Jointly published by The Division of General Studies, Chukwuemeka Odumegwu Ojukwu University, Nigeria (formerly Anambra State University) and Klamidas.com. Journal of Education, Humanities, Management and Social Sciences (JEHMSS), Vol. 3, No. 1, May 2025. https://klamidas.com/jehmss-v3n1-2025-01/ |
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Exploring the Nexus between Corporate Culture and Employees’ Retention in Private Firms in Anambra State, Nigeria Chukwujekwu Charles Onwuka & Christian Igwebuike Ezeh
ABSTRACT The study examined the nexus between corporate culture and employees’ retention in private firms in Anambra State, Nigeria. It analyses the key variables that have been linked to success of organisational goals which refers to the ability of an organisation to retain its employees over a period of time. The study employed the descriptive research design. This study was conducted among 155 employees in ten selected private firms within the three urban centres within Anambra State, who aged between a minimum age of 27 years to a maximum age of 48 years. The instrument for data collection was questionnaire. The instrument was administered to the respondents on face-to-face basis by the principal researcher, with the help of two research assistants. Data collected from the survey were coded into the Statistical Package for Social Sciences (SPSS) software package version 26.0, which was used in processing all the relevant data. The results of the study indicate the need for corporate culture strategies to provide equitable opportunities for skill enhancement and career progression that would foster a sense of inclusion and value among employees. The study concludes with recommendations that there is need for the organisations to strengthen their communication and feedback mechanisms by developing open communication channels, to encourage employee engagement and regularly sharing of updates on company goals and performance to build trust and ensure transparency. Keywords: corporate culture, employees, organisation, productivity, retention
INTRODUCTION In the contemporary industrial work practices, organizations are constantly changing their organizational processes in order to meet up with the high competition in the global market. Thus, one of the key variables that have been linked to success of organizational goals amidst this competition is employee retention, which refers to the ability of an organization to retain its employees over a period of time (Kurdi, Alshurideh & Afaishat, 2020). Onwuka, Nwokolo and Achebe (2022) stated that when employees perceive that their organisation cares and provides them all the support they require, they are more likely to commit to the achievement of their organisation’s goals, which would also translate to organisational efficiency and productivity. A number of scholars have recognized employee retention as key to organizational success because when organizations succeed in retaining highly motivated employees, they put in their best efforts to help in achieving organizational goals (Kyndt et al., 2009). It is believed that when an individual has work commitment, he or she is more likely to perform tasks and responsibilities that will help an organisation achieve a goal (Onwuka, Nwokolo & Achebe, 2022). Onwuka and Abonyi (2022) are of the view that management should be able to adopt their style of leadership style to the situation and look at cues such as the type of task, the nature of the group, and other factors that might enhance employees’ performance. However, employees’ retention does not occur in a vacuum; rather, it is associated with a number of variables, including work environment/atmosphere, opportunity for growth training and development, work-life balance, leadership/management style, social support system, among others (Macaraig, 2024; Shakeel & But, 2015; Kossivi, Xu & Kalgora, 2016). Among these variables, corporate culture seems to be less linked with employees’ retention within the ambit of extant empirical research available. Thus, this present study aims at investigating the nexus between corporate culture and employees’ retention. Corporate culture refers to the shared values, beliefs, attitudes, and behaviours that characterize an organization. It is a crucial aspect of any business as it shapes the way employees interact with each other and with customers. A strong corporate culture can lead to employee satisfaction and increased productivity (Akpa, Asikhia & Nneji, 2021). There are different elements of corporate culture, and they include leadership, teamwork, communication/feedback, employee engagement/decision-making process, and innovation practices. These elements work together to create a positive environment for employees and drive organizational success. Onwuka and Abonyi (2022) observed that the success and negligence of any organization depend on the leadership style exercised by the leaders of such an organization. Organizations which strive to cultivate positive corporate culture are more likely to retain their employees compared to organizations with lower corporate culture. Research in Western countries has substantiated this claim by demonstrating that organizational culture has a significant influence on employee retention (Galindo, 2022; Setiawan & Hastuti, 2022). However, this assumption has not been empirically tested within the context of private firms in Anambra State, which means that there is a gap in knowledge that needs to be filled in this regard. Research of this nature is essential as it helps organizations understand how their corporate culture impacts employee retention. It also has the potential of helping organizations identify areas where they need to improve their culture to retain employees. For instance, if it is found that employees leave or have intention of leaving because they feel undervalued or unappreciated, the organization can take steps to improve recognition programmes or offer better benefits. Moreover, research of this nature can also help organizations retain top talents by creating a positive image of their corporate culture. This will enable them to differentiate themselves from competitors in the job market. OBJECTIVES OF THE STUDY
