Causes and Consequences of Employee Turnover:

A Quantitative Study of Impact of Employee Turnover in an Organisation

]
 Employee Turnover ii

ABSTRACT

All of the leading organisations believe that human resource department is the key to their

success. The problem that usually human resource departments face is the employee turnover.

Turnover has been defined as employees voluntarily leaving his or her employer; turnover has

also been defined as the degree of movement across the membership boundary of a social

system. The purpose identified in this research is to find the causes of high employee turnover

within the organisation and understand the impact of employee turnover in an organisation. The

objectives of the study involve understanding the causes of high employee turnover within the

organisation, examining the consequences of high employee turnover within the organisation,

and exploring the impact of employee turnover in an organisation.

 Employee Turnover iii

Table of Content

ABSTRACT....................................................................................................................................ii
CHAPTER 1: INTRODUCTION....................................................................................................1
Background of the Study..........................................................................................................1
Problem Statement...................................................................................................................3
Research Aims and Objectives.................................................................................................4
Structure of the Study...............................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................6
Employee Turnover..................................................................................................................6
Factors of Employee Turnover.................................................................................................7
Costs of Employee Turnover....................................................................................................9
Employee Job Satisfaction, Commitment and Turnover........................................................10
Impact of Rewards/Pay on Employee Turnover............................................................15
Impact of Promotion on Employee Turnover................................................................16
Impact of Job Safety and Security on Employee Turnover...........................................17
Impact of Working Conditions on Employee Turnover.................................................17
CHAPTER 3: METHODOLOGY.................................................................................................20
Research Design.....................................................................................................................20
Data Collection.......................................................................................................................21
Sampling.................................................................................................................................21
Ethical Consideration.............................................................................................................21
REFERENCES..............................................................................................................................23
 Employee Turnover 1

CHAPTER 1: INTRODUCTION

This chapter offers an overview of the entire dissertation. It provides a background to the

research study, aims and objectives of the study, problem of the research, significance and

rationale of the research and nature of the study. This chapter provides the layout of the

dissertation that briefly explains the flow of the dissertation and the subject that is covered in

each of the chapters of this dissertation.

Background of the Study

Turnover has a significant impact on an organisation. Organisations invest a lot on their

employees in terms of induction, training, development, maintaining and retaining them in their

organisation (Allen, Shore & Griffeth, 2003, p. 99). Therefore, manager at all costs must

minimize employee’s turnover.

A growing concern for many organisations is high employee turnover rates. In particular,

organisations in the some industry have higher than average employee turnover rates when

compared with companies in other industries. Employee turnover can be so costly that

organisations will take measures to retain their employees (Allen, Shore & Griffeth, 2003, p. 99).

Employee turnover in the organisations is high at all levels of employment: however, high

turnover is particularly anticipated at the level of front-line employees (i.e. cashier, sales

associate).

In an effort to decrease turnover rates, employers continually try to determine the reasons

that employees leave their organisations. Turnover has been found to be impacted by variables

such as work-family conflict, family-work conflict, pay satisfaction, job satisfaction, and
 Employee Turnover 2

organisational commitment (Allen, Shore & Griffeth, 2003, p. 99). There is a need for research in

the field of human resource management to determine the relationship between various variables

and turnover intentions (employee's intentions to withdraw from an organisation and how to

prevent turnover intentions, which ultimately prevents turnover. The intention to quit a job is the

immediate precursor of turnover.

Batt & Valcour (2003) found that organisational commitment only partially mediates the

relationship between job satisfaction and turnover intentions, meaning that job satisfaction has

both a direct and indirect effect on turnover intentions, via organisational commitment. Batt &

Valcour (2003) found that organisational commitment had a stronger effect on turnover

intentions than the impact job satisfaction imposed. Batt & Valcour (2003) found that

organisational commitment has a direct effect on turnover intentions and that job satisfaction has

a direct effect on both organisational commitment and turnover intentions. In addition, Batt &

Valcour (2003) found that the most immediate determinants of turnover intentions are job

satisfaction and organisational commitment.

