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An Analysis of The Impact of Working Conditions On Labour Turnover
An Analysis of The Impact of Working Conditions On Labour Turnover
An Analysis of The Impact of Working Conditions On Labour Turnover
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Table of Contents
List of Tables..............................................................................................................................3
1.0 Introduction..........................................................................................................................4
General Objective...............................................................................................................6
Objectives...........................................................................................................................6
5.2 Remuneration...................................................................................................................7
6.2 Hypothesis......................................................................................................................10
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List of Tables
Table 1: Employee Retention rates of ABC Bank.....................................................................5
Table 2: Research Proposal Time frame..................................................................................10
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1.0 Introduction
As a result, executives and scholars are paying special attention to the causes of employee
turnover and their impact on business success (Dilanthi & Rasanjana, 2020). Many authors
have studied the impact of job satisfaction that contribute to employee turnover, but few have
looked into the role of factors which affect employee turnover in the Sri Lankan banking
business.
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2.0 Statement of the Problem
Many factors have been found to be associated with a higher likelihood of employees leaving
their companies, according to research findings It is more likely that workers who work in an
environment with unfavourable working conditions will willingly leave their current
employers, and it is more likely that if their company fails to take the required steps to
improve these factors, employees will not change their minds about leaving their current
employers (Cottini, et al., 2011). Therefore, it is impossible to overstate the strength of the
association between such factors and labor turnover in the workplace. One benefit of
conducting this planned research in the field of labor relations is that it will assist employers
in securing some of their existing employees. Firms must also "make sure talent retention"
and "maintain and improve expertise," which are both important objectives to achieve
(Bertrand, et al., 2010). Evidently, one of the most significant challenges for businesses is the
high cost of employee turnover, which involves the costs of recruiting and training new
employees. This is one of the most significant challenges for businesses. In addition to a
significant monetary loss, which can range from a few thousand dollars to more nearly twice
of an individual's annual income, there are serious adverse repercussions for organizational
performance and group motivation (Singh & Loncar, 2010).
The findings of the study also suggest that some top-level corporate executives may be
completely unaware of the factors of employee turnover. It is more likely that business
executives will be able to change the outcomes if they can recognise the reasons why
individuals are considering leaving the company before they actually leave (Pitts, et al.,
2011).
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Table 1: Employee Retention rates of ABC Bank
2016 96% -
As a result, it is important to examine what factors in the company are affecting the increase
of labour turnover. The findings of this research would help ABC Bank in devising new
human resource strategies which would assist in reducing labour turnover and resulting in
saving the expenses faced by the company due to labour turnover.
General Objective
To examine the impact of work conditions on the staff turnover at ABC bank
Objectives
1. To examine the concepts of factors which impact labour turnover.
2. To explore the impact of the selected factors on labour turnover.
3. To conduct a mixed method research in the case of ABC bank to examine the impact
of various factors on labour turnover.
4. To provide recommendations for ABC bank based on the findings of the study.
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5.0 Literature Survey
This section provides a brief literature survey on several factors which impact labour
turnover.
The quality of a person's work environment has a significant impact on his or her attitude
toward the job, and is considered acceptable or appropriate if it allows him or her to carry out
activities in an ideal, healthy, secure, and pleasant manner (Cox & Cheyne, 2000).
According to the findings of (Kurniawaty, et al., 2019), the work environment can be
divided into three categories:
1) the physical work environment, which comprised of a work environment that is primarily
connected with employees such as work stations, seats, tables etc. and
2) the intermediary environment, which includes an external atmosphere that can affect
human conditions like temperature, moisture, air circulation, illumination, noise, vibration,
smell, hue etc.
3) The non-physical work environment, which includes all situations pertaining to work
relations, including positive relationships with supervisors, coworkers, and subordinates.
The non-physical work environment can be further subdivided into two categories: the social
work environment and the psychological workplace. It is possible to describe the
psychological work environment in terms of the mental actions that an employee engages in
during work hours or while at the workplace. Psychological aspects of the workplace include
clear descriptions of and connections to other information sources on topics such as stress,
bullying, working conditions, cooperation, and conflict.
The social work environment, on the other hand, is concerned with interpersonal connections
in the workplace. Communication styles, as well as the connection between leaders and
subordinates, are all covered. It also encompasses the relationships that exist between
coworkers, the willingness of others to assist, and the ability to work as a team. Maintaining
personal respect for workers at every level of the organization is crucial for the development
of a progressive workplace setting during the course of business functions.
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The links between perceived working environment and turnover intentions was investigated
by (Arnoux-Nicolas, et al., 2016) in a sample of 336 French workers from a variety of job
scenarios. According to the findings, unpleasant working circumstances were positively and
significantly associated with the intention to quit one's job. However, because the findings are
more than a decade old, they may not be applicable to the Sri Lankan context and may even
be out of date.
More importantly, according to another research on the physical environment (noise levels
and air quality, light levels and exposure to toxic substances, temperature and humidity,
aesthetics) can have an impact on job satisfaction and ultimately trigger turnover intentions
(Applebaum, et al., 2010).
5.2 Remuneration
Employees who are paid largely for their work without the involvement of any commission
or bonus payments may experience discontent with their compensation, despite the fact that
the quantity of compensation is not considered to be a motivating factor (Akhtar, et al.,
2016). As a result, unhappiness induced by inadequate remuneration practices may result in
personnel quitting their positions.
According to some research, it is vital for employees to be satisfied with their total
compensation because this can have an impact on their attitudes and behavior, which in turn
can have an impact on their desire to leave the company (Hassan, 2014). Other studies, have
found that monetary compensation is one of the most essential and significant determinants in
employee retention, when compared to all other sorts of incentives available (Milkovich &
Newman, 2004). Employers, it is claimed, can implement successful pay schemes that will
engage employees and increase their performance, resulting in them being more loyal and
interested in the success of the company.
