Lunar International

College Postgraduate
Program Department of Business
Administration

Determinants Factor for Professional Employees Turnover Intention: The Case

of National Bank of Ethiopia

By: Hewan Kebedom

ID. No.:

GSR/0084/13

Supervisor: Dr. Tariku Atomsa

July 2023
Addis Ababa, Ethiopia

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 Lunar International
College Postgraduate
Program Department of Business
Administration

Determinants Factor for Professional Employees Turnover Intention: The Case of

National Bank of Ethiopia

By: Hewan Kebedom

Supervisor: Dr. Tariku Atomsa

(PhD)

A Research Submitted to the Department of Business Administration in Partial

Fulfillment of the Requirements for the Award Master of Business Administration at
Lunar International College

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 July 2023
Addis Ababa, Ethiopia

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 DECLARATION

I do hereby declare that the work which is being presented in this thesis entitled Determinants Factors for
Professional Employees Turnover Intention: The Case of National Bank of Ethiopia with the guidance
and support of the research supervisor is my own original work. It has not been submitted partially or in full
by any other person for an award of a degree in any other university or higher education institution and all
sources of material used for the thesis have been duly acknowledged.

By:

Signature:

Date:

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 LETTER OF CERTIFICATION

This is to certify that Hewan Kebedom carried out his/her study on the topic entitled “Determinants Factors
for Professional Employees Turnover Intention: The Case of National Bank of Ethiopia.” I have
supervised and directed the student in undertaking the research reported herein and I confirm that the student
has effected all corrections suggested and suitable for submission for the Award Master of Business
Administration to the best of my knowledge.

Supervisor Date

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 APPROVAL

This is to certify that the thesis submitted in partial fulfillment of the requirements for the Award Master of
Business Administration by Hewan Kebedom complies with the regulations of the College and meets the
accepted standards with respect to originality and quality.

Supervisor Signature Date

Internal Examiner Signature Date

External Examiner Signature Date

Dean Signature Date

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 Table of Contents
Cover page...........................................................................................................................................................ii

Declaration..........................................................................................................................................................iii

Letter of certification..........................................................................................................................................iv

Approval................................................................................................................................................................v

Table of Contents.................................................................................................................................................vi

Abbreviations / Acronyms...................................................................................................................ix

List of Tables........................................................................................................................................................x

Abstract................................................................................................................................................................xii

Acknowledgement...............................................................................................................................................xii

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study...............................................................................................................................1

1.2 Statement of the problem............................................................................................................................3

1.3 Research Questions......................................................................................................................................5

1.4 Research Objectives......................................................................................................................................5

1.4.1 General Objective...................................................................................................................................5

1.4.2 Specific Objectives.................................................................................................................................5

1.5 Scope of the Study........................................................................................................................................6

1.6 Limitation of the Study................................................................................................................................6

1.7 Significance of the study............................................................................................................................6

1.8 Organization of the Research Proposal.....................................................................................................6

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 CHAPTER TWO

REVIEWS OF RELATED LITERATURES

2.1 Introduction................................................................................................................................................8

2.2 Theoretical Literature...............................................................................................................................8

2.2.1 Definition of employee turnover............................................................................................................8

2.2.2 A global overview of employee turnover...............................................................................................9

2.2.3 Two-Factor Theory...............................................................................................................................10

2.2.4 Maslow Hierarchy of Needs Theory.....................................................................................................11

2.2.5 Factors that Affect Employee Turnover...............................................................................................11

2.3 Empirical Literature................................................................................................................................19

2.4 Conceptual Framework...........................................................................................................................22

CHAPTER THREE

RESEARCH METHODOLOGY

Introduction..........................................................................................................................................................24

3.1. Research Design and Method.................................................................................................................24

3.1.1 Research Design....................................................................................................................................24

3.1.2 Research Approach...............................................................................................................................24

3.2. Sources and Types of Data.....................................................................................................................24

3.2.1 Types of data.........................................................................................................................................24

3.2.2 Sources of data......................................................................................................................................25

3.3 Sampling Method and Sampling Size.....................................................................................................25

3.4 Data Collection Method...........................................................................................................................25

3.4.1 Sampling Method..................................................................................................................................26

3.4.2 Sample Size Determination...................................................................................................................27