Some studies found that job satisfaction has a positive direct impact on organisational

commitment and a negative indirect impact on turnover intentions, meaning employees'

satisfaction with their jobs is linked to their commitment to the organisation. Ultimately, this

commitment leads to fewer turnover intentions (Capko, 2007, p. 116). However, some studies

found that job satisfaction has a direct impact on organisational commitment as well as turnover

intentions.

Turnover, the loss of fellow workers, has an impact on those who remain that must be

acknowledged by management in today's environment. Chen et al. (2011) examined the effect of

downsizing on the individual's sense of self. To the extent that the self feels attacked, individuals
 Employee Turnover 3

will react defensively and negatively. The study looked at three separate cases and found that the

loss of self resulted in a reduced organisational commitment and a lowered positive affect. On

the other hand, Chen et al. (2011) found that turnover had a mixed impact on the loyalty and

satisfaction of the employee depending on who left the firm.

This study highlights the reasons behind the high turnover rate within the organisations.

This new information contributes to the existing literature on these variables by providing a

theoretical foundation for future research on turnover intentions and its immediate precursors in

the industry, as well as other industries. It also helps organisations in determining what actually

contributes to employees leaving the company, which will be beneficial in developing strategies

to prevent turnover (Capko, 2007, p. 116). This study will lead to strategies that organisations

can use to increase their chances of retaining employees. High turnover in the organisations must

be corrected for continued success (Capko, 2007, p. 116).

Problem Statement

Turnover and intentions to leave an organisation are primary concerns for many

companies, especially those in the service industry. Turnover rates are a large cost that

organisations try to minimize. Even if an employee has turnover intentions but has not actually

left the organisation, it still costs the organisation money and lost opportunities. For example, the

organisation may incur costs that result from the employee's slower work pace and increased

absenteeism. When employees are absent, the organisation incurs costs in lost sales opportunities

and lost service (Capko, 2007, p. 116). The organisation also increases its expenses by paying

overtime pay for employees who take on the work of those who are absent.
 Employee Turnover 4

There are several variables that influence employee turnover and turnover intentions.

Specifically, work-family conflict, pay satisfaction, job satisfaction and organisational

commitment are all related to turnover or turnover intentions. The purpose of this study was to

investigate the causes of high employee turnover within the organisation and understand the

impact of employee turnover in an organisation.

Research Aims and Objectives

The purpose identified in this research is to find the causes of high employee turnover

within the organisation and understand the impact of employee turnover in an organisation. The

objectives of the study are:

 To understand the causes of high employee turnover within the organisation.

 To examine the consequences of high employee turnover within the organisation.

 To explore the impact of employee turnover in an organisation.

Structure of the Study

This research comprises of five chapters. Chapter one of this study offers an overview of

the entire dissertation. This includes topic description, aim and purpose of this research study.

This chapter of this dissertation provides a background to the research study, problem of the

research, significance and rationale of the research and nature of the research study. This chapter

provides the layout of the dissertation that briefly explains the research’s flow and the subject

that is covered in each of the chapters of this dissertation.

The second chapter of this research study presents the past researches and literature that

are published on the same subject. Various researches have been identified, checked and obtained
 Employee Turnover 5

from different sources such as the internet. This shall be useful for the purpose of gathering and

extracting relevant information for answering the questions of this research study. The researches

chosen for the literature review are formulated on the basis of the theoretical framework which

has been described through numerous contributions to the problem of the research.

Chapter three offers the method of research which has been used for this dissertation.

Chapter three of this research study has discussed the research method which has been used for

the purpose of obtaining all the relevant information for conducting this research. This chapter of

the dissertation provides type of method adopted and it also represents rationale and justifies the

chosen research method. A description for the techniques of the research has been offered in this

chapter which provides an explanation of the ways through which the knowledge and

information can be collected or gathered for this research study.

