CHAPTER II

REVIEW OF LITERATURE
2.1 Introduction
A literature review is a systematic and critical examination of existing scholarly studies
related to a specific research topic. It helps researchers understand previous findings,
theoretical perspectives, research methodologies, and key concepts relevant to the area of
investigation. The purpose of a literature review extends beyond summarizing existing
knowledge; it also identifies inconsistencies, research gaps, and areas requiring further
exploration. By reviewing prior studies, researchers establish a strong theoretical and
conceptual foundation for their work, ensuring that the research is grounded in existing
academic knowledge while contributing new insights to the field. The literature review
section of this dissertation presents a comprehensive examination of studies related to
employee turnover, employee retention, exit feedback, job satisfaction, organizational
commitment, leadership effectiveness, workplace culture, and managerial support. The
review is organized using a variable-based and objective-oriented structure, focusing on
factors influencing employee turnover and retention within organizations.
The first section of the review discusses independent variables such as communication issues
salary dissatisfaction, career growth opportunities, leadership, organizational culture,
leadership, and recognition, managerial support. The second section focuses on employee
retention as the dependent variable, while the third section examines studies that explore the
relationship between employee turnover factors and retention practices. Employee retention
has become a strategic concern for organizations because retaining experienced employees
contributes to organizational stability, productivity, and competitive advantage. Conversely,
high employee turnover results in increased recruitment costs, training expenses, and
disruptions in organizational operations (Dessler, 2020). As a result, many organizations have
adopted exit interviews and exit surveys to better understand the reasons behind employee
turnover and to develop effective retention strategies to retain the employes in the
organization. However, the success of these practices largely depends on how effectively
organizations analyze and utilize the feedback obtained from departing employees. Therefore,
this review highlights existing knowledge and identifies gaps that justify the need for the
present study on the impact of exit feedback on employee retaining practices in a
manufacturing company.

2.2 Exit feedback factors

Salary dissatisfaction and employee turnover
One of the most often cited causes of staff turnover is compensation. Herzberg's 1959
Motivation-Hygiene Theory notes that pay is a hygiene element meant to prevent discontent
but not always inspire staff members. Employees regularly compare their salary to peer firms
and industry standards. Employees are more likely to look for other employment options
when they think their pay is either unfair or inadequate.
Dessler (2020) contends that compensation management is essential for employee retention
since employees view pay as a mirror of corporate value and acknowledgment. In
manufacturing sectors, where pay rivalry is widespread, poor benefits usually fuel high
turnover rates. According to recent research by Mishra et al. (2025), competitive wage
arrangements greatly increase employee engagement and retention by lowering discontent
and building corporate loyalty.
Though salary is a major predictor of employee turnover, studies show that compensation
alone cannot ensure retention. Even if they are paid well, employees might still decide to quit
if other aspects of the job are not good enough. This suggests that businesses must embrace
retention holistically instead of concentrating only on pay.

Career growth opportunities and employee turnover

More and more, career growth prospects are seen as key elements influencing staff retention.
Employees look for companies that provide chances for advancement, promotions, and skill
development as well as long-term employment. Herzberg (1959) claims that advancement
and chances for personal development inspire engagement and boost staff happiness.
According to Twenge (2010), younger generations stress professional development and
career advancement more than older ones. Employees who see little chances for advancement
sometimes grow dissatisfied and look for companies with better career prospects. Many
times, career stagnation is mentioned in manufacturing companies as a major cause of
employee turnover, especially among younger workers.
Training and development initiatives greatly help to retain employees by improving skills,
raising job happiness, and developing organizational loyalty. Companies that support staff
development foster a sense of belonging and worth, therefore lowering turnover risk. Dessler
(2020)

