Emloyees Turnover

Employees Turn Over In PVT. Sector

Introduction:Background of Study:

There is a serious problem of employees’ turnover in private sector

(banks, financial institutions, manufacturing organizations, service industries etc.).

Because of this problem a lot of problems were taking place. E.g. less job

commitment, more cost on recruitment of employees, loss of time, more usage of

the resources of the organization that may be used in other profitable work areas of

business. Many organizations have conducted the research on the topic of

“employees` turnover in private sector. A brief review can be found under the

heading of LITERATURE REVIEW.

Research objectives :

The basic purpose of the study is to reduce the rate of

employees’ turnover and providing the solution of the problem and

recommendations to implement these solutions for all the type of private

organizations for all level of organizations and also for all functional areas of the

organization. By reducing the turnover rate, we can make the employees more loyal

and efficient. We can save our cost and time required for recruitment of the

employees again and again.

We will conduct our research work by keeping in mind the following objectives: to

Identify the basic causes of employees’ turnover

To establish suitable effectiveness criteria for reducing employees’ turnover

To describe the extent to which the effectiveness criteria for controlling

employees’ turnover have been met.

To determine the factors associated with the problem.

To estimate whether some of those factors are more influential than other

factors.

To develop an explanatory theory that associates certain factors.

reduce employees turnover

increase job commitment

Punjab University Gujranwala Campus

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increase job satisfaction

increase the loyalty of employees toward their organization

reduce the cost on recruitment of employees

compete in the market

Save the organization from losses which may be the result of high turnover.

Our planning will be to achieve the above objectives by visiting and investigating the

market (private institutions, manufacturing concerns, service industries etc.).

Significance:

By control over this problem of high turnover in

private sector, organizations can achieve a lot of major benefits or we can say that

there will be more than one benefit the firms can achieve by the findings of our

research work. These benefits are as follow:

Increased productivity

More efficiency

More effectiveness

Strong culture because all the employees are aware of it due to low rate of

turnover

Less utilization of resources and more production due to increased

experience of employees.

High rate of expertise

High quality products and services also due to experience in the field

High profitability due to low costs

Increased Employees loyalty toward organization

High job commitment

More job satisfaction of the employees.


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Literature Review:

We used different types of sources e.g. internet, newspapers and

different economical journals and find the following data about our project.

African Journal of Business Management pp. 049-054, June 2007Available online http://www.academicjournals.org/ajbmISSN 1993-8233 © 2007 Academic Journals

Review

A review of the literature on employee turnover:Henry Ongori

Department of Management, University of Botswana, Botswana. E-mail:

[email protected].

Accepted 22, May 2007

“Employees turnover” as a term is widely used in business

circles. Although several studies have been conducted on this

topic, most of the researchers focus on the causes of employee

turnover but little has been done on the examining the sources of

employee turnover, effects and advising various strategies which

can be used by managers in various organizations to ensure that

there is employee continuity in their organizations to enhance

organizational competitiveness. This paper examines the sources

of employee turnover, effects and forwards some strategies on

how to minimize employee turnover in organizations.

Key words: Employee, turnover, sources, effects, strategies.


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INTRODUCTION:

Organizations invest a lot on their employees in terms of induction and

training, developing, maintaining and retaining them in their organization.

Therefore, managers at all costs must minimize employee’s turnover.

Although, there is no standard framework for understanding the

employees turnover process as whole, a wide range of factors have been

found useful in interpreting employee turnover Kevin et al. (2004).

Therefore, there is need to develop a fuller understanding of the

employee turnover, more especially, the sources- what determines

employee turnover, effects and strategies that managers can put in place

minimize turnover. With globalization which is heightening competition,

organizations must continue to develop tangible products and provide

services which are based on strategies created by employees. These

employees are extremely crucial to the organization since their value to

the organization is essentially intangible and not easily replicated Meghan

et al. (2002). Therefore, managers must recognize that employees as

major contributors to the efficient achievement of the organization’s

success Abbasi et al. (2000). Managers should control employee turnover

for the benefit of the organization success. The literature on employee

turnover is divided into three groupings: sources of employee turnover,

effects of turnover and the strategies to minimize turnover.

Definition:

Employees’ turnover is a much studied phenomenon Shaw et al.

(1998).But there is no standard reason why people leave organization.

Employee turnover is the rotation of workers around the labour market;

between firms, jobs and occupations; and between the states of

employment and unemployment Abassi et al. (2000). The term “turnover”

is defined by Price (1977) as: the ratio of the number of organizational

members who have left during the period being considered divided by the

average number of people in that organization during the period.


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Frequently, managers refer to turnover as the entire process associated

with filling a vacancy: Each time a position is vacated, either voluntarily or

involuntarily, a new employee must be hired and trained. This

replacement cycle is known as turnover Woods, (1995). This term is also

often utilized in efforts to measure relationships of employees in an

organization as they leave, regardless of reason. “Unfolding model” of

voluntary turnover represents a divergence from traditional thinking (Hom

and Griffeth, 1995) by focusing more on the decisional aspect of

employee turnover, in other words, showing instances of voluntary

turnover as decisions to quit. Indeed, the model is based on a theory of

decision making, image theory Beach, (1990). The image theory describes

the process of how individuals process information during decision

making. The underlying premise of the model is that people leave

organizations after they have analyzed the reasons for quitting. Beach

(1990) argues that individuals seldom have the cognitive resources to

systematically evaluate all incoming information, so individuals instead of

simply and quickly compare incoming information to 050 Afr. J. Bus.

Manage. more heuristic-type decision making alternatives.

Sources of employee turnover Job related factors:

Most researchers (Bluedorn, 1982; Kalliath and Beck, 2001; Kramer et al.,

1995; Peters et al., 1981; Saks, 1996) have attempted to answer the

question of what determines people's intention to quit by investigating

possible antecedents of employees’ intentions to quit. To date, there has

been little consistency in findings, which is partly due to the diversity of

employed included by the researchers and the lack of consistency in their

findings. Therefore, there are several reasons why people quit from one

organization to another or why people leave organization. The experience

of job related stress (job stress), the range factors that lead to job related

stress (stressors), lack of commitment in the organization; and job

dissatisfaction make employees to quit Firth et al. (2004). This clearly


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indicates that these are individual decisions which make one to quit. They

are other factors like personal agency refers to concepts such as a sense

of powerlessness, locus of control and personal control. Locus control

refers to the extent to which people believe that the external factors such

as chance and powerful others are in control of the events which influence

their lives Firth et al. (2004). Manu et al. (2004) argue that employees

quit from organization due economic reasons.

