THE INFLUENCE OF HIGH-PERFORMANCE WORK SYSTEMS AND EMPLOYEE ENGAGEMENT ON EMPLOYEE RETENTION IN SMALL ENTERPRISES IN THE MANUFACTURING SECTOR IN METROPOLITAN AREAS
Keywords:
High Performance Work System, Employee Engagement, Employee RetentionAbstract
This research aimed to investigate the influence of high-performance work systems and employee engagement on the employee retention of small enterprises in the manufacturing sector in metropolitan areas. The samples included 400 employees working in small enterprises registered with the Department of Industrial Works (DIW) in metropolitan areas. The research tool used in this study was a questionnaire. Statistical analysis was conducted by using percentage, means, standard deviation, and Structural Equation Modelling (SEM) analyses. The research findings indicated that high-performance work systems (HPWS), employee engagement, and employee retention had overall high mean values. The high-performance work systems had a direct effect on employee engagement in terms of vigor, dedication, and absorption, as well as on employee retention. Furthermore, employee engagement in terms of vigor directly affected employee retention; however, employee engagement in terms of dedication and absorption does not directly influence employee engagement. These findings provided insights into the high-performance work systems of employees and the employee engagement that can contribute to employee retention within organizations further.
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