THE EFFECT OF EMPLOYEE DEVELOPMENT PROGRAM ON

EMPLOYEE RETENTION: THE CASE OF ETHIOPIAN SHIPPING

AND LOGISTICS SERVICE ENTERPRISE

A THESIS SUBMITTED TO SCHOOLS OF GRADUATE STUDIES OF

ST.MARY’S UNIVERSITY IN PARTIAL FULFILMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTERS OF MBA

BY: Tadelech Mehari Tesfaye

JUNE, 2021
ADDIS ABABA, ETHIOPIA

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 ST.MARY’S UNIVERSITY SCHOOL OF GRADUATE STUDIES
DEPARTMENT OF MBA

THE EFFECT OF EMPLOYEE DEVELOPMENT PROGRAM ON

EMPLOYEE RETENTION: THE CASE OF ETHIOPIAN SHIPPPING AND
LOGISTICS SERVICE ENTERPRISE.

RESEARCH PAPER SUBMITTED TO ST.MARY’S UNIVERSITY

SCHOOL OFGRADUATE STUDIES DEPARTMENT OF MBA IN
PARTIAL FULFILMENT OF THE REQUIREMENT FOR DEGREE OF
MA IN MASTER OF BUSSINES ADMINSTERATION

PREPARED BY: TADELECH MEHARI TESFAYE (ID NO.SGS0167/2012A)

ADVISOR: YERGALEM TADELE (Ph.D.)

JUNE, 2021
Addis Ababa, Ethiopia

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 ST.MARY‟S UNIVERSITY
SCHOOL OF GRADUATE STUDIES
DEPARTMENT OF MASTER OF BUSSINES ADMINSTRATION

THE EFFECT OF EMPLOYEE DEVELOPMENT PROGRAM ON EMPLOYEE

RETENTION IN ETHIOPIAN SHIPPING AND LOGISTICS SERVICE
ENTERPRISE

BY
Tadelech Mehari Tesfaye

Approved by the Board of Examiners:

___________________ _______________
Dean office Signature

__________________ _______________
Advisor Signature

__________________ _______________
External Examiner Signature

_________________ _______________
Internal Examiner Signature

JUNE, 2021

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 DECLARATION
I undersigned declare that, this paper is prepared for the partial fulfillment of the requirements
for MBA: Master of Business Administration entitled “The effect of employee development
program on employee retention in Ethiopian Shipping and Logistics Service Enterprise” this
study is prepared by my own effort. I have made it independently with the close advice and
guidance of my advisor. This study has not been submitted for any degree in this University or
any other University. It is offered for the partial fulfillment Masters in Master of Business
Administration.

Name Tadelech Mehari Tesfaye

Signature _______________
Date ___________________

Advisor: Yirgalem Tadele (Ph.D.)

Signature: _________________
Date: ____________________

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 ACKNOWLEDGEMENTS

First of all, I would like to thanks almighty God with his mom St. Mary‟s for his great support to
accomplish this research work and for his infinite support in my entire life success.
My greatest thanks go to my Advisor Dr. yirgalem Tadele for his suggestion, dedication, Support
and guidance throughout my thesis.
I would like to express my deep and sincere gratitude to my family especially my mother, my
father and my brother for always being my side and encouraging me. And also my sister‟s
husband Mr. Shambel Getahun and his friend Mr. Yibeltal for making this thesis possible by
their guidance and insightful comment.
Finally my sincere gratitude goes all managers and staffs of Ethiopia Shipping and Logistics
Service Enterprise for their kind assistance and support throughout the data collection of the
research.

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Contents
CHAPTER ONE ........................................................................................................................................... 1
1. INTRODUCTION ................................................................................................................................ 1
1.1 Background of the Study .................................................................................................................... 1
1.2 Background of the organization .......................................................................................................... 4
1.3 Statement of the problem .................................................................................................................... 5
1.4 objectives of the study ........................................................................................................................ 6
1.4.1 General objectives of the study .................................................................................................... 6
1.4.2 Specific objectives of the study ................................................................................................... 7
1.5 Research Hypothesis ........................................................................................................................... 7
1.6 Significance of the study ..................................................................................................................... 7
1.7. Scope of the study .............................................................................................................................. 8
1.8. Limitation of the study ....................................................................................................................... 8
1.9. Operational Definition ....................................................................................................................... 8
1.10. Organization of the study ................................................................................................................. 9
CHAPTER TWO ........................................................................................................................................ 10
2. LITERATURE REVIEW ....................................................................................................................... 10
2.1 Introduction ........................................................................................................................................... 10
2.1.1 Definition of Employee Development Program ........................................................................ 10
2.1.2. Training ..................................................................................................................................... 11
2.1.3. Job Rotation .............................................................................................................................. 13
2.1.4. Coaching and Mentoring........................................................................................................... 14
2.1.5. Career development/Promotion ................................................................................................ 16
2.1.6. Employee Retention .................................................................................................................. 17
2.2. Theoretical Foundations of the study ............................................................................................... 18
2.2.1. Herzberg‟s Motivation-Hygiene theory .................................................................................... 18
2.3Related Empirical Literature Review ................................................................................................. 19
2.3.1 Effect of training on employees‟ retention................................................................................. 20
2.3.2The effect of Job rotation on employee retention ....................................................................... 22
2.3.3. Effect of Coaching and mentoring on employees‟ retention..................................................... 23

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 2.3.4 Effect of Carrier Development/ promotion on employee retention ........................................... 24
2.4. Conceptual framework ..................................................................................................................... 26
CHAPTER THREE .................................................................................................................................... 27
3. METHODOLOGY OF THE STUDY .................................................................................................... 27
Introduction ................................................................................................................................................. 27
3.1 Research Design................................................................................................................................ 27
3.2 Research Approach ........................................................................................................................... 27
3.3 Population, sample size and sampling procedure ............................................................................. 28
3.3.1 Target population ....................................................................................................................... 28
3.3.2 Sampling Procedure and Sample size determination ................................................................. 28
3.4 Data Sources and Data Collection Method ....................................................................................... 28
3.4.1 Data Sources and Types ............................................................................................................. 28
3.4.2 Data Collection .............................................................................................................................. 29
3.5 Methods of Data Analysis ................................................................................................................. 29
3.6. Reliability......................................................................................................................................... 30
3.7. Validity ............................................................................................................................................ 31
3.8. Research Ethics ................................................................................................................................ 31
CHAPTER FOUR....................................................................................................................................... 32
Data Analysis & Interpretation of Results .................................................................................................. 32
4.1 Demographic Characteristics of the Respondents............................................................................. 32
4.1.1 Sex of Respondents .................................................................................................................... 32
4.1.2. Age of respondents.................................................................................................................... 33
4.1.3. Educational Level of Respondents ............................................................................................ 33
4.1.4. Years of Service (Experience) in the Company ........................................................................ 34
4.2 Descriptive Statistics Analysis .......................................................................................................... 35
4.2.1 Results of Employee Development Program ............................................................................. 36
4.2.2 Results of Employee Retention .................................................................................................. 40
4.3 Inferential Statistics Data Analysis ................................................................................................... 41
4.3.1 Correlation results ...................................................................................................................... 41
4.3.2 Assumption test on multiple linear regression model ................................................................ 42
4.3.3 Multiple Regressions.................................................................................................................. 44

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CHAPTER FIVE ........................................................................................................................................ 50
CONCLUSIONS AND RECOMMENDATIONS ..................................................................................... 50
5.1 Conclusion ........................................................................................................................................ 50
5.2 Recommendations ............................................................................................................................. 51
5.3 Suggestions for further research ....................................................................................................... 52
REFERENCES ............................................................................................................................................ 53
APPENDICES ............................................................................................................................................ 58

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 List of tables

Table 3.1 Reliability Statistics of variables .................................................................................. 31

Table4.1: Sex of Respondent ........................................................................................................ 33
Table 4.2: Age of respondents ...................................................................................................... 33
Table 4.3: Educational Qualification ............................................................................................ 34
Table 4.4: Years of Service (Experience) in the Company .......................................................... 34
Table 4.5 Respondents response on Training ............................................................................... 36
Table 4.6 Respondents response on Job Rotation......................................................................... 37
Table4.7. Respondents response on Carrier Development ........................................................... 38
Table 4.8 Respondents response on Mentoring and Coaching ..................................................... 39
Table 4.9 Respondents response on Employee Retention ............................................................ 40
Table 4.11 Correlations between independent and dependent variables ...................................... 41
Table 4.11Multi-Collinearity Test ................................................................................................ 43
Table 4.12: Model summary of Employee Retention ................................................................... 44
Table 4.13: ANOVA of Employee Retention ............................................................................... 45
Table 4.14 Regression Result of employee development program on employee Retention ........ 45

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 List of Figures
Figure 4.1: Normality Test …………………………………..………………….. 55

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List of Abbreviation/Acronyms
ESLSE- Ethiopian Shipping and Logistics Service Enterprise
HRM- Human Resource Management
EDP- Employee Development Program
TR- Training
JR- Job Rotation
CR- Carrier Development
M&C- Mentoring and Coaching
ER- Employee Retention
ANOVA – Analysis of variance
SPSS - Statistical Package for Social Science

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 ABSTRACT
Employee retention is a fundamental perspective for each organization with respect to
competitive advantage because human resources are the most basic resource in the world. As a
result, organizations are increasingly focusing on employee retention. The study was conducted
Questionnaire with a perspective on improving Employee retention in ESLSE. The main
objective of this study is to investigate the effect of Employee Development programs on
employee retention in Ethiopia Shipping and Logistics Service Enterprise, to assess the effect of
Training, job rotation, Carrier development and mentoring and Coaching on employee retention
in ESLSE. The research used an Explanatory study applying quantitative research approach in
which data was collected across a population through simple random sampling method from a
sample size of 216 employees and used descriptive and inferential statistics in order to analyze
the data. And a Multiple Regression made to test the hypothesis how well the Employee
Development Program could predict the employee retention, correlation analysis was used to
see their relationship between independent and dependent variables. The finding of the current
study appears to conclude that effective Employee development programs can help organizations
to get satisfied employees and gain ability to retain its valuable human capital. The analysis
showed that there were employee’s retention strategies available in the organization and
employee development program significantly affect employee retention. However, considerable
number of employees in Enterprise is still unsatisfied with the employee development programs,
the researcher conclude and recommend that the organization should understand the importance
and value of EDP and needs to revise and should formulate strategies to establish employee
training policy, job rotation programs, carrier development programs and mentoring and
coaching programs in order to motivate and improve their employee performance and employee
retention.

KEYWORDS: Training, job rotation, Carrier Development/Promotion, coaching and mentoring

and employee retention

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 CHAPTER ONE

1. INTRODUCTION
1.1 Background of the Study
Today‟s organizations are working in a dynamic environment with rapid changes in information
technology, market uncertainties, shortened product life cycles and competition. (Dinopoulos
and Syropoulos, 2007; Roy and Sivakumar, 2012). The changing nature of the business and its
environment at the recent times forced organizations move with the trend of time so as to exist
and flourish in this ever-changing world. Organizations must also move with the advancement
in technology to reach their prospective clients and ensure that the names of their products
continue to be uppermost in their customers‟ mind.

There is no doubt that any organization that does not move with these changes will find it
difficult to survive in the present world of business. Garavan, Hogan and Cahir-O'Donnell
(2003) outline that for organizations to develop and accomplish the stated goals; it is necessary
to have learnable employees who will fit in the changing world of business. Aruna and Anitha
(2015) supported that the training an employee gets from the organization have impact on
employee's decision to leave or stay within the organization.