Using economic model they showed that people quit from organization

due to economic reasons and these can be used to predict the labor

turnover in the market. Good local labor market conditions improve

organizational stability Schervish (1983). Large organizations can provide

employees with better chances for advancement and higher wages and

hence ensure organizational attachment (Idson and Feaster 1990). Trevor

(2001) argues that local unemployment rates interact with job satisfaction

to predict turnover in the market. Role stressors also lead to employees’

turnover. Role ambiguity refers to the difference between what people

expect of us on the job and what we feel we should do.

This causes uncertainty about what our role should be. It can be a result

of misunderstanding what is expected, how to meet the expectations, or

the employee thinking the job should be different Kahn et al. Muchinsky,

1990. Insufficient information on how to perform the job adequately,

unclear expectations of peers and supervisors, ambiguity of performance

evaluation methods, extensive job pressures, and lack of consensus on

job functions or duties may cause employees to feel less involved and less

satisfied with their jobs and careers, less committed to their

organizations, and eventually display a propensity to leave the

organization (Tor et al., 1997). If roles of employees are not clearly

spelled out by management/ supervisors, this would accelerate the

degree of employees quitting their jobs due to lack of role clarity.


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Voluntarily vs. involuntary turnover:

There are some factors that are, in part, beyond the control of

management, such as the death or incapacity of a member of staff. Other

factors have been classed as involuntary turnover in the past such as the

need to provide care for children or aged relatives. Today such factors

should not be seen as involuntary turnover as both government regulation

and company policies create the chance for such staff to come back to

work, or to continue to work on a more flexible basis Simon et al.

(2007).

Organizational factors:

Organizational instability has been shown to have a high degree of high

turnover. Indications are that employees are more likely to stay when

there is a predictable work environment and vice versa (Zuber, 2001). In

organizations where there was a high level of inefficiency there was also a

high level of staff turnover (Alexander et al., 1994). Therefore, in

situations where organizations are not stable employees tend to quit and

look for stable organizations because with stable organizations they would

be able to predict their career advancement. The imposition of a

quantitative approach to managing the employees led to disenchantment

of staff and hence it leads to labour turnover. Therefore management

should not use quantitative approach in managing its employees.

Adopting a cost oriented approach to employment costs increases labour

turnover Simon et al. (2007). All these approaches should be avoided if


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managers want to minimize employee turnover an increase organizational

competitiveness in this environment of globalization.

Employees have a strong need to be informed. Organization with strong

communication systems enjoyed lower turnover of staff (Labov, 1997).

Employees feel comfortable to stay longer, in positions where they are

involved in some level of the decision-making process. That is employees

should fully understand about issues that affect their working atmosphere

(Manger et al. (1996). But in the absence openness’ in sharing

information, employee empowerment the chances of continuity of

employees are minimal. Costly et al. (1987) points out that a high labour

turnover may mean poor personnel policies, poor recruitment policies,

poor supervisory practices, poor grievance procedures, or lack of

motivation. All these factors contribute to high employee turnover in the

sense that there is no proper management practices and policies on

personnel matters hence employees are not recruited scientifically,

promotions of employees are not based on spelled out policies, no

grievance procedures in place and thus employees decides to quit.

Griffeth et al. (2000) noted that pay and pay-related variables have a

modest effect on turnover. Their analysis also included studies that

examined the relationship between pay, a person’s performance and

turnover. They concluded that when high performers are insufficiently

rewarded, they quit. If jobs provide adequate financial incentives the

more likely employees remain with organization and vice versa. There are

also other factors which make employees to quit from organisations and

these are poor hiring practices, managerial style, lack of recognition, lack

of competitive compensation system in the organisation and toxic

workplace environment Abassi etal. (2000).


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Effects of employee turnover:

Employee turnover is expensive from the view of the organization.

Voluntary quits which represents an exodus of human capital investment

from organizations Fair (1992) and the subsequent replacement process

entails manifold costs to the organizations. These replacement costs

include for example, search of the external labor market for a possible

substitute, selection between competing substitutes, induction of the

chosen substitute, and formal and informal training of the substitute until

he or she attains performance levels equivalent to the individual who quit

John (2000). Addition to these replacement costs, output would be

affected to some extend or output

would be maintained at the cost of overtime payment. The reason so

much attention has been paid to the issue of turnover is because turnover

has some significant effects on organizations (DeMicco and Giridharan,

1987; Dyke and Strike, 1990; Cantrell and Saranakhsh, 1991; Denvir and

Mcmahon, 1992).Many researchers argue that high turnover rates might

have negative effects on the profitability of organizations if not managed

properly (Hogan, 1992; Warmouth and Davis, 1993; Barrows, 1990).

Hogan 1992, nearly twenty years ago the direct and indirect cost of a

single line employee quitting was between $ 1400 and $4000. Turnover

has many hidden or invisible costs Philips (1990) and these invisible costs

are result of incoming employees, co-workers closely associated with

incoming employees, co-workers closely associated with departing

employees and position being filled while vacant. And all these affect the

profitability of the organization. On the other hand turnover affects on

customer service and satisfaction Kemal et al. (2002).


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Catherine (2002) argue that turnover include other costs, such as lost

productivity, lost sales, and management’s time, estimate the turnover

costs of an hourly employee to be $3,000 to $10,000 each. This clearly

demonstrates that turnover affects the profitability of the organization

and if it’s not managed properly it would have the negative effect on the

profit. Research estimates indicate that hiring and training a replacement

worker for a lost employee costs approximately 50 percent of the

worker’s annual salary (Johnson et al., 2000) – but the costs do not stop

there. Each time an employee leaves the firm, we presume that

productivity drops due to the learning curve involved in understanding the

job and the organization. Furthermore, the Ongori 051 loss of intellectual

capital adds to this cost, since not only do organizations lose the human

capital and relational capital of the departing employee, but also

competitors are potentially gaining these assets Meaghan et al. (2002).

Therefore, if employee turnover is not managed properly it would affect

the organization adversely in terms of personnel costs and in the long run

it would affect its liquidity position. However, voluntary turnover incurs

significant cost, both in terms of direct costs (replacement, recruitment

and selection, temporary staff, management time), and also (and perhaps

more significantly) in terms of indirect costs (morale, pressure on

remaining staff, costs of learning, product/service quality, organizational

memory) and the loss of social capital Dess et al. (2001).


