When an employee leaves the organization, he along with him also takes the knowledge, company policies, and strategies along with him to the competitor. Moreover, selecting another candidate and aligning him to company culture add another cost to the organization. Although the problem of employee retention has been in existence since a long time, the problem is getting grimmer and serious with time. In this context, it is important for companies to retain their employees. This has led to an increased interest in research in the area of Employee Retention.
Employee retention is the set of tools, processes and techniques that HR managers shall use to encourage employees to be in the organization for maximum amount of time. The main objective of employee retention processes is to reduce the voluntary turnover. It is important to note that these are not just a set of HR practices but it also requires an understanding of the psyche of the employees and their interrelationships with their subordinates and managers. This paper does a literature review of the various research papers that have been published in this area.
The research focusing on reasons on voluntary turnover by employees has mainly pointed out two categories of reasons: family (personal) reasons or professional reasons. Often, employees leaving the organization leave it because they do not find a fit between the organizational goals and their own goals. One of the propositions on why employees leave is based on the fact that employees are having a psychological contract with the organization where each has a set of expected outcomes from the other party. If an employee feels that the organization is not fulfilling its duty in terms of what it owes to the employee, he is more likely to quit the job (Vos and Megank, 2007). Job dissatisfaction among an employee may be the result of job stress, repetitive work, ambiguous role or excessive workload. Economic factors such as pay, rewards, bonuses