An investigation on the relationship between employee retention strategies and productivity in commercial banks, Kenya

Abstract

Very little research, if any, has been done on what practices firms use to retail employees in Kenya. Since this is important, especially for the banking industry experiencing high employee turnover rates, it is important to carry out a study to determine the employee retention practices in the banking industry. The study sought to investigate the employee retention strategies among commercial banks in Kenya and their influence on employee productivity. The variables of interest in this study were leadership, promotions, training, and rewards and how they influence employee productivity. The present study used a cross-sectional survey design. The population of this study was all the 43 commercial banks which had been operating in Kenya for at least five years. A census of the 43 banks was done but at the end of data collection, 32 banks were finally used in the analysis as they duly responded.

Primary data was collected using questionnaires structured based on the objectives of the study. After collection of data and testing for reliability, the questionnaires were coded and analyzed with the aid of SPSS. Then, the study used descriptive statistics to establish the extent to which each of the practices was applied in the banking industry. The descriptive statistics here were the percentages, mean and standard deviations. Then, the Pearson's correlation and regression analysis were used to test the impact of employee retention strategies on employee productivity. The study found that leadership has a significant influence on employee retention and positively influences employee productivity in commercial banks in Kenya.

The study found that that most of the banks used promotions as a retention strategy and that promotions positively influence employee productivity. The study also found most of the commercial banks in Kenya use training to retain employees and that this has a positive outcome on employee productivity. It was also noted that rewards are used by most of the banks to retain employees and that the influence on employee productivity is positive though very low. The study recommends that there is need for more banks to enhance their retention strategies in various aspects because of the high turnover rates in the industry.