Having brilliant, motivated, and experienced, skill, knowledgeable and competent employees
should be the base for all change processes in a firm. This kind of employees provides the main
source for developing new ideas and knowledge (Snell and Dean, 1992). Employees and their
associate assets are crucial for exposing an organization to technology boundaries that increase
their capacity to absorb and deploy new and substantially different knowledge domains
(Subramaniam and Youndt, 2005). Highly motivated and trained employees may question the
established organizational routines; hence, this kind of employees become critical to push the
firm to its technological borders, constituting the best incentive towards obtaining new
knowledge and radical change (Nonaka and Takeuchi, 1995; Hill and Rothaermel, 2003). In this
sense, it makes sense to state that those firms with the best skill, knowledge and attitude will be
able to create the highest number of new ideas and products, being human capital the main

1
source for new ideas and knowledge helping in the development of radical change investing in
it in the form of learning and development is mandatory. Turn over reduces the firm ability to
assimilate new ideas, insights, customer suggestions and complains.
So, the assimilation of acquired knowledge is related to employees‟ absorptive capacity and
capabilities, being important aspects within the knowledge transfer and exploitation processes in
a firm. In this way, accumulated experience and abilities, education and training could play an
incentive role in absorbing, using, assembling, interpreting external knowledge cogenerated
with suppliers or users in order to develop new products and processes. Soosay and Hyland
(2008) highlighted absorptive capacity to assimilate knowledge and lead to change achievement
by means of knowledge, skill and experience.

In the new economy, knowledge has a strategic position in creating a firm‟s value; that
knowledge is a source of a firm‟s outcomes. Knowledge is a unique resource (Kogut and
Zander, 1992). It is the most difficult resource to duplicate and it needs to be integrated with
many different capabilities (Spender, 1996; Sambamurthy and Subramani, 2005). Organizations
must also move with the advancement in technology to reach their prospective clients and
ensure that the names of their services continue to be uppermost in their customers‟ mind. There
is no doubt that any organization that does not move with these changes will find it difficult to
survive in the present world of business. Garavan, Hogan and Cahir-O'Donnell (2003) outline
that for organizations to develop and accomplish the earlier stated goals; it is necessary to have
learnable employees who will fit in the ever-changing world of business. Employee
development program is an investment that promotes skill, knowledge, satisfaction and
retention of employee. Aruna and Anitha (2015) supported that the type of training an employee
gets from the organization have impact on employee's decision to leave or stay within the
organization.
Retention of employees in the rapidly changing environment is critical to ensure that valuable
skills, knowledge and experience remain in the industry and not to lose to other competing
sectors.
Retention matters because high turnover creates high replacement costs and is clearly associated
with low levels of customer satisfaction, customer loyalty, and a loss in revenue. Retention is

2
challenging today due to a growing imbalance in the supply and demand of qualified personnel
(Padron, 2004).
The retention of employees ensures that skills and expertise are not lost so that the absorptive
capacity to assimilate new knowledge and redeploying and lead to change is achieved. Taylor
(2002) indicates the importance of employee retention in the following manner: There are
several new job opportunities, but the pool of talented employees is not ever decreasing.
Getting suitably skilled employees remain a great problem for organizations. It, therefore,
remains a vital aspect to retain talented employees. Many current jobs require employees with
talent and their respective skills for that job.

Ensuring that the right employees are available for the right job should create a committed and
involved employee that can keep the turnover rates lower. This should lead to higher levels of
satisfaction, loyalty towards clients, and higher service levels (Dawson & Abbot, 2009).
The other reasons suggested that the high turnover rate in the industry is the demographics of
employees as well as the demanding nature of the industry.

Organizations have tried throughout the years to implement measures and reward systems to
ensure that the skilled employees remain in their respective employment, but this seldom had
the desired result.

Retention of qualified and skilled employees remains one of the biggest struggles faced by
industry leaders. A company can only move as fast as its employees, so the ones that train and
develop people will move much more quickly. Although training of employees in organizations
has improved drastically over the years, the literature on employee retention through adequate
training provided still needs to be elaborated on. Furthermore, Aruna and Anitha (2015)
supported that the type of training an employee gets from the organization have impact on
employee's decision to leave or stay within the organization. Accordingly Employee job
rotation, carrier development/promotion and employee mentoring and coaching also have their
own effect in relation to employee retention of valuable employee so the current study
investigates into the relationship between employee development program and employee
retention in the case of Ethiopian Shipping and Logistic Service Enterprise (ESLSE)

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Ethiopian Shipping and Logistic Service Enterprise (ESLSE) is a fertile research setting to the
current study. This is because In ESLSE employee development has a strategic position and the
company invests money, and has a training Centre managed by Human Resource Department.

1.2 Background of the organization

Ethiopian Shipping and Logistics Services Enterprise (ESLSE).

Ethiopian shipping lines was founded in 1964 G.C and started operation in 1966 with three
newly built ships and two general cargos and tankers. The company was established as a share
company with capital of 50,000.00 Birr, subsequently raised to 3,750,000.00 Birr. Tacprus
investment inc. of Washington DC agreed to subscribe to 51% of the capital requirements
designating two directors of the company. The Ethiopian government underwrote the remaining
40% of the capital required designating two director. Finally the company has been fully owned
by the government of Ethiopia since 1967/70 G.C.

The current Ethiopian shipping and Logistics Services Enterprise is formed by merging the
former three public enterprises that have until recently been operating separately in a rather
similar and interdependent maritime sub-sector; namely, Ethiopian Shipping Lines SIA.C,
Maritime and Transit Services Enterprise and Dry Port Enterprise following the issuance of
Regulation by the Council of Ministers (Regulation No. 255/2011) and is vested with the huge
responsibility of rendering sea-transport & logistics services to the country‟s importers,
exporters, and investors in a more effective and efficient way, by reducing transit time, cost and
handoffs. Besides, a truck operating company named Comet Transport SC has recently been
transferred to ESL following a government decree issued in the mid of 2014. And the name of
the enterprise changed to Ethiopian Shipping and Logistics Service Enterprise ESLSE.

ESLSE has a multitude of vessels, heavy duty trucks, sea and dry port facilities, chicaneries, etc.
that enable it render efficient sea and land transport services as well as sea and dry port services.
ESLSE has its headquarters located in the heart of Addis Ababa, Ethiopia, with main 3 branches
at Djibouti, Modjo, and Kality (the former Comet) and other branches in Mekelle, DireDawa,
Kombolcha, Semera and Gelan towns. It also has a Maritime Training Institute at a place called
Babogaya in Bishoftu (former Debrezeit) Town.

4
It is the only company involved in sea fright activity in the country. The companies in its long
sea transportation services manage to build a reputation of reliability efficiency and good
services it gives a liner service in north continent and Mediterranean routs. It also gives a cross
trade services mostly from Europe, to red sea, and Gulf ports.

Currently the enterprise introduce multimodal transport system which will benefit the country in
many respects, notably by minimizing time loss at transit shipment points, reducing warehouse
improve their competitive position in the international market minimizing burden of
documentation and formalities, improve safety and security of goods in the country.

1.3 Statement of the problem

With the rapidly changing environment and the competiveness in the business sector,
organizations are facing the challenges of retaining skilled employees. These talent employees
are helpful in developing organizational goals (Mobrman, 2007). Having brilliant, motivated,
and experienced human capital should be the base for change processes in a firm. Employees and
their associate skills, experience, ability, competency, talent and memory are crucial for exposing
an organization to technology boundaries that increase their capacity to absorb and deploy new
and substantially different knowledge domains (Subramaniam and Youndt, 2005). Highly
motivated and trained employees may question the established organizational routines; hence,
this kind of human capital becomes critical to push the organization to its growth, constituting
the best incentive towards obtaining new knowledge and radical change (Nonaka and Takeuchi,
1995; Hill and Rothaermel, 2003).
Therefore, retaining the skilled employees has an impact in the development of organizational
goals, by giving them an opportunity to develop their skills, knowledge, attitudes and introducing
different training and development programs in the workplace (Carmeli, 2005). However, very
few researchers have specified that a continuous training in the working environment rise
employee retention (Grawitch, Gottschalk and Munz, 2006).
According to the research that was conducted by kavittha, Geetha and Arunachala (2011), it was
discovered that to retain a well skills employees has become a serious subject and a lot of
organizations are facing challenges to retain their talented employees, and organizations loses
their employees due to lack of management. It is a great lost when a trained and talented
employee leave the organization, this will create a weak loyalty guide in the organization.

5
Masbigiri and Nienabar (2011) outline that the inability to retain employees can lead to more
expenditures, losing skill, knowledge and experience; the recruitment of new employees will
involve spending more money and have an adverse consequence on the proceeds of continuous
reality. Therefore, retaining experienced employees reduces the cost of recruiting new employees
into the organization.

Despite the vast studies on retention, Hausknech (2009) noted that literature on employee
turnover which is aimed at identifying factors that caused employees to quit, much less is still
not known about factors that compelled employees to stay or retention.

Although training of employees in organizations has improved drastically over the years, the
literature on employee retention through adequate employee development program provided still
needs to be elaborated on. The existing studies in this relation (Taylor, 2014) have taken a
general human resource management (HRM) focus on employees performance, very little
attention is given to the motivational role of employee development and hence creating a gap on
the effect of employee development program on employee retention. Lack of training, mentoring
and coaching, job rotation and carrier development/promotion Etc., leads the employee seeking
for an alternative employer who will be willing to provide it (Taylor, 2014). And also most of
the studies are focused part of the development program like most of them training and
development effects in employee retention and the like and here the researcher needs to be
realistic evidence on effects of employee development program like Training, job rotation,
carrier development / promotion, Mentoring and Coaching, on employee retention. And there is
no published research conduct in the organization (ESLSE). Therefore the researcher has an
interest to investigate the effect of employee development program on employee retention in
Ethiopia shipping and logistics service enterprise.

1.4 objectives of the study

1.4.1 General objectives of the study
The main objective of this study is to examine the effect of Employee Development program on
employee retention in the case of Ethiopia Shipping and Logistics Service Enterprise.

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1.4.2 Specific objectives of the study
The specific objectives of the study are to:

1. To examine the effect of Training on employee retention in ESLSE.

2. To determine the effect of job rotation on employee retention in ESLSE.
3. To determine the effect of coaching and mentoring on employee retention in ESLSE.
4. To examine the effect of carrier development/promotion on employee retention in
ESLSE.

1.5 Research Hypothesis

Ha1. Training does have a statistical significant effect on employee retention in ESLSE.

Ha2. Job rotation does have a statistical significant effect on employee retention in ESLSE.

Ha3. Coaching and mentoring does have a statistical significant effect on employee retention in
ESLSE.

Ha4. Carrier development/promotion does have a statistical significant effect on employee

retention in ESLSE.

1.6 Significance of the study

This study is designed to investigate the effect of employee development program on employee
retention, little or no sufficient study is carried out regarding with the area. Accordingly the
study tries to fill the gaps existing in the current literature.

This study may serve as a source of information for further study that would be made on related
topics. Besides, the staff management may use the findings of this study to put into practice to
retain the valuable assets-human capital.

Hence, the management of the enterprise could use the findings of this study in designing the
employee development programs depending on mission and needs of its staffs. In addition to
this, the study gave the researcher the opportunity to gain deep knowledge in the area.

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1.7. Scope of the study
(Based on the Geographic, Variable and Methodology)

This study focused on the effect of employee development program on employee retention of
Ethiopian Shipping and Logistics Service Enterprise. Ethiopian shipping and logistics service
enterprise is one of the biggest public sectors in Ethiopia having lot of branches including dry
ports throughout the country so Due to time and cost consideration and also because of COVID
19 this study is conducted only in the Head Office employee which is found in Addis Ababa.

Based on the variable there are many employee development programs this research focuses on
four types of Employee development programs which is independent variable Training, job
rotation, carrier development / promotion, and Mentoring and Coaching and also dependent
variable which is Employee Retention.

Based on the methodology this research uses explanatory research method because it is the
possible way to analyze relationship variables.

1.8. Limitation of the study

The study did not cover the entire workforce of the organization, because the research will be
limited to Head Office employee in A.A and also shortage of pervious similar researches in
Ethiopian case, and limited resource may affect the qualities of the study output. But the
researcher, as much as possible, tried to mitigate these biases in order to come up with valid
conclusion.

1.9. Operational Definition

Employee Development: A system for assisting employees to develop within their current jobs
or advance to fulfill their goals for the future (Karen Shelton, 2001).

Employee Retention: A company‟s ability to keep quality employees who are contributing to
business success (Karen Shelton, 2001).

