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FACTORS INFLUENCING EMPLOYEE RETENTION OF SERVICE CREWS

IN MC DONALD’S CARMONA, CAVITE

Thesis Proposal
Submitted to the faculty of the
Department Management
Cavite State University – Carmona Campus
Carmona, Cavite

In partial fulfilment
of the requirements for the degree of
Bachelor of Science in Business Management

ANNE MIANO
ELDREIH CASTILLA
September 2018
FACTORS INFLUENCING EMPLOYEE RETENTION OF SERVICE CREWS
IN MC DONALD’S CARMONA, CAVITE

Anne Miano
Eldreih M. Castilla

An undergraduate thesis manuscript submitted to the faculty of the Department of Management,


Cavite State University-Carmona Campus, Carmona, Cavite in partial fulfilment of the
requirements for the degree of Bachelor of Science in Business Management with contribution No.
TBM – 2018 – 06 – 006 Prepared under the supervision of Ms. Maria Andrea Conde-Francia.

Introduction

In the current competitive, global business-environment, organizations were continuously

triggered by social-developments and economic-advancements, which consequently passed

pressures to the labour-market (Burke and Ng,2006). According to the report from Hay Group

(2013), an employee turnover-rate of 23% was forecasted and the number of global voluntary-

quits were expected to be around 192 million by 2018.

Thus, on one hand, the organizational-issue was the lack of talented-workers, meanwhile,

on the other hand, organizations were faced with the risk of losing their skilled, experienced

human-resources which they already possessed (Gharib et al.,2017). This has potentially created a

competitive disadvantage to organizations (Moncarz et al.,2009) and subsequently has forced them

to consider employees as an important asset, who needs to be protected and retained (Kossivi et

al.,2016).
Retaining talented employees will not only boost the competitiveness of companies, but

will also reduce the cost of companies alleviating costly recruiting-cycles; which counts for like

two-thirds of organizational spending, and any interruptions on the ongoing-operations.

(Kumar, 2012). Therefore, since issues of employee retention are recorded to be emerging with

the current and predicted increases in turnover rates, retaining employees is likely to be a major

challenge for employers in the immediate-future, which needs much focus from organizations

(Walsh and Taylor, 2007). Thus, the key focus of this research is to recognize and analyse the

factors affecting employee retention, based on secondary-research-articles.

Retention issues are emerging as the most critical workforce management challenges of

the immediate future. Researches have shown that in the future, successful organizations will be

those which adapt their organizational behaviour to the realities of the current work environment

where longevity and success depend upon innovation, creativity and flexibility. In fact, the

dynamics of the work environment will have to reflect a diverse population comprised of

individuals whose motivations, beliefs and value structures differ vastly from the past and from

one another. This phenomenon is especially true in light of current economic uncertainty and

following corporate downsizings when the impact of losing critical employees increases

exponentially (Caplan and Teese, 1997).

Critical analysis of workforce trends points to an impending shortage of highly-skilled

employees who possess the requisite knowledge and ability to perform at high levels, meaning that

organizations failing to retain high performers will be left with an understaffed, less qualified

workforce that ultimately hinders their ability to remain competitive (Rappaport, Bancroft, &

Okum, 2003) with managers facing a difficult challenge of motivating and retaining the employees
in an environment of increased uncertainties (Mitchell, 2002). Retention rates generally falls as

employees become distracted, confused and preoccupied with potential outcomes immediately

following an organizational transition (Bridges, 1991). However, despite the vast literature on

employee turnover, which is aimed at identifying factors that cause employees to quit (Griffeth,

Hom, & Gaertner, 2000), much less is known about the factors that compel employees to stay. For

example, Maertz & Campion (1998) noted “relatively less turnover research has focused

specifically on how an employee decides to remain with an organization and what determines this

attachment…retention processes should be studied along with quitting processes”. Steel, Griffeth,

& Hom (2002) added “the fact is often overlooked, but the reasons people stay are not always the

same as the reasons people leave”.

