Employee retention and organizational performance: Evidence from banking industry

Article history: Received: May 30, 2020 Received in revised format: May 3


Introduction
Employees are a crucial resource for any organization, and the company's failure or success is often linked with its ability to attract, retain and reward talented and capable employees appropriately. The retention of skilled employees can be considered an important advantage source for any organization. Nevertheless, while an organization seeks to retain its employees, different challenges also need to be faced (Barney 1991;Pettman 1975;Wernerfelt 1984). Generally, creative employees are encouraged to stay in organizations, while employees who are weak performers with low productivity are encouraged to leave. If it were calculable, companies should retain employees who contribute positively to the value and profit of the company and who also have a higher positive effect on the company. Employee retention, in this case, is preferable to hire a new employee as a substitute for an effective employee as well as taking into account the cost of hiring the new employee. According to Gering and Conner (2002), retaining a productive workforce is important for any organization because if the organization cannot retain its employees, it will not be able to exploit its human asset progress inside the organization. There is an extensive number of studies focusing on customer retention (Alshurideh 2017;Alshurideh et al. 2017;Alshurideh 2016a,b,c,d; and to what level retention is beneficial for the organization (Alshurideh, 2016a). This understanding supports the idea that employees are considered a basic and essential organizational asset. However, there have not been not that many studies that focus on employee retention and how employees become a real asset for any organization. The banking industry has a central and supportive role to increase the economic progress of any country. Moreover, the turnover percentages in the banking sector are growing especially when employees are dissatisfied with their jobs, and the tendency to leave the organization is increasing (Schuler & Jackson 2006). This becomes a critical business issue and a costly application, particularly if valued employees are leaving. Besides, the cost of employing a new employee is very high and, typically, requires time.
Therefore, it would be useful to investigate factors that significantly influence employee retention in the banking sector. Different factors can strongly affect employee retention such as job security, affiliation, esteem and self-actualization.
This study aimed to determine what factors affected employee retention in the commercial banking sector in Jordan. Employee retention strategies are becoming a major concern for bank management since it involves how to keep and sustain its human capital. The study discusses these retention strategies in more detail, especially how psychological job security, economic job security, affiliation and self-actualization affect employee retention and how this retention affects organization performance in the banking setting in one of the emerging markets. The banking sector in Jordan can be considered one of the key leaders of the Jordanian economy. Despite various events that have occurred since 2011 resulting in the Arab Spring uprisings. However, the healthy-capitalized and extremely regulated Jordanian banking sector proved resilient, maintaining its expansion and growth during the first half of 2013. The sector presently involves 26 banks, 15 of which are listed on the Amman Stock Exchange (ASE) (Hudairi 2015). Many scholars such as Oladapo (2014) have investigated talent management and how this management should have the skills and techniques to evaluate their employees by using comprehensive approaches to identify those who are highly-skilled. Companies need to develop different ties with these employees including financial, psychological and social ties to retain them.

Study importance and objectives
The main purpose of the study is to understand the main drivers of employee retention and increase the awareness of how to keep one of the main organizational assets in the Jordanian banking sector (Vasquez 2014). The study also contributes to the existing literature on employee retention while analyzing topics on developing a new theoretical framework, which is based on previous studies that relate to the banking sector. This study could have a significant effect on banking sector growth and bridge awareness and understanding gaps regarding the significant value of employee retention as most studies have focused on customer retention (Alshurideh 2013;Alshurideh, Masa'deh & Al Kurdi 2012;Ashurideh 2010).
This study is important as it tries to construct a new model for employee retention and its findings can be used in the future to define the main causes of the retention behavior. In addition, it could also impact on switching behavior drivers for employees who work for banking institutions as this sector has been witnessing a high percentage of employees switching recently. Tackling this phenomenon helps organizations to create innovative strategical plans to determine the practices that increase employee retention. Therefore, the study assists the economic sector to maintain growth and sustainability by improving their financial status by decreasing the cost of searching, hiring and training new employees and losing employees with expertise. In addition, the study can be considered one of the pioneer pieces of work that investigates the employee retention phenomenon in one of the emerging markets by developing a theoretical model and test it statistically. Hence, the study provides the foundation for further studies exploring employee retention in the banking sector. These findings should inspire future researchers to shed more light on this topic especially for organizations who have an interest in employee retention. Organizations should understand that not all employees who work for them are loyal or have a high level of commitment. Some employees stay with an organization because of the tendency to resist changing their job or work teams (Shapiro and Kirkman 1999), being connected to the organization culture (Alas & Vadi 2006), or because they may not have managed to find another job. Studies by Hafeez, Malak, and Zhang (2007) and  started considering employees to be a core company asset and they contribute significantly to the organization's profitability. This is because a large number of studies such as Alzoubi et al. (2020) and  have claimed that employee retention helps to retain customers and minimize the organization's operational costs in addition to costs caused by hiring and training new employees. This research highlights the employee retention issue by exploring a set of retention drivers that have rarely been researched together, namely, psychological, physical, affiliation and self-actualization factors as motivators of employee retention.

