MEASURING EMPLOYEES TURNOVER INTENTION: AN EMPIRICAL STUDY

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1 MEASURING EMPLOYEES TURNOVER INTENTION: AN EMPIRICAL STUDY Dr.D.S.Chaubey,* Director, RCMCA, Roorkee Mob: Nidhi Maithel** Research Scholar Pacific University Udaipur(Rajasthan) - MOb Vishal Gupta *** Research Scholar Pacific University Udaipur (Rajasthan) - Mob Abstract:- Human resource plays a significant role in improving organizational performances. High rate of turnover and employees attrition has posed many problem in front of management. Management of human resource has become a challenging task for HR management in the present environment. Thus it is important to identify turnover intents as early as possible in order to enable planners to help implement courses of action. Issues encountered may be in the areas of shrinking pool of entry-level workers, individual differences, use of temporary workers, productivity and competitiveness, retirement benefits and skills development. The paper discusses on the various dimension of employees turnover intention and analyses important factors of employees turnover. For this purpose a survey of 191 employees working in the some selected industries of Dehradun district of Uttarakhad state was carried out. It specifically considered satisfaction with pay, nature of work and supervision as the three facets of job satisfaction that affect employee turnover intention. Key Words: turnover intention, organizational performances, productivity, competitiveness, organizational efficiency

2 Introduction The concept of employee turnover intention has become one of the most important topics in organization. Some of the scholars come up with a lot of factors that could give impact on turnover intention; however there are other factors such as organizational culture and organizational commitment, organizational person fit also could give impact towards turnover intention. Turnover is defined as the individual movement across the membership boundary of an Organization. Interestingly unlike actual turnover, turnover intent is not explicit. Intentions are a statement about a specific behaviour of interest. Studies have shown that turnover is one of the most researched phenomena in organizational behaviour (Price, 2001). The broad range of turnover studies is indicative of the significance and complexity of the issue. The phenomenon attracts interest due to its psychological dimension, its organizational significance, and its economic dimension. Thus it is imperative for HRM managers to understand that there are several factors inherent to counter staff intentions or turnover. Organization invest a lot of investment on their employees in way of recruitment, induction, their training and development, maintaining and retaining them within their organization. Therefore it is extremely crucial for employers to retain their employees within the organization and prevent them from leaving and going to work for other companies. Therefore, there is a clear need to develop a better understanding of employee turnover and more specifically the sources that are key indicators of why employees leave the organization which would then have a profound impact on the strategies that managers can employ in order to reduce employee turnover within their organizations. Review of literature Unlike actual turnover, turnover intent is not explicit. Intentions are a statement about a specific behavior of interest Turnover intent is defined as the reflection of the (subjective) probability that an individual will change his or her job within a certain time period and is an immediate precursor to actual turnover. A broad range of literature examining the relationship of turnover intent and actual turnover (e.g. Mobley, 1977/ Hom&Griffeth 1991) exists. Actual intention and turnover intention have been measured separately; however, actual turnover is expected to increase as the intention increases. The results of the different

3 studies provide support for the high significance of turnover intention in investigating the individual s turnover behavior. Employees turnover has been studied from various aspects. One theory highlight that employees decision to resign is influenced by two factors: their perceived ease of movement, which refers to the assessment of perceived alternatives or opportunity and perceived desirability of movement, which is influenced for instance by job satisfaction (Morrell et al., 2004; Abdullah et al., 2012). This describes how balance is struck both for the organization and its employees in terms of inducements, such as pay, and contributions, such as work, which ensures continued organizational efficiency. According to Meaghan et al (2002) the value of employees to an organization is a very crucial element in organizations success. This value is intangible and cannot be easily replicated therefore, it becomes very important that managers should control employee turnover for the benefit of the organization. The current literature on employee turnover is primarily divided into three groups, viz: - sources of employee attrition, effects of employee turnover and the strategies used in order to minimize turnover. Mueller&Price(1990) highlight the psychological factors that have an Impact on Turnover Intent. Psychological determinants refer to the employee s mental process and behavior, such as expectations, orientation, job satisfaction, organizational commitment, job involvement or affectivity. Conceptualizing turnover psychologically deals with factors that are influenced by employee s emotions, attitude or perception (Mueller&Price, 1990: p. 322). Locke (1969) the job satisfaction as one of the reason of turnover intention. According to him Job satisfaction is the pleasurable emotional state resulting from the appraisal of one's job as achieving or facilitating the achievement of one's job values. Job satisfaction was conceived to be one s affective attachment to the job viewed either in its entirety (global satisfaction) or with regard to particular aspects such as leadership. It is conceptualized as an affective and emotional response. Satisfaction is defined as the degree to which employees have a positive affective orientation towards employment by the organization (Price, 1977: p.79 Economists view the employee s decision, whether he wants to leave or stay, as a result of a rational cost-benefit assessment. When rewards to costs ratio of staying with an organization are equal to the ratio at another place of employment, the employee will decide not to leave the current organization. Economic view analyzes the turnover process with more emphasis on the interplay between externally determined variables such as pay or Turnover Intent

