University of Information Technology & Sciences (UITS)

Term Paper
On
Assessing employee turnover in case of Rahim Afrooz Limited

Prepared for:

Mr. Chowdhury Abdullah Al Mamun

Assistant Professor School of Business

Course Title: Strategic Management

Course Code: MBA 601
Program: IMBA
Summer 2017

Prepared by:

Name ID
Md. Ariful Islam 16202522
Md. Ashraful Islam 16202523
Shebo roy 16202521
Md. Abu Saleh 16202512
Jahidul Islam Bhuiyan 16302515
Md. Mehedi Hasan 17102521

Date of Submission: 28 July 2017

28/07/2017
Mr. Chowdhury Abdullah Al Mamun
Assistant Professor School of Business
University of Information technology & Sciences
Baridhara Campus, Dhaka

Subject: Submission of Report

Dear Sir,

We are pleased to submit the term papers on Assessing employee turnover in case of Rahim
Afrooz Limited, which is a requirement of this course.

Preparing this report has been a pleasant learning experience for all of us. If you need further
clarification on any topic regarding our report, please contact us any time at your convenience.

We will be glad if you accept our work. We are expecting your valuable advice and co-
ordination for our future developments.
Thanking you.

Sincerely,

Md. Ariful Islam

ID: 16202522

Md. Ashraful Islam

ID: 16202523

Shebo Roy
ID: 16202521

Md. Abu Saleh

ID: 16202512

Jahidul Islam Bhuiyan

ID: 16302515

Md. Mehedi Hasan

ID: 17102521
 Acknowledgement

First of all we would like to take this opportunity to express my gratitude toward all those people
who have helped us in the successful completion of this term paper, directly or indirectly. We
would also like to express our sincere gratitude towards Mr. Chowdhury Abdullah Al Mamun
for his guidance and help which he willingly provided at every step of our term paper.

Finally, we would like to thank all friends for their encouragement, support and good wishes.
 Executive Summary
Being one of the leaders in their respective business arena, Rahimafrooz Ltd. (RAL) is not
invincible to the basic problem of Employee Turnover. RAL is one of those few companies
who have a full fledged HR department to handle issues like employee satisfaction, HR training
& development, motivation etc. Even after that they have not been able to fully alleviate the
problem arose from employee turnover.

According to the analysis, it was found that approximately two-thirds of the employees of RAL,
who left the organization during the period, had been employed for a period of 12 months or less.
Largest percentage (67.57%) of respondents left due to job related reasons, followed by 27.03%
who showed personal reasons namely family, health, further studies reason etc. The job related
reasons included: dissatisfaction with retail, dissatisfaction with salary, better employment non-
retail, no career growth and scheduling problems.

A gender based analysis revealed that, males are more prone to leaving a job than that of the
females. Roughly 74% of the males left the organization whereas the number of females was
26.0%. This reflects the overall gender imbalance evidenced in organization.

The overall analysis has revealed that, RAL, even after being the market leader is having hard
time to retain their desired employees for a longer period of time or for a period by which the
organization will be heavily benefited by their experienced decisions and performance.
Nonetheless, RAL is trying hard to find out the reason so that in near future they can deal with
this intricate problem more easily.
Table of Contents
No Contents Page No
1 Introduction 1
2 Aim and objectives 2
3 Literature Review 2
4 History of Rahim Afrooz Limited 3
5 Dependent Variables of employee turnover 3
6 Independent Variables of employee turnover 4
7 Reasons of termination 5
8 Recommendation 6
9 Conclusion 7
10 References 8
Introduction
Employee turnover refers to the number or percentage of workers who leave an organization
and are replaced by new employees. Measuring employee turnover can be helpful to
employers that want to examine reasons for turnover or estimate the cost-to-hire for budget
purposes. In the era of globalization, it has been regarded to be a key issue to deal with
employee turnover for any business organization. Chan et al. (2010) also state employee
turnover as a serious issue, particularly in the area of human resource management. To fulfill
the basic needs and provide a good working environment, good pay and other benefits in an
economic approach is quite multifaceted and burdensome to an organization. Every business
desires to increase the productivity and lessen turnover, thereby leading to be profitable.
Employee turnover supervision is an obligation to attain organizational goals effectively.
However, high turnover would bring devastation to the business in the form of both direct
and indirect costs. Direct costs are referred to costs such as expenses on recruitment,
selection, orientation, workshop and training for the fresh employees. Indirect costs are
indicated to spending on education, condensed self-confidence, stress on the existing worker
and the collapse of social capital. Moreover, high employee turnover will put at risk on
reaching the organizational goal. To combat the challenges in the cutthroat business world,
management has considered employee turnover as a major concern and initiated some
measures to retain them in the organizations.

