Learn about the theories that explain how to deal with employee retention in your organization

Retaining best talents is a common challenge for most organizations. Experts have developed several employee retention theories to help companies retain their employees. They help organizations to understand the best practices for keeping employees. Here is a list of employee retention theories:


Job embeddedness theory

This theory argues that the connections of employees to their organizations determine if they leave their positions or stay. For instance, where the employee feels fit for the job such as if they have the necessary job knowledge, personal skills, a favorable working environment and the connection with the community. Links with the community and the organization can make an employee to be stuck in an organization. Lastly, if the employee feels that they will be sacrificing good relationships they have nurtured with their colleagues, or if they are forfeiting good projects or programs, they might stay.

Maslow’s hierarchy of needs

This theory emphasizes on the need of companies to consider the basic requirements of their employees including health, job security and payment. They can then advance to the position of the employee in the organization. When employees know that you care about their health and that their job is guaranteed, they will be committed to the company.

Herzberg’s theory(Motivator-hygiene)

The Herzberg’s theory focuses on two broad categories of factors, which determine employee retention rate. They include motivator and hygiene factors. The motivator factors lead to employee satisfaction whereas the hygiene elements cause dissatisfaction. Motivator factors according to the theory include recognition, achievement, work, growth, and advancement. On the other hand, hygiene factors include a relationship with boss, supervision, salary, relationship with colleagues, work conditions and the company’s policy.

Victor Vroom’s expectancy theory

The theory explains that if the goals of an employee are aligned to those of the company, the retention rate is high. Hence, it is important for companies to understand the goals of their employees and if they match those of the organizations.

Equity theory in business

Equity theory has been used in social studies to explain relationships. In business or organizations, it is often used to substantiate the relationship between employees and their employer. Employees will compare their individual input/output and the input and outcomes of their colleagues. In other words, they tend to establish the equitable treatment. In this case, inputs may include expertise, experience, qualifications, time and personal qualities. Outcomes, on the other hand, include benefits, monetary compensation, and flexible work arrangements. If employees perceive inequity, they might decide to leave the company.

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