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Contents
1. Introduction to the organization...........................................................................................................2
2. Challenges of the employee turnover...................................................................................................2
2.1 Delivering the expected service consistently..................................................................................2
2.2 Safe guard the customer base.........................................................................................................2
2.3 Increasing the cost...........................................................................................................................3
2.4 Damaging reputation.......................................................................................................................3
3. Employee Turnover of MBSL..............................................................................................................3
Table 1.....................................................................................................................................................3
4. Causes for turn over..............................................................................................................................3
4.1 Increased competition of the industry............................................................................................3
4.2 Lack of efficiency in recruiting.......................................................................................................4
4.3 Multi-cultural context.....................................................................................................................4
4.4 Lack of recognition..........................................................................................................................4
5. Situation Analysis..................................................................................................................................5
5.1 Physiological.....................................................................................................................................5
5.2 Safety................................................................................................................................................5
5.3 Love and belongingness...................................................................................................................5
5.4 Esteem need......................................................................................................................................6
5.5 Self Actualization.............................................................................................................................6
6. Situation Analysis via Herzberg two factors model............................................................................6
6.1 Motivation factors............................................................................................................................6
6.2 Hygiene factors................................................................................................................................6
7. Recommendations..................................................................................................................................7
7.1 Industry competition.......................................................................................................................7
7.2 Recruiting.........................................................................................................................................7
7.3 Avoid Multi-cultural context..............................................................................................................7
7.4 Implement Recognition programme..............................................................................................7
7.5 Empowering the people...................................................................................................................7
8. Conclusion..............................................................................................................................................7
9. Bibliography..........................................................................................................................................8

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1. Introduction to the organization

Merchant Bank Of Sri Lanka & Finance PLC a subsidiary finance company of Bank of Ceylon is
a leading financial service provider in the country.MBSL is a listed company in Colombo stock
exchange and is a finance company licensed by central bank of Sri Lanka. MBSL is providing
innovative financial service via a wide range of investment and lending solutions along with the
corporate advisory service & margin trading over the last four decades via fourty eight branches
island wide (Merchant Bank of Sri Lanka & Finance PLC, 2022).
MBSL has many highlights after its establishment in 1992 such as merging and acquisition of
few other finance companies.(Merchant Bank of Sri Lanka and Finance PLC, 2022).
PROFITS OF LAST THREE YEARS (LKR)
2018 2019 2020 2021
181,285,000 102,584,000 (1,108,305,000) 529,044,000

Been a service providing organization and the quality of the service offered by the MBSL rely on
the employees(Linstead, Fulop and Lilley, 2009), employee turnover plays a vital role (Nyaga,
2022) in the long run success (Ongori, 2007) of MBSL.
This report objective is to analysis the employee turnover of MBSL with its causes and how
challenging the employee turnover in this current context been a service provider. Analysis of
the current situation by motivation theories and recommendations to overcome the challenges
using motivation theories.

2. Challenges of the employee turnover

2.1Delivering the expected service consistently

MBSL is a service providing organization and the quality of the service depend on the employee
who provide the service. Frequent change of the people who supplying the service compromise
the quality of MBSL further the organization is accepting the deposit of the customers when they
see new faces handling their accounts clients get kind of uncomforting in their mind and this may
lead to withdrawal of the retail deposits of the customers. So that providing quality service
consistently is a challenge (THOMAS and JOSEPH, 2015)
2.2Safe guard clients
MBSL not only loose the employee but also the valuable portfolio handle by particular
employee. It is been observed that most of the time client has a good relationship leave the
organization with the employee (Abeysekera, 2007)

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2.3Increasing the cost

MBSL have to recruit and train people (Linstead, Fulop and Lilley, 2009) the cost for recruiting
and training will increase drastically (Wijebandara, Malalage and Fernando, 2019) and that will
negatively impact on organization performances (Chaudhary, 2022).

2.4Damaging reputation
Been a financial service provider and MBSL is highly engaged with public deposits. The image
create in client’s mind in employee turnover is not good.

3. Employee Turnover of MBSL

Year Total no of Staff Resigned Staff LTO

2016 864 141 16%
2017 912 103 11%
2018 971 183 19%
2019 1002 182 18%
2020 984 112 11%
2021 973 109 11%

Table 1

(Sources Internal)
The above figures reveal that 830 no of staff has resigned from MBSL for last five years this is
almost close to existing number of staff of the organization.

