Retention Rate on Organizational Performance

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KFC is one of the busiest fast food industries in UK and it is based in USA. KFC has big market share in UK. KFC provides training and good career path to its employees. KFC faces problems to meet business objectives, increasing customer satisfaction. To overcome difficulties and increasing organizational performances KFC wants to finds out the impact of retention rate on organizational performance. This is one month survey conducting with KFC employees and various secondary resources. Various articles, journals, newspaper and magazines have been collected to find out the information on motivation and organizational performance. 30 employees have been communicated via email to collect primary data. The primary and secondary data show that motivation has major impact on organizational performance. If organization can motivated its employees then performance of employee's with a high volume. Employee's attitude towards motivation is very positive. Employees want motivation rather than any other things. From the research it is clear that if KFC can improves its motivational strategy it can increase its organization performance.


Employee retention is a process through which the organization can keep its employees with a certain period of time. Retention is good for both employee and organization. The objectives of the research are about employee's retention and organizational performance. Beginning of the research paper describes briefly about the research topic. It has three different parts. The paper is started by pointing out the research topic and its impact. After that the main parts are discussed. Among the three main parts the initial one is "Research Proposal." The research proposal starts with the hypothesis. After selecting hypothesis the research proposal describe briefly about the organization. After that the research proposal describes about the context and rational, reason for research, aim, objectives, literature review, methodology, resources and action plan. The next part of the research is "Actual Research." It has research design, data collection, and data analysis. The ending part of the research is "Presentation and Evaluation." It is about the analysis of findings, methodology evaluation, conclusion and recommendation. The references, bibliography and appendix are also included with the research.



If retention rate is related to organizational performance, than by increasing employee's retention rate will increases organizational performance.

Background Theory

Employee retention is the main concern of almost all of the organizations. Basically, small businesses suffer more because of employee's high expectation. There are many firms; offer little benefits last 10 years or so. Now-a-days employees need and wants growing every day. Employees want more than their salary. As a result employee turnover is increasing. On the other side the importance of retention become very important for every organization. (Kim McLean, 2008). Employee retention always increases organizational performances. Retention also encourages current employees to remain with the organization. Long term service of employee's means they are efficient and effective to their job duties. Again they know very well how to job done. On the other side retention can save several costs to the organization. Such as, hiring cost, training cost, productivity cost, replacement cost and efficiency cost. (Workforce Planning for Wisconsin State Government, 2005). Employee retention has several benefit but employees' turnovers has several disadvantages. Some of the article shows that, "turnover is a silent but significant profit killer." (Kottolli, 2010).

Brief Summary to the Organisation

KFC is one of the busiest fast food industries in UK and it is based in USA. KFC has big market share in UK. KFC provides training and good career path to its employees. The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952. At present KFC have more than 24,000 employees. KFC operates all over the world and its main business trend is Halal food.

Context and Rational

Today KFC faces some problem with its employee's turnover. Employees do not paying attention to their job duties. They turn up late and try to go home early. They are not very active as they used to in 2008. Customers often complain to the manager that, employees are serving very late. They are more concentrated in gossiping with each others. Some of the KFC stores take 5 to 10 minute to serve customer even though there is only one customer. Some employees are giving resignation without having informed. Due to frequent change of employees, customer dissatisfaction is growing day by day. Lack of concentration of employees and their carelessness shows that employees are not loyal to KFC. Sometimes managers also support employees and careless about KFC code of conducts.

Reasons for the Research

KFC undertakes the research to find the ways retain its employees'. Employees' turnover is growing day by day. KFC wants to keeps its employees in order to provide high level of customer service. KFC also wants to reduce the cost of hiring, training and efficient cost. If employee's turnover rate decreases KFC can increase its market share. Also it is possible for KFC to increase its customer satisfaction and bring back previous business reputation.


The aim of the research is to discover the impact of employees' retention rate on organizational performance.


A list of the objectives of the research has given below: To reduce employee turnover To increase customer satisfaction To increase employee satisfaction