Chapter four of this research study provides findings that are obtained with the use of the

research method. For meeting the aim of this research quantitative method of research has been

used. This chapter of the study also provide discussion and analysis of the findings and results

that are obtained from the dissertation. It also provides analysis of the data that has been gathered

extracted from the primary as well as secondary sources of information. After the collection of

the data, major points were noted by the researcher and the findings have been analysed by

techniques of research utilised in this research study.

Chapter five offers the conclusions and recommendations for this research study. It

summarises the entire information that has been provided in this research study and the way in

which knowledge has been achieved from the primary as well as secondary sources.
 Employee Turnover 6

CHAPTER 2: LITERATURE REVIEW

This chapter presents the past researches and literature that are published on the subject.

Various researches have been identified, checked and obtained from different sources available

on the internet. This was useful for the purpose of gathering and extracting relevant information

for answering the questions of this research study. The researches chosen for the literature review

were formulated on the basis of the theoretical framework which was described through

numerous contributions to the problem of the research.

Employee Turnover

Turnover has been defined as employees voluntarily leaving his or her employer;

turnover has also been defined as the degree of movement across the membership boundary of a

social system (Hancock et al. 2013, p. 573). According to the researcher, turnover is an

individual‘s own estimated probability (subjective) that they are permanently leaving the

organisation at some point in the near future. According to some researcher, employee turnover is

an incident of employees voluntarily leaving an organisation. These definitions imply that

turnover is a process and not an instant occurrence. Turnover Intent Over the last 40 years,

considerable research has been devoted to predictive models of voluntary turnover, with job

satisfaction, organisational commitment, and intent to leave/quit among the most commonly

proposed antecedents. Individual studies have generally supported linkages among turnover and

those variables. Researchers theorize that there are two types of turnover, voluntary and

involuntary (Hancock et al. 2013, p. 573).

 Employee Turnover 7

There are three main reasons for employees leaving their job: retirement, dismissal, or

voluntary resignation. The first two, retirement and dismissal are influenced by management and

organisational policies; whereas the last, represents a personal decision to leave work. The focus

of this study will be on providing a baseline measurement of factors that may influence voluntary

turnover of employees. Most models of voluntary turnover assume that job dissatisfaction is the

primary reason for turnover. There is an extensive body of work that supports the negative

relationship between employee turnover and job satisfaction. Job dissatisfaction causes

employees to explore alternative employment opportunities, evaluate the ease of movement to

these new employment opportunities and finally actual turnover. Therefore, the traditional

conceptual approach of turnover, views voluntary separation as a consequence of low job

satisfaction combined with alternative labour market opportunities that are subjectively

perceived as having higher values and relative ease of movement (Hancock et al. 2013, p. 573).

Factors of Employee Turnover

Employee turnover is a problem that has been found to be related to leadership

behaviours (Capko, 2007, p. 116). When examining the problem of employee turnover, many

researchers have determined that one of the primary reasons people leave their jobs is their

inability to get along with their managers or supervisors (Capko, 2007, p. 116). In one of the

earliest and most complete attempts to focus on the problem of employee turnover in the

organisation, Choi & Dickson (2010) reported the results of a 3-year study in the which they

concluded that, although pay was often a factor for why employees voluntarily separated from

their jobs, quality of supervision, inadequate working conditions, and job dissatisfaction were the

reasons most frequently given for leaving the industry. Choi & Dickson (2010) obtained similar
 Employee Turnover 8

results in a study examining employee turnover within the hospitality industry when they

surveyed six restaurants and six hotel chains.

Furthermore, in one of the most comprehensive research studies specific to the restaurant

industry about the causes of employee turnover, researchers from the Yang, Wan & Fu (2012)

study surveyed 5,500 employees in the food service industry. Although there were many reasons

found for employee turnover, the researchers suggested that employee relationships with their

managers were an important reason why employees left their jobs.

