Impact of Employee turnover and Controlling it.

 Human capital is the key to a successful business. It has the necessary skill and the talent to drive businesses to higher levels. (Allen, 2008). Therefore, it is important for organizations to maintain a workforce with talent and skill to survive the competition and to achieve its goals. But human nature is so complex and diverse from one to another. Keeping such diverse individuals in the long run and directing them to achieve a common goal (organizational goals) is a key challenge that the managers face today. (Allen 2008). With the advancement of trade, continuous new opportunities open for the talented and skill labor. Which means that there is plenty of opportunities for the workforce to turnover form one organization to another. March and Simon (1958) who studied about employee turnover intention in early stages stated that for an employee to move from one job to another, there should be a “perceived desire and a perceived possibility of such ease of movement”. In today’s context we can argue that “perceived possibility of such ease of movement” is plenty as there are so much of new openings due to the economic advancement and globalization. Due to this reason, “a desire” to change the job to a better organization which gives more benefits constantly kindles in present day employee’s mind.

Therefore, employee turnover has become a key challenge for HR managers at present and a number of studies have been conducted and a number of solutions proposed by these studies, but still employee turnover has not decreased. (Veloulsou, 2004, sited in Wjebandara 2019).

Calculating the employee turnover rate and understanding it,

The employee turnover rate is calculated by dividing the number of employees who left the company by the average number of employees in a certain period in time. This number is then multiplied by 100 to get a percentage.

Source – https://www.slideteam.net/

To calculate the employee turnover rate 3 variables are required.

1. The number of employees who left (voluntary and involuntary) the company in a certain period of time. (Quarterly/ half yearly or annual)

2. The number of employees the company was employing at the beginning of a certain period.

3. The number of employees the company was employing at the end of certain period

We cannot generalize the employee turnover rate of an organization and say that it is acceptable or not as it varies depending on many factors. But usually it is compared with the industry standard in a geography during a specific time period and then benched marked with the national turnover ratio. There are industries where the turnover is higher than the national turnover ratio. In Sri Lanka Apparel industry is such an industry.

If the turnover ratio of an organization is higher than the industry standard of that geography during that period, it is an indication of a problem in the organization which requires immediate attention (Allen,2008).  High turnover incurs high costs and low productivity to the organization. But if the high turnover is due to poor performers leaving the organization it can be beneficial for the organization (Udechukwu ,2007).

Why turnover matters to an organization 

Organizations must take a note of the turnover of employees due to three factors.

1.      It is costly.

Employee departures cost a company time, money, and other resources. Research suggests that direct replacement costs can reach as high as 50%-60% of an employee’s annual salary, with total costs associated with turnover ranging from 90% to 200% of annual salary (Cascio,2006 sited in Allen 2008).

 

2.      It affects performance.

New joiners take time to catch up the work and initially are slow and makes mistakes. Due to this the flow of the work in an organization is affected and the production may become slow and wastage also may increase due to defects. If it is a service organization customer service may get affected and the organization may lose some customers as well. (Cascio,2006 sited in Allen 2008).

 

 

3.      It would be difficult to find talent and thus would be difficult to manage the organization without required talent.

Due to brain drain lot of developing countries are losing skilled labor. Therefore, it would be difficult to replace specialized talent if an employee with such skill resigns. Sometimes organizations may even have to continue without filling these vacancies for some time. As an example we can mention the shortage of Fintech professionals in IT sector and surgeons dealing with kidney transplants in Sri Lanka.

How employee turnover could be controlled.

As discussed earlier, unhealthy turnover is a concern for organizations and it needs to be controlled. But finding ways and means of controlling turnover is no easy task as there is no fixed recipe for it. Each organization will have to find its own treatment by finding out the cases for the turnover.

However, Various researchers have suggested different HR practices as the most appropriate in controlling turnover according to their findings. According to Allen (2008) Correct recruitment, Correct selection, socialization, training and development, compensation and rewards, supervision and employee engagement are the most effective factors in controlling employee turnover. According to Zang (2016), employee engagement and job design, understanding the real needs of employees, effective dealing with employee complaints, a fair and a competitive compensation package, training and career development, improving living conditions of employees are the effective factors in controlling employee turnover. Therefor it is not practical to list or name any practice or practices as ideal, as it would depend and very from organization to organization.

The below video also explains the measures which can be adopted to control employee turnover in an organization.

Source - https://www.youtube.com/watch?v=JAjR6cac6O4

References.

1.      Allen, D.G (2008). Retaining Talent, SHRM Foundation, U.S.A.

2.      March, J. & Simon, H. (1958). Organizations, Wiley & Son, New York.

3.      Udechukwu, I.K. & Mujtaba, B.G. (2007), Determining the probability that an employee will stay or leave the organization: A mathematical and theoretical model for organizations, Human Resource Development Review. Vol 6, No 2, pp 164-84.

4.      Wijebandara,H.M.M.A. ,  Malalage,G.S., and  Fernando,W.R.P.K.A (2019). Factors Affecting Employee Turnover Intention among Non-Managerial Employees in Selected Financial Companies in Colombo District. Kelaniya Journal of Human Resource Management, VoL 14 ,Issue 01, Page 33-4.