3.5. Data Analysis Methods.....................................................................................................................28

3.6. Reliability and Validity.....................................................................................................................28

3.7. Ethical Considerations............................................................................................................................29

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 CHAPTER FOUR

RESULT AND DISCUSSION

4. Introduction......................................................................................................................................................30

4.1 Response Rate...........................................................................................................................................30

4.2 Respondents’ socio-demographic characteristics..................................................................................30

4.3 Percentage Analysis and Descriptive Statistics for study variables....................................................32

4.4 Descriptive Analysis for Overall Sample...............................................................................................40

4.5 Reliability and Validity Analysis............................................................................................................42

4.5.1 Reliability Analysis...............................................................................................................................42

4.6. Correlation Analysis of the Study Variables........................................................................................44

4.7 Multiple Regression Analysis..................................................................................................................45

4.7.1 Classical Assumption Test Results.......................................................................................................46

4.7.2: The Estimated Result of the Regression Models.................................................................................48

4.8 Summary of Findings...............................................................................................................................50

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion.................................................................................................................................................52

5.2 Recommendation......................................................................................................................................52

References.............................................................................................................................................................54

Appendix 1 Questionnaire.................................................................................................................................. 57
Appendix 2.......................................................................................................................................................... 61

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Acronyms
NBE (National Bank of Ethiopia)

UK (United Kingdom)

USA (United State of

America) IT (Information

Technology) HR (Human

Resource)

BCEA (Basic Conditions of Employment Act)

HRD (Human Resource Department)

IV (Independent variable)

DV (Dependent Variable)

SPSS (Statistical Package for Social Sciences)

WC (Working Condition)

R (Remuneration)

CP (Career Progression)

Rc (Reward)

L (leadership)

SD (Standard Deviation)

ET (Employees Turnover)

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 LIST OF TABLES

TITLE PAGE

Table 2. 1: Summary of Empirical Literature..........................................................................................20

Table 3.1: Proportional sample size allocation plan for each cluster......................................................25

Table 4.1: Analysis of socio demographic variables...............................................................................29

Table 4.2: Percentage Analysis and Descriptive Statistics for the decrease in employees‟ turnover...................32

Table 4.3: Percentage Analysis and Descriptive Statistics for Remuneration.........................................33

Table 4.4: Percentage Analysis and Descriptive Statistics for Working Conditions...............................35

Table 4.5: Percentage Analysis and Descriptive Statistics for Leadership..............................................37

Table 4.6: Percentage Analysis and Descriptive Statistics for Opportunities for Career Progression…39

Table 4.7 Overall Descriptive Analysis result the study variable............................................................40

Table 4.8: Reliability Analysis result.......................................................................................................43

Table 4.9: The correlation results for all variables under study...............................................................44

Table 4.10: The result of model summary for regression model..............................................................48

Table 4.13: The result of ANOVA for regression model.........................................................................48

Table 4.14: The results of regression coefficients for model...................................................................49

Table 4.15: Summary of the hypothesis test result...................................................................................51

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Abstract
The primary objective of this study was to examine the Factors Affecting Professional Employees
Turnover: The case of National Bank of Ethiopia. To achieve this purpose, descriptive and explanatory
study designs have been employed through cross-sectional survey questionnaire from a sample of 150
professional employees. These respondents have been selected from each stratum (senior and manager
level, middle level employee (officers) and low level employee (junior and assistant officers) by random
Sampling method. The data collected through questionnaire is analyzed using statistical measures such as
descriptive statistics, correlation and multiple regression analysis by using SPSS version 25. The study
found a significant positive impact of working condition, leadership, reward and opportunities for career
progression on employee retention or the decrease in employee turnover while remuneration found to
positive but statistically not significant . Since working condition was found to be a positive predictor of
the decrease in employee turnover, the managements and CEOs of the organization should engage in
increasing the qualities working environment to retain their employees

Key Words: employee turnover, working condition, leadership, reward and opportunities for career
progression and remuneration

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 Acknowledgment
First and foremost, I would like thanks the Almighty God and his mother virgin st marry. He gives power to the
faint; and to them that have no Might he Increases strength, and thanks to my family: my Mum, sisters and brothers for
their unparalleled love and support.
I would like to express my gratitude to my advisor Dr. Tariku Atomsa for his
constructive contributions throughout this study.

