THE IMPACT OF EMPLOYEE TURNOVER ON ORGANIZATIONAL PERFORMANCE
THE UNITED REPUBLIC OF TANZANIA
PRESIDENT’S OFFICE
PUBLIC SERVICE
MANAGEMENT AND GOOD GOVERNANCE
TANZANIA PUBLIC SERVICE COLLEGE –
MTWARA CAMPUS
THE IMPACT OF EMPLOYEE TURNOVER ON
ORGANIZATIONAL PERFORMANCE
CASE STUDY OF MTWARA DISTRICT COUNCIL
RESEACH
REPORT
BY
ZAINA
MWENDA
REG: DHRM17/01/M.599
A
Research Report for Partial Fulfillment of the Award of Diploma in Human
Resource Management of Tanzania Public Service College
Tanzania
Public Service College
Mtwara
Campus
March,
2018
|
CERTIFICATION I,
the undersigned, certify that we have read and hereby recommend for
acceptance by Tanzania Public College, research report entitled; The Impact of Employee Turnover on
Organizational Performance: Case Study of Mtwara District Council in
partial fulfillment of the requirements for the award of Diploma in Human
Resource Management. _________________________ Mr. H. AMANI Supervisor DECLARATION AND COPYRIGHT I,
Zaina Mwenda, declare that, this
dissertation is my original work and that; it has not been presented and will
not be presented to any other higher learning for a similar or any other diploma
award. Signature________________________ Date____________________________ This
dissertation is a copy right material protected under the Berne Convention,
the Copyright Act 1999 and other international and national enactments in
that behalf on intellectual property. It may not be reproduced by any means
in full or in part, except for short extracts in fair dealings, for research
or private study, critical scholarly review or discourse with an
acknowledgement, without the written permission of the Public Service Collage
on behalf of the author. ACKNOWLEDGEMENT My first and foremost
thanks goes to the Almighty God for giving me the strength, courage to pursue
my studies and conducting this research study. I also thank my parents for
supporting me morally and spiritually during the whole period of my studies
and during the research study. Their encouragement, advice and support
enabled me to put in effort which enabled me to conclude the study
successfully. My sincere gratitude go to my
Supervisor, Mr. H. Amani, who guided me from proposal writing up to the final
report writing of this project report. His criticism, invaluable patience,
intellectual guidance and support helped me not only to accomplish this
study, but also to come up with the expected standards. Sincerely, she
deserves all kinds of credits. Furthermore, my thanks also go to
all those who have contributed to this research in one way or another, such
as my fellow students and others in the preparation of this paper. Kindly
receive my gratitude. Lastly, but not least, my
thanks go to all respondents and members of staff of Mtwara District Council
who participated in this study as respondents and the Head of Human Resources
Department for her cooperation and support during the whole duration of my
study. DEDICATION I dedicate
this dissertation to my lovely family. Thank you very much for sending me to
school, you have opened so many doors for me. ABBREVIATIONS HRM Human
Resources Management DC District
Council DEO District
Executive Officer DPA Diploma Human
Resource Mnagaement ABSTRACT This
research was aimed at assessing the impact of employee turnover on
organizational performance. The study used Mtwara District Council (MDC) as a
case study. The methodology used to conduct this study included the use of
various data collection tools such as questionnaires and interviews. The study used primary data collection methods such as;
observation, interviews and questionnaires. The study also used secondary
data collection methods such as documentation. From the findings of the study, the
researcher concludes that employee turnover has significant impact on MDC
because it results in additional costs due to recruitment, hiring and
training of new staff, it results in disruption of work flow due to vacant
positions, it leads to lost productivity and lastly, but not least, it
results in a huge loss of know-how and work experience of experienced
employees who leave. To
address the issue of employee turnover at MDC, the researcher recommends that
the local government authorities should increase the salary paid to employees
and offer attractive benefits such as leave, loans, medical care and
performance bonuses. Also, the local government authorities should improve
work conditions by making sure that employees have all the necessary tools
they need to perform their duties effectively without stress or too much work
and offer frequent training to employees so as to provide them with
opportunities. |
CHAPTER ONE
BACKGROUND OF THE STUDY
1.1 Introduction
This
chapter includes the background of the problem, statement of the problem,
objective of the study, research questions, and significance of the study,
scope of the study and limitations of the study. This research study aimed to assess
the impact of employee turnover on organizational performance by focusing on Mtwara
District Council (MDC) as a case study.
Employee
turnover can be defined as ratio of number of employees that leave a firm
through attrition, dismissal, or resignation during a period to the number of
employees on payroll during the same period. Labour turnover is concerned with
movements of individuals into jobs (hiring) and out of jobs (separations) over
a particular period. Labour turnover relates to the movement of workers into
and out of jobs.
According
to Gupta (1996), employee turnover also refers to the rate of change in the
workforce of an enterprise during a given period of time. It has been defined
as ‘the time to time changes in the composition of the work force that results
from hiring, release and replacement of employees.’ It is a measure of the
extent to which old employees leave and new employees enter the service of a
concern.
According to Boxall et al (2003),
employee turnover is mostly caused by the need for employees to change jobs due
to various reasons such as old age, length of tenure, lack of job satisfaction,
unsatisfying work environment, lack of organizational commitment and poor
salary and benefits.
1.2 Background
Information
In
recent years,
The
expected outcome of these firms is to employ most of the local individuals
graduated in the country and remunerate them according to their skills and
performance. This motivates them and brings an attitude of job satisfaction
among the employees in various business firms. However, the labour turnover in
various sectors, such as the local government authorities is at alarming rate which
has been postulated to 50% (Ngirwa, 2005).