5.      Zhang, Y, (2016). A review of employee turnover influence factor and countermeasures. Journal of human resource and sustainability studies. Vol 4, no 2, June 2016.

Herzberg’s and McGregor’s theory Vs Employee turnover.

 

Herzberg’s Two Factor Theory. (Theory of motivation factors)                  

American psychologist Frederic Herzberg in 1959 introduced a powerful motivational theory which is known as Herzberg’s two factor theory. It is also known as motivation hygiene theory or dual factor motivational theory as well. In developing this theory, he was influenced by the Maslow’s hierarchy of needs. (Jones 2011). According to this theory Herzberg divides the factors that affect job satisfaction into two categories as motivation factors and hygiene factors or intrinsic and extrinsic factors. 

According to this theory, presence of motivation or the intrinsic factors increases the motivation of an employee and presence of hygiene or extrinsic factors reduce job dissatisfaction (Herzberg et al 1959 sited in Alshememri 2017).

Hygiene or extrinsic factors refers to the basic needs an employee may look in a job such as salary, good working environment, job security, organization policy, supervision etc. These are the lower levels of Maslow’s hierarchy of needs. It’s important for managers to realize that not providing the appropriate and expected extrinsic motivators will increase dissatisfaction and decrease motivation among employees The absence of hygiene factors can create job dissatisfaction, but their presence does not motivate or create satisfaction (Herzberg et al 1959 sited in Alshememri 2017).

Motivators or intrinsic factors refers to the higher-level needs in the Maslow’s hierarchy of needs such as esteem and self-actualization needs. These will include the potential for career growth, learning and development opportunities, recognition, responsibility. The presence of these factors in a work place will definitely increase the job satisfaction and motivation among employees in an organization (Herzberg et al 1959 sited in Alshememri 2017).

According to Herzberg (1966 sited in Alshemeri 2017), intrinsic motivators and extrinsic motivators have an inverse relationship. That is, intrinsic motivators tend to increase motivation when they are present, while extrinsic motivators tend to reduce motivation when they are absent. This is due to employees’ expectations. Extrinsic motivators (e.g., salary, benefits) are expected, so they won’t increase motivation when they are in place, but they will cause dissatisfaction when they are missing. Intrinsic motivators (e.g., challenging work, growth potential), on the other hand, can be a source of additional motivation when they are available (Herzberg et al 1959 sited in Alshememri 2017).

The below illustration explains the Herzberg’s theory in a simple way for easy understanding.

Figure 1. – Herzberg’s two factor theory.

 

Source - Ivey Business Journal.

 

If the management is interested in increasing the motivation of its employees, it should focus on the motivators or the intrinsic factors rather than the hygiene factors in the organization. (Allen,2008).

Even though the two-factor theory of Herzberg is widely accepted in general all over the world across organizations it may not hold correct to some jobs or the effect of factors may vary according to the job. As an example, according to a study carried out by Bellot and Tutor in 1990, it was found that salary acted as a strong motivator for Tennessee Career Ladder program which has 30,000 members. According to Herzberg, salary is a hygiene factor and is not a motivator. (Gawel 1996).

From a number of studies conducted it has been established that there exists a negative relationship between motivation and employee turnover intention(Varma,2017). Therefore, the managers who are looking to curb turnover in organizations must strive to improve the job satisfaction of employees by providing motivator factors in the employee’s reward system (Varma 2017).

 

            McGregor’s theory ‘x’ and theory ‘y’  

 

 

 

Source – https://www.simplypsychology.org/

Douglas McGregor articulated a new management theory in 1957 in an article titled “The human side of Enterprise” and the same was affirmed and expanded in 1960 with the publication of his book under the same title. In this book he put forward three views of management out of which the theory of X and Y was built. (Lawter, 2015).

The first view - managerial work behaviors (or practices) ultimately reflect a manager’s fundamental assumptions about people—which McGregor (1960) referred to as a cosmology. (Lawter 2015).

Second view -  That there were two diametrically different views about the nature of people at work, which he called Theory X and Theory Y. (McGregor 1960, cited in Lawter, 2015)

Theory X—which he claimed was the predominant perspective in the 1950s, was based on three assumptions:

 (a) people are naturally lazy and try to avoid work whenever possible;

(b) people are inherently irresponsible and, thus, it is necessary to closely monitor work behavior; and

(c) most workers have little to contribute intellectually to the operation of an enterprise.

This latter incapacity necessitates providing detailed instructions and reducing the scope of work to match the limited abilities of “hired hands.”

 Theory Y- that a more positive view of human nature was generally more accurate:

(a) people can find work enjoyable, and under suitable conditions, experience motivation and fulfillment;

 (b) people are not inherently irresponsible; rather they are capable of self-direction and self-control; and

(c) people have the potential to make important intellectual contributions to the work they perform.

Theory Y, employees are seen as individuals who actually want to work, who like their work and who are creative and innovative. (Lawter, 2015).