Organizational culture and work environment

Organizational culture encompasses all the shared values, attitudes, beliefs, norms,
behaviours, and expectations that define employee behaviour and influence how work is
carried out within a company. It is crucial for employee retention, loyalty, engagement, and
happiness since it is the psychological and social environment in which they operate. A
healthy corporate culture encourages teamwork, mutual respect, open communication, trust,
and employee involvement in decision-making. On the other hand, a bad organizational
culture characterized by a lack of appreciation, favouritism, little employee involvement, and
inadequate communication generally results in low morale, discontent, and increased
turnover intention. Through the Hawthorne Studies, Mayo (1933) highlighted the
significance of social interactions and workplace settings on employee happiness and output.
His research emphasized that employees are motivated by social connections, praise, and a
feeling of belonging within the organization, in addition to financial incentives. The study
emphasized the importance of teamwork, clear communication, and supportive supervision in
enhancing organizational performance and fostering good employee attitudes. Human
Resource Management practices today are still influenced by Mayo's research, which laid the
foundation for the Human Relations Approach.
In a similar vein, Amabile (1998) emphasized that autonomy, recognition, support, and
possibilities for creativity are the hallmarks of work environments where employee drive and
involvement are higher. Staff members are more inclined to work effectively and remain
faithful to their organizations when they feel valued and empowered. However, strict
workplace regulations that restrict creativity and staff involvement might increase
dissatisfaction, stress levels, and decrease motivation. When organizational culture is seen as
being unsupportive by employees, they occasionally recount negative experiences during exit
interviews and are more inclined to look for employment elsewhere.
Dessler's (2020) study additionally reveals that organizational culture has a significant
impact on employee retention since it influences how people perceive organizational support,
equity, and a sense of belonging. A strong and healthy culture promotes trust between
management and employees, encourages people to commit to corporate goals, and fosters
teamwork. Employees who see their work culture positively are typically happier in their
positions and less inclined to leave the organization. Conversely, organizations characterized
by low employee recognition, bad leadership, and insufficient communication contribute to
increased turnover rates.
According to Twenge's (2010) research, younger workers in particular place a high value on
a company's culture when evaluating employment prospects. Workplace excellence is now
determined by factors including flexibility, respect, work-life balance, inclusiveness, and
possibilities for personal development. More and more, staff members are searching for
businesses that share their principles and give them rewarding and encouraging job
opportunities. Thus, organizational culture plays a crucial role in recruiting, retaining, and
engaging personnel.
Additionally, research by Hom et al. (2017) indicates that the relationship between
organizational culture and turnover is moderated by both job satisfaction and organizational
commitment. Workers are more likely to demonstrate greater dedication and develop an
emotional bond to their firm if they have positive leaders, effective communication, and
supportive workplace interactions. Even when given external job opportunities, these
employees are less prone to depart the organization. On the other hand, unpleasant work
situations defined by conflict, prejudice, and poor management occasionally diminish
turnaround targets and staff happiness. According to recent studies on staff retention,
company culture affects retention decisions as much as pay and benefits. Today's employees
place the highest importance on respect, inclusion, teamwork, psychological safety, and
opportunities for professional and personal development in their workplace. Businesses that
actively foster a positive culture are more likely to retain gifted employees, increase job
satisfaction, and improve the company's overall productivity. As a result, in order to identify
workplace concerns and develop effective retention strategies, it is essential to understand
how employees perceive company culture using departure remarks.

Managerial support and leadership effectiveness

Employee retention depends much on effective leadership. Many times, staff members depart
companies rather than their bosses. Good leaders encourage employee growth, give helpful
criticism, and help to make the office supportive.
Major predictors of employee turnover Hom et al. (2017) found were bad supervisor
relationships and insufficient management assistance. Employees who view their managers as
unsupportive are more likely to be unhappy and have turnover intentions. Steers (1977)
discovered that organizational commitment and staff retention are much influenced by
leadership quality.
Employee job satisfaction and well-being also depend on managerial help. Encouraging
communication, acknowledge successes, and handle staff issues help leaders to build trust
and dedication. Exit feedback usually draws attention to issues with inadequate leadership,
poor communication, and lack of support from management, therefore stressing the need of
leadership in retention campaigns.