As a result of the global pandemic, the current unfavorable economic conditions and growing
prices may indicate that salary is an important factor in an employee's decision to leave their
place of employment. However based on productivity studies in many organizations, several
researchers have maintained that compensation cannot be the primary driver of increased
employee productivity (Eunice, 2011). As a result, the researcher has expressed great concern
about the findings of this investigation and has offered the proposed study.
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5.3 Opportunities for Career Progression
As defined by the American Society for Human Resource Management, career progression is
a formal approach adopted by an organization in order to ensure that individuals with the
features required in the job are available when the organization requires their services (Nel, et
al., 2011).
According to the findings of a study that examined the relationship between career
advancement and labor turnover, one of the characteristics of a high retention culture is the
availability of development opportunities that encourage continuous learning (Stichler, 2005).
According to a similar study, companies that provide development opportunities as a way of
demonstrating concern for their employees' career advancement can increase their
commitment to remain at their current workplace (Cardi & Lengnick-Hall, 2011).
Academics have identified two types of rewards: financial (extrinsic) rewards and non-
financial (intrinsic) rewards, both which can be used to enhance an employee's performance
(Luthans, 2010). Moreover, financial incentives include pay-for-performance incentives such
as performance bonuses, job promotions, commissions, gratuities, tips and other rewards.
Non-financial rewards are those that are not monetary or cash in nature, such as social
recognition, praise, and genuine appreciation, among other things.
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Previous empirical studies have found that employees being encouraged and promoted by
their employers feel valued by their employers and are more likely to repay the company with
their dedication and contributions. Moreover, employees who are encouraged and promoted
by their employers are also less likely to leave their organization. It can be deduced that
employees who receive rewards and decent promotions within their organization, will be
ultimately encouraged to stay in their positions (Nawaz & Pangil, 2016)
developed.
Working
Conditions
Remuneration
Employee Turnover at
ABC Bank
Opportunities
for Career
Progression
Rewards and
Recognition
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6.2 Hypothesis
The following hypotheses have been developed for this study;
H0: There is no significant relationship between the factors affecting labour turnover and
labour turnover
H1: There is significant relationship between work conditions and labour turnover
H3: There is significant relationship between opportunities for career progression and labour
turnover
H4: There is significant relationship between rewards and recognition and labour turnover
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Second-hand information, on the other hand, refers to information that has not been derived
directly from study participants and has been obtained by another researcher for a purpose
other than that of the initial researcher (Bhattacharyya, 2006). Among other sources, this
research relied on secondary material in order to construct theoretical domains and identify
research gaps. This included academic journals, conference proceedings and textbooks.
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8.0 List of References
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Management, 2(3), pp. 333-342.
Akhtar, N., Awan, A. & Anwar, M., 2016. Impact of Job Satisfaction & Remuneration on
Turnover Intention : A Survey of (Private) Schools of (Okara) Pakistan. International Review
of Management and Business Research, 5(2).
Applebaum, D. et al., 2010. The impact of environmental factors on nursing stress, job
satisfaction, and turnover intention. Journal of Nursing Administration, 40(7), pp. 323-328.
Arnoux-Nicolas, C., Laurent, S., Lhotellier, L. & Annamaria, D. F., 2016. Perceived Work
Conditions and Turnover Intentions: The Mediating Role of Meaning of Work. Frontiers in
Psychology, 7(704).
Baron, R. M. & Kenny, D. A., 1986. The moderator–mediator variable distinction in social
psychological research: Conceptual, strategic, and statistical considerations.. Journal of
Personality and Social Psychology, 57(6), pp. 1173-1186.
Bertrand, F., Peters, S., Pérée, F. & Hansez, I., 2010. Factors of dissatisfaction encouraging
resignation and intentions to resign: a comparative analysis of age groups. Trav. Hum., 1(73),
pp. 213-237.
Brewton, P. & Millward, L., 2001. Organizational Research Methods. London: SAGE.
Burns, N. & Grove, S. K., 2005. The practice of nursing research : conduct, critique, and
utilization.. St. Louis, Mo.: Elsevier/Saunders.=.
Cardi, R. L. & Lengnick-Hall, M. L., 2011. Will they stay or will they go? Exploring a
customer-oriented approach to employee retention. Journal of Business and Psychology,
26(2), pp. 213-217.
Cottini, E., Kato, T. & Westergaard-Nielsen, N., 2011. Adverse workplace conditions, high-
involvement, work practices and labor turnover: evidence from Danish linked employer-
employee data. Labour Economics, 1(18), pp. 872-880.
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Cox, S. J. & Cheyne, A. J. T., 2000. Assessing safety culture in offshore environments..
Safety Science, 34(1), pp. 111-129.
Eunice, N. S., 2011. Labour Turnover And Employee Performance: A Case Study Of Kisii
Bottlers Limited Cocacola Company In Kenya., Kampala: Kampala International University.
Fida, M. K., Khan, M. Z. & Safdar, A., 2019. Job Satisfaction in Banks: Relative
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Harvey, W., 2013. Victory can be yours in the global war for talent: Social factors and
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Hassan, R., 2014. Factors influencing turnover intention among technical employees in
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Kurniawaty, Ramly, M. & Ramlawati , 2019. The Effect of Work Environment, Stress, and
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Luthans, F., 2010. Absenteeism and the collective bargaining agreement: An empirical test.
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Nel, P., Werner , A., Poisat, P. & Sono, D. P., 2011. Human Resource Management. 8 ed.
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Pitts, D., Marvel, J. & Fernandez, S., 2011. So hard to say goodbye? Turnover intention
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