Economic security and employee retention
The basic definition of security attempts to explain and predict a group of activities, which avoid or reduce the deliberate harm of or risk for a person's life and property. This is considered as the security industry, and it includes all interface channels with government security activities like police and army. The security economy will be defined as the activities handling, avoiding and relieving insecurity in the economy field (OECD 2004). It can also be described as compensation for basic social security and is shaped by achieving the basic needs infrastructure, which has a relation with health, education, accommodation, information, social protection and work-related security. The sustainability of work-related security factors will be drivers to achieve economic security (International Labor Organisation 2004). When employees feel satisfied with economic security in any country or even any business field, they tend to stay in companies and do not search for another job or even move to another organization, sector or another country. Singh (2012) revealed that employee retention with economic sustainability could be achieved if the employees own the necessary skills. From an economic point of view, the high rate of employee turnover affects the economic system of any country as well as the global economy negatively. Low-economic progress is noticed in countries with employment instability such as what was witnessed in Greece and Spain (Fountoulakis 2014). Based on this economic security understanding, the effect of economic security on employee retention can be proposed as: H1: Employees' economic security influences employees' retention, positively.

Psychological security and employee retention
According to Maslow's motivation theory based on the hierarchy of human needs, psychological security is the first and most basic level of need. The concept of this variable is based on the ability of humans to maintain a constant normal status of living needs. It includes physical factors that are necessary for human survival like food, water, breathing, shelter, etc. (Adair 2006). Employees who have job security usually experience a secure normal life and can fulfill their life needs and requirements satisfactory by having a sustainable job. Being psychologically sustainable leads to having high sustainability and increases employee satisfaction and performance. In the business sector, psychological security is translated to having a suitable working environment and receiving appropriate financial compensation. Without these factors, employees will be pushed to look for jobs that can satisfy these psychological needs (Hanif, Khalid & Khan 2013). Based on this understanding of psychological security, the effect of psychology security on employee retention can be proposed as: H2: Employees' psychological security influences employees' retention, positively.

Affiliation and employee retention
McClelland's theory of needs attempts to explain and predict the individual's behaviour and performance based on his or her needs. These needs have been categorized into three levels, namely, achievement, power and affiliation needs. The achievement seekers are always looking to excel, the power-seekers are looking to control and have authority, while the affiliation seekers are looking for harmonious relationships with other people (Royle & Hall 2012). The need for affiliation generally is about becoming more socially-oriented and spending more time in social relationships, workgroups and desiring to be loved. Also, it strives for team activities in which reciprocity and cooperation are essential (Yamaguchi 2003). In the banking industry, affiliation can be found when the employee is looking to work in a cooperative environment and is concerned with establishing and maintaining interpersonal relationships as well as being friendly. Based on the understanding of affiliation, the effect of employee affiliation on their retention can be proposed as: H3: Employee affiliation influences employee retention, positively.

Self-Actualization and employee retention
Self-actualization is the ability of a human to meet his or her potential and it varies from one person to another. A father can be self-actualized when able to provide sufficient care for his family, while a scientist could be self-actualized when able to complete a study in his or her field (McLeod 2007). Achieving self-actualization requires looking beyond a homeostatic state, being more creative and having "peak experiences", which are inspiring experiences that allow a person to accomplish his or her potential. A self-actualized person becomes more effective and creative (Maddi 1996). Also, self-actualization is a unique trait and for this, it is not universal behaviour. This means that self-actualized individuals are different from the majority and significantly identified from them (Soni and Soni 2016). In the business sector, self-actualization can be achieved through gaining the satisfaction of using employee skills and potential. This can happen when an organization's leaders and managers lead the employee to achieve greater motivation and productivity (Hanif et al. 2013). Based on an understanding of selfactualization, the effect of employee self-actualization on their retention can be proposed as: H4: Employee self-actualization influences employee retention, positively.

