Employee the number of permanent employees who
Employeeturnover can be defined as the number of permanent employees quit the organizationwithin the reported period versus the number of permanent employees on the lastday of the previous reported period (physical headcount). On the other hand,the employee turnover includes only natural employee turnover likeresignations, termination, retirement and it does not reflect any redundancies.(Biz-development.com). Moreover, employee turnover refers to the rate of changein the active people of an organization during a given period of time.
Boxallet al (2003) and Gupta (2009) defined employee turnover as the time-to-timechanges in the composition of the workforce. According to them these resultfrom hiring, releasing and replacing employee. It is a measure to the extent towhich old and new employees leave or enter the service. Labor turnoverindicates the number of employees being hired to replace the employees who haveleft the firm for any reason, including resignation, discharges and layoffs.Labor turnover is concerned with individuals who work for firms rather thanself-employed individuals. For the purpose of this study employee turnover wasdefined as the number of permanent employees who decide to leave the bank in agiven period of time. JobStress: Stress at workplace is oftenreferred to as ‘occupational stress’.
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The basic rationale Underpinning the concept is that the work situation hascertain demands, and that problems in meeting these can lead to illness orpsychological distress. Job stress is a one of the main health problem for bothemployees and organizations, and can lead to burnout, illness, labor turnover,absenteeism, poor morale and reduced efficiency and performance. Hence, stressis considered as one of the contributing factors that influenced theefficiency, absenteeism, increase in health care costs and other unfavorableresults that associated with specific situations, characteristics of the work environment, and individualperceptions and reactions in the context of the workplace (Stacciarini andTroccoli, 2003). Giga and Hoel in 2003concluded that high rates of mergers, acquisitions, increasing economicinterdependence among countries due to globalization, technologicaldevelopment, and restructuring have changed the organizational work over thelast few decades have resulted in excessive work demand, role conflicts, timepressure, ergonomic insufficiencies andproblematic customer relationship are causes of stress. The experience of jobrelated stress (job stress), the range factors that lead to job related stress(stressors), lack of commitment in the organization; and job dissatisfactionmake employees to quit. Firth et al.
(2004).Every individual experienced stress intheir daily life. Stress is a common element in any kind of job that people do.A mild stress could stimulate individuals towards higher level of achievement.However, when stress becomes too severe, it can become dangerous due to itsphysical, psychological and behavioral harmful effects on the individual. Theword stress originally derived from the Latin word stringere, which refers todraw tight, to describe hardships and or affliction (Cartwright & Cooper,1997). It occur when individuals’ physical and emotion do not match with theirjob demands, constraints and or opportunities (Leka, Griffiths, & Cox,2004). There are two major types of stress which are eustress (good stress) anddistress (bad stress) (Fevre, Matheny, & Kolt, 2003; Selye, 1984).
Eustress is defined as individuals whohave experienced moderate and low stress levels. Individuals who areexperiencing eustress will be able to meet job demands which lead to positivework life. Distress is defined as individuals who have experienced high stresslevels. Distressed individuals will not able to meet job demands.
The inabilityto meet job demands could de-motivate them and subsequently their quality ofwork life deteriorates (Fevre, Matheny, & Kolt, 2003; Leka, Griffiths,& Cox, 2004).According to Selye (1984), individualsconstantly strive to achieve a balance between the good forces of eutress andthe destructive forces of distress. However, an acceptable stress level differsfrom one person to the other.
It exists within the person’s personal andinternal experience, which is the experience of the individual (Selye, 1984).Hence, stress is an internal experience of an individual arising from his orher ability to adapt to internal and external pressure.According to Materson (1980), there aremany causes of stress such as workload, cuts in staff, change at work, longworking hours, lack of supervision, inadequate training, inappropriate workingconditions, too heavy responsibilities and poor relations with colleagues.Another researcher Ganster & Logan (2005) identified key factors such aswork environment, management support, workload determines how stressful thework can be and its effect on employee physical and mental health.Relationshipbetween Job stress and Intention to leave the organization The job engagement factors such as jobstress, job satisfaction and job commitment have positive impact on employees’Grobler et al., (2011) found that employee turnover is one of the best answersto dealing with stress. An example of an employee in the organization who, dueto age, experience stress due to the inability to doing the job at the satisfactorylevel that they used to when they were younger.
