positive
reinforcement to maximize employee satisfaction and minimize employee turnover.
Victor Vroom’s Expectancy theory suggests that motivation depends on two
things-how much we want something and how likely we think we are to get it
(Griffin, 2000, p. 483). The following diagram summarizes the basic expectancy
model (Griffin, 2000, p. 484):
Figure No. 2-1: Vroom’s Expectancy Model based on Ricky W. Griffin
J. Stacey Adams’s Equity Theory is concerned with fairness and equality.
Employee compares his or her job’s input-outcomes ratio with that of relevant others
and then corrects any inequity (Robbins and Coulter, 2006, p. 403). Whenever
employees perceive inequity, they’ll act to correct the situation (Dittrich and et al.,
1979). If they got success want stay present job. This theory emphasizes expected
behavior of employees to retain them in the organization.
Environment
Efforts
Ability
Employee
retentipon
Motivation
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Research Gap
There have been a number of valuable research studies on employee retention.
McCann (2004), Howard and et al. (2007), Trulson (2004, 2007), HR-Focus (2004),
Lyons and et al. (n. d.), Gberevbie (2010), Kaiser and Hawk (2001), Pare and et al.
(2008), SCB (2008) etc. have conducted many researches in the field of HRM and
employee retention. However, none of these studies provides a picture of the
employee retention of banking industry of Nepal. Thus, this study attempts to fill this
gap linking with international research studies.
CHAPTER III
RESEARCH METHODOLOGY
Research Methodology is a process of gathering, recording, analyzing, and
interpreting the data. This chapter deals about research methodology used in this
study. The basic objective of this study is to explore employee retention of sample
banks and to find out the relation of retention and its components. For achieving the
objective, the following research methodology shall be followed in the course of
conducting the research.
Research Philosophy
Research is systematic, controlled, empirical, and critical investigation of
hypothetical propositions about the presumed relations among natural phenomena
(Kerlinger, 2007, p. 11). It is systematic and organized effort to investigate a specific
problem that needs a solution (Sekaran, 1992). It is “undertaken not only to solve a
problem existing in the work setting, but also to add or contribute to the general body
of knowledge in a particular area of interest to the researcher’’ (Wolf and Pant, 2007,
p. 5).
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Research has purpose/s. The possible purposes for doing research may be
either one or more of the following (Kothari, 2008): (i) to get research degree along
with its consequential benefits; (ii) to face the challenge in solving the unsolved
problems, i.e., concern over practical problems initiates research; (iii) to get
intellectual joy of doing some creative work; (iv) to provide service to society; and (v)
to get respectability (p. 2).
Management research method is a comprehensive guide to the design and
conduct of research in management related disciplines such as organizational
behavior, human resource management, industrial relations, and the general field of
management (Tharenou, and et al., 2007, p. 1). It provides systematic research process
and helps to solve management-related research questions.
The basic criteria of good business/management research are as follows
(Dubey, n. d.):
Purpose should be clearly defined and common concepts be used. Statements
should be short and direct,
Underlining relevant parts for better emphasis,
Pictures and graphs accompanying tables,
Graphics and animations accompanying the presentation of the report,
Procedure should be described in sufficient detail to permit another researcher
to repeat the research for further advancement, keeping the continuity of what
has already been attained (p. 8).
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Research Design
Research designs are plans and the procedures for research that span the
designs from broad assumptions to detailed methods of data collection and analysis
(Creswell, 2011, p. 3). It serves as a framework for the study, guiding the collection
and analysis of the data, the research instruments to be utilized, and the sampling plan
to be followed (Wolf and Pant, 2007, p. 92). It gives the answer of what, when,
where, and how much. It is the conceptual structure within which research is
conducted; it constitutes the blueprint for the collection, measurement, and analysis of
data (Kothari, 2008, p. 31).
Research design is the plan, structure, and strategy of investigation conceived
so as to obtain answers to research questions and control variance (Kerlinger, 2007, p.
300).
There are three types of research designs. They are: qualitative, quantitative and
blend of qualitative and quantitative or mixed. The researcher initially chooses
methods based on the questions to be addressed, however, the questions, issues, and
topics of the study may change as the researchers’ conception of the reality of the
“world’’ being studied changes (Jacobs, 1987).
Research design shall be qualitative for this study. Qualitative research is a
means for exploring and understanding the meaning individual or groups ascribe to a
social or human problem (Creswell, 2011, p. 4). This is concerned with subjective
assessment of attitudes, opinion, and behavior. Techniques used are focus group
interviews, projective techniques, and depth interviews (Marie and et al. n. d., p. 4).