Third View - he (Mc Gregor) argued that a manager’s cosmology (i.e., assumptions about people at work) was potentially a self-fulfilling prophecy and thus would work according to this assumption. (Lawter,2015).

In a summery we can state that McGregor believed that managers' basic beliefs have a dominant influence on the way that organizations are run. Managers' assumptions about the behavior of people are central to this. McGregor argued that these assumptions fall into two broad categories - Theory X and Theory Y. (Cunningham 2011).

This theory consists of two extremes as X and Y. In today’s corporate world we cannot find any organization which is run either using theory X or Y alone. It is because that individuals with divers’ personalities are employed and both X and Y theories exists in the workforce. If any organization adopts only theory X in managing employees, it will de-motivate creative, self-committed and Loyal employees and chase them away from the organization, In the other hand if an organization adopts only theory Y in managing employees, it will not be able to achieve its target and goals as the employees with theory X factors will not work as they are lazy. Therefore, the ideal would be a mix of both these management styles.

We can conclude that, Mc Gregor recognizes that it cannot actually motivate people, but have to acknowledge that opposing forces at play. Therefore, what the managers can do is attempt to create the right climate, environment or working conditions for motivation to be enabled. (Cunningham 2011)

 

 

 

References

 

 

1.      Allen, D.G (2008). Retaining Talent, SHRM Foundation, U.S.A.

2.      Alshmemri, M, Shahwan-Akl. L and Maude. P (2017). Hersberg’s Two Factor Theory. Life Science Journal 2017;14 (5).

3.   Cunningham, R.A (2011)., Douglas McGregor-a lasting impression. Ivey Business Journal. Sep/Oct, vol 75 issue 5, 2011, pp5-7.

4.      Gawel, J.E (1996). Herzberg's Theory of Motivation and Maslow's Hierarchy of Needs. Practical Assessment, Research, and Evaluation: Vol. 5, Article 11. Available at: https://scholarworks.umass.edu/pare/vol5/iss1/11 (accessed on 14th April 2022).

5.      Jones, T. L. (2011). Effects of motivating and hygiene factors on job satisfaction among school nurses. PhD thesis, Walden University, Minneapolis, MN. Available at https://www.semanticscholar.org/. (Accessed on 20^th April 2022).

6.    Lawter, L., Kopelman, R. E., and Prottas, D. J. (2015). McGregor's theory X/Y and job performance: A multilevel, multi-source analysis. Journal of Managerial Issues, Vol: XXVII, Nov 2015.pp 84-101.

7.  Verma, C. (2017) Importance of employee motivation & job satisfaction for organizational performance. International Journal of Social Science & Interdisciplinary Research. Vol. 6 (2), February (2017), pp. 10-20.

 

 

 

 

 

 

 

Motivational Theories and Employee Turnover

 

The success of any business in today’s competitive world mainly depends on the commitment and the performance of its human capitol. Therefore, driving its workforce to its maximum potential to achieve organizations goals and retaining such talent in the organization in the long run is equally important for any business. Therefore, today’s business continuously searches for ways and means of driving its workforce to its maximum while retaining them for longer periods in their payroll (Hosseni, 2014).

It is a well-known fact that satisfied employees contribute their maximum and are committed to achieving organization’s goals and that their turnover intention is very low (Verma, 2017).  Employee satisfaction depends on various factors and that it is not easy to maintain the satisfaction level constant without motivation. What motivates employees changes constantly and thus it is very complex. (Alshamemri 2017).

Motivation is the driving force that will lead people to achieve (Bedeian,1993). Employees get motivated by intrinsic (internal) as well as extrinsic (external) factors. (Alshamemri, 2017). Intrinsic factors depend on the individual personality and it can be controlled by the individual. Extrinsic factors depend on the external environment of the employee and it can be influenced by the employer. Therefore, it is important that organizations frame policies to motivate employees by identifying extrinsic factors in its strategic HR plan if they are interested in minimizing turnover in the organization. To have an understanding of the extrinsic factors and its effects to employee motivation, it is important that the HR managers study different motivational theories which are widely practiced today by incorporating it into the HR strategy with a view of minimizing turnover.

            Maslow’s need hierarchy theory

Abraham Maslow a phycologist became renowned with his motivational theory that he published in 1943 named “A theory of human motivation”. This theory is known as “Maslow’s hierarchy of needs theory “and has been the subject of many researchers and discussions worldwide since then.

According to his theory Maslow bundled human needs in to 5 bundles as physiological, safety, social, esteem and self-actualization and arranged according to a hierarchy. He stated that humans are motivated to achieve these needs according to the hierarchy and will be motivated to climb up in the pyramid when one need is fulfilled.

 Figure 1 below show the pyramid of hierarchy of Maslow. 

                              

         Figure1  

                 

 Source -  https://www.simplypsychology.org/maslow.html.

Physiological needs or the basic needs of a human such as food, clothing and shelter are ranked as the most important and is places in the bottom of the pyramid. Individuals will strive to satisfy these needs before any other need as these are the basics to live. (Maslow 1943,1954. cited in McLeod 2018).