These types of employees considerquitting the organization before their normal retirement age. The employees with high level of stresshave lower job commitment and satisfaction (Fairbrother and Warn, 2003), andthus, increase their intensity to quit their jobs (Lam and Zhang, 2003). AdditionallyCalisir et al. (2011) pointed that the employees have higher stress have higherpossibility to leave their job. Job stress associates with employees’ jobsatisfaction and job commitment (Firth et al., 2004).
According to Calisir etal. 2011) the employees’ intention to be also relatively depends on employees’job satisfaction. Job commitment plays an major role in influencing employees’intention to quit (Michael et al., 2009). The employee’s high intention toleave the organization will have minimum job commitment compared to thoseemployees’ with minimize intention to leave (Calisir et al., 2011). Jobcommitment is also directly related to employees’ job satisfaction.
Theorganization commitment normally has more impact on the employee’s intention toleave compared to job satisfaction (Lam and Zhang, 2003).Job dispositionalfactors are such as self-esteem, social support impact on employees’ intentionto leave their current job and company (Lo and Ramayah, 2011). Low self-esteem,lack of social support from management and subordinates and lack of locus ofcontrol will increase the employee’s intention to leave.
Job stressor such asrole ambiguity, role conflict, work overload and work-family conflict have nodirect link with the employees intention to leave (Firth et al., 2004). Theorganizational employees intention to leave influence by job stressors throughthe social support and job engagement factors such as job satisfaction, jobcommitment and job stress. Career Growth: Larson (2004) Careerprogress makes stress on employee’s understandings of the value of his or hercareer prospects. Obstacles in career development can appear at any time duringan employee’s working period which serves as stressor for them. This type ofstressors may include an array of matters like being stuck at a same position, nohopes of career advancement or threats of downsizing (Smith and Cooper, 1994.High employee turnover could also be due to no potential opportunity foradvancements or promotions. Employees prefer other companies which may providethem with higher posts and increased compensation packages.
(Rampur, 2009)According toMayrhofer et al., (2007), career growth opportunity is the availability ofchances that an employee encounters or wishes to encounter so as to enhancetheir career’s upward mobility. Most often, these opportunities are provided bythe organization that the employee works for. Alternatively, the employee canstill find these opportunities elsewhere, particularly those in the employee’scareer life. The reason as to why most organizations do not provide careergrowth opportunities is related to cost element. According to Chang (1999),organizations are faced with contrasting dilemmas for the career growth oftheir employees, whilst they try to forge strategies for turnover containmentand cost reduction. Chang (1999), argues that employees who seek career growthwithin the organizations they currently work for, have a higher affinity forcareer growth opportunities than those who do not. There exists a strong correlation between careergrowth opportunities and employee turnover (Puah & Ananthram, 2006).
Chenet al., (2010) argue that the strong correlation between career growthstrategies and employee turnover are meant to optimize both the effectivenessof employees careers while at the same time enhancing organizations growthobjectives. Organizations that lack a contingency plan in managing theiremployees’ career growth, most often suffer the consequence of employeeturnover (Armstrong, 2009).Equally, Agarwal, et al.
, (2006)contends that failure to meet employee’s expectation in career growthopportunities results in high turnover with employees’ seeking theseopportunities elsewhere. According to Jones and McIntosh (2010), understandingthe worth of employees’ career, and enhancing mechanisms for the growth anddevelopment can significantly reduce turnover intentions, and eventualturnover. Duffy, et al., (2011) argues that organizations that place obstaclesin employee’s career development stand a greater chance of funnelingdisgruntled employees who would quit the organization at any best availableopportunity for growth.
