Impact of training on reducing staff turnover in retail sector

IMPACT OF TRAINING ON REDUCING STAFF
TURNOVER IN RETAIL SECTOR – A CASE
STUDY OF TESCO, UK
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DECLARATION
I declare that this research is completely my effort and piece of work based on study conducted
by myself. Any work or theory used in this dissertation have been duly referenced and given
proper sources. Moreover, the research has been conducted according to the guidelines provided
by the tutor.

ACKNOWLEDGEMENT
I would like to thank my supervisor, ---------- for his/her help in the process of completing this
dissertation. This dissertation would not have been possible without my supervisor’s help and
patience.

Contents
DECLARATION..........................................................................................................................................3
ACKNOWLEDGEMENT ............................................................................................................................4
ABSTRACT..................................................................................................................................................9
CHAPTER 1 - INTRODUCTION..............................................................................................................10
1.1 DEFINITION OF TURNOVER.................................................................................................11
1.2 TRAINING AT TESCO .............................................................................................................12
1.3 AIM AND OBJECTIVES OF RESEARCH...............................................................................13
1.3.1 Research Objectives.................................................................................................................13
1.3.2 Research Questions..................................................................................................................13
1.4 STRUCTURE OF STUDY.........................................................................................................13
1.4.1 Chapter I – Introduction...........................................................................................................13
1.4.2 Chapter II – Literature Review ................................................................................................14
1.4.3 Chapter III – Research Methodology.......................................................................................14
1.4.4 Chapter IV – Data collection & Analysis ...............................................................................14
1.4.5 Chapter V – Conclusion & Recommendations ........................................................................14
CHAPTER 2 – LITERATURE REVIEW ..................................................................................................16
2.1 DEFINITION AND CLASSIFICATION OF STAFF TURNOVER .........................................17
2.2 REASONS BEHIND EMPLOYEE TURNOVER .....................................................................19
2.2.1 Relationship between Job satisfaction and Turnover..............................................................19
2.2.2 Relationship between Commitment and Turnover .................................................................20
2.2.3 Causes of dissatisfaction at work............................................................................................20
2.2.4 Relationship between Training, career development and turnover.........................................22
2.3 TURNOVER IN RETAIL SECTOR ..........................................................................................22
2.4 ROLE OF TRAINING IN REDUCING EMPLOYEE TURNOVER........................................26
2.5 EFFECT OF COMMITMENT STRATEGY ON EMPLOYEE TURNOVER..........................26
2.5.1 Effect of Training on Employee Investment...........................................................................28
2.5.2 Effect of Training on Employee Reciprocity..........................................................................30
2.5.3 Effect of Training on Employees Identity...............................................................................31
2.5.4 Effect of Training on Employees Lack of Alternatives ..........................................................32
2.6 CONCLUSION...........................................................................................................................32
CHAPTER 3 – METHODOLOGY ............................................................ Error! Bookmark not defined.
3.1 RESEARCH DESIGN................................................................ Error! Bookmark not defined.
3.1.1 Research Philosophy............................................................... Error! Bookmark not defined.
3.1.1.1 Realism ........................................................................... Error! Bookmark not defined.
3.1.1.2 Positivism........................................................................ Error! Bookmark not defined.
3.1.1.3 Interpretivism.................................................................. Error! Bookmark not defined.

3.2 RESEARCH METHODS ........................................................... Error! Bookmark not defined.
3.2.1 Questionnaires......................................................................... Error! Bookmark not defined.
3.2.1.1 Closed ended questions................................................... Error! Bookmark not defined.
3.2.2.2 Open ended questions ..................................................... Error! Bookmark not defined.
3.2.2.3 Interview questions ......................................................... Error! Bookmark not defined.
3.2.3 Population of Research ........................................................... Error! Bookmark not defined.
3.2.4 Sample of Research............................................................. Error! Bookmark not defined.
3.3 DATA COLLECTION ............................................................... Error! Bookmark not defined.
3.3.1 Quantitative Data .................................................................... Error! Bookmark not defined.
3.3.2 Qualitative Data ...................................................................... Error! Bookmark not defined.
3.4 DATA ANALYSIS..................................................................... Error! Bookmark not defined.
CHAPTER 4 – RESULTS & ANALYSIS OF DATA............................... Error! Bookmark not defined.
4.1 RESULT ACCORDING TO DEMOGRAPHICS...................... Error! Bookmark not defined.
Table 1.1 Gender and Marital status.......................................... Error! Bookmark not defined.
Fig 1.1 Fig 1.2 ................................................................... Error! Bookmark not defined.
Table 1.2 Age group and duration at Tesco............................... Error! Bookmark not defined.
Figure 1.3 Figure 1.4........................................................... Error! Bookmark not defined.
Table 1.3 Position at Tesco........................................................ Error! Bookmark not defined.
Figure 1.5................................................................................... Error! Bookmark not defined.
Table 1.4 Change of jobs in last 5 years.................................... Error! Bookmark not defined.
Figure 1.6 Figure 1.7........................................................... Error! Bookmark not defined.
............................................................................................................ Error! Bookmark not defined.
Table 1.5 Reasons for leaving the Job....................................... Error! Bookmark not defined.
Fig 1.8........................................................................................ Error! Bookmark not defined.
4.2 GENERAL TRAINING ............................................................ Error! Bookmark not defined.
4.2.1 General Training at Tesco........................................................ Error! Bookmark not defined.
4.2.2 Usefulness of General Training ............................................... Error! Bookmark not defined.
Table 1.6 Gap between training at Tesco .................................. Error! Bookmark not defined.
4.3 SPECIFIC TRAINING.............................................................. Error! Bookmark not defined.
4.3.1 Training before change ........................................................... Error! Bookmark not defined.
Table 1.7 Effective ways of training ......................................... Error! Bookmark not defined.
4.3.2 Satisfied with training provided............................................. Error! Bookmark not defined.
4.4 AFFECT OF TRAINING ON EMPLOYEE TURNOVER ...... Error! Bookmark not defined.
Table 1.8 Skills learnt / utilised in other companies.................. Error! Bookmark not defined.