Employees
in the local government authorities are hardly to be seen working on the same
institution consecutively for three years. There has been a movement of staff
from one local government authorities to another day after day. This employee’s
movement has brought some doubts among the stakeholders in the local government
authorities and different questions are being asked in connection to the
performance of these institutions and its compliance on international and
nation labour policy (Ngirwa, 2005).
1.3 Statement
of the Problem
Expansion
of the local government authorities in Tanzania has resulted in new challenges
that face Human resources personnel. One of the challenges is shortage of
personnel for various positions related to the local government authorities. As
a result, there is stiff competition for the few available personnel where by local
government authorities compete among each other to attract qualified and
competent staff. This has resulted in a situation where by employee turnover is
very high.
High
turnover rates among employees in the local government authorities have severe
impacts on the performance of local government authorities’ as it tends to
affect productivity and undermine profitability. Local government authorities
find themselves having to incur costs of training new staff members in order to
replace those who have left. This trend posses a new challenge to human
resources personnel as high turnover has negative impacts on organizational
performance.
1.4 Objective
of the Study
1.4.1
General Objective
The
general objective of this study was to assess the impact of employees’ turnover
on organizational performance by focusing on MDC as a case study.
1.4.2
Specific Objectives
i.
To
establish the extent of employee turnover on performance of MDC
ii.
To
explore the impact of employee turnover on the performance of MDC
iii.
To
establish measures taken by MDC to reduce employee turnover.
1.5 Research
Questions
This research study was guided by the following research questions:
i.
What is the extent of employee turnover on performance of MDC?
ii. What is the impact of employee turnover on
performance of MDC?
ii.
What measures have been taken by MDC to reduce employee turnover?
1.6 Significant
of the Study
The
findings of this research study will help human resources practitioners to
establish the impact of employee turnover on organizational performance and in
doing so help them to identify the causes of employee turnover and develop
measures to be taken to reduce employee turnover. The findings of this research
study will also help members of the general public to understand various trends
concerning employee turnover.
In
conducting this research study, the researcher expects to acquire new knowledge
in the field human resource management and the related issues about human
resources. Completion of this research study will also enable the researcher to
partially fulfill the requirements for the award of Diploma in Human Resource Management
offered by the Public Service College.
1.7 Limitation
of the Study
In conducting this research study, the researcher expects to face
the following limitations:
1.7.1 Financial constraints
The
cost of conducting the research hindered the full success of the study since
the amount of finance available was insufficient to meet budget of the study
and hence the researcher had to narrow down the study and reduce the sample
size expected to be used in the study.
1.7.2 Time factor
Due
to the shortage of time to conduct a fully extensive and intensive study, the
researcher had to limit the scope of the study by conducting the study so as to
finish the study within the time specified by academic calendar TPSC.
1.7.3 Lack of local
empirical literature
Local empirical
literature on employee turnover was very lacking. As a result, the researcher
had to rely on empirical literature from other countries, and this may not give
a true picture of the situation on the ground.
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
In this chapter is about the
conceptual framework of the study and a review of various literatures reviewed
by the researcher from various sources such as books and journals.
2.2 Conceptual Framework
This research study is guided by a
conceptual framework developed by Mobley et al (1979) who noted that the
relationship between intentions and turnover is consistent and generally
stronger than the job satisfaction-turnover relationship. The authors also
stipulate a significant association between
organizational commitment and turnover intentions. In addition, Tang et al’s
(2000) confirmed the link between commitment and actual turnover and Griffeth
et al’s (2000) analysis showed that organizational commitment was a better
predictor of turnover.
Figure
1: Conceptual framework (Source:
Mobley et al. 1979).
Work conditions The
better the work conditions the less the likelihood of employee turnover,
and vice versa
Independent
variables
Dependent variables
Performance of the company
According to the
conceptual framework, the performance of an organization is largely influenced
by the wages that the organization pays it’s employees and the work conditions
work conditions within the organization. Better pay and better work conditions
means that the employees become more satisfied and are less likely to quit the
organization.
The more employees
are satisfied with pay and work conditions, the low the rate of turnover, the
better their performance and the better the performance of the organization.
Thus, there is an inverse relationship between pay and work conditions and the
rate or turnover.
Independent
variable ----- Organization performance
Pay
Work conditions
Independent variables Company policy
Promotion
2.3 Trends in Terms of Turnover
According to Penna (2003), a new type of employee is emerging in
the market, characterized by less loyalty, being continuously looking for a
better job opportunity and his younger age. Old fashioned loyalty just doesn’t exist
anymore. The reason for this fading loyalty is that companies have failed to
show loyalty in the first place. Low unemployment is seen as a major influence
for this as it widens the range of opportunities. But careless employers who
show no interest to what matters most to employees are also as a major reason.
According to CIPD (2005), employers consider that labour turnover
has a serious negative effect on organizational performance and that staff
retention is their most pressing issue. In order to find out reasons behind
turnover, employers use exit interviews as a tool for preventing further
turnovers. Top three reasons for turnover are promotion outside of the
organization, lack of development or career opportunities and the need to
change careers.
According to a report by Agenda Consulting (2005), turnover is
lower for managerial employees (13,9% ) than for operational employees (21%).
The overall employee turnover rate for the
The public sector has an average turnover rate of 11.5%. The
lowest levels are found among civil servants, fire fighters, the police and
other public sector staff groups who are relatively highly skilled and well
paid. Turnover levels also vary from region to region. The highest rates are
found where unemployment is lowest and where it is unproblematic for people to
secure desirable alternative employment.
As a proportion of aggregate turnover, the percentage of people
leaving organizations through redundancy remains small. The most commonly cited
reason for staff turnover is promotion outside the organization (53%) with lack
of development or career opportunities the next at 42%. There is little evidence of any long-term
trend towards higher staff turnover.
