Impact of HRM Practices on Employee Retention with the Moderating Role of Organizational Culture in Banking Sector of Pakistan

Abstract

Current study has aimed to investigate the impact of HRM practices on employee retention with moderating role of organizational culture in banking sector of Pakistan. In this study, recruitment and selection, training and development, performance appraisal, and compensation (representing HRM practices) were considered as the independent variables. Organizational culture was used as the moderator. Employee retention was used as the dependent variable. Meanwhile, employees working in banking sector of Pakistan were the targeted audience for investigating the relationship between variables mentioned above. Quantitative research method was used, as primary data was collected through adopted structured questionnaire based on 5-Likert scale. The responses were recorded from 250 respondents (employees working in banking sector of Pakistan) through convenience sampling technique. Responses recorded were analyzed through statistical tests (correlation, regression, and moderation analysis) by using SPSS Software. Recruitment and selection, training and development, performance appraisal, and compensation were empirically tested with employee retention and found positive correlation between them. Furthermore, regression analysis has also proved that there exists a significant positive relationship between recruitment and selection, training and development, performance appraisal, and compensation (independent variables) and employee retention (dependent variable) in banking sector of Pakistan, accepting H1, H2, H3 and H4. Moreover, moderation analysis has proved moderating effect of organizational culture in relationship between recruitment and selection, training and development, performance appraisal, and compensation (independent variables) and employee retention (dependent variable) in banking sector of Pakistan, accepting H5, H6, H7, and H8. Hence, moderation analysis proved that improvement in organizational culture strengthens the relationship between HRM practices and employee retention in banking sector of Pakistan and vice versa.