Fig 2.1 Fig 2.2 ................................................................... Error! Bookmark not defined.
Table 1.9 Factors determining effectiveness of training............ Error! Bookmark not defined.
Figure 2.3................................................................................... Error! Bookmark not defined.
4.5 ANALYSIS OF QUALITATIVE DATA ................................. Error! Bookmark not defined.
4.5.1 Response of Staff / Managers ................................................. Error! Bookmark not defined.
4.5.2 Analysis................................................................................... Error! Bookmark not defined.
CHAPTER 5 – CONCLUSION AND RECOMMENDATIONS .............. Error! Bookmark not defined.
5.1 CONCLUSION ......................................................................... Error! Bookmark not defined.
5.2 RECOMMENDATIONS........................................................... Error! Bookmark not defined.
5.2.1 Future Recommendations ....................................................... Error! Bookmark not defined.
REFERENCES ...........................................................................................................................................33
WEBSITES.............................................................................................................................................35
APPENDIX - QUESTIONNAIRE ............................................................. Error! Bookmark not defined.

ABSTRACT
Training and development of employees is an important part of human resource practices. With
growing competition in market and globalisation, large and medium organisations are investing
heavily in this area to gain future benefits.
This research will discuss different attitudes of employees which ensure reduced turnover rate
among them. These attitudes include employee loyalty and commitment with company,
employees’ willingness to invest time in company, lack of opportunities, career development
opportunity in company and others. Furthermore, this research will investigate the effect of
training on increasing these factors and as a result reducing turnover among employees.
The first chapter will introduce the topic and reasons behind conducting this research. In this
chapter, the company chosen for this research will also be introduced. A case study will be
performed on Tesco, Chessington, Surrey branch in United Kingdom. Aims and objectives of
this study will be outlined in this chapter, which will give a roadmap to the research.
Theoretical framework of the research will be discussed in the second chapter. This will include
the discussion of earlier researches carried out on the similar topic. The third chapter will bring
out the methodology used to carry out the research. In order to conduct the case study,
quantitative and qualitative research will be carried out by using structured and semi-structured
questionnaire. Primary data obtained from the questionnaire will be analysed against the
secondary research in chapter two.
This will be followed by the calculation and analysis of results in the fourth chapter. The data
obtained from the responses of questionnaire will be calculated using simple arithmetic
percentages and averages. The last chapter will sum up the entire research with conclusion.
Recommendations will also be made for the current training system of Tesco and further
research in this area.

CHAPTER 1 - INTRODUCTION
Training is increasingly becoming very important for the companies in their effort to gain
competitive advantage in the market. Professionals see this as an important tool towards gaining
organizational goals. They argue that training is best source of increase in employee turnover and
retention. They also believe that training is an extremely important part of human resources
practice (Colarell and Montei, 2006).
There has been a considerable increase in training industry. Joyce (2008) quotes statistics from
The American Society for Training and Development and says that from there was an increase of
$135 per employee on the training programs from 2003 to 2007, whereas, there has been a slight
decline in training expenditure from 2008 onwards (astd.com, 2010). Joyce argues that
employers are still spending on the training system during the financial crunch, which makes it
even more important for the company’s growth.
Kaufman and Hotchkiss (2007) argue that although training can be extremely beneficial for
company’s growth, it can also be high cost for them. These costs may vary from the salary of the
trainer to the technology or material required for it. There are other indirect costs, like
productivity of the employee during and after completing the training. Apart from all these costs,
it is generally expected that the productivity of the employees will increase at the end of the
training program. There is two-way benefit of training; the company will benefit from the
increased output of employees, whereas, the increase in productivity will ensure higher wages
and better pay and rewards. Generally the company will weigh its cost incur on training with the
expected benefit derived from the productivity of the employees.
Besides the costs incurred on training, employee turnover also plays an important part in the
investment made on training. The company will avoid investing more on training programs, if
there are high chances of employee turnover. Reason behind this is that the company will lose all
its investment if the employee leaves upon completion of the training. Keeping in view the
turnover issue, organizations decide very prudently about the investment they have to make in