2.4 Turnover and Gender
There is little evidence of a person’s
sex being linked to turnover. Griffeth et al’s (2000) examined various personal
characteristics that may be linked to turnover and concluded that there were no
differences between the quit rates of men and women. They also cited evidence
that gender moderates the age-turnover relationship (i.e. women are more likely
to remain in their job the older they get, than do men).
According to Delloitte (2004), in the high turnover industries in
particular, a great deal of employee turnover consists of people resigning or
being dismissed in the first few months of employment. Poor recruitment and
selection decisions, both on the part of the employee and employer, are usually
to blame, along with poorly designed or non-existent induction programmes.”
Expectations are often raised too high during the recruitment
process, leading people to compete for and subsequently to accept jobs for
which they are in truth unsuited. Organizations do this in order to ensure that
they fill their vacancies with sufficient numbers of well-qualified people as
quickly as possible. However, over the longer term the practice is
counter-productive as it leads to costly turnover (Delloitte, 2004).
2.5 Causes of Employee Turnover
Arthur (2001) stipulates that causes of high turnover rates in
organizations include; incompatibility of staff with corporate values, feelings
of not being appreciated or valued, not feeling part of the company, not
knowing how one is doing for lack of feedback, inadequate supervision, lack of
opportunity for growth, lack of training, unequal salaries and benefits, lack
of flexible work schedules, unsatisfactory relationships at work, too much work
and not enough staff, inadequate or substandard equipment, tools, or
facilities.
More specifically, Arthur (2001) draws attention to a change of
attitude towards work in the younger generation1. The author argues that
younger people are less likely to have a sense of loyalty after having frequently
seen their parents fall victims to corporate “downsizing”. As a result, they know that they have to actively manage their
career.
In addition, younger people are more interested in continuing
learning and education and expect to go through numerous jobs and career
changes throughout their lifetime. They respect expertise and knowledge, rather
than titles and will be reluctant to start working for an employer who does not
allow them to challenge the status quo.
They try to balance careers and familial responsibilities,
unwilling to give up either one. They have grown up and are comfortable with IT
and as a result expect it to prevail in the workplace. If a company is behind
in this area, it will appear as unattractive and bound to be uncompetitive (Arthur,
2001).
Sometimes employee turnover is caused by the attraction of a new
job or the prospect of a period outside the workforce which 'pulls'. On other
occasions, employees are 'pushed' due to dissatisfaction in their present jobs
to seek alternative employment. Sometimes it is a mixture of both, pull and push factors or domestic
circumstances outside the control of any employer, as is the case when someone
relocates with their spouse or partner (Arthur, 2001).
According to Arthur (2001), push factors are a great deal more significant in most
resignations than most managers appreciate. It is relatively rare for people to
leave jobs in which they are happy, even when offered higher pay elsewhere.
Most staff have a preference for stability.” The use of exit interviews is
widespread yet they are notoriously unreliable.
2.6 Determinants of Turnover
The following are factors that employees consider before deciding
to leave a particular organization:
2.6.1
Employability:
Employees tend to
leave organizations that don’t appreciate the need of employees build up a
'portfolio' of skills and competencies that will make them more marketable.
2.6.2
Career Development:
Employees are more
likely to leave an organization that does not offer them opportunities for
career development. Also, promotions need at least to be seen as based on fair
decisions.
2.6.3
Empowerment:
Employees are more
likely to leave an organization which does not allow employees to make an
important contribution to decisions that would have been seen as prerogative of
management.
2.6.4
Work-life Balance:
Employees are more
likely to leave an organization which does not offer a work-life balance.
Employees need a satisfactory balance between work and the rest of their life.
2.6.5
Process
Fairness:
Employees are more likely
to leave an organization that dies not take in to account the interests of
employees when important decisions are taken;
2.6.6
Communications:
Employees are more
likely to leave an organization that does not have an effective two-way
dialogue between employer and employees.
2.6.7
Management Style:
Employees are more likely to leave an organization whose
managers use a 'top down' approach instead of a 'bottom up' management style.
2.6.8
Wages and Conditions
Martin (2003) argues that there is an
inverse relationship between wages and turnover (i.e. establishments with
higher relative pay had lower turnover). Supporting Martin, Campion (1991)
suggests that the most important reason for turnover is higher wages.
2.6.9
Pay and Performance
According to Griffeth et al (2000), pay has
a modest effect on turnover. Also, if high performers are not sufficiently
rewarded, they leave.
2.6.10
Rural or Remote Areas and Lifestyle Factors
Employees who have to travel long distances to work or those who work in
areas that keeps them away from family and friends, or who live in areas with
high cost of living are more likely to quit the organization they work for.
2.6.11
Organization Size
Kirschenbaum and Mano-Negrin (1999) indicate that turnover is affected
by organizational size, with size being a key mediator of organization’s
internal labour market. Organizational size impacts on turnover through wage
rates and career progression paths.
2.6.12
Unionization
Martin (2003) looked at the effect of unions on labour turnover and
found clear evidence that unionism is associated with lower turnover. Lower
turnover is a result of the ability of unions to secure better working
conditions thus increasing the attractiveness for workers to stay.
2.6.13
Influence of Co-Workers
According to Kirschenbaum and Weisberg (2002), co-workers’ intentions
have a significant impact on an employee’s desire to leave. The more co-workers
influence an employee to stay, the more likely the employee will stay.
2.7 Measures to Reduce Turnover
Initiatives taken by employers to reduce turn over include;
improved employee involvement and communication, increased learning and
development opportunities, improved induction process, increased pay, improved
selection techniques, improved benefits, changes to improve work-life balance
and improved line management HR skills. These measures are aimed at alleviating
“push” factors – those that erode employee commitment and make them actively
consider a move and combating “pull factors” by improving pay and benefits
(CIBD, 2005).
