FACTORS AFFECTING EMPLOYEE ATTRITION IN SMALL SCALE INDUSTRIES IN COIMBATORE DISTRICT AN EMPIRICAL STUDY

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1 International Journal of Mechanical Engineering and Technology (IJMET) Volume 9, Issue 11, November 2018, pp , Article ID: IJMET_09_11_011 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed FACTORS AFFECTING EMPLOYEE ATTRITION IN SMALL SCALE INDUSTRIES IN COIMBATORE DISTRICT AN EMPIRICAL STUDY Dr.M.Nandhini Associate Professor, Department of Management Karpagam Academy of Higher Education Coimbatore Dr.P.Palanivelu Professor, Department of Management Karpagam Academy of Higher Education Coimbatore ABSTRACT Employee attrition in an organisation is a serious issue and it will affect the performance of the organisation. Impact of attrition on organisations performance has to be considered for improving the concern. Managing the human resource is not a simple task. Employees has to be convinced in terms of monetary and non-monetary benefits. Cost of replacing an employee due to high level of attrition will be more for an organisation. Employer has to take steps to reduce the level of attrition and strategy has to be adopted to retain the employees in organisation. An investigation is made in this study to find out the factors affecting the attrition and strategy to be followed to retain employees in the organisation. Key words: Attrition, Retention, Work Life Balance, Recognition, and Organization Cite this Article Dr.M.Nandhini and Dr.P.Palanivelu, Factors Affecting Employee Attrition in Small Scale Industries in Coimbatore District An Empirical Study, International Journal of Mechanical Engineering and Technology, 9(11), 2018, pp INTRODUCTION Employees are the backbone of an organisation. The success of the concern depends up on the performance, efficiency, ability and morale of the employees. The co-ordination between coworkers and also with superiors is a main reason for success of the organisation. The level of attrition may be varying from one organisation to another because may factors are there which induce or influence the level of attrition viz., salary, promotion, recognition, increment etc., The employee s turnover ratio will be high if they are not satisfied with the existing organisational 89 editor@iaeme.com

2 Dr.M.Nandhini and Dr.P.Palanivelu culture and environment. Employees must be retained in all forms of organisation for growth prospective. The study aims to find out the intention and reason for attrition. 2. REVIEW OF LITERATURE Fitz-enz (1990) in his study observed that, employee commitment and retention is not determined by a single issue but by a cluster of factors. Many previous researches had identified a number of factors associated with employee retention have been identified. Factors that are commonly cited are developmental opportunities and quality supervision, job stress and colleague stress compensation and appreciation of work done, provision of challenging work, promotion and development chances, attractive atmosphere within the organization, relationships with colleagues, work-life balance, communication and supervision Ghapanchi and Aurum (2011) in their study, retention factors include remuneration and benefits, training opportunities, fair and equal treatment, organizational culture. Allen and Shanock (2013) stressed on relationship with colleague socialization, Andrews and Wan (2009) emphasized on management style and leadership to increase an organization retention capability. A group of researchers led by Loan-Clarke (2010) noted autonomy, workschedule flexibility and social support help organization to keep their employees for a longer period of time. Christeen (2014) in his study he identified 8 retention factors: management, conducive environment, social support and development opportunities, autonomy, compensation, crafted workload, and work-life balance 3. OBJECTIVES OF THE STUDY 1. To know the reasons, why attrition occurs in an organisation 2. To find the ways to reduce the attrition 4. STATEMENT OF PROBLEM This research article aims to find out the reasons for employee attrition and it also try to find out the why the organisation is lagging in retaining the employees. Success of the organisation depends upon the employees. Employees are the backbone of any organisation. Once the attrition level of employees is identified, the management can take necessary action to reduce the level of attrition. 5. RESEARCH DESIGN, SAMPLE SIZE AND SAMPLING METHOD Descriptive research design has been adopted. 5 small scale industries in Coimbatore district have been selected for the study. The sample size is 150. Convenient sampling technique has been adopted for selecting the sample. Questionnaire method has been adopted for collecting the data from the respondents 6. FRAMEWORK OF ANALYSIS The collected data have been analysed by applying the statistical tools by applying the statistical tools like Percentage Analysis Mean ANOVA Chi-Square Test 90 editor@iaeme.com

3 Factors Affecting Employee Attrition in Small Scale Industries in Coimbatore District An Empirical Study 7. RESULTS AND DISCUSSION OPINION/ ATTRIBUTES Employees Opinion about leaving the organisation Table 1 Employees Opinion about Leaving the Organisation HIGH HIGH MEDIUM LOW LOW (IN PERCENTAGE) TOTAL It is clear from the above table that, 28.1 percent of employees are having the opinion of leaving the organisation is very high and 19.9 percent of employee s opinion about leaving the company is medium. It is concluded that, 28.1 percent of employees having the opinion of leaving the company is very high. OPINION/ ATTRIBUTES Recognition for capability, efficiency and good work done Cash award/increment/ Promotion received for outstanding performance Table 2 Employee s Opinion about Recognition HIGH HIGH MEDIUM LOW (IN PERCENTAGE) LOW 100 TOTAL Table 2 clearly explains that, 36.3 percent of employees have the opinion that, recognition received for capabilities, efficiency and good work done are medium percent of employees says that cash award, promotion and increment received for performance are high. Table 3 Employee s opinion about Appreciation OPINION/ ATTRIBUTES Appreciation received for the work done Motivation received to earn new skills on the job HIGH HIGH MEDIUM LOW (IN PERCENTAGE) LOW TOTAL editor@iaeme.com

