A Study of the relationship between retention strategies and job performance in the IT industry in Sri Lanka

Abstract

In today’s world, employee turnover is one of the major issues faced by many companies. The turnover rate impacts the employees’ performance and organization’s stability as well. This study explores and analyses the relationship between retention strategies and job performance in the Sri Lankan IT industry. The main objectives are to determine the job performance of employees in the software industry, discuss the factors that affect the turnover in the software industry, examine the relationship between retention strategies and job performance, and recommend a set of guidelines to improve job performance. The analysis of the literature review discusses the current research on retention factors such as, employee recognition, flexible working arrangements, rewards, compensation, work-life balance, leadership and management, etc. This study has identified five main retention factors using a pilot test, to be addressed throughout the research. The research methodology is based on a quantitative approach; hence a survey is conducted with 300 employees who work in IT industry. The survey questionnaire contains 30 questions, with five questions per variable. Descriptive analysis is performed to analyze the respondent demographic characteristics based on frequency analysis and the central tendencies measurement of constructs. Then, the scale measurement is used for the reliability analysis. This is followed by inferential analyses using the Pearson correlation coefficient analysis. Finally, the ANOVA test is applied to identify the impact of the five independent variables with the dependent variable, job performance. According to the analysis results, it can be concluded that flexible working arrangements have a high impact on job performance compared to the other four variables. Management and leadership, employee recognition, onboarding/training and employee relations have a considerable relationship with job performance even though it is of a lower impact. Further, a set of recommendations is proposed to improve the job performance of employees in the IT industry in Sri Lanka. These recommendations will enable the organizations to identify employees’ needs and wants. These strategies can be implemented based on a priority level, which includes the most influential ranking with the intention of satisfying and motivating the employees. Thus, by meeting the needs of employees, job performance can be increased and by that, the employee turnover rate can be reduced.