Employee termination for poor job performance, absenteeism or violation of workplace

policies is called involuntary turnover -- also referred to as termination, firing or discharge.
It's involuntary because it wasn't the employee's decision to leave the company. Layoffs
could also be considered involuntary terminations, though layoff procedures usually are
handled differently from termination. Some layoffs have certain federal and state provisions
that aren't afforded to employees who are fired because of performance or policy violations.
When an employee leaves the company of her own volition, it's called voluntary termination.
Employees give a number of reasons for leaving their jobs. They may be accepting
employment with another company, relocating to a new area or dealing with a personal
matter that makes it impossible to work. When an employee voluntarily terminates the
employment relationship, she generally gives the employer verbal or written notice of intent
to resign from her job.

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Aim and Objectives
The aim and objectives of this report are as follows

1. To find out the various causes and influential factors of employee turnover in business
organization

2. Explores some sound retention strategies on how an organization can retain

employees and minimize the rate of turnover

3. Identify problems, analyzing the information and recommending possible solutions in

recent time.

4. To provide an overall insight about the employees turnover.

Literature review

There have several reasons of employees turnover, some of them given below.

1. Rude behavior. Studies have shown that everyday indignities have an adverse effect
on productivity and result in good employees quitting. Rudeness, assigning blame,
back-biting, playing favorites and retaliations are among reasons that aggravate
employee turnover. Feeling resentful and mistreated is not an enticement for a good
work environment.

2. Work-life imbalance. Increasing with economic pressures, organizations continue to

demand that one person do the work of two or more people. This is especially true
when an organization downsizes or restructures, resulting in longer hours and
weekend work. Employees are forced to choose between a personal life and a work
life. This does not sit well with the current, younger workforce, and this is
compounded when both spouses or significant others work.

3. The job did not meet expectations. It has become all too common for a job to
significantly vary from the initial description and what was promised during the
interviewing stage. When this happens it can lead to mistrust. The employee starts to
think, What else are they not being truthful about? When trust is missing, there can
be no real employee ownership.

4. Coaching and feedback are lacking. Effective managers know how to help
employees improve their performance and consistently give coaching and feedback to
all employees. Ineffective managers put off giving feedback to employees even
though they instinctively know that giving and getting honest feedback is essential for
growth and building successful teams and organizations.

5. Organizational instability. Managements constant reorganization, changing

direction and shuffling people around disconnects employees from the organizations
purpose. Employees dont know whats going on, what the priorities are or what they
should be doing. This causes frustration leading to confusion and inefficiencies.

2
The effect of employee turnover in Companies

High turnover can harm a business's ability to retain customers and provide high-quality
customer service. Customers may feel more comfortable talking to the same employees and
customer service representatives over time. Personal relationships and familiarity can build
customer loyalty. High rates of turnover lead to higher costs related to recruiting and training
new employees. It costs businesses money to hire human resource workers to interview and
hire candidates and training new workers can be a costly process that diverts skilled workers
from revenue-generating activities. Experienced workers who have to frequently train new
hires are less able to concentrate on their normal job duties. In a small business, the owner
himself might have to train new employees. The combined effect of the negatives that can
result from high turnover may cause a firm to generate less profit. Anything that tends to
increase costs or reduce productivity or revenue will tend to reduce profit. A new business
often takes months or years to achieve profitability and unexpected costs like high turnover
can increase the time it takes a new venture to make a profit.

How to retention employee turnover in the organization

By the following step one organization cane minimize the employee turnover in the
organization.

1. Hire the right people: The best way to ensure employees dont leave you is to make
sure you are hiring the right employees to begin with. Define the role clearlyboth to
yourself and to the candidates. And then be absolutely sure the candidate is a fit not
only for it, but for your company culture.

