An Empirical Examination of Performance Management on Employee Retention

Performance management has become an integral part of an organization’s strategic initiative to align employee goals with its Vision and Mission. Performance management is imperative to ensure the sustenance and competitiveness of an organization in the modern day global knowledge economies. Effective management of employee performance coupled with a robust reward and recognition structure leads to higher employee productivity, engagement and consequentially higher levels of employee retention. Engagement and enablement are both important determinants of employee performance. Retention of key employees is highly critical in ensuring the long-term sustenance and success of a business enterprise. The key performers ensure a ready pipeline for effective succession planning, continuance of business plans while fostering a culture of organizational learning, knowledge dissemination and elimination of recruitment and learning costs. This study is based on the administration of a structured, non standard research instrument to a target group of 129 employees of a leading telecom player in India. The objective of this study is to establish the linkage of performance review, rewards and recognition with employee retention. The data garnered was subjected to partition analysis to identify the causal factors of employee retention and its linkages with organizational performance management systems. The research reinforces the importance of a robust performance management system in aligning employees with the organization’s goals, resulting in superior business performance