8
Training- refers to the teaching and learning activities carried on for the primary purpose of
helping members of an organization acquire and apply the knowledge, skills, abilities, and
attitudes needed by a particular job and organization.

Job rotation- is a lateral transfer of employees among a number of different places and tasks
within jobs where each needs different skills and responsibilities (Abdella, 2009).

Mentoring and Coaching -According to CIPD (2013), “mentoring and Coaching are
development techniques based on the use of one-to-one discussions to enhance and individual‟s
skills, knowledge or work performance”.

Carrier development / promotion-Career development is a continuous process where both

employees as well as employers have to put efforts in order to create conducive environment so
that they can achieve their objectives at the same time (Khadijetou Wane, 2013).

1.10. Organization of the study

This paper is organized in five chapters;

Chapter one provides an introductory overview of the full study including the statement of the
problem, objectives of the study, research hypothesis, relevance of the study, scope and
limitation of the study, and organization of the study.

Chapter two will review the literature on the effects of employee development program on
employee retention. Theoretical and Empirical review.

Chapter three presents the methodology used for the study and gives a detailed overview of the
population, sampling technique, the research design, data source and collection procedures and
data analysis procedures. And also show the reliability, validity and ethical considerations.

Chapter four focuses on the research results and discussion.

The final chapter five includes summarizes conclusion and recommendations for the study.

9
 CHAPTER TWO

2. LITERATURE REVIEW

2.1 Introduction
This section of the research discussed the factors relating to the relation between employee
development and employee retention, an examining of the role of training, job rotation, coaching
and mentoring and career development on employee retention. The reason is to gain
understanding of existing literature, bringing out the gap and filling it for future research, the
impact and importance of employee development program on employee retention.

Tharenou, Sake and Moore (2007) outlines that the private and public organizations are now
awakening to the urgent need to invest in the employee development to ensure good performance
and increase in productivities. According to Hennestad (2000), employee development has an
impact on retention, which influences organizational management; it reduces the cost of
recruitment and selection of new employees. Retaining skilled employee‟s link to having
qualified employees; this helps in achieving the organizational goals.

Noe (2008) outlines that organization cannot do anything without employees, the retention of
some experienced employees will reduce high turnover. In any business, high turnover has a
negative result on the sustainable development, due to the high competition in the organizations.
The competitors are willing to offer better payment and other attractive rewards for experienced
and well-skilled employees.

The review is based employee development program comprises of training, job rotation,
coaching and mentoring and career development as well as employees retention.

2.1.1 Definition of Employee Development Program

Employee development programs are ways to improve an employee's broader skills as a person
over an extended time period in a more holistic approach. Learning and development
opportunities help boost employee engagement and productivity. Often, these programs are
administered or managed by human resources departments.

10
Today organizations not only help their employees to be successful but also provide them with
developmental opportunities to enable them to successfully contribute to the achievement of
organizational goals (Gerbman, 2000). When employees feel they are contributing towards
organizational goals, they get increasingly engaged with their roles and serve for long tenures
(Logan, 2000). Employees often feel elated to see their work getting recognized and appreciated
(Moses, 2000). Employee development plays a significant role in employee retention and
employees seek new opportunities to enhance their knowledge, skills and abilities to accomplish
their professional goals (Wagner, 2000). Therefore, organizations endeavoring to meet these
intrinsic desires are often reciprocated through trust, loyalty, morale and satisfaction (Nunn,
2000).

2.1.2. Training
In today‟s business, training does not only link with work-related development, but it linked to
influence option, sentiment and performance. Therefore, it is a pathway for employees to learn
new skills and creating advancement towards employee satisfaction (Armstrong, 2009). Training
strengthens employees to be more active towards their career development, which leads to
retention. Choo and Bowley (2007) supported that training have impact on career development,
improving employer brand and employee's retention. Jehanzeb and Bashir (2013) suggested that
training and development aims are to improve employee‟s skills and helping them to understand
the organizational culture. In addition, understanding the necessary level of career choice.

In any organization, training of employees plays a role in achieving the organizational goals. The
qualities of these trained employees will determine how far an organization will go among its
counterparts. Rosti and Shipper (1998) outlines that training and development of the employees
ensure good performance and this enables the organization to achieve its objectives, to attract,
train and develop talent employee that will exploit all the obtainable resources to bring about
expansion in the company.

Armstrong (2003) summarize training as an appropriate and orderly modification of behavior

through learning, development, which happen as result of teaching, coaching, development and
designed experience. The same author mentioned that training as a process to equip the
employee's with the necessary skills, knowledge to handle their professional tasks. According to
D. Rajasekar (2014), training is the process of enhanced knowledge, developed skills and

11
changed the attitudes of people so that they are effective in their work responsibilities. It is also
emphasize that employees given on the job cross functional trained, and make them volunteer to
do something different, crates job security to its employees, establishment of friendly
relationship between coworkers for the purpose of improvement, interpersonal relationship
among the employer and employee, the form of job redesigned has to be done to make the jobs
more interested and challenged, improved quality of work life and rewards linked with
performance. According to Armstrong (2003), employee's development helps to enhance staff
ability for future requirements and adaptability prospect. Beardwell and Hidden (1997) consider
training and development as an intended process to modify the attitude, knowledge through
coaching experience to achieve effective performance in their roles. Many organizations offer
different training programs to improve the employee‟s skills especially in the area of technology
development and business practice, such as supervisor training, exclusive development and
interpersonal skills (Beardwell and Hidden, 1997).

Lorette (2006) recommended training as an ability to designed and encourage both new and old
employees to improve and enhance the performance of qualified employees and managers, as
well as to be more effective in performing their tasks in the workplace. This highlights needs for
more systematic approach to assess the training needs of individual. Such as reviewing
individual capability in the workforce. Training is an instrument to enhance performance and it is
one of the possible solutions to progress in business (Lorette, 2006).

Hise, Gable, Kelly and McDonald (1983) outline training and development as a framework,
which organizations act. As well as the organizational culture and any structure, that supports the
skilled development of the managers and the employees within the organization structures.
Therefore, empowering the employees to undergo some training will definitely improve the
employees' prospective and skills for the career role, which can lead to increment in the business
output. Nabi (2003) outlines that for the managers to seek for strategic transformations in the
workplace; the management was advice to invest its capital on training, as to enable the
organization to achieve its strategic goals. Therefore, Bashir and Khattak (2008) presumed and
suggested that employee involvement influenced by perspective of the human resource
professional. They added that the more an employee become optimistic about the organization,
the more they are committed to work perfectly and want to remain within the organization. They

12
suggested that any organization seeking competitiveness has to map out different strategies and
appreciate employee‟s effectiveness and satisfied their needs, as to encourage them to remain in
the organization after the training program.

2.1.3. Job Rotation

Job Rotation is a management approach where employees are shifted between two or more
assignments or jobs at regular intervals of time in order to expose them to all verticals of an
organization. It is a pre-planned approach with an objective to test the employee skills and
competencies in order to place him or her at the right place. In addition to it, it reduces the
monotony of the job and gives them a wider experience and helps them gain more insights.

According to Torrington and Hall (1991) described the job rotation as movement of employees
among different tasks and positions which will probably be of similar nature. Different
organizations do rotate their employees from one job to another across various departments for
multiple reasons depending on specific need of an organization. And also Jaime (2001) stated
that job rotation promotes Psychological and physical health of employees through creating
positive attitudes on employees, facilitating their health and increase the variety of work through
reduction boredom and having self-motivation towards their position in the organization.

Different authors stated Job rotation is training method followed by the organization to develop
the employees in various department were they can gain diversified learning of job skills for a
specific period of time and job rotation is a practical approach to enrich and expand the job
assignment of the employees (Seibet & Kraimer,2001). Therefore, job rotation is a method of job
design which allows the employees to learn the skills from various departments and eliminates
the employees fatigue caused by the same kind of job assignment by changing such assignment
(Richard, 1981).

An important aspect of job rotation is in its inherent ability to promote organization learning.
Ortega (2001) argues that job rotation indeed can promote organization learning better than
specialization in circumstances where there is little information about the relative import of
different job tasks. With the benefits that accrue from organizational learning, it means that job
rotation is an indispensable aspect of job designs.

13
Job rotation is also important in the development of employees (Sonnenfeld and Peiperl, 1988).
This means that when properly designed and executed, job rotation can result in improvement of
capacity of employees hence resulting in enhanced task performance and productivity.

Ostroff and Kozlowski (2015) show that job rotation facilitates information sharing and
socialization and this results in a more knowledgeable employee base and the resultant effect is
that employees undertake their tasks much better hence enhancing work place productivity for
the employees individually and collectively.

Zeira (2010) argues that job rotation is an important technique of augmenting employee‟s task
commitment and job involvement and as such plays an important role in facilitating normal
functioning of organizations thereby helping drive efficiency and effectiveness, which ultimately
leads to enhanced workplace productivity.

Job rotation is one way of created job satisfaction, and employee retention that helps as a means
in order to maintain the high performance employees in the enterprise. Thus job rotation can be
described as lateral transfer of employees among a number of different places and tasks within
jobs where each needs different skills and responsibilities.

2.1.4. Coaching and Mentoring

According to CIPD (2013).Coaching and mentoring are development techniques based on the
use of one-to-one discussion to enhance and individual‟s skills, knowledge or work performance.
However, some companies refer to the activities of coaching in general terms such as life
coaching, performance coaching, business coaching, facilitative management; and mentoring is
used as some specific type of counseling (Kinlaw, 2000). Mentoring can be formal and informal.
In formal mentoring, mentor and mentee are distinguished by senior employees by focusing on
organizational and individual goals; the duration and scope of mentoring relationships are
structured; and the frequency of learning experience and contact is structured. But in informal
mentoring, mentor and employee pair with each other instinctively and usually provides focus on
goals and objectives of the employee; the duration and the relationships of mentoring could be
short-term as well as long- term; and frequency of contact and experience from the learning are
unstructured (Kulik and Bainbridge, 2005). The term coaching for the staffs should have target

14
of high improvement and high performance of the employees at the workplace which generally
refers to procedures of assisting others in order to improve their working skills, develop and
learn new skills, achieve aims and objectives, find individual success to manage personal and
organizational challenges.

Employee mentoring offers by the organization near on their employees in order to couch from
different perspectives of employee, their work skills, and their duties on the job

Besson (2012) defined coaching as a way of collaborating with employees in a stimulating and
innovative development that will motivate the employees to exploit in their personal and
professional prospective. Any organization that invest on coaching increases their outputs; it
strengthens the success to develop working relationships, work gratification and teamwork,
which can be used to develop employee‟s inspiration. Coaching can enhance the talent and shape
the capabilities of the employees (Besson, 2012). However, coaching is considered as a vigorous
appraisal, used in developing the employees to be more successful in their career and improve
their performance as a leader. Some organization coaches some of its employees who are with
high potential for advancement, because coaching has a significant impact on employee‟s job
performance. It adds value to the organization, to maximize their own potential to create an
opportunity for change in employee‟s career, which increases organizational competence to
retain its employees (Besson, 2012). Coaching can add value to organizational development; it
retains and motivate employeesto perform well in their roles. It improves executive learning,
performance and leadership efficiency with working relationship with supervisors and
customers; it reduces conflict among the employees (Besson, 2012).

Many organizations are accepting coaching method and they see it as important approach that
add better value for the development of the employee‟s career and bringing out their potential
skills (Nelson et al., 2006). While Cushion, Armour and Jones (2003) investigated on coaching
system as a structure mentoring programs, as significant factor in the development of employees
within the organization. Woodman (1993) review that the basic development of coaching is
within coach instruction and progress, as a continuous and professional development for the
employees. This has to be through formal coaching programs that take place within a period. He
suggested that this can offer little opportunity of learning for a new employees and he believe it
is ineffective. Although employers recognize the importance of coaching literature, because it

15
adds value and identified the skills and brings out the potential of employees (Cushion et al.,
2003).

