Superior University

MODULE: BUSINESS RESEARCH METHOD

GROUP ASSIGNMENT: OVERVIEW OF PREVIOUS STUDIES

COURSE INSTRUCTOR: MISS TEHIMINA AKBAR

SUBMITTED BY: LEADER 11338

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ABSTRACT :

This research is conducting to investigate the causes of employee turnover. Proposed study will use different research articles to develop a model which shows that employee satisfaction, employee motivation and employee involvement (independent variable) has an impact on employee turnover (dependent variable). Using a longitudinal research method sample of 50 employees of organization (Glaxo Smith Kline gsk) Bank (UBL), Superior University (Employee), Commerence Students and general public we have conducted the proposed research. This study tested the impact of employee satisfaction, employee motivation, employee involvement on employee turnover. However the analyses have shown that employee involvement is selected as best among employee satisfaction, employee motivation.

INTRODUCTION:

Employee turnover is the number of permanent employees leaving the company within the reported period versus the number of actual active permanent employees on the last day of the previous reported period.

Five reasons due to which employees leave organizations:

1. The most common reason why employees leave a certain organization is that they see better opportunity elsewhere. Man has a growing desire to own more things and better pay can give them this. Apart from that, they are compelled to look for better pay because of financial needs.

2. Another reason could be that the employees are not happy with the organization. There are cases when employees leave the company even if they offer competitive salaries. This is because of the organization itself. The employee does not approve of the management style and they are unhappy with the culture of the organization. These factors can cause employees to say goodbye to the organization.

3. There are also cases when the employees leave because of their fellow employees or his superiors. Clashes of personalities are common in the workplace. When an employee can no longer stand the tension in the workplace, he may opt to leave the organization. It does not matter if he finally got his dream job or receiving a generous paycheck. If he no longer has peace of mind, he will look for another job.

4. It is man's nature to seek for growth. If he feels that there is no room for him to grow in a certain organization, he will look for a place where he can grow further. However, this is not a factor for everyone. There are those who are satisfied to do the same thing even after ten years.

5. The condition of the organization could also be a factor. If it is unstable, the employees will surely look for a more stable organization. They would not want to stay long in an organization that could close any time1.

This research is conducted to investigate the causes of employee turnover and its impact on employee satisfaction, employee motivation and employee involvement. Because mostly researches doesn’t cover three of these independent variables. So we have put forth our efforts to compile three employee satisfaction, employee motivation and employee involvement of these variable in one package in order to provide readers ease to get the

1 http://www.articledashboard.com/Article/Five-Common-Causes-of-Employee-Turnover/976138 researched on 25.07.11 at 10:45 PM.

information on these three variables and their impact on employee turnover. And for this research we have used “Employee turnover: a neural network solution” by Randall S. Sextona, ∗, Shannon McMurtreyb, Joanna O. Michalopoulosc, Angela M. Smithc, “Society for 1 Human Resource Management, Employee Turnover: Analyzing Employee Movement Out of the Organization”, “A CONTEXTUAL STUDY OF LINKS BETWEEN EMPLOYEE SATISFACTION, EMPLOYEE TURNOVER, and CUSTOMER SATISFACTION AND FINANCIAL PERFORMANCE” ,“Exploring the relative and combined influence of mastery-approach goals and work intrinsic motivation on employee turnover intention” , “Conceptualizing How Job Involvement and Organizational Commitment Affect Turnover and Absenteeism” to support our research.

LITERATURE REVIEW:

To understand the nature of employee turnover it is necessary to first define the terminology. While there are many definitions of employee turnover for the purpose of this paper turnover is defined as “the movement of workers 1 in and out of employment with respect to a given company” (Randall S. Sextona, 2004). This movement is usually considered voluntary however involuntary separations are also of concern, but will not be the focus of this research. (Randall S.Sextona, 2004) States that employee turnover has attempted to explain why employees leave and how to prevent the drain of employee talent. Their research focuses a neural network (NN) to predict turnover. They have used a Modified Genetic Algorithm to train the NN. This research found that a NNSOA (Neural Network Simultaneous Optimization Algorithm) trained NN to predict high degree of accuracy of turnover rate for a small mid-west manufacturing company in a 10-fold cross validation experimental design.