training the employees. Companies should take into account all the factors, like the duration, cost
and location of training before starting the program (Frazis and Speltzer, 2005).
Organizations usually spent lot of money in hiring, training, developing and retaining their
employees. This is the reason that managers make all the effort to reduce the level of employee
turnover (Kevin et al., 2009). They said that there is no standardized procedure of reducing
turnover and managers should study different factors that may affect employees and make them
to leave the organization. The need is to develop strategies to counter and minimize the factors
that cause turnover. Globalization has made competition even tougher between the
organizations, so that they have to come up with products and services which would make them
unique. Employees are source of gaining competitive edge in the market, as they can help
provide high value services to the company. Also, if retained by the company, these employees
are not easily replicated by other companies. Hence, managers should make every effort to
understand the factors behind turnover and try to minimize them as much as possible.
1.1 DEFINITION OF TURNOVER
There are various reasons behind employee turnover. Abassi et al (2005) describe turnover as the
circulation of employees in the job market from one organization, job or profession to another or
from being unemployed to employed. Whereas, Price (1977) cited in Abassi et al (2005)
describes turnover as the ratio of the employees leaving in a particular period divided by the
people employed in an organization in the same period of time. He also said that the process of
turnover starts from the time an employee leaves voluntarily or involuntarily to the time another
employee is hired and trained to fill that space. This complete cycle is called turnover.
According to Hom and Griffeth (2007), the term turnover can also be used to describe the
relationship between an employee and organization upon their leave. They believe that an
employee makes a conscious decision to leave an organization. This decision is made after a long
process of analyzing different factors, internal and external. Internal factors can be the behavior
of the manager, organization policies, lack of career growth; while, external factors can be the
better job offer, higher wages, more rewards etc. This is also termed as push and pull factor.
Push factors are the internal factors of the organization that push an employee towards another
organization, while pull factors are external factors which attract the employee towards it

(Beach, 2009). He argued that either single factor makes the employee leave the organization or
sometimes both pull and push factors play significant role in employee’s decision to leave.
This research will examine the relationship between training provided by organizations and
employee turnover in retail organization. Through this study, inquiry will be made into different
areas and factors that cause turnover and how these can be minimized through training programs.
The research will focus on a UK based retail company, Tesco.
1.2 TRAINING AT TESCO
Tesco is one of the three largest retail stores in the world with more than 472,000 employees in
its stores located in Europe, North America and Asia (Guardian, 2010). The company has
devised an effective plan to retain its employees through training and career development. The
company has a training institute called “Tesco Academy” that designs and carries out training
programs. These training programs are made to meet the changing trends and ambitions of the
employees. The team in charge of planning a training program reviews the existing trends of the
customers and competitors and the expectations of the employees. Then a training program is
devised according to the observations and recordings. After an extensive research in its stores in
the UK, Europe, USA and Asia, Tesco Academy came up with the Trainer Assessment Program
(TAP) (Case study: Tesco, 2011).
The purpose of TAP was to identify and understand the needs of trainers responsible for the
training of thousands of employees in the company. These trainers are provided with special
training under this program to cope with the challenges of training the employees. At the end of
their training, the trainers are awarded with professional certificate to ensure their future growth.
Tesco pays great importance to the career development of its employees. For this reason, the
company has developed a training program called “Every Little Helps” which aims to enhance
the abilities of its employees needed to carry out their job efficiently, while giving them an
opportunity to grow professionally (Tesco Plc, 2011).
Another significant training program run by Tesco is their Optional Development Program,
which is offered to the apprentices to encourage them to study while at work. In this program
approximately 7000 employees are given training at a time. Through this program, the company

prepares the existing employees for the next level in their careers. Tesco HR manager says this is
the reason that almost 80% of the managerial positions are filled from internal hiring (Tesco,
Careers, 2011).
1.3 AIM AND OBJECTIVES OF RESEARCH
The aim of the research is to identify and evaluate the impact of training on reducing staff
turnover at Tesco.
1.3.1 Research Objectives
Following are the objectives of the research:
1. To identify and evaluate the factors behind employee turnover in an organisation
2. To examine the effect of staff turnover on organizational performance
3. To analyse the role of training in reducing staff turnover
4. To critically analyse the training procedure at Tesco and its effect in staff turnover
1.3.2 Research Questions
Following are the questions which will be explored in the research:
1. How can training improve the turnover of staff in a company?
2. What factors determine the employees’ level of commitment towards the company?
3. What kind of training impacts employees’ performance?
4. How far has Tesco been successful in decreasing the turnover of its employees?
1.4 STRUCTURE OF STUDY
This research paper comprises of five chapters; introduction, literature review, research
methodology, data calculation and analysis and conclusion and recommendations. Each chapter
begins with an introduction, giving the summary of the chapter.
1.4.1 Chapter I – Introduction
The first chapter introduces the topic under discussion. It explains the role of training in human
resource planning, while focusing on its impact on the turnover of employees in a retail sector.

1.4.2 Chapter II – Literature Review
This chapter includes discussion on the theoretical framework of the research. Important terms
like turnover have been defined and explained, followed by analysis of the theory of
commitment.
1.4.3 Chapter III – Research Methodology
The third chapter outlines the methodology used to conduct the research. Research design and
structure has been discussed in this chapter, while the sample and questionnaire have also been
discussed.
1.4.4 Chapter IV – Data collection & Analysis
Data collected from questionnaires will be calculated, using simple mathematical tools and the
results will be shown in tabular form. The result will also be analysed according to the
theoretical framework of the research.
1.4.5 Chapter V – Conclusion & Recommendations
The last chapter sums up the entire research. It gives the conclusion based on the results and
analysis in chapter four. Also, recommendations are given for Tesco to improve its training
system and reduce turnover.