4 Dr.M.Nandhini and Dr.P.Palanivelu The above table reveals that, 18.8 percent of employees have the opinion that the 46.8 percent of employees have the opinion that the appreciation received for the work done are high percent of employees have the opinion that motivation received to learn new skills on the job is high. Table 4 ANOVA - Age Vs Attrition Factor H0: There is no significant difference between age and attrition factors of the employees. Factors Mean Square F Sig. Salaries Superior Subordinate Relationship Growth Opportunities Facilities Policies and Procedures The above table reveals that, there is a significant difference among the different categories of age group of employees with the attrition factors. Hence the alternative hypothesis is accepted. Table 5 ANOVA - Educational Qualification Vs Attrition Factor H0 : There is no significant difference between educational qualification and attrition factors of the employees. Factors Mean Square F Sig. Salaries Superior Subordinate Relationship Growth Opportunities Facilities Policies and Procedures It is clear from the above table that, there is a significant difference between the educational qualification of employees with the attrition factors. Hence, the null hypothesis is rejected. Table 6 ANOVA -Experience Vs Attrition Factors H0 : There is no significant difference between experience and attrition factors of the employees. Factors Mean Square F Sig. Salaries Superior Subordinate Relationship Growth Opportunities Facilities Policies and Procedures editor@iaeme.com

5 Factors Affecting Employee Attrition in Small Scale Industries in Coimbatore District An Empirical Study It is interpreted from the above table that, there is a significant difference between the work experience of the employees with the attrition factors. Hence the null hypothesis is rejected and the alternative hypothesis is accepted Table 7 Ranking - Attrition Reasons Statements Mean Rank Supervisor rude behaviour towards employees 3.54 VIII Lack of opportunity for advancement 4.02 I Lack of employee ability in decision making X Present job did not meet employee expectations 3.97 II Unpleasant working environment 3.69 VI Work life imbalance 3.47 IX Dampen the employees 3.79 IV Insufficient skills of employees V Lack of training facilities 3.66 VII Lack of support from supervisors 3.81 III It is interpreted from the table 7 that, lack of opportunity for advancement is main reason for employee attrition, so it gets rank I. Table 8 Chi-Square Test - Employees Opinion Statement P Value Accepted / Rejected Unpleasant working environment is not reason Accepted Lack of opportunities for advancement is not reason Rejected Inadequate employee compensation is not reason 5.54 Rejected Job did not meet employee expectation is not reason 9.17 Rejected Lack of training facilities is not reason 5.95 Rejected Employees were not given chance to express employees ideas 3.86 Rejected Talented employees were not recognised 7.98 Rejected Flexible working hours to employees are not provided 9.98 Rejected The above table reveals the reasons for employee s attrition and it is analysed by applying chi-square test. 8. SUGGESTIONS Work life imbalances, Unpleasant working environment and lack of opportunity for advancement are the main reason for employee attrition. Majority of the employees recommended for improvement in working environment. Meetings must be regularly conducted to know the expectation of employees editor@iaeme.com

6 Dr.M.Nandhini and Dr.P.Palanivelu Training programmes like personality development, self-development and stress management must be organised regularly for employees. Employees must b reviewed before and after conducting the programmes. Training to employee is insufficient it has to be improved Rewards can be provided for the employees Exit interview must be conducted and reasons must be identified and steps/strategy must be taken to reduce or to eliminate the attrition in future. 9. CONCLUSION The primary aim of any organisation is to be a market leader. To attain this goal the organisation should concentrate more on employees and strategy must be adopted to retain them for the long period. It is identified that lack of growth opportunities is the main reason which force employees to change their jobs. This study concludes that to reduce attrition industries should create some opportunities for the growth of their employees within the organization by adopting new Innovative Technologies and Effective training programs. REFERENCES [1] Abelson, M. and B. Baysinger (1984), Optimal and dysfunctional turnover: Toward an organizational level model, Academy of Management Review, Vol. 9(2), pp [2] Arnold, H.J. and Feldman, D.C., (1982), A multivariate analysis of the determinants of job turnover, Journal of Applied Psychology, Vol. 67, (3), pp [3] Arthur, W., Bell, S., Donerspike, D., and Villado, A.,(2006), The use of Person- Organization fit in employment decision making; An assessment of its criterion related validity, Journal of Applied Psychology, Vol.91, pp [4] Barrick, M.R., and Zimmerman, R.D.,(2005), Reducing voluntary turnover, avoidable turnover through selectio,, Journal of Applied Psychology, Vol. 90, pp [5] Cotton, J.L. and Tuttle, J.F., (1986), Employee turnover: A meta-analysis and review with implications for research, Academy of Management Review, Vol.11 (1), pp [6] Gerhart, B., (1990), Voluntary turnover and alternative job opportunities, Journal of Applied Psychology, Vol.75(5), pp [7] Hinkin, T.R., and Tracey, J.B., (2000), The cost of turnover: Putting a price on the learning curve, Cornell Hotel and Restaurant Administration Quarterly, Vol 41, pp [8] Ongori.H.(2007), A Review of the Literature on Employee Attrition, African Journal of Business Management, pp [9] Weisberg, J. and Kirschenbaum, A., (1993), Gender and turnover: A re-examination of the impact of sexton s intent and actual job changes. Human Relations, 46(8): WEBSITES /518371_ editor@iaeme.com