4 opportunity (Morrell et al., 2001: p. 21). However, a criticism of the sole economic perspective might be that it fails to capture the complexity of the process of turnover within an individual firm. According to Mueller and Price (1990: p. 321), pay is considered as a part of the sanctions system used by the organization to motivate employees to be in compliance with its regulations and rules. The wage payment plays an important role in their current as well as in possible future employment. The lower the salary is in his existent organization, the more an employer will aim to change this situation. Furthermore it is to assume, that better paid employees within the same hierarchy level tend to stay in the organization (Henneberger&Sousa-Poza, 2007: p. 61). However, there are well-established literatures concerning motivation (e.g. McGregor 1957) suggesting that for at least some individuals, pay is not the sole motivating factor. It is told that motivation has some link with job choice and that pay will not be the sole criterion used when people decide to choose a job, or when they decide to continue within an existing job. Some of the scholars have focus on company size and organizational issues influencing employees turnover intention. It is seen that during recession phase in the mid-nineties, smaller organizations were confronted with higher turnover rate, whereas bigger organizations were able to keep their employees. It is assumed that bigger companies pay a higher salary, have more existing promotion opportunity (internal vertical and horizontal mobility) and offer a higher job safety than smaller companies. extra work load, organizational environment, employee relationship also influence turnover and increases the loss of productivity. Objectives and Research Methodology The objective of this research work is to identify and understand factors of employee turnover and to make recommendations to the management to effectively design strategies in order to increase job satisfaction and reduce employee turnover. To achieve these objectives both quantitiave and qualitative methods were employed to understand employees turnover intention which influence employees to switchover to another organization. This research was conducted in some selected medium size manufacturing and service sector organization located in Dehradun district. A random sample of employees from all departments / locations was selected which included non-management, middle level management and senior management employees. Surveys along with a cover letter explaining

5 the significance and the need for conducting the same were sent to all 300employees across 10 different firms of Dehradun. In order to ensure a good response rate, follow up telephonic calls were made in order to encourage respondents to complete and return the survey. After follow-up 225 questionnaires were returned. After editing 191 responses were found suitable which was taken up for the proposed study? Table 1 Demographic determinants Category Count Percentage Age Upto 25 Years Years Years 45 to 55 Years From Years Gender Marital Status Education level Male Female Married Un Married Up to matriculation Intermediate Graduation Post Graduation Professional Qualification Others Tenure Less than 1 year 1 to 3 years 3 to 5 years 5to 10 years years years more than 30 years Demographic variables, also known as personal characteristics, are widely used in turnover research. These variables are seen as social categories for an individual (Price, 1995). Some of the determinants were examined to have a direct impact on turnover intent, such as age gender, marital status education qualification and tenure The data obtained through surveys reveals that sample is dominated by younger lot, male and married and well educated people. It also reveals that sample is the composition of experienced person as almost 40% employees are having experience ranging from 3 to 10 years. 12.5% employees indicated