LITERATURE REVIEW Concept of Corporate Culture Corporate culture is one of the important concepts within organizational practices which influences work practices and employees’ behaviour within organizations. A way to define corporate organization in a proper way is to define the two concepts separately. In this direction, the concept of ‘corporate’ is used to represent a group of people or organizations that are united by a common purpose. Hornby (2018) noted that the word ‘corporate’ is associated with a large business company. Culture on the other hand is a generic term that represent the beliefs, values, customs, and practices of a social group or society. Taylor (1871, p.1) defined it as “the complex whole which includes knowledge, belief, art, law, morals, custom, and any other capabilities acquired by man as a member of society”. Put together, corporate culture, therefore, refers to mutual values, views, principles, beliefs, practices and additional features that exist within an organization, which help the organization to maintain balance and productivity (Ahmad, 2020). In addition to this, Schein (1985) as cited in Amah and Daminabo-Weje (2013, p.43) defined corporate culture as: The pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and integration that have worked well enough to be considered valid, and therefore to be taught to new members as the correct way to perceive, think and feel in relation to those problems. The important elements of corporate culture include: 1) leadership – which refers to the leadership style prevailing within the organization. Quality leadership sets the proper tone for the entire organization by modelling behaviours and values that are important to the organizations’ success; 2) communication pattern – which refers to the system of communication that prevails within the organization. Effective communication ensures that everyone in the organization understands what is expected of them and how their work contributes to achieving organizational goals; 3) teamwork – which relates to the manner in which the employees work together as a team for the overall organizational productivity. A strong sense of teamwork fosters collaboration among employees, which leads to increased productivity and better outcomes for customers (Khawam, DiDona & Hernández, 2017); 4) Innovation – which refers to the degree of creativity which is brought into the work practices within the organization. Innovation encourages employees to think creatively and come up with new ideas that can help drive growth. These elements are essential for creating a positive corporate culture that promotes employee engagement, customer satisfaction, and overall organizational success. By prioritizing these elements, organizations can create a workplace where employees feel valued and motivated to do their best work every day. Onwuka and Abonyi (2022) are of the view that using a suitable style for a university organization is an essential requirement that should be comprehended by a leader which will go a long way in boosting employees’ work performance. Concept of Employee Retention Employee retention is one of the important concepts in organizational behaviour and practices; it has been described as a process of minimizing employee turnover and maximizing employee satisfaction and commitment to the organization; simply put, it is an organization’s ability to retain its workforce (Gorde, 2019). Shakeel and But (2015) averred that employee retention involves a planned and organized effort taken by the management of an organization to motivate and entice employees to stay with the organization for the maximum period of time. In other words, employee retention involves continuous and planned effort taken by an organization to retain the knowledgeable, skilled and competent employees for a long period of time. Onwuka and Abonyi (2022) indicated that employee performance in an organization is an important building block which lays a foundation for improved work performance. No organization can survive in isolation, hence collective effort of all the members of the organization is required. Overtime, scholars have measured employee retention using different quantitative indicators. One of the primary metrics for determining employee retention is turnover rate – often calculated as the number of separations divided by the average number of employees during a given period. Retention rate is yet another metrics for measuring employee retention, as it helps to provide understanding about the percentage of employees who remain with the organization over a specific period of time. Another relevant metrics is Employee Net Promoter Score (ENPS) – which gauges employee satisfaction and loyalty, which can be determined by how likely the employees are to recommend their organization to others. Onwuka, Nwokolo and Achebe (2022) observed that perceived organisational support is significant to increasing the employees’ affective achievement to the organisation and their expectations that greater efforts towards meeting organisational goals will be rewarded. THEORETICAL