2.3 Employee retention

Employee retention is the capacity of a company to keep seasoned, talented, and skilled staff
for a long time. High retention rates help to keep the workforce stable, increase production,
lower hiring and training expenses, and preserve organizational knowledge, therefore making
this among the most crucial indicators of organizational success. Companies that effectively
keep their workers gain from improved organizational performance, greater employee
engagement, and closer relationships. Conversely, a high employee turnover rate could throw
off production, raise operating costs, cause knowledge loss, and lower staff morale.
Consequently, companies in several industries—including the manufacturing sector—are
strategically prioritizing employee retention. Meyer and Allen (1991) claim that a major
determinant of employee retention is organizational commitment. Their Three-Component
Model of Organizational Commitment comprises affective, continuance, and normative
commitment. Affective commitment is the emotional bond an employee has to the company
and their identification with it. Strong emotionally committed staff members stay with the
company since they really want to be and feel related to its ideals and objectives. An
employee's knowledge of the costs of leaving the company—such as loss of benefits,
seniority, or career possibilities—refers to continuance commitment. Normative commitment
is the degree to which an employee feels responsible and duty-bound to stay with the
company. The authors propose that workers with more of these kinds of commitment are less
likely to quit their jobs and more inclined to help their company succeed. Steers (1977)
further underlined how organizational commitment affects staff retention. Employees that
have good work surroundings, supportive leadership, meaningful job assignments, and
chances for personal growth are more likely to become more dedicated toward their
companies, according to his analysis. Such devotion helps staff members to stay with the
company for longer stretches and helps to lower turnover intentions. Steers said that
employer-employee psychological link—that enhances employee loyalty and lowers the
likelihood of resignation—arises from organizational commitment.
Furthermore, job satisfaction is said to be a significant predictor of employee
retention .Locke (1976) defined job happiness as a good emotional state resulting from the
evaluation of one's work experiences. According to his theory, employee satisfaction is
greatly influenced by elements including fair pay, encouraging management, recognition,
chances for professional development, and good working circumstances. Employees that feel
their needs and expectations are being addressed are more likely to stay dedicated to the
company. On the other hand, discontent with these issues usually causes people to quit their
jobs and look for other work options. Judge et al. (2001) carried out a thorough meta-
analysis investigating the link between job happiness and job performance. Their results
showed a robust positive link between organizational results and staff happiness. Content
workers typically show more engagement, productivity, commitment, and organizational
citizenship behaviour as well as they are also less prone to show turnover intentions and
absenteeism. Improving employee happiness using good human resource strategies, the study
found, may greatly improve retention results and general company performance. Dessler
(2020) stressed that compensation management, employee engagement activities,
performance appraisal systems, training and development programs, and career planning
possibilities all have a significant impact on staff retention. Companies that support employee
growth and offer chances for advancement create a positive workplace that inspires staff
members to stay with the company. Dessler also stressed that retention a corporate plan
including leadership, communication, employee well-being, and workplace culture not only
an HR responsibility. Mishra et al. (2025)'s recent studies show that current retention
techniques go beyond conventional benefits and pay. Their research showed that workers are
more and more prioritizing work-life balance, flexible work schedules, recognition initiatives,
supportive leadership, and positive organizational culture in addition to career growth
possibilities. These elements finally help to increase retention rates by driving more
organizational commitment and staff engagement. The report indicates that companies have
to use a comprehensive approach to retention that takes care of both their personal and
professional requirements.
From the perspective of social work, employee retention is intimately related with employee
well-being, helpful organizational systems, and strengths-based workplace practices.
Emphasizing the need of setting surroundings that encourage dignity, respect, empowerment,
and participation is a hallmark of social work values. Companies who give employee well-
being top priority by means of inclusive workplace practices, work-life balance programs,
counseling services, and supporting policies are more likely to keep staff members and
improve job satisfaction. These approaches help to create better employer-employee
relationships and better working conditions. Understanding employee retention inside
companies depends greatly on Systems Theory. Systems Theory sees companies as complex
systems in which rules, personnel, managers, and departments constantly interact and affect
one another. Employee retention and behavior choices are influenced by social interactions,
leadership styles, communication networks, corporate culture, and working circumstances.
One area of the system's issues—poor communication or weak leadership—can reduce staff
satisfaction and raise turnover intentions. Improving retention therefore calls companies to
simultaneously handle several organizational elements instead of concentrating on just one.
The research as a whole points to a complex idea called employee retention that is shaped by
organizational commitment, job satisfaction, leadership success, corporate culture, employee
well-being, and human resource management policies. Research routinely show that
employees who work for companies with supportive environments, significant job
possibilities, fair treatment, recognition, and strong leadership are more likely to stay.
Therefore, knowing the elements affecting retention is critical for creating scientifically
proven plans reducing turnover and advancing long-term organizational success.