Samuel (2010) equates moving up the organization tomoving out of the organization and counts for basic career growth that can triggerturnover. However Feldman and Nigel (2008), extrapolates an argument by statingthat employee turnover could also be necessitated by opportunity foradvancement or promotion outside the organization. Usually employees with ahigher affinity for growth opportunities would prefer other organizations whichmay offer them such opportunities or better opportunities with increasedcompensation packages, research done by Duffy, et al., (2011), Jones andMcIntosh (2010), Samuel (2010). Relationshipsbetween Organizational Career Growth and employees’ turnover intention Organizationalcareer growth shows potential for managing turnover, its biggest impact is onthose who desire a career (Weng & McElroy, 2012). Business organizationalcareer growth is more regular and more closely associated with individualattitudes and behavior (Weng & Xi, 2010).
Weng & McElroy (2012),conceptualized career growth as consisting of four factors: career goalprogress, professional ability development, promotion speed, and remunerationgrowth. The dimensions of career growth were badly affected related to turnoverintentions. However, promotion speed and remuneration growth into a singlefacet collapsed to rewards. Wang et al. (2014), findings highlight a previouslyunexamined relationship between organizational career growth and voice behavior(including turnover intentions). Organizational career growth is not a tacticconcept; one might expect the relationship between it and voice behavior to beaffected by career stage. This study suggests important implications on howorganizations should adapt their practices to better deal with the changingpatterns of career management in today’s organizations.
The multi-dimensionalconcept suggested by (Weng et al., 2010), that career advancement is both afunction of the employees’ efforts and the company’s willingness to reward suchefforts. Weng et. al. (2010), studied with 961 employees in 10 cities in thePeople’s Republic of China, found that the four aspects of career growth. This researchwas focused on managers because they are more likely than employees to bepresented with career growth opportunities, particularly in China.
Likewise, Weng& McElroy (2012), studied research data gathered from the People’s Republicof China, were used to test Weng’s (2010) four model of career growth and to pointout its effect on job commitment and turnover intentions. The result of theresearch was turnover intentions are negatively related to the three dimensionsof career growth, with the correlation coefficient of career goal progressbeing the highest, followed by professional ability development, and thenorganizational rewards. With respect to the control variables, age isnegatively correlated with turnover intentions. Ballout (2009) in his researchon bank employees in Lebanon highly committed and competent employees likecompetitive targets and new opportunities for career advancements if these canbe performed successfully. Employers can reap the benefits of highly committedemployees if they provide the long-term career development which contributes tocareer success (Ballout 2009). The organization employees can find personal careergrowth in other organizations if career opportunities are perceived to bereduced in their present organization. Loss of a talented and skilful worker isa cost to the organization, so organizations strive to retain valuableemployees by developing a committed workforce and preparing them for futureorganizational development and commitment (Ballout 2009). Another same type ofresearch was done with Weng & Hu?s (2009) model, Karavardar (2014), thisstudy was done in Turkey with 226 auditors from 92 audit firms in Turkey.
Thisstudy examined the direct effect of organizational career growth on turnoverintention, as well as the buffering influence of organizational commitment onthis relationship among auditors in Turkey. This was revealed that professionaldevelopment and salary benefits have strongly affects on turnover intention. Inspite of this, career goal progress and promotion speed had no significanteffect on turnover intention. According to Chang (1999), employees who expectcareer growth have higher expectations for career growth opportunities withintheir organizations.
To the degree that individuals can meet their careeradvances needs within an organization, they are more happily to remain withthat organization. Failure to meet these expectations would lead theseindividuals to seek employment opportunities elsewhere. (Weng & McElroy, 2012). Compensation & Benefits: Compensation has been defined in a variety of ways,According to Deluca (1993) and Rajkumar (1996), compensation is defines as pay,reward, remuneration, or salary and wage management. These terms are often usedinterchangeably in organization. In an organization perspective, compensation& benefits can be defined as an important human resource managementfunction where it emphasizes planning, organizing, and controlling varioustypes of pay systems.
Benefits refer to the part of the total compensationpackage provided to the employee in whole or in part by payments from theemployer and it’s did not include the pay for time spent on work (Milkovich& Newman, 2008). Besides, benefits are group membership rewards thatprovide security for employees and their family member. Benefits are anon-compensation paid to employees. Some benefits are mandated by law, forexample social security, unemployment compensation and worker compensation.
