HOW TURNOVER RATIO BE REDUCED OF NON-MANAGERIAL EMPLOYEES

BY

Yousuf Soomar (34621)

Sheryar Ahmed (30442)

Danish Qureshi (23676)

Talha Shehzad (31912)

Shoaib Ahmed (36685)

Sohaib Ahmed (35551)

A thesis submitted in partial fulfillment of the requirements for the degree of Bachelor`s of

Business Administration to Research Facilitation Unit - RFU (Department of Business

Administration) at the IQRA University Main campus, Karachi

Karachi, Pakistan

23-11-2019

i.
HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

Acknowledgements

All appreciation is for the Almighty, the most Gracious and Merciful, who gave us the
capacity to complete our research project. We really want to thank our Mentor, our Supervisor,
Dr. kalpina Kumari for the unconditional support. Last but not the least we would like to thanks
IQRA University who gave us the opportunity to learn in one of the esteemed educational
institution of Pakistan.
HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

Contents
Executive Summary ...................................................................Error! Bookmark not defined.

1. Introduction .........................................................................Error! Bookmark not defined.

2. Company Profile .................................................................Error! Bookmark not defined.

2.1 Definitions of key Terms .........................................................Error! Bookmark not defined.

3. Project Background .............................................................Error! Bookmark not defined.

4. Industry Background ...........................................................Error! Bookmark not defined.

5. Area of Investigation...........................................................Error! Bookmark not defined.

6. Purpose of Project ...............................................................Error! Bookmark not defined.

7. Industry Experience ............................................................Error! Bookmark not defined.

8. Managerial Implications .....................................................Error! Bookmark not defined.

HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

Executive Summary

This research explains us why there is high employee turnover in non-managerial employees in

Toyota Indus motors in Karachi, Pakistan. The role of non-managerial employees in any

organization is really important if the organization is specially about producing products that

deliver value and customer satisfaction. Of course, non-managerial employees do not make

decisions or have a say in organizational strategies on how to achieve those goals but their work

is to follow those sets of rules and procedures that make sure that the target is being achieved. The

whole day to day operations rely heavily on non-managerial employees, with that said it really

makes difficult for any organization to run down its operations smoothly if there is high employee

turnover among non-managerial section. Our research will make sure that how high employee

turnover rate can be decreased.

 HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

1. Introduction

1.1 Background

This research expects to find why there is high turnover ratio among non-managerial employees

in Toyota Indus motors Pakistan. Toyota Indus motors have been present in Pakistan for nearly 30

years. They are present in the market since 1990.Toyota Indus are authorized assembler and

manufacture Toyota and Daihatsu vehicles in Pakistan. However, after so many successful years

Toyota Indus is facing many problems from macro environment problems such as government

policies and other uncontrollable factors from arrival of rival Kia that is also threatening their

market share. Perhaps one problem that can be dealt and can be controlled is the high turnover

ratio among non-managerial employees the turnover rate is almost 30-35% which is really high if

we compare it with managerial employees whose turnover is almost 5%.

2. Company Profile

Toyota Corporation has been in the market since 1937 but in Pakistan Toyota came in 1989 as

a joint venture with the House of Habib as Toyota Indus Motors. Since then Toyota Indus Motors

have been manufacturing, assembling cars and also are officially providing Toyota auto parts and

accessories since 1990. Toyota Indus manufacturing plant is located in Karachi’s Port Bin Qasim

industrial Zone with an area of about 105 acres.

 HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

2.1 Definitions of key Terms

Non-Managerial Employees

By non-managerial employees we mean by that staff or employees that have no power in decision

making and are involved day to day operations, usually lower level staff is known as non-

managerial employees (Watts, 1989).

Turnover

Turnover is the term used to describe the number of employees leaving the organization or being

replaced by the management (Agnes, 1999). Frequently, managers refer to turnover as the entire

process associated with filling a vacancy: Each time a position is vacated, either voluntarily or

involuntarily, a new employee must be hired and trained. This replacement cycle is known as

turnover (Woods,1995).

3. Project Background

Any organization or company that is manufacturing products or providing services cannot sustain

if there is high turnover ratio among its non-managerial staff. Especially when almost all

operations are performed by them. Similar is the case with Toyota Indus where employee turnover

has reached up to 30-35% which means they need to hire more and more people to do operations

related to manufacturing cars and assembling vehicles.in many cases such problems disrupt

operations to a dangerous level that can really hurt the organization and its image specially with
 HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

rivals now giving a tough time to Toyota Indus. So, our main aim is to sustain the turnover rate of

non-managerial employees or find a solution that decreases non-managerial employee turnover

rate.

4. Industry Background

The industry we focused is automobile industry where car manufacturing and assembling is done.

Our focus right now is in non-managerial employees where firstly formalization is high; use of

scientific management is normal that is used to increase productivity, where concept of job

specialization is implemented meaning employees would be put in performing different roles that

make them specialize in certain key areas(division of labor).With all such things we need to

understand that in automobile industry the importance of non-managerial employees on overall

productivity is really crucial. Of course they do not have powers to make decisions but they run

whole operations day to day and have actually become expert in their jobs so a high turnover

among them really creates gaps and makes things a lot complex to perform the operations.

5. Area of Investigation

Our area of investigation comes under the department of Human resource management.

6. Purpose of Project

Our project’s aim is to find why there is high turnover among non-managerial employees? And

what steps or solutions should be provided to reduce the turnover rate. If turnover rate does not

decrease, then it really makes things complex specially for an organization like Toyota Indus where
 HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

in recent years its strategy has gone to cost cutting. Now if there is high turnover then it would

mean more hiring, with more hiring there will be more training seasons that would not fit with

company’s strategy of cost cutting.

7. Industry Experience

Our experience in visiting Toyota Indus was positive. The managers and staff were really co-

operative with us not only they felt comfortable with us but also they were comfortable with us in

sharing the company’s information and telling us their problems and what steps could be taken to

minimize their problems and they also listened to our suggestions or ideas that we had come up

with.

8. Managerial Implications

With our research’s results we can apply our solutions to the Toyota Indus and it will help Toyota

Indus to lower their non-managerial employee turnover rate.

HOW TURNOVER RATIO CAN BE REDUCED OF NON-MANAGERIAL EMPLOYEES

References

Ongori, H. (2007). A review of the literature on employee turnover. African Journal Of Business

Management.

Watts, G. (1989). IDENTIFYING CAREER ORIENTATIONS OF FEMALE, NON—

MANAGERIAL EMPLOYEES AT VIRGINIA TECH.

Emekah Mbah, S., & Ikemefuna, C. (2012). Job Satisfaction and Employees’ Turnover Intentions

in total Nigeria plc.in Lagos State. International Journal Of Humanities And Social Science, 2(14).