Statement of the Problem

The study was conducted to determine the Factors Influencing Employee Retention of

Service Crews in Mc Donalds’s Carmona Cavite. The researchers intended to know the following:

1. What are the demographic profile of the participants in terms of:

A. age;

B. sex;

C. civil status, and

D. length of service

2. How does compensation affect the employee retention of service crews in Mc Donald’s

Carmona, Cavite?

3. How does work life balance affect employee retention of service crews in Mc Donald’s

Carmona, Cavite?
4. How does management/leadership affect employee retention of service crews in Mc

Donald’s Carmona, Cavite?

5. Is there a significant relationship between compensation and employee retention?

6. Is there a significant relationship between work life balance and employee retention?

7. Is there a significant relationship between leadership and employee retention?

Objective of the Study

Generally, this study sought to examine the Factors influencing Employee Retention of

Service Crew’s in Mc Donalds Carmona Cavite.

1. the demographic profile of the participants in terms of:

a. age;

b. sex;

c. civil status, and

d. length of service

2. the compensation affect the employee retention of service crews in Mc Donald’s

Carmona, Cavite.

3. the work life balance affect employee retention of service crews in Mc Donald’s

Carmona, Cavite.

4. the management/leadership affect employee retention of service crews in Mc Donald’s

Carmona, Cavite.

5. assess a significant relationship between compensation and employee retention.

6. assess a significant relationship between work life balance and employee retention.

7. assess a significant relationship between leadership and employee retention.


Significance of the Study

A lot of individuals will be benefited in the outcome of this study specially the following:

Company. The outcome of this study may help the company to gain some advantage to

know that can be possible to less paying the recruiter to teach newbie in the field.

Employee. This study will help the employee to be aware of their presence in organization

and their value.

HR Manager. Through this study HR Manager will know that their time and effort that

spent in conducting interviews and selection been lessen.

Researcher. The result of the study can serve as future reference for researchers and may

be used as the basis of making new study about the same topic.

Time and Place of the Study

The study will be conducted in Mc Donald’s Carmona Cavite from September 2018 to

December 2018.

Scope and Limitation of the Study

The place of the study covered Carmona Cavite. The study was limited to the service crew

of Mc Donald’s were the participants regardless of their age, sex, civil status and length of service.

This study set limitation with the information gathered. The personal profile will include age, sex,

civil status and length of service. The Employee Retention will only include its factors belongs

compensation, work life balance and leadership.

Operational Definition of Terms


Compensation. something, typically money, awarded to someone as a recompense for

loss, injury, or suffering.

Employee Retention. refers to the ability of an organization to retain its employees.

Leadership. the action of leading a group of people or an organization.

Work life balance. is the term used to describe the balance that an individual needs

between time allocated for work and other aspects of life. Areas of life other than work-life can

be, but not limited to personal interests, family and social or leisure activities.

Conceptual Framework

The conceptual Framework of the study shows the relevant factors that influence employee

retention of service crews in Mc Donald’s in Carmona, Cavite. Figure 1 illustrates the influence

and connection of the independent variables to the dependent variable. In this study, compensation,

work-life balance and leadership will serve as the independent variables while employee retention

will be the dependent variable.

COMPENSATION

WORK-LIFE
EMPLOYEE
BALANCE
RETENTION

LEADERSHIP

Figure 1. Conceptual framework showing the relationship between the compensation, work-
life balance and leadership to the employee retention.
REVIEW OF RELATED LITERATURE

Employee Retention

Employee-retention is generally ‘the intention of employees to stay loyal to their current-

workplace (Huang et al.,2006). It is when employees are encouraged to remain in the organization

for a long-period or until the ongoing-project is complete (Bidisha,2013). Thus, as cited by

Govaerts et al (2010), the survival of organizations was highly-dependent on their human-assets.

Subsequently, has it created; a mandatory requirement for organizations to retain those human-

assets (Horwitz et al.,2003). Thus, this literature review mainly focuses on recognizing the factors,

and how they affect employee retention. Subsequently, as per studies of (George,2015; Moncarz

et al,2009; Kossivi et al,2016; Umamaheswari and Krishnan,2013); compensation, work-life-

balance, management/leadership were noted as the commonly identified factors affecting

employee-retention.

