Article

Return on Retention (RoR): Management and Labour Studies

41(4) 1–27
A Grounded Theory Study of © 2016 XLRI Jamshedpur, School of
Business Management
Knowledge Workers in Indian & Human Resources
SAGE Publications
IT Services Industry sagepub.in/home.nav
DOI: 10.1177/0258042X16676687
http://mls.sagepub.com

P. Premalatha

Abstract
Knowledge workers in the Indian information technology (IT) services industry are the main contribu-
tors to the growth of the industry and the economy. However, human resource (HR) processes to
manage knowledge workers are still evolving. There are gaps in understanding how HR interventions
which lead to the retention of key employees can strengthen organizational outcomes. This study
proposes a framework that builds linkages between different elements of retention of knowledge work-
ers and outcomes that exhibit the competitiveness of IT companies. Knowledge of these outcomes can
be an important incentive for firms to continue pursuing strategies for retaining talent.
The purpose of this study is to explore the outcomes of talent retention strategies adopted in the
IT services industry through the grounded theory approach. The study reflects the lived experiences
of line managers (16), employees (17), HR managers (10) and top-level executives (2) in the sector.
Purposeful sampling was used to identify the research participants. The in-depth interviews conducted
with the participants were transcribed verbatim and analyzed using open, axial and selective coding.
The study uncovers seven propositions as returns on retention (RoR) strategies: (i) successful
talent retention contributes to cost-effective HR practices, (ii) managing individuals’ performance and
retaining achievers foster corporate performance management, (iii) retaining young and senior work-
force results in retaining knowledge assets and strengthening human capital development, (iv) retaining
women talent promotes gender inclusivity across levels, (v) successful retention strategies result in
workforce motivation and morale, (vi) talent retention positively impacts job involvement and organiza-
tional commitment and (vii) employee recognition and retention practices promote reverse brain drain.

1
Associate Professor, Centre for Human Resource Management and Labour Relations, School of Management and Labour
Studies, Tata Institute of Social Sciences, Deonar, Mumbai 400088, India.

Corresponding author:
P. Premalatha, Associate Professor, Centre for Human Resource Management and Labour Relations, School of Management and
Labour Studies, Tata Institute of Social Sciences, Deonar, Mumbai 400088, India.
E-mail: premalatha@tiss.edu
2 Management and Labour Studies 41(4)

Keywords
Knowledge workers, talent retention, return on retention, organizational outcome, information
technology services industry

Introduction
The information technology (IT) industry in India is the largest private sector employer in the country
with 3.1 million employees with 16,000 firms across the country. As a proportion of national GDP, the
sector revenues have grown from 1.2 per cent in FY1998 to 8.1 per cent in FY2014 (NASSCOM, 2014).
According to estimates, the revenues of the IT industry in India is expected to touch US$225 billion by
2020 (NASSCOM, 2011). The software and IT sector, which is engaged primarily in outsourced ‘know-
ledge work’, has produced a highly visible new category of global ‘knowledge workers’ and introduced
unique forms of work and workplaces in India (Upadhya, 2008). Across the world, the Indian software
industry is regarded as a high-growth industry and has been growing at more than 50 per cent per year
(Majumdar, 2014). While the software industry accounted for about 7 per cent of India’s GDP in 2008
(Majumdar, 2014), it accounts for nearly a fifth of India’s exports (Kumar & Joseph, 2005). Since India
is currently argued to be the world leader in computer and information systems’ exports with a share of
18.15 per cent of world exports in 2012 (Mani, 2014), several human resource (HR) management issues
such as retention to optimally manage knowledge workers who are critical resources become important
(Bhoola & Mallik, 2014; Donnelly, 2015; Majumdar, 2014).
While several studies have examined the determinants of managing attrition or retaining knowledge
workers (Abrashoff, 2001; Englmaier, Muehlheusser & Roider, 2014; Hofaidhllaoui & Chhinzer, 2014;
Strack, Baier & Fahlander, 2008), there are very few studies which have empirically examined the value
that organizations derive by successfully retaining employees. The few studies that have focused on the
consequences of retention suggest that retaining knowledge workers could lead to innovation and
improved organizational performance (Abelson & Baysinger, 1984; Hess & Rothaermel, 2011; Meier &
Hicklin, 2008; Ryu & Lee, 2013). However, the relationship between retention and organizational
performance has not been posited to be a linear relationship and instead has been posited to be an
inverted U-shaped relationship (Abelson & Baysinger, 1984; Meier & Hicklin, 2008). Retention has
been viewed from a costs perspective and it has been suggested that when retention crosses an optimal
threshold, the costs associated with retention lead to a decline in organizational performance, and thus
turnover is considered to be important in providing a stimulus to employees to be creative and productive
(Kellough & Osuna, 1995; McElroy, Morrow & Rude, 2001).
While retention may not be important for the sake of retention and employees who do not fit the
organizational mandate may need to leave the organization, it is necessary to consider broad-based
organizational outcomes. Much of the literature which suggests that retention is detrimental beyond a
threshold posits organizational performance in linear, unidimensional terms (e.g., McElroy et al., 2001;
Meier & Hicklin, 2008). On the other hand, retention of knowledge workers in a sector, such as the
IT industry in India, may be important from the perspective of several beneficial outcomes which may
feed into each other. While strategic human resource management (SHRM) practices seek to achieve
multi-dimensional performance outcomes, such as reducing costs, improving corporate performance,
human capital development, gender inclusivity, developing motivated workforce, job involvement,
organizational commitment and reverse brain drain (Donnelly, 2015; Gollan, Kalfa, Agarwal, Green &
Randhawa, 2014; Guerci, Radaelli, Siletti & Rami Shani, 2015; Kale, 2009; Peters, Poutsma, Van der
Heijden, Bakker & Bruijn, 2014; Shaw, Park & Kim, 2013), it needs to be explored whether retention
Premalatha 3

can complement and substantially add to SHRM practices in positive way affecting these multi-
dimensional performance outcomes. By mobilizing contextual, grounded evidence through qualitative
interviews in the IT industry in India, whether an ambiguous understanding of retention strategies can be
problematized is explored. Contextual and narrative evidence is mobilized to explore whether the costs
of retention can be recovered from the multi-dimensionality of beneficial organizational outcomes which
reinforce each other and create a climate of innovation, resourcefulness and agility, thus transcending the
detrimental effects of above-optimal retention thresholds.