2. Keep compensation and benefits current: Be sure that you are paying employees
the fair going wage for their work (or better) and offer them competitive benefits,
orreallywho can blame them for ditching you? This might seem like a no brainer
but youd be surprised how few companies offer raises that keep up with an
employees development and actual rising worth.

3. Recognize and reward employees: Show your employees they are valued and
appreciated by offering them real-time recognition that celebrates their successes and
their efforts. Make it specific, social and supported by tangible reward, and you, too,
will be rewardedwith their loyalty.

4. Offer flexibility: Todays employees crave a flexible life/work balance. That impacts
retention directly. In fact, a Boston College Center for Work & Family study found
that 76% of managers and 80% of employees indicated that flexible work
arrangements had positive effects on retention. And more and more companies know
it. That means, if youre not offering employees flexibility around work hours and
locations, they might easily leave you for someone who will.

3
History of Rahim Afrooz Limited
The Rahimafrooz journey dates back to the early fifties when Late Mr. Abdur Rahim founded
a small trading company and paved the way for making of one of todays leading
Bangladeshi business conglomerates. Over the decades, Rahimafrooz has grown in size,
scale, and diversity. The group today has seven Operating companies (SBUs), three other
business ventures, and a non-profit social enterprise. As of 2008, the group currently employs
more than two thousand people directly and a further twenty thousand indirectly as supplier,
contractors, dealers and retailers.

Pakistan Extended export market to Middle East, Nepal, Bhutan, Sri Lanka, Myanmar and
Pakistan. 1996 Established Excel Retreads, a cold-cure tyre retreading plant, as a franchisee
of Elgi Retreads, India. 1997 Undertook a management and organizational re-structuring to
reorganize Group business

operations into strategic business units (SBUs) 1997 Introduced Rectifier and Power Back-up
Application. 1997 Attained ISO 9002 certification for battery manufacturing. 1999
Introduced PCM range economy battery for commercial vehicle segment 2000 Started
exporting to Kuwait & Lebanon, Georgia and CIS Countries

Hold First India Distributors Convention. 2000 Opened India Business Office in Ahmedabad
Launched new brand of automotive battery-VOLTA, which is a Valve Regulated Lead Acid
battery 2000 Introduced own brand RZ tyre and launched in the local market. 2000 Received
business Award as Enterprise of the Year.

Dependent Variables of employee turnover

Each of the eight dependent variables are an employees preference for having pay
determined by the respective factor.

LENGTH OF SERVICE IN THE ORGANIZATION is the number of years of tenure an

employee has with his current organization.

THE SKILLS YOU POSSES is defined as the specialized abilities an employee has that
differentiate him from other employees.

MARKET FORCES is defined as the external factors that may affect ones pay, to include a
shortage in the job field.

YOUR JOB PERFORMANCE can be either an appraisal rating or a measured output in a

manufacturing job.

COST OF LIVING is defined as the expenses associated with living where the job is located.

JOB RESPONSIBILITIES are defined as the level of importance of ones position. This is
often correlated to the degree of risk involved with decisions at that level.

INCONVENIENCES OF YOUR JOB are the difficulties and hassles associated with your
position.

4
EDUCATION LEVEL comprises both the number of full years of college as well as the
degrees completed. For the purpose of this study, the degrees are stated as Associates,
Bachelors, Masters and Doctorate, and the number of years is computed based on the credits
completed as opposed to time spent in school.

Independent Variables of employee turnover

The independent variables are factual background data.

They consist of age, education level, and whether the respondent has been indirectly or
directly adversely affected by unemployment in the last five years. The research instrument
that was used was an internal document developed by staff in the corporate office of RBL
and distributed to the human resource manager to be used to collect exit information from
employees who voluntarily or involuntarily terminated employment with the organization.
The survey instrument asked respondents to identify specific reasons for leaving the
organization.

Reasons of Termination
When the reasons for terminating were analyzed by category, the greatest number of exiting
employees gave job-related reasons for leaving. Non job-related reasons were given by
26.00% of the exiting employees. Four of the respondents left without notice. Reasons due to
employee faults were given by none of the respondents.