Coaching is use to inspire an employee to face any challenges that may occur during working
period, and this would in turn elevate their motivation to attain individual‟s goals as well as the
organizational objectives (Feldman, 2001). Coaching is a necessary tool for the development of
career for the improvement of the skills and performance of employees. Coaching relate to
individual improvement, growth and to accomplish a higher performance rank by providing
positive feedback and support (Rayner, 2008).

2.1.5. Career development/Promotion

Career development is a system which is organized and it's a planned effort of achieving a
balance between the career needs of individual and the organization's workforce requirement.
The challenge for the HR professionals is to develop and identify the career development
strategies and train them which would improve the commitment of employee and he or she
would feel that they are being given importance. This will help organization to retain employees
and they will be more motivated to work hard and enthusiastically which will help the
organization to achieve their goals effectively and efficiently.

Career development is about providing opportunities for employees to grow personally and
professionally (Horwitz et al., 2003). It means that employees are able to be promoted and go to
higher levels within their organizations. Career development considered as one of the human
resource practices that help in retention management issue. Many studies mentioned it as one of
the main retention strategies (George, 2015). Studies have shown that a lack of career
development opportunities within an organization leads to high employee turnover (Presbitero et
al., 2016). In contrast, organizations that implement career development programs are more
likely to have a high level of commitment and retention among their employees. In fact, De Vos
and Meganck (2009) in his study argues that career development opportunities among other
unpopular factors such as job content and work-life balance have a higher impact on employees‟
retention than compensation, performance appraisal and communication. Similarly, (Hausknecht
et al., 2009) confirms that among all factors studied to assess their relationship to employees‟
retention (job satisfaction, career development opportunities, organizational commitment and
organizational reputation), career development is the most related to employees‟ retention

16
decision. Horwitz et al. (2003) confirmed the idea by saying that the most popular retention
factors are not always the most effective ones; many variables can play roles in this idea such as
the type of industry the organization operating in, the type of organization either local or
multinational among other factors.

In their study, Chen et al. (2004) conducted in Taiwan to examine the career needs and also to
assess the gap between these needs with the provided career development program in one of
research and development department. Results concluded that employees have a high intention to
leave if the gap between these needs and the available career development program is high.
Based on their result, career development is the main contributor to employees‟ job satisfaction

2.1.6. Employee Retention

Due to different definitions of the literature review conducted by researchers, the organizations
naturally make some efforts to retain employees who enhance the status of the organization.
kavittha, Geetha and Arunachala (2011) outlines that the employee‟s retention is a responsive. It
is an effort to keep qualified employees in an organization. Aruna and Anitha (2015) view
employee retention as procedure whereby an employee has undergone some training and
coaching and become talented in the area of specialization and be committed in the work within
the establishment, this add to the advantage of the organization.

Any successful organization who are in search to lessen the misuse of business income is to
enhance the reduction of the employee turnover. While Ratna and Chawla (2012) suggested that
it is better for an organization to retain a qualify employee rather than hiring, because employee
retention signified taking a proper process of encouraging the employees to dwell in the
organization as long as they desire. According to the research that was conducted by kavittha,
Geetha and Arunachala (2011), it was discover that to retain a well skills employees has become
a grave subject and a lot of organizations are facing challenges to retain their trained employees,
and some organizations loses their employees due to lack of management. It is a great lost when
a trained and talent employee leave the organization, this will create a weak loyalty guide in the
organization. Masbigiri and Nienabar (2011) outline that the inability to retain employees can
lead to more expenditure, losing well skilled employees can be a great loss; the recruitment of
new employees will involve spending more money and have an adverse consequence on the

17
proceeds of continuous reality. Therefore, retaining competent employees reduces the cost of
recruiting new employees into the organization.

Kavitha and Geetha (2011) also review that most companies are not capable to retain their
trained employees, as cost of inability to manage and provide them with the necessary facility
after training makes organization to loss the employees. The competitors are ready to offer an
attractive offer, as to attract the qualified employees.

2.2. Theoretical Foundations of the study

In order to gain insight into questions about what makes people satisfied with their jobs and stay
in the organization as well as what underlying processes account for people‟s feelings of job
satisfaction, Herzberg‟s Motivation-Hygiene theory is used. The theory attempts to specify the
particular needs that must be satisfied or the values that must be attained for an individual to be
satisfied with his job. Herzberg‟s theory tries to answer questions like „what needs do people try
to satisfy?‟ and „What impels them to action?‟

2.2.1. Herzberg’s Motivation-Hygiene theory

According to Herzberg's Motivation-Hygiene theory, certain workplace variables lead to job
satisfaction, while others lead to job dissatisfaction. His findings have a practical impact on
people's perceptions of intrinsic motivation. Individuals, he claims, are uncomfortable with the
satisfaction of lower-order wants at work, such as those related to minimum wage levels and bad
working conditions. Rather individuals look for higher level needs having to do with
achievement, recognition, responsibility, and advancement. This appears to be parallel with
Maslow‟s theory of need hierarchy. Herzberg, on the other hand, provided a new dimension to
this research by proposing a two-factor model of motivation, based on the idea that the existence
of one set of job characteristics leads to unhappiness and the desire to resign.

According to theory, in order to improve employee attitudes and productivity, managers must
recognize that greater contentment leads to higher job satisfaction and, as a result, staff retention.
Unfavorable assessments of job-related variables such as business regulations, supervision,
operational problems, interpersonal relations, a lack of career possibilities, and working
conditions can also cause dissatisfaction. These factors do not only lead to dissatisfaction, but
also serve a reason for employees to leave.

18
Opportunities for employee development and the utilization of skills are important factors
affecting job satisfaction and motivation. Job satisfaction is a function of training opportunities.
Motivational theories have pointed to the motivational role of employee development. It is
considered by Maslow as a higher need that is satisfied at a high level (Maslow, 1970) and is
considered by Herzberg as a motivator or satisfier factor (Herzberg, 1966) as cited in Abdella
(2017 ). Therefore employee development is a satisfier factor to retain employees in the
organization. Building upon this theory the current study investigates the relation between
employee development program and employee retention.

2.3Related Empirical Literature Review

Employee development program is one of the most important factors that are used for employees
and employers in the industry. Employee development program for employees as an activity
performed to indicate companies care about their employees wants to achieve (Elena P., 2000).
Many of the companies engaged in employee development program for the purpose of gaining
employee job satisfaction and retention which are used for employees to work hard and utilize
their full skills and efforts to achieve the goals of the organizations. This concept indicates that
employee development has recognized by the employees who want to learn or who are willing to
learn. When employees are willing to learn, they show their interest in the developmental
activities, as a result they are more satisfy and retain with their job which was lead to increase in
their performance Elena P. (2000).

Employee development is a personal responsibility of employees at all levels and involved in the
developmental activities whether the upper level employees, middle or lower level employees
(Antonacopoulou, 1996). When an individual employee wants to learn, he would learn more and
more, he would participate in many other activities such as attend in short term trainings, on the
job trained and others developmental activities, either on the job or off the job. This certainly
would lead to employee development, and also increases their performance, and satisfaction in
their work place, thus minimize turn over bothos 2020. Training, Employee mentoring and
coaching, job rotation, and career development/promotion, is an important instrument on
employee retention that addresses gaps or discrepancies between an ideal and an optimal stage of
developmental program but it requires the interest of employers.

19
2.3.1 Effect of training on employees’ retention
Employee Knowledge originated from results-driven, ambitious, idealistic, competitive,
optimistic, and people-orient is lost unless companies develop strategies to simultaneously retain
skilled and experienced employees in order transition their knowledge to younger workers
(Morton, Foster, & Sedlar, 2005). The turnover of experienced workers leads to “brain drain”
that results the loss of key information about the task or work place practices that could be a loss
for the organizations (Tsegaye, 2016).

Delgad et.l (2011) disclosed that employee‟s knowledge makes a person becomes better
employees. Accorded to Silverthorne (2004), the better the knowledge of employees fit with the
organization, the higher the job satisfaction, the higher the organizational commitment and the
lower the turnover rate. Siebern-Thomas (2005) found that job satisfaction tended to be higher
where there was access to workplace training. Jones et al. (2008) found that training is positively
and significantly associated with job satisfaction and that job satisfaction is also positively and
significantly associated with workplace performance.

Abdella (2009) states that individuals gain satisfaction from jobs that require the use of their
abilities and skills as compared to jobs in which they feel their abilities are not being used. The
same author concludes that skill utilization has a strong influence on job satisfaction because
workers desire jobs that allow them to make good use of their skills and abilities. In addition
Shipton et al. (2004) maintain that employees are most likely to contribute their knowledge and
skills to innovate in situations where they feel positively towards their jobs and organizations.

The findings of Grant et al. (1990) support that employee who feels they are contributing their
skills and abilities to the job tend to have higher levels of job satisfaction. As a result apart from
meeting the requirements of Human Resources, training will also increase the marketability of
the employee being trained, and ultimately the organization. The skills the employees gain will
enable them to meet challenges head on and succeed (tsegaye, 2016). Besides, when the training
falls short of the intended purpose the employee will become frustrated and this will lead to
employee turnover (Kirschenbaum & Weisberg, 2002).

Nel et al. (2004) suggested that a continuous phase of training with development programs
should be able to ensure that the employees remain up to date with the latest issues in the
industry, and thus will ensure that the employee‟s knowledge and competence stay on par.
20
Supporting employees through empowering them to gain access to further education will make
them more valuable for the organization (Smit and De Cronje, 2003). Regular workshops or
seminars will increase the employee‟s understanding of their respective roles in the organization,
as well as to stimulate new goals that they can set for themselves. The employees must be
challenged continuously in their roles on the job to enable them to remain on par with their fields
of expertise. Van Tiem (2003) said that employees will remain engaged for longer in their
organization when they feel that the organization has invested in them.

Booyens (2000) said that the orientation in the organization is the personalized training of the
individual employee to assist him with becoming familiar with the job that he needs to fulfill on
the job itself. The aim of this orientation is to be as effective as possible and remain productive.
This orientation process‟s aim is the need to reduce the anxiety. Page (2001) also states that an
orientation process will also assist in facilitating the employee‟s social interaction with the
organization.

Cheng and Waldenberger (2013) found a positive relationship that consisted between training,
individual employee improvement and turnover. Martin stated in 2008 that with the upgrading
and enhancing skills abilities, employees tend to be more fulfilled and thus tend to remain with
the organization for longer.

Brown and Leigh (1996) state that professional development may also lead to an increase in the
perceived meaningfulness of work, encouraging people to invest more cognitive and emotional
resources in their work, and enhancing employees' identification between their work roles and
the organization‟s goals. It is also possible that people develop a stronger sense of job
competence and autonomy when they perceive learning opportunities, leading them to feel more
enthusiastic and comfortable in achieving the job requirements (Daniels, 2000).

Similarly, employees need ongoing training to increase their knowledge, which positively affects
their enjoyment of work. There is an ongoing theme in the literature that professional
development has a positive effect on employees in the workplace (Novick et al., 2008). For
instance, Novick et al. (2008:272) maintain that Professional development of employees pays off
in two key ways. First, such development leads to breadth of skills, knowledge, and attitudes
greater job satisfaction by the employees, improved morale, , and enhanced employee

21
performance. Second, the organization benefits reduced employee‟s turnover. The following
hypothesis tries to short this argument.

Ha1: Training has a statistically significant effect with employees’ retention.

2.3.2The effect of Job rotation on employee retention

Job rotation is a practice that allows an employee to move laterally between divisions or units
within an organization, through allowing the employee on-the-job training and experience in a
variety of areas, without a change in rank or employment status (Morrison and Hock, 1986).
Redman and Wilkinson (2001) state that there are ranges of jobs in each organization where
employees can be set to work for a short period on each job by moving from one cycle to the
next – hence the term 'rotation'. Job rotation within an organization alleviates employee
boredom, provides job variety, and allows employees to learn new skills (Abdella, 2009).
Organizational practices most commonly mentioned in police literature identify job rotation as
being a significant activity in the promotion of professional development. Therefore,
professional development programs have a positive influence on employee job satisfaction, and
subsequently improve performance and reduce turnover (Abdella, 2009).