Methodology
The purpose of the study is to understand the returns for an organization when it could successfully retain
its employees. The article addresses this objective through grounded theory approach. Grounded theory
is a qualitative research method that focuses on rich field data collected from multiple stakeholders. It is
an inductive, theory discovery methodology that uses a systematic set of procedures to develop a theo-
retical account covering the features of a topic while simultaneously grounding the account in empirical
observations of data (Glaser & Strauss, 1967). The study has followed the tenets of building grounded
theory in organizational studies through five stages (Premalatha & Srivastava, 2014): entry into the
research, data selection, data collection, analytic process and theory building. The methodological
assumptions have guided the researcher to go with an open mind to the field without any preconceived
notions developed based on the literature. Awareness of the available technical and non-technical litera-
ture makes the researcher to have an intimate familiarity with the research concern. This may lead the
inquirer conditioned or biased to the factors intensely quoted in the literature and may ignore the rest
(Charmaz, 2006). Hence, the study was started with the field data collected from 45 executives across
different levels in 10 organizations in IT services industry without formulating any conceptual frame-
work based on the extant literature. Field narratives were collected from employees working in the areas
of software development, maintenance and testing, 17 (8 females, 9 males); managers, 16 (2 females,
14 males), HR managers, 10 (5 females, 5 males); and top management officials, 2 (males).
The participants for the study were chosen based on purposeful sampling: intensity sampling,
criterion sampling, snowball sampling (Patton, 1990) and theoretical sampling (Glaser & Strauss, 1967).
Intensity sampling was used to locate research participants who are information-rich cases. Initial
discussion with the campus relations managers and HR managers facilitated in locating research partici-
pants who have the relevant information pertaining to the research, knowledge and expertise they have
in the field. Criterion sampling was used to review and study the critical incidents of research partici-
pants focusing on the criterion of importance for the study—retention of employees and its outcomes.
Participants were encouraged to narrate incidents based on their lived experiences of talent retention and
its outcomes. Snowball sampling was helpful in locating both information-rich key informants and criti-
cal cases. When interacting with HR managers and research participants, a few key names and incidents
were mentioned repeatedly and recommended as they had important information pertaining to the study.
Theoretical sampling was used to collect data for generating theory. The sampling design directed the
researcher to collect and analyze the data simultaneously, and to decide what data to collect next and
where to find them, in order to develop the theory as it emerged (Glaser & Strauss, 1967). This supports
the tenets of grounded theory which is inductively derived from the study of the phenomenon it repre-
sents through constant comparative analysis (Glaser & Strauss, 1967). That is, it is discovered, devel-
oped and provisionally verified through systematic data collection and analysis of data pertaining to that
4 Management and Labour Studies 41(4)

phenomenon. Therefore, data collection, analysis and theory stand in a reciprocal relationship with each
other (Strauss & Corbin, 1990).
The study reflects the lived experiences of knowledge workers in the industry through unstructured
in-depth interviews (Charmaz, 2006; Glaser, 1978, 2002; Strauss, 1987). The study has operationally
defined a knowledge worker as an ‘an employee at any level in the organization, who leverages informa-
tion, distributes value-added deliverables by capitalizing knowledge and experiences empowerment,
autonomy, continuous innovation, learnability, knowledge sharing, networking, and remains as an asset
to the organization’. The inclusion criterion for the study is an employee on the payroll of any organiza-
tion in the IT services industry who is a knowledge worker and continues to be an achiever in the
organization with a tenure of more than 2 years in an organization and 5 years in the IT services industry.
The following ethical guidelines (Christians, 2000) were maintained across different phases of the
study. Research subjects were fully informed about the objectives, nature and results of the study in
which they were involved. Voluntary participation and their permission to be the subjects for the study
were obtained. Deliberate misrepresentation of the data was not done and the data collected for research
were not used for any other commercial purposes or against the interest of the company. Identity of the
research locations and the researched organization, department/division, was not disclosed to others.
Anonymity was maintained and pseudonyms were assigned wherever necessary. Confidentiality was
ensured as the primary safeguard against unwanted exposure. Professional etiquette was uniformly
retained to see to that no one was harmed or embarrassed. Ensuring that data are accurate is a cardinal
practice in research. Fabrications, fraudulent materials, omissions and contrivances are both non-
scientific and unethical and were not followed in any phase of the research.

Return on Retention: Qualitative Data Analysis of

Field Narratives and Discussion
The interviews with the employees, managers and HR professionals revealed the importance of retention
and outcomes of retention strategies. The interviews were transcribed verbatim and analyzed for perti-
nent concepts and themes. The data were analyzed through canons of open, axial and selective coding
(Strauss & Corbin, 1998) and facilitated by the software Atlas ti version 5.0. This process had divulged
concepts, categories and sub-categories with their properties and dimensions of organizational outcomes
of retention strategies. First, in the open coding phase, the texts (interview transcripts, field notes and
documents) were analyzed for important information pertaining to the study. This phase facilitated the
study to uncover, name and develop concepts by analyzing the text and exposing the thoughts, ideas and
meanings which are embedded in the data. This first analytic step led to the rest of the analysis. During
this phase, data (the interview transcripts) were broken down into discrete parts, closely examined and
compared for similarities and differences. The researcher’s written memos after each interview which
included record of analysis, thoughts, interpretations, questions and directions helped in further data col-
lection and analysis. Theoretical memoing is the core stage of grounded theory methodology. Memos
included the theorizing write-up of ideas about substantive codes and their theoretically coded relation-
ships as they emerge during coding, collecting and analyzing data, and during memoing (Glaser, 1998).
It is also important to note that some participants explained the concepts in vivo codes (Glaser & Strauss,
1967; Strauss, 1987) that had further stimulated the analyses. Vivo codes are the words or phrases or
jargons used by the research participants which are attractive and appealing. Second, in axial coding
phase, events, happenings, observations, incidents, actions and interactions that were found to be
Premalatha 5

conceptually similar in nature or related in meaning were grouped under more abstract concepts termed
‘categories’. In the third phase, selective coding was used to identify the interlinkages and relationships
among the categories identified during the axial coding phase. The inter-rater reliability was checked by
asking a fellow researcher to do the coding for a segment of the data. The data collection and analysis
came to an end when the data collection fulfilled the criterion of theoretical saturation. Theoretical satu-
ration (Glaser & Strauss, 1967) was achieved when additional analysis no longer contributed in discov-
ering anything new about a category.
The concepts and categories that emerged from open and axial coding, respectively, are presented in
Table 1 and the theoretical framework developed from selective coding is presented in Figure 1, and
discussed in the following sections:

Table 1. Outcomes of Talent Retention: Concepts and Categories (identified using open and axial coding)

Concepts That Emerged during Open Coding Categories That Emerged during Axial Coding
1. Direct, indirect and administration costs Cost-effective HR practices
2. Loss of opportunity and efficiency costs (Theme 1)
3. Employee turnover
4. Economic slowdown and recession
1. Talent segmentation based on individual performance Corporate performance management
2. Appropriate retention measures to star, average and poor (Theme 2)
performers
3. High-performance-driven culture
4. Employee engagement
1. Learning and development initiatives Human capital development
2. Career development initiatives (Theme 3)
3. Communities of practice
4. Long-term investment in employees
5. Developing the talented workforce
6. Retaining knowledge assets
7. Retaining the baby boomers
1. Support services for women at work Gender inclusivity across levels (Theme 4)
2. Conducive corporate culture
3. Reserving seats at the top for women
4. Gender-inclusive initiatives and affirmative action programmes
5. Lack of convinced engagement of male executives
6. Work-life balance issues
1. Creating and sustaining life-giving forces and positive Workforce motivation and morale (Theme 5)
energy in the workplace
2. Individual attention and recognition to employees
3. High-performing teams with mutual support
4. Role of managers
1. Organizational value system Job involvement
2. Employee-friendly HR practices (Theme 6a)
3. Onsite assignments
4. To build career based on one’s own career anchor
5. Monetary rewards
(Table 1 continued)
6 Management and Labour Studies 41(4)

(Table 1 continued)

Concepts That Emerged during Open Coding Categories That Emerged during Axial Coding
1. Compliance Organizational commitment
2. Identification (Theme 6b)
3. Internalization
4. Support from management throughout their tenure
5. Support during tough times
6. Social capital
7. Affective
8. Continuance
9. Normative
1. More scope for material rewards in the country Reverse brain drain
2. More opportunities for professional challenges (Theme 7)
3. Creating CONNECT with the parent organization
4. Investment in human capital
5. Rapid growth of the Indian IT sector in the global market
6. Organizational feminine culture
Source: Author’s own.