The problem of employee turnover in the organisation is not limited to any specific

country. In an empirical study of work, motivation, and job satisfaction among Chinese

restaurant managers in Hong Kong, Newman, Thanacoody & Wendy (2011) determined that the

annual turnover rate varied between 30% and 100% and that the turnover rate of management

personnel was so high, it created problems in the quality of service delivery, job satisfaction, and

employee morale within the restaurant industry. The importance of leadership within the

restaurant industry cannot be minimized.

Lessons on leadership and employee turnover can also be learned from other high

turnover industries. For example, in a case study involving the high-turnover clothing industry in

the United Kingdom, Stanley et al. (2013) found that employees from manufacturing firms that

had lower than average annual employee turnover rates consistently cited job satisfaction,

management style, and working conditions as reasons for staying. Their research suggested that

positive actions by management can encourage employee attachment to leaders and the

organisation and are critical in supporting work values that reduce employee turnover. Thus,

leadership practices as a variable in shaping employee attitudes is critical in understanding why

employees stay in high-turnover industries. Although it is important to understand the role of

 Employee Turnover 9

leadership for restaurant operators within the hospitality industry, it is equally important to

understand the costs associated with high employee turnover.

Costs of Employee Turnover

It costs employers millions of dollars a year in industries that experience high employee

turnover just to replace new employees (Mosadeghrad, Ferlie & Rosenberg, 2007, p. 15).

However, these costs deal only with the direct costs associated with employee turnover such as

human resource functions of having to recruit, select, hire, and train a new employee for the

organisation (Mosadeghrad, Ferlie & Rosenberg, 2007, p. 15). Indirect costs associated with

employee turnover are difficult to identify. For example, lower employee morale, mistakes by

overworked employees and inefficiencies as a result of the transition process of having to learn a

new job are hard to quantify for many organisations (Mosadeghrad, Ferlie & Rosenberg, 2007, p.

15). In fact, human resource professionals have determined that even if a new employee is given

the best training available, the productivity level has been estimated to be no more than 50% of a

seasoned employee's productivity, and it could take up to a year for a new employee to develop

into a fully productive worker for a organisation (Mosadeghrad, Ferlie & Rosenberg, 2007, p.

15), thereby, disrupting the quality of the product and the excellent customer service required in

the hospitality industry.

Furthermore, not only does excessive employee turnover create poor customer service, it

also lowers sales and interferes with any business expansion plans (Mosadeghrad, Ferlie &

Rosenberg, 2007, p. 15). Thus, the costs associated with employee turnover can result in poor

employee morale, undermine customer loyalty, and can have a negative impact on operator's
 Employee Turnover 10

profitability (Mosadeghrad, Ferlie & Rosenberg, 2007, p. 15). Such costs are a concern to the

organisation.

Therefore, the best way for an organisation to reduce the costs associated with employee

turnover is to reduce employee turnover itself (Mosadeghrad, Ferlie & Rosenberg, 2007, p. 15).

Employee Job Satisfaction, Commitment and Turnover

A factor that is negatively correlated to job satisfaction is turnover. Individual satisfaction

or dissatisfactions is shaped by an employee’s total situation at work, home, and every aspect of

his or her work. Nasab (2008) stated that three of the most popular questionnaires developed to

measure job satisfaction are the Job Descriptive Index, Minnesota Satisfaction Questionnaire,

and Faces Scale. Of course, with any scale, the construct of job satisfaction is constantly

changing.

Nasab (2008) stated that employees who are satisfied with their job are more motivated to

perform well, help others more, and show an overall higher commitment to the organisation.

Equity theory specifies that job satisfaction is related to an individual’s perception of his or her

balance of inputs and outputs, thus leading to a sense of equity. The feeling that an employee is

being treated impartially leads to job satisfaction. Equity theory explains that people judge

whether they are being treated fairly by comparing themselves to others (Nasab, 2008, p. 55).