Safety needs- Safety needs refers to physical, environmental and emotional safety and protection. As examples Job security, financial security, protection from animals, family security, health security, etc. (Maslow 1943,1954. cited in McLeod 2018).

Social needs refer to the love and care; belongingness, friendships a person search in living in the society. The need for interpersonal relationships motivates an individual behavior. (Maslow 1943,1954. cited in McLeod 2018).

Esteem Needs Maslow categorized esteem needs into two categories as internal esteem needs (self- respect, confidence, competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and admiration). (Maslow 1943,1954. cited in McLeod 2018).

Self-actualization needs- This include the urge to become what you are capable of becoming / realizing personal potential. It includes the need for growth and self-contentment. It also includes desire for gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs are never fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue growing. (Maslow 1943,1954. cited in McLeod 2018).

We can relate the life of a Sri Lankan youth to this model as an example to understand this more clearly. In Sri Lanka when a youth completes his studies he will initially search for a job that will at least allow them to meet their basic needs without depending on the parents. In this instance they will not search for the most suited job, but will search for a job that will give a salary at least to meet the basic needs. Once in the job they will search for a more fulfilling job to suite their qualifications  which will have more benefits than the salary. Here they will search for a job which is secure in a reputed organization which will give them health insurance, loans etc. which is the second level of the pyramid.

Once established in the job then they will think of marriage, which is the 3rd level of the pyramid. (Social needs which includes love and belonging). Once married a promotion in the job, a car for prestige becomes needs which are esteem needs.

As stated earlier, Maslow initially stated that an individual must satisfy lower level needs in the pyramid to progress to higher levels, but later he clarified and moderated his earlier position in 1987 and stated that it is not necessary for a person to satisfy 100% to move to the next level (Maslow 1987, cited in McLeod 2018).

Regarding the structure of his hierarchy, Maslow (1987) proposed that the order in the hierarchy “is not nearly as rigid” as he may have implied in his earlier description. (Maslow 1987, cited in McLeod 2018).

 "It is quite true that man lives by bread alone — when there is no bread. But what happens to man’s desires when there is plenty of bread and when his belly is chronically filled? At once other (and “higher”) needs emerge and these, rather than physiological hungers, dominate the organism. And when these in turn are satisfied, again new (and still “higher”) needs emerge and so on. This is what we mean by saying that the basic human needs are organized into a hierarchy of relative prepotency" (Maslow, 1943,Maslow 1987, cited in McLeod 2018).

 Maslow noted that the order of needs might be flexible based on external circumstances or individual differences. For example, he notes that for some individuals, the need for self-esteem is more important than the need for love. For others, the need for creative fulfillment may supersede even the most basic needs. (Maslow 1987, cited in McLeod 2018).

 Maslow (1987) also pointed out that most behavior is multi-motivated and noted that “any behavior tends to be determined by several or all of the basic needs simultaneously rather than by only one of them” (Maslow 1987, cited in McLeod 2018).

Studies conducted on Maslows’s theory have proved that this theory could be applied globally across all cultures even though his experiments were conducted in western countries and cultures. (Taormina 2013).

The original five stage model of the hierarchy of needs were expanded to include cognitive and aesthetic needs in 1970’s. (McLeod 2018).

 References 

1.  Alshmemri, M, Shahwan-Akl. L and Maude. P (2017). Hersberg’s Two Factor   Theory.  Life Science Journal  2017;14 (5). pp:12-16.

2.    Bedeian, A.G.(1993). Management (3rd edn.). Dryden Press ,New York.

3.    Hosseini,S.A.R (2014). Factors affecting employee motivation. Management and    Administrative Sciences Review, Vol.3, Issue: 4 (Special Issue), pp: 713-723.

4.    McLeod, S.A.(2018). Maslow's hierarchy of needs. Retrieved from https://www.simplypsychology.org/maslow.html .(Accessed on 11th April 2022).

5.    Toarmina,R.J. and Gao J.H (2013). Maslow and the Motivation Hierarchy: Measuring Satisfaction of the Needs. The American Journal of Psychology (2013)126 (2) pp 173. Available at https://scholarlypublishingcollective.org/uip/ajp/article-abstract/126/2/155/258006/Maslow-and-the-Motivation-Hierarchy-Measuring.( Accessed on 14th April 2022).

Employee Motivation and Employee Turnover

All employees need some kind of a motivation to be engaged and achieve the goals in the job that they do. Motivation is the inner force that drives people to do things and achieve things. (Shahzadi et al,2014). Higgins (1994) defined motivation as an internal drive to satisfy an unsatisfied need and by Bedeian, (1993) as the “will to achieve”.  

Individuals are different to each other in skills, attributes and in their preferences. In the same manner the factors that motivates an individual also varies from individual to individual depending on many cognitive factors. (Hosseini 2014). There are many theories’ that have evolved as a result of many studies conducted on employee motivation and factors that affect it. 