Theme 1: Organizations Sustain Profits When Employees Are Retained

To understand how organizations save resources by retaining talent, an inquiry was done with HR
professionals to understand how attrition/turnover rate is calculated. Employees, both line and HR
professionals, were interviewed to understand how organizations measure and calculate employee turn-
over. Employee turnover is calculated on a regular basis and is reported in their annual reports. Most of
the individuals and the organizations interviewed followed the following formula to measure turnover:
Total number of employees leaving in a year
# 100
Total number of employees in the year
This calculation of attrition rate using a simple formula helps the organizations in understanding the cost
associated with it. It was found that many companies have included only the voluntary resignations when
they are calculating the attrition rate. They have not included the other separations, such as lay-offs,
terminations, retrenchment and deaths, as these are considered as unavoidable. If the organization
includes the number of involuntary separations to the voluntary turnover, the attrition rate will be more
than what is presented in the public domain. So, one needs more understanding about the way attrition
rate is calculated and the problem associated with it.
Discussion with the line and HR executives in the industry reveals that organizations lose their invest-
ment substantially when employees leave. The direct and administration costs are incurred on various
functions, such as advertisement, the entire process of recruitment and selection, external recruitment
agency, cost of psychometric tests and assessment centre, background investigation, orientation
programme, initial learning programme, on-the-job training, employee referral bonuses, joining bonuses,
accommodation and facilities provided to the employees, relocation allowances, redundancy pay, bene-
fits and services offered, payroll administration, mentoring and coaching, medical examinations
and other training programmes. Loss of opportunity and efficiency costs occur when employees are on
probation, bench and notice period (1–3 or 6 months), inefficiency of the new incumbent/replacement,
Figure 1. Return on Retention (RoR) of Knowledge Workers (developed using selective coding)
Source: Author’s own.
Notes: (1) RoR sign means ‘the factor leads to an outcome variable as a Return on Retention’.
(2) ‘+’ sign means ‘the factor positively impacts on’; ‘–’ sign means ‘the factor negatively impacts on’; ‘==’ sign means ‘the factor is associated with’.
8 Management and Labour Studies 41(4)

loss of morale and efficiency among the other colleagues and loss of the human capital to their competi-
tors. Thus, it is evident that organizations benefit when they could retain their employees and lose
substantially during employee separations.

Role of HR in Auditing Attrition on a Regular Basis

To promote increasing retention rate by reducing attrition, companies have introduced different strate-
gies and develop their managers to strengthen retention in their respective teams. Nandini, Group HR
Manager of a leading IT services company, says:

When I took this portfolio—Attrition Management, it was somewhere around 28% voluntary attrition and over-
all was 29% to 30%. But, today we are down to almost 15%. So it has been a good thing. This has helped us in
saving our costs tremendously.
Even 15% is on the higher side, we are all working together to bring down the attrition rate.

When attrition can be brought down to a healthier rate, it helps in saving the organizational costs.
The study reveals that cost associated with turnover also depends on who is leaving.

Role of Managers in Retaining Talent and Impacting Organizational Savings

Abhijeet, currently working as delivery lead with a leading IT organization, says:

The incident is about an important project that I have handled. The highlight of the project was $4 billion deal
and the visibility was with the CEO of the company. What happened there was a small consulting firm and they
were handling the business SME role and our company was given the role of the IT part of it. I was chosen as the
Project Leader and I had been given this defined work that I had to complete that work. It so happened that the
consultants were in favor of another company and so initial phase was very turbulent as they wanted to send us
out and get another company and they had the ultimate command over the client side. We were short of employ-
ees as there was high attrition among employees with experience. It is very difficult to replace experienced
employees and especially when they are high performers.
I had to induct inexperienced and new employees onto the project. That was the time when junior resources
were clueless about nature of their jobs and career progression within the organization and was on lookout for
opportunities with the other organizations. I had to put in lot of efforts to make these resources ready for the
project. If I had not done, we would have lost these young and brilliant resources for whom we have spent
substantially for hiring and training, and also we might have lost the project with the client.
I came back to India to train people and also make them ready for the technical part of it and when the
development was over, we went back to the client for the implementation. I had to work 16–17 hours a day
without taking any holidays for the period of that project and a lot of time was spent in mentoring people. In the
end, the entire process was automated which was previously manual and semi-automatic, there was operational
improvement, productivity improvement and reduction in cost.

This experience of Abhijeet portrays the efficiency, capability of the manager in handling clients, third
party, company officials, team members, etc. As we understand, different phases of project life cycle
require different skill sets from the manager. This incident is similar to some of the experiences of other
managers in handling the team with specific reference to their expertise in skill sets. Whenever there
is huge cost-cutting in the project, the manpower includes more of freshers or employees with lesser
Premalatha 9

number of years of experience. At this juncture, how the manager deals, identifies the skill sets, mentors
his junior colleagues is important. At times, half of the time is gone in mentoring the juniors. Employees
expect the managers to give the progressive action plans, ideas to proceed and supporting hands through-
out to sail through the project. So, mentoring helps in developing the juniors, thereby the manager could
increase his or her share in emotional account of the employees. Most of the participants in the industry
interviewed related the return on retention (RoR) to cost-effectiveness, as employee turnover to any
organization is costly.
Proposition 1: Successful Talent Retention Management Contributes Cost-effective HR Practices
There are different consequences experienced by organizations when they could retain employees
successfully. Cost-effectiveness is one of the major organizational outcomes of retaining talent.
Organizations should look beyond behavioural and statistical analysis of turnover and concentrate on
economic terms, as turnover rates and costs for many organizations are unacceptably higher.
Cost of termination, replacement, vacancy and learning curve productivity loss generally cost a
company the equivalent of at least 6 months of a non-exempt person’s pay and benefits, and a minimum
of 1 year’s worth for a professional or a manager. The combination of pay, benefits, contingents, absence
and turnover yields a total cost of human capital for the organization (Fitz-Enz, 2000). Organizations
sustain costs when employees leave (Bramham, 2001; Cascio, 2000; Fair, 1992; Hom & Griffeth, 1995;
Lynch, 2003; Mobley, 1982; Phillips, 1990; Taylor, 2005). Understanding the costs (Cascio, 1982) asso-
ciated with turnover in organizations in the industry is important for line managers and HR professionals.
The role of line managers is important in talent retention (Ancona, Malone, Orlikowski & Senge,
2007; Brewster, Brookes & Gollan, 2015; Day & Schoemaker, 2008; Premalatha, 2016) and saving
organizational costs by retaining the right employees with the support of HR professionals. The conse-
quence of turnover is higher when high performers leave than when low performers leave. Hence,
distinguishing effective from non-effective leavers is important in turnover research (Porter & Steers,
1973). This highlights the importance of understanding the relationship between an individual’s perfor-
mance and turnover. It is vital to evaluate performance from both the perspectives: as a cause and as a
consequence in understanding individual performance–turnover relationship (Mobley, 1982).