Rotating employees to different positions is an excellent way to motivate employees, give them a
sense of belonging, reduce boredom and fight off a lack of commitment (Tsegaye,
2016).Through these process employees learn several different skills and perform each task for a
particular time period, and used for different place of job assignments that helps the employee in
order to understand the different steps that is used created a product and service delivery, how
their own effort affects the quality and efficiency of production and customer service. Job
rotation practices can defer to skill variety and task identity rotated employees to different
positions is a very good way to motivate employees, give them a sense of belonged, decrease
boredom and force away a lack of commitment and increase employee satisfaction (tsegaye,
2016). Therefore, job rotation enables employees to gain experience in different stages of the
business and, hence, broaden their viewpoint and as the result satisfied and retained them for a
reasonable period of time. It is possible to short the above studies into:

Ha2: Employee rotation has a statistical significant effect with employee retention.

22
2.3.3. Effect of Coaching and mentoring on employees’ retention
Accorded to Journal of Applied Business and Economics (2011), the mentoring process as a
“developmental, cared, shared, helped relationship where one person invests time, knowledge
and effort in order to increase and improve another person‟s growth, knowledge and skills” that
is helpful for employee‟s job satisfaction and retained in the organization. Tsegay (2016)
mentioned that Mentoring program in banked industry considered as performance interventions,
but this program are implemented to pair an experienced employees as a mentor, with an
inexperience employee as a mentee. The purpose is to increase the knowledge and productivity
of the employees and to enhance the performance of the organization. In those banks effective
implementation of mentoring program, the benefits of running such kinds of program have
compensated the costs they incur.

Coaching retains and motivates employees to perform well in their roles. It improves executive
learning, performance and leadership efficiency with working relationship with supervisors and
customers; it reduces conflict among the employees (Besson, 2012).

Coaching inspires an employee to face any challenges that may occur during working period,
and this would in turn elevate their motivation to attain individual‟s goals as well as the
organizational objectives (Feldman, 2001). Coaching is a necessary tool for the development of
career for the improvement of the skills and performance of employees. Coaching relate to
individual improvement, growth and to accomplish a higher performance rank by providing
positive feedback and support (Rayner, 2008).

Therefore, coaching enhance the performance and brings out the right potentials of the
employees, it also helps the individuals and the organizations in making decisions about
designing, implementing and measuring the effectiveness of the job role in the organization
(Whitmore, 2010).

Coaching is useful for motivating staff, delegating, problem solving, team building, staff
development, assessments, team working, planning and reviewing (Whitmore, 2010).

Therefore, in organizations coaching is an important instrument in developing the employee‟s

career, refining the skills and performance, as it is on one to one progression. It is to improve the
growth and to achieve advance performance level, by providing positive support and

23
consciousness to the employees in order to be active in their roles. This will encourage the
employees to remain in the organization, and it will lead to less expense in training new
employees (Whitmore, 2010).

Shamash and Sims (2011) review that the drop in using coaching as a method to develop the
potential and competent employees in the business environment has increased turnover and
unemployment. According to a study carried out by Wolf (2011) continuous training by coaching
appraisal to improve performances brings the right potential of the employees and increases
retention in the organizations.

Building up on the above reviewed literature, it is possible to hypothesize in such a way that:

Ha3: Coaching and mentoring has a statistical significant effect on employee retention.

2.3.4 Effect of Carrier Development/ promotion on employee retention

Vroom (1982) argued that promotional opportunity is a goal most workers desire and that an
individual's performance is related to the degree to which the individual believes that being
promoted is related to performance on the job and how strongly the individual desires the
promotion. Studies of employee satisfaction have identified promotional opportunities as an
environmental antecedent to job satisfaction (Ellickson and Logsdon, 2001). Purohit (2004)
states that while it is true that individuals search for satisfaction in their work environment, they
also attach importance to the opportunities for promotion that these jobs offer. If a job offers the
opportunity of promotion in the future, it provides more satisfaction. If the opportunity for such
promotion is limited, this reduces satisfaction. According to Schneider et al. (1992), employees
who perceive few opportunities for advancement have negative attitudes toward their work and
their organizations.

Therefore, it is important for the organization to take into account cases where promotion
policies are designed to enhance employee satisfaction. According to Armstrong (2004), in any
organization where there are frequent promotional moves and promotion arrangements cause
problems, it is advisable to have a fair promotions policy and procedure that is known to both
management and employees.

Meier and Hicklin (2007) concluded that the technique of lowering the turnover rate of an
organization lies in the expansion of employees‟ responsibilities through promotion and that it
24
can prompt the organization towards sustainable development. Competent employees can easily
quite if organization does not provide career development, which can lead to high turnover in the
organization (Clarke, 2009).

A study by Meyer (2003), conducted to examine the mechanism involved in observed relations
between Human Resource Management practice and employee commitment has shown that
internal career development of employees is the best predictor of effective employee
commitment which will likely enhance retention.

In another study by Prince (2004) it was found that talented employees are required for
maintaining a competitive advantage and employees want career grown opportunities to develop
and rise in their career ladder. In yet another study by Eyster (2008), which explored” to identify
the main factors of retention management strategies” in two organizations based in India, found
that career development is a critical incentive for employees to retain. A study by Yamamoto
(2006) has also shown that employees who have attained career plateau have a higher degree of
intention to quit due to reduced opportunities in the present organization well.

Organizations needs cannot be satisfied without satisfying individual needs of career

development that leads to employee satisfaction, boost up productivity, and reduce turnover rate
of employees (Goyer, 2010). Career development and growth in their workplace creates retention
and increased job satisfaction (Papageorgiou et al., 2013). On the other hand, dissatisfaction with
management supervision leads to job dissatisfaction (Abdella, 2009).

Abdella (2009), disclosed that there is a positive relationship between job satisfaction,
advancement and propensity to turnover and there is a negative relationship between perceptions
of upward mobility and the propensity to leave among a service-orient business organization.
Julietomoikhudu (2012) said that career development takes into account the legitimacy of
employee needs at all levels and attempts to provide the best possible match with organizational
need so as to retain them.

A study of bank sector in India has shown that Career development is more valuable for the
development of the organization's values and goals and objectives in relation to their retention of
employees. Thus, career development in organizations helps to develop their careers experience
and reduces employee turnover rates (Sapna Bai and Mehran Bhutto 2016)

25
Career development creates opportunities for promotion within an organization and provides an
opportunity for training and skill development that allows employees to improve their
employability, hiring on the external and internal labor market (Stahl, Björkman, Farndale,
Morris, Paauwe, Stiles & Wright, 2012).

Armstrong (2009) concurs when he asserts that, lack of clear career path or development is a
significant cause of poor employee retention. To maintain a stable workforce, employers should
learn to plan to provide career opportunities by providing employees with more full expectations,
encouraging promotion from within and developing equitable promotion procedures (Armstrong,
2009). Therefore, the following hypothesis is made:

Ha4: Career development / promotion has a significant effect with employee retention

2.4. Conceptual framework

Building up on the above theoretical foundation and reviewed empirical literature the study
developed a conceptual framework as follows. In this study employee retention is a dependent
variable while training, job rotation, carrier development/promotion, and coaching and
mentoring are independent variables.

Independent Variables Dependent Variable

Training

Job rotation, Employee retention

Mentoring and Coaching

Carrier development/promotion

Source: (Compiled from Literatures)

26
 CHAPTER THREE

3. METHODOLOGY OF THE STUDY

Introduction
In the previous chapter deals with literature and concepts related to the subject matters of the
research. In this chapter the researcher tried to show the research design and methodology that
was be used in conducted the study. Research design, population, sample size and sampled
method, research instrument, source and method of data collection, procedure of data collection,
validity, reliability, and ethics and method of data analysis and presentation.

3.1 Research Design

The study put into practice the explanatory research design because the study aimed to answer
why training, job rotation, coaching and mentoring and carrier development have an effect on
employee retention. Since explanatory research demands to investigate logically organized
propositions which are used to explain describe and predict the phenomenon to investigate the
effects of relationships between variables. Explanatory research distinguishes between dependent
and independent variables. Accordingly the research objectives and hypothesis of the study were
addressed through explanatory research type (Saunders et al., 2009).

3.2 Research Approach

The current study focused on investigating the relation between employee development and
employee retention Based on the research behavior, the researcher decides to quantitative
research approach. It is used to test hypotheses (Kothari, 2004). This is due to quantitative
method generalizes research findings to its population. Quantitative method can achieve greater
objectivity and more accurate results. It is used to achieve the validity and reliability of data. It
provides quantitative numerical data (Saundars et.al, 2009).

27
3.3 Population, sample size and sampling procedure
3.3.1 Target population
The target population for this study is employees of Ethiopian Shipping and Logistics Service
Enterprise working in Head Office located in Addis Ababa.

3.3.2 Sampling Procedure and Sample size determination

The study sample will consist employees from the head office which is located at Addis Ababa.
From the head office employee will be selected by using simple random sampling technique.
All employees in the main head office will be the target population for the study. A random
sample of 258 will be selected from the target population. The head office has 726 total numbers
of employees. By using Taro Yamane‟s formula of n=N/ [1+N (e2)] the sample size will be
257.904 this will be approximately 258.

Sample size determination

n=N/ [1+N (e2)] = 726/ [1+726(0.052) = 257.904 = 258

Where n= sample size

N= population size

e= level of precision or acceptable sampling error (0.05)

3.4 Data Sources and Data Collection Method

3.4.1 Data Sources and Types
There are two types of data: primary data and secondary data. Primary data is collected for a
specific issue. It could be either qualitative such as interviews, semi-structured or unstructured;
focus groups; observations; and case studies, or it could be quantitative such as questionnaires;
and structured interviews. On the other hand, secondary data is available to any researcher to
obtain what is required, and consequently, it is not created for specific topics. Secondary data
embraces raw data and published summaries (Saunders et al., 2012).

28
Primary type of data is suitable for both descriptive and explanatory research, for example, Collis
and Hussey (2003), Hair et al. (2007) and Saunders et al., (2012). Based on the research
questions and objectives, this study employs primary data.

3.4.2 Data Collection

The main emphasis of this study is examining the effect of employee development program on
employee retention of Ethiopian shipping and logistics service enterprise. Hence, the study‟s unit
of analysis is employees of the enterprise. Therefore, the data essential for this research is
gathered from primary source through questionnaires of employee and managers in the head
office of Ethiopian shipping and logistics service enterprise. The questionnaire design to elicit
the required information relating to the dependent and independent variables. There will be close
ended questions and most of the questions will be stated in a five-point Likert scale for officers
and for HR managers of the ESLSE.

3.5 Methods of Data Analysis

Descriptive analysis used to analyze data gathered through questionnaires. The data gathered
through questionnaires was fed into SPSS to make the data ready for processing through graphs,
figures, tables and charts, i.e. a descriptive analysis was implemented like frequencies, mean and
standard deviation. In addition to descriptive analysis, the study also conducted inferential
statistics to see the effect of independent variables of EDP (Training, job rotation, Mentoring and
Coaching and career development/promotion,) on dependent variables (Employee Retention) in
ESLSE. By using Pearson‟s r, Correlation coefficient and multiple regression analysis.

The followed multiple regression equation was used for the study:

Y = β0+ β1X1+ β2X2+ β3X3+ β4X4 +ε

Where

Y = dependent variable (employee retention)

β0 = is the Y intercept or constant

β1 ... β4 = coefficient of regression which measures how each independent variable influences
the dependent variable that is employee retention.

29
X1 = Training

X2 = job rotation

X3 = Mentoring and Coaching

X4 = carrier development/promotion

ε= Error Term

The model adopted from the research conducted by Scheryl Waeni Musyoka (2015)

3.6. Reliability
Bordens and Abbott (2011) showed that reliability related to the extent to which a test measured
consistently regardless of what it measured or whether or not a test produced the same results on
different occasions. The measure was reliable when respondents gave the same answer in
different situations. Cronbach‟s alpha is a reliability measure designed by Lee Cronbach in 1951.
(Bhattacherjee, 2012) Cronbachs alpha is a coefficient of reliability. It is commonly used as a
measure of the internal consistency or reliability of a psychometric test score for a sample of
examinees.