FRAMEWORK One of the important theoretical perspectives that is considered very relevant for the topic of this present research is the Social Exchange Theory (SET). SET is a transactional theory that was developed by a number of scholars within the field of Sociology, including Homans (1961), Blau (1964) and Emerson (1962). The major tenet of the theory is that people engage in social interactions with the expectation of receiving rewards and avoiding punishments. As such, individuals weigh the costs and benefits of their actions before engaging in any social exchange. This means that individuals will only engage or continue to engage in social exchanges if they believe that the benefits outweigh the costs. Using the assumptions of this theory, it could be deduced that employees are likely to stay with an organization (employee retention) when they perceive that they are receiving benefits that outweigh the costs of staying. These benefits can include job security, opportunities for growth and development, fair compensation, a positive work environment, and importantly a flexible corporate culture. In turn, employees reciprocate by contributing to the success of the organization through their work performance. Corporate culture plays a significant role in shaping employees’ perceptions of their benefits and costs, and ultimately their willingness to continue with the organization. A positive corporate culture that values employee well-being and fosters a sense of community can increase employee satisfaction and commitment to the organization. On the other hand, a negative corporate culture characterized by poor communication, lack of trust, poor leadership style and unfair treatment can lead to high turnover rates. Consequently, the social exchange theory proposes a direct relationship between corporate culture and employee retention which is subjected to empirical test in this study using private organizations in Anambra State. METHODS This study was conducted in Anambra State, Nigeria, which is one of the five states in the Southeast region of Nigeria. The state shares boundaries with Delta State in the West, Imo State and Rivers State in the South, Enugu State in the East and Kogi State in the North. The indigenous ethnic group in the state is the Igbo people; they constitute 98% of the entire population of the state while 2% consists of other ethnic groups found in the state. The state hosts a large number of private corporate organizations, which makes the area suitable for the study. However, being an institutional-based research, the study was conducted in selected private organizations within the state. For the purpose of confidentiality, the identities of the selected organizations are withheld. This study used the descriptive research design. This research design helps to describe the variables in a research by identifying patterns in variables and the relationships that occur naturally between and among them (Sousa, Driessnack & Mendes, 2007). The research design was adopted for this study based on the view that this study sought to describe the relationship between corporate culture and employees’ retention. This study was conducted among 155 employees (Males = 83, Females = 122) in ten selected private firms within the three urban centres of Anambra State; the employees aged between a minimum age of 27 years to a maximum age of 48 years, with a mean age of 35.9 years. The respondents included employees of different levels including secretaries, administrative employees, machine operators, and security personnel, among others, within the selected private firms. All the respondents completed at least the secondary school level of education which is an indication that all respondent had the potential of responding effectively to the research theme. The respondents were selected through the convenience sampling technique in which respondents were selected based on their availability during the days of data collection. The instrument for data collection was questionnaire developed based on existing literature on the study variables. The questionnaire consisted of two parts – the first part contained multiple response items which were designed to collect information on the socio-demographic characteristics of the respondents. The second part consisted of three sets of questions designed to measure the variables introduced in this study. The first set was titled ‘Corporate Culture Questionnaire (CCQ)’ which was used to measure the existing corporate culture in the selected private firms. It consisted of 12-items scale that measured the four dimension of corporate culture viz: employee well-being, teamwork, communication and diversity and inclusion. Each of the items were measured using three items each – making it 12 items on corporate culture. The items were designed on positively worded 7-point Likert-type response options ranging from ‘1’ – completely false – to ‘5’ – Very true. An example of the questions is ‘This organization encourages open communication and honesty among all levels of employees’, with response options of 5 – very true, 4 – true, 3 – neither true nor false, 2 – false, and 1 – completely false. The second set in the second part of the questionnaire was titled ‘Employees’ Retention Questionnaire (ERQ)’. It contained 5-item scale designed to measure employees’ retention within the selected private firms. The items were equally designed on negatively worded 5-point Likert scale response options ranging from ‘5 – strongly agree, to ‘1’ – strongly disagree. An example of the items is ‘I don’t see myself working at this organization for the next 5 years or more’; with