I would like to express my gratitude, to all my friends who supported me directly and indirectly. I am also
indebted to graduating students who cooperated and participated during the survey.
Last but not least, I would like to thank for National Bank of Ethiopia for allowing and providing
assistance in contacting employees and Special thanks go to bank managers for their collaboration.

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 CHAPTER ONE
1. INTRODUCTION

1.1 Background of the Study

For any organization to run successfully, several human elements are essential. One is good
leadership that starts from the top geared towards best results. A second need is good
organizational and management practices. Third, there must be a team of people with the
knowledge, skills, aptitudes, and attitudes to perform a sufficiently high level of production to
accomplish the organization mission and financial performance (Hermann, 1999). The same
requirements apply whether running a manufacturing company, a service business, a
professional firm or a non-profit.

Employee turnover is defined as the “influx and exit of individuals into and out of the work
force of an organization over a specific period of time‟. Exit from an organization can take
the form of resigning, redundancy, retirement, dismissal or death. Voluntary turnover is
recognized as any departure as a result of the individual’s decisions or actions while
involuntary turnover is due to termination of the employment by the organization.
Involuntarily turnover includes all dismissal form of exit which is believed to be beneficial to
the organization, while voluntarily turnover accounts for all other forms of exit and is felt to
be a loss to the organization (Armstrong, 2006).

On the contrary there may be a role the organization can play in the case of turnover that is
driven due to internal factor and termed as avoidable turnover. If the employee is too
expensive to retain then it would be better for the organization to let him/her go. Further they
argued both retention and turnover involve some cost. Hence organizations should aim to
optimize the balance between these costs (the sum of turnover plus the sum of costs
associated with reducing it) to the minimum level (Blake, 2006).

High rate of turnover among employees is a serious workforce problem and employee
turnover costs are an inevitable cost of doing business. Listing the possible benefits and
disadvantages of turnover is not difficult. Voluntary turnover can increase productivity by

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securing better matches between jobs and workers. It also provides opportunities for an
employer to reduce or change the composition of the workforce, given that some inflow and
outflow is recognized as a healthy way to encourage innovation within an organization
(Curran, 2001).

On the other hand, turnover generates administrative costs involving the location, selection,
and training of new workers. It may also involve actual output losses or quality reductions
during the period in which a vacated post remains unfilled or temporarily staffed (Parsons,
2006). For example, a hospital may have to be shut down if nurses are in short supply. It may
also take some time for the new worker, once hired, to become fully productive; generally,
the length of time is dependent on the skill level of the job (Curran, 2001). Turnover costs are
often directly related with the amount of job-specific training a post requires, and if the new
worker proves to be less productive than the previous employee, once trained, the costs of
turnover to an employer may be substantial.

According to Phillips (2005) turnover clearly involves a trade-off between costs and benefits.
In many cases, turnover calculations are complicated by the fact that costs and benefits can be
distributed across different components of the organization. For example, when a worker
quits her or his job, an organization incurs administrative costs, but if the quitter is replaced
by a more productive worker, or if the quitter moves to another job in the same organization
where he or she is more productive, the organization may, on final accounting, gains from the
quit. According to Gray and Normand (2006) if workers move from one organization to a job
in another organization in which their productivity is greater, then the organization as a whole
may benefit even if an individual organization incurs a net cost.

Even though turnover is frequently mentioned as a problem in most organizations, there is

very limited research has been conducted on the actual costs and benefits associated with it
or on the efficacy of certain policies to address it. From an economic perspective, lack of
information on the costs and benefits of turnover makes it difficult to evaluate the extent of
any problem. Given that wages or comparative time evaluations motivate job changes, pay
levels are often viewed as the obvious remedy for retention problems. Evidence from the
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Economics literature suggests that the supply of labor is elastic, and that individuals respond
to pay increases by remaining in post longer and also work more hours (Phillips, 2005).

1.2 Statement of the problem

The impact of employee turnover has received considerable attention by senior management,
human resources professionals and industrial psychologists. A high staff turnover rate has
negative consequences on the organization whichever way one looks at it. Besides the costs
associated with actual separation of the employee and recruiting, hiring and training of new
employees other costs may not be easy to measure. The indirect cost of turnover may extend
to decrease in the quality of customer service and performance of commercial banks
internationally and locally (Suzuki, 2007).