2.7.1 Employee Retention Strategies
Hansen (2005) argues that investing in retention is more cost
effective than continuously recruiting new ones. Among the reasons behind
turnover, he outlines: planning weaknesses, poor information systems, lack of
management support at field level, conflictual atmosphere, poor involvement of
staff in decision making, lack of transparency in management, stress and
burnout and poor management.
The first two steps to take when developing an employee retention
strategy are to find out why employees in hard to recruit groups are leaving
and what employee turnover among these groups is costing your organization.
But, obtaining accurate information on reasons for leaving is hard. Where exit
interviews are used it is best to conduct them a short time after the employees
hand in their notice. Also, confidentiality should be assured and the purpose
of the interview explained.
Retail companies are known to often have far above average
turnover rates. Some do however manage to make their employees stay. To deal
with high turnover rates, retail companies opt to tailor make their own
executives. This is done by giving new managers better orientation and
training, both as a way to retain hem but also use their improved people
management skills as a retainer for those they manage (Breuer, 2000).
According to Breuer (2000), the first week of a new employee’s
experience is the most vital factor in retention and needs therefore to be
consciously managed and well planned. He also advocates for line managers to be
held accountable for retention. Apart from that, the author also underlines the
importance of “hiring for company fit” and making sure new employees know that
they can grow by staying with their new employer.
2.7.2 Using Psychological Contracts to
Reduce Turnover
The term “psychological contract refers to “the perceptions of the
two parties, employee and employer, of what their mutual obligations are
towards each other” These obligations will often be informal and imprecise:
they may be inferred from actions or from what has happened in the past, as
well as from statements made by the employer, for example during the
recruitment process or in performance appraisals (CIPD, 2004).
Some obligations may be seen as 'promises' and others as
'expectations'. The important thing is that they are believed by the employee
to be part of the relationship with the employer. Establishing a psychological
contract is one of the ways employers can use to reduce turnover. For a
psychological contract to work, it should be based on employees' sense of
fairness and trust and their belief that the employer is honoring the 'deal'
between them (CIPD, 2004).
When a psychological contract is established, increased
employee commitment and satisfaction will have a positive impact on business
performance. Research evidence shows that, where employees believe that
management have broken promises or failed to deliver on commitments, this has a
negative effect on job satisfaction and commitment and on the psychological
contract as a whole. This is the case where managers are responsible for
breaches, e.g. where employees do not receive promised training, or performance
reviews are badly handled (CIPD, 2004).
Organizations that wish to succeed have to get the most out of
their human capital. In order to do this, employers have to know what employees
expect from their work. The psychological contract offers a framework for
monitoring employee attitudes and priorities on those dimensions that can be
shown to influence performance. The traditional psychological contract is
generally described as a commitment by the employee in return for the employer
providing job security.
In a psychological contract, employees promise to work hard, uphold company reputation, maintain high level of attendance,
show loyalty to the organization, work extra hours if required, develop new
skills and update ones, be courteous to clients and colleagues, be honest and
come up with new ideas. On the other hand employers promise to offer
opportunities for training and development, offer recognition for innovation or new idea, give feedback on
performance, offer attractive benefits packages, offer job security and a
pleasant and safe working environment (CIPD, 2004).
2.8 Measuring Employee Turnover
Measuring turnover matters because a lot of people are just
waiting for the right opportunity to leave says the report. It adds that
“before determining whether an employer has a labour turnover problem, it’s
necessary to establish some measure of “natural” turnover. This, rather than
the raw quit rate, represents the most appropriate measure of how problematic
turnover actually is for an employer.” This can among other things be
influenced by age, with younger workers more likely to switch jobs whereas
older ones privilege security (CIBD, 2005).
2.8.1 Employee Turnover Cost
Concerning turnover costs, the major categories of costs to take
account of are identified as:
- Administration
of the resignation
- Recruitment
costs
- Selection
costs
- Cost
of covering during the period in which there is a vacancy
- Administration
of the recruitment and selection process
- Induction
training for the new employee.
Many of these costs consist of management or administrative staff
time (opportunity costs) but direct costs can also be substantial where
advertisements, agencies or assessment centers are used in the recruitment
process. Also, more complex approaches to turnover costing give a more accurate
and invariably higher estimate of total costs.
2.8.2 Calculating Turnover
The formula to calculate the crude turnover rate is:
Total number of leavers over period x 100
Average total number employed over period
2.9 Impact of Employee Turnover on Performance
There is no evidence that there is no set level of employee
turnover above which effects on the employing organization becomes damaging.
Where it is easy to find and train new employees quickly and at little cost, it
is possible to sustain high quality levels of service provision despite having
a high turnover rate. On the contrary,
where skills are Scarce, recruitment is costly or it takes several weeks to
fill a vacancy, turnover is likely to be problematic.
On the other hand, some employee turnover positively benefits
organizations. This happens whenever a poor performer is replaced by a more
effective employee, and can happen when a senior retirement allows the
promotion or acquisition of welcome 'fresh blood'. Moderate levels of staff
turnover can also help to reduce staff costs in organizations where business
levels are unpredictable.
2.10 The Impact of Turnover on Employees
According to Redford (2005), nearly a quarter of staff in the
2.11 The Significance of Turnover
Gray et al (1996) stipulates that it is unrealistic to consider
staff turnover as a purely negative phenomenon. It is actually considered by
economists to be a necessary component of an efficient labour market and can be
beneficial to an organization in several ways, for example with increased
productivity by ensuring better matches between jobs and workers
2. 12 Synthesis
From the literature review, the researcher concludes that employee
turn over is determined by various factors such as the need for career
development among employees, the need for work-life balance among employees,
management style of a particular organization, wages, work conditions and size
of a particular organization. Also, the researcher concluded that employee
turnover is a very critical issue in the performance of local government authorities
because it affects profitability.