Theme 2: The Art of Managing Individuals’ Performance to Achieve

Corporate Performance
Most of the companies considered for the study in the IT sector follow forced ranking to appraise their
employees. The method is different from relative and absolute rating which was practiced widely before.
In this method, organizations adopt a predetermined percentage of employees to be categorized under
top, average and poor performers. Forced ranking benefits the organizations in increasing their financial
turnover and optimizes the costs, especially when the market operates in a complex and dynamic
environment.
Interviews reveal that the method promotes competitiveness among the team members and thus
enables an organization in becoming a high-performing organization. The categorization of employees
is important as employees differ in their needs, aspirations, productivity and engagement level.
This enables the firm to understand their performance, aspirations and their intentions to stay with the
organization. To devise appropriate retention strategies, organizations classify employees into smaller
homogenous sub-units as star, average and poor performers to enhance retention management.
Organizations have a small percentage of star performers whose performance is commendable. If this
potential talent has to leave the organizations for various reasons, it is very difficult for the organizations
10 Management and Labour Studies 41(4)

to replace them. Organizations in the sector provide star performers with many opportunities, such as
career on fast-track, quality projects, awards, recognition and opportunity for onsite assignments, nomi-
nating them for succession planning and grooming them by providing individual development plans,
adequate soft skills and leadership skills. Managers in their interview revealed that some percentage of
star performers are very difficult to handle. Companies are extra cautious to take care of them even
during downturn as these are the talents that continue to have high demand in the market even during
recession. Some companies are ready to make an exception to a rule to retain them.
Organizations in the industry have witnessed another set of category of employees who are not as
smart as their star performers, but provide continuous and sustainable good performance to their team
members for its deliverables. Almost 60–80 per cent of the entire organization is categorized under this
category. Employees under the grading of ‘good performers’, ‘met expectations’, ‘solid performers’ or
‘B Players’ as called by different organizations are part of this division. While explaining the strategies
for retaining the star performers who represent the small segment of the workforce, it is important to
strategize to retain the average performers. So, it is felt by the managers interviewed that it is important
for managers to deal appropriately with these solid performers. Organizations further classify this cate-
gory as top 60 per cent and bottom 40 per cent. Companies motivate and retain these employees by
offering training and development, certification programmes and enrolling them for executive education
programmes. When the economy faces a slowdown or recession and the organization has lesser projects,
people from this bottom 40 per cent of the performers are the ones who are usually put on bench for a
stipulated period. During this period, they are offered training programmes with the aim of improving
their performance.
Organizations deal with poor performers differently. Managers try to understand the reasons for their
poor performance and change their projects and give them performance improvement plans. Initiatives
such as career path demystification, career counselling and guidance and coaching and mentoring help
these employees to build their career. Employees whose performance is poor on a consistent basis are the
target for lay-offs and are removed from the organization.
This results in talent segmentation for retention and thereby increases the organizational deliverables.
The customized initiatives and strategies for different kinds of performers improve the employee
retention and thus corporate performance management.
Organizations in the industry engage their talents through strategizing their performance manage-
ment. The strategies promote retention among the workforce and thereby increase the organizational
deliverables. The very nature of the industry and competition in the sector make the employee to be more
focused on its deliverables.
Praveen who is in the industry for 20 years, who worked with both IT product and service companies,
says that

There are many challenges in this sector as it is a very competitive market. There are many, many players.
So, we have to come out with very innovative solutions and value propositions to customers to ensure that the
clients get the desired deliverables. The industry needs high and steady performers….

The situation demands a high level of performance from its employees.

Proposition 2: Managing Individuals’ Performance and Retaining Achievers
Foster Corporate Performance Management
Human resource management practices followed in the organizations create value, increase the firm’s
performance and give a sustainable competitive advantage (Kaya, 2006). Performance management is
an ongoing process of identifying, measuring and developing human performance in organizations.
Premalatha 11

The purpose is to measure progress, differentiate between levels of performance, pinpoint training needs,
validate rewards and identify employees for promotion (Grote, 1996). Performance factors such as
system awareness, performance planning, feedback mechanism and support systems are more likely
to influence effectiveness of the performance management processes (Rao, 2007) and organizational
deliverables. Performance management is one of the important interventions which yield high RoR.
Organizations use different methods to appraise their employees. One of the popular methods is forced
ranking.
The great value of using a forced ranking process does not result merely from categorizing people into
different buckets. The pay-off comes from the action that is taken with each person following the assess-
ment sessions (Grote, 2002). In dealing with star performers, managers are required to be a benevolent
guardian rather than a traditional boss (Goffee & Jones, 2007).

Almost every organization has a rock star, an employee whose skills and productivity far exceed those of his
peers. But if his interpersonal skills don’t mirror his work prowess, he may be more of a liability than an asset.
(Kushnir, 2008)

In retaining star performers, Brady’s (1987) explanation on the principle of benefaction is more relevant
than the principle of membership, as it is best suited to retain high performers. The principle of benefac-
tion facilitates the managers to act or respond as per the situation and significance of the individual to the
firm, whereas the principle of membership allows the managers to be uniform and standardize their
strategies irrespective of the situation and the individuals.
While emphasizing the retention of star performers, retention of average performers needs a special
attention. Companies’ long-term performance, even survival, depends far more on the unsung commit-
ment and contributions of their B players. These capable, steady performers are the best supporting
actors of the business world. During tough times, when star employees leave the organization for more
money and/or quality of project, it is this level of players who play the dominant role in meeting the
team’s deliverables (DeLong & Vijayaraghavan, 2003). For poor performers, the separation process
frees the organization of relatively lesser-performing contributors and allows these individuals to achieve
a higher probability of career success by finding jobs and or organizations that are more congruent with
their skills (Grote, 2002). Though appraisal through forced ranking method suffers from controversies,
it promotes competitiveness among the team members, enables in adopting the appropriate strategies to
deal with different kinds of performers and thus enables high-performing work culture and builds a high-
performing organization.
The high-performance work practices have an impact on employee turnover, productivity and
corporate financial performance (Huselid, 1995). Organizations take many initiatives to bring the best
out of their employees through innovative performance management strategies to retain employees.
Organizations pay more attention to the methods they adopt for performance appraisal and integrate
some of the strategies, such as talent segmentation, employee engagement, learning and development
(L&D) and career development with performance management. These retention initiatives enable organ-
izations to improve their corporate performance management and develop their human capital.

Theme 3: Continuous Learning and Career Development

Initiatives in the Industry
Organizations invest a substantial amount of money and resources on their employees in enabling
their L&D. The L&D division is a specialist function in most of the organizations included in the study.
12 Management and Labour Studies 41(4)

The centre focuses more on offering training programmes which help them in shaping their career aspi-
rations. A good retention policy aids in developing and retaining human capital in the organization.
The study has revealed different retention initiatives followed by the organizations in IT services sector
that cater to the development of human capital. Managers in the industry expressed the importance of
investing in the long-term growth of their employees by offering continuous training, job rotation and
adequate onsite opportunities. Organizations take pride in explaining about their initiatives for human
capital development. The L&D centres initiated by the organizations have good infrastructure that
includes library, conference halls, auditorium, discussion rooms, classrooms, personal computers, audio-
visual facilities for teleconferencing and videoconferencing. The centre is networked with internal and
external trainers in developing and conducting the training programmes.
Some of the career development initiatives by the organizations are career path demystification,
career counselling and guidance and coaching and mentoring facilitated by managers. These career
initiatives are recognized by employees in knowledge-intensive sectors. Companies in this sector have
excelled in development initiatives, such as grooming freshers, integrating the newcomers, training
programmes, certification programmes, executive education, internal mobility, developing intrapreneurs
and entrepreneurs and management development programmes. Organizations in the sector have created
successful knowledge management portals and communities of practice to create, share and disseminate
knowledge.

Retaining Knowledge Workers Aids in Retaining Knowledge Assets

The industry’s capability to use IT is phenomenal which aids Indian firms to compete globally. The
industry also a bridge in the transfer of tacit knowledge.