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CHAPTER 2 – LITERATURE REVIEW
In this chapter theoretical framework of the research will be developed. This chapter will discuss
the reasons behind employee turnover and how it can be reduced through training. In the first
phase different factors causing employee turnover will be discussed, with emphasis on the
internal factors. In the next phase factors that ensure employee retention will be discussed, such
as employee commitment and time investment. Also, their relationship with training will be
explored and investigated.
2.1 DEFINITION AND CLASSIFICATION OF STAFF TURNOVER
Different researchers have defined turnover as movement of employees leaving or joining the
organization (Nel, Werner, Haasbroek, Poisat, Sono & Schultz, 2008). As per the definition, the
researchers do not consider transfers from one branch or office of the same organization to
another to be staff turnover, as it is a permanent activity.
The authors also explained the controllable and uncontrollable forms of turnover. Controllable
turnover is the one that is in control of the management. These include the voluntary turnover,
which means the resignation of employees and the termination from work. Such situations can be
avoided if the management plays proper role. To minimize the number of resignations, managers
should motivate employees, offer better salaries and bonuses, train them and provide
opportunities for career development. Similarly, terminations can be controlled if the
management recruits employees best suitable for the job, train them according to the
expectations and policies of the organization, provide support and guidance when necessary and
provide them with opportunity to utilize their strengths. Also, effort should be made to mould the
behavior of the employee according to the environment and policies of the company. They
should be provided with opportunities for proper socialisation.
Uncontrollable staff is the kind of turnover which cannot be controlled or avoided by the
management. These include unexpected accidents like death, downsizing staff because of
financial loss etc. Similarly, Price (1997) has stated that difference should be made between
avoidable and unavoidable turnover. He explained that avoidable turnover is in control of the
management and the reduced or prevented.

It is pertinent to mention here that retrenchments because of financial loss and cost-cutting would
be counted as involuntary turnover (Schultz & Schultz, 2006). They pointed out that in some
situation this may be voluntary as well; such as employees resigning due to lack of bonus in
worse financial times.
Nel et al (2008) pointed out that both voluntary resignations and terminations are controllable by
the management. However, some authors stressed that resignations are voluntary turnover, while
terminations are involuntary; adding that both these can be measured and controlled by the
management (Swanepoel, Erasmus, Van Wyk and Schenk, 2003).
Some authors supported Nel et al (2008) definition and stated that turnover is the movement of
employees leaving the organization (Globler et al, 2006). Although they say that that voluntary
and involuntary turnover are different from each other, but they do not give any specific
differences between the two. But they clearly stated that there is a direct link between job
satisfaction and staff turnover. They explained that management should identify and work on
factors which reduce employees’ satisfaction at work.
Gordon (1991) defined staff turnover as the number of voluntary resignations, while others
define it as the number of employees leaving the organization in a certain period of time
(Newton & Davis, 1997). It has also been observed that the cause of involuntary turnover may
not be related to employees, as it can be restructuring of the organization or downsizing the
employees, where the management has to let go of the employees (Price, 1997).
North and Stone (2006) said that turnover is a voluntary process, chosen by employees to leave
the organization. They said this process brings a balance between the benefits of organization
and employee’s aspiration for better opportunity and career development. These factors can be
termed as push and pull factors. Pull factors are those that attract the employee to the job market
and push factors are those organizational factors that force the employee to look for new
opportunities. Moreover, employees’ attitude towards career development and better
opportunities in the job market are major factors in voluntary turnover. Similarly, organizations
which do not invest in employees create push factors for them to leave.
Negrin and Kirschenbaum (1999) explained different attitudes of employees which affect the
turnover rate of organization. They said that voluntary turnover reflects an attitude of employee

who is in transition of jobs and looks for better opportunity while staying at a job. Such
employees react violently to the negative environment in the organization and are the first ones
to leave. Overall, it is the attitude towards career development that drives the employees to quit
their jobs for better ones. This can also be explained through argument of market viability, which
says that an employee who has greater control on his/her professional abilities and is aware of
strengths is bound to move more from one organization to another.
Greenberg and Baron (2000) explained that while considering different aspects of turnover, this
should also be noticed that sometimes turnover can be in interest of the organisation and can
prove to be beneficial. Turnover allows organization to reduce its costs through fewer salaries
and other financial benefits. However, this can be money consuming with cost of recruiting and
training new employees necessary for specific fields. Also, professionals whose skills are less in
demand in the market are less likely to leave organizations frequently.
It was necessary to explain the difference between controllable and uncontrollable turnover, as
this research work will discuss controllable turnover and measures to reduce it. Focus will be on
the training of staff to help them in their career growth and reduce turnover rate.
2.2 REASONS BEHIND EMPLOYEE TURNOVER
Boxall et al (2009) have carried out a study in which they concluded that there are several factors
that affect the motivation level for job in a work place. They argued that all these factors were
linked with turnover, which appeared several times during the study.
An earlier research done by Mobley et al (1979) as cited in Morrell et al (2007) proposed that
factors such as age, duration at work, job satisfaction, job design and job commitment were
indirectly related to turnover, i.e., higher the level of these factors, lower the rate of turnover.
2.2.1 Relationship between Job satisfaction and Turnover
There have been number of researches done on the relationship between the level of job
satisfaction of an employee and turnover rate. One of the researchers’ Lum et al (2008)
suggested that increase in the motivation and level of satisfaction of employees can lead to lower
turnover rate in an organization. It was also researched that job satisfaction is indirectly