6 that they are fresher and having experience of less than 1 years. Almost one third (30.4) were having experience from 1 to 3 years. Employees having more than 10 years experience account for almost 17% respondents in the sample Factor influencing Turnover intention :A Descriptive Statistics Qualitative data that was obtained both from questionnaires and interviews includes the different statement like I understand the mission of the company clearly, I understand how my job aligns with the company s mission, My supervisors are strong, trustworthy leaders, It is easy to get along with my colleagues, I believe my salary is fair to my responsibilities, The benefits I received are practical and address my needs, I believe my job is secure, I feel safe at my worksite, I can balance between my job and family responsibilities, I have sufficient tools and resources to do my job daily, A career advancement opportunity that they would not receive in the short term when they stayed with their present employer, I look my priority first than organizational priority, Employee leaves their current job in order to improve their life standards and also concerning to the new benefits package which they expect to receive, This organization provide better opportunity for career development, I look other choice and keep on liasioning with other recruiters to keep my self ready for future uncertainty, I keep my self ready to leave without having a new job prepared, I feel bore with my present job, Ineffective supervision leads me in favour of making mood for switchover, My job gives me a feeling of achievement, The company recognizes my achievements, My company tells me clearly on the step for achievement, I feel that the goals setting for my task are achievable, Appreciation by management on completion of task give me pleasure of happiness, My manager always thanks me for the job well done, I receive adequate recognition and rewards for a job well done, I like the recognition I get for doing my job well, I always feel proud to work for this company, There are opportunities for me to grow in this organisation, experience, skills and performance are well recognized in this organisation, My organization always gives priority for existed employee by hiring from within, I always prefer the opportunity of career advancement against money, There is a good promotion and career prospect to right candidate in this organsiation, I give more preference to my position then benefits, In the present organization, I am empowered enough to do my job, I have got freedome and I can make my own decision in my job, I always feel that my contribution is important in achieving organization mission, My job is interesting in this organisation, My job challenges me frequently, I am free to choose my own method of working, I feel that the amount of work I am expected to do is reasonable on

7 which employees were asked to rate on the scale of 1 to 5 and mean and SD were calculated with the help of SPSS software and, was grouped into 7 important factor and this was done to make a comparative analysis on the data collected from interviews and the survey, which helped to identify employees turnover intention The first, quantitative data obtained from surveys was analyzed using descriptive statistics technique in order to summarize the data set obtained. This provided a meaningful insight of various factors influencing employees to quit the organization. These factors includes,organisational Environment, Achievement, Recognition, Growth, Advancement, Responsibility and Work itself. The mean and SD thus obtained of each factor is presented in the table below. Table 2 Factors Influencing Turnover intention :A Descriptive Statistics Organisational Environment N Minimum Maximu m Mean Std. Deviation Achievement Recognition Growth Advancement Responsibility Work itself Valid N (listwise) 191 Many researchers have made an attempt to study and determine why employees quit the organization. There are various factors that affect an individual's decision to move from one organization to another or just leave the organization. According to mean rating of different factor, achievement motive of the employees has scored highest mean of 3.21 with SD it was followed by career advancement with the meand and SD the higher responsibility( Mean and SD.73849) turnover. has also influencing employees to Table 3 Mean of different factors influencing employees turnover intention across the different Age categories of respondents Age wise Classification Upto 25 Years Organisatio nal Environmen t Achievemen t Recognitio n Growt h Advancemen t Responsibilit y Work itself

8 25-35 Years Years 45 to 55 Years From Years Total It is seen from the above table that mean rating of Achievement motives has scored highest mean of among the employees in the age upto 25 years. Higher responsibility has scored highest mean in the age group of years. However achievement motive has motivated a large number of respondents as this factor has been rated higher by all the respondents as it scored mean of Table 4 One Way ANOVA with age category of respondents Sum of Squares df Mean Square F Sig. OrganisationalEnvironmen t Within Total Achievement Within Total Recognition Within Total Growth Within Total Advancement Within Total Responsibility Within Total Workitself Within Total One way ANOVA was carried out to test the hypothesis that, the mean of factor influencing turnover intention does not differ significantly across the different age categories of respondents; the table showing calculated value of F is lesser than the tabulated value of F (2.37) at (p< 0.05) level of significance in the case factors like Organisational Environment,

9 Achievement, Recognition, Growth, Advancement and Responsibility.. thus null hypothesis is accepted indicating that there is no significant difference in the mean of different factors of turn over intention across the different age categories of the respondent. However null hypothesis is rejected in case of factor like work itself and it is inferred that there is significant difference in the opinion of the respondents related to this factor. Table 5 Mean of different factors influencing employees turnover intention across the different Level of Education of respondents Edn Qualification Organisational Environment Achievement Recognition Growth Advancement Responsibility Workitself Up to matriculation Intermediate Graduation Post Graduation Professional Qualification Others Total Table 6 One Way ANOVA with Level of Education of respondents Sum of Squares df Mean Square F Sig. OrganisationalEnvironm ent Within Total Achievement Within Total Recognition Within Total Growth Within Total Advancement Within Total Responsibility

