Khalid Ahmad; Kenneth Azumah , pp. 94. MAM/Sektionen för Management, 2012.
Retaining employees is an important goal of every organization. This thesis explores the factors that can significantly impact employee retention in an organisation. It attempts to relate some of the factors discovered to major theories such as the Employee Equity Model, Herzberg’s (Two-Factor) Theory and the Job Embeddedness Theory. The literature surveyed by this study mention employee motivation, job satisfaction and job embeddedness as the main factors that influence employee retention rates. The study proposes that job embeddedness is a superior model that significantly explains employee retention. The population for the study were 53 respondents out of 75 taken from a patent firm in Australia, a representation of the rapidly growing knowledge industry. The participants of the survey were contacted through private email and selected for the study by simple random sampling done via the listing of the employee names in a spreadsheet program. The survey questions were categorized under six major theories of employee retention with each category having an average of five questions. Four most significant theories emerging were compared and the theory best explaining employee retention was chosen. The four most significant theories were Employee Equity Model, Herzberg’s (Two-Factor) Theory and the Job Embeddedness Theory, and the one that most explains employee retention was Herzberg’s (Two-Factor) Theory. This implies that notwithstanding the age of the Two-Factor theory, it is still significant for managing employee retention in today’s rapidly expanding service- and knowledge-based organizations.