Employee retention and the moderating role of psychological ownership in retail

Abstract

Retailing is one of the critical stages in supply chain operations, in which human resources and employee retention play a decisive role as in any organization. Based on motivation theories for employee retention (ER), this study examines the integrated indirect effects of organizational and personal motivators on ER through employee engagement (EE) in the retail industry. Furthermore, it assesses how psychological ownership (PO) directly affects ER and moderates the effect of ER on EE of full-time employees in the Vietnamese context as empirical evidence. The combination of a qualitative methodology (in-depth interviews with retail experts) and a quantitative methodology (a survey conducted with 571 fulltime retail employees) is deployed. PLS-SEM with SmartPLS is utilized for data analysis and hypothesis testing. The study findings demonstrate that the integrated roles of organizational and personal motivators significantly affect ER through EE in retail companies. Interestingly, the study discovered that PO has a significant positive influence on ER, but a higher PO can reduce the relationship between EE and ER. Practically, the study highlights the implication that organizational motivators may not be sufficient to retain employees, since the intention of employees to remain or quit also depends on personal factors. It also suggests that in the working environment with a solid relationship between EE and ER, PO can lead to negative employee behaviour, such as bias, misconduct, and disengagement, which may harm the company.