The costs incurred by local government authoritiess in training
new staff to replace those who have left affect the bottom line because after a
certain period of time the local government authorities finds itself in a
position where by staff members have to learn new procedures and the local
government authorities has to form new teams to replace those who have left the
local government authorities. The learning curve experienced by new staff
members is a very costly exercise that affects both, the profitability and
harmony within the local government authorities.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This
chapter covers the research design, area of the study, population, sample and
sampling technique, data collection methods, data analysis, validity and
reliability of data.
3.2 Research Design
According
to Zikmund (2000), a research design is a master plan specifying methods and
procedures for collecting and analyzing the required data. It is a means that
is to be followed in completing a study. The research design helps the
researcher to obtain relevant data to fulfill the objectives of the study
(Churchill and Lacobucci, 2002). There are three types of research design
namely; descriptive, exploratory and causal research designs.
3.2.1 Exploratory
Research Design
Exploratory
research design is suitable for exploratory studies whose main emphasis is to
formulate a problem for more precise investigation or developing a working
hypothesis from an operational point of view. The major emphasis is on the
discovery of ideas and insight; as such the research design appropriate for
such studies must be flexible to provide opportunity for considering different
aspects of a problem under study (Kothari, 2006)
3.2.2 Descriptive Research Design
In descriptive research design, the major emphasis is on determining the
frequency with which something occurs or the extent to which two variables
covary. It is typically guided by an initial hypothesis (Churchill, 1996).
Descriptive studies are also concerned with specific predictions, narrations of
facts and characteristics concerning individuals, groups or situation (Kothari,
2006).
3.2.3 Causal Research Design
Causal
research design is suitable for studies whose major emphasis is on determining
causal and effect relationship. Causal studies typically take the form of
experiments, since experiments are best suited to determine cause and effect
(Churchill, 1996). Of the three research designs, this study employed
descriptive design and a cross sectional study where by data will be collected
at one point at time.
3.3 Area of the Study
The
study was conducted at the head office of Mtwara District Council (MDC) which
are located in
3.4 Study Population
The
study population included all quit employees and current employees of Mtwara
District Council at different departments in the head office. The researcher
selected respondents among current employees of the local government
authorities and among former employees of the local government authorities. The
researcher perused details of quit employees of the local government
authorities to establish the reasons why they left the local government
authorities.
3.5 Sampling and Sample Size
3.5.1 Sample and Sample Size
Kothari (2006) defines sample as a collection of some parts
of the population on the basis of which judgment is made. A sample is small
enough to make data collection convenient and large enough to be a true
representative of the population from which it had been selected. Sample size refers
to a number of items to be selected from the population of the study to
constitute a sample.
3.5.2
Sampling Procedure
According to
Kothari (2006), sampling is defined as selection of some parts of aggregate of
the totality based on which a judgment or inference about the aggregate or
totality is made. It is a process of selecting a group of people, events,
behaviour, or other elements with which to conduct a study. An important issue
influencing the choice of a sampling technique is whether a sampling frame is
available.
In
this study, the researcher employed stratified sampling technique. The study
will divide the population in two categories; quit employees of the local
government authorities and current employees of the local government authorities.
The researcher then randomly selected 100 respondents from each category, thus
making a total of 200 respondents.
3.6 Data Collection Techniques
Both
quantitative and qualitative techniques were applied in the study in order to
overcome the shortcomings from each technique (Saunders, et al 2000). Also,
both primary and secondary data were collected. Primary data was directly
collected from the field by the researcher, and secondary data was collected
through reading different research, journals and staff records from the Human
Resources Department of the local government authorities as follows;
3.6.1 Interview technique
The researcher held face -to-face interviews with the
respondents in order to get a direct feel from the employees themselves. According
to (Kothari, 2006), an interview is a set of question administered through oral
or verbal communication or is a face-to-face discussion between the researcher
and interviewee respondents. This method was used because it enabled the
researcher to get supplementary information to questionnaires.
3.6.2 Questionnaires
Structured
and unstructured questionnaires were prepared and distributed to the selected
respondents to fill and return to the researcher. These questionnaires aimed to
capture data that was used in analysis and is expected that there are some
respondents who feel shy or worry during interview were comfortable to fill the
questionnaires instead.
3.7 Data Analysis Technique
Data
collected was carefully checked for correctness, analyzed and coded by
using Microsoft Excel software and the
findings were presented in the form of through tables, percentages, bar charts
and histograms.
CHAPTER FOUR
RESEARCH FINDINGS, ANALYSIS AND
DISCUSSION
4.1 Introduction
This
chapter is concerned with presentation, discussion and analysis of findings of
the study. The data collected was carefully checked
for correctness, completeness, accuracy, clarity and uniformity. Numerical data
was analyzed by computing percentages for quantification purposes. The
data was then processed by using Microsoft Excel and presented in tables by
using words, numbers and percentages, charts and graphs.
DATA COLLECTED FROM EXIT
EMPLOYEES OF MDC
4.2 Age Profile of Exit Employees of MDC
The following data was gathered by
analyzing the age profile of exit employees of MDC. The aim of this survey was
to determine whether intention to turnover among exit employees is determined
by age. The results are presented in Table 1 below:
Table 1: Age
profile of exit employees of MDC
|
Age bracket |
Number of exit employees |
Percentage of respondents |
|
18-30 years |
50 |
50% |
|
31-45 years |
31 |
31% |
|
Above 45 years |
19 |
19% |
|
Total |
100 |
100% |
Source: Research findings (2018)
The results show that 50% of exit
employees of MDC were in the 18-30 age group compared to 31% of exit employees
of the local government authorities who were in the 31-45 age group and 19% of
exit employees of the local government authorities who were in the above 45 age
group. These findings suggest that the intention to exit diminishes with age.