proportional to turnover (Mobley at al., 1979; cited in Morrell et al., 2007). Similarly, Griffeth et
al (2007) found out that job satisfaction has a great impact on the turnover rate of employees in
an organization. They said that major reason behind turnover is employee’s dissatisfaction with
the management and a more interesting job offer from another company.
2.2.2 Relationship between Commitment and Turnover
While there seems to be a strong relationship between job satisfaction and turnover rate;
researchers have also proposed that employee commitment with the organization also plays an
important role in the decision behind turnover.
Lum et al (2008) carried out a study on pediatric nurses, in which they concluded that
commitment with the organization has a direct relationship and a great affect on employee’s
decision to leave the organization. Mueller and Price (1990), cited in Lum (2008) said that there
is a close relationship between job satisfaction and commitment, as motivated and satisfied
employees tend to stay committed with the organizations for long time. Hence, they said that
there job satisfaction, commitment and turnover are inter-related to each other, as both the
variables affect the rate of turnover.
However, Elangovan (2011) observed that there are various turnover models which do not take
into consideration the relationship between job satisfaction and organizational commitment with
turnover rate. He proposed that there is a strong relationship between stress and job satisfaction
and between job satisfaction and organization commitment. He said that if the employees are
under stress at work, they are more likely quit the job as they are not satisfied. Similarly, a
committed employee is likely to hold on to the job for a long time.
2.2.3 Causes of dissatisfaction at work
There are various reasons that may cause dissatisfaction at work place. Researchers have argued
that among various factors, pay can be the most important factor in voluntary turnover. Lum et al
(2009) studied the effect of pay on the decision of employees to quit work. They found out that
the study gave mixed results, but higher number of employees suggested that they would
consider leaving the organization if they are not paid according to their job. Similarly, there have

been other studies that revealed that there is not a strong relationship between pay, job
satisfaction and turnover rate.
However, Martin (2008) carried out a survey to find out the importance of higher wages and
career growth among hospitality employees. He found out that these two variables can work as
push and pull factors in turnover rate. He explained that if an employee is dissatisfied with the
wage rate, he or she is likely to leave the job for another company which offers higher wage rate.
In another study carried out by Griffeth et al (2007), it was concluded that pay and rewards have
considerable effect on the satisfaction and turnover rate in an organization. They analysed
different variables including pay, employee performance and turnover rate. Their study
concluded that employees who give high performance expect to be paid and rewarded
accordingly. When the wage rate fails to meet their expectations, they leave the job for better
options.
Griffeth et al (2007) also cite findings from research carried out by Milkovich and Newman
(1999). The later proposed that the high performers look for collective rewards from the
organization rather than individual incentives. But when the organizations fail to fulfill their
expectations, they tend to leave the organization for better offers.
Sometimes, pay or monetary rewards are not the only reason behind dissatisfaction that may
result in turnover. Tang et al (2009) carried out a study including mental health professionals.
They observed that different variables such as attitude of employees towards money, job
satisfaction and voluntary turnover. They found out that attitude of employees towards money is
also an important factor in decision to leave the organization. They said that employees who
value money more than job satisfaction tend to leave the job voluntarily, as compared to those
who regard job satisfaction more important than money. Two things were noted in this study;
pay or monetary reward does not affect job satisfaction and dissatisfied employees result in
increase turnover.

2.2.4 Relationship between Training, career development and turnover
During the course of his study, Martin (2008) found a complicated relationship between training,
career development and turnover. He argued that training can affect turnover in two ways; it can
help decrease turnover rate and sometimes may result in increased turnover rate. Martin further
explained that with enhanced and improved career development skills, employees will be
satisfied enough to stay with the organization for long. But they can also leave for another
employer who will offer better options. This is mostly the case when organizations are not able
to provide challenging work according to the employees’ skills.
However, some researchers have concluded training has no impact on the movement of
employees from one organization to another (Shah & Burke, 2005; Green et al., 2008). They
concluded that training which is given by the organizations result in reduce turnover rate, as the
organizations are likely to build training programs which will prepare their employees to meet
future challenges or change in organizations. Whereas, training obtained outside the organization
leads to higher turnover rate.
Another study done by Chang (2009) focused on relationship between career development and
commitment towards the organization. He found out that when employees are committed they
are less likely to leave the organization. This is also because they see career growth in their
organizations. It was also seen that employees who have low career ambitions are not committed
with the company and hence tend to move frequently from one organization to another.
Chang (2009) also concluded that employees tend to stay long in the organization when they see
that the management is working for their benefit and career growth. They would prefer an
organization which has opportunities for internal growth and promotions and provide training
and professional advice.
2.3 TURNOVER IN RETAIL SECTOR
This dissertation is targeted towards investigating and critically analyzing the unique characteristics
of retail organizations and how these characteristics define their overall strategies in retaining staff

and reducing turnover and affect their respective performances’ impact. Retail have been playing a
very critical role in the world economies. Retail organisations employ around about 9% of workers in
the USA and 5% in UK, France and Germany. In the UK retail are basically among the most earning
businesses and are biggest employers (Bennett, Iossa & Legrenzi, 2010).
Before investigating the impact the unique characteristics of retails make on their overall strategy
and performance, it is of utmost importance to establish a clear set of guidelines to classify any
organization as a retail Organizations. As per Salamnon and Anheier (1992b), the lack of attention
given to retail sector around the world has been more due to the factors that are more conceptual than
empirical. In order to define the boundaries around retail sector, this dissertation will start with the
following five big fundamental classifying elements as suggested by Salamnon and Anheier (1992b):
A) Formally Constituted
B) Private in basic structure
C) Self Governing
D) Serving every community and class
E) Commodity eccentric
These five elements will work as a guiding mechanism for picking up right retail examples,
understand the overall RETAIL sector in any exemplary world economy UK, establishing an
appropriate definition in the realms of UK, and most importantly, in critically analyzing the unique
characteristics that shape the strategies and performance of any RETAIL.
Once establishing the clear-cut boundaries around the different sets of RETAIL, this thesis will
attempt to establish the function of RETAIL and an attempt will be made to understand the
methodology used by retail organisations to retain staff. But this is interesting to note that the retail
system in different countries of the world differ from eachother. For example: In the US states have
laws relating to the structure of RETAILs and in the past few decades there has been a general
tendency of liberalizing the laws governing the structure of RETAILs in different states. This, in
return, has flourished the retail enterprises (Ware, 1996). In contrast, the there are no retail laws in
Britain. As per the British Laws, the RETAILs come under the folds of corporate law and the
organizations can only seek corporate status, but they must conform to the rules and guidelines laid
out by English Corporate Law (Ware, 1996). Till the 19th
century, the American and English Laws
classifying the retail were quite similar (Ware, 1996).