The values of Cronbach‟s alpha range from 0 (observed items are not consistent) to 1 (they
completely correlate). This means that internal consistency will be acceptable if Cronbach‟s
alpha is high (George and Mallery, 2003). Hair et al. (2010) and Field (2009) reported that
Cronbach‟s alpha ought to be equal to or above 0.70 according to Heung and Chu (2000) Liu and
Arnett (2000). In order to achieve Cronbach‟s alpha, the study conducted a pilot test. Therefore,
the initial questionnaire was delivered to and collected from 30 Ethiopian shipping and logistics
service enterprise employees who work in the main office in order to obtain some assessment
related to the questions‟ reliability and validity. Then the returned 29 pilot instrument questioners
are coded, analyzed, and a Cronobach‟s Alpha test is identified by SPSS IBM version 20.00.

30
Hence,

Table 3.1 Reliability Statistics of variables

No Variables Cronbach‟s Alpha

1 Training 0.802

2 Job Rotation 0.754

3 Coaching and Mentoring 0.775

4 Carrier Development 0.882

5 Employee Retention 0.814

So as a result, the overall Cronobach's Alpha value of the dependent and independent variables
in this study met the minimal reliability indicator criteria of Cronobach's Alpha >.070.

3.7. Validity
Validity, often called construct validity, refers to the extent to which a measure adequately
represents the underling construct that it is supposed to measure, (Bhattacherjee, 2012). Validity
is used to make more accurate and meaningful results. And also Content validity or expert
validity depends on the quality of the literature and the theories which are used to build this
instrument and some experts should assess the questionnaire, also, in order to determine whether
or not the questionnaire measures what it should measure (Ruane, 2005; Vogt, 2007). So the
initial questionnaire was delivered to my advisor and three MBA students. Most of the feedback
confirmed that the items related to their constructs and recommended that some items be
rephrased in order to be clearer and more understandable.

3.8. Research Ethics

According to Creswell (2003) “as the researchers‟ anticipate data collectors, they need to respect
the participants and sites for the research”

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 CHAPTER FOUR

Data Analysis & Interpretation of Results

This chapter presents the results of the study based on the analysis of the data collected from the
respondents and discussion of results on the basis of the literatures. As indicated in the previous
chapter, the main attempt of this study is to investigate the effect of employee development
program on employee retention. Therefore, the analysis and discussions for research findings
obtained from the questionnaires. It reports the investigation results obtained from employees of
the enterprise offices covered in the questionnaire.

So the data gathered through questionnaire are presented, analyzed and interpreted using
percentages and frequencies with the help of Statistical Package for Social Science (SPSS). To
collect relevant data, 258 questionnaires were distributed to employees of the Ethiopia Shipping
and Logistics Service Enterprise. Among the questionnaires distributed to employees 258
questionnaires, the researcher collected 216 properly filled questionnaires in which the response
rate is 83.72 percent. Twenty Five (42) questionnaires missed because in one hand some of them
were incomplete on the other hand respondents failed to return back their filled questionnaire to
the researcher. According to the organized questionnaires, the researcher produced the following
analyses.

4.1 Demographic Characteristics of the Respondents

4.1.1 Sex of Respondents
The demographic data for sex shows that out of the 216 respondents 143 respondents are male
and 73 respondents are female. Table 4.1 shows the majority of respondents are males that
represented 66.2 percent, while female represents the remaining 33.8 percent.

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Table4.1: Sex of Respondent

Gender of Employee
Frequency Percent Valid Percent Cumulative
Percent

Female 73 33.8 33.8 33.8

Valid Male 143 66.2 66.2 100.0

Total 216 100.0 100.0

Source: Own Survey, 2021

4.1.2. Age of respondents

The table 4.2 below discloses that majorities of the respondents who are at the age of 27-37
covering almost 62% followed by age group 19-26(19% percent). And 38-48 and 49-59 are
respectively 15.7% and 3.2%.Generally age is one of important demographic variable that
influences the physical and mental abilities of individuals at work. Most of the employees are
younger therefore it is a productive age group to do their job in fresh mind

Table 4.2: Age of respondents

Age of Employee

Frequency Percent Valid Percent Cumulative

Percent

19-26 41 19.0 19.0 19.0

27-37 134 62.0 62.0 81.0

Valid 38-48 34 15.7 15.7 96.8

49-59 7 3.2 3.2 100.0

Total 216 100.0 100.0

Source: Own Survey, 2021

4.1.3. Educational Level of Respondents

The table 4.3 shows those respondents‟ educational level ranges from college diploma to
master‟s degree. Majority of the respondents, i.e., 76.4 percent of the respondents (165 out of the
total 216 respondents) hold BA degree which represents. While the remaining 27 and 24 of them
are masters and diploma holders, respectively. This shows that almost all employees are capable
of quickly acceptable for things and implement to their own jobs

33
Table 4.3: Educational Qualification

Level of Education
Frequency Percent Valid Percent Cumulative
Percent

Degree 165 76.4 76.4 76.4

Diploma 24 11.1 11.1 87.5

Valid
MA 27 12.5 12.5 100.0

Total 216 100.0 100.0

Source: Own Survey, 2021

4.1.4. Years of Service (Experience) in the Company

The service year of the respondents varies from a minimum of 1 and a maximum of over 15
years. The majority of respondents have served their company from 0-5 years which represents
41.2% and 20.8% percent (a total of 62%). There respondents which have served their current
company from 6-10 years are 25%, and those who worked 11-15 years in the company are 5.6%
in present. The result shows most of the respondents joined the enterprise in recent times. In
these case not more than ten years.

Table 4.4: Years of Service (Experience) in the Company

Experience of Employee
Frequency Percent Valid Percent Cumulative
Percent

< 2 years 45 20.8 20.8 20.8

2–5 89 41.2 41.2 62.0

6- 10 55 25.5 25.5 87.5

Valid
11 – 15 12 5.6 5.6 93.1

over 15 15 6.9 6.9 100.0

Total 216 100.0 100.0

Source: Own Survey, 2021

Therefore relatively most of the responses about demographic characteristics more or less were
proportionally approach to the true population of the study area which in turn gave relatively

34
better opportunity to elicit analyzable information and data on assessing the effect of employee
development program on employee retention.

Before proceeded to the analysis of the data collected, the overall reliability of the measurement
scales is tested.
Reliability test
No Variables Cronbach‟s Alpha

1 Training 0.872

2 Job Rotation 0.783

3 Coaching and Mentoring 0.871

4 Carrier Development 0.763

5 Employee Retention 0.852

The overall Cronobach‟s Alpha value of the entire dependent and independent variables in the
study has fulfilled the minimum requirement of a reliability indicator i.e. Cronobach‟s Alpha >
0.70. The study is reliable.

4.2 Descriptive Statistics Analysis

The study targeted a sample size of two hundred fifty eight. Out of two hundred fifty eight
questionnaires two hundred sixteen of them were collected with a response rate of 83.72%.
However, in order to get higher response rate the researcher distributed two hundred fifty eight
questionnaires. Only two hundred sixteen responses were valid with complete answers. Finally,
the statistical methods of analysis were discussed, which included a descriptive analysis, through
SPSS version 20. Descriptive statistics was used to analyze the quantitative data. The data were
analyzed and the output interpreted in terms of frequencies, mean, standard deviation,
percentage, and table by using likert scale 1= strongly disagree, 2= disagree, 3= neutral, 4= agree
and 5= strongly agree ,mean values to show the degree of agreement or disagreement
respondents represented their opinion to each questionnaire items.

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4.2.1 Results of Employee Development Program
Here the researcher try to presents respondents perception of EDPs in key four areas namely,
training, job rotation, career development, employee mentoring and coaching.

Analysis in this respect is helpful to pinpoint the toughest and weakest contributors of the
employee development program pointers. There by helps to review the Employee Development
Program and improve its contribution.

4.2.1.1 Training
The fundamental aim of training is to help the organization achieve its goals and objectives by
adding value to its key resource which is the human resource. In this section, the researcher
analyzed the effect of the trainings provided by the company upon the employee‟s retention.
Huselid (1995) has suggested that employee development program such as providing training are
important determinates of employee retention.

Table 4.5 Respondents response on Training

Item S.D% D% N% A% S.A% Mean Stand.

Dev‟n
The course content is relevant to my job. 10.2 8.3 27.3 46.3 7.9 3.33 1.078
Almost everything learnt can be applied at 9.7 25.0 31.9 30.6 2.8 2.92 1.026
work
It is difficult to practically apply what has 2.8 9.7 42.1 40.7 4.6 3.35 0.827
been learnt
I found that skills and knowledge can be 7.4 15.7 27.3 41.7 7.9 3.27 1.057
applied in the enterprise
I can coach other new employees to the area 13.4 14.8 37.5 25.9 8.3 3.01 1.133

Source: output of SPSS

Based on the above result, almost half of the respondents (46.3%) agreed that the course content
is relevant to their job with a mean score of 3.33and Almost everything learnt can be applied at
work is 2.92, They also agreed with the issue It is difficult to practically apply what has been
learnt with a mean score of 3.35, and they agree on the application of skills found, I found that
skills and knowledge can be applied in the enterprise mean of 3.27 and finally I can coach other
new employees to the area with a mean of 3.01 and which is neutral. The overall mean result

36
shows that employees are agree with training effects on their approach on the enterprise.
Generally, in the aspect of training in the organization as the researcher found from the survey it
implies that there is training available in the Enterprise, even though it needs some improvement
to give equal training opportunity to their employees,

4.2.1.2 Job Rotation

Table 4.6 Respondents response on Job Rotation

Item S.D% D% N% A% S.A% Mean Stand.

Dev‟n

Transfer employees from one department to 24.5 25.5 13.9 18.1 18.1 2.8 1.452
another

Change employee positions in the same 26.4 26.4 21.8 18.1 7.4 2.54 1.261
department

I have got an opportunity to do a variety of 28.2 22.7 20.4 26.9 1.9 2.51 1.212
tasks.

Job rotation program of the enterprise is an 19.0 26.9 13.0 36.9 14.4 2.91 1.368
excellent system to acquire new methods of
work.

Before job rotation, the organization seeks 36.6 31.5 11.1 17.1 3.7 2.2 1.209
my consent.

Source: output of SPSS

Based on the above result mean score of the respondents shows their disagreeability to the
questions related to “Transfer employees from one department to another” mean score of 2.8,
“Change employee positions in the same department” mean score of 2.54,” Before job rotation,
the organization seeks my consent” mean score of 2.2. The rest of the two measurements of job
rotation “I have got an opportunity to do a variety of tasks” mean score of 2.51, and “Job rotation
program of the enterprise is an excellent system to acquire new methods of work” a mean score

37
of 2.91. The job rotation measurement factor shows that most of their responses are approach to
disagree. Therefore from these jobs rotation program in the enterprise was not good enough for
the employees, so most of the respondents disagreed about job rotation; the organization should
consider these and needs improvement for the sake of their employees.

4.2.1.3 Carrier Development

Table4.7. Respondents response on Carrier Development

Item S.D% D% N% A% S.A% Mean Stand.

Dev‟n
There is promotion and opportunity for 21.3 28.7 17.1 14.4 18.5 2.8 1.412
career development provided by the
enterprise.
There is a clear path way for career 27.3 29.2 16.7 18.1 8.8 2.52 1.301
development in the enterprise.
I know where my career is going 28.7 20.11 20.8 27.3 2.8 2.55 1.242

My work effort contributed to my personal 22.7 33.3 19.0 18.1 6.9 2.53 1.220
growth
Women and men have the same 37.0 28.7 12.0 17.1 5.1 2.25 1.258
opportunities for career and development.
Source: output of SPSS

The mean scores of responses suggest that respondents were at most disagree to questions on
career development as shown in Table above. As shown the result majority of the respondents
disagree that there is promotion and opportunity for career development provided by the
organization the mean score of 2.8 and on the issue of their “knowing where their career is
going” Mean score of 2.55, There is a clear path way for career development in the enterprise
Mean score of 2.5, concerning their intention to growth “My work effort contributed to my
personal growth” Mean score of 2.53, and regarded their gender “Women and men have the
same opportunities for career and development. ”Mean score of 2.25, from the response of
employees the researcher concluded that career development in enterprise was not enough for the
employees, so most of the respondents disagreed about career development program; the

38
organization should consider these and needs improvement for the sake of their employees to
minimize turnover.

