A study of the relationship between human resource management practices and employee retention

In this study, the objective was to determine the influence of HRM practices and work environment towards employee retention in selected SME companies. The research design used in this study is correlation study. The independent variables were HRM practices such as compensation, benefits and rewards, performance appraisal, training and career development. Working environment was also included as part of the independent variable. The dependent variable is employee retention. Survey method was used to collect data from 100 respondents in various SME companies, and the simple random sampling was applied. Finally, the finding shows all the HRM practices (compensation, benefits and rewards, performance appraisal, training and career development) and working environment were significantly correlated with the dependent variable (employee retention). Regression analysis identified that training and development contributes the most towards retaining the SME employees, followed by working environment practices. The result of this study had provided some beneficial information regarding: how SME can retain their employees particularly, on HRM practices such as training and development. The findings also can be used as a guideline for HRM practitioners in SME encouraging employees to attend training and to provide more career opportunities.