LEADERSHIP DEVELOPMENT PRACTICES AND EMPLOYEE RETENTION: THE MEDIATING EFFECT OF PSYCHOLOGICAL EMPOWERMENT

Abstract

In knowledge intensive organizations the employee’s retention major reason is that any loss of individual with skills and expertise Couse major loss of confidence, skill knowledge and competitive expertise to the organization. This study will explore the impact of Developmental Practices of Leadership on Employee Retention (ER) and will test the mediating effect of Psychological Empowerment (PE) in Knowledge-intensive Industries of Pakistan. Leadership development (LD) was implemented in the following ways: succession planning (SP), coaching and mentorship, effectiveness of leadership training and 360-degree feedback. The research type used in this study is quantitative, which is cross-sectional research. The analysis technique used in this study is the analysis of Partial Least Squares Structural Equation Modeling (PLS-SEM) using the software of SmartPLS. The results show that all four leadership development practices (leadership training effectiveness, 360-Degree feedback, succession planning and coaching and mentorship) have significant and positive relationships with employees' psychological empowerment (PE).ER is also significantly and positively related to PE (β = .481, p < .001). In addition, the relationships between SP and ER and between coaching and mentorship and ER are both significant intermediated by PE, with β = .103 and p = .002 and β = .138 and p < .001, respectively. Results indicate that PE is a significant mechanism that explains how LD practices influence employees' turnover. The study offers practical tips for organizations interested in enhancing retention efforts by fostering LD in the context of employees' sense of meaning, competence, autonomy, and impact