4. Causes for turn over

Voluntary turn over mainly happens due to the low satisfaction (Yousuf and Siddqui, 2018) of the
job and will be more focusing on voluntary turn over (Employee Turnover: Causes, Effects, and
Strategies, 2022)
4.1Increased competition of the industry
This is a highly competitive industry and competitors welcoming trained staff especially from
MBSL as the organization under the shelter of Bank of Ceylon assuming that they well equipped
with knowledge (Madhushani and Mudalige, 2020).
As per Maslow’s hierarchy of needs people have different level of needs if an employee can’t
climb to the next due to limiting factors of the current organization they may seek an opportunity

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from their competitors where he get the comfort of climbing to next level (Jayasekara,
Wijayanayake and Dissanayake, 2021)

4.2Lack of efficiency in recruiting

This has create a major impact to. As an example marketing officers to MBSL been recruited
from different industries. Financial industry is very competitive environment when recruited
from different industries people do not have time to absorb and perform so they leave.

4.3Multi-cultural context
At some department of MBSL due to amalgamation with few other institutions highly affect to
the new comers as it is very difficult to absorb to the different cultures(Management and
organization, 2017) in each department (internal sources)

4.4Lack of recognition
MBSL paying a flat bonus. Not on performance basis the staff who put the maximum effort to
achieve their KPI is not satisfied about this because the employees who got less marks in their
KPIs also get the same benefits. There is no such motivation to the achievers. so that they leave
most of the time hard workers leaving.

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5. Situation Analysis

(Expert Programme Managment, 2022)

The MBSL’s context can be described by using the first four levels of the model the deficiency
needs.
5.1Physiological
A bankers is basically a knowledge worker the physiological needs need to meet without
compromising as he has many opportunities in the banking industry in MBSL context the
salaries of the company is average when considering with the industry so that the basic needs of
the employees is meeting averagely. The result is unsatisfied employees.
5.2Safety
In this context the safety refers to the job security. MBSL has just met a decent profit for 2021
after many struggle due to macro-economic factors. People been assign for different job roles
and people who cannot perform has to take a decision. Hence the current understanding about the
job security is negative.
5.3Love and belongingness
At MBSL previously there was only a single workers union Ceylon Bank Employee Union but
due to cross fire that been divided and established a new union. Due to this internal relationship
been damaged.

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5.4Esteem need
Due to the above reason 5.3 the respect for other is gone the union issue is reflecting even in day
today works sometimes even in social media.
5.5Self Actualization
This depends and different from person to person no proper channel to identify and help people
to achieve to the fullest potential person he want to be (McLeod 2007).

When analyzing via Maslows model it is identified that the employees with the fullest potential
is leaving the organization as they have a very less opportunity to reach to the next tier.

6. Herzberg two factors model

(Nickerson, 2021)

6.1Motivation factors
Motivation factors like recognition is absent or very rarely happened,opportunity for growth is
narrow as the organization’s higher position is not getting vacant. Even the senior management is
stagnated. Responsibilities not been given as most of the responsible work done through
centralize department and there is lot of stress of doing same thing over the years (Inam Khan,
Danial Aslam and Lodhi, 2011).
6.2Hygiene factors
Salary of employee’s average also the relationship with coworkers is not healthy due to conflicts
of two workers unions(Blyton and Turnbul, 2004). Company policies is in place as an example
promotion policy (Alshmemri, Shahwan-Akl and Maude, 2017) is there but it need to be adjust
with current situation (Two-factor theory - Wikipedia, 2022).

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7. Recommendations
Recommendation done on the basis of eliminate dissatisfaction by ensuring hygiene factors are
met and create conditions for satisfaction (Robbins and Judge, 2022) by meeting motivational
factors (2022).
7.1Industry competition
This is out of organization control but it is recommended to conduct frequent job satisfaction
surveys and identify the employee’s intention and communicate to higher management via a
proper channel and follow up the same.
7.2Recruiting
Recommended to be more efficient in recruiting new employees and get more referencing about
candidates past performances from reliable sources. Head hunting to recruit marketing people is
highly recommended.

7.3Avoid Multi-cultural context

It is recommended to empower the current policies to ensure a common culture across the
organization, monitoring and reviewing is mandatory until adaption of the same.
7.4Implement Recognition programme
Implement a performance basis bonus scheme which will motivate the people and encourage
them to earn more if work more basis.
7.5Empowering the people
Responsibilities need to be given rather than centralizing the authority to a single department or a
person people should be empowered and that will motivate people and feel more
valuable.Further a recognition programme with an incentive scheme need to introduce.

8. Conclusion
The report reveal that MBSL employee turnover has a major impact on business performances as
satisfied employee create more happy customers. Thus employee satisfaction and retention is
vital for MBSL which is currently not practicing and that has affected on long run business
performances (Yousuf and Siddqui, 2018).
Implementing above recommendation accordingly will help MBSL to overcome the challenges
identified and retain the employees in the long run.

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9. Bibliography

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<https://www.mbslbank.com/about-us/> [Accessed 15 July 2022].
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Intention among Non-Managerial Employees in Selected Financial Companies in Colombo
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Ezoicreport this ad Categories Career Skills Change Management Communication Skills
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