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Strategies to minimize employee turnover:

Strategies on how to minimize employee turnover, confronted with

problems of employee turnover, management has several policy options

viz. changing (or improving existing) policies towards recruitment,

selection, induction, training, job design and wage payment. Policy choice,

however, must be appropriate to the precise diagnosis of the problem.

Employee turnover attributable to poor selection procedures, for example,

is unlikely to improve were the policy modification to focus exclusively on

the induction process. Equally, employee turnover

Attributable to wage rates which produce earnings that are not

competitive with other firms in the local labor market is unlikely to

decrease were the policy adjustment merely to enhance the

organization’s provision of on-the job training opportunities. Given that

there is increase in direct and indirect costs of labor turnover, therefore,

management are frequently exhorted to identify the reasons why people

leave organization’s so that appropriate action is taken by the

management. Extensive research has shown that the following categories

of human capital management factors provides a core set of measures

that senior management can use to increase the effectiveness of their

investment in people and improve overall corporate performance of

business: Employee engagement, the organization’s capacity to

engage, retain, and optimize the value of its employees hinges on how

well jobs are designed, how employees' time is used, and the

commitment and support that is shown to employees by the management

would motivate employees to stay in organization’s.. Knowledge

accessibility, the extent of the organization’s “collaborative ness” and its

capacity for making knowledge and ideas widely available to employees,

would make employees to stay in the organization. Sharing of information

should be made at all levels of management. This accessibility of

information would lead to strong performance from the employees and


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creating strong corporate culture Meaghan et al. (2002). Therefore;

information accessibility would make employees feel 052

Afr. J. Bus. Manage. That they are appreciated for their effort and chances

of leaving the organization are minimal. Workforce optimization, the

organization’s success in optimizing the performance of the employees by

establishing essential processes for getting work done, providing good

working conditions, establishing accountability and making good hiring

choices would retain employees in their organization. The importance of

gaining better understanding of the factors related to recruitment,

motivation and retention of employees is further underscored by rising

personnel costs and high rates of employee turnover (Badawy, 1988;

Basta and Johnson, 1989; Garden, 1989; Parden, 1981; Sherman, 1986).

With increased competitiveness on globalizations, managers in many

organizations are experiencing greater pressure from top management to

improve recruitment, selection, training, and retention of good employees

and in the long run would encourage employees to stay in organizations.

Job involvement describes an individual’s ego involvement with work and

indicates the extent to which an individual identifies psychologically with

his/her job (Kanungo, 1982). Involvement in terms of internalizing values

about the goodness or the importance of work made employees not to

quit their jobs and these involvements are related to task characteristics.

Workers who have a greater variety of tasks tend stay in the job. Task

characteristics have been found to be potential determinants of turnover

among employees (Couger, 1988; Couger and Kawasaki, 1980; Garden,

1989; Goldstein and Rockart, 1984). These include the five core job

characteristics identified by Hackman and Oldham (1975, 1980): skill

variety, which refers to the opportunity to utilize a variety of valued skills

and talents on the job; task identity, or the extent to which a job requires

completion of a whole and identifiable piece of work - that is, doing a job

from beginning to end, with visible results; task significance, which

reflects the extent to which the job has a substantial impact on the lives


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or work of other people, whether within or outside the organization; job

autonomy, or the extent to which the job provides freedom,

independence, and discretion in scheduling work and determining

procedures that the job provides; and job feedback, which refers to the

extent to which the job provides information about the effectiveness of

one’s performance (Tor et al., 1997). Involvement would influence job

satisfaction and increase organizational commitment of the employees.

Employees who are more involved in their jobs are more satisfied with

their jobs and more committed to their organization (Blau and Boal, 1989;

Brooke and Price, 1989; Brooke et al., 1988; Kanungo, 1982). Job

involvement has also been found to be negatively related to turnover

intentions (Blat and Boal, 1989). Job satisfaction, career satisfaction, and

organizational commitment reflect a positive attitude towards the

organization, thus having a direct influence on employee turnover

intentions. Job satisfaction, job involvement and organizational

commitment are considered to be related but distinguishable attitudes

(Brooke and Price, 1989). Satisfaction represents an affective response to

specific aspects of the job or career and denotes the pleasurable or

positive emotional state resulting from an appraisal of one’s job or career

(Locke, 1976; Porter et al., 1974; Williams and Hazer, 1986).

Organizational commitment is an affective response to the whole

organization and the degree of attachment or loyalty employees feel

towards the organization. Job involvement represents the extent to which

employees are absorbed in or preoccupied with their jobs and the extent

to which an individual identifies with his/her job (Brooke et al., 1988).The

degree of commitment and loyalty can be achieved if management they

enrich the jobs, empower and compensate employees properly.

Empowerment of employees could help to enhance the continuity of

employees in organizations. Empowered employees where managers

supervise more people than in a traditional hierarchy and delegate more

decisions to their subordinates (Malone, 1997). Managers act like coaches


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and help employees solve problems. Employees, he concludes, have

increased responsibility. Superiors empowering subordinates by

delegating responsibilities to them leads to subordinates who are more

satisfied with their leaders and consider them to be fair and in turn to

perform up to the superior’s expectations (Keller and Dansereau, 1995).

All these makes employees to be committed to the organization and

chances of quitting are minimal.

Conclusions:

Therefore, if the above strategies are taken into account the business would be

able to survive in a dynamic environment by treating their employees as one of

their assets which needs a lot of attention. Employees are the backbone of any

business success and therefore, they need to be motivated and maintained in

organization at all cost to aid the organization to be globally competitive in

terms of providing quality products and services to the society. And in the long-

run the returns on investments on the employees would be achieved.

Management should

Encourage job redesign-task autonomy, task significance and task identity, open

book management, empowerment of employees, recruitment and selection must

be done scientifically with the objective of retaining employees. Managers

should examine the sources of employee turnover and recommend the best

approach to fill the gap of the source, so that they can be in a position to retain

employees in their organization to enhance their competitiveness in the this

world of globalization. Managers must understand that employees in their

organizations must be treated as the most liquid assets of the organization

which would make the organization to withstand the waves of globalization. This

asset needs to be monitored with due care, otherwise their organizations would

cease to exist. Employees should be given challenging work and all managers

should be hired on the basis of know how by following laid down procedures of

the organization and this would make organization to have competent managers

at all levels of management and hence good supervision. Griffeth et al. (2000)

noted pay and pay-related variables have a great effect on employee turnover.