Once establishing the clear cut definition of RETAILs in the UK, the unique characteristics of the
RETAILs will be listed out and then the impact different techniques and strategies of retail to avoid
and reduce turnover will be discussed. For the purposes of this dissertation, it will be quite crucial to
establish the right model for strategy and parameters for performances.
In order to establish firm understanding for the research question, the study will aim to fulfil six key
objectives. The research will start by establishing clear cut boundaries around RETAILs in the UK
by utilizing the five classifying elements listed (above) by Salamnon and Anheier.
1) The first objective of retail is to provide necessary commodities and every day use products
to the customer from all walks of society.
2) It is their responsibility to understand the needs of the customers and arrange necessary
products that fulfil their demands requirements.
3) The most important role is played by the employees or the staff in the retail sector. Since
retail is customer oriented, it is necessary that the staff are well trained and friendly and deal
with the pressures of customer service.
4) Using the RETAILs’ unique characteristics the impact on RETAILs strategies will be
studied. It should be noted that the RETAILs examples used for listing the unique
characteristics will be used to study the impact as well.
5) Right parameters will be established to measure the performance of a RETAIL based in UK.
The examples used in listing out the unique characteristics will be used to list out
performance parameters.
6) Finally, using the listed out unique characteristics for the exemplary RETAILs cases, the
impact on RETAIL training on employees will be studied.
The free market system in the world economies basically consists of entities in three different kinds
of categories:
a) Public Sector
b) Private Sector
c) Non-Profit Sector
The entities in public sector are generally publicly traded, state-owned agencies, government entities
which come under the purview parliamentary office, statuary audit control and established company
laws. Whereas, the entities in the private sector operate under free market competition, have their

annual accounts subjected to independent public audit system and they are controlled by ownership
interests. The retail sector falls in the private sector or the corporate sector. The organizations in this
sector include a variety of different entities such as family owned retail, public owned retail. Some
retail organisations are also going into different other sectors like charity, research and scientific,
educational, cultural or professional, private foundations etc., together with some of the other
entities, the RETAIL sector collaborates with the public sector in the delivery of goods and services
(Torres, Pina 2003).
In the past three decades, the importance of RETAIL has grown to a very large extent in the different
world economies. There also has been an increase in the size and the amount of resources managed
by the RETAIL. These reflective trends have made it quite important for us to study the impact of
unique dynamic characteristics of RETAIL on their respective Strategies and Performances. For the
study of a topic of this vastness, it becomes quite relevant to choose a mature world economy: UK in
our case - and develop the research study by also considering multiple exemplary RETAIL based in
UK, Tesco.
Turnover rate in retail sector has increased immensely over the years. The sector is faced with major
challenges due to growing inflation and financial crises in past few years. Although large number of
people are turning to retail after losing their jobs due to downsizing and financial cuts in their
organisation of employment. The only sector that welcomes people from different other professional
sectors, qualifications and skills is retail.
This can be an advantage or a disadvantage to the retail organisation. Advantages can be in form of
cheap labour, which is readily available any time. Also the organisation does not have to spend much
on the recruitment and training of the employees, as both these are standardised in retail sector. Large
numbers of employees required in the retail are for customer services. This may create problems for a
store, if the employees are not recruited after careful process. For example, a person with IT
background may not be good with customer service, so it will be a great challenge for the person to
deal with people face to face. Such an employee will get de-motivated very easily and would look for
other options in the market.
Similarly, if the employees are not given proper training they will not be able to cope with the
growing demands of the job. Training is necessary in the retail sector, as most of the employees are
from various backgrounds and have no formal training of being a retail store employee.

If the employees are not trained according to the demands of the job, then the store would have to
bear the loss of losing employees often. In the long run, the retail organisation will end up losing
more money in recruiting and training new batch of employees.
2.4 ROLE OF TRAINING IN REDUCING EMPLOYEE TURNOVER
Krueger and Rouse (2008) studied the effect of training and development programs can have on
the growth of various organizations. They studied various variables that were the result of
training, educational and vocational programs carried out in various organizations. Variables
included the productivity, improved performance, job satisfaction, motivation and regularity at
work. It was observed that these variables result in reduced turnover rate in organizations. The
researchers explained in presence of these factors, commitment of employees towards their
organization increases, which result in reduced turnover rate. Thus, the strategy of reducing
turnover by increasing employee commitment level through training can lead to company growth
and success.
Although there are various human resources strategies to increase commitment level of
employees, but this paper will focus mainly on training programs of companies and its role and
importance. Scholl (2003) said that companies should develop strategies to motivate and retain
employees for long period of time. These strategies should be able to develop a psychological
and emotional relationship between an employee and the company. This should be done in an
attempt to tie up the employee for a longer period of time with the company, which will help the
company to reduce cost of hiring and training another employee. This is the commitment
strategy that can help human resource managers to gain loyalty and commitment from the
employees. This strategy can be used for almost every human resource practice, for example,
recruitment, selection, performance management etc; but in this research focus is on the training
of employees and its affect on turnover of employees.
2.5 EFFECT OF COMMITMENT STRATEGY ON EMPLOYEE TURNOVER
An employee who is committed with the organization will tend to remain with it for a longer
period of time. Researchers have conducted various studies to argue and find out the accuracy of
this phenomenon. The conclusion was that there are greater chances of a committed employee to
stay longer with the company than a non-committed one. Steers (1977), cited in Green et al