The Society of Human Resource Management Research Committee author of “Employee Turnover: Analyzing Employee Movement Out of the Organization” states that “critical characteristics of employees (obtained by reviewing the distributions of their ages, employment times, salaries, and recruitment sources) can be used to describe those who leave in 6 months versus those who leave in 12, 24, or 36 months with empirical research” While turnover rates vary according to industry; organizations; geographic locations; and employee characteristics, whereas the rates of specific groups of employees can help the company determine root causes of employee turnover. Turnover does not always bring on negative consequences to the organization; there are positive aspects of turnover for both the organization and the exiting employee. It depends on the type of turnover either functional or dysfunctional. Functional turnover occurs when poor performers leave and good performers stay. This instance often occurs when the organization terminates the employment relationship. When good performer’s leave and poor performers stay, the organization experiences dysfunctional turnover. When looking to reduce turnover, Company focuses on dysfunctional turnover due to its negative impact on the organization (Committee, June 1993).Another empirical research conducted states the links between nonfinancial measures such as employee satisfaction and customer satisfaction and financial measures of performance. Using cross-sectional data on a sample of more than 500 department stores, this study provides empirical evidence on the effects of employee satisfaction and turnover on customer satisfaction and, in turn, on revenue and cost measures. And found that a satisfied employee is more likely to be motivated to serve the customer better (Rajiv D. Banker, November 10, 2000). But in this study we are going to find the causes of employee turnover and going to prove that whether the causes (employee motivation, employee satisfaction and employee involvement) have impact on employee turnover or not. Motivation has been a difficult concept to properly define, in part because there “are many philosophical orientations toward the nature of human beings and about what can be known about people” (Rajiv D. Banker, November 10, 2000)).(Kuvaas, August 2009) states that mastery goals and intrinsic motivation have separately been found to predict employee turnover and turnover intention, respectively. A cross-sectional survey was conducted among employees representing more than 400 organizations from a wide range of industrial sectors. The theoretical or subject scope of the paper was to integrate motivational antecedents for employee turnover. When assessed jointly, intrinsic motivation was the strongest predictor of turnover intention. The relationship was only positive for employees low in intrinsic

motivation. (GARY 3. BLAU, 1987) describes how job involvement and organizational commitment can enhance our understanding of task-related effort as well as withdrawal behaviors. Research has conducted to test the adequacy of this model. Several models (Mobley, 1979); (Steers, 1977) & (Rhodes, 1981) link organizational commitment, or job involvement conceptually to turnover and absenteeism. The relationship between organizational commitment and absenteeism also has been inconsistent (Angle. H., 1983). For example, (Hammer, 1981)found a significant negative relationship between organizational commitment and absenteeism, while Angle and Perry (1981) did not. Less empirical research exists about the relationship of job involvement with turnover and absenteeism. It was found that Job involvement seems to more consistently predict turnover than absenteeism.

MethodologyFor the purpose of this study turnover in different organizations (Lahore organizations (Glaxo Smith Kline gsk) Bank (UBL, HBL, ABL, FAYSAL ETC), University Employee (Superior, UCP, Comsat, Preston, Virtual etc), Telecommunication organizations, Pell etc) were focused. The simple random sampling consist of a total of 3 organizations were selected, where as views of students and general public were also included. The selected organizations were from Pakistan because these are the prominent sectors to relate our study. As the current study examines the Causes of employee turnover, so questionnaires were selected as a data collection instrument.

Following is the format of questionnaires:

QUESTIONNAIRES

You are kindly requested to complete this questionnaire by encircling bullets so that we can get your perspective for our knowledge.

1-NAME _______________________

2-AGE 20 to 30. 30 to 40. 40 to 50. 50 to above.

3-Gender. Male. Female.

4-What categories best describes your job? Officer/Director/Manager/Supervisor. Group Leader. Customer Services. Sales Reps. Student. Other.

5-Education. Primary/Matriculation.

Intermediate. Bachelors. Master/M Phil. Other.

6- Income Level. Rs 10000 to 20000. Rs 20000 to 30000. Rs 30000 to 40000. Rs 40000 to above. NIL.

