A STUDY ON THE RELATIONSHIP BETWEEN PERFORMANCE MANAGEMENT AND EMPLOYEE RETENTION IN BANKS OF THIRUVARUR DISTRICT

Abstract

Performance management is a crucial element in organizational success, particularly in the banking sector, where employee productivity and retention significantly impact service quality and customer satisfaction. This study examines the relationship between performance management and employee retention in select public and private sector banks in Thiruvarur District, Tamil Nadu. The research aims to identify the effectiveness of performance appraisal systems, training and development programs, incentives, and work culture in retaining employees. A mixed- methods approach is employed, combining quantitative surveys with qualitative interviews to gather insights from bank employees and managerial personnel. The study investigates key performance management components, such as goal-setting, feedback mechanisms, reward systems, and career advancement opportunities, to understand their influence on employee motivation and job satisfaction. Additionally, the research explores the impact of factors such as work-life balance, job security, and recognition on retention rates in the banking sector. Preliminary findings suggest that a well-structured performance management system enhances employee engagement, fosters career growth, and significantly reduces turnover rates. Public sector banks, with their structured promotion policies and job security, exhibit different retention patterns compared to private banks, which focus more on performance-based incentives and career progression. The study also highlights potential challenges, such as inadequate feedback mechanisms, lack of career development opportunities, and employee dissatisfaction with appraisal processes, which may contribute to higher attrition rates. The research provides valuable insights for banking institutions to refine their performance management strategies, ensuring higher employee satisfaction and improved retention rates. It emphasizes the need for a balanced approach, integrating both financial and non-financial rewards, regular performance feedback, and career development initiatives. The findings of this study can help policymakers and banking executives design effective employee retention strategies, ultimately contributing to organizational growth and stability in the competitive banking environment.