Job satisfaction is a construct of study within industrial/organisational psychology. Rode

(2004) emphasized, “Theorists and practitioners seem to accept the assumption that nearly

everybody seeks satisfaction in his or her work” (p. 1205). Additionally, general job satisfaction

is an essential part of adult career development. There are very studies in the law enforcement

field, as it relates to perceptions of job satisfaction. As in most military-structured law

 Employee Turnover 11

enforcement agencies, the officers are trained to do what they are asked and officers’ satisfaction

level is of no concern (Rode, 2004, p. 1205). The typical study of the law enforcement

population examines the variance of demographics and personal and organisational

characteristics.

Saari & Judge (2004) divided theories of job satisfaction into two categories: process

theories and content theories. Content theories determine which needs are mandatory to attain

job satisfaction. According to Maslow, an individual’s hierarchy of needs is made up of lower

level (i.e., safety, security, physiological) and higher level needs (i.e., esteem, self-actualization).

The needs theory is brought to a close after lower level needs have been achieved; then the focus

can be on the employee’s job satisfaction. As a person becomes satisfied at each level, higher

needs and wants emerge for the employee (Petronio & Colacino, 2008, p. 21). When those needs

are satisfied, new and higher needs emerge, and so on. Petronio & Colacino (2008) stated that

while some individuals achieve a sense of personal satisfaction from their work, others might not

(p. 21).

Vroom was a major contributor to the understanding of motivation and the concept of

valence (when affective orientations are directed toward a particular outcome that is conveyed

across a range of positive and negative values) (Petronio & Colacino, 2008, p. 21).

Organisational characteristics are significantly related to employee perception of job satisfaction

and can account for up to 50% variance of satisfaction level. Theorists McGregor and Herzberg

argued that the needs and desires of employees must be taken into consideration in order for the

organisation to function. Affective response is the first gut-level emotional response the

employee associates with his or her job performance (Petronio & Colacino, 2008, p. 23). The two

most commonly explored traits of personality and job satisfaction are positive and negative
 Employee Turnover 12

effect. A higher positive affect will report a higher level of job satisfaction and higher negative

affect a lower level. The development of the job satisfaction model is a result of research on

motivation and the psychological drive behind behaviour.

Herzberg stated that employee job satisfaction is achieved when two motivating factors

are achieved: a desire to avoid pain (financial, physical, and psychological) and a chance to

thrive at internal standards of perfection (Ramlall, 2004, p. 52). Herzberg interviewed 200

accountants and engineers and asked them to recall instances that made them feel negative or

positive about their work. Participants were also asked to provide a few reasons why they felt

positive or negative, along with a chronological timeline of events leading to their feelings (as

cited in Ramlall, 2004, p. 52). This was for the purpose of investigating what caused

dissatisfaction or satisfaction at work for the accountants. The positive satisfiers were found to be

the work itself, the type of recognition given for the job performed, advancement opportunities

offered, and the reasonability given. According to Herzberg, the negative satisfiers were

interpersonal relationships, job security, working conditions, company policy, supervision, salary,

and personal life (Ramlall, 2004, p. 52). The two-factor theory of motivation and job satisfaction

was then proposed by Herzberg. Motivator factors address achievements, recognition for

achievement, work itself, responsibility for enlarged task, and growth and advancement to higher

level tasks. The second dimension addresses the perception that the presence of a particular set of

job incentives or characteristics leads to job satisfaction at work and another set to job

dissatisfaction.

Herzberg concluded that employees reported feeling satisfied from the intrinsic nature of

work and dissatisfaction based on the extrinsic nature of their work. In other words, if the

employees get recognition for achievement, can grow from additional responsibility, and have
 Employee Turnover 13

interest in their work, they will be motivated. Motivators relate to job satisfaction because they

are intrinsic in work-related elements. The motivators promote growth and development; thus,

the major motivators cause work satisfaction and increase work performance.