Employee retention
These days, employee retention is a significant factor affecting most business fields, and continues to be one of the main challenges driven by company managers. All organization managers and stakeholders have to consider employee retention in their plans and estimate its long-term effect on the organization's behavior and productivity (Mohanty, 2009). Employee retention is defined as "the effort by an employer to keep desirable workers to meet business objectives" (Frank, Finnegan & Taylor 2004). On the other hand, turnover is a description used to refer to the unplanned loss of the company employee who voluntarily leaves the company. All previous studies of employee retention, have focused on employee retention of older workers based on the ethical views (Calo 2008). One appraisal built by evaluating employee retention and its effect on the organization, concluded that employee retention has affected organizations, economies and communities for a long time as well as professional commitment, satisfaction, motivation and employee behavior (Davis 2013). In the statistical view, the employee retention rate is the most competitive key factor tracked during market research. In addition, employee retention is related somehow to job satisfaction, and if job satisfaction is lacking, it is expressed in some pattern as turnover, absenteeism and decisions to retire (Saari & Judge 2004). According to Irshad and Afridi (2011), the main factors affecting employee retention, are based on various factors from the human resource management's point of view and their ability to play an essential role in managing and controlling employee retention. The first factor is ensuring that "employee personal value matches with the job", which matches the employee skills, knowledge and ability with the potential job description. The second factor is "compensation", which plays a significant role in attracting and retaining good employees. Especially those employees who give outstanding performances or have unique skills. These qualities are indispensable to organizations because these organizations have often invested heavily in the training and orientation of these personnel. The third factor is "rewards", which describes anything that companies offer to their employees as a result of their work performance, which is expected by the workers. The fourth factor is "training and career development", which means the company must offer training sessions to workers so that the company revenue can be increased in the future. The fifth factor is "career advancement opportunities", which relate to any planned effort to achieve stability between worker needs and specific business needs. The sixth factor is "supervisor support", which reflects the good relationship between supervisor and employee, and which plays a critical role in employee retention. If the relationship is bad, the employee's retention is less likely in the organization. The seventh factor is "work environment", which represents to what level employees tend to work and remain in the companies that offer a positive work environment, where they feel that they are important and able to improve their productivity. The last factor is "organizational justice", which reflects the ethical dealing of workers by the company. Eventually, employee retention is the main target for all organizations since recruiting qualified employees with potential is essential for any organization. However, retention is more important than recruiting, because the organization is spending more to train the new employee, and according to research, the cost of replacing an old employee with a new one will be up to twice the old employee's annual salary Irshad & Afridi 2007). The next part explains how employee retention influence organsation performance.

Organization performance
One critical question that might be asked is how employee retention influences organizational performance. AlDamoe, Yazam and Ahmid (2012) studied the mediating influence of human resource management practices especially those related to the effect of employee retention on the organizational performance. The study found that employee retention mediated such relations and effects in all the organizations' performances. This is in line with what other scholars have found such as Paul and Anantharaman (2003), who found that human resource management practices that included indicators such as employee productivity and employee retention, affected both organizational operational and financial performances. Additionally, there have been many findings that have confirmed the relation between employee retention and employee performance (Gberevbie 2010), employee engagement and employee retention (Markos & Sridevi 2010), employee behavior and organization performance (Cascio 2006), work-life balance and employee retention (Kar and Misra 2013). Based on this organizational performance understanding, the effect of employees' retention on organizational performance can be proposed as: H5: Employee retention influences organizational performance, positively.

Theoretical Framework
The study is investigating the main causes of employee retention in the banking sector within the Jordanian context. The model for this study was developed based on reviewing various significant and interrelated previous studies. Employee retention is controlled by four main variables, which are security economic, security psychological, affiliation and self-actualization as seen in Figure 1. These factors were proposed to influence and drive employee retention, which, in turn, influenced organizational performance.