4.2.1.4 Mentoring and Coaching

Table 4.8 Respondents response on Mentoring and Coaching

Item S.D% D% N% A% S.A% Mean Stand.

Dev‟n
Mentoring and coaching helps to enhance 7.4 13.9 25.0 35.6 18.1 3.43 1.155
knowledge, skills and expertise from the
experienced professionals as they can assist
less experienced employees gear up to the
speed.
During work employees are given support 11.6 14.8 23.1 26.9 23.6 3.36 1.304
by their mentors.
My retention is influenced by staff 12.5 20.4 31.5 21.3 14.4 3.05 1.223
mentorship and coaching programs that the
firm has put in place.
Mentors and coaches are always around 10.6 17.6 27.8 36.6 7.4 3.13 1.120
when needed.
We are socially connected in the workplace 12.5 14.4 24.1 28.7 20.4 3.30 1.289
than before.
Source: output of SPSS

From the Table 4.9, the mean score of the respondents shows agreement to their participation on
regular review of objective of knowledge sharing for improvement. Form the questions
respondents shows their agreement on the issues of “Mentoring and coaching helps to enhance
knowledge, skills and expertise from the experienced professionals as they can assist less
experienced employees gear up to the speed.” with the mean score of 3.43, and “During work
employees are given support by their mentors.” with the mean score of 3.36, the respondents
also agreed that “Mentors and coaches are always around when needed.” the mean score of 3.13
and “We are socially connected in the workplace than before.” a mean score of 3.30, and finally

39
the respondents also agreed to My retention is influenced by staff mentorship and coaching
programs that the firm has put in place with a mean score of 3.05. The finding shows that most
of the respondents agree that mentoring and coaching has its own effect and it has been found to
influence employee retention.

4.2.2 Results of Employee Retention

Table 4.9 Respondents response on Employee Retention

Item S.D% D% N% A% S.A% Mean Stand.

Dev‟n
Investment in on EDP is considered 6.0 16.2 36.1 32.9 8.8 3.22 1.019
important factor by the organization.
Opportunity for moved to higher levels 4.2 6.0 42.6 37.5 9.2 3.43 0.902
within the Organization.
The degree of attachment to individuals 2.8 9.7 38.4 44.0 5.1 3.39 0.839
associated with the organization such as
supervisor, co-workers, or customers.
The degree to which the organization is to 5.6 13.9 37.5 23.6 19.4 3.38 1.114
be trustworthy and well respected
Employees tend to remain with the 8.8 18.1 26.9 25.9 20.4 3.31 1.232
organization when they feel their
capabilities and efforts are recognized and
appreciated.
A good work environment enhances 7.4 12.5 34.3 29.6 16.2 3.35 1.118
employee retention.
There is low labour turnover in the 7.9 22.2 33.3 28.2 8.3 3.07 1.074
organization
Source: output of SPSS

40
4.3 Inferential Statistics Data Analysis
4.3.1 Correlation results
Correlation between the independent variables (Employee development
program) and Dependent variable (Employee Retention)

Table 4.11 Correlations between independent and dependent variables

Training Job rotation Carrier Mentoring and Employee

development coaching Retention
Table 4.11 Correlations between independent and dependent variables
Pearson Correlation 1

Training Sig. (2-tailed)

N 216
Pearson Correlation .391* 1
Job rotation Sig. (2-tailed) .000
N 216 216
Pearson Correlation .487** .551** 1
Carrier development Sig. (2-tailed) .000 .001
N 216 216 216
Pearson Correlation .532** .326* .475** 1
Mentoring and coaching Sig. (2-tailed) .000 .000 .000
N 216 216 216 216
*
Pearson Correlation .638** .359* .293 .597** 1

Employee Retention Sig. (2-tailed) .000 .000 .002 .000

N 216 216 216 216 216

**. Correlation is significant at the 0.01 level (2-tailed).

Source: Own Survey, 2021

In this topic tray to measure the degree of association between variables that is independent
variable‟s (Employee Development Program) and Dependent variables (employee Retention) in
Ethiopian Shipping and Logistics Service enterprise. Pearson‟s correlation uses to associate the
independent variables and dependent variables. These paper used Pearson‟s coefficient of
correlation in order to quantify the strength of the relationship between the variables Pearson

41
correlation coefficient reveal magnitude and direction (either positive or negative) and the
intensity of the relationship (-1.0 to +1.0). The table 4.11 shows below above, the coefficients of
dependent and independent variables with the range of 0.293 up to 0.638 all are significant at
p<0.01 and <0.05
As the result given on the table 4.11 the relationship between the independent variables, the
symbol shown in the table “**” indicates that each of the variable are significant correlated with
each other at a significant level of p<0.01
All independent variables are significantly correlated with the dependent variable employee
retention

4.3.2 Assumption test on multiple linear regression model

4.3.2.1Multicollinearity Test
Field (2005) stated that multicollinearity refers to which two or more independent variables are
very closely correlated. The presence of multicollinearity would not contribute to a good
regression analysis. However, in most research, multicollinearity is present to some degree, but
as long as the correlation coefficient between any two variables is not too large, the assumption
of multicollinearity can then be ignored (Pedhazur 1997).

The following assessments can be carried out to diagnose the multicollinearity:

If the correlation coefficient is greater than 0.9 between independent variables then there is cause
for concern (Field, 2005). If the largest Variance Inflation Factor (VIF) value is greater than 10,
then there is cause for concern (Field, 2005). VIF was used in this study as the cut-off threshold
for high multicollinearity.

Another way of assessing multicollinearity is to measure the tolerance values. If the tolerance
value is less than 0.1, there is almost certainly a serious collinearity problem (Hair et al., 1998;
Field, 2005). In other words, very small tolerance values denote high collinearity.

42
Table 4.11Multi-Collinearity Test

Model Collinearity Statistics

Tolerance VIF

(Constant)

Training .906 1.107

1 Job rotation .990 1.164

Mentoring and coaching .707 1.414

Carrier development .996 1.004

Therefore there is no multicollinearity problem.

4.3.2.2 Normality Test
Normality test help to determine whether the data used is normal for the residuals, and therefore,
that this assumption is met in the data for statistical tests. The approaches can rely on visual
inspection or statistical tests. When visualize the fit of the normal distribution, examine the
probability plot and assess how closely the data points follow the fitted distribution line. Normal
distributions tend to fall closely along the straight line. As it can confirmed by visual inspection
of the Normal p-p plot result from SPSS 20 our residuals seem normally distributed which means
the model is free of normality problem.

Figure 4.1 Normality Test

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4.3.3 Multiple Regressions
Regression result of Employee development program on Employee Retention

In this study multiple regressions was employed. The basic objective of using multiple regression
equation on this study is to make the study more effective at describing, understanding and
predicting the stated variables. That is, in this study it was primarily used to identify the effect of
employee development program on employee retention. Here, the basic assumptions of
normality, no multicollinearity are tested before the regression was run.

This method is used to predict the value of a variable based on the values of two or more
variables. So multiple regressions was used as one of the methods so as to measure the value of
identified retention factors related to each other.

In order to identify type‟s employee development serve as predictors of employee retention

cores, a multiple regression analysis was conducted on the employee retention. However model
fitness test should be carried out before hypotheses testing by using F ratio and R square tests.

ANOVA uses the F-ratio to test the overall fit of a linear model. It is an inferential test designed
to assist researchers in deciding whether they should accept or reject their model.

Table 4.12: Model summary of Employee Retention

Model Summaryb
Model R R Square Adjusted R Std. Error of the Estimate
Square
1 .729 .636 .624 .0.4253
a. Predictors: (Constant), mentoring and coaching, carrier development, Training, Job rotation
b. Dependent Variable: Employee Retention

While entering training, job rotation, carrier development, coaching and mentoring as
independent variables produced a significant model at the .000 level with 4 predictor variables
accounting for 63.6% of the variance in employee retention. Which means that 62.4% of the
effects of employee development program on employee retention. This therefore shows that the
variables under study explain 62.4% of the dependent variable and the remained 37.6 are
explained by other variables.

44
 Table 4.13: ANOVA of Employee Retention
ANOVAa
Model Sum of Squares Df Mean Square F Sig.

Regression 74.263 4 14.853 86.593 .000b

1 Residual 36.189 211 .117

Total 110.452 215

a. Dependent Variable: Employee Retention

b. Predictors: (Constant), mentoring and coaching, carrier development, Training, Job rotation

An ANOVA test is done to state whether the survey is significant. This method helps to figure
out whether to reject or accept the Null Hypothesis. It is a method used to test the groups and
identify if there is any difference between the groups. So the results indicate the model was
significant at P = 0.000 and therefore this meets the threshold since P is less than 0.05 and it
shows the probability value of 0.000, which indicates that the regression was highly significantly
predicted how Training, job rotation, career development/promotion and Mentoring and
Coaching, influenced employee retention .

F test used to test Ho: B1=B2=B3=B4 i.e. all Betas are zero

Ha: (Alternate Hypothesis) at least one beta is different from zero

Since F test is statistically significant (.000 is less than Alpha=0.05)

Hence, Ha is accepted. So the model fit with the collected data.

Table 4.14 Regression Result of employee development program on employee Retention

Coefficientsa
Model Unstandardized Coefficients Standardized T Sig. Collinearity Statistics
Coefficients

B Std. Error Beta Tolerance VIF

(Constant) .562 .121 4.113 .000

Training .371 .101 .096 3.684 .000 .906 1.107

1Job rotation .454 .130 .700 3.493 .002 .990 1.164

Mentoring and coaching .128 .031 .170 4.172 .000 .707 1.414

Carrier development .161 .077 .142 2.095 .037 .996 1.004

a. Dependent Variable: Employee Retention

45
Source: SPSS output (2021)

Evaluating of the Predictor Variables

Table 4.15 represents 4 predictors of employee retention in order of their strength of contribution
to the dependent variable (ER). The results indicate that training has a statistically significant
effect with employee retention (β= .096, Sig. =.000< .05). This was followed by job rotation has
a statistically significant effect with ER (β= .700, Sig. =.002 < .05), C&M has also statistically
significance effect with ER (β= .170, Sig. =.000p < .05), besides carrier development has a
statistically significant effect with employee retention (β= .142, Sig. = .037< .05),
Y = 0.562+ 0.096X1+ 0.700X2+ 0.170X3+ 0.142X4

Then the Hypothesis:-

Ha1.Training does have a statistical significant effect on employee retention in ESLSE.

Alternative hypothesis was accepted because β= .096, Sig. =.000< .05

Ha2. Job rotation does have a statistical significant effect on employee retention in ESLSE.

Alternative hypothesis was accepted because β= .700, Sig. =.002< .05

Ha3. Coaching and mentoring does have a statistical significant effect on employee retention in
ESLSE.

Alternative hypothesis was accepted because β= .170, Sig. =.000p < .05

Ha4. Carrier development/promotion does have a statistical significant effect on employee

retention in ESLSE.

Alternative hypothesis was accepted because β= .142, Sig. = .037< .05

46
Discussion of the Results:-
Ha1: Training has a statistically significant effect on employee retention.
For the first hypothesis, results showed a positive and significant relationship between training
and employees retention (β = 0.096, p<0.00); hence, Hypothesis 1 was supported. And it means a
unit increase in Training results in a 0.096 times increases in retention when other factors are
constant. Thus, focusing on training and providing more training programs mean more
commitment and retention among employees.
Training improves present and future work skills and behavior. Organizations which provide
enough work-related training and adequate resources help employees to develop their abilities to
improve their performance and productivity. Since there is a direct link between job satisfaction
and training, the focus of training efforts should be on employee task assignment and
empowerment (Reiner and Zhao, 1999). Employees needed to be specialized in various fields to
solve problems and fight different challenges more effectively (Abdulla, 2007).
Ability utilization has a strong impact on job satisfaction and work innovation. Employees desire
jobs that allow them to make good use of their skills and knowledge. Vroom (1982) states that
individuals gain satisfaction from jobs that require the use of their abilities, as compared to jobs
in which they feel their abilities are not being used. Shipton et al. (2004) maintain that employees
are most likely to contribute their knowledge and skills in order to innovate, in situations where
they feel positively towards their jobs and their organizations and hence retained in the
organization.