Management must compensate employees adequately. They should pay

employees based on their performance and in addition they should given


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employees incentives like individual bonus, lump sum bonus, sharing of profits

and other benefits. Hence, if these are put in place they would minimize

employee turnover.

Problem Statement:

After the preliminary data collection, we can now develop a statement to explain the basic

problem.

Problem definition is defined as:

“A statement that explains what the real problem is, what types of factors are involved

in this problem and finally what are consequences of a problem.”

After going through interviews and literature review we check the following essential

elements of Problem Definition:

1) Antecedents(Contributing Factors)

2) Real Problem(What is Wrong)

3) Consequences(Results)

The problem under investigation is

Background:

There is a serious problem of employees’ turnover in private sector

(banks, financial institutions, manufacturing organizations, service industries etc.).

Because of this problem a lot of problems were taking place. E.g. less job

commitment, more cost on recruitment of employees, loss of time, more usage of

the resources of the organization that may be used in other profitable work areas of

business.

Problem:

Why the employees turnover is more in private sector. It means that in

public sector, employees’ turnover is less than the private sector. It creates a lot of

other major problem for the organizations


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Diagramatical Presentation:

(Real problem) (Consequences)

(Antecedent)


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Low Employee commitment Low employee loyalty More cost incurred on

employee recruiting Loss of time More usage of resources

“Employee turnover in private

sector”

Duties of JobTraining and development programOpportunities for promotionSalary TreatmentWorking ConditionsWorking HoursStrict ControlNon competitive wagesSick pay system Unhealthy competitionreward system relationship with new bossmanagement doesn’t display people’s skill


ANTECEDENTS:

Antecedents are the contributing factors which are responsible for the real problem.

In our projects Antecedents are as:

Duties of Job

Training and development program

Opportunities for promotion

Salary Treatment

Working Conditions

Working Hours

Strict Control

Better job opportunity

Non competitive wages

Sick pay system

Unhealthy competition

Reward system

Relationship with new boss

Management doesn’t display people’s skill

Low resiliency


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REAL PROBLEM:

Real problem is that situation which results from the antecedents or contributing factors. So

in our project real situation which is created from the contributing factors is:

“Why the employees turnover is more in private sector. It means that in public

sector, employees’ turnover is less than the private sector. It creates a lot of other

major problem for the organizations”.

CONSEQUENCES:

“Consequences are the results or effects of real problem”.

In our project consequence are as follow:

Low Employee commitment Low employee loyalty More cost incurred on employee recruiting Loss of time More usage of resources


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Theoretical Framework:

“It is a logically developed, described and

elaborated network of associations among variables that have been

identified through interviews, observation and literature survey.”

It tells us the issue of why or how we expect certain relationships to

exist and nature and direction of relationship of variables.

Following five basic elements/features should be found in a

Theoretical framework:

1- Variables should be clearly identified.

2- How related are variables with each other.

3- Discuss whether the relationship would be positive or negative in

nature.

4- Clear explanation that why we would expect these relations to exist.

5- A schematic diagram of the framework so that reader can visualize

the relationships.


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Variables:

The identification of key variables, factors or sources is very important in every research

study.

It can be defined as:

“A variable is anything that takes different values according to different people, places

or time.”

Types of Variables :

i. Dependent variable

ii. Independent variable

iii. Moderating variable

iv. Intervening variable

v. Extraneous variable

I. Dependent variable:

“Any variable that will depend on others for its values”

II. Independent variable:

“It is the variable that influences the dependent variable in either positive or negative

way.”

III. Moderating variable:


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It is also called second independent variable. A variable that has strong contingent

affect on the dependent and independent relationship.

IV. Intervening variable:

These are variable which start working when independent variable starts its

functioning they can be observed but not measured

V. Extraneous variable:

These variables are in infinite number of variables which have no or little affect on

the situation. The role of these variables can be ignored very easily.

Variables involved in our problem:

Following variables are involved in our problem.

Dependent variables:

In our problem there is only one dependent variable and that is ”Employees

turnover in private sector”, It depends upon a number of other variables or

factors.

Independent variables:

Following are independent variables in problem under discussion

Duties of Job

Training and development program

Opportunities for promotion

Salary Treatment

Working Conditions

Working Hours

Strict Control

Non competitive wages


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Sick pay system

Unhealthy competition

Reward system

Relationship with new boss

Management doesn’t display people’s skill

Care of children or aged relatives

Non family and friendly work schedule

Instable organizations

Changing work environment

Inefficient private organizations

Employee is not job or culture fit

Moderating variables:

Following are the moderating variables in problem being faced;

1 Role of inflation due to which wages becomes scarce

2 Role of management

3 Role of private sector employee

4 permanent job opportunity

Intervening variables:

Colleague politics

Low resiliency

Extraneous Variable:

Role of public sector employee


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Theoretical Frame Work Diagram

(Dependant Variable) (Intervening Variables) (Independent Variables)

/////////////////////////

Extraneous Variable

Role of public sector employee


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Role of inflationRole of management


Hypothesis development:

“A hypothesis is a logically conjectured relationship between two or more variables

expressed in the form of a testable statement.”

OR

“A statement whose validity will be confirm in future by applying different statistical tools”

So, in hypothesis we confirmed the validity of any statement after the experiments or data

collection.

KINDS OF HYPOTHESIS:

1 DESCRIPTIVE

2 RELATIONAL

This can be further classified as…

a. Co relational hypothesis

b. Casual hypothesis.

Casual hypothesis:

“The hypothesis which show cause and effect relationship is called casual hypothesis”.

Co relational Hypothesis:

“When a statement will create relationship among more than two factors or when causes of a

problem are more than one, the hypothesis about such a problem will be called as co relational

hypothesis.”

OR

“When there is only one problem and there are a lot of factors or variables which

Increase the problem is also called Co relational Hypothesis”.


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Duties of the Job:

Ho: If duties of the job are decreased, employee turnover will not be decreased.

H1: If duties of the job are decreased, employee turnover will be minimized.

Training and Development Program:

Ho: If training and development program are increased, employee turnover will not be

decreased.

H1: If training and development program are increased, employee turnover will be

decreased.

Opportunities for Promotion:

Ho: If opportunities for promotion are increased, employee turnover will not be

decreased.