Employee turnover is one of the aspects most studied in organizational research as it has a
direct implication to the organizations‟ day to day running and survival in the industry (Mitri
and Gupta, 2002). The cost of high turnover can be substantial, and in fact, according to a
study that was conducted by Hay Group (2004), it indicates that employees‟ turnover could
cost companies up to 40% of their annual profits, and most of the organizations fail to
recognize the cost of losing employees, particularly indirect costs. For example, if an
employee leaves, there could be a lost opportunity cost in terms of technical expertise,
dedication, productivity, drive and determination, high achievement, creative capacity,
experience, educational level, position in the industry or field or any combination of these
and other factors(Price, 2007).

According to studies that have been conducted by various authors this include; Blake, (2006);
Armstrong,(2006); Sekuguchi,(2004), who identified that the common reason why
employees leave is the existence of a poor relationship between the employee and his/her
immediate manager. There is a saying that “people leave managers, not organizations” many
employees decide to resign from an organization as a result of conflict they may be having
with their immediate managers. The lack of a career advancement plan is another reason why
employees leave their organizations. This results in high job dissatisfaction leading the

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managerial-level employees to look for alternative employment thereby increasing the
employee turnover rates of an organization. Another reason why employees leave their
organization is due to the poor match between the employee and the job or the organization
(Price, 2007).

Other Empirical studies regarding employee‟s turnover have focused on other sectors like
education (Iqbal et al., 2014 Rizwan et al., 2017), marketing, (Noor, & Maad, 2008), services
sector and (Bajwa, Yousaf, & Rizwan, 2014), health (Ahmad & Riaz, 2011). However, in the
history of Ethiopian context, there is a less quantity of research on the subject especially for
national bank of Ethiopia which mostly relies on skilled labor and there exist tough
competition to survive. In addition, Majority of the studies viewed job dis-satisfaction as a
core factor for employees to leave the organizations (Spector, 1994; Nazim, 2008; Kanwal, &
Majid, 2013), thus leaving space to investigate other factors responsible like working
condition (including poor working environments, securities and workplace organization),
employee remuneration (including salaries/wages and benefits), career progression
(including orientation, skill training & development and education program) and rewards .

National Bank of Ethiopia set maximum attrition rate in its strategic planning as 8 percent.
The actual attrition rate of professional employees excluding of nonprofessional employees
at the bank is presented below.
Fiscal Year Attrition Rate/Turnover Rate (%)
2016 12
2017 15
2018 16
2019 9
2020 7
2021 8
2022 12

Source: HRMD, NBE

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This shows that the registered rate is above the attrition rate set by the Bank except the fiscal
year 2020 and 2021. Hence, the trend reflects that NBE is facing high turnover of
professional employees. However, the causes of NBE professional employees leaving the
organization voluntarily are not well identified since as far as the knowledge of the
researcher studies have not been conducting on National Bank of Ethiopia in this regard.
Hence, this research is intended to address the factors affecting professional employees‟
turnover in National Bank of Ethiopia and will fill the gap in literature, variables and
methodology. This study more specifically intends to answer the following basic/research
questions.

1.3 Research Questions

1. How leadership affects employee’s turnover?

2. How remuneration affects employee’s turnover?
3. How reward affects employee’s turnover?
4. To what extent opportunities for career progression affect employee’s turnover?
5. How working condition affects employee’s turnover?

1.4 Research Objectives

1.4.1 General Objective

The general objective of this research is to examine the factors that influence professional
staff turnover in National bank of Ethiopia and provide positive suggestions to reduce
turnover.

1.4.2 Specific Objectives

The specific objectives of the study are:
1. To what extent leadership affects employee’s turnover?
2. To examine how remuneration affects employee’s turnover?
3. To what extent reward affects employee’s turnover?
4. How opportunities for career progression affect employee’s turnover?
5. To what extent working condition affects employee’s turnover?

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1.5 Scope of the Study

The study focused on examining the factors affecting employee’s turnover in national bank
of Ethiopia. This study will be conducted using sample size of 240 professional employees.
The study will also focus on the study variables such as employee turnover (dependent
variable), and independent variables (leadership, remuneration, working condition, career
progression and rewards). Therefore, it mainly confines on these six independent variables.

