Author

Aneeq Ahmed

Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2016

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

This research thesis explains and highlights the glaring issue of employee attrition rate in relation to employee engagement and satisfaction for an organization working in Pakistani culture. As Pakistan’s economy is growing, more employment opportunities and choices are being created. It is getting increasingly challenging for organizations to attract and retain talent and potential. Developed and recognized national and multinational companies spend a lot on finding innovative talent and then face difficulties in retaining it. Such organizations realize that a “satisfied” employee does not necessarily mean a loyal employee or a top performer. They need to do something beyond to reduce attrition. What is the ideal attrition rate; what effect does employee engagement, in reality, have on attrition rate; what causes employee engagement to fall and how much an organization should spend on engagement and attrition rate improvement; are a few puzzling questions that have been answered methodically in this thesis.

Organizations with dynamic attrition rate control regimes actively monitor attrition and classify it as healthy or unhealthy. Healthy attrition is called as it is necessary for other employees’ progression and bringing new synergies to the organization. It is also healthy if the exit is of low performer as it embeds efficiency and productivity in the organization. Unhealthy attrition rate refers to a large number of personnel’ attrition which causes brain drain and reduces required experience.

In times of diminishing loyalty, employee engagement comes forward as a powerful tool in managing human capital. The fact that it has strong impact on bottom line adds to its importance. If employee engagement really impacts the attrition rate of an organization, then it justifies the expense on engagement gauging and improvement activities. In order to establish the hypothesis stated above, survey questionnaire was used to gather data from 111 professionals as primary data source. Secondary data sources were used to understand the existing literature on the topic.

Chi-Square test was applied to the data set using Minitab. The Hypothesis “Engagement of employees have significant impact on their will to leave the organization” was accepted at 95% confidence interval.

It was concluded that employee engagement does have impact on employee attrition rate in an organization and it also justifies the expense on engagement activities. However, one must also take it into consideration that attrition can be improved through employee engagement to a limited extent only and thus the efforts in this regard must be done according to the required attrition target.

In the end of this report, recommendations have been generated addressing direct and indirect engagement of employees. It is also established that employee engagement is not a one-time activity but a continuous effort in bringing efficiencies to the organization and also not focused on a single goal.

Pages

44

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