(2006) proposed that highly committed employees stay hooked to the company for a long period
of time than a non-committed one. He said that highly committed employees have the urge to
produce more at work, come to work regularly and have a positive attitude towards the co-
workers and the job. Thus, he concluded that commitment is a significant factor in curtailing
employee turnover.
Similarly, Arthur (2004) carried out a study on employees of two steel mills. On one mill he
studied the effect of commitment strategy, while on the other control strategy. Arthur observed
that the company that followed commitment strategy yielded business growth and productivity.
He also found out that the turnover rate in this mill was considerably lower than the one which
followed controlled strategy. Through this human resources can make a great impact on the
organization. By adopting a strategy human resources can influence the employees’ decisions to
change the organization and their attitude towards the current organization. Also, when human
resource managers adopt a commitment strategy, then the percentage of employees leaving the
organization reduces.
Green et al (2006) said that according to their study commitment strategy plays an important role
in retaining the employees. Their study revealed that the organization that practiced committed
strategy managed to reduce the rate of turnover from 19% to 10%, whereas, the likelihood of job
search was reduced from 26% to 15%. Owens (2008) came up with results with his study of
effect of training on organizational growth. Although his study discussed different outcomes of
training, he managed to find the relationship between training and turnover rate. He found out
that employees who had high commitment level towards their organization, have high level of
“turnover cognition”. High level of “turnover cognition” means that the employee tends to stay
for long period of time with the company. When he applied T-test, it was calculated that turnover
cognition had mean of 33.44 with commitment to organization of 84.45; as compared to
untrained employees with mean of 29.32 and commitment level of 73.86. By calculating the
level of commitment in trained and untrained employees separately, it was helpful in proving
that more committed employees are, more chances of staying long with the company and vice
versa.

Commitment also plays an important role in job performance of an employee. This is ascertained
that a committed employee will perform well on the job, which ultimately leads to employee
retention (Walton, 2005). It is believed that when employees perform well improves the working
environment of the company, which increases the company growth.
There is a two way relationship between the growth of company and the performance of
employees. If the performance of employees is low or not up to the expected out turn then it will
affect the growth of the company.
Of the several outcomes of commitment strategy Walton discusses four most important
variables, which impact the turnover of the employees in a company. By discussing these four
variables, we can gain deeper insight into the relationship between training and turnover.
2.5.1 Effect of Training on Employee Investment
Investment is the time and effort an employee makes in return for higher rewards and pay in
future. Becker (2003) argued that the benefits reaped from the investment made in the company
can be in form of monetary or non-monetary rewards. He said that training is also a benefit
gained over a period of time, which may result in higher employee commitment and increased
investment in the company. Becker said this can be achieved in two ways; by providing general
training and specific training. General training enhances employees’ general skills and provides
them with basic skills to survive in the job. These skills help the employee to perform in any
company in the market. Kaufman and Hotchkiss (2006) said that it is very unlikely that an
employer will invest in basic training skills, as the employers are able to use them anywhere in
the job market. Another reason that employers would avoid general training is that it is the kind
of training that almost every employee can benefit from and thus, it enhances the skill of the
employees all over the market. Keeping in view the market trends, organizations would have to
compete with each other in paying more to its employees to retain them. And even by doing that,
there are still high chances that the employees would leave the company as soon as a better offer
comes in the market. This way the company will have to bear double cost of training the
employee and hiring a new one when they leave.

Contrary to this, on-the-job or specific training is the one that is provided to employees which is
specific to the demands of the company only (Frazis and Spletzer, 2005). Through this training
only the employer can benefit out of it. This may include technical training which is specific to
the products or services of the company. This type of training differs from general training in a
way that it can only be given by the company and all costs are born by them. The downside of
this training is that employees may not be able to utilize the skills learnt in the company with any
other employer. The idea behind this training is that the skills attained through this training are
nontransferable to any other company, but at the same time it enhances the skills of the
employees which will be beneficial for the company. This increases chances of career growth of
the employees within the company and reduces the chances of turnover to maximum level.
Becker argues that due to its nontransferable nature, this training is given by the companies and
all costs are incurred by the company. During the course of training the employees are not paid
high and the anticipation of getting a higher wage after training also keep them stick to the
company. If we compare Becker’s model with that of commitment strategy, we can see that
employees’ investment in terms of time, effort and wait for wage increase will lead to the
commitment with the organization. Thus, training becomes a side benefit which fosters employee
investment that leads to commitment and reduced turnover rate.
There are other researches that have expanded the works of Becker by blending the general and
specific forms of training. Pischke (2009) said that without even knowing some companies give
a blend of general and specific training to their employees. He argued that general and specific
training are dependable to each other. He said that companies invest unknowingly in general
training while providing with specific training to their employees. Speltzer (2005) said that
according to the research done by Employer Opportunity Pilot Project, 63% of employees
reported that the training that they received can be transferable to other companies. Moreover,
90% of the employees believed that their skills can be utilized in other companies as well.
The results found by Speltzer can be compared with the commitment strategy. This ensures that
the time invested during training and in anticipation of better wages and rewards can be taken as
the commitment towards the company, even in the situation when the employees know that their