The relationship between job satisfaction and job performance has been studied

extensively for nearly a century. As far back as the 1920s, the Hawthorne Studies were one of the

first to analyze this potential connection. The Hawthorne Studies evaluated whether worker

productivity would increase or decrease given the physical surroundings of their work

environment and the interest that management showed in the employees. The results showed that

worker productivity did increase when physical conditions improved. These physical conditions

included better lighting, maintaining clean work areas, a more open workspace, and relocating

workstations. It was also suggested that productivity increase occurred due to the increased

interest being shown in them. This produced a motivational effect on the workers that was not

originally expected. The Hawthorne Studies also revealed that workers improved or modified

their behaviour when they knew that they were being studied. This has become known as the

“Hawthorne Effect” and is still studied to this day.

Now, over 90 years and over two thousand articles later, researchers are still examining

how job satisfaction variables relate to turnover intent. Work-family conflict literature one of the

most studied topic when it comes to employee turnover and job satisfaction is one of the most

frequently studied outcomes in this literature. As a result, job satisfaction is often studied as it

impacts organisational commitment and turnover intentions. With every study there seems to be

a new variable added to the expansive body of existing literature. Despite this, there has not been

one all encompassing formula to define job satisfaction up to this point.

 Employee Turnover 14

A major study conducted by Herzberg changed the preconceived notion that as job

satisfaction rises, job dissatisfaction decreases. Herzberg determined that job satisfaction and job

dissatisfaction act independently of each other and are effected by different sets of factors.

Known as the motivation-hygiene theory, or dual-factor theory, Herzberg states that job

characteristics relating to what the employee does effects job satisfaction whereas dissatisfaction

results from environmental factors such as supervision, salary, company policies, relationships

with co-workers and working conditions. Job satisfaction can be influenced by recognition,

achievement, and personal growth. Herzberg’s findings have had a considerable influence on

theoretical, practical, and academic terms of thinking. Leaders must realize that not all

employees are in the same situation and their varying needs should be considered individually.

Since this distinction between job satisfaction and job dissatisfaction, job satisfaction has

been linked to specific job characteristics, time/stress variables, variety of work, responsibility of

projects, performance requirements, work recognition, and customer perceptions of service

quality performance. Though Herzberg lists environmental roles as affecting job dissatisfaction,

job satisfaction has recently been shown to be influenced by: compatible role expectations, on

the job relationships, quality of co-workers, and whether the employee has friends and/or family

working for the organisation. The variables affecting organisational commitment and job

satisfaction overlap considerably since both factors directly affect the other.

As with organisational commitment, an employee’s job satisfaction was often related to

management. Factors such as management style, concern and caring for both employees and

customers, and supporting a work/family balance were all noted as having a significant impact

on job satisfaction.
 Employee Turnover 15

Is there a clear link between job satisfaction and employee turnover? Many studies have

empirically shown that there is indeed a strong connection. These studies showed that job

satisfaction is an important precursor to turnover and turnover intentions. Job satisfaction heavily

influences turnover intention and represents a reliable indicator of actual voluntary turnover.

Numerous research articles have tried to empirically show all of the factors that influence job

satisfaction such as compatible role expectations, on the job relationships, quality of co-workers,

whether the employee has friends and/or family working for the organisation, management style,

management’s concern and caring for both employees and customers, and supporting a

work/family balance. Though there are many variables affecting job satisfaction, most of the

literature reviewed agreed that overall job satisfaction is an important variable in the turnover

process.