H1: If opportunities for promotion are increased, employee turnover will be decreased.

Increased Salary

Ho: If salary of the employee is increased, employee turnover will not be decreased.

H1: If salary of the employee is increased, employee turnover will be decreased.

Working Conditions:

Ho: If working conditions are made good, employee turnover will not be decreased.

H1: If working conditions are made good, employee turnover will be decreased.

Working Hours:

Ho: If working hours are made appropriate, employee turnover will not be decreased.

H1: If working hours are made appropriate, employee turnover will be decreased.

Type of Control:


25


Ho: If control on employee is made carrot, employee turnover will not be decreased.

H1: If control on employee is made carrot, employee turnover will be decreased.

Better Job Opportunity:

Ho: If employee gets a better job opportunity, he will not leave the job.

H1: If employee gets a better job opportunity, he will leave the job.

Competitive Wages:

Ho: If wages are made competitive, employee turnover will not be decreased.

H1: If wages are made competitive, employee turnover will be decreased.

Well Pay System:

Ho: If there is well pay system, employee turnover will not be less.

H1: If there is well pay system, employee turnover will be less.

Role on Job:

Ho: If role on job is clear to the employee, employee turnover will not be less.

H1: If role on job is clear to the employee, employee turnover will be less.

Colleague Politics:

Ho: If colleague politics is reduced, employee turnover will not be decreased.

H1: If colleague politics is reduced, employee turnover will be decreased.

Reward System:

Ho: If there is better reward system, employee turnover will not be less.

H1: If there is better reward system, employee turnover will be less.

Relationship with new Boss:

Ho: If the relationship of the employee with new boss is good, employee turnover will

not be less.


26


H1: If the relationship of the employee with new boss is good, employee turnover will be

less.

Management Displays people’s Skill:

Ho: If management displays people skill, there will not be less employee turnover.

H1: If management displays people skill, there will be less employee turnover.

Care of Children and Aged Relatives:

Ho: If company cares the children and aged relatives of the employee, there will not be

less employee turnover.

H1: If company cares the children and aged relatives of the employee, there will be less

employee turnover.

Family and Friendly Schedule:

Ho: If work schedule is made “family and friendly”, employee turnover will not be

decreased.

H1: If work schedule is made “family and friendly”, employee turnover will be

decreased.

Permanent Job Opportunity:

Ho: If job in private sector is made permanent, employee turnover will not be

decreased.

H1: If job in private sector is made permanent, employee turnover will be decreased.

Stable Organization:

Ho: If organization is made stable, there will not be less employee turnover.

H1: If organization is made stable, there will be less employee turnover.


27


Predictable Work Environment:

Ho: If work environment is made predictable or stable, employee turnover will not be

decreased.

H1: If work environment is made predictable or stable, employee turnover will be

decreased.

Inefficient Organization:

Ho: If organization is efficient, employee turnover will not be less.

H1: If organization is efficient, employee turnover will be less.

Recruitment Criteria:

Ho: If employee is selected according to the job or culture fit, employee turnover will

not be decreased.

H1: If employee is selected according to the job or culture fit, employee turnover will be

decreased.

“Our hypothesis is of co relational types because we have multiple

Independent factors on which dependent variable depends.”


28


Research Design:

Research design is a plan or procedure of investigation to obtain answers to research

questions. It is overall scheme and plan of research which includes an outline of what the

investigator do from developing hypothesis to final analysis of data.

Classification of Research:

There are four types of study.

1. Exploratory

2. Descriptive

3. Hypothesis testing

4. Case study


29


1) Exploratory:

Conducted when we don’t know much about the situation or we

Have not much familiar on how similar problems were solved in the past.

2) Descriptive Study:

Focus on accurate description of the variables in the

Problem model. It is done to be able to describe the characteristics of variables in the

situation.

3) Hypothesis Testing:

Explain the nature of certain relationship or establish the

differences among groups or the independence of two or more factors.

4) Case Study:

If the researcher has to explain the current situation in the light of an event

which has already occurred in the past then this purpose is to case study.

“The purpose of our study is descriptive in nature, because the information already

available that the “Employee turnover is greater in the private sector”.


30


Data Collection techniques:

There are two types of data collection methods.

1. Primary data collection

a. Structured interviews

b. Unstructured interviews

2. Secondary data collection

a. Questionnaires

Primary data collection:

Structured Interview:

“Structured Interviews are conducted when it is known at the outset

what information is needed. The interviewer has a list of pre-determined questions to be

asked of the respondents either personally, through the telephone, or by sending the main

through electronic mail.”

Un-Structured Interview:

“In case of unstructured interview, the interviewer asks the

questions without any pre-determined sequence. Those questions are asked first which come

in the mind of the interviewer first.”

“So we conducted Structured Interviews with the employees of different selected

organizations. And our method of collecting Primary Data is through Structured


31


Interviews and Un-structured Interviews which we have already discussed in

preliminary data collection methods”

Focus Groups:

We went to the private organization to consult about the “employee turnover in the

private sector”.

Panels:

Our group went more than one time to consult with them about the problem so, that

becomes a panel.

Unobtrusive measures:

“It means to trace the measures from a primary source that does not involve

people”.

“We also use this technique just to find the reasons of employee’s turnover in

private sector”.

Secondary data collection:

Questionnaire:

“A questionnaire is a pre formulated written set of questions to which

respondents record their answers, usually within rather closely defined alternatives.”

Questionnaires are an efficient data collection mechanism when the researcher knows exactly

what is required and how to measure the variables of interest.

Questionnaire can be.

1 Personally Administered questionnaire

2 Mailed questionnaire

3 Electronic questionnaire


32


“During our research process we made close ended questionnaires, and these are personally

administered. Because we had less time to conduct this research and we need questionnaire

within that limited time to be filled by respondents so we conducted this kind of

questionnaire”

Population:

All the employees of private sector in Gujranwala.

Sampling:

The process of using a small number of items or parts of a large population to

make conclusions about the whole population.

Sampling Design:

Sampling has three parts

1. Sampling Units

2. Sampling Frames

3. Parameters of Investigations

Sampling Units:

Units Peoples (Individuals)

Sample 160

Population Un limited

Population Elements

Availability of financial and technical

resources.

Individuals

Self


33


Sampling Frame:

Our Sampling frame is based upon type of organization.