Gender

When the categories of reasons for terminating were analyzed by gender, the category
rankings were the same as for the aggregate data in Table below. Job-related reasons were
most often the reason given for leaving by both males and females. Although the gender
differences are significant, a greater percentage of males left due to non job-related reasons.

Length of Employment

A significant difference in category of reasons for leaving was found based on length of
employment. The greatest number of respondents left for job related reasons except for those
employed 0-12 months. The number of these employees left without notice (8%), yet almost
as many left due to job related (34.0%) and non-job-related (20.0%) reasons. For the exiting
employees who had a length of employment of 1-2 years, little difference was found in the
number who left due to job related (16.%) and non-job-related (4.0%) reasons.

5
Recommendation
1. Develop People - Organizations that focus on employee development enjoy higher
employee satisfaction, which leads to lower turnover. If each employee has a concrete
development plan that is reviewed at least annually and contains a variety of growth
opportunities, the employee will have little reason to look for greener pastures elsewhere.

2. Recognize Good Performance - Reinforcing people for doing good work lets them know
they are appreciated. Tangible and intangible rewards are a great way to show
management appreciation for workers who excel. This improves morale if done well.
However, understand that reinforcement can be a minefield if it is not handled properly.
Make sure employees receive sincere appreciation by management on a continuing basis.

3. Build Trust - By extending trust to employees, leaders demonstrate their willingness to

support them. This pays off in terms of higher trust on the part of employees toward the
organization. There is a whole science on how to build trust. By creating a real
environment, more trust in an organization will lead to lower turnover.

4. Reduce Boredom - Employees who are underutilized, tend to get bored and restless. If
there is a vacuum of activity, people often get into mischief. It is important for managers
to craft job duties and responsibilities such that people are actively engaged in the work
every day.

5. Communicate More - In nearly every corporate survey on employee satisfaction, the

issue of communication surfaces as either the number one or number two complaint.
Communication needs to be ubiquitous and consistent. It is not enough to have a monthly
corporate news letter or an occasional town hall meeting. Communication needs to take
many different forms and be a constant priority for all levels of management.

6. Cross Train - Employees, who have been trained on several different jobs recognize they
are of higher value to the organization and tend to be less inclined to leave. Along with
the pleasure of having more variety of work, employees appreciate the ability to take on
additional skills. Having good bench strength allows the organization to function well,
even during times of high vacation or illness.

7. Feedback Performance - there needs to be a constant flow of information on how all

employees are doing in each area of the organization. People who are kept in the dark
about their performance become disillusioned and cranky. The simple kindness of letting
people know how they are doing on a daily or weekly basis pays off in terms of lower
turnover.

8. Train Leaders - All levels of management and supervision need to be highly proficient at
creating an environment where the culture is upbeat, positive, and has high trust. This
does not happen by accident, or simply by desire.

6
Conclusion
The problem of employee turnover has plagued the organization for many years and will
most likely continue. The problem of high employee turnover warrants attention. The
organization may contribute to the problem or chose to work to decrease employee turnover.
By understanding the implications of actions involving employees and the organization can
hopefully have a favorable impact on employee turnover. Organization must learn to adjust
their traditional practices to avoid compounding the employee turnover problem.

This study examined the reasons for termination of employment of 50 employees of RBL.
General information about the exiting employees and the reasons given for leaving the
organization were analyzed in an attempt to identify possible opportunities to decrease
employee turnover in the future. The results of the study are summarized in the following
sections.

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References
1. Al Mamun CA, Md. Hasan MN (2017) Factors affecting employee turnover and
sound retention strategies in business organization: a conceptual view. Problems and
Perspectives in Management , 15(1), 63-71.

2. http://smallbusiness.chron.com/employee-turnover-definitions-calculations-
11611.html

3. https://en.wikipedia.org/wiki/Turnover_(employment)

4. http://www.peoriamagazines.com/ibi/2009/dec/12-reasons-employees-leave-
organizations

5. http://www.wikihow.com/Reduce-Employee-Turnover

6. http://www.assignmentpoint.com/business/management/term-paper-on-employee-
turnover-in-rahim-afroz-limited.html

7. https://leadergrow.com/articles/27-10-keys-for-reducing-turnover