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Most popular research method in management is qualitative. This research
involves the exploration and interpretation of the perceptions, opinions, and behavior
of small samples of individuals (Wolf and Pant, 2007, p. 116).
Qualitative research methods typically include interviews and observations but
may also include case studies, surveys, and historical and document analysis (Savenye
and Robinson, n. d., p.1046). Ethnography, grounded theory, case studies,
phenomenological research, and narrative research are qualitative strategies of inquiry
(Creswell, 2011, p.13).
Qualitative research is a process that involves purposes, conceptual framework,
research questions, methods, and validity. Following figure shows the relationship
among the five components of research:
Figure No. 3-1: A model of qualitative research design (Wolf and Pant, 2007)
The rationales behind adopting qualitative research are as follow: firstly, this
method uses open-ended questions that provide respondents the opportunity to
respond in their own words rather than to choose from fixed responses or pre-fixed
alternatives; secondly, the nature of research questions and unknown variables are the
Conceptual
Framework Purposes
Research
Questions
Reliability
& Validity Methods
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causes of the using this research method; and finally, I have experiences and interest
in qualitative research.
Keeping in mind the above reasons, an exploratory research methodology shall
be used in this study. Exploratory research is the systematic investigation of
relationship between or among two or more variables. It gives emphasis for words
rather than quantification in the collection and analysis of data. This research
diagnoses a situation, screens the alternatives, and discovers the new ideas (Zikmund,
n. d.).
The exploratory research may be conducted by one or more of three
approaches: (i) examining existing literature, (ii) questioning knowledgeable
individuals, and (iii) examining a few selected cases (Wolf and Pant, 2007, p. 336).
The relationship between HR practices and employee retention shall be
explored and whatever relationship exists shall be described.
Population and Sampling Techniques
Broadly all the organizations constitute the population. Specifically, all the
Nepalese organizations are the population of the research. More specifically all the
Nepalese organizations in the banking sector constitute the population of the research.
To be precise, all the Nepalese commercial banks are the population.
There are thirty two commercial banks in Nepal. The study covers six
commercial banks three from foreign joint venture and three from national private.
They are: Standard Chartered Bank Limited, Nepal Investment Bank Limited, Nepal
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SBI Bank Limited, Bank of Kathmandu Limited, Nepal Credit and Commerce Bank
Limited, and Kumari Bank Limited.
This study will adopt the systematic random sampling technique to select these
six banks from the list of thirty one commercial banks. The justification for this
technique is based on the fact that it enables every subject in the sampling frame to
have equal opportunity to be selected without bias in systematic manner (Ogbeide,
1997).
Procedures of Data Collection
Data collection is the crucial step of research. Data can be collected from
various sources. Collected data should represent the real world of the subject matter as
far as possible (Baker, 1994).
Data collection method should be systematic or step by step. The data collection
steps include setting the boundaries for the study, collecting information through
unstructured or semi-structured observations and interviews, documents, and visual
materials, as well as establishing the protocol for recording information (Creswell,
2011, p. 178).
There are several techniques of data collection in qualitative research. Wolf and
Pant (2007) state the following techniques of data collection: (i) Depth interviews
(conversational, not structured), (ii) Opinion leader survey, (iii) Historical
investigations, (iv) Focus groups studies through video conferencing, telephone, and
on-line using e-mail, chat room, websites, etc., (v) Films, photographs, and video
tapes, (vi) Field notes, (vii) Open-ended questions, (viii) Observations, (ix) Case
studies, like single or cross-case analysis, and (x) Delphi technique (pp. 118-119).
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Qualitative data will be collected from primary and secondary sources of data.
The primary data are those which are collected a fresh and for the first time and thus
happen to be original in character (Kothari, p. 95). The secondary data, on the other
hand, are those which have already been collected by someone else and which have
already been passed through the statistical process (Ibid).
Keeping in mind the purposes of the research, both primary and secondary
sources of data shall be used. The study will be used structured, semi-structured, and
unstructured questionnaires and interviews, and observations to obtain primary
information from respondents. In addition, I will use check lists, qualitative audio-
visual materials and I will maintain diary to collect information.
Secondary data will be collected by visiting different libraries within and
outside Nepal, procuring relevant documents from the concerned offices and
authorities like- the concerned banks, Planning Commission Division, Nepal Stock
Exchange office, Nepal Rastra Bank, Central Bureau of Statistics, Bankers’
Association etc., journals, websites and so on.
Tools and Techniques of Data Analysis
The analysis of data requires a number of closely related operations such as
establishment of categories, the application of these categories to raw data through
coding, tabulation and then drawing statistical inferences (Kothari, 2008, p. 18). It
involves preparing the data for analysis, conducting different analysis, moving deeper
and deeper into understanding the data (some qualitative researchers like to think of
this as peeling back the layers of an onion), representing the data, and making an
interpretation of the larger meaning of the data (Creswell, 2011, p. 183).