Hypotheses and constructs of operational definitions
The study was planned to explore a set of employee retention drivers in the banking sector. Based on the study model as illustrated in Fig. 1, a set of hypotheses were proposed as: H1: Employee economic security influences employee retention positively. H2: Employee psychological security influences employee retention positively. H3: Employee affiliation influences employee retention positively. H4: Employee self-actualization influences employee retention positively. H5: Employee retention influences organizational performance positively.
The study selected a set of concepts which need to be explained. Firstly, employee retention with economic sustainability can be achieved if the employee owns the necessary skills. Secondly, psychological security is the offering of an appropriate working environment and financial compensation of the employee, as employees tend to look for jobs that can satisfy their psychological needs. Then,, the need for affiliation generally is about becoming more social as employees spend more time in social relationships with work peer friends and workgroups Finally, in the business sector, self-actualization can be achieved through gaining the satisfaction of using employee skills and potential, which can happen when an organization's leaders and managers lead the employee to achieve greater motivation and productivity.

Economic Security
Psychological Security Affiliation Employees Retention retention Organization Performance Self-actualization

Research Methodology
A quantitative method was utilized in this study, and a questionnaire was designed and validated to collect the needed primary data to analyze the factors affecting employee retention in the banking sector in Jordan. A simple random sampling technique was utilized to collect the primary data from five commercial banks in Jordan. Although the questionnaire was disseminated to 450 different bank employees chosen randomly, only 340 of the questionnaires were valid for analysis. The high response rate of 76% was because the study questionnaires were distributed and collected personally. A Likert scale was used to allow the respondents to express their feelings towards the study items, ranging from strongly agree as the highest and strongly disagree as the lowest. Also, the ranking scale was used to allow the study sample participants to rank the study constructs and denote which one affected their retention more. Regarding the study sample's main demographical characteristics, 64% of the study sample were males and the rest were females. In addition, 14% of the study sample possessed high school degrees, 67% held Bachelor's degrees, and the rest were postgraduate employees (19%). Regarding the longevity of working for the same organization, 47% of the participants had worked less than three years, 34% had worked less than five years, and 19% had worked more than five years.

Data Analysis
Several statistical techniques were applied in this study to test the study model and construct items, which were Factor Loading (FL), Cronbach's Alpha, CR and AVE and R2. Table 1 shows that four items for each construct were valid to collect the primary data as seen in the FL data. The FL values for all items were distributed from 0.746 to 0.878, which all were seen good to be used. Cronbach's Alpha values for the study constructs were distributed between 0.771and 0.834, which all were more than 70%. CR values were distributed between 0.742 and 0.802, which all were more than 70%, and AVE were distributed between 0.646 and 0.722, which all were more than 50%. According to many statistical measures that were explained by Hair et al.( 2017) and compared to others Alzoubi et al. 2020;Kurdi 2016), results showed that the convergent validity and reliability for each study factor and the measurements of study model met the required statistical standards.  Table 2 illustrates the correlation cross-loading values for the study constructs. The correlation value for each construct with itself was more than the correlation values with other constructs. Also, the correlation values were distributed between 0.412 and 0.587. This indicated that the correlation among the study constructs were positive and strong. The coefficient of determination (R 2 ) measure was the core for analyzing the developed model. By squaring the correlation values amongst the study variables compared to predicted values (Lin et al. 2010), the coefficient indicated the predictive accuracy for the study's model. According to Chin (1998) and Liu, Liao and Peng (2005), if the value is more than 60%, it can be considered high. Thus, the model expressed high explanation power of the studied phenomenon at hand, and the model's predictive power was72.1%. as seen in Table 3.