1 Manufacturing

2 Trading

3 Services

4 Telecommunication

5 Others

Parameters of Investigations:

No. Questionnaires 200

Collected Questionnaires 175

Valid Questionnaires 160

Availability of Time 25 Days

Availability of Recourses Approximately Rs-4000

Sampling:

“the process of using a small number of items or parts of a large

population to make conclusions about the whole population”.

Sample:


34


“A subset or small part of a large population”.

Types of sampling:

Probability Sampling

Non Probability Sampling

1) Probability sampling:

A sampling design which is based upon the concept of random selection.

OR

A sampling technique where every element of population have known and equal

chances of selection

Types of probability Sampling:

Simple random sampling

In Such types of situation we will use S.R.S;

It must be based on generalized result.

When our population is homogeneous

We have less time and less resources

Population frame is clear

Complex Random Sampling

CRS is used in the following situations;

Population is not homogenous (divided into groups and subgroups).

We are concerned with real generalization.

Population frame is limited.

We have enough time and resources

In case of exploratory research.


35


Types of CRS

Systematic sampling

“According to this approach we will select the member of the sample on the basis of a

particular system” e.g. System means selecting every nth element in the population

starting with a randomly chosen element between 1 to N.

Stratified sampling:

This sampling approach is used when our population consists upon the groups having

different characteristics. Stratified sampling is a probability sampling design that first

divides the population into subgroups and then subjects are chosen randomly from

each sub group.

Cluster sampling:

“A probability sampling design in which sample is chosen on the basis of intra- group

heterogeneity and inter-group homogeneity.”

Inter ---- without comparison

Intra ----- with comparison

Area sampling:

It is actually a form of cluster sampling within an area when the research is concerned

to population within identified geographical area such as cities, countries, particular

locality the process of sampling will be called area sampling


36


Double sampling:

A process which includes collecting data from a sample using previously defined

techniques based on the information from a sub sample for further analysis.

This plan is used when further information is needed from subset of the group from

which same information has already been collected from the same study.

2) Non probability Sampling:

A sampling design which is based upon the concept of non random selection.

OR

A sampling technique where every member of population have not equal chances of

selection

We use non probability sampling techniques in following situation;

Less concern with generalization

Mostly concern is to feel the situation

We have limited time and need the quick information

When population frame is not clear

Types of Non Probabilities Sampling

I. Convenient sampling

The procedure which refers to the collection of information from members of the

population who are conveniently available is named as convenient sampling.

II. Purposive sampling


37


If it is necessary to get or obtain information from some specific target group we

will use purposive sampling.

Here sampling is confined to specific type of people who can provide the desired

information.

Two approaches are used by purposive sampling.

a) Judgment approach

According to this approach we search for appropriate respondents and judge whether

they can provide us the required information or not. So according to this approach our

sample consist of only that respondents who can provide us relevant information.

b) Quota sampling

According to this approach we fix the quota of people for every area to get

information from appropriate respondents.

“In our research we used the purposive sampling and we use the following types of

approaches.

Quota sampling

Because we filled our questionnaire under particular quota like following

20% from customers, 20%from distributors, 20%from traders or wholesalers and 40%

from local manufacturing companies.

Tools of Data Collection:

There are two tools of data collection.

a) Qualitative research technique

b) Quantitative research technique


38


We have used quantitative technique in our research as well as qualitative technique.

Data collection, Data Processing and Analysis:


39


What is your age?

Frequency Percent Valid PercentCumulative

PercentValid less than 20 years 25 11.0 11.0 11.0

20-30 years 101 44.5 44.5 55.5

30-40 years 74 32.6 32.6 88.1

40-50 years 20 8.8 8.8 96.9

more than 50 years 7 3.1 3.1 100.0

Total 227 100.0 100.0


40


what is your age?more than 50 years40-50 years30-40 years20-30 yearsless than 20 years

Per

cen

t

50

40

30

20

10

0

what is your age?

in which type of organization you are employeed now?


PercentValid manufacturing 77 33.9 33.9 33.9

trading 45 19.8 19.8 53.7

services 94 41.4 41.4 95.2

other 11 4.8 4.8 100.0

Total 227 100.0 100.0


41


in which type of organization you are employeed now?otherservicestradingmanufacturing

Per

cen

t

50

40

30

20

10

0

in which type of organization you are employeed now?

Gender?


PercentValid male 183 80.6 80.6 80.6

female 44 19.4 19.4 100.0

Total 227 100.0 100.0


42


femalemale

Gender?

how much experience of job do you have in the private sector?


PercentValid less than one year 49 21.6 21.6 21.6

1-5 years 100 44.1 44.1 65.6

5-15 years 62 27.3 27.3 93.0

more than 15 years 16 7.0 7.0 100.0

Total 227 100.0 100.0


43


how much experience of job doyou have in the private sector?more than 15 years5-15 years1-5 yearsless than one year

Per

cen

t

50

40

30

20

10

0

how much experience of job doyou have in the private sector?

what is your experience in the current job?


PercentValid less than 1 year 74 32.6 32.6 32.6

1-5 years 90 39.6 39.6 72.2

5-10 years 40 17.6 17.6 89.9

more than 10 years 23 10.1 10.1 100.0

Total 227 100.0 100.0


44


what is your experience in the current job?more than 10 years5-10 years1-5 yearsless than 1 year

Per

cen

t

40

30

20

10

0

what is your experience in the current job?

Are you satisfied with the "Duties of your job"? If not, will you leave your current job?


PercentValid very satisfied 52 22.9 22.9 22.9

satisfied 108 47.6 47.6 70.5

not satisfied, yes I will leave 49 21.6 21.6 92.1

not satisfied, I will not leave 18 7.9 7.9 100.0

Total 227 100.0 100.0


45



not satisfied, I will not leave

not satisfied, yes I will leave

satisfiedvery satisfied

Per

cen

t

50

40

30

20

10

0


Are you satisfied with the "Training and development programs" in the organization you are working? If not satisfied, will you leave your job?



satisfied 108 47.6 47.6 64.3

not satisfied, yes I will leave 51 22.5 22.5 86.8


Total 227 100.0 100.0


46




not satisfied, yes I will leave


Per

cen

t

50

40

30

20

10

0


Are you satisfied with the "Opportunities for promotion" in your current job? If not satisfied, will you stay in the current organization?



satisfied 89 39.2 39.2 58.1

not satisfied, no I will not stay 53 23.3 23.3 81.5

not satisfied, yes I will stay 42 18.5 18.5 100.0

Total 227 100.0 100.0


47



not satisfied, yes I will stay

not satisfied, no I will not stay


Per

cen

t

40

30

20

10

0


What is the "Salary treatment" in the organization you are doing your job? If there is bad salary treatment, will you stay here?