The level of success of an organization depends on the level of commitment of its employees. (Verma. 2017). The only way that an organization can make their employees committed to its goals are by motivating them. The job of managers and supervisors in a work place is to get the work done from the workers who are under them. How they can get the set goals or tasks achieved through their subordinates are by motivating them. Motivating a work force is not an easy task as motivation directly deals with the human nature. Every individual in an organization is motivated by some different factor. Understanding human nature is very simple and in the same way it could be very complex too. An understanding and appreciation of the human nature is a prerequisite to effective people motivation which influences the entire behavior of the employee (Shahzadi et al.2014).

Businesses today operate in a very competitive environment. Apart from the competition from rivals, business has to face the fast changing business environment due to digitalization and technology.  Organizations need to frame strategies to face this situation and the ones who survive will sustain longer than others. (Verma 2017). While battling with competition and changing environment the other challenge the organizations face today is how to manage turnover of work force. (Verma 2017). One of the main reasons for this turnover may be because of their lack of Motivation and commitment for the organization. This point of view was emphasized by Prof. Singh & Tiwari (2011) in the study of Motivation and its relationship to Job Satisfaction. The HRM policies and practices should be directed in such a manner that they are aligned to the organization strategies and also understand the employee expectations. (Verma 2017). These strategies are not just directed towards the retention and attraction but also to overcome other adverse effects of demotivation and dissatisfaction such as absenteeism, low performance, low morale, low contribution to the team, less orientation and focus to the organizational objectives. (Verma 2017). These factors could affect the organizations capacity to compete in the highly competitive business environment and adopting the much needed change. Thus it makes it important to study and understand the factors which motivates employees and create job satisfaction among them.

A good rewards system with good salary, training and development opportunities, career growth, working conditions, work life balance, job security, recognition could be listed as the main motivation factors for employees (Hosseini 2014). The order and the importance of these factors may change from individual to individual, but it will definitely boost the morale of the employee to work harder and more committedly. Absence of these factors in a work place will definitely de motivate the employees and will eventually lead to leave for better organizations when an opportunity arises (Hosseini 2014).

According to Bagraim et al. (2007), the concept motivation refers to the force within us that arouses (intensity), directs and sustains our behavior.               

There are three major components of motivation which are (i) direction, (ii) intensity, and (iii) persistency according to the above citation.

 Direction is a goal which forces the employees to perform an act to achieve the targets. The targets are chosen consciously or unconsciously by the employees. There are factors which influence the employees in selecting the targets. These factors can be both internal and external factors. Employees select their targets which they consider best among potential alternatives. The intensity is the level of determination or efforts put by the employees in the process of achieving the targets. This means how hard the employees have tried, and how much energy, time, or any other mental or physical things they have been spent during the process of achievement of the targets. Persistence is the ability of the employees to maintain the motivation through times even though there is existence of obstacles.

The accomplishment of goals (direction) depends on the force (intensity) and the level of sustaining this force (persistency). The combination of these 3 factors is known as motivation.

We can broadly divide motivation in to two parts on the basis from where the motivation is derived.

   

                                                         Motivation                  

Intrinsic Extrinsic

                                 

1. Intrinsic Motivation (Internal Motivation)

Intrinsic motivation refers to doing an activity for its own sake, for the pleasure and satisfaction derived simply from performing it (Deci,1975, sited in Alexendries,2002). This type of motivation comes from within a person, to do a task or achieve a particular goal

Understanding the factors that promote intrinsic motivation can help HR managers to see how it works in employees and how it can be used to increase employee motivation thereby to increase employee performance in organizations. The factors that affect intrinsic motivation include curiosity, challenge, control, recognition, corporation and competition. Non-financial rewards like recognition, security, title, promotion, appreciation, praise, decision making involvement, flexible working hours, workplace comfort ability, feedback, work design, social rights act as rewards (motivators) for the intrinsic motivation. (Yang, 2008, sited in Shahzadi et al.2014). 

The role/ title of “Justice of the Peace” in Sri Lanka can be given as a classic example for a job which is driven by intrinsic motivation. Even though the title holder renders an important service to the society by spending his time and energy no financial reward is offered to him, instead he is driven by the honor or the recognition that the title brings him from the society. Even though some would not prefer the idea of spending their time and energy for a cause which does not bring any financial benefit (which is the motivator for them) there is another segment in the society who crave to obtain positions like these for the honor and prestige.

2. Extrinsic Motivation (External Motivation)

Extrinsic motivation comes from outside sources or forces as salary, money or grades etc. (Scott and Bruce, 1994, sited in Shahzadi et al.2014). Some other person or organization motivates the individual to work hard to achieve certain goals or tasks for extrinsic rewards which are offered in return. Extrinsic motivation is driven by motives (rewards) like financial bonus, rewards, punishment, demotion etc. 

Hence, the main question for the management is to find answers to the question that from where to get the extrinsic motivation and how the employer can help the employee sustain their motivation by rewarding them accordingly.

The below video gives an in-depth view of the intrinsic and the extrinsic motivation theories we discussed above.

 

Source - https://www.youtube.com/watch?v=R6GRgML2gos.