7-Company benefit is a factor that plays a significant role in employee turnover. Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

8-Salary is an important negotiator but by handling it wrong you can blow the Job offer or go to work at far less than you might have gotten? Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

9-Performance review is one of the factors that lowers the morale/confident or contributes to factors leading employee turnover? Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

10- How much job satisfaction effects employee turnover? 20% to 40% 40% to 60% 60% to 80% 80% to above.

11- Motivated employees always look for the better way to do job and are more quality oriented and productive/fruitful?

Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

12- Job involvement is one of the reasons which influence turnover intention? YES. NO.

13- Highly job involved individuals seem also to be satisfied with their jobs? YES. NO.

14- Motivation is a very important element of behaviour? Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

15- To what percent Job satisfaction is in regard to one's feelings or state-of-mind regarding the nature of their work? 20% to 40% 40% to 60% 60% to 80% 80% to above.

16- Job involvement is the degree of importance of the job in employees' self-image? Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

17- Motivation is like the fuel in the engine? Agree. Strongly Agree. Neutral. Disagree.

Strongly Disagree.

18- Job satisfaction played an important role to employees’ turnover because it would lead employee resigned when their job satisfaction is low? Agree. Strongly Agree. Neutral. Disagree. Strongly Disagree.

Thank you for giving your precious time.

___________________________

ANALYSIS

(Inferential & Descriptive)

SIMPLE REGRESSION WITH GRAPHS AND PLOTS ON STAT GRAPHICS

Y as Employee turnover and Satisfaction as X1

HISTOGRAM WITH POLYGON REPRESENTING Y ON X 1

HISTOGRAM WITH POLYGON REPRESENTING Y ON X 2

HISTOGRAM WITH POLYGON REPRESENTING Y ON X3

Histogram for Y

Y

frequency

2.9 3.3 3.7 4.1 4.5 4.9 5.30

4

8

12

16

Histogram for Y

Y

frequency

2.9 3.3 3.7 4.1 4.5 4.9 5.30

4

8

12

16

INTERPRETATION:

The above histogram with polygon shows random relationship between dependent and independent variable and cannot figure out exact relationship due to ups and downs or is not normally distributed where mean median and mode are equal.

DESCRIPTIVE ANALYSIS AND GRAPHS ON MINITAB

Histogram for X3

X3

frequency

1.8 2.8 3.8 4.8 5.8 6.80

2

4

6

8

10

12

Reporting Box plot of Y on X1

INTERPRETATION:

Box plot of Y is negatively skewed where as Box plot of X1 negatively skewed and the dot in box plot shows the extreme value. And is not fulfilling the properties of normal distribution.

Reporting Dotplot of Y on X1

INTERPRETATION:

The above Dot plot is of Y and X1 and in both plots bubbles are horizontally shown same like a straight line and have an exact or clear relationship.

Y as Employee turnover and Performance appraisals as X2

Reporting Box plot of Y on X2

INTERPRETATION:

Box plot of Y is negatively skewed and is not fulfilling the properties of normal distribution where as Box plot of X2 shows different points horizontally located and just one value shows the trend of mean.

Reporting Dotplot of Y on X2

INTERPRETATION:

The above Dot plot is of Y and X2 and in both plots bubbles are horizontally shown same like a straight line and have an exact or clear relationship.

Y as Employee turnover and Working environment as X3

Reporting Boxplot of Y on X3

INTERPRETATION:

Box plot of Y is negatively skewed where as Box plot of X3 is also negatively and is not fulfilling the properties of normal distribution means (means is not equal to median is not equal to mode.)

Reporting Dotplot of Y on X3

INTERPRETATION:

The above Dot plot is of Y and X3 and in both plots bubbles are horizontally shown same like a straight line and have an exact or clear relationship.

