The Effects of Organization's Retention Strategies on Firm's Performance

Many firms encounter the issue of frequent labour turnover because of increasing job dissatisfaction in their work mainly from the unsuitable employee retention strategies. The failure of implementing effective employee strategies can earnestly affect the most established companies, as cited why performance in a challenge in some organization because of inappropriate employee-recruitment strategies (Amadasu, 2003), of employee involvement in decision making (Jike, 2003) as well as poor remuneration and application of traditional retention strategies (Adebayo, 2001; Ayagi, 2001).

Some organizations face the problem of frequent labour turnover due to job dissatisfaction on the part of the workforce arising from the provision of inappropriate employee-retention strategies. Several authors cite gaps as to why performance is a challenge in some organizations in Nigeria such as inappropriate employee-recruitment strategies (Amadasu, 2003); poor work environment (McOliver, 2005); lack of employee involvement in decision making (Jike, 2003), inability of organizations to formulate and implement rational decisions (RD) (Iyayi, 2002); poor remuneration and application of traditional retention strategies (Adebayo, 2001; Ayagi, 2001).

The employees of the companies are the most values resources and they possess the talent, experience and knowledge that are required for the company to excel as it adds economic value to firms (Riordan et al., 2005). Therefore, employees are crucial element for a company to be able to reach its organizational goals. As a result, it is necessary for organization to retain their employees by in placing suitable employee retention to make employees stay in the company and contribute to the workforce. As cited by Peterson (2005), he said that it was cumbersome to undergo a long hiring process, employee training, and all the other necessary procedures when employing a new employee.

The human resource possesses skills, experience, and knowledge that add economic value to firms or organizations (Riordan et al., 2005). The human factor is therefore fundamental to the achievement of organizational goals. As a result, it becomes imperative for organizations to put in place strategies to retain their workforce for performance. According to Peterson (2005):

[...] it is incredibly frustrating to go through a long hiring process, employee training, providing uniforms and other necessities, and then have the employee quit after two months. Then you start over.