That means the likelihood of employees to exit diminishes with advancement of
age.
4.3 Level of Education of Exit Employees
of MDC
The
following data was gathered by the researcher in order to determine the level
of education of exit employees of MDC. The objective of conducting this survey
was to establish whether the intention to turnover among exit employees was
determined by their level of education.
The findings of the study were recorded as shown in the table and figure
below;
Table 2: Level of
education of exit employees of MDC
|
|
Number of exit employees |
Percentage of respondents |
|
Diploma |
28 |
28% |
|
Degree |
62 |
62% |
|
Post graduate/Masters |
10 |
10% |
|
PhD |
0 |
0% |
|
Total |
100 |
100% |
Source: Research findings (2018)
The results show that 62% of exit employees
of MDC had Advanced Diplomas or Degrees, followed by 28% of exit employees of MDC
who had Diplomas and 10% of exit employees of MDC who had Post Graduate
Diplomas or Masters Degrees. There were no exit employees with PhDs. These
findings suggest that employees with Advanced Diplomas or Degrees are more
likely to have the intention to turnover, followed by those with Diplomas.
The researcher observed that those with
Post Graduate Diplomas are least likely to have the intention to turnover,
probably because they have begun an upward career trend, and are more likely to
have more experience, better paid, and be more satisfied with their jobs
compared to those with degrees who are likely to have less experience, be less
paid and be less satisfied with their jobs.
4.4
Gender Profile of Exit Employees of MDC
The
researcher analyzed the gender profile of exit employees of MDC to establish
whether the intention to turnover among exit employees of MDC was determined by
their gender. The findings of the analysis were recorded as shown in the table
and figure below:
Table 3:
Gender profile of exit employees of MDC
|
|
Males |
Females |
|
Number of exit employees |
65 |
35 |
|
Percentage |
65% |
35% |
Source: Research findings (2018)
Figure 3: Gender profile of exit employees of MDC
KEY: Females Males
Source: Research findings (2018)
From the data collected, it was clear that only 35 percent
(35%) of exit employees of MDC were females while 65% of exit employees of MDC
were males. These findings suggest that male employees of the local government
authorities are more likely to have the intention to exit compared female
employees of the local government authorities. The researcher observed that
female employees of the local government authorities are less likely to exit
because they tend to be more satisfied with their jobs and are leas likely to
change jobs frequently due to influence from their husbands, for those who are
married.
4.5 Marital Status of Exit Employees of MDC
The researcher analyzed the marital
status of exit employees of MDC to establish whether the intention to turnover
among exit employees of MDC was influenced by their marital status. The findings
from the analysis were documented as shown in the table and figure below;
Table 4: Marital status of
exit employees of MDC
|
|
Single |
Married |
|
Number of
exit employees |
80 |
20 |
|
Percentage |
80% |
20% |
Source: Research findings (2018)
Figure 4: Marital
status of exit employees of MDC
KEY: Single Married
Source: Research findings (2018)
The results show that 80% of exit
employees of MDC were single while 20% were married. These findings suggest
that single employees of MDC are more likely to have the intention to exit
compared to married employees. This is probably because, married employees are
more likely to be much older, more settled, more experienced, and thus more
likely to be better paid and thus, be satisfied with their jobs. Also, the
researcher observed that married employees tend to be more settled because they
seek stability and don’t want to shift locations frequently so as not to
disturb their families, especially children.
4.5 Level of Experience
Among Exit Employees of MDC
The researcher analyzed the level of work
experience of exit employees of MDC in order to determine whether the intention
to exit among exit employees of MDC was determined by their level of work
experience. The findings from the analysis were documented as shown in the
table and figure below;
Table 5: Level of
work experience of exit employees of MDC
|
|
Number of exit employees |
Percentage of exit employees |
|
0-5 years |
42 |
42% |
|
6-10 years |
33 |
33% |
|
more than 10 years |
25 |
25% |
|
Total |
100 |
100% |
Source: Research findings (2018)
From the findings of the study, 42% of
exit employees of MDC had work experience of 0-5 years, 33% of exit employees
of MDC had work experience of 6 to 10 years and 25% of exit employees of MDC
had work experience of more than 10 years. These findings show that the
intention to turnover among employees of MDC diminishes as their level of work
experience increases. The researcher observed that this is probably due to the
fact that experienced employees are likely to be better paid, and hence more
satisfied with their jobs and less likely to exit their jobs.
4.6 Positions Held by
Exit Employees of MDC
To
establish the positions held by exit employees of MDC at the time of exiting,
the researcher analyzed the positions they held before exiting. The objective
conducting this analysis was to establish whether the decision to exit among
exit employees of MDC was determined by the level of their positions. The
findings from the analysis were documented as shown in the table and figure
below;
Table 6: Position
held by exit employees of MDC
|
|
Number of exit employees |
Percentage of exit employees |
|
Senior Position |
9 |
8% |
|
Middle-Level position |
32 |
28% |
|
Junior position |
59 |
59% |
|
Total |
100 |
100% |
Source: Research findings (2018)
The
study found out that 59% of exit employees of MDC held Junior positions in the local
government authorities, while 32% of exit employees of MDC held Middle-level
positions in the local government authorities and the rest 9% held Senior
positions in the local government authorities. These findings suggest that the
intention to turnover among employees of MDC diminishes as the employees move
up the corporate ladder from Junior, to Middle-level and to Senor Positions.
This is probably because, as Junior employees of the local government
authorities get promoted to Middle-level and Senior positions, they tend to be
better paid and thus, become more satisfied with their jobs, and hence be less
likely to have the intention to turnover.