Knowledge Retention through Retaining Baby Boomers

An important new dimension that is felt in most of the knowledge-intensive organizations today is
managing and retaining the senior workforce. The industry has experienced a substantial number of
experienced, highly knowledgeable executives leaving their current employers to join other firms, start
new ventures or to initiate some innovative projects.
To access the critical tacit and implicit knowledge that resides among the retirees or the aging
workforce,

Tata Consultancy Services, a leading IT services organization has initiated a social collaboration platform using
social technologies. The organization emphasizes and provides platform to demonstrate how a social collabora-
tion platform could be integral in capturing and using tacit knowledge that resides among employees, retirees,
partners, vendors and external researchers to solve problems as they occur in real time. (Banerjee, Franklin &
Delong, 2015)

Similar to TCS, the other organizations in this sector have taken many initiatives to retain the knowledge
and the senior knowledge workers. Employers have begun to build integrated strategies to encourage
employees with valuable skills and experience to stay in the workforce. Organizations value the
senior workforce as they become more valuable as they get older and scarcer. This creates an inclusive
environment and retention of human capital.
Premalatha 13

Proposition 3: Retaining Young and Senior Workforce Results in Retaining Knowledge Assets and Strengthening
Human Capital Development
Contributions by Schultz (1962) and Becker (1964) on human capital are more relevant in understanding
the theme—human capital development as one of the RoR. Schultz (1962) defines the theory of human
capital as the knowledge and skills that people acquire through education and training as being a form of
capital, and that this capital is a product of deliberate investment that yields returns. Becker (1964) built
on the idea and explained that expenditure on education, training and medical care could all be consid-
ered as investments in human capital. He defines the theory of human capital as a form of investment
by individuals in education up to the point where the returns in extra income are equal to the costs of
participating in education. Returns are both private to the individual in the form of additional income
and to the general society in the form of greater productivity provided by the educated. Human capital
theory can be associated with resource-based view of the firm (Amit & Schoemaker, 1993). Sustainable
competitive advantage (Barney, 1991) is achieved by having a resource pool that cannot be imitated or
substituted by its rivals and thereby achieving human capital advantage.
Strong L&D foundation, career development initiatives and communities of practice facilitate organ-
izations to gain competitive advantage by retaining their knowledge assets. Employees who participate
in communities of practice experience success in learning by acquiring the relevant knowledge and
skills, comprehending their roles, through higher organizational commitment and intentions to remain
with the company (Joohee, Wonsup & Jacobs, 2009). Community of practice refers to a group of people
who generate new knowledge in the process of sharing their knowledge, experience or insight on a
common interest or problem in a subject while they interact (Wenger, 1998).
The Indian software and IT industry should be treasured and nurtured for its role to transfer
knowledge across borders to reach Indian firms (Kite, 2013). Thus, retaining employees in organizations
helps in retaining knowledge assets. Experiential, conceptual, systemic and routine knowledge assets
(Nonaka, Toyoma & Konno, 2001) are successfully retained by retaining the knowledge workers.
Experiential knowledge asset is the accumulated tacit knowledge the employees have developed over a
period of time, based on the hands-on experience with the internal and external stakeholders. It includes
skills, competencies and know-how learnt which are difficult to grasp, share, evaluate or trade. Conceptual
knowledge asset is the explicit knowledge articulated through images, symbols and language. Systemic
knowledge asset is the systematized and packaged explicit knowledge which includes explicitly stated
technologies, product specifications, manuals, legally protected intellectual properties, such as licenses
and patents and documented information about clients, customers and suppliers. Routine knowledge
asset is the practical tacit knowledge that is routinized and embedded in the actions and practices of the
organization. Know-how, organizational culture and organizational routines for carrying out the day-to-
day business of the organization are examples of routine knowledge assets. The nature of these
four knowledge assets, especially their tacit component, can only be retained by retaining the minds of
the knowers. Failing to do so, the knowledge walks out during turnover. Thus, developing and retaining
the knowledge workers enhances the knowledge assets to be more firm specific, difficult to imitate and
thus results in human capital development and sustainable competitive advantage.
Organizations lose their intellectual capital and organizational memory when experts and leaders
retire. This demands successful retention and transfer of knowledge which are highly tacit in nature
(Linderman, Baker & Bosacker, 2011). Retention of senior resources is emphasized in knowledge-
intensive organizations. The presence of positive traits, such as experience, good judgement, strong work
ethic and a commitment to quality (Lord & Farrington, 2006), among senior workforce demands the
need for retention. Organizations have developed strategies to eliminate stereotypes (lacking flexibility,
14 Management and Labour Studies 41(4)

resistant to new technology, unwilling or unable to learn new skills and unable to change or adapt) about
the senior workforce. Strategies to motivate, distribute work fairly, encourage postponement of retire-
ment, allow flexi-time, invite retired employees back at least once a year for a company luncheon,
develop a post-retirement database noting skills and experience of each retiree, update performance
management and reward systems and allow working at home (Johnson, Indvik & Rawlins, 2009) are
beneficial to retain the rich talent and irreplaceable tacit knowledge that these workforce possess.

Theme 4: The Battle for Women Talent in the Industry

Indian IT-BPO industry has emerged as a preferred career destination for the knowledge workers in the
country through its best practices to attract and retain women employees. However, the industry faces
many challenges in retaining women employees.
Stephen, a Delivery Lead of a leading IT services firm, while quoting one of her junior colleague’s
incidents, says:

Payal is good both in technical and managerial competencies. But she has quit the industry to take care of her
family responsibilities. The other day she has mentioned informally that she can’t take care of her career and the
family. The option….. Quit the job…. May be she would take up a job with lesser working hours and travel time.

Similar to Payal, another Calcutta-based woman IT professional interviewed who quit last year, says the
reason was to give more time to her daughter who was growing up. The interviews with the managers
express that female employees are hardworking, loyal to their work and their organization. They bring
different outlook in the work processes with their special capabilities and competencies which are essen-
tial for the smooth functioning of the team. Women managers are successful in the industry. But the study
reveals that as they grow up in the hierarchy, additional responsibilities and the societal demands hamper
their career growth and development. Women drop out significantly during the journey across different
levels and while they are reasonably well represented at the entry level, the percentages drop as we look
at the higher levels.
Karuna, 33 years old, recently applied for jobs through employment consultancies and job portals
after taking a break of 3 years for raising her child. She left the industry as a project manager. She was a
little sceptical whether she could get the right profile. But to her surprise, more than six employers
evinced interest in meeting her for an interview. Karuna said:

It was unbelievable that companies were ready to hire me with a decent package and a good profile, despite my
career break.

The narrative illustrates that employers are willing to hire women employees with career breaks and
offer women opportunities for their ‘second careers’. But, it is revealed in the interviews that most of the
employees are not even aware of this and are very apprehensive about the fact that their career will be at
stake when they are required to take breaks.
Thus, the advancement of women continues to be an area of concern. What are the initiatives taken
by companies in IT services industry to take care of issues like these? Are they sensitized to the needs of
women employees in the society? Industry leaders claim that Indian companies no longer view gender
inclusivity as a corporate social responsibility activity, but as a business imperative. In one of her
interviews, Sucharita Palepu, Global Head—People Practices in Tech Mahindra, asserted:
Premalatha 15

Women bring with them their unique and commanding brand of leadership. They bring distinct personality
and motivational strengths to leadership roles. They seamlessly bring on board qualities like empathy and
emotional intelligence in their decision-making process. Women learn to manage conflict as an intrinsic skill.
(Newsline, 2008)

This scenario is demonstrated through the intake of women employees across different levels in the
company. Most of the companies in this sector have clear-cut policies laid down on recruitment, orienta-
tion and integration to build an inclusive work environment. Based on the interviews with 27 male
employees and 18 female employees across different companies, the following are captured as some of
the best practices to provide support for women at work: flexible work schedules, work from home,
maternity benefits, lactation centres, day-care facility, parenting workshops, women’s forum, recreation
club for women, anti-sexual harassment policy, health and wellness awareness programme, transporta-
tion, flexible leave policy, doctor on call, gender inclusivity council, career advancement inclusive work
environment, maternity leave benefit from 6 months to 1 year and spouse transfer. Second career, leader-
ship development programme for women, extended maternity leave (including adoption leave), pater-
nity leave, escorted drop for women after extended hours at work, a transit policy (for women travelling
alone ) and a special bonus for attracting women talent through employee referral are also some of the
new initiatives in the industry. These initiatives are taken by the organizations to retain women talent in
the industry, thus leading to a gender-inclusive workforce.