Motivation is seen as one of the most important factors in issues related to human resources management (HRM) and organizational behavior management (Lathem, 2007). Despite the existence of different and sometimes conflicting views about motivation, its role and significance in the management of human resources and organizational behavior in particular is undeniable.

Therefore, the management must look for solutions and techniques to enhance its employees’ motivation. This can be done by rewarding them intrinsically or extrinsically. Low employee motivation at work may reduce the efficiency and effectiveness in the organization, leading ultimately to high employee turnover. and thus the failure of the organization. Therefore, it has become mandatory for each organization to adopt the needed policies and strategies to improve the employee motivation to survive (Abbas Zadeh, 1996).

References

1. Alexandries, K., Grouios, G.(2002). Perceived Constraints on Recreational Sport Participation: Investigating their Relationship with Intrinsic Motivation, Extrinsic Motivation and Amotivation. Journal of Leisure Research, 2002, Vol. 34, No. 3, pp. 233-52.

2. Bagraim, J., Cunningham, P., Potgieter, T. and Viedge, C.,( 2007). Organizational behavior. A contemporary South African perspective. (2nd edn.). Pretoria: Van Schaik.

3. Bedeian, A.G.(1993). Management (3rd edn.). Dryden Press, New York.

4. Higgins, J.M. (1994). The management challenge (2nd edn.). Macmillan, New York.

5. Hosseini,S.A.R.(2014). Factors affecting employee motivation. Management and Administrative Sciences Review, Vol.3, Issue: 4 (Special Issue), pp: 713-23.

6. Shahzadi,I. ,Javed,A.,Parzda, S,H.,Nazreen, S., and Khanan ,F. (2014) Impact of employee motivation in employee performance. European Journal of Business and Management. Vol.6, No.23, 2014.

7. Verma, C. (2017) Importance of employee motivation & job satisfaction for organizational performance. International Journal of Social Science & Interdisciplinary Research. Vol. 6 (2), February (2017), pp. 10-20.

8. Zadeh, M.A and Mehrvazhan A. (1996). Organizational Behavior. Tehran, Allameh Tabatabaei University.

Job satisfaction and employee turnover

 Fulfillment of many factors will lead to job satisfaction of an individual. These factors may take a different hierarchy depending on the individual perception. The main factors that affects job satisfaction are shown below. (Kapoor 2018).

                    

Remuneration

According to Shaw et al (1998), Pay is something given in exchange for services rendered in an organization. Where the exchange is less favorable to the employee than to the employer, the employee is most likely to leave the firm as soon as alternate employment options are available. (Tsui 1997, sited in Shaw et al 1998). Therefor we can see that pay or the remuneration plays a significant role in retaining and rewarding high quality human resources. To be more precise, one of the critical factors of employee turnover is lower salary. When employees receive lower salary and insufficient financial rewards, they tend to stay no longer with the organization (Lavob, 1997). A common opinion is that good pay can be a strong determinant of job satisfaction that leads to achieve higher productivity in the organization. Naeem et al (2016) also revealed that the turnover intention is significantly negatively associated with the salary, which means that when salary decreases as a result turnover intention increases and vice versa.

Work life balance

Clutterbuck (2003) defined work life balance is a state where individual try to manage potential demand on his or her time and energy in a way that fulfilled needs for his or her well-being. Klopping (2011) defined that work life balance is a measure of control where, when and how individuals work. The best balance between work and personal life depends on individual requirements and as such a general measurement or an equation cannot be drawn.

 Researchers have proved that, mostly employees who are suffering from heavy working hours have to struggle to manage the needs of their family life and they suggested that, flexible working schedules may positively impact on employees in their intention to stay in the job. The matter of maintaining the balance between person’s personal and professional life is mostly a talked topic in modern business world. Noor (2011) revealed that, there is a negative correlation between work life balance satisfaction and intention to leave. And this relationship is mediated by job satisfaction and organizational commitment.

Working conditions

Working conditions mainly refers to the employees working environment. Poor lighting, poor ventilation, noise and disturbances, rest rooms, lunch rooms, furniture and equipment, safety measures available for people who are engaged in hazards jobs makes the working environment of an employee. If these are bad or not up to the expectation of the employee the employee may not be able to cope up for a long period (Singh 2008).  

Long work shifts, heavy and difficult physical tasks, very strict rules and regulations with regard to individual freedom and supervisor’s attitude also makes a part of the employees working environment even though it is not a part of the physical environment of the work place.

Career development and career growth.

Career Development Association of Alberta defined career development as “the lifelong process of managing learning work, leisure and transitions in order to move toward a personally determined and evolving preferred future” (2012).

There are 4 components in career development.

I. Education – Includes basic education requirements and the training and coaching                                         required to have an up to date knowledge in the job.

II. Capability – Individual capabilities and skills required to perform the job well 

III. Networking – Having the correct relationships to perform the job.  

IV. Experience – The hands on experience required to perform the job well.

 Career development is a process and it is a part of the organizations HR strategy. It will span through several years in a person’s career or even take his entire life in the job. 

Below is the career development process.

Figure 2.

