Impact of Employee Satisfaction and Retention Towards Organizational Performance in the Service Industry

Human resources are the most important aspect in the organizations as it helps to achieve organizational performance. Nowadays, the biggest challenge that organizations are facing is to satisfy their employees and retain them. Retention of highly skilled employees enable organizations to improve their performance that contribute to maintaining competitive advantage and competitiveness in the market. To achieve employee retention, one of the key aspects is improving employee satisfaction for maintaining high organizational performance. Thus, the primary focus of this paper is to review various literature and research on how employee satisfaction and retention affect organizational performance among employees in the service industry. A data collection was conducted using questionnaires for data collection among employees in the service industry. The research model focuses on the measurement of 5 factors, such as teamwork, working conditions, employee loyalty, employee retention and organizational performance. The findings indicate that employee loyalty has significant effects over organizational performance, employee retention has significant effect over working conditions and employee loyalty. In contrast, teamwork, working conditions and employee retention have no significant effects over organizational performance. The findings for this study can be used as a guideline for employee satisfaction and retention towards organizational performance.