1.6 Limitation of the Study

In conducting this study, there are different limitations.

Not find the old document because of lack of documentation by the bank also there is Lack of document
to this study when gathering the necessary & relevant raw data and the study was limited to Addis Ababa
especially in Awash Bank This is due to operational constraints like time, budget, labor etc

1.7 Significance of the study

The study is significance because the problem is increased year to year so the bank should do
the best for their employees to stay by using different mechanism which is listed in the
variables affect the employee not to stay or stay in the bank. There is no good suggestions
from the employees depending on their sense of good environment, good salary, allowances
and other rewards so the research will fill the gap by knowing what the employee feel about
the bank in terms of career progressions, leadership, remuneration working condition and
also rewards.

1.8 Organization of the Research Proposal

This study is organized in to five chapters. The first chapter commences with the introduction
part of the study. It includes sub sections like the background of the study, statement of the
problem, research question, general and specific objective, significance, scope and limitation
of the study. The second chapter discusses the details of related literature of the
study;

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Theoretical literature review, empirical and conceptual frame work. The third chapter
focused on research methodology, research design, research approach, research setting, target
population, validity, reliability and ethical consideration. Fourth chapter discusses data
presentation, analysis and finally in chapter five conclusions will be drawn based on analysis
and possible recommendations has been forwarded by the researcher based on the
investigation.

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 CHAPTER TWO

REVIEWS OF RELATED LITERATURES

2.1 Introduction

This chapter contains literature review as derived from research and works by other
researchers obtained from journals. It also contains theoretical review, empirical review as
well as the conceptual framework. It aims at assisting in the problem definition, and makes it
possible to understand what other researchers and writers have done or contributed to the
topic.

2.2 Theoretical Literature

2.2.1 Definition of employee turnover

Employee turnover is defined by scholars in a number of ways. Even though such definitions
are different by vocabulary, the ultimate meaning remains the same. Henha (2017) defined
employee turnover as the situation where an employee ceases to be a member of an
organization. Further, Harkins (1998) elaborated that employee turnover is the entrance of
new employees into the organization and the departure of existing employees from the
organization.

Employee turnover or leaving employees from the current organization can be categorized
into main three types (i) unavoidable; (ii) desirable and (iii) undesirable turnover. The
unavoidable turnover refers to employees leaving the organization due to causes such as
retirement, sickness, family matters etc. The other two types of turnover which are desirable
and undesirable refer to employers terminating the employments due to a lack of
competencies of employees and employees leaving the organization by their own preference
against the will of employers. Moreover, those three types of turnover fall into another two
categories that are involuntary and voluntary turnover. Among those two classifications, only
the voluntary turnover overlaps with the undesirable category which makes involuntary
turnover characterized by both unavoidable and desirable categories (Henha, 2017).

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2.2.2 A global overview of employee turnover
In the United Kingdom (U.K), the Chartered Institute of Personnel and Development
(2007: 1) reports that the overall turnover rate for the U.K. in the year 2006 was
reported as 18.1%. Turnover rates vary from sector to sector with the highest level of
turnover (22.6%) found in the private sector organizations with the public sector having
an average turnover rate of 13.3%. In the United States of America (USA), Smith
(2007:1) argues that businesses spend over USD 200billion annually recruiting and
replacing their employees. In the healthcare sector in USA for example, a report by
Sellgren, Ekvall and Tomson (2007: 169) estimates that the turnover rate would reach
a level of 29% in year 2020.

Gustafson (2002: 106) shows that the hospitality industry in the USA and elsewhere is
experiencing a labor shortage with the attendant high rate of turnover. Kaufman (1998: 54)
forecasts a considerable current and future shortage in the supply of information
technology (IT) professionals in the USA. A jobs forecast by Computerworld (1998: 1)
estimates that there were 350 000 vacant IT jobs in the USA in 1998 with a forecast of
1.3million more IT professionals needed in the next decade with a turnover rate of 13%
or higher. This suggests that turnover would continue to be a problem in the years
ahead. To reduce the ever-increasing turnover rates, organizations must understand and
put in place the right strategies to retain these professionals. According to Lockwood and
Anari (1997: 252) the following factors were listed as crucial retention strategies for IT
professionals in the USA and U.K in the order of importance: Money (base salary plus
bonus and stock options); the chance to learn new skills and working conditions (e.g.
physical, colleagues & boss, casual dress). Survey found that the majority of IT
professionals admitted to having left their former organizations for more money, while a
little above half of these professionals left for career advancement. Common practice
suggests that most people need a vacation break to prevent job stress and burnout.
Furlonger (1997: 3) reports that Scandinavian and European organizations typically offer
more vacation benefits and three-day weekend mini-vacations than their USA
counterparts.