Structural Model Analysis
To check and verify the study hypotheses, the path analysis was used. The proposed theoretical association between the study variables were checked using SEM-SPLS. Table 4 shows the path analysis values for the proposed hypotheses. It can be illustrated that all proposed relations were confirmed and found to be significant. Based on the data analysis results, the hypotheses H1, H2, H2, H4, and H5 were supported where (β= 0.131, P<0.002) for the first factor, (β= 0.432, P<0.004) for the second factor, (β= 0.132, P<0.000) for the third factor, (β= 0.182, P<0.001) for the fourth factor and (β= 0.152, P<0.005) for the last factor. A summary of the hypotheses testing results is shown in Table 4.  Table 5 shows the relative importance of the study's factors. Results indicated that bank employees cared about psychological factors since it was given the highest rating, followed by economic factors and affiliation. However, self-actualization, was rated as the factor that least affected employee retention. This finding supports that having feelings of well-being psychologically was the first requirement for employees especially for organizations that relied more on teamwork (Rasmussen & Jeppesen 2006). The study found that economic security affected employee retention, with (β value of 0.131 and P-value of 0.002) results supporting the first hypothesis. This result was observed by Vasquez (2014) who found that some management concepts were vital such as employee retention, which was considered as important and enhanced organization performance. As long as employee's turnover increased and as long as the unemployment rate increased, this, in turn, would influence economic growth and national economy. Vasquez's (2014) study revealed that to increase employee retention, organizations should work to enhance the work environment from different perspectives such as providing incentive and reward programs and having proper management support. Another confirmation comes from Salman, Ahmad and Matin (2014) who investigated the factors behind employee retention in the banking sector in Karachi, Pakistan. The scholars found that employee retention was vital and affected bank performance. Because of a lack of skilled employees in the bank sector, employee turnover increased and these issues influenced the economic growth as a whole. Thus, managers in the banking sector should develop policies to motivate and keep good employees, and not to just accept the turnover of highly-skilled employee but also to keep the skilled employees for a long time. Accordingly, it can be concluded that employee retention is important for economic stability and, in return, economic stability is important and increases the employees' retention rate. Many scholars such as Ramlall (2004) have also confirmed this relationship.

Study findings and discussion
For the study, the relationship effect of psychological security on employee retention, was supported with (β value of 0.423 and P-value of 0.004) results supporting the second hypothesis. This relationship was supported by Samuel and Chipunza (2009) who studied the main intrinsic and extrinsic motivational variables that affected employee retention within both the public and private sector organizations. These scholars found that social-economic stability and even psychological wellbeing in addition to job security were critical for employee retention, and if the top management respect these factors, the turnover rate would be decreased. Besides, Nowack and Learning (2008) claimed that having a psychologically-healthy workplace environment was essential to retain good employees. There are also many approaches to enhance these needs such as employee engagement, and having good social and emotional competencies. Based on this, Sandhya and Kumar (2011) confirmed that if organizations wanted to increase employee retention, it was important to make employees feel comfortable psychologically and physically.
Regarding testing the influence of affiliation on employee retention, the study supported this relation practically, with (β value of 0.132 and P-value of 0.000) results supporting the third hypothesis. This finding is important especially when few studies have tackled such a relationship. Some scholars such as Kyndt et al. (2009) found that to retain good and skilled employees, employees should have feelings of respect, encouragement and an opportunity to be heard, especially from their direct supervisors. In addition, highly-qualified employees needed more affiliation in their work environment. Thus, it is important to care about employee characteristics. Lee and Way (2010) explained to what level an employee's characteristics could play a critical role in both employee satisfaction and work retention in the hotel setting. Based on this, it can be said that highlyqualified employees need to be retained and not allowed to leave because they usually expressed more affiliation toward the organization and their colleagues, believed in team work and behaved in a more friendly manner towards other employees and even customers. The study found that fulfilling employee self-actualization affected employee retention, with (β value of 0.182 and P-value of 0.001) results supporting the fourth hypothesis. These results found that if employee efforts were appreciated and recognized by management, employees tended not to leave. Some organizations did not lose any opportunity to develop their employee skills, which enabled them to carry out their daily work activities freely and exceed any work obstacles Alzoubi et al. 2020). Such a positive work environment pushed employees to enhance their self-actualization and feel proud of working for their organizations Ghannajeh et al., 2015;Obeidat, Alshurideh, Al Dweeri. & Masa'deh, n.d.). The study found that employee retention affected organization performance, with (β value of 0.152 and P-value of 0.005) results supporting the fifth hypothesis. By looking at the previous independent factors that were tested and by considering the antecedent employee retention factors perfectly, employees tended to be in their jobs for a long time. In such circumstances, employee retention, especially the highly-skilled employees led to an increase in organizational performance (Alshraideh, Al-Lozi & Alshurideh 2017;Alshurideh, Alhadid & Al Kurdi 2015;Brayfield & Crockett 1955).
Securing employees, caring about their psychological needs, and taking care of their social surroundings usually pushed them to be happy, proud of themselves and have high self-affiliation and self-actualization Zu'bi et al. 2012). This, in turn, usually saved the organization from losing talented employees and boosted its performance.