Career development is a part of an employee’s career growth process. Career growth is the big picture and it is the overall growth of someone’s professional life. It is the different roles and responsibilities a person handles in different hierarchies in a person’s professional life. 

The existence of a clear career development and a growth path will lead to increase job satisfaction of employees and thereby will negatively impact turnover. If an organization lacks career development programs, it may lose talented employees. By implementing a career development program, it will not retain all the valuable talented employees, but will decrease the risk of losing them.

Job security

Herzberg (1968 cited in Yousef 1998) defines Job security as the extent to which an organization provides stable employment for its employees. It is an assurance to the employee that his/her job will be there for them to be employed as long as they wish. 

When employees are satisfied with the security of their employment they tend to be more satisfied with their jobs than in a situation when the job security is poor. It has been observed that those employees who are hired on contract basis are less motivated than permeant employees and it is mainly because of job security (Anwar 2011).  

Recognition

 Dessler (2011), explains that recognition positively effect on employee performance. Recognition mostly refers to the formal programs that recognizes employees based on various criteria’s like employee of the year, best performer. Best attendance etc. Employers in many countries use recognition program such as long service award or loyalty award for employees who complete many years. Such an action enhances the retention of employees in industries where turnover rate is high

According to Mobely’s theory (1979), as described in an earlier blog, when an employee gets an intention to leave the job he will evaluate the current job that he is employed in now to see whether he is satisfied or happy with it as the initial step. Job satisfaction will play a major role in an employee in deciding whether he is happy in the job and if he finds that all the elements which is required to be happy or satisfied in the job are fulfilled he will not proceed further in the intention to leave the job. As such we can argue that job satisfaction is the main determinant in employee turnover and that it has a strong negative relationship with the turnover intention. 

References

1.  Anwar,S,. Aslam,M. and Tariq,M.R. (2011). Temporary job and its impact on employee performance. Global journal of management and business research. vol 11, no 8 of 2011.

2.    Career Development Association of Alberta. (2012).  What is Career Development? Available from: https://www.careerdevelopment.ab.ca/whatiscd (Accessed on 3rd April 2022).

3. Clutterbuck, D. (2003). Managing work-life balance: A guide for HR in achieving organizational and individual change. Charted Institute of Personal and Development (CIPD) Publishing.

4. Dessler,G.B.V. (2011). Human Resource management (12th ed.). Florida International University.

5. Fadel,S (2019) Career Development an overview. Available from https://www.researchgate.net/publication/336812981_Career_Development_An_Overview. (Accessed on 3rd April 2022).

6. Hoppock, R. (1937). Job satisfaction of psychologists. Journal of Applied Psychology, 21(3), pp300–3.Available from  https://doi.org/10.1037/h0057579 (Accessed on 2nd April 2022.).

7.  Yousef,D.A (1998). Satisfaction with job security as a predictor of organizational commitment and job performance in a multicultural environment. International Journal of man power. May 1998. pp 184.

8. Klopping, L. (2011). Work Life Balance. Druck and Binding ,Norderstedt, Germany.

9. Naeem, A, Awan, A.W.A, Anwar M.A. ,Sajid Ali S.S and Qurban, M (2016). Impact of Job Satisfaction & Remuneration on Turnover Intention: A Survey of (Private) Schools of (Okara) Pakistan. International Review of Management and Business Research, 5(2), 653-75.

10. Noor, K.M. (2011). Work-life balance and intention to leave among academics in Malaysian public higher education institutions. International journal of business and social science, 2(11).

11. Shaw, J.D., Delery, J.E., Jenkins JR, GD. & Gupta, N. (1998). An Organization-level Analysis of Voluntary and Involuntary Turnover, Academy of Management Journal, Vol.41.No 5,pp 512.

12. Singh, B.D. (2008). Industrial Relations: Emerging Paradigms. New Delhi: Naraina.

     

Factors causing Voluntary turnover

 

Employees may decide to leave an organization due to various reasons. In earlier studies it was emphasized that employees will leave only when there is a ‘perceived desirability to do so and when there is a perceived possibility of such ease of movement’ (March and Simon 1958) According to this theory, for an employee to quit a job two factors had to be satisfied. The first, he should have a desirability to quit the job due to some reason. secondly there should be ease of movement from the job. If there are no job opportunities in the market, if the employee cannot leave the job due to some legal or other binding factor such as bonds or loans, even if there is a desire, the employee will not be able to leave the job.

Employees intention to turnover or desire to quit may trigger due to various reasons, Salary expectations, job dissatisfaction, stress, skills and ability, difficulty to balance work with family life, carrier development, poor working conditions, internal politics, superior’s attitude, government policy are some examples for the reasons that people intend to leave their jobs. The reasons for an individual’s turnover intention may vary according to age, gender, marriage, education levels and years of working in the organization (Liu and Wang, 2006). Previous studies found that the rate of female employee turnover is higher, as compared to male employees. This may be attributed mainly due their family commitments and child birth.  According to Ma et al. (2003), ‘Employees who are young, inexperienced and with high education level tend to have low level of satisfaction about jobs and careers, and have lower commitment to the organization, these negative attitudes are associated with turnover intention’.