response options of 5 – strongly agree, 4 – agree, 3 – undecided, 2 – disagree, and 1 – strongly disagree. The third set in the second part of the questionnaire contained items designed to interrogate the likely measures that could be adopted to improve employees’ retention within private firms in Anambra State. It contained 7 items designed on Likert-type response options ranging from 5 – very likely, to 1 – very unlikely. An example of the items is ‘How likely or unlikely do you feel the following can help to improve employees’ retention in your organization: i) creating a positive organizational climate’, with response options of 5 – very likely, 4 – somewhat likely, 3 – undecided, 2 – unlikely, 1 – very unlikely. The instrument was administered to the respondents on face-to-face basis by the principal researcher, with the help of two research assistants (a male and a female). First the researcher approached the management of the selected private organizations and expressed his research intentions, and to obtain relevant research approvals from them. Upon obtaining the necessary approvals, the researcher went into field with his research team on different days to collected data, a process which lasted for three weeks. Data collected from the survey were coded into the Statistical Package for Social Sciences (SPSS) software package version 26.0, which was used in processing all the relevant data. Actual data analysis involved first, descriptive analysis of the socio-demographic variables using frequency count and simple percentage and presented in a composite table. Thereafter, the research questions were answered using both inferential and descriptive statistical tools. While the inferential aspect employed the linear regression model to determine the relationship between the two study variables, which answers the first research question, the descriptive aspect was employed to answer the second research question. FINDINGS Table 1 Socio-demographic distribution of the respondents
Table 1 provides information on the result of analysis conducted on the socio-demographic variables of the respondents. The data clearly showed that the study included 155 respondents, with 64 males (41.3%) and 91 females (58.7%), indicating that females comprise the largest composition of employees in private firms in Anambra state. This gender distribution highlights the need for corporate culture initiatives that address the specific needs and expectations of female employees, which may influence retention rates in the selected firms. The age distribution of the respondents shows that the majority (54.8%) fell between 27 and 31 years old, reflecting a youthful workforce. Additionally, 15.5% aged between 37 to 41 years, and 23 (14.8%) were in the 42 to 46 age brackets. Fewer respondents (12.9%) and (1.9%), were in the 32 to 36 and 47 to 51 age groups, respectively. This predominance of younger employees suggests that corporate culture practices should prioritize factors such as opportunities for growth, innovation, and a vibrant workplace environment to appeal to early-career professionals, who are likely to be demotivated by the absence of these elements. In terms of marital status, the largest proportion (44.6%) of the respondents were married, while a closer proportion (31.7%) of them were single, highlighting that the workforce in private firms within Anambra State includes a mix of individuals with varying family obligations. Smaller numbers of participants reported being separated (10.9%), widowed (8.2%), or divorced (4.6%). This diversity in marital status indicates the importance of creating corporate culture practices that support both work-life balance and flexibility, catering to employees with differing personal responsibilities. Educational attainment among the respondents was diverse, with the largest group (40.0%), holding bachelor’s degrees, followed by 25.2% of them with diploma qualifications. Additionally, 18.1% of the respondents had completed only the secondary school level, while the least proportion (16.8%) had attained up to the post-graduate level. This range of educational levels reflects a workforce with varying professional capacities and aspirations, indicating the need for corporate culture strategies to provide equitable opportunities for skill enhancement and career progression that would foster a sense of inclusion and value among employees at all educational levels. Nature of Corporate Culture in the Selected Private Firms The first specific objective of this study was to examine the nature of corporate culture in the selected private firms in Anambra State. To do this, questionnaire items measuring four key constructs including Diversity & Inclusion, Rewards & Recognition, Employee Well-Being, and Communication System were used to collect data. Each construct was evaluated based on three statements, with means and standard deviations calculated for individual items as well as for total scores within construct. The analysis conducted on the responses obtained from the respondents is shown in Table 2. Table 2 Mean and Standard deviation regarding the nature of corporate culture in the selected firms