2.4 Relationship between exit feedback and employee retention

Many studies have looked at the link between employee experiences, desire to leave, and
retention results. Mobley (1977) created a thorough employee turnover model that sees
turnover as a psychological and behavioural process instead of just one occasion. Employees
first find something they don't like about their jobs, like the pay, how they're supervised, their
chances to get ahead, or the circumstances of their work. This discontent causes one to
consider leaving, look at other job possibilities, intend to look for other employment, and
finally resign. Mobley stressed that businesses can detect apparent warning signals of
turnover from staff surveys. His theory implies early action by companies that aggressively
follow employee issues and discontent levels can help to avoid employee departures by way
of intervention. The model is still quite relevant as it underlines the need of knowing
employee attitudes before turnover happens, therefore exit feedback becomes a major source
of data for retention planning. Exit interviews and exit surveys are great human resource
management tools that give companies direct insight into why people decide to leave,
according to Dessler (2020). By means of these comments systems, staff members usually
provide information about pay, management techniques, career development possibilities,
organizational culture, work-life balance problems, and supervisor relationships as well as
about issues with the job. Such data helps companies spot repeating problems that could be
causing employee turnover. Though many companies often gather exit feedback, Dessler
points out that many neglect to methodically examine the data or apply it for strategic
planning. Consequently, the same organizational problems keep showing up and causing
repeated turnover. He underlines that exit feedback is a strategic source of data that can help
to inform policy changes, increase employee happiness, and enhance retention efforts n0t
only as an administrative activity. Companies that properly evaluate exit comments can better
spot problems in the workplace and apply focused treatments to solve staff issues.
Technological developments' impact on human resource management was investigated by
Stone et al. (2015), who discovered that modern companies rely more and more on HR
analytics to help to improve decision-making. The authors pointed out that technology
developments have changed conventional feedback mechanisms by letting companies gather,
store, and evaluate enormous volumes of employee data more quickly. Advanced HR
information systems let companies see trends in departure comments like discontent with
leadership, communication issues, lack of training options, or worries about corporate
culture. These analytical tools help companies to go beyond arbitrary interpretations and use
data-driven retention techniques. Moreover, HR analytics helps businesses to spot weak
employee groups, forecast turnover risks, and create proactive retention strategies. The
research indicates that by offering timely and useful analysis of exit comments, adding
technology into exit feedback analysis will greatly improve the results of employee retention
programs. Studies on employee retention consistently show how crucial employee input and
opinions are in determining organizational policies. Employees who have chances to voice
their worries and experiences provide useful material that will enable companies to enhance
the atmosphere of their offices. Exit feedback especially offers fresh perspectives since
departing staff members are frequently more ready to share honest opinions on organizational
strengths and shortcomings. Studies on common themes from exit feedback have found
unhappiness with pay, few chances for professional advancement, subpar communication,
bad leadership, insufficient recognition, and negative surroundings. Through methodical
investigation of these problems, businesses might come to see more clearly the underlying
causes of turnover and create plans to solve them. This strategy not only aids lower future
turnover but also helps to increase job happiness, organizational commitment, and employee
participation among current workers.
Even if exit feedback is known to be important, the body of knowledge shows some
restrictions. Most research concentrates mostly on finding causes of staff turnover instead of
considering how companies could best use exit input to create and carry out retention plans.
Moreover, many research projects are carried out in service-oriented sectors, therefore
neglecting manufacturing companies somewhat in the literature. Unique workforce issues
that manufacturing companies frequently confront include repetitive work, production
demands, shift schedules, and limited career progression possibilities, which could affect
employee turnover differently than in other industries. Therefore, there is little empirical data
on how exit feedback can be converted into useful retention strategies in manufacturing
environments. Furthermore unexplored from a strategic human resource management
viewpoint is the link between exit comments and staff retention. Although scientists agree
that departure comments offers insightful data, fewer studies look at how companies
automatically convert staff input into organizational learning and ongoing improvement
projects. Research on how exit feedback data might be included into retention policies,
leadership development programs, employee engagement projects, and organizational culture
enhancement initiatives is needed. Closing this divide will enable companies to go beyond
just knowing why staff members leave to create proactive plans meant to keep them. The
research shows, all things considered, a strong correlation between employee experiences,
exit comments, and retention results. Research by Mobley (1977), Dessler (2020), and Stone
et al. (2015) taken together imply that employee comments offer important understanding of
working conditions that affect turnover choices. However, little research has precisely looked
at how businesses, especially in the manufacturing sector, could successfully use exit input to
raise employee retention policies. Therefore, the current study wants to close this gap by
looking at exit input gathered from manufacturing company staff members and investigating
how the results might be applied to improve retention policies and lower staff turnover.

