The purpose of this study is to identify the effect that employee retention has on productivity of small businesses, doing so would shed light as to what increases productivity as measured by business sales. This objective of the study is to be able to investigate the relationship of different retention management strategies used by small businesses and to the business’ productivity in order to gather evidence of the importance of employee retention to the operation of small businesses.
Specifically, this study tries to identify the widely used employee retention strategies 4 that most small businesses employ, to measure the productivity rates of small businesses through sales rates and to determine whether the identified retention strategies are related to company productivity. Limitations This study investigates the relationship of employee retention measures to small business productivity rates in the production of goods, hence the study is limited to this specific field and caution should be given in generalizing it to all small business enterprises.
Moreover, small businesses as identified in this study has a workforce of 15 or less but the standard definition of small and medium enterprises are companies with 100 or less employees, thus the number of employed workers in the business again limits the kind of small business that the study is applicable to, which basically are local enterprises where the proprietors are the managers of the business.
The study is also limited in the sense that many factors can affect productivity and this has not been measured in the study, likewise several factors can also affect the decision of employees to stay with the company but again it has not been considered in this study. Assumptions
In this study the productivity of the small businesses were measured in relation to employee retention methods. Based on the literature on retention management it is expected that the retention methods used by small businesses will positively affect the productivity of the company (A1), and that the absence of any retention strategy will lead to low productivity (A2).