Compensation

Compensation was defined as the sum of both financial and non-financial remuneration,

offered to employees by employers for the provision of their valuable services (Osibanjo et

al.,2014). It constitutes of wages/salaries, bonuses, incentives and other fringe-benefits like

holidays, health-insurance and company-vehicles (Patnaik and Padhi,2012). On one hand,

compensation was identified as a motivator; and therefore, a key-retention-strategy (Gardner et

al.,2004), which had a direct relationship with employee retention (Hytter,2007). Meanwhile, on

the other hand, Teseema and Soeters (2006), cited more specifically that voluntary turnover was

high among employees who valued higher financial-rewards as a part of their compensation-

package, which subsequently implied that compensation plays a major-role in retention. For

instance, professional nurses who migrated from South Africa cited compensation as the reason
for their leaving (Spence et al.,2009). Yet controversially, Hayes et al (2006) and Kossivi et al

(2016) stated that compensation and retention holds no-direct-relationship. For example, though

Google Inc. was famous for having a generous-compensation package, their median tenure was

around one year, due to the fact of the tech-market being hyper-competitive, with many new job-

opportunities (Business Insider,2015). Also, in the recent global survey of CEOs carried by PWC

(2011), they discovered that 65% of corporate-leaders were focusing on non-financial rewards.

Also, it was further cited by millennials that ‘money is not everything’. Furthermore, based on a

research carried by Kovach (2001) among industrial blue-collar workers, it was noted that

wages/salaries alone do not satisfy workers. Thus, it could be realized that; compensation is

moreover a key-driver of retention, yet it alone will not retain employees in the long-term, as unlike

in the past generations, today’s employees, both managerial and blue-collar workers think much

about the worth of their job, in many other aspects, like work/life-balance and employer-employee

relations (PWC,2011), rather than just focusing on pay-rates.

Work-Life Balance

According to Hudson (2005), work-life-balance was defined as a properly-planned balance

between a person’s personal-life and professional-life. Meanwhile, Estes and Michael (2005)

stated that work-life-balance includes; flexible work-arrangements and leaves, including practices

like; flextime, teleworking, job-sharing-schemes, family leave-programs and onsite child/elderly-

care. Over the years, work-life balance has become an increasingly significant factor for many

professionals in organizations. Unlike in the past generations, in the present-day business

environment, employees tend to demand for flexible work-schedules which brings a balance

between their professional and personal lives (Ellenbecker,2004). According to a survey carried

by PWC (2011), 95% reported the importance of work-life-balance, whereas, 70% stated that it is
highly important. Millennials from Japan were the least concerned people about work-life-balance,

but still 85% of them said that work-life-balance is important to them. Furthermore, Kossivi et al

(2016) and Arnolds (2005) stated that; jobs that offer work-life-balance offer opportunities for

employees to fulfill their family and other responsibilities; like child and elderly-care-

commitments, educational-plans, religious-observances and fulfill the need for reduced levels of

stress, with flexible-work (ACAS,2015). These will boost employee retention levels, whereas,

work places which lack work-life-balance will be encountered with high turnover levels, implying

low-retention levels. For instance, in Taiwan, family matters, mainly including child care and

traditional family responsibilities (Sinha and Sinha,2012); regularly has affected the retention of

working-women, who consequently tend to have higher turnover-rates than men (Naqvi and

Bashir,2012). Thus, with respect to this concern, if work-life-balance existed, working mothers

could have planned their work schedules by considering their home and children-based schedules,

thus allocating dedicated time for both their professional and personal lives (George,2015).

Leadership

Leadership and Employee Retention Eisenberger and associates (1990) [51] suggested that

employee’s perception regarding an organization is strongly influenced by their relationship with

the supervisor. McNeese-Smith (1995) [52] mentioned in his study on Leadership behavior of

hospital directors found that there is significantly positive relation between productivity, work

satisfaction and organizational commitment of staff. Brunetto and Farr-Wharton (2002) [53] were

of the view that supervision of the immediate manager increases the level of job satisfaction in the

public sector employees. Chung-Hsiung Fang, Sue-Ting Chang, Guan-Li Chen (2009) [54] has

found that leadership style can affect organizational commitment and work satisfaction positively

and work satisfaction can affect organizational commitment and work performance positively.