skills can be used in other companies. This can actually make the employees more committed
towards their work and organization. Researchers have also said that employees sometimes are
unaware that the training they are getting can be used in other companies. Regardless of this,
employees spent more time on work, produce better work, their performance improves; which
translates into more rewards and high wages that lead to commitment with organization and
reduced turnover rate.
2.5.2 Effect of Training on Employee Reciprocity
Reciprocity means that two-way, that is an employee will be loyal and committed to the
company because the company has trained and enhanced the skills of the employees. This is
similar to the notion of being under debt, in which employee feels that he/she is under the debt of
the company. Researchers have argued that this notion can be useful for the companies, as their
training can play a major role in developing this feeling in the employees. The kind of training
that fosters the feelings of reciprocity in the employee will ensure their commitment towards the
organization.
Glance et al (2007) argue that organizations that provide training to their employees on regular
basis have greater chances of retaining them than the ones who do not follow this practice. They
further explained that the companies which have trained staff are able to adjust in the times of
change inside and outside the company. They carried out a research on organizations with
changing environments and recorded the effect on turnover. Their research concluded that
companies which had trained employees faced less resistance from employees and low level of
turnover, as compared to the companies with untrained employees who were not ready to face
the challenge of changing environment.
If we see this from the reciprocity view, it can be ascertained that the trained employees feel in
debt of the company and tend to stick with the company in times of change. This commitment
can also be due to the fact that the employees were already trained to cope with the needs of the
change, which may result in better work conditions and pay raise. Also, this training may offer
the employees an opportunity to increase their skills and knowledge of their job, which they may
not be able to get anywhere else. This also leads to the sense of debt that fosters commitment and
loyalty in the employees.

Burke (2005) observed that the trained employees who found their training relevant and
beneficial for their future goals have rated their companies very favourably and plan to stick to
the companies for long period of time.
2.5.3 Effect of Training on Employees Identity
Various researches have shown that there is a close relationship between the identity of the
employee and its job. So it can be said that training that increases the productivity of an
employee at work helps it to identify itself with the organization and enhances commitment
towards the company. When hired, the employee has to pass through a formal training and plays
a role of socialization for the new employees (Tannenbaum et al., 2010). New employees have
high hopes and expectation from the company when they join. These desires and expectations
when fulfilled by the company help the employee to identify more closely with the company.
Similarly, when a training program fails to satisfy the demands and expectations of the
employees then it turns into a negative attitude towards the company. These failed or unmet
expectations and demands can lead to lack of commitment in an employee, which may result in
higher turnover. Similarly when the demands of an employee are met, then they feel greater
affinity and identification with the company, which leads to loyalty and commitment towards the
company. Green et al (2006) said that companies tend to give specific job training so that they
can identify with the culture of the organization, while also gain skills for career growth. They
said that Japanese companies like Toyota follow this path rigorously to build level of association
and attachment in employees with the companies, while also giving them social identity.
Bartlett (2009) said that training can increase the identification of an employee with organization
when used with a strategy. Social support for training is one way of integrating employees in the
culture of the organization. This support comes from higher and middle management and also
the co-workers which helps the new employee to go through the training successfully and blend
in with the environment of the company. Due to this the commitment of employees towards the
organization increases and so reduces the risk of turnover.

2.5.4 Effect of Training on Employees Lack of Alternatives
Becker (2003) has described this in his model of general and specific kinds of training. The kind
of training that limits the job alternatives of curtails the opportunities for employees outside the
company leads to reduced turnover. There are several researchers who have defended Becker’s
work and expanded on the model. Lynch (2001) cited in Green et al (2006) observed that young
employees with specific training skills tend to stay committed with the organization for longer
period of time than the ones with general training skills. She also found out that employees with
specific training skills tend to get more benefits than the ones with general training.
Glance et al (2007) elaborated on the “cherry-picking” phenomenon, which refers to the practice
when companies wait till the employees get trained and then attracts them with better offers and
job opportunities. They said that companies tend to steal the trained employees as they help in
reducing the cost of training while increasing their production. Due to this practice, organizations
also lose all their investment in terms of cost and time on their employees. This is the main
reason that companies stick to specific job training.
2.6 CONCLUSION
In this chapter different models and approaches of training have been discussed to build a
theoretical framework for the study. In the first part of the research various reasons behind
turnover have been discussed, such as, dissatisfaction at work, organizational environment,
career development, pay and wage rate and attitude of employees towards work and money.
Through the understanding of these factors the relationship between commitment and turnover
has been established. It was seen through various researches that committed employees tend to
stick to the organization for a longer period of time than the non-committed ones. In the next
phase, the research focused on the literature that explained ways through which commitment can
be fostered in employees. These include through employee investment of time and efforts,
reciprocity between employees and organizations, social identity of the employees and lack of
job alternatives. Although there are various other factors which enhances commitment among
employees which leads to lower turnover, but this paper will focus on these four elements.

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