4.7 Voluntary v/s Involuntary Turnover
The following data was collected to
compare the percentage of voluntary to involuntary turnovers among exit
employees of MDC. The findings from the analysis were documented as shown in
the table and figure below;
Table 7: Voluntary
V/s involuntary turnover among exit employees of MDC
|
|
Exit employees of MDC who left
voluntarily |
Exit employees of MDC who left
involuntarily |
|
Number of
exit employees of |
78 |
22 |
|
Percentage |
78% |
22% |
Source: Research findings (2018)
The results show that 78% of exit
employees of MDC had exit voluntarily compared to 22% of exit employees of the local
government authorities who exit involuntary. These findings suggest that
majority of exit employees of MDC exit for their own reasons and not by being
forced by the local government authorities.
4.8 Why Labour Turnover
is High at MDC
To establish the reasons why exit employees
of MDC left, the researcher analysed information collected during exit
interviews with exit employees of MDC. This analysis was also aimed at helping
the local government authorities to prevent current employees of the local
government authorities from leaving. The data collected from the analysis was
documented as shown in the table and figure below;
Table 8:
Reasons for leaving among exit employees of MDC
|
|
Number of exit employees |
Percentage |
|
Going for further studies |
28 |
28% |
|
Looking for career advancement |
17 |
17% |
|
Looking for better pay |
42 |
42% |
|
Poor work environment |
13 |
13% |
|
Total |
100 |
100 |
Source: Research findings (2018)
From the findings of the study, the
researcher found out that 42% of exit employees of MDC left the because they
were looking for better pay and accepted positions from other organizations,
28% left because they wanted to attend further studies, 17% of exit employees
of the local government authorities left because they accepted positions in
other organizations that would enable them to develop more professional skills
and 13% of exit employees of the local government authorities left because they
were not satisfied with working conditions at the local government authorities. From the analysis, it is clear that, the main
causes of turnover among exit employees of MDC are; in adequate pay, lack of
career advancement opportunities, in adequate training opportunities within the
local government authorities, and poor work environment. A combination of these
reasons result in poor morale among employees and hence the intention to
turnover.
4.9 Employee Turnover Trend at MDC
2004-2009
The following data was collected by the
researcher after analyzing the employee turnover trend at the local government
authorities from the year 2004 to the year 2009. The objective of conducting
this analysis was to establish the magnitude of the problem and to find out
whether the trend has been upward or downward. The findings from the analysis
were documented as shown in the table and figure below;
Table 9: Employee
turnover trend at MDC 2004-2009
|
Year |
Number of exit employees |
Total employees |
|
2004 |
9 |
107 |
|
2005 |
12 |
121 |
|
2006 |
16 |
125 |
|
2007 |
19 |
129 |
|
2008 |
17 |
156 |
|
2009 |
23 |
165 |
|
Total |
96 |
|
Source: Research findings (2018)
CHAPTER FIVE
5.0 DISCUSSION OF THE FINDINGS
This
chapter presents a discussion of the findings of the study.
From the study, the researcher found out
that the intention to quit among employees of MDC diminishes with advancement
of age. Employees with Advanced Diplomas or Degrees are more likely to have the
intention to turnover compared to those with Post Graduate Diplomas or Masters
degrees. Also, male and single employees are more likely to have the intention
to quit compared female or married employees.
The researcher also found out that
intention to turnover among employees of MDC diminishes as level of work
experience increases. This is probably because as employees become more
experienced and start moving up the corporate ladder from Junior, to
Middle-level and to Senor Positions they become better paid and hence they
become more satisfied with their jobs and hence, less likely to have the
intention to turnover.
From the study, the researcher found
out that the employee turnover rate at MDC from the year 2004 to the year 2005
has stood at approximately 12%. This means in any given year, out of 100
employees of the local government authorities, 12 leave the local government
authorities for various reasons. This is a relatively high turnover rate and it
may have high impact on the performance of the local government authorities.
The main causes of turnover are inadequate pay and
unsatisfactory work conditions.
Majority of current employees of the local government
authorities said that the
level of pay offered by the local government authorities is not satisfactory
and they are also not satisfied with their work conditions or employee benefits
offered by the local government authorities. As a result of employee turnover,
the researcher found out that the local government authorities loses an average
of Tshs 84,640,000 per year or Tshs 6,886,666 per month, or TShs 229555 per day
as costs incurred due to employee turnover.
5.2
CONCLUSIONS
From the findings of the study, the
researcher found out that employee turnover has significant impact on MDC
because it results in additional costs due to recruitment, hiring and training
of new staff, it results in disruption of work flow due to vacant positions, it
leads to lost productivity and lastly, but not least, it results in a huge loss
of know-how and work experience of experienced employees who leave.
In
conclusion, the assessment of the workplace environment is crucial and a
regular system to capture and evaluate feedback must be in place in order to
maintain a healthy work environment. Turnover can have a detrimental effect on
an organization and its employees if company management allows it. However, there are tools that can be used to
prevent or reduce employee turnover and its impact on organizational
performance.
5.3 RECOMMENDATIONS
Prevention
is better than curing. MDC should put their best effort to prevent and/or
reduce employee turnover. This will help the local government authorities to
save money, time, and effort. The researcher recommends the following measures
to be taken by the management of MDC to prevent or reduce employee turnover;
- The management of the local
government authorities should look again
at the selection process. Initial screening and interviewing can help
avoid future turnover as well as prevent employees from leaving.
- Also, job description should
include; job function, duties, responsibilities and qualifications. This
will help to informs applicants of the details of the job parameters.
Thus, the employees would know what to expect from the job and what the
company expects from them.
- In addition, the application
process should give the employer other insights into the candidate. The interview is the most important part
of the hiring process. In a limited period of time, the interviewer must
determine accurately if the applicant has the skills required and a good
attitude.