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A widely held belief is that employees have developed „bad‟ attitudes due to the labour
shortage. Employees are believed to job-hop for no reason, or even for fun. Hewitt Associates
(2006: 1) found that public and private sector organizations in China, Hong-Kong, India,
Japan, Korea, Malaysia, the Philippines, Singapore, and Thailand experienced 14% and 16%
turnover rates in year 2004 and 2005, respectively. The possibility of the rate increasing is
high as Asia‟s dynamic growth agenda collides with the demographic trends of an ageing
population and an immediate need to attract more skilled employees. The effect of a rising
turnover rate is already manifesting as it is now easier than before for employees to move
from one organization to another thereby increasing the complexity and costs of retaining the
right employees in an organization.

Many reasons have been given for the high rate of turnover in Asia and one of these reasons
according to a study by Hewitt (2006: 1) is inequity in compensation. The report noted that many
organizations are already losing their employees to organizations that are offering higher salaries.
The study listed limited growth opportunities and role stagnation as other reasons for high rates of
turnover. A very effective retention strategy adopted by Asian organizations is the ability to raise
base pay above the market rate. Organizations are also increasingly providing the opportunity to
teach their employees new skills and providing favorable work-life balance in their bid to retain
key employees.

2.2.3 Two-Factor Theory

Herzberg and his colleagues (Herzberg, Mausner & Snyderman, 1993) proposed a two-factor
theory in which job satisfaction and dissatisfaction were influenced by different factors. The
two-factor theory emphasized that employees‟ needs are influenced by two types of factors:
hygiene (or extrinsic) and motivating (or intrinsic) factors. Extrinsic factors include salary,
working conditions, supervision, company policy, poor interpersonal relations and job
security (Mullins, 2010). The absence of hygiene factors will result in employees‟ job
dissatisfaction. Contrariwise, the fulfillment of extrinsic needs only eliminates hindrances to
job satisfaction and in itself does not bring about job satisfaction.

The theory, however, proposed that intrinsic factors such as achievement, reward, the nature
of work, responsibility, advancement, and growth seem to be related to job satisfaction.
Hence, organizations cannot motivate employees until what dissatisfies them has been
removed (Herzberg, 1966). In line with this assertion, Mullins (2010) stressed that to motive
employees to give of their best; management must give proper attention to the motivation or
growth factors. Nevertheless, hygiene factors are necessary to avoid unpleasantness at work
and to deny unfair treatment (Mullins, 2010). Put differently, the meeting of lower-level

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needs of employees is not motivating but can have a demotivating impact if not met.
Therefore, true motivation occurs only when employee’s higher-level needs are met (La
Motta, 1995).

2.2.4 Maslow Hierarchy of Needs Theory

Commonly known as the hierarchy of needs, is also a motivational theory, developed under
believed that human beings are motivated by needs that are in-born (Saleemi, 2005).
Maslow‟s theory comprises of five needs: Physiological need (most basic - air, water, sleep,
food), safety needs (stability and consistency), love and need to belong (affiliate) needs, self-
esteem needs (confidence/ respect) and Self-actualization needs. Theory states that lower
needs must be satisfied before one can progresses to the next level of needs. In work place,
employee‟s needs must be met, especially safety needs and esteem need (acceptance and
reward) failure to which, they will be bound to leave in search of satisfaction (Handelman,
2009).

2.2.5 Factors that Affect Employee Turnover

2.2.5.1 Leadership
Leadership is one of the key aspects that result to improved performance of the organization.
The approach applied by managers to influence employee to perform will vary from one
organization to another in the modern organizational context. Peter Drucker defines
leadership as “the only definition of a leader is someone who has followers.” And further
states that to gain followers requires influence but does not exclude the lack of integrity in
achieving leadership. According to Maxwell (2004) leadership is influence nothing more
nothing less. Timmins (2008) states that team work among employees and knowledge
management is enhanced by good leadership in the organization. Leaders can apply
autocratic, participative and laisser-faire style of management to influence employee
behaviour (Deery and Kinnie, 2002).