2.5 Research gap

Looking back at past research, there is plenty known about why people stay or quit jobs.
Work done by Mobley, later by Herzberg, Meyer and Allen, Steers, more recently Hom
[Link] shows what pushes workers toward staying or walking away. The findings indicate that
pay matters and also growth opportunities. The behaviour of the leaders , team atmosphere,
help from bosses, clarity in communication , being noticed, and feeling involved are also
indicators for employee retention. Instead of just listing causes, these studies point to
patterns: when workers feel valued, they stick around. Judge’s analysis early in the 2000s,
along with Dessler’s updates by 2020, underlines how happy someone feels at work ties
directly into whether HR systems actually keep talent. Because of all this, we now see clearer
links between workplace conditions and who stays, who goes Researchers examined
departure triggers often, yet few looked closely at turning farewell comments into smart HR
moves. Departing staff commonly face exit talks or questionnaires but what follows after
gathering their thoughts? Not much clarity exists. Data pours in through those channels
though translating it into real workplace upgrades rarely happens. So the space between
collecting words and using them well stays wide open when holding onto talent matters.
A key missing piece involves digging deep into exit interviews through careful study. Most
past work talks about what drives people away - low pay, weak management, feeling ignored,
blocked promotions, or miscommunication. Yet some researchers skip how to turn those
farewells into real plans backed by proof. Not much has been done on using departure details
to spot repeated problems, rank company flaws, then build focused fixes matching staff
worries. Even though tools for analysing human resources data have been sharper lately, hard
facts showing whether these methods actually keep more employees are still scarce. One gap
in current studies lies in how little attention goes to particular fields, especially manufacturing
firms. While much has been written about staff leaving jobs, most findings come from service
companies, tech environments, hospitals, or global enterprises. Manufacturing settings get
less spotlight - places where people deal with routine duties, strict output goals, rotating
shifts, tough physical labour, and narrow paths for growth. How these aspects affect who
stays or leaves might play out unlike what happens elsewhere. Work done inside India's
factory landscape, since workplace habits, social norms, job markets, and worker hopes can
stand apart from patterns seen across Western regions.
Integrating various aspects of employee experience into one clear picture using what people
say when they leave. Most research looks at things like workplace vibe, boss quality, support
from managers, happiness at work, growth chances, or involvement - but usually just one at a
time. Instead of separating them, looking at how they link up matters more. Rarely do
researchers blend these pieces to see how they jointly shape who stays and who goes,
especially through departure insights. Seeing the connections helps reveal why someone
really decides to walk away. That deeper view lets companies grasp the full story behind
exits, leading to smarter ways to keep talent. Still, when it comes to helping workers feel
supported, what happens after someone leaves a job hasn’t been studied much. Yet behind
every resignation sits clues about empowerment, care from leaders, and daily working life.
Because staying healthy at work matters more now than before, gaps remain in understanding
how real stories from departing staff link up with changes an organization could make.
Looking closely at why people go might just shape better ways to keep others - ways that
value both results and human needs.
This research looks at why people left jobs in a factory setting, using their final comments as
source material. Because insights come directly from those who exited, patterns begin to
show about what pushed them away. When trust in leaders was low, or growth paths unclear,
workers often walked out. Where communication failed, frustration built up slowly, then led
to departure. Feedback points to management styles that sometimes ignored team needs.
Since real experiences shape these outcomes, ignoring them costs companies talent. Patterns
repeat when support feels missing during tough stretches. From chaos some clarity emerges -
small changes in daily interactions might keep more staff onboard. What gets said on the way
out often hints at long-standing issues overlooked while inside. Through this lens, quitting
isn’t random; it follows predictable threads. Lessons pulled from departures can reshape
hiring follow-through and team dynamics afterward. As results align with workplace
behaviour studies, they also challenge outdated assumptions about loyalty in factories. Seeing
exits as data shifts how managers plan stays. Retention grows not from grand promises but
consistent actions noticed over time. By treating leavers’ words seriously, firms gain sharper
awareness of internal climate.

2.6 Conclusion
The review of literature demonstrates that employee turnover is influenced by a combination
of organizational, managerial and individual factors. Salary dissatisfaction, lack of career
growth Opportunities, poor organizational culture, ineffective leadership and inadequate
managerial support consistently emerge as major predictors of employee turnover. At the
same time employee retention is strengthened through organizational commitment, job
satisfication, supportive leadership and effective HR practice.
While the previous studies have contributed significantly to understanding turnover and
retention, limited attention has been given to the practical application of exit feedback for
retention improvement. This gap provides the foundation for the present study, which aims to
examine the impact of exit feedback on employee retention practices within a manufacturing
company and contribute to both academic knowledge and organizational practice.