Browsing by Author "Alsuwayyid, Ali"

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Impact of Employee Loyalty on Firm Performance
(Saudi Digital Library, 2019) Alsuwayyid, Ali; Khawaja, Muhammad
Replacing employees is a large investment. The cost of replacing an employee is significantly high. A company spends a lot of precious time and money in search for the best talent with the help of advertising, recruitment agencies, screening, interviewing, and hiring. In this regard, a study was conducted by the Centre for American Progress. According to them, the cost of employee attrition is high and it varies with respect to the role of the employee and his salary level. The CAP inferred that the cost of replacement for a low paying job is 16% of the annual salary, for a medium paying job it is 20 % of the annual salary, while for an executive level position it is 213% (Boushey et al. 2012). Whether the employees leave for career growth opportunities or because of internal conflict, there is a huge loss of unnecessary wealth and resources. This study on impact of employee loyalty on firm performance examines the factors that impact employee loyalty and how it is related with the firm performance. This research examines the data compiled at Al-Habib Medical group (HMG), a healthcare industry giant in Saudi Arabia. The information contained here is in reference to the high attrition rate that HMG is facing. While there are a great number of researches already conducted on employee loyalty and firm performance, a scope of further understanding still exists. There is still scope of studying the various components of Employee Loyalty and how it is related to firm growth whether the relation is direct or through a mediating variable. This study contains a Literature Review of researches done on similar topic. It is followed by a survey results that captured the perception of HMG employees on Supervisor Attitude, Work Environment, Compensation, Service Quality and Firm Performance with the help of 19 items based on a five point scale. The main goals of the research were to identify the current trends in Human Resource Management practice and how it can be improved. The primary research questions in the study were - What are the Key factors that impact employee loyalty at Al-Habib Medical Group? What factors have contributed positively in increasing Employee Loyalty in Al-Habib Medical Group? How Employee Loyalty can contribute towards effective organizational performance of Al Habib Medical Group? The sampling design used for the purpose of this study was Convenience Sampling Design. The 135 respondents under study, were the employees of HMG. The data was collected with the help of administration of Survey. Finally the statistical analysis was done on the collected data with the help of SPSS. There are many key findings in this research. According to the data analysis, there was a strong correlation between Supervisor Attitude and employee Loyalty with Pearson Correlation Co-efficient of .776 at p = .05 significance level. Similarly Work Environment was found to be strongly correlated to Employee Loyalty with Pearson Correlation Co-efficient of .832 at p = .05 significance level. Pay scale was also found to be strongly correlated to Employee Loyalty with Pearson Correlation Co-efficient of .787 at p = .05 significance level. Employee Loyalty was found to be moderately correlated with Firm performance with Pearson Correlation Co-efficient of .445 at p = .05 significance level. The Cronbach‟s Alpha test for Reliability showed strong internal consistency with an alpha value of .891. The Research results were found to have significant Criterion Validity with 133 degrees of freedom and critical „r‟ value of 0.2. With the detailed study on the impact of Employee Loyalty on Firm Performance study found that the all the hypothesis stood to be true. However, some of the results were not so overwhelming. The study was found to be valid and reliable, and the main hypothesis, which is the topic of the study, i.e. employee loyalty has significant positive relation with firm performance. Therefore, the management at Al-Habib Medical group should tread with care in terms of applying the result of the research. The key factors that had a significant impact on employee loyalty according to the model were Supervisor attitude, Work Environment and Pay scale. However, correlation analysis showed that though pay scale had a positive correlation with service quality, but it was a very weak correlation. Therefore, based on the data analysis, management can specifically modify their approach to increase employee loyalty in the organization. They can take the following steps to increase employee loyalty and service quality  Be inspirational and lead with example. This is because in this study we found that there is a significant positive relation between Supervisor Attitude and Service Quality  Improve the sense of belongingness among employees by being amicable and approachable  Provide assist to the subordinates wherever and whenever required to solve complex business problems  Many employees strongly agreed that reward policy in the company should improve. This gives an opportunity to the managers to improve upon their reward policy  One of the way to ensure improvement in reward policy is by providing travel benefits, health insurance that may increase their savings, as many respondents revealed that they could not save an adequate amount from the salary Despite conducting an extensive study, there are some limitations to this research, one of them being shortage of time. Due to time limitation, the researcher was not able to gather responses from large number of audience. The findings and recommendations of the study may only be applied to the said organization. The recommendations might not be implemented in organization with different work setting. The impact of employee loyalty on a firm‟s growth is a vast topic. The nature of study demands rigorous attention to details. It requires the understanding of even the limiting factors that might result in a significant change and thus a scope for future research 1. Structure and Division of Chapters in Research Report This research is designed to assess the impact of employee loyalty on firm performance. The division of chapters are as follows: 1.1. Introduction The introduction part contains a brief about the topic and introduces the readers with what the topic intends to achieve. The introduction part is divided into eight subparts. The first part is about what the topic means. The later part will introduce the readers with the background of the topic and the industry or company around which the whole research is designed. The later parts will include the reason for research where the researcher will attempt to explain why the topic should be studied. It is followed by the purpose of the study, where researcher will give arguments for what the study constitutes. Then we will deal with the problem statements of the research. After that the objectives and research questions will be formulated. Then we will define the scope of the study. Then the researcher will introduce the readers with a brief about the research approach which will give an introduction to data collection and data analysis. Then the researcher will provide the Managerial relevance of the study. The last part will explain how the study is useful and what impact it will make 1.2 Literature review This chapter is dedicated to the earlier studies and researches done on the similar topic. This will be carried out to form a base for the research. This part will explain how the researcher decided to study the topic. In this part previous journals and books from relevant topic will be studied and the variables will be defined o its basis. This part will also help in giving a direction to the research 1.3. Empirical Review This part will contain the Description of the research methodology. Here, the model of the research will be defined based on the literature of the study. This will culminate into hypothesis formulation. The exact source of data will be revealed. In this part the sampling design, research design of the study will also be explained. Unit of analysis will be explained and then Field settings and time horizon of the study will also be explained. Data collection method will also be explained in this chapter 1.4. Results of the study In this chapter the results of the study will be analysed based on the collected dat. Each item in the questionnaire will be analysed according to the statistical analysis and relevance. The implications of the results will also be explained about each of the item. The statistical techniques will be applied to test the hypothesis of the research. A linear regression will be carried out to test the hypothesis. Reliability and validity of the items will be tested. Correlation will be established between the variables. A descriptive statistics table will be created. 1.5. Summary, Conclusions and Recommendations In this chapter, a summary the whole research will be drafted. Then the managerial implications of the findings will be explained. Based on the findings the recommendations will be made and cost benefit will be analysed. Finally, the limitations of the study and future research suggestions will be discussed.
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