IMPACT OF HRM PRACTICES ON EMPLOYEE TURNOVER INTENTIONS THROUGH ORGANIZATIONAL CLIMATE: A SOCIAL IDENTITY PERSPECTIVE

Abstract

Employee turnover rate is a major concern for organizations. Several prior studies have found a significant role of HRM activities in retaining the employees. However, this stream of research lacks in explaining the process of how that happens. Therefore, based on social identity theory, this research aims to determine the relationship between different HRM activities and employee retention through organizational climate in the Chinese context. The five major HRM functions identified in this research are recruitment and selection, performance appraisal, compensation, training, and career development. A survey of 180 respondents is conducted; all the participants are chosen from employees of four different organizations across China. The responses are analysed using SmartPLS 3.2.8 software by adopting the PLS-SEM technique. The results of this research suggest that all the HRM functions are statistically significant and positively associated with organizational climate. The findings also support the indirect effect of all HRM functions on employee retention through organizational climate. This research will provide an insight into the process that develops employee retention in China and help organizations transform their HR policies. It will also help organizations identify the areas that need improvement.