Gender inclusivity is not about a set of simple initiatives that corporations need to undertake to increase the
female population within their organisation or policies to ensure women have a harassment-free and secure work
environment. It is a far more complex multi-dimensional, transformation journey, with multiple stakeholders
that must work together in order to help create a holistic and empowered society where men and women have
different but equal roles to play. Padma R. Ravichandar, Country Head, Mercer Consulting (Business Standard,
May 13, 2009).

Analysts in the industry state that there is a direct correlation between the employment and retention of
women employees and the economic well-being of the organization and the country at large. Managers
in organizations strongly felt that it is important that women executives are provided with regular career
counselling by their immediate managers and the management. When the industry has this scenario of
recruiting more female employees than the past and attrition among women quoting family reasons is
rising, it is important to understand how the companies should be gender-inclusive.
Proposition 4: Retaining Women Talent Promotes Gender Inclusivity across Levels
Mckinsey’s survey of global executives finds that corporate culture and a lack of convinced engagement
by male executives and work-life balance issues are critical problems for women. Most men and women
agree that a top-level career implies ‘anytime, anywhere’ availability to work and that this imposes a
particularly severe penalty on female managers (Devillard, Sancier-Sultan & Werner, 2014). The devel-
opment of the IT sector is bringing about a gradual gendering of engineering education, but a deeper
analysis reveals a clear process of exclusion in career progression. The gender mainstreaming task
for attaining gender parity in the software industry thus necessities both government and the industry
to respond positively to women’s interests and concerns and take appropriate affirmative actions
(Padmanabhan, 2011).
Gender diversity is considered as an important business goal among all the leaders. There is no
aspirational gap among men and women leaders in pursuit of their aspirations to move up in the organi-
zations. Companies with more than two female board members demonstrate a better return on equity
16 Management and Labour Studies 41(4)

compared to the industry average (Angier & Axelrod, 2014). Women on boards is good to the firms, but
the gender diversity programmes that organizations have are not sufficient enough. Organizations should
instil gender diversity values in everyone’s lives and especially at the leadership positions. Organizations
should give priority to finding qualified female directors. If required, organizations should even be ready
to reserve seats or to expand the board’s size for a period of time to promote the leading edge of gender
diversity (Barsh, Nudelman & Yee, 2013). According to NASSCOM-Mercer ‘Gender Inclusivity:
Building Empowered Organisations’ study in 2008, organizations have achieved tremendous benefits,
such as stronger employer brand, higher levels of productivity and profits, reduced attrition within the
workforce and addition of powerful brand ambassadors, through their gender-inclusive initiatives
(NASSCOM 2009). Thus, it is proved that there is a need for companies to facilitate an organization
culture that fosters gender inclusivity as one of their business imperatives.

Theme 5: Generating and Sustaining Positive Energy in the Workplace

The retention strategies through HR initiatives adopted by the organization make the employees a happy
and engaged workforce. Motivation is one of the major consequences of retention strategies adopted by
the organizations. An organization in the industry is known for the facilities it provided to its employees.
There are companies that have a world-class campus, with good ergonomical conditions, canteen, day-
care provisions and other facilities, such as swimming pool, basketball court and gymnasium with yoga
instructors. For employees, these are the feel-good factors. The majority of the workforce in IT industry
is young adults. They feel happy when there is substantial positive energy in the workplace. This holds
good for any age group.
During interviews, participants said that they are happy when they are understood more as an
individual than collectively as a group, as individual needs are very different from each other.
How organizations give individual attention is important in retaining employees.
Pramodini, General Manager—HR, describes:

I am perceived to be a manager who gives a lot of freedom to my team to operate and they find it motivating and
encouraging. Because many of them have joined me from outside organizations and they personally come to me
and have spoken to me that they are glad that I am not like their supervisor from their previous organizations.
I give them individual attention, a completely free hand and encourage them to take their own decisions.

Ashwini who is working with an Indian IT services, business solutions and outsourcing company as a
senior software engineer says:

In my organization, if you are struggling with something, everyone else will be there with you to help you to
complete your work in time. I have checked with my friends placed in other organizations. They do not get
support of their peers and senior colleagues as I get here in my organization. I’m happy that I am working here.

The team performance depends on its members. The quality of people in the team matters a lot in achiev-
ing the deliverables. Naveen, a Principal Consultant with a global IT, research and development, consult-
ing company, says:

When I joined this organization I worked with very good people. Few of my team members are from IITs and
IIMs. I had every good experience in my first project itself; felt that the people were excellent to work with.
If anyone asks me what I like about this organization, I would definitely say that it is the people. People are the
first thing to me and the culture in which we operate. That is the reason why since five years I still continue to
work in this industry and with the same organization.
Premalatha 17

In contrast to Ashwini and Nagaraj’s views, Manish who is currently with an Indian IT services corpora-
tion and was working with a manufacturing firm earlier says:

In manufacturing, we worked like a society/family. But in IT industry there is no human relationship. We have
ultra-modern facilities. There is no bonding. You come and you go. As long as you do your work, no one bothers.
After working for five years you want to leave the company they’ll say, Good bye. That is the company culture.
In IT industry, it is completely systems and processes driven. Today, I am working and tomorrow someone can
come and replace. This is applicable to everyone.

The above-mentioned excerpts focus on the need for bonding that they create in their working environ-
ments. Some of the other participants when asked to describe what exactly they mean by working
environment, they related to the life-giving forces and positive energy provided by the company. This
they have felt when they had good projects, good team, good working processes and good managers
which were the primary factors facilitating retention. Krishnan who is working with an IT consulting
firm says that

There are always people around you in this company who are ready to mentor you, guide you in professional as
well as in personal issues. That was the positive thing that I observed in my organization. And there was always
a driving force around me. There were people who constantly motivate you.

Proposition 5: Successful Retention Strategies Result in Workforce Motivation and Morale

Exciting work and challenge, career growth, L&D, fair pay and benefits, relationships and working
with great people, supportive management, a great boss, pride in the organization, its mission and its
product, great work environment or culture, being recognized, valued and respected, meaningful work,
making a difference and autonomy are drivers that enable employee retention and motivation with
sustained positive energy (Kaye & Jordan-Evans, 2002). Building positive energy in an organization is
found to be a great motivator for all the employees across different levels and verticals.

Building energy is going to be the major challenge facing leaders and human resource management professionals
over the next 20 years…. Leadership is about managing energy, first in yourself and then in those around you.
The challenge of energy management, though, is not just an individual endeavour; it extends to organizations in
a big way. (Clawson & Newburg, 2005)

Though the relevance of some of the classic and contemporary theories in motivation such as need
hierarchy (Maslow, 1954), need for existence, relatedness and growth (Alderfer, 1972), need for achieve-
ment, need for power and need for affiliation (McClelland, 1961; McClelland & Burnham, 1976),
intrinsic and extrinsic factors (Herzberg, 1966) and equity (Adam, 1965) is valid in conventional organ-
izations, retaining employees by providing opportunities for employees to acquire, bond, comprehend
and defend (Nohria, Groysberg & Lee, 2008) is more relevant and results in a motivated and engaged
workforce.