2.2.5.2 Working Conditions

A poor work environment may cause discomfort to some employees who may end up being
attracted to other organizations with better working conditions. In a study conducted by
Pillay (2009), public sector employees felt employment security, workplace organization and
the working environment were the most important factors, whereas the private sector
employee rated workplace organization, employment security and professional practice as
being the most important. It should be realized that, working conditions in an organization,

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have a role to play in deciding whether to stay or leave. These are the gaps that may be
explored. Good working conditions may serve as a motivating factor to employees, in order
to stay in an organization. This, therefore, means that the impact of service benefits in staff
retention cannot be ignored.

Various employee service benefits are regulated by the legislation in Ethiopia and leave;
working time; employment remuneration; termination of employment; and others; are some
of the benefits that they are entitled to. It is evident that public and private sector employment
have to comply with the Employment Act (2007) at a minimum level; working conditions
should be continuously improved. However, if the organization wants to retain its valued
employees, service conditions should be attractive. Therefore, employers must demonstrate
commitment and responsibility so as to ensure that all workers, irrespective of specialist field,
are treated fairly. The Basic Conditions of Employment Act can be utilized to ensure that
basic working conditions are maintained and improved. However, it has to be acknowledged
that some organizations provide more favorable benefits above the minimum and therefore,
employees will always have a choice to move from one organization to another. The Basic
Conditions of Employment Act (BCEA) if used correctly is one of the tools that are used to
motivate and retain employees in various fields of work, but as previously mentioned, the
issues enshrined in the BCEA are part of the keys to motivate all employees. Employees need
a work environment that they like and find appropriate.

Necessary tools and proper equipment is also a prerequisite by law for all organization as
stipulated under the Occupational Health and Safety Act (20017), (G.O.K, 20017). If the
workplace lacks important facilities, such as proper lighting, furniture, clean restrooms, and
other health and safety provisions, employees won't be willing to put up with the
inconvenience for long (Handelman, 2009). There should also be regular routine maintenance
and modern equipment to cope up with change in technology. The demand for such facilities
has recently been caused by changes in global and regional legislation resulting from
employee‟s awareness of their human rights. Secondly employees must have adequate
personal protective equipment. This refers to protective clothing, gloves, shoes, masks,
helmets, goggles, or other garments or equipment designed to protect the wearer‟s body from
injury by blunt impacts, electrical hazards, heat, chemicals, and infection, for job related
occupation safety and health purposes. The use of personal protective equipment is to reduce
employee exposure to hazards. The steps to donning and doffing personal protective
equipment need be done in correct order (Handelsman, 2009).It is also important to consider
work schedule when dealing with working conditions .The work schedules associated with
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Different jobs vary, some jobs may be performed during normal daily work hours and work
days and some jobs require working nights, weekends and extended hours. As Kodz and
Lynch (2002), explains the principle of work life balance is that there should be a balance
between an individual‟s work and their life outside work and this balance should be healthy.
As defined by work Foundation (2003b) the concept of work life balance is about employees
achieving a satisfactory equilibrium between work and non-work activities and potential
responsibilities. Flexible working is considered the most practical solution to establishing an
effective work life balance. This covers home working, part time working, compressed
working weeks, annualized hours, and job sharing creating an environment in which staff that
opts to work flexibility and those who raise work life issues will require a cultural shift in
many organizations, backed by senior level support (Handelman, 2009).

Research has shown that flexible work-schedules lead to greater work-life balance and can
offset work stress (Pearce & Mawsons, 2009). Therefore, organizations should be in a
position to provide their employees with the opportunity to work flexible hours. Research
suggests that when adults and children to their family, men and women tend to become more
traditional in how they divide workloads, in other words, tasks become delegated by gender
rather than by interest or ability (Hogarth and Dean, 2008).When work interferes with family
and relationships there is a higher absenteeism rate and turnover than when the individual is
able to balance family needs with the support of organizational programs. In additional