Impact of Rewards/Pay on Employee Turnover

Employee satisfaction is resulted from various factors, which includes rewards or pay, the

work itself, promotion opportunities, leadership, relationships with peers and colleagues etc.

among these mentioned factors, pay or salary is one of the most significant factors. According to

Bowling (2007), a positive relationship exists between the equity based compensation and

performance of the employees. Further it was also concluded that pay or salary plays a crucial

role in attracting and retaining employees in organisations that are human capital intensive

(Bowling, 2007, p. 167). Additionally, pay or salary of employees significantly impacts their job

satisfaction level and eventually the employee turnover. According to Bowling (2007), flexibility

in the compensation of employees does not have any effects on the job satisfaction level. In this

study the researcher conducted the research on the employee turnover in public sectors. The
 Employee Turnover 16

study concluded that compensation is the primary determinant of employee turnover (Bowling,

2007, p. 167).

Another study was conducted to investigate the relationship between the compensation of

an employee and job satisfaction level. The study by Catteeuw (2007) concluded that pay or

salary of an employee highly affects turnover.

According to Catteeuw (2007), in an organisation there are different variables that highly

influence the employee performance and turnover. These variables include compensation,

commitment towards the organisation, relationship between compensation and employee

performance etc. (Catteeuw, 2007, p. 151). Some empirical evidences prove that a positive

correlation exists between the two variables; employee compensation and employee

performance.

Impact of Promotion on Employee Turnover

According to results of the study conducted by Han (2009), there are several determinants

which can influence the employee turnover level. There are many studies that focused on the

demographic factors; however, other studies concentrated on the influence of working

environment on the level of employee turnover (Han, 2009, p. 878). Other factors including the

job autonomy, social relations, promotion opportunities, leadership behaviour etc. are also very

influential on job satisfaction and increasing employee turnover level. According to study by Han

(2009), job satisfaction of employees is directly related to the opportunities of promotion present

in the organisation (Han, 2009, p. 878). A study conducted by Han (2009) presented that a

positive relationship exists between the promotion opportunities and perceived employee

performance. If managers of any organisation wish to decrease employee turnover and increase
 Employee Turnover 17

the employee performance levels in the organisation, the managers should introduce fair

opportunities for promotion to the employees (Han, 2009, p. 878).

Impact of Job Safety and Security on Employee Turnover

According to the research studies conducted by several authors, employees are highly

dissatisfied due to the level of insecurities among them. Many crucial factors such as low level of

job security, the nature of work itself, inadequate working conditions, low compensations and

benefits, lack of promotion opportunities, low job autonomy etc. have unfavourable and

unpleasant influence on employee’s job satisfaction level and increases employee turnover

within the organisation (Macey, 2008, p. 3).

According to the research conducted by Macey (2008) on Japanese employees it was

found that arrangement of employment, such as seniority systems and lifetime employment,

leads to job security, which in turn leads to high level of organisational commitment from

employees (Macey, 2008, p. 4).

Studies conducted by Macey (2008) found that the employee turnover increases as the

job insecurity level increases. According to Macey (2008), the organisational commitment from

employees is highly influenced by the level of job security (Macey, 2008, p. 4).

Most of the researches conducted on job insecurities concluded that organisational

commitment level and job performance have negative correlation with job insecurity.

Impact of Working Conditions on Employee Turnover

According to various researches, the environment in which employees work is also

crucial for determining the level of employee turnover. Many researchers concluded that the
 Employee Turnover 18

work environment of employees can yield positive outcomes as it can lead to job satisfaction and

employee commitment (Michael, 2009, p. 410). Furthermore, various factors have different

effects on the levels of employee commitment. Factors such as working conditions,

compensation and benefits, rewards and incentives, appraisal and recognition etc. have different

impacts on the employee turnover level (Michael, 2009, p. 410). Researchers have concluded

that lack of promotion, inadequate working conditions, job insecurity and low job autonomy has

leads to high employee turnover rate (Michael, 2009, p. 410).

Natural symptom of increasing employee turnover is the low level of quality and

performance of employees and the declining effectiveness of organisational units, which employ

dissatisfied workers. This, in turn, leads to the weakening conditions of the company. Therefore,

it is important for the leaders to timely notice dissatisfaction, identify its sources and to take

prompt action to correct the condition. The main reasons for increasing employee turnover rate in

various organisations are more likely due to the level of pay, poor working conditions, lack of

social security and job insecurity.