PercentValid very good 35 15.4 15.4 15.4

good 70 30.8 30.8 46.3

normal 82 36.1 36.1 82.4

bad, no I will not stay here 30 13.2 13.2 95.6

bad, yes I will stay 10 4.4 4.4 100.0

Total 227 100.0 100.0


48



bad, yes I will staybad, no I will not stay here

normalgoodvery good

Per

cen

t

40

30

20

10

0


What is the "Working conditions"? If not healthy, will you quit?


PercentValid healthy 88 38.8 38.8 38.8

normal 104 45.8 45.8 84.6

not healthy, yes I will quit 25 11.0 11.0 95.6

not healthy, I will not quit 10 4.4 4.4 100.0

Total 227 100.0 100.0


49


What is the "Working conditions"? If not healthy, will you quit?not healthy, I will not quitnot healthy, yes I will quitnormalhealthy

Per

cen

t

50

40

30

20

10

0

What is the "Working conditions"? If not healthy, will you quit?

Are you satisfied with the Working hours? If not satisfied, will you leave?



satisfied 124 54.6 54.6 75.3

not satisfied, I will leave 38 16.7 16.7 92.1


Total 227 100.0 100.0


50




not satisfied, I will leavesatisfiedvery satisfied

Per

cen

t

60

50

40

30

20

10

0


What type of control play an important role in the problem of employees' turnover?


PercentValid strict 129 56.8 56.8 56.8

normal 83 36.6 36.6 93.4

carrot 15 6.6 6.6 100.0

Total 227 100.0 100.0


51



carrotnormalstrict

Per

cen

t

60

50

40

30

20

10

0


If you get a better job opportunity, will you leave your current job?


PercentValid yes 196 86.3 86.3 86.3

no 31 13.7 13.7 100.0

Total 227 100.0 100.0


52


If you get a better job opportunity, will you leave your current job?noyes

Per

cen

t

100

80

60

40

20

0

If you get a better job opportunity, will you leave your current job?

Is Non competitive wages the cause of employees' turnover?



no 82 36.1 36.1 100.0

Total 227 100.0 100.0


53


Is Non competitive wages the cause of employees' turnover?noyes

Per

cen

t

60

40

20

0

Is Non competitive wages the cause of employees' turnover?

What is the pay system in your organization? Are you satisfied with that?


PercentValid sick pay system,satisfied 32 14.1 14.1 14.1

sick pay system, not satisfied 98 43.2 43.2 57.3

well pay system, satisfied 87 38.3 38.3 95.6


54


well pay system, not satisfied 10 4.4 4.4 100.0

Total 227 100.0 100.0


well pay system, not satisfied

well pay system, satisfied

sick pay system, not satisfied

sick pay system,satisfied

Per

cen

t

50

40

30

20

10

0


If your role on job is not clear, will you leave the job?



no 69 30.4 30.4 100.0

Total 227 100.0 100.0


55


If your role on job is not clear, will you leave the job?noyes

Per

cen

t

60

40

20

0

If your role on job is not clear, will you leave the job?

What is the role of "colleague politics" (unhealthy competition with other employees) in employees' turnover?


PercentValid important 78 34.4 34.4 34.4

normal 114 50.2 50.2 84.6

lesser important than other factors 35 15.4 15.4 100.0


56


Total 227 100.0 100.0


lesser important than other factors

normalimportant

Per

cen

t

60

50

40

30

20

10

0


Are you satisfied with your reward system? If not, will you leave?



satisfied 127 55.9 55.9 64.8

not satisfied, I will leave 53 23.3 23.3 88.1


Total 227 100.0 100.0


57




not satisfied, I will leavesatisfiedvery satisfied

Per

cen

t

60

50

40

30

20

10

0


you are not satisfied with the relationship with your new boss, will you quit your job?



no 77 33.9 33.9 100.0

Total 227 100.0 100.0


58



noyes

Per

cen

t

60

40

20

0


If your family status changes (marriage, divorce etc.), will you leave your job?



no 149 65.6 65.6 100.0

Total 227 100.0 100.0


59


If your family status changes (marriage, divorce etc.), will you leave your job?noyes

Per

cen

t

60

40

20

0

If your family status changes (marriage, divorce etc.), will you leave your job?

Does the cause "management doesn't display people skills" play an important role in employees` turnover?



no 81 35.7 35.7 100.0

Total 227 100.0 100.0


60



noyes

Per

cen

t

60

40

20

0


Employee will leave the job if he has


PercentValid low resiliency 165 72.7 72.7 72.7

high resiliency 62 27.3 27.3 100.0

Total 227 100.0 100.0


61


Employee will leave the job if he hashigh resiliencylow resiliency

Per

cen

t

80

60

40

20

0

Employee will leave the job if he has

Is care of children or aged relatives also a cause of employees` turnover?



no 101 44.5 44.5 100.0

Total 227 100.0 100.0


62


Is care of children or aged relatives also a cause of employees` turnover?noyes

Per

cen

t

60

50

40

30

20

10

0

Is care of children or aged relatives also a cause of employees` turnover?

Is the "Non family friendly work schedule" basic cause of employees' turnover?



no 88 38.8 38.8 100.0

Total 227 100.0 100.0


63



noyes

Per

cen

t

60

40

20

0


If you are offered a permanent public sector job, will you leave your current job?



no 60 26.4 26.4 100.0

Total 227 100.0 100.0


64



noyes

Per

cen

t

80

60

40

20

0


If organization is instable, would you like to go to that organization which is stable and you can predict your career advancement?



no 48 21.1 21.1 100.0

Total 227 100.0 100.0


65



noyes

Per

cen

t

80

60

40

20

0


In which organization you will like to stay? Where there is


PercentValid predictable work

environment 47 20.7 20.7 20.7

changing work environment 97 42.7 42.7 63.4


66


stable work environment 83 36.6 36.6 100.0

Total 227 100.0 100.0

In which organization you will like to stay? Where there isstable work environmentchanging work environmentpredictable work environment

Per

cen

t

50

40

30

20

10

0

In which organization you will like to stay? Where there is

Is high inefficiency in the organization cause of employees` turnover in private sector?



no 62 27.3 27.3 100.0

Total 227 100.0 100.0


67



noyes

Per

cen

t

80

60

40

20

0


What will be the position of employees' turnover in the organization where the selection of the employee is not according to the Job/Culture Fit?