5.4 POLICY IMPLICATIONS
From
the findings of the study, conclusions and recommendations made in the study;
it is clear that there is a need to have a clear policy that addresses head-on
the issue of employee turnover in the work place.
REFERENCES
Agenda Consulting, (2005), “People Count: Benchmarks for Human Resources in the
Voluntary and Community Sector”
Arthur, D. (2001), “The Employee Recruitment and Retention Handbook”, Amacom
Books,
Arthur, D. (2001), “The Employee Recruitment and Retention Handbook”, Amacom
Books,
Breuer, L, N. (2000), “Even
in High Turnover Industries, Not Everyone’s a Quitter”,
accessed from www.workforce.com/archive/feature/22/24/42/index.php
Bryars, et al. (1991). Human
Resource Management 3rd Richard, Irwin inc.
CIPD, (2004), “Managing the Psychological Contract”, accessed from
www.cipd.co.uk/subjects/empreltns/psycntrct/psycontr.htm?issrchres=1
CIPD, (2005), “Recruitment, Retention and Turnover 2005”, accessed from
www.cipd.co.uk/subjects/recruitmen/general/recruitretnt.htm?issrchres=1
Churchill, G.A. and Lacobucci, D
(2002). Market Research Methodological Foundations,
2nd ed, the McGraw-Hill
Companies Inc.
Deloitte, (2004), “It’s 2008: Do You Know Where Your Talent Is? Why Acquisition and
Retention Strategies
Don’t Work”, accessed from
www.deloitte.com/dtt/cda/doc/content/us_talentmgmtpov_2.11.05.pdf
Gupta, C.B. (2008). Human Resource
Management, 11th ed, Educational Publisher, New
Hansen, F. (2005), “The Turnover Myth”, accessed from
www.workforce.com/archive/feature/24/06/37/index.php
Ngirwa, C.A (2005), Human Resources
in
Manual, NPC (T), DSM
Penna (2003), “Itchy Feet, A Research on Employee Loyalty”, accessed from
Personneltoday.com, (2003), “Turning the Corner on Staff Turnover”, accessed from
www.personneltoday.com/articles/2003/10/21/20979/turning+the+corner+on+staff
www.personneltoday.com/articles/2005/12/06/32883/trends+job-hopping.htm
Saunders, N. (2000) Research Methods
for Business Students, Person Professional
Limited.
Wherrett, A. (2004), “People Measures that Work”, accessed from www.mercerghsc.com
APPENDIX I: SCHEDULE FOR THE RESEARCH STUDY
The table below is the schedule,
which shows the time and activity that the researcher was spend during the
whole period of the research, up to from February, 2018.
|
ACTIVITY |
DURATION
(IN WEEKS) |
|||||||
|
7 |
8 |
9 |
10 |
11 |
12 |
1 |
2 |
|
|
Preparation of the materials for research e.g.
questionnaires |
|
|
|
|
|
|
|
|
|
Making arrangements and appointments with respondents. |
|
|
|
|
|
|
|
|
|
Conducting interviews with respondents |
|
|
|
|
|
|
|
|
|
Distributing questionnaires to respondents. |
|
|
|
|
|
|
|
|
|
Distributing questionnaires to respondents. |
|
|
|
|
|
|
|
|
|
Collecting of questionnaires and review of collected data |
|
|
|
|
|
|
|
|
|
Preparation and presentation of
research report |
|
|
|
|
|
|
|
|
APPENDIX
II :
BUDGET FOR THE RESEARCH STUDY
|
ITEM |
PARTICULARS |
AMOUNT IN TSHS |
|
STATIONERIES |
- 2 Reams of plain paper TShs 5,000 @ -
2 Clip Files TShs 5,000 @ |
40,000 |
|
PHOTOCOPYING |
- Questionnaires 4pg x 40
TShs 50 @ page |
30,000 |
|
TYPING AND PRINTING |
-
30 pages (Proposal)
x 2 -
40 pages (Report) x
2 TShs 1,000 @ page |
200,000 |
|
TRANSPORT |
For 10 weeks Two days a week
TShs 2,500 @ day |
150,000 |
|
MEALS |
For 8 weeks Two days a week
TShs 5,000 @ day |
100,000 |
|
TELEPHONE FOLLOW-UPS |
For 8 weeks Two days a week
TShs 5,000 @ day |
100,000 |
|
MISCELLANEOUS |
-
Internet search -
Assistants’
allowances -
Etc |
300,000 |
|
TOTAL |
920,000 |
|
APPENDIX III: QUESTIONNAIRES
I am a student at the Public Service
College (TPSC), pursuing diploma in Human Resource Mnagaement. I have prepared
this questionnaire for purpose of collecting data concerning on my research
study titled “The impact of Employee Turnover on Organizational Performance:
Case Study of Mtwara District Council (MDC). Your contribution is highly valued
in making the study successful. Assurance is given that your personal
information will be handled confidentially and secrecy.
1. Age
a) 18 – 30 years
b) 31 – 45 years
c) above 45 years
2. Sex a) Male
b) Female
3. Marital status a) Married
b)
Single
4. Education
a) Diploma
b) Advanced
Diploma or Degree
c) Post Graduate
Diploma
d) Masters Degree
5. Rank/position a) Senior position
b) Middle-level
position
c) Junior position
6. Level of work experience
a)
0 – 5 years
b)
6 – 10 years
c)
More than 10 years
7. Mode of turnover
a) Voluntary
b) Involuntary
8. Reasons for leaving?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
9. What is the employee turnover
trend for the year 2006 to 2010?
………………………………………………………………………………………………………………………………………………………………………………………………
Thank you for your cooperation.
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