 Literature Review

According to Robert L. Mathis, John H. Jackson in their book, "Retention of human resources must be viewed as a strategic business issue." Retention of employees has several benefits and advantages. Employees are getting high level skills when they working same environment for long period of time. But, the result of employee's turnover is vital for the company. If an efficient employee gives resign company need to appoint new people. The new employee is not efficient and cannot provide satisfactory level customer service. That cost higher for the company. To support employee retention an article can help further. The world leading company shows high level of employee retention programme. As a result employees are providing high level service and working hard for the organization. Anne bruce (2006), described in his article, " how to motivate every employee". He also described, "how Google manage its employees retain with its". He described that, "like at Google, one of the web's most successful and growing search engines. Here employees play roller hockey during work hours, bring their dogs to work, and eat lunch and the company cafe. The result ? Employees work long, hard hours and love their jobs." Again, survey and research on employee retention is an issue since the early age of industry revolution. A survey takes place in 1980. The focus of the survey was on the employee retention. The survey demonstrated that, "people want more from work than money". "An early study of thousands of workers and managers" by the American Psychological Association clearly demonstrated this. While managers predicted the most important motivational aspect of work for people would be money, personal time and attention from the supervisor was cited by workers as most rewarding for them at work. In a recent Workforce article, "The Ten Ironies of Motivation," reward and recognition guru, Bob Nelson, says, "More than anything else, employees want to be valued for a job well done by those they hold in high esteem." He adds that people want to be treated as if they are adult human beings. Another article described that, "We knew from past experience that Love2reward offered a great product and service (for our employee retention scheme). It's all about giving our team what they want, and feedback tells us that we've got it right" Pizza Express UK.

The data sources are given below:

"Turnover is a silent but significant profit killer". By Arun Kottolli (2010), Employee Turnover Kills Profits. "Keeping good employees is a challenge that all organizations share and it becomes even more difficult as labour markets tighten", by Robert L. Mathis and John H. Jackson. (2008:76), Human Resources Management "Retention of human resources must be viewed as a strategic business issue" by Anne Bruce, "How to motivate every employee" Nelson (2003) writes in The Ten Ironies of Motivation that, "I have known for years--that money isn't everything when it comes to employment" "Employee retention is most critical issue facing corporate leaders as a result of the shortage of skilled labour, economic growth and employee turnover" By "For service-oriented careers such as account management and customer service, high turnover can lead to customer dissatisfaction." By Shelley Moore (2010) The above resources give qualitative data about the retention and organizational performance. From the data it is found that retention can change trend of employee turnover form any company. Retention makes employees motivate. It also brings job satisfaction. It gives clear definition of job responsibilities. The motivated and satisfied employees provide high level customer service. The high level customer service increase organizational performance. On the other hand employee turnover show negative impact to company. The results are hiring cost, training cost, efficiency cost and much other cost. The collection of secondary data initially shows that there is a relationship between employee turnover and organizational performance. If employee's retention increases then organizational performance also increases. If employees' retention decreases then organizational performance also decreases.


The research proves that retention has major impacts on organizational performance. Thus, the hypothesis is supported by the research. Finally it is found that if KFC develops better retention policies it can keep its employees. As a result KFC can increase it organizational performances.


As the hypothesis of this research is proved and this research is made only on fast food company (KFC) so other fast food companies can make use of the results of this report for the related featured problems and to improve their performances. Both qualitative and quantitative data shows that retention can increase organizational performance. As it is concluded that with the help of good retention rate KFC can improve its business performance and profit ratio. Trained and satisfied employees can do their job more efficiently and effectively as compare to not properly trained or dissatisfied staff. As its been found that two variables, retention rate and organizational performance have positive correlation, which means that change in retention rate of employees will have effect on organizational performance. Furthermore it is advised to KFC that it should focus on employee's retention rate by using different tools for retention (such as salary increase, bonuses, promotions and pension schemes). As this is identified that organizational performance is mostly depending on retention rate, 80%(out of 30) employee's view to improve retention policy and 56%(out of 30) employee still thinking that they will quit the company if the will get any better opportunity in different company so company should take this matter seriously to enhance their organizational performance worldwide and to sustain their business profitability by improving retention policy.

The methodology has some limitation to. The data is collected from a sample of 30 people. Again, only KFC employees provide data. There is no way to make sure that the target employees have replied back the questionnaire. Employee may not give the right answer. Though the limitation, this research can help further research on retention and organizational performance. All the resources have valid source identification. If KFC can take sample such as 300 or 500 employees it can make better and more reliable research. For this research only 30 employees have been selected from 4 stores. If KFC uses more stores such as 30 to 50 stores or a region based stores such as East London or West London based stores the research will more reliable and accurate. KFC need to think broader range of research by using more money, manpower and time. In the future further research could be done on McDonald and burger king from different regions in order to see if the same pattern of research result is obtained. In addition could be targeted at managers in the future. Despite of limitations, this research can help further research in retention and organizational performance. All the data used has valid resource identification. The final result of the research is retention rate can help the organization improves its performances


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Retention rate on Organizational performance. (2017, Jun 26). Retrieved July 19, 2024 , from

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