CHAPTER ONE:

GENERAL INTRODUCTION

1.1       Background to the Study

Career development and employee retention are key strategic considerations for all organization regardless of size, sector, market or profile. The development of the capacity and capability of the organizations managers has a fundamental impact on efficiency, effectiveness, morale and profitability of an organization. High performing organizations increasingly pay close attention to the validity of their recruitment practices and are becoming equally vigilant about developing their employees in order to ensure they achieve optimum performance both in the present and the future. This is confirmed by Mwenebirinda, (1998) who acknowledges that employee performance can be enhance via training that addresses identified weaknesses. One of the most significance developments in the public sector in recent times is the increasing importance given to human resources. Torrington and Hall (1987) agree and point out that due to their use of labour intensive activities and increasing competition within the sectors, financial services in general and industry in particular have embark on considerable investment in career development. A career refers to all of the jobs that people hold during their working lives. Career planning is the process by which employees plan their career goals and paths. Career development refers to all technical and managerial skills employees acquire to achieve their career plans. Employee retention is an act of keeping or retaining workers in an organization for increases turnover. Employee retention can means how long an individual has stayed with an employer, or it can means how long a person has been attached to the labour force. Employee retention can be represented by a simple statistic ( for example, a retention rate 80% usually indicates that an organization kept 80% of its employees given period). However, many consider career development as relating to the effort by which employers attempt to retain employee in their workforce. In this sense, retention becomes the strategies rather than the outcome.

Career development is considered important factor in employee retention, organization has the incentives to decrease employee turnover in form of training & development of workers. According to Clark (2001), organizations are intensification development for talented employees, through proficiency analysis, input on employee interests, need development and multisource appraisal of capabilities and formulate plans for action. Wetland (2003), suggested that firms and individual made investment on human capital in the form of development. Career development enhances the skills, organization needs to start training and development programme. Career development provides specialized technique and skills to employee that helps to rectify deficiencies in employee performance, and provide the skills and abilities to employee which will be needed in the organization in the future. Development of skill consists of improving interpersonal communication; technologies, problem solving and basic literacy, the development of people, their competencies and the process of development of the total organization are the main concerns of organization to enhance retention. Stone and Freemen (1992) list special training for career development and employee retention undertaken by supervisors as: Career Planning and Development for personnel. The retention of talented employees is an advantage to an organization because employees’ knowledge and skills are central to a company’s ability to economically competitive. Employee retention becomes increasingly important to organization because periodic labour shortages can reduce high performance employee. Thus workers are searching for better employment opportunities and organizations are seeking to increase productivity of their career path within an organization to move them to remain in the organization to achieve their personal career goals.

In spite of the fact that, there are challenges in relationship between employee retention and career development, HR executive find that attracting and retaining is a problem because when employee leaves the job, organization lost not only employee. But also lost the customers and clients who were loyal with the talent is a problem because of bounded rationality, particularly of cultural and social norms associated with the country (Metcalfe 2008). Organizations are employees, knowledge of production, current projects, competitor and past history of the organization. Ineffective career development is a problem that affects the retention of employees in the sense that organizations quality of served and turnover would reduce which may stop them not to retain employees. Unwanted turnover due to stress, how job satisfaction, unsatisfactory working condition and inadequate benefits may chase employee not to stay in an organization.

Organizations make enormous efforts to attract handfuls of employees and sustain them in the organization. In today’s business scenario only high salary and designation is not significant for employees to retain them in the organization, but career development also play important role in their retention. Career development in the organizations helps to retain the talented employees because it gives imperative outcomes to employer and employees. To gain and maintain competitive advantage, organizations required talented and productive employees and these employees need development to enhance and cultivate their competencies (Prince, 2005). According to Silbert (2005), well skilled and talented workers may easily find good job, position and workplace elsewhere; however the effective way for retaining these talented employees is to enhance friendly and close working environment and to promote leader support. Career development provides opportunity to test employees abilities and providing level of performance to enhance employees’ capability and make them to stay in the organization.

This study provides an assessment of relationship between career development and employee retention in the public sector.

1.2       Statement of the Research Problem

In any public sector organization, career development has become necessary to serve as a way of improving employee talent and retention of employee for the achievements of organizational objectives. In spite of the role such career development has not adequately enhanced employee retention in the public sector, this is as a result of poor training and development in a public sector. Inadequate organizational capabilities and the organizational competencies also affect career development and employee retention. This is because organizational capabilities and organizational competencies need right kind of human resource in order to achieve organizational goal. As argued by Prahald and Hame (2000), organizations that acknowledge and direct their organizational competencies efficiently competes more productively and effectively. Retaining employees is the key issue in current business environment. Without well incorporated staff in the organization and putting their greatest effort, success can never be long term. Problems existing in the personnel or in a sense human capital, have unforeseen influences that cause troubles with training, planning and decision making. So it clarifies the reason why employees leave the organizations. Cole (2000) stated that employees are more likely to stay with organizations that give them the sense of pride and they will work to maximum potentials due to some rationales as work climate, rewards, opportunities to develop and grow and the work life balance (Madiha et al, 2009). Major cost of organizations is due to more employees quitting the job, these quit rates raise labor costs and lower organizational performance (Norsworthy & Zabala 1986 cited in Batt, Colvin & Keefe, 2002). Several factors e.g presence of challenging and meaningful work, opportunities for development and growth, level of empowerment, responsibility and managerial integrity and coordination affect the employee retention in various organization (Birtet., 2004). Walker (2001) determined that compensation and appreciation of the task accomplished, challenging and meaningful work climate, learning opportunities, and strong relationship with workers, better work life balance, better coordination within the organization, are the key factor that support retention. Factor such as poor rewards, poor style of leadership, lack of development opportunities, poor working environmental conditions directly affect employee retention (Hytter, 2007).