European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 4, No.3, 2012 145 Factors Affecting Employee Retention: A Comparative Analysis of two Organizations from Heavy Engineering Industry Chandranshu Sinha, (Corresponding Author) Amity Business School, Amity University Campus, F3 Block, Sector 125, Post Box – 503, Noida 201303 India Mobile: 91-11-9650670222; Email: chandranshu.sinha@gmail.com Ruchi Sinha Galgotias Business School, 1, Knowledge Park, Phase II, Greater Noida 201306, Uttar Pradesh, India Mobile: 91-11-9818145712; Email: ruchidatta.sinha@rediffmail.com Abstract The study explores to identify the main factors of retention management strategies in organizations. The organizations taken into consideration are two heavy engineering manufacturers based in India. The data was collected from 100 employees holding middle managerial positions in the two organizations. The Cronbach’s alpha of the questionnaire was found to be 0.823& Pearson correlation was 0.951 (p<0.001). The factor analysis of the component ‘retention management strategies’ led to the extraction of 3 factors each from both the organizations. The factors for EEPL* were “competence & relationship oriented”, “scholastic & futuristic oriented” and “developmental & reward oriented”; while for MBPL*, the factor were “relationship oriented”, “competence & scholastic oriented” and “reward oriented”. The results indicate that these factors have substantial roles to play in making employees stay and how at middle managerial level different aspects are valued while deciding upon the retention strategies in similar contexts (i.e. sector). Keywords: Retention Strategies, Employee Retention, Retention Management 1. Introduction Employee retention issues are emerging as the most critical workforce management challenges of the immediate future. Researches have shown that in the future, successful organizations will be those which adapt their organizational behavior to the realities of the current work environment where longevity and success depend upon innovation, creativity and flexibility. In fact, the dynamics of the work environment will have to reflect a diverse population comprised of individuals whose motivations, beliefs and value structures differ vastly from the past and from one another. This phenomenon is especially true in light of current economic uncertainty and following corporate downsizings when the impact of losing critical employees increases exponentially (Caplan and Teese, 1997). Critical analysis of workforce trends points to an