Theme 6: Strategies to Generate Involvement, Identity and

Internal Motivation
It was felt that the retained workforce is more involved with the job. As the tenure in the organizations
increases, employees’ involvement and their commitment towards their organization is positive. Having
committed employees increases the individuals’ performance, reducing turnover and absenteeism.
18 Management and Labour Studies 41(4)

Nagaraj says:

There is a lot of challenging work out here for me. That matters to me a lot. I want to experience new challenges
(technical or business challenges) and experiment new things. And my organization has provided with opportu-
nities to work in challenging projects. And definitely there are choices. Suppose you do not enjoy working in a
project you can always switch to some other project. People will listen to you. That is one thing that I really like
about my organization.
I feel that career growth is definitely good here in this organization. There are lot of opportunities to make a
transition from one level to another and management does support us in this. When I say management, I am refer-
ring to my managers who I report to. We actually get an opportunity to prove ourselves and get into the right role.
I have joined as C2 level, now I have been promoted to C5 level. In five years I got promoted twice. My longer
stint in the organization has provided me to explore the opportunities available in my organization.
The kind of opportunities I get here, make me to stick with this organization with high level of involvement
and commitment. My ex-colleagues who had left, now regret and feel very sorry about their decision.

Aditya who is known for his fast-track career record in his organization and is currently working as
Delivery Lead says:

I had immense opportunities to prove myself. Approaching my seniors wasn’t difficult for me. There is not too
much of a hierarchy. I have even interacted with my CEO. So, probably that has brought the confidence to go and
ask for more responsibilities and which has brought me here…. The position where I am now.

In IT services industry, the career anchors of employees are found to be sense of accomplishment,
technical competence, challenging assignments, money, stability and security, consulting, autonomy,
entrepreneurship aspirations, people management, size of the firm and choice of the industry. The L&D
initiatives and provisions for career progression based on one’s career anchor promote the employees’
behaviour and attitude in alignment with the growth of the organization. It was revealed in the study that
these initiatives promote involvement in their jobs and commitment among the employees.
Employees interviewed feel that the support for employees and their families during onsite assignments
is important and it speaks volumes about the way the company takes care of its employees. Anupama,
Project Manager working with an Indian IT services organization, shares that

In the year 2004, I had some personal problem in UK with the client. It was to the extent, I was thinking of
quitting the job. But then, the immediate supervisors were very kind and they helped me to solve the problem
and got me back to India.

Retention of knowledge workers is an important concern in both good and bad times. Organizations have
reported lower turnover rates during downturn and retention issues surfaced again once the market gets
strengthened. When the global economy is not doing well, there are not many projects to outsource to the
country. This demands the organizations to go for strict cost-cutting measures or downsizing. Most of the
companies used the first strategy, while the rest, the latter. Both have their own merits and demerits.
It is based on the corporate strategy and culture of the company. The role of top management is extremely
important during bad times. Chandrima says:

This year, because of the recession, we went through a very bad time. But we had a lot of senior management
people coming and talking with us saying ‘we know you all going through tough measures but we shouldn’t give
up as a team we should do well, so on and so forth.’
Nothing feels as better as when you are heard by the manager…. Call it during the time of grievances and
giving our inputs….
Premalatha 19

Gayatri, Vice-President—corporate communications working with a multinational IT services firm,

says:

We have heard things from the horse’s mouth, and we’ve grown with that, and learnt how good men they are and
really our founders are excellent men…so the credibility, that is whatever is going to happen, the company is not
going to do bad to you…. That really helps.

This sort of feeling really makes them to get life-giving forces, makes them energetic and not to think of
the other organizations in spite of getting offers from different organizations during boom time. The
retention strategies adopted by the organizations have substantial impact on employees’ satisfaction,
commitment and engagement especially during economic recessionary phases .
Proposition 6: Talent Retention Positively Impacts Job Involvement and Organizational Commitment
Job involvement and organizational commitment are one of the consequences when organizations could
retain their employees. Job involvement is the extent to which an individual identifies psychologically
with his or her job. Organizational commitment is the extent to which an employee identifies with the
nature and goals of a particular organization and wishes to maintain membership in that organization
(Mowday, Porter & Steers, 1982). The retention mechanisms adopted by the company have an impact on
their level of involvement and commitment. Commitment is relevant for both individual employees and
organizations. Mowday (1999) asserts that when employees are committed to work, they add meaning
to their life by increasing perceived self-worth. Successful organizations develop their employees by
identifying and nurturing their career anchors. Career anchor is an employee’s self-concept, consisting
of self-perceived talents and abilities, basic values and most importantly the evolved sense of motives
and needs as they pertain to their career (Schein, 1992). Organizations identify the employees’ career
anchors and take appropriate initiatives to build the career of employees, and thus promote involvement
in their jobs and commitment among the employees. The study further unveils that these initiatives result
in three types of bonds between an employee and an organization: compliance, identification and inter-
nalization (O’Reilly and Chatman (1986) based on Kelman’s (1958) work on attitude and behaviour).
Compliance reflects instrumental behaviour designed to gain rewards. Identification occurs when
employees want to maintain a relationship with an organization which has attractive values and goals.
Internalization reflects behaviour driven by internal values or goals that are consistent with the organiza-
tion. Rigorous recruitment and selection procedures and a strong, clear organizational value system are
associated with higher levels of employee commitment based on internalization and identification.
Strong organizational career and reward systems are related to higher levels of instrumental or
compliance-based commitment (Caldwell, Chatman & O’Reilly, 1990).
Employees’ behavioural and attitudinal commitment (Mowday et al., 1982) relates to the process
by which individuals become locked into a certain organization and build a relationship with their organ-
ization; thus results in affective, continuance and normative commitment (Meyer & Allen, 1991).
Affective commitment refers to employees’ emotional attachment to, identification with and involvement
in the organization. Continuance commitment refers to commitment based on the costs that employees
associate with leaving the organization. Normative commitment refers to employees’ feelings of obliga-
tion to remain with the organization. Knowledge workers in the organizations experience all three forms
of commitment to varying degrees. Steeper the decline in an individual’s affective and normative
commitments across time, the greater the rate of increase in that individual’s intention to quit and actual
turnover (Bentein, Vandenberg, Vandenberghe & Stinglhamber, 2005). The combinations of organiza-
tional commitment and job involvement impact turnover (Blau & Boal, 1987; Huselid & Day, 1991;
Simons & Jankowski, 2008) and thus become an integral RoR.
20 Management and Labour Studies 41(4)

Theme 7: Celebrating the Returnees—India Lures Its Talent Back

The quality of life in India is much better than before, and jobs too have become better, both in terms of material
benefits and professional challenges. (Kiran Karnik, Former Chairman, NASSCOM)

It is important to note that reverse brain drain is happening in India unlike how it was before. Influx of
expatriates is increasing every year and is attributed to India’s growing economy. Expatriate is a person
who lives outside his/her native country. Expatriates are actively looking into opportunities for returning
to India. Ravindran from a leading consulting, technology and outsourcing firm says,

Its almost fifteen years over. Now, I am coming back to India with my family members. I started my career with a
leading IT Services firm based in India. Relocated to Europe and now I am returning to India as Chief Operating
Officer. I feel great to return to India.

When similar minds were interviewed, they expressed their happiness to return to the country. The con-
tributions by the industry to grow up in the value chain and strategies adopted by the firms to engage and
retain their employees are the main reasons quoted for their reasons to come back.
Christopher, Project Manager with a technology product in an American multinational IT corporation
and who relocated to the US 10 years ago, expresses:

In the recent past, I see not many opportunities for employees’ career growth in the countries abroad…especially
in the US. When I compare, I find there are availability of better opportunities with good profile for career growth
and development in India…more than the other developed countries.