Job satisfaction is also something that a manager must consider in managing employee

turnover. The manager must decide whether an employee’s performance variable, which may be

sometimes high and sometimes low, is caused by the ability, effort, or both. Reflection on the

causes of the increasing employee turnover level puts the manager in a diagnostic role. A

manager cannot decide whether a person should remain in position long term without being able

to determine why an employee performs well on a regular basis, which may be whether for

internal or external reasons to the person.

Another effect on the employee turnover evaluation based on the satisfaction of the

employee's work relates to his beliefs about the role of manager. If an employee believes that a
 Employee Turnover 19

manager makes an assessment based on qualities or characteristics not related to performance, he

or she will not be able to value or confidence in the system and eventually leave the organisation.

This will result in a decrease in commitment to the organisation, which will affect long-term

productivity of the organisation. A manager has an important role in the evaluation, which is

rather based on performance standards.

 Employee Turnover 20

CHAPTER 3: METHODOLOGY

This chapter offers the method of research which has been used for this study. This

chapter discussed the research method which has been used for the purpose of obtaining all the

relevant information for conducting this research. A description for the techniques of the research

has been offered in this chapter which provides an explanation of the ways through which the

information was collected or gathered for this research study.

Research Design

In this study the researcher used quantitative research method for collection of required

primary data. Quantitative research is often referred to as empirical or statistical studies.

Quantitative research involves measurements of the characteristics and gives the results in

amounts. It helps a researcher to gain precise knowledge based on the respondents input. A

researcher can, by conducting quantitative research, make numerical analysis. Accurate findings

can be obtained by the researcher using this method. Moreover, the results obtained from a

sample, using quantitative approach can be generalized to the population from which the sample

was taken.

The researcher’s choice to use quantitative method was due to the fact that it enables the

researcher to gain numerical data from the respondents in order to gain an understanding of the

topic. Another reason to use quantitative data is to obtain clear and precise data. Qualitative

studies are subjective in nature which means they require vast amount of data and time for

analysis. Therefore, the researcher chose to use quantitative data to generate reliable results in

the limited time and budget.

 Employee Turnover 21

Data Collection

In this study the researcher used Likert scale type questionnaire for collecting primary

research regarding causes of high employee turnover within the organisation and the impact of

employee turnover in an organisation. The researcher did not use any existing questionnaire

instead decided to develop his own questionnaire.

Sampling

The data was collected through non probability sampling method. Non probability

sampling methods enable a researcher to choose the samples according to his judgment, and

allow the researcher to gather data at a lesser cost, and in lesser time as compared to probability

sampling. The kind of sampling done was convenience sampling. This approach of sampling

allows a researcher to gather data from the respondents that are easily available. The

questionnaires were distributed among the respondents randomly, and were not chosen by the

researcher. Therefore, the information was obtained by those respondents who were available

and willing to participate in the study. A sample of 50 employees was selected to understand their

perception about the causes of high employee turnover within the organisation and the impact of

employee turnover in an organisation.

Ethical Consideration

Ethical considerations are the most crucial aspects of the study that is essential to enhance

the value of the research as well as to increase the generalisiblity of the research outcomes to the

wider population. However, the ethical considerations include the consent form as well as

confidentiality concerns and all other strategies that are used by the researcher to conduct the
 Employee Turnover 22

research in an ethical way. In this particular research, the researcher used consent form to make

sure that the contribution of the participants is purely based on their consent. In addition to it, the

researcher made sure to the participants that the information provided by the participants will

remain confidential throughout the study even after the completion of the study in order to

ensure the ethical considerations of the study. In addition to it, the researcher gave a certain

importance to the legitimacy of the information that is going to be included in the study in order

to make sure that the study follows the ethical codes provided by the university.
 Employee Turnover 23

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