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Data analysis procedure of this research study would be according to the
following model:
Raw Data
Organizing & Preparing Data for Analysis
Obtain General Sense
(Depth, credibility, use of information)
Coding the Data
Themes
Interpreting the Meaning of Themes
Figure No. 3-2: Data analysis model (Creswell, 2011, p. 185)
When primary data will be collected, they shall be systematically sorted. Since
they are mainly the qualitative data, they will be converted into quantitative data using
Likert’s 5 scale model, ranging from best to the worst like 5 (strongly agree), 4
(agree), 3 (undecided), 2 (disagree), and 1( strongly disagree). Then they will be
properly tabulated.
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Secondary data will be rearranged according to customary accounting
principles. They will be tabulated in the systematic way.
In order to analyze data, appropriate tools and techniques shall be used.
Statistical tools like average, standard deviation, coefficient of standard deviation,
correlation shall be used. Appropriate financial tools, like ratio analysis, shall also be
used. SPSS program shall be extensively used to analyze and interpret data. Tables,
charts, graphs, pie charts etc. shall be used whenever required to exhibit and analyze
the data.
Reliability and Validity
Reliability is the degree of consistency between two measures of the same
thing (Mehrens and Lehman, 1987). The measure of how stable, dependable,
trustworthy, and consistent a test is in measuring the same thing each time is reliable
(Worthen et al., 1993). It is the extent to which a test or any measuring procedure
gives the same result on repeated trials in similar circumstances.
Reliability refers accuracy and consistency measuring device. We can use
suitable method for reliability of research. Wolf and Pant (2007) suggest the
reliability of the measurement may be obtained by one of the three methods: (i) test-
retest or the repetition of the same measure; (ii) Alternative measurement forms or
giving another form of the measure deemed to be equivalent, and (iii) Spilt-half or
dividing a measurement into at least two equivalent parts (p. 153).
Gibs (2007) suggests following reliability procedures:
Check transcripts to make sure that they do not contain obvious mistakes made
during transcription.
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Make sure that there is not a drift in the definition of codes, a shift in the
meaning of the codes during the process of coding. This can be accomplished
by constantly comparing data with the codes and by writing memos about the
codes and their definitions.
For team search, coordinate the communication among the coders by regular
documented meetings and by sharing the analysis.
Cross-check codes developed by the different researchers by comparing
results that are independently derived.
The researcher will follow above suggestions to make the study more reliable.
Validity refers to whether a study measures or examines what it claims to
measure or examine (www.holah.karoo.net/reliabilityandvalidity.htm). It is
truthfulness. Does the test measure what it purports to measure? Validity is the extent
to which certain inferences can be made from test scores or other measurement
(Mehrens and Lehman, 1987). It is the degree to which they accomplish the purpose
for which they are being used (Worthen et al., 1993). There are three kinds of validity.
They are as follows (Wolf and Pant, 2007):
Content validation involves assessing the representativeness or sampling
adequacy of the items contained in the meaning of the instrument.
Construct validation involves understanding the meaning of the obtained
measurements.
Criterion-related validation involves inferring an individual’s score or
standing on some measurement, called a criterion, from the measurement at
hand (p. 151).
The researcher will follow above validations to make the study more valid.
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Credibility, transferability, dependability and conformability (Trochim, 2008)
are the elements of reliability and validity of the study. Credibility refers believable
from the viewpoint of the participant in the research and transferability refers to
generalized ability to other context. Similarly, dependability refers replicable ability
of the research in other subjects and conformability refers the degree to which the
result could be confirmed.
Factors like- methods of data collection, tools and models of analysis, testing,
interaction, response of respondents, bias of researcher etc. directly affect in the
validity and reliability of the study. The study will take into account strictly these
factors and will commit in testing and using relevant instruments and models.
Trustworthy is essential in research. The keen attention will be given in the
reliability and validity to make trustworthy study. Only trustworthy sources will be
used in the course of action and the role of researcher will be mentioned in the study.
Ethical Issues
Pratt (2006) stated that, the main ethical debates in qualitative research revolve
around the tensions between covert and overt research, and between the public's right
to know and the subject's right to privacy. Clearly, some practices that might be
extremely unobtrusive, such as observing through a one-way mirror, concealed tape-
recording or telephone-tapping are just not permissible - and might lead to criminal
proceedings! Participant observation has, on occasions, been likened to spying or
voyeurism. This study will fully considered the ethical matters of the organizations.
The study will observe the non-negotiable value of honesty and fairness. Respect for
persons will be maintained properly.
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