By studying the reasons for the voluntary turnover intentions We can categories them into three main blocks based on the ability of controlling the factor that affect the turnover.

1)      Individual factors affecting turnover.

2)      Institutional factors affecting employee turn over

3)      External factors affecting turnover.       

 

 

Voluntary turnover                                    

 

                    Individual Factors             Institutional Factors                       External Factors

                                                                               

1)      Individual factors affecting turnover.

Individual factors leading to turnover intentions refer to the personal characteristics of an employee. These characteristics could be those which are ingrained in the individual, such as personality, or those which are learnt, such as skill, ability etc. Studies indicate that various cognitive and non-cognitive factors do influence, directly or indirectly to an employee’s intention and then finally the decision to actually quit the organization.

Stagner(1948) defines personality as "the organization within the individual of those perceptual, cognitive, emotional and motivational systems which determine his or her unique responses to the environment‟ (Jha 2009).  Friedman & Rosenman’s (1959) theory of Type A & Type B personality, motivated researchers to unearth the relationship between personality and turnover intentions among individuals. However, a significant relationship between personality and turnover intentions could not be established from the researches. (Dole et al. 2001).

Going beyond the cognitive factors, researchers tried to find out the relationship between non-cognitive factors like ability, gender, number of years of experience, etc on the one hand and turnover intentions amongst employees on the other. Ability refers to the capacity of an individual to perform tasks on a job. The overall ability of an individual is essentially composed of two sets of factors: intellectual ability and physical ability. Jackofsky & Peters (1983) hypothesized that ability has an indirect and multifaceted effect on the desirability of movement. Further, the model hypothesized that as people with high ability are dissatisfied working on routine tasks, they have a high desirability to move to an alternative job. However, a further study on Jackofsky & Peter’s (1983) model showed that ability has only a marginal effect on an individual’s perceived desirability of movement from his current organization (Rosse, 1987).

Scholars have also attempted to establish a connection between ethnicity, gender, personality, and hierarchical position on the one hand and turnover intentions on the other. The obtained results however negated any such connection (Dole et al. 2001). But it is commonly believed that there is a relationship between gender and turnover as statistics show a higher turnover among female employees in certain industries. Eg : apparel industry, education sector and retail sector in Sri Lanka.

1.      Institutional factors affecting turnover

 

As discussed earlier there are many factors that would make an employee want to quit the job they are doing, but could be controlled by the organization if they knew the reason for the quitting. These factors are known as the institutional factors effecting turnover.

Employees would leave the job when they are dissatisfied. Below are some of the main reasons that would make an employee dissatisfied with the job that they are doing for which the organization is responsible and therefore could be controlled by it if they provide an acceptable solution to these reasons. In most of the organizations today when an employee tenders a resignation an “exit interview” is held and the reasons for the resignation is discussed. Based on the outcome of this interview the employer provides alternative solutions for the employees reasons for resignation and if the it is acceptable the resignation is revoked. Some such alternative solutions are salary increments, transfers, providing other benefits, offering a flexi working schedule etc.

 Smith (2009) listed out twelve major reasons for employees to leave from their Jobs. Those were rude behavior, work-life imbalance, inability to meet expectations, employee misalignment, feeling undervalued, lack of coaching and feedback, lack of decision making ability, inadequate skills, organization’s instability, stagnation, lack of growth opportunities and lack of appreciation. We can also add remuneration, working environment, job stress supervisor attitude, other benefits available other than the salary as other institutional factors affecting employee turnover.

2.      External factors affecting turnover

 

These are the factors that cause employee turnover but the causes cannot be controlled neither by the employee or the institution. Employees may be forced to leave their jobs and shift to other geographies due to political unrest, due to natural disasters or plagues. This type of reasons can be termed as external factors. Some examples for this type of turnover is employees resigning jobs in war tone areas, natural disaster prone areas.

 

 

 

 

References

1.     Dole, C. and Schroeder, R.G. (2001). The impact of various factors on the personality, job satisfaction and turnover intentions of professional accountants. Managerial accounting Journal, Vol 16, No 4, pp 234-45.

2.      Friedman, M. and Rosenman. (1974), Type A Behavior and Your Heart. Knopf, New York, NY.

3.    Jackofsy, E. and Peters, L. (1983). The hypothesized effects of ability in turnover process, Academy of Management Review, Vol 8, pp 46-49.

4.   Jha, S. (2009). Determinants of employee turnover intentions: A review. Management Today, VoL.9, No. 2, pp. 26-33.

5    Liu, Y.A. and Wang, F. (2006). A Study on the Influence Factors of Employee Turnover Intention, Enterprise Economy, Vol 6, pp. 42-44.

6   Ma, S.J., Chen, J.Q. and Wang, L. (2003). A Study on the Causes of Employee Turnover. China Human Resources De[1]velopment, 9, pp. 18-20.

6.    Rosse, J.G. (1987), Job-related ability and turnover, Journal of Business and Psychology, Vol 1, No 4, pp 326-36.