Multiple Regression Analysis

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Dependent variable: y

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Standard T

Parameter Estimate Error Statistic P-Value

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CONSTANT 1.35042 1.03064 1.31027 0.1976

x1 0.110433 0.12559 0.879319 0.3845

x2 -0.168691 0.130912 -1.28858 0.2049

x3 0.316827 0.139973 2.26349 0.0291

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Analysis of Variance

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Source Sum of Squares Df Mean Square F-Ratio P-Value

-----------------------------------------------------------------------------

Model 5.25256 9 0.583618 2.17 0.0452

Residual 10.7474 40 0.268686

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Total (Corr.) 16.0 49

R-squared = 32.8285 percent

R-squared (adjusted for d.f.) = 17.7149 percent

Standard Error of Est. = 0.518349

Mean absolute error = 0.395699

Durbin-Watson statistic = 1.72434

INTERPRETATION:

The equation of the fitted model is

Y = 1.35042 + 0.110433*X1 -0.168691*X2 + 0.316827*X3

The R-Squared statistic indicates that the model as fitted

Explains 32.8285 % of the variability in Y. The standard error of the estimate shows the standard deviation of the residuals to be 0.518349. Since the P-value in the ANOVA table is greater or equal to 0.10, there is not a statistically significant relationship between the variables at the 90% or higher confidence level.

Summary Statistics

x1 x2 x3

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Count 50 50 50

Average 2.48 4.2 1.04

Variance 0.622041 0.571429 0.0391837

Standard deviation 0.788696 0.755929 0.197949

Minimum 1.0 3.0 1.0

Maximum 4.0 5.0 2.0

Stnd. skewness 1.32333 -1.0229 13.9757

Stnd. kurtosis -0.400791 -1.65547 32.2316

Sum 124.0 210.0 52.0

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Discussion

The main purpose of this study is to find the impact of employee satisfaction, employee motivation and employee involvement on employee turnover. And to prove this model we used research instruments i.e. questionnaires. And after collecting data and analyzing them through

descriptive and inferential statistics we came to know that the model is good fit and all the independent variables have impact on dependent variable.

CONCLUSION

Nowadays, it is becoming a major problem among most of the companies, especially in low paying jobs. There are many aspects that play a significant role in the employee turnover rate of a particular company. Such aspects can stem from both the company as well as the employees. The employers generally give more importance to the employee turnover rate, as it is a very expensive aspect of the business.When employees leave the company, the employer has to incur a huge amount of direct and indirect expense. These costs normally include advertising expenses, resource management expenses, loss of time and productivity, work inequality etc. The company may quarterly calculate employee turnover rates to find out the factors causing the turnover. If the company determines the most common causes of employee turnover, it would certainly be able to take the necessary steps for recruiting and retaining well-qualified personnel. However this proposed study shows that employee satisfaction, employee motivation and employee involvement is directly or indirectly related with employee turnover. Because three of them are not much combinable focused in this study. However the above discussed research shows the relationship of employee involvement, Job satisfaction and motivation with turnover, Organizational change and turnover. As employee satisfaction, employee motivation and employee involvement are not combine focused. So we have conducted a search for those who want to know their combined relationship with turnover. However there are so many causes for turnover like salary, Job performance, personal growth, reward, compensation but this study focuses three causes of employee turnover employee satisfaction, employee motivation and employee involvement. And the analysis have shown that X3 (Involvement) is selected as best among 3 just because of its p-value (The probability of accepting null hypothesis) which is found less than other variables.

s

REFERENCES:Angle. H., &. P. (1983). Organizational commitment:. Work and Occupations , 10, 123-146.

Committee, S. (June 1993). Employee turnover. 2.

GARY 3. BLAU, K. B. (1987). Conceptualizing How Job Involvement. Academy of Managernent Review, Vol 12, No 2. , 288-300.

Hammer, T. L. (1981). Absenteeism when. journal of Applied Psychology, , 66, 561-573.

Kuvaas, A. D. (August 2009). Exploring the relative and. 1.

Mobley, W. G. (1979). Review and conceptual analysis of the employee turnover. Psychological Bulletin , 86, 493-522.

Rajiv D. Banker, C. K. (November 10, 2000). A CONTEXTUAL STUDY OF LINKS BETWEEN EMPLOYEE. k.

Randall S. Sextona, ∗. S. (2004). Employee turnover. Employee Turnover: a neural network solution , 1-2.

Rhodes, S. &. (1981). Conventional versus worker. Human Relations , 34, 1013-1035.

Steers, R. (1977). Antecedents and outcomes of organizational , 46-56.