Conclusion
Psychological, economic, affiliation and self-actualization as employee retention drivers were tested in this study. This study was conducted in the bank service context in the Jordanian commercial bank sector, which is considered one of the emerging markets in the Middle East. For employee retention, employees should feel pride in themselves, and it is important for them to be accepted, socialized and friendly towards their colleagues, managers and even customers Alzoubi et al. 2020). These needs should be carefully considered by the top management and decision-makers. Also, for the organization's internal marketing and creating a positive internal environment, it is essential for service providers to retain highly-qualified employees ELSamen and Alshurideh 2012). Accordingly, having a positive environment helps to push employees to communicate in a friendly manner with each other and be happy to interact sufficiently with each other, managers and customers Alshurideh, Al Kurdi, Abumari & Salloum, 2018;Ammari, Al Kurdi, Alshurideh & Alrowwad, 2017). In addition, happy employees who usually have positive feelings of being accepted and treated with courtesy, are listened to, and invited to express their thoughts and feelings by their immediate bosses, tended to stay working for the same organization longer than unhappy employees (Alshurideh, Shaltoni and Hijawi, 2014;Alshurideh, 2016;Ammari, Al Kurdi, Alshurideh & Alrowwad, 2017). In addition, if employees are respected and appreciated, then they admitted to performing difficult and challenging work tasks, used new work methods with which they were not familiar, and were happy to work in high noise levels in which voices needed to be raised when talking to people less than one meter away. By being appreciated at the workplace, employees feel that they are accepted, which pushes them to look at problems as challenges rather than as obstacles, they also feel challenged and confirmed that they were given assignments that inspire, test and stretch their abilities. Much effort should be exerted by management to recognize and offer all tangible and intangible means to allow employees to develop their skills. Accordingly, employees believed that rewards for success were greater than the penalties for failure, and confirmed feeling in control of their work and their capability of competently carrying out their daily tasks.
To sum up, it is the organization's responsibility not just to search, find and employ highly-qualified and talented employees, but also to retain them. This is because employee retention is the key to success of any organizational performance and with these employees, organizations can have competitive advantages (Balakrishnan, 2014). Thus, top management should have a clear strategy to retain highly-qualified and skilled employees by focusing on the retention causes that have been discussed in this study.

Study limitations
The researchers faced many obstacles during the preparation of this research; one of which was the lack of a cooperative environment in the banking sector, especially with external researchers. This cooperation is needed as scholars faced difficulties when needing to collect data from a large number of study samples. Some study sample units lacked the courage to answer the study survey and refused to complete the survey. This reluctance might be a result of the sensitive nature of the items or employees being afraid of their managers or direct supervisors. As a result, participants may have been concerned with providing information about their feelings and suggesting practical ideas on how to minimize the job switching problem, minimize the turnover issue, and increase the employee retention rate.

Study theoretical and practical implications
The results of this study have provided a set of both theoretical and practical implications related to many employee retentions issues. Firstly, the psychological status of employees needs more research and scrutiny within emerging markets. Managers should care about the psychological issues that their employees face and care about enhancing psychological levels over time.
Secondly, the majority of organizations cared about the yearly evaluation documents and assessment reports for their employees, as these performance indicators relied on the use of tangible elements that related to work performance, but ignored others such as psychological indicators. Additional evaluation indicators that are related to psychological assessment tools are needed, especially for organizations that hire a large number of employees. Thirdly, physical job indicators and economic indicators were seen as important and influenced employee retention. Fourthly, additional investigation is required into dimensions that relate to work environment, task familiarity, work noise levels, office dimensions, healthy office space, safety elements, jobs types and hazardous work tasks. Fifthly, more studies need to explore job types and how employees themselves viewed these jobs tasks. Considering the level of challenges in performing some tasks and how employees embraced daily tasks that were seen as challenges Finally, mentoring daily work tasks and increasing innovation in these tasks is another topic that needs to be researched and monitored by managers to increase employee self-actualization and retention.