10 Workitself Within Total Within Total One way ANOVA was carried out to test the hypothesis that, the mean of factor influencing turnover intention does not differ significantly across the different level of education qualification of respondents; the table showing calculated value of F is lesser than the tabulated value of F (2.37) at (p< 0.05) level of significance in the case factors like Organisational Environment, Achievement, Recognition, Growth, Advancement and Responsibility, and work itself. Thus null hypothesis is accepted indicating that there is no significant difference in the mean of different factors of turn over intention across the respondents of different education level. Table7 Mean of different factors influencing employees turnover intention across the respondents of Different Level of experience Year of Experieince Organisation al Environment Achievement Recognitio n Growt h Advancemen t Responsibilit y Workitsel f Less than 1 year to 3 years to 5 years to 10 years years years more than 30 years Total It is seen from the above table that mean rating of Achievement motives has scored highest mean of among the employees having experience of more than 30 years. Higher responsibility has scored highest mean in the employees having experience from 20 to 30 years. Table8 One Way ANOVA Across the respondents of Different Level of experience Sum of Squares df Mean Square F Sig. OrganisationalEnvironm ent Within Total

11 Achievement Recognition Growth Advancement Responsibility Workitself Within Total Within Total Within Total Within Total Within Total Within Total One way ANOVA was carried out to test the hypothesis that, the mean of factor influencing turnover intention does not differ significantly across the different tenure of the employees in the organization. The table showing calculated value of F is lesser than the tabulated value of F (2.37) at (p< 0.05) level of significance in the case factors like Organisational Environment, Achievement, Growth, Advancement and Responsibility, and work itself. Thus null hypothesis is accepted indicating that there is no significant difference in the mean of different factors of turn over intention across the respondents of different tenure. However null hypothesis is rejected in case of recognition and indicating that there is significant difference in the mean of different factors of turn over intention across the respondents of different tenure Table 9 Regression Analysis Unstandardized Coefficients Standardized Coefficients t Sig. Model B Std. Error Beta B Std. Error 1 (Constant) OrganisationalEnvironm ent Achievement Recognition

12 Growth Advancement Responsibility Workitself a Dependent Variable: overall environment and Switching Intentin A regression analysis was carried out to have a relationship of all the factor of turnover intention with the customers willingness to switch over the organization.. On the basis of information presented in the table it can be expressed as Switching over (Y) = OrganisationalEnvironment Achievement+.193 Recognition+.339Growth Advancement -.200Responsibility+.243 Workitself Conclusion:- Voluntary employee turnovers incur significant cost for an organization. Thus it is important to identify turnover intents as early as possible in order to enable planners to help implement courses of action. In this research work, individual, organizational and mediating factors contributing to employee turnover intentions have been analyzed. Whereas no single factor can be attributed to turnover intentions, it is advisable to take a holistic approach towards handling employee turnover issue in any organization. It is suggested that organization should focus on the factor of turn over intention like like Organisational Environment, Achievement, Growth, Advancement and Responsibility, and work itself. And due care must be given to the education and employees tenure in the organization so as to reduce the turnover rate in the organization. References:- 1. Abassi SM, Hollman KW (2000). "Turnover: the real bottom line", Public Personnel Management, 2 (3): Byrman, A. & Bell, E. (2000), Business Research Methods, 2nd Edition, Oxford press. 3. Firth L, David J Mellor, Kathleen A Moore & Claude Loquet (2007). How can managers reduce employee intention to quit? J. manage.psychol. 19 (2):

13 4. Gerstner, C. R., & Day, D. V. (1997). Meta-analytic review of leader-member exchange theory: Correlates and construct issues. Journal of Applied Psychology, 82, Hom P.W., Griffeth R.W. (1995). Employee turnover, South Western college publishing, Cincinnati, OH pp Kevin MM, Joan LC, Adrian JW (2004). Organizational change and employee turnover Personnel Rev. 33 (2): Locke E (1976). The nature and causes of job satisfaction", in Dunnette. MD (Eds). Handbook of Industrial and Organizational Psychology, Rand McNally, Chicago, IL, pp Louis, M.R. (1980), "Surprise and sense-making: what newcomers experience in entering unfamiliar organizational settings", Administrative Science Quarterly, Vol. 25 No.2, pp Meaghan Stovel, Nick Bontis (2002), Voluntary turnover: knowledge managementfriend or foe? J. intellect. Cap. 3 (3): Mobley, W.H. (1977), "Intermediate linkages in the relationship between job satisfaction and employee turnover", Journal of Applied Psychology, Vol. 62 No.2, pp Ongori, H. (2007), A review of the literature on employee turnover, African Journal of Business Management, pp , ISSN Wanous, J.P. (1992), Organizational Entry: Recruitment, Selection, Orientation and Socialization of Newcomers, Addison-Wesley Publishing Company, Reading, MA.

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