A Structural Equation Model for Measuring the Impact of Human Resource Management Practices and Organizational Loyalty on Employee Retention: An Indian Perspective

The role of human resource management practices and organizational loyalty dealing with employee retention has been widely explored and examined in the existing literature. The majority of human resource management researchers have focused on the role of policies and practices in different sectors related to employee retention. However, less attention has been given to identifying the practices and procedures common across all industries and sectors. The present study attempts to determine and examine the most important constructs like HR practices and organizational loyalty of employee retention management and proposes a comprehensive structural equation model to measure the impact of these constructs on employee retention. After an extensive review of the literature, organizational loyalty, and human resources management practices like recruitment and selection, compensation and benefit, training and development, supervision and evaluation have been identified as four essential practices dealing with employee retention and are common across all industries. These practices constitute the component factors of an employee retention management predicting employee’s turnover intentions. The survey method was adopted, and the original data obtained through the self-administered questionnaire. The valid one hundred and eighty-nine (189) respondents analyzed by using Lisrel 8.7, Structural equation model (SEM) analysis results shows that human resource management practices and organizational loyalty have strong positive impact on employee retention. This study tends to assist human resource managers and decision makers in selecting the appropriate motivating factors to retain and satisfy their employees