Effects of human resource management practices on retention of employees in the banking industry in Kampala, Uganda
Abstract
The importance of human resource in any organization cannot be overstated, as they are the
ones who contribute significantly to the organizational goals. Therefore, organizations’ need to
ensure that they have effective strategies to keep their skilled employees satisfied and loyal.
One of the ways to achieve this is through implementing sound HRM practices that can enhance
employee retention. This is especially relevant for the banking industry in Uganda, which faces
a high threat of employee turnover due to the competitive nature of the sector. The aim of this
research was to explore how HRM practices influence the retention of employees in the
banking industry in Kampala, Uganda. In particular, it investigated the effects of career
management and work-life balance on employee retention. The research also examined how
job satisfaction moderates the relationship between HRM practices and employee retention.
The study followed an explanatory cross-sectional survey design and was undertaken in the
Kampala CDB. The researchers used stratified random sampling to choose 342 employees from
different banks as their sample. They applied both descriptive and inferential statistical methods
to analyses the data. They performed a Binary Logistic Regression analysis to examine how
well the HRM practices could predict employee retention. The results of this study show that
HRM practices such as compensation and work-life balance are important to employees and
affect their retention in the banks. Moreover, work-life balance and employee engagement,
which are new topics in HRM research, both significantly predicted employee retention.
However, unexpectedly, career management did not have a significant impact on employee
retention. It was also clear that job satisfaction could not moderate the interaction between
HRM practice and employee retention. The study suggests that, to improve employee retention
in the banks, the banks should pay attention to their human resource even in a competitive
environment, so that they can gain a competitive edge through them. The banks should offer
some flexibility because work-life balance seems to be important to the employees.
Additionally, it is suggested that employees should be empowered and given challenging tasks
that will make them use their full potential. Also, the banks should collaborate with universities
and other academic institutions for research on the problems they face, so as to find the best
solutions for human resource management.