Employees’ benefits include pension, health insurance, fringe benefits, welfareand etc (Lee, Hsu & Lien, 2006). Benefits are a crucial part of anemployee’s total compensation package besides, benefits can be treated as thepayment or entitlement, such as one make under an insurance policy or employmentagreement, or public assistance program or more generally, something of valueor usefulness. Benefits may also be seen as a reflection of justice in society (Herman,2005).In today’s globalizes world, organizations arefacing changes generated by increased competition, mergers and acquisitions,shifting markets and changing employee demographics (Chen & Hsieh, 2006). Therefore,it is crucial for company to strategies their competitive and benefits plans inorder to attract suitable talent, maximize return on human capital and increaseemployees’ job satisfaction. The major component of a good performingorganizational involvement is the purpose of the intervention to the employee.One involvement that may be purpose to many peoples is the amount of theirbenefits increase (Mayuri & Mark, 2005).
One reason of increase employee turnover rates is minimumsalary and benefits packages. An employee is employed in low salary position withlimited benefits, there is little incentive to stay if a similar type of employeroffers even a slightly higher rate of pay. “Lower paying job positionsexperience an overall higher number of employee quitting the job, they tend tocost companies less per replacement peoples than do good salary paying jobroles. However, they incur the cost more often. For these most of the reasons, organizationsfocus on employee retention strategies regardless of pay scales.” (Beam,2009) Workers who make more, but whose salaries fall short of the going marketrate, may feel undervalued at their current companies and look for a companythat will pay them what they’re worth (Firth et al.
, 2004). Manu et al. (2004)stated that employees leave from organization due to economic reasons. The mostcommon reason for employee turnover rate being so high is the salary scalebecause employees are usually in search of jobs that pay well.
(Hissom, 2009). The best reason is the lower salary as to whyan employee may be lacking in performance. (Rampur, 2009). Unequal orsubstandard salary structures come under this category as well. “When two ormore employees perform similar type of work and have similar responsibilities,differences in pay rate can lead minimum paid employees to quit.
Ina like vein,if you pay less than other employers for similar work, employees are likely tojump ship for higher pay, if other factors are relatively equal.” (Handelsman,2009)Relationshipsbetween Organizational compensation & benefits and employees’ turnover. Researchersfound that the compensation among the most important factors for employees inconsidering to accept a job offer, however, what is not so clear is the impactthat pay has in regard to retention of the new employee after hire (Barber& Bretz, 2000). The salary satisfaction of an employee upon their absorbingto the job does not mean that they will continue to be satisfied with their payin the years to come. Currall, Towler, Judge, & Kohn (2005) found that paysatisfaction is significantly associated with the intent to quit in a study ofpublic school teachers. In support of this finding, pay satisfaction has alsobeen associated with increased organizational commitment, job satisfaction, andgreater intent to stay in the position (Farrell & Rusbult, 1981, Lum,Kervin, Clark, Reid, & Sirola, 1998). It is evident; therefore, that compensationis an important variable to include in the present study.
Employment benefitsinclude items such as retirement, health insurance, life insurance, disabilityinsurance, paid leave, paid holidays, flexible scheduling, and educationalassistance to name a few. These benefits have been shown to bond an employee tothe employing organization and result in a strong correlation between benefitsand turnover (Shaw, Delery, Jenkins, & Gupta, 1998). However, policies thatallow for work/life balance are becoming increasingly important.
These policiesallow for employees to manage their daily activities outside of the workenvironment such as caring for children, or allowing for involvement inpersonal activities. Flex schedules, part-time options, job sharing,telecommuting and phased retirement are common approaches (Berger & Berger,2004). Commitments to family pressures, community issues and other non-workrelated factors can influence the employees’ likelihood of staying with anorganization (Mitchell, Holtom, Lee, & Graske, 2001). It is important toconsider work/life balance programs for employees, as this is one of the majorneeds expressed by the emergent worker (Spherion, 2010).