When this information was shared with some of the participants who had more onsite opportunities in
different countries, they were extremely happy about the change and opined that this change was
expected. Probing further into what prompts employees to move out and come back to India, the
following insights were found useful relevant to the theme.
The industry is popular among generation Y workforce for the compensation and benefits and
availability of onsite opportunities that the industry offers. Onsite assignments are great motivators to
attract and retain the employees. Most of the projects that the company has are sourced from outside
the country. This requires some of the individuals working in the project to coordinate from the clients’
location outside the country. Employees prefer onsite mainly to earn more, get international exposure
and to increase one’s employability.
Raghu who is a Project Manager with an Indian IT services, business solutions and outsourcing firm
and who has gone onsite to four different countries for almost once in every 2 years including US and
European countries says:

Onsite assignments are very important in one’s career. The individual’s resume value goes up and there are lot of
opportunities for individual’s growth and development.

But the challenge is that employees associate more to their clients than to their organizations during their
onsite tenure. This happens when people are there on client locations for a longer duration. The projects
are deployed on their clients’ locations which are not on the company premises. They are with the client’s
locations throughout their project. They report and interact regularly with their clients. This makes them
to have lesser or no affiliation to their parent organization.
Premalatha 21

Viswanathan who is heading the operations division says:

A lot of people otherwise feel no emotion…with respect to connect to their organization. They would just feel
its OK. If his client is Citibank, he is more associated with the bank than his organization, call it Wipro or TCS.

There are also instances wherein the employees have joined the client organizations in other countries.
Companies lose their employees to other organizations in the client locations when they fail to deploy
appropriate engagement and retention measures. When companies are employee-friendly and focus on
retaining employees, even the people who have left the organizations join back and continue their asso-
ciation with the company. Companies also encourage this when the employee continues to be an asset.
Ram, Project Manager with a global IT services firm, says:

I have witnessed employees leaving and joining back the company. They have joined back mainly because of our
working environment and flexibility. And they advise the other employees not to leave the organization and they
share their experiences and appreciate the organization vis-à-vis the other employers.

Divyasri who is a Programme Manager with an Indian IT services company says:

There was one person who left our firm when he was a Project Manager and joined some other company in the
US two years back. He has just joined us back in a different business unit at two levels higher.

It was believed that if an employee leaves, he/she can get higher packages and good roles outside and
may be in the future, one can think of joining back the organization. It helps in shaping one’s career.
And for the organization, it helps in tapping the knowledge and expertise the employee has gained in
other organizations. Also, it is important to note that the organizations that have attracted the returnees
are typically the organizations with a caring and supporting organization culture.
There are some of the organizations that could not do so because the organizations were not investing
in people. Some companies do not often understand this, and they do not invest in people thinking that
people are not loyal and anyway they are going to leave. After all, loyalty is reciprocal.

Proposition 7: Employee Recognition and Retention Practices Promote Reverse Brain Drain
Expatriates returning to India is increasing year by year, mainly due to 9/11, subprime crisis and
the political scenario of host countries. This is attributed mainly to the scarcity of growth opportunities
in other countries, the rapid growth of the Indian knowledge-intensive organizations in the global tech-
nological market and the way employee retention is taken care of in Indian organizations.
The jobs that would guarantee continued employment, a stable future and the ability to provide
comfortably for the family through achieving a measure of financial independence (Schein, 1992) are
provided in knowledge-intensive organizations. Successful teams demonstrate commitment to their
members and create a sense of belonging. Commitment has come through in the personality of the
organizations (Rapaport, 1993). The Hofstede & Hofstede (2001) feminine culture favours retention and
enables reverse brain drain. The feminine culture emphasizes on cooperation, caring for others, modesty
and quality of life. It is a fact that the knowledge of expatriates if lost is very difficult to replace.
By adopting more of a feminine culture, the organization can focus on retaining expatriates. Organizational
culture plays a dominant role in retaining employees and also in bringing them back to the organization
even after they had left and joined other organizations.
22 Management and Labour Studies 41(4)

Conclusion
Even with the global economic meltdown of 2008 and 2009, the country has witnessed continuing chal-
lenges in retaining talent. Despite the lay-offs and increasing unemployment rate, companies in the boom-
ing sectors have continued to search for skilled talent to fill key roles at all organizational levels. Drawing
from the resource-based view of the firm, Holland, Sheehan and De Cieri (2007) argue that in an environ-
ment characterized by increasing levels of skilled labour shortages, organisations need to design employ-
ment systems that prioritize HR development to enable competitive advantage. When the job market is
faced with fluctuations and complexity from the perspectives of employees and employers, retention
becomes one of the core strategies for knowledge-intensive organizations to get the desired returns.
For organizations, returns need not be associated with quantitative parameters associated with the
bottom line alone, as organizations also need to be seen as ethical collectives associated with larger ques-
tions of human well-being (Rhodes & Wray-Bliss, 2013). Questions of human well-being can be
addressed by organizations only when they are interested in the well-being of their own employees
(Wood, Veldhoven, Croon & de Menezes, 2012). In qualitative terms, returns obtained by organizations
are a sense of resilience, tacit knowledge, harmony and atmospheres of innovation, when they show that
they care about employee well-being and are interested in retaining talented employees (Adler, 2015).
Based on the analysis of the narratives and findings from the field data, the following propositions
emerged from the study as outcomes of retaining knowledge workers and these are presented in
Figure 1 and have been discussed in the previous section:

RoR 1: Successful talent retention management contributes cost-effective HR practices

RoR 2: Managing individuals’ performance and retaining achievers foster corporate performance
management
RoR 3: Retaining young and senior workforce results in retaining knowledge assets and strengthening
human capital development
RoR 4: Retaining women talent promotes gender inclusivity across levels
RoR 5: Successful retention strategies result in workforce motivation and morale
RoR 6: Talent retention positively impacts job involvement and organizational commitment
RoR 7: Employee recognition and retention practices promote reverse brain drain

The findings of the study may further be studied by testing the above-mentioned propositions using
positivistic paradigm.
Revisiting the extant theories in talent management is important in today’s context as the relevance of
the existing theories has become obsolete. The academia in HR development needs to develop more
substantive theories in the field of organization behaviour and HR management as it needs a different
approach in building relevant theories or to suggest modifications in the extant theories. Future research-
ers may use more of qualitative inquiry based on interpretivism (Altheide & Johnson, 1994; Kuzel &
Like, 1991; Secker, Wimbush, Watson & Milburn, 1995) and constructivism (Guba & Lincoln, 1994) as
future research needs closer and deeper perspectives of phenomena under study existing in dynamic
environment involving different stakeholders. The approach, grounded theory as a design, provides
opportunities for practitioners and educators. Insights from grounded theory studies have the potential to
influence organizational practices in both narrow and broad contexts. In addition, participation in
grounded theory research by those involved in HRD as researchers, practitioners or educators will
provide opportunities for the further refinement and clarification of the grounded theory research method
itself (Egan, 2002).
Premalatha 23

Cost-effective HR practices, performance management, human capital development, gender inclusivity,

workforce motivation and morale, job involvement and organizational commitment and reverse brain
drain emerged as RoRs. To get these returns, organizations should envisage retention as more of a
corporate strategy than merely as an HR strategy. Retaining knowledge workers cannot be viewed myop-
ically as and when emergency exit arises. It should be looked at from a long-term perspective and at a
larger picture in terms of organization’s goals, objectives and strategic imperatives. Employee retention
is an important agenda for the organizations when they think of merger, acquisition or any other strategic
alliances with other entities. Best are the organizations that can include retention in their mission and
vision statements. Also, retention strategies should emerge and evolve responding to the industry’s
contextual conditions.

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