PercentValid very high 45 19.8 19.8 19.8

high 101 44.5 44.5 64.3

normal 64 28.2 28.2 92.5

low 17 7.5 7.5 100.0


68


Total 227 100.0 100.0


lownormalhighvery high

Per

cen

t

50

40

30

20

10

0


Findings/ Results:


69


We have find out the following results for our research report:

1) Employee turnover is greater in private because of employees’ dissatisfaction towards

their Duties of job.

2) Training and development programs are not enough.

3) Lower opportunities for promotion in private sector.

4) Salary treatment is not good enough in private sector.

5) Poor or unhealthy working conditions in the organizations.

6) More working hours as compared to the public sector.

7) Strict control on employees plays an important role in the private sector.

8) Employee is always attracted to a better job.

9) Non competitive wages discourage the employees in the private organizations.

10) Sick pay system is also a major cause of employee turnover.

11) Role of the employee on job is not clear.

12) Unhealthy competition also contributes towards the employee turnover.

13) Reward system is not good in the sector.

14) Due to bad relations with the new boss is also a cause of this problem.

15) Employee turnover is greater when their skill is not displayed by the management.

16) Low resiliency or less flexibility of the employee is also a cause of employee

turnover.

17) Private organizations are not caring the children or parents of the employees as

compared to the public sector organizations.

18) The employees want to leave that job that doesn’t allow them to spend a little bit time

with their friends and family.

19) Employees always try to have a permanent public sector job.

20) In instable organizations, employees turnover is greater.

21) Employees always like to work in innovative or stable environment.

22) In an inefficient organization, employee turnover will be greater.

23) Employee would like to leave the organization if he is not selected according to the

job or culture of organization.

Recommendations:


70


After our research study we have the following recommendations:

1. Private organization should adopt the strategy of well pay system in which

there is a fix limit of the number of leaves in one month. sick pay system

should be avoided.

2. Private organizations should care the parents and children of the employees

just like public sectors. Children of employees should be given scholarships in

educational institutions, free medical allowance or facility should be given to

the parents or children of the employees.

3. Before the selection of the employee, organizations should check the

resiliency or flexibility level of candidates of employment by defining the

resiliency criteria.

4. Employees should be paid competitive wages , by providing high wage rate to

that person who works efficiently and effectively. For example if employees

are paid on working hours base and one employee works for eight hours and

provides output of 200 units, while other employee works for the same hours

and provides output of 250 units, second employee should be rewarded. So,

that both the employees are encouraged.

5. Assigning the right duty to the right person in which he is skillful.

6. Building training and development programs centre where untrained and unskilled

persons should be provided specific training programs.

7. There should be specified criteria for providing opportunities for promotion so that

each person can become aware of promotion stages and can struggle to get

promotion.

8. Salary package should be appropriate to the hardworking of the employees it should

be evaluated with the employee’s hardworking performance and provided outcome.


71


9. Working hours should be fixed for all employees and each employee should be

assigned equal time for working and equal work. There should be no burden of work

on employees.

10. Management should have normal or moderate control over employees. It should be

neither too strict nor too polite. Moderate control can be created through providing

friendly attitude and trusting on employees. Better job opportunities should be

provided to employees that can be provided by evaluating the regular high

performance and consistency of hard working of employees and motivating them.

11. Role of employees on job should be clear to them. it can be possible when employees

have prescribed knowledge about the nature of work. While in most of the

organizations employees are also assigned that work which does not include in their

duty schedule.

12. Colleague politics (unhealthy competition among employees) factor should be

decreased. It is possible when equal importance will be given to the employees and

encouraging those employees who are involved in the unhealthy competition with

other employees, it should be known to them that they have only concern with their

own duties, they should not interfere in others work.

13. There should be proper reward system; the employees should be appreciated if they

show extra ordinary performance. The employees should be satisfied with their

reward system; they should be paid at standard wage rate.

14. Good relationships among boss and employees are a sign of commitment and fair

attitude by both. The boss should have some frequent visits to the workplace of

employees and solve their problems and motivate them to work hard then good

relationships among employees and boss will take place.

15. Management should display people skills, if an employee is a seller but he is trained

skill full and experienced as marketer, the management should achieve benefits by

displaying his skills and assign that duty to him which he can perform in better way.

The management should make optimal use of his skills.


72


16. Work schedule of employees should be prepared in such a way that they can spend

their same time with their family and friends. It can be possible when working time is

fix and appropriate while in most of the private sectors, the employees only know

their time to enter in their work but do not know the time of going back.

17. There is need to know the causes due to which employees have a great demand of

public sector job. These causes can be known/discovered by making a comparison of

public sector and private sector ,incentive to employees

18. The nature of working environment should be appropriate to the employees demand.

Employees should be assign the work according to there merit and ability of work.

19. Private organization should have efficiency in the working which is possible when all

workers and management are sincere with the organization and work hard to get the

organization to the way of success.

20. Selection of employees should be made according to the job which suits and fits to

the employees’ skill it is possible when work is assigned to the related person on

which he has commanding control.

21. Salaries of employees should be paid intimae because delay in salaries dissatisfied the

employees from the working or the organization and they give up hard working and

willing to leave the organization. Employees are assets of the company. It should take

care of them.

22. Employees should be paid standard wage rate which is fixed by the Government at

least Rs.4600/- per month. When management will be sincere with the employees

they will also show sincerity and stand by the company in ups and downs of business.


73


Conclusion:

Employees’ turnover is greater in private sector as compared to public sector. It is a serious

problem for the private organizations. Due to this situation, other many types of problems are

taking place such as unemployment, low job commitment, usage of more resources (financial

and natural) and time. But the private organizations can overcome this problem if they follow

the suggestions made above.


74


Reference:

Reference Books:

Sekaran, Uma, Research Methods for Business, Fourth edition.

Bell, Emma, Bryman, Alan. Business research methods by Oxford press.

Choudhary Muhamad Rauf, polymer’s Modern statistics for business and economics,

polymer publications.

Reference websites:

Abassi SM, Hollman KW (2000). "Turnover: the real bottom line", Public

Personnel Management, 2 (3) :333-342.

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