As shown in Table 2, the mean scores for the items measuring Diversity & Inclusion indicate a low perception of effectiveness in promoting an inclusive environment. Specifically, the item ‘Promotes a diverse and work environment’ had the lowest mean score (M = 2.06, SD = 1.29), suggesting that respondents feel this aspect is poorly addressed within their organizations. The overall mean for the Diversity & Inclusion construct was M = 2.42 (SD = 1.30), further confirming a perception of inadequacy in fostering equal opportunities for career advancement and valuing creativity. In terms of Rewards & Recognition, the mean scores also reflect a lack of effectiveness. The item ‘Rewards and recognizes employees’ achievements and contributions’ received the lowest mean score of M = 1.61 (SD = 1.01), indicating significant gap in recognizing employee achievements within the selected firms. The total mean for this construct was M = 2.24 (SD = 1.23), suggesting that employees feel undervalued in their contributions to the organization, which could negatively impact motivation, job satisfaction and overall job retention. The findings regarding Employee Well-Being suggest variability in the perception of support provided by organizations. The item ‘Provides adequate support for employees to manage workplace stress’ had highest mean score (M = 3.08, SD = 1.24), indicating employees feel relatively supported in managing stress compared to other areas. However, the overall mean for Employee Well-Being was M = 2.55 (SD = 1.32), highlighting that while some support exists, it is still perceived as inadequate, particularly regarding mental health policies (M = 2.08, SD = 1.35). Finally, the Communication System construct yielded a total mean score M = 2.54 (SD = 1.26), indicating moderate perception of communication effectiveness within the selected private firms. The item ‘Encourages open communication and honesty among all levels of’ received a mean score of M = 2.31 (SD = 1.19), suggesting that there are significant barriers to open dialogue within the workplace. The item ‘Has an efficient feedback system’ had a higher (M = 2.77, SD = 1.44), showing some positive feedback regarding opportunities for employees to express their experiences. Overall, the grand mean and standard deviation indicate that employees in the selected private firms perceive various aspects of corporate culture specifically Diversity & Inclusion, Rewards & Recognition, Employee-Being, and Communication Systems—as inadequate (M = 2.44, SD = 1.28). The low mean scores across the four constructs suggest that there is substantial room for improvement in fostering a supportive and inclusive corporate culture in private firms within Anambra State. Relationship between corporate culture and employees’ retention Another important interest of this study was to examine whether a relationship exist between the corporate culture within the selected private firms and employees’ job retention. The analysis in this respect was done by cross tabulating the data obtain in relation to employees’ job retention with that of corporate culture, and using the regression analysis to test the relationship. The result of this test is presented in Table 3. Table 3 Regression model showing the relationship between corporate culture and employee retention
A multiple regression analysis was conducted to examine the relationship between corporate culture constructs (diversity and inclusion, rewards and recognition, employee well-being, and communication systems) and employee retention in selected private firms Anambra State. The regression model indicated a moderate positive correlation between the corporate culture and employee retention, (F(4, 150) = 7.449, p < .001), with a coefficient of determination (R2 = .166), suggesting that approximately 16.6% of variance in employee retention can explained by the corporate culture constructs included in the model. Analysis of the coefficients showed that ‘Diversity and Inclusion’ (B = -0.500) was statistically significant(p < .001), indicating that an increase in diversity and inclusion is associated with a decrease in employee retention (β = -0.435). In other words, if the corporate culture of the firms is favourable towards diversity and inclusion, the employees are more likely to remain with the firms. The result however showed that the coefficient for ‘Rewards and Recognition’ (B = 0.071) was not statistically significant (p = .588), suggesting that rewards and recognition do not have a meaningful impact on employee retention. On the other hand, the coefficient for ‘Employee Well-being’ (B = 0.292) was statistically significant (p = .022), implying that a positive relationship exists between the construct and employee retention (β = 0.213). This suggests that improved employee well-being is associated with higher retention rates. Finally, ‘Communication Systems’ (B = -0.037) was not statistically significant (p = .755), indicating that communication systems do not significantly affect employee retention. Conclusion/Recommendations The major aim of this research was to explore the nexus between corporate culture and employee retention, with specific focus on private firms in Anambra State Nigeria. Through the in-depth analysis conducted on the data gathered from the field, the study has been able to substantiate that there is a poor corporate culture within private firms in Anambra State, judging from the low mean scores obtained in relation to the key constructs of corporate culture introduced in this research viz: diversity, recognition, employee well-being, and communication. Organizations can cultivate more positive work environments, leading to enhanced employee satisfaction and retention. These changes not only benefit employees but also contribute to the overall success and sustainability of the organization in a competitive business landscape. The integration of recent academic research findings emphasizes the critical nature of these interventions for fostering a thriving organizational culture. Based on the foregoing, the following recommendations were provided:
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