Role played by Performance Management and Employee Retention on the performance of Primark

By

CHAPTER # 1: INTRODUCTION

Background of the Study

A growing concern for many organizations is high employee turnover rates. In particular, organizations in the retail industry have higher than average employee turnover rates when compared with other industries. Employee retention can be so costly that organizations will take measures to retain their employees. Employee retention in the retail industry is high at all levels of employment: however, high turnover is particularly anticipated at the level of front-line employees (i.e. cashier, sales associate).

In an effort to decrease turnover rates, employers continually try to determine the reasons that employees leave their organizations. Employee retention has been found to be impacted by variables such as work-family conflict, family-work conflict, pay satisfaction, job satisfaction, and organizational commitment (Trevor Black 2004 64). There is a need for research in the field of retailing to determine the relationship between these variables and turnover intentions (employee's intentions to withdraw from an organization and how to prevent turnover intentions, which ultimately prevents turnover. The intention to quit a job is the immediate precursor of turnover.

Background of the Company

Primark Stores, a subsidiary of Associated British Foods, is engaged in operating departmental stores. The company owns and operates 219 departmental stores that provide products such as women's wear, children's wear, menswear, footwear, accessories and household textiles. The company operates in the UK, Ireland, Spain, Netherlands, Portugal, Germany and Belgium. It is headquartered in Reading, the UK. As a privately held entity, Primark Stores is not obliged to publish its financial results.

Primark tracks employee retention at a basic level to determine employee satisfaction levels, the impact of recruitment and hiring costs and the effectiveness of recruitment processes. They also track turnover to assess the effectiveness of current leadership and leadership training needs. Tracking turnover is similar to monitoring employee retention both give insight to conditions ripe for plummeting employee morale and motivation.

Employee Satisfaction

oTracking employee turnover for reasons related to employee satisfaction provides with dual-purpose insight about the reasons employees leave. During the exit interview process, employees who indicate they feel the company devalues their expertise are stating upfront that satisfaction and recognition are two very important employment factors to them (Tsang 1997 89). However; this can and has had a direct detrimental effect on the current employees within the store. As discovered in the recent staff survey when existing employees start to leave and the reasons behind this is due to their satisfaction and their worth to their managers, existing employees start to speculate if their own work is actually valued.

oPrimark as an organization tracks employee retention, and through employee surveys can obtain tangible

oOn the other hand, the domino effect of turnover can affect existing employees. Once employees start leaving organizations for reasons pertaining to employee satisfaction, current employees begin to wonder if their own work is truly valued. Tracking employee turnover to measure employee satisfaction levels gains traction and popularity as employers become more cognizant of the ...