Ha2: Job rotation has a statistically significant effect on employee retention.

The study has shown that there is a statistical significant relation between job rotation and
employee retention (β =.700, p<0.02) Based on the above results, hypotheses Ha2 is accepted. In
other words, the correlation analysis a positive relationship between job rotation and employee
retention. Hence, it can be suggested that job rotation within an organization alleviates employee
boredom, provides job variety, and allows employees to learn new skills (Abdella, 2009). This
analysis is consistent with the studies of Zahra and Covin, (1994) and Gunday et al. (2011) who
confirm a positive relationship between job rotation and employee retention that disclosed job
rotation as being a significant activity in the promotion of professional development and
improves performance and reduces turnover. Job rotation helps for newcomers, as it introduces
them to the different functions of the organization within which they are working. Utilizing job

47
rotation is a successful approach to make jobs more interesting, being mindful of workers‟
preferences, competencies and interests. Therefore, job rotation enables employees to gain
experience in different stages of the business and, hence, broaden their viewpoint and as the
result satisfied and retained them for a reasonable period of time.

Ha3: Coaching and mentoring has a statistical significant effect on employee retention.
The study revealed that Coaching and mentoring has a statistically positive effect on employee
retention (β = 0.170, p<0.00). Hence, hypothesis Ha3 is supported.
This is in line with Journal of Applied Business and Economics (2011) that the mentoring
process as a “developmental, cared, shared, helped relationship where one person invests time,
knowledge and effort in order to increase and improve another person‟s growth, knowledge and
skills” that is helpful for employee‟s job satisfaction and retained in the organization. And
coaching enhance the performance and brings out the right potentials of the employees, it also
helps the individuals and the organizations in making decisions about designing, implementing
and measuring the effectiveness of the job role in the organization (Whitmore, 2010).
According a study carried out by Wolf (2011) continuous training by coaching appraisal to
improve performances, brings the right potential of the employees. This can increase retention in
the organizations

Ha4: Career development / promotion has a statistical significant effect with employee
retention
The finding of the study pointed out that carrier development / promotion has a statistically
positive effect on employee retention since β = 0.142 and p<0.037). Therefore, hypothesis Ha4 is
accepted.
Meier and Hicklin (2007) concluded that the technique of lowering the turnover rate of an
organization lies in the expansion of employees‟ responsibilities through promotion and that it
can prompt the organization towards sustainable development. Competent employees can easily
quite if organization does not provide career development, which can lead to high turnover in the
organization (Clarke, 2009). A study by Meyer (2003), conducted to examine the mechanism
involved in observed relations between Human Resource Management practice and employee
commitment has shown that internal career development of employees is the best predictor of
effective employee commitment which will likely enhance retention.

48
A study of bank sector in India has shown that Career development is more valuable for the
development of the organization's values and goals and objectives in relation to their retention of
employees. Thus, career development in organizations helps to develop their careers experience
and reduces employee turnover rates (Sapna Bai and Mehran Bhutto 2016)

49
 CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

This chapter presents the conclusions, possible recommendations and suggestion for further
research based on the analysis and interpretation of the collected data.

5.1 Conclusion
Employees are valuable assets through which organizations cannot live without them. This is due
to employees are sources for skill, experience, competency, talent which are rare and valuable to
create competitive advantage. It is therefore important for organizations to institute appropriate
strategic tools to satisfy, and retain skillful employees because dissatisfaction and employee
turnover are costly and can negatively affect organizational effectiveness. Furthermore,
Masbigiri and Nienabar (2011) outline that the inability to retain employees can lead to more
expenditure, losing well skilled employees can be a great loss; the recruitment of new employees
will involve spending more money and have an adverse consequence on the proceeds of
continuous reality. Therefore, retaining experienced employees reduces the cost of recruiting
new employees into the organization.

Kavitha and Geetha (2011) also review that most companies are not capable to retain their
trained employees, as cost of inability to manage and provide them with the necessary facility
after training makes organization to loss the employees. The competitors are ready to offer an
attractive offer, as to attract the qualified employees. Therefore, retaining of talented, skilled and
experienced employees is a big challenge in today‟s organizations without providing employee
development as a motivator or satisfier of employees need.

Therefore, the purpose of the current study was to examine the effect of employee development
program on employee retention in ESLSE. To this end, this study aimed to investigate the effect
of employee development on employee retention in the case of ESLSE by taking its employees
as unit of analysis.

The total population was 726 employees under head office, with target sample size of 216
Employees in Addis Ababa. Self-administered Structured questionnaires were applied to collect
data based on the research objective and hypotheses. Descriptive statistics was used to analyze

50
data for demographic characteristics frequencies, percentages distribution tables, and the mode
mean, and standard deviation. Inferential statistics analysis was carried out by using correlation,
and multiple linear regression analysis. An explanatory research design and quantitative method
were also suitable for this study. A questionnaire was delivered to ESLSE and 216 usable
questionnaires were collected (with a response rate of 83.72%). This study used SPSS to test the
research hypotheses. The measurement model has confirmed that the research measures
indicated accepted reliability and validity. Based on the research results, hypotheses are
accepted.

The findings of the study appear to point out that employee training, job rotation, career
development/promotion, and coaching and mentoring have a statistical significant relation on
employee retention in ESLSE. And the analysis showed that there were employee‟s retention
strategies available in the organization. However, considerable no of employees of the
Enterprise is still unsatisfied with the employee development programs specially in job rotation
and carrier development, but better application in training and mentoring and coaching,
employee mean a lot to be done in the organization even some amount will affect the
organization goal so the researcher tried to conclude and recommend that the organization should
understand the importance and value of EDP and needs to revise and should formulate strategies
to establish employee training policy, job rotation programs, carrier development programs and
mentoring and coaching programs in order to motivate and improve their employee performance
and employee retention because human resource is the most important resource to any
organization. Without having skilled and talented employees, it is difficult to attain planned
goals by the organization. Therefore, we can say that organizational success is dependent on
retention of its talented employees. Accordingly, the findings of the current study and literatures
appears to conclude that effective Employee development programs can help organizations to get
satisfied employees and gain ability to retain its valuable human capital.
Building upon the findings of the study the following recommendations are suggested:

5.2 Recommendations
According to the research findings, the researcher has produced the following possible
recommendations. First, although employee development plays a significant role on employee
retention in ESLSE, It is recommended that the Ethiopian Shipping and Logistics Service

51
Enterprise should regularly implement employee development programs not only the mentioned
here but also other employee development programs in order to improve employee and overall
organizational performance by retaining talented employees in the enterprise.

Another recommendation of the study is that employee retention is improved by implementing a

necessary training program that is based on employee gap analysis and is closely matched with
the enterprise goals, as outlined in this study and ESLSE should provide free Wi-Fi to get how to
improve logistics index of Ethiopia, seminars, workshops, and conference in relation to sea
transport, railway and shipping. And also ESLSE should assess and formulate appropriate
menses-computer, e-book.

Providing peer to peer discussion every morning for half an hour, assigning new employees to
experienced ones and giving special assignments to senior experts and mangers once in a year
and planning and delivering retreat programs for knowledge and experience sharing.

Rotating employees per year since it is not as such much costly to the ESLSE. Rather than
recruiting form external source it would be better to promote existing employees.

Being a sponsor for some employees to attend higher education in logistics and supply chain
management such as AAU College of commerce to create a reliable worked environment in
order to get the heart and minds of employees that leads to employee development and employee
retention.

5.3 Suggestions for further research

First of all the research on Employee development program and its effect on employee retention
is a very significant area due to the importance of human resources. However, not sufficient
studies are carried out in this area. It is therefore important that more researchers especially those
in Ethiopia require continue to explore the area empirically.

Also, this study mainly employed quantitative methods. Further researchers can conduct research
by using other research approach such as in-depth interview and qualitative techniques which
can provide in-depth knowledge about employee development programs besides data analysis
should be carried out by using a latest analysis which is called structural equation model.

52
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 APPENDICES
Saint Mary’s University

School of Graduate Studies

Master of Business Administration (MBA)

Questionnaire Administered to Head offices employees of Ethiopian shipping and logistics

service enterprise (ESLSE)

This questionnaire is designed to meet the objective of research titled:

“THE EFFECT OF EMPLOYEE DEVELOPMENT PROGRAM IN EMPLOYEE RETENTION

IN ETHIOPEAN SHIPING AND LOGISTCS SERVICE ENTERPRISE” for partial fulfillment
of MSC in Master of Business Administration from Sent Merry University.

Dear respondent,

I would like to assure you that your response will only be used for the intended purpose and
remains Confidential. Therefore you are kindly requested to respond the questions utmost good
faith, freely and to the best of your knowledge. No need to write your name.

I thank you for your participation and prompt response.

Tadelech Mehari Email: [email protected]

Mobile 0902-654342

58
Section A: Personal Profile of Respondents.

General Instruction: Please indicate your choice by putting “√” mark in the bracket.

1. Sex/Gender/: A) Male [ ] B) Female [ ]

2. Age (in year): A) 19 to 26 [ ] B) 27 to 37 [ ] C) 38 to 48 [ ]

D) 49 to 59 [ ] E) Above 60 [ ]

3. Level of education: A) Diploma [ ] B) Bachelor's Degree [ ]

C) Master‟s Degree [ ] D) others [ ]

4. Your years of experience A) < 2 years [ ] B) 2-5years [ ] C) 5-10years [ ]

D) 11-15years [ ] E) Over 15 years [ ]

Section B: The questionnaire items

1. Employee Development Program

The Questionnaire is prepared in Likert-scale form with five (5) point scales questions related
with Employee Development Program and I ask you to tick (√) or the appropriate scale (point)
that indicates your opinion in table below. The values of scales are: 5 = strongly agree, 4 =
Agree, 3 = Neutral, 2 = Disagree and 1 = strongly disagree.

S.N Training 5 4 3 2 1
1 The course content is relevant to my job.
2 Almost everything learnt can be applied at work
3 It is difficult to practically apply what has been
learnt
4 I found that skills and knowledge can be applied in
the enterprise
5 I can coach other new employees to the area

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 Job Rotation 5 4 3 2 1
1 Transfer employees from one department to another
2 Change employee positions in the same department
3 I have got an opportunity to do a variety of tasks.
4 Job rotation program of the enterprise is an excellent
system to acquire new methods of work.
5 Before job rotation, the organization seeks my
consent.
Career Development 5 4 3 2 1
1 There is promotion and opportunity for career
development provided by the enterprise.
2 There is a clear path way for career development in
the enterprise.
3 I know where my career is going
4 My work effort contributed to my personal growth
5 Women and men have the same opportunities for
career and development.
Mentoring and Coaching
5 4 3 2 1
1 Mentoring and coaching helps to enhance
knowledge, skills and expertise from the
experienced professionals as they can assist less
experienced employees gear up to the speed.
2 During work employees are given support by their
mentors.
3 My retention is influenced by staff mentorship and
coaching programs that the firm has put in place.
4 Mentors and coaches are always around when
needed.
5 We are socially connected in the workplace than

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 before.

2. Questions related to Employee Retention

S.N Employee Retention 5 4 3 2 1

1 Investment in on EDP is considered important factor
by the organization.
2 Opportunity for moved to higher levels within the
Organization.
3 The degree of attachment to individuals associated
with the Organization such as supervisor, co-workers,
or customers.
4 The degree to which the organization is to be
trustworthy and well respected
5 Employees tend to remain with the organization
when they feel their capabilities and efforts are
recognized and appreciated.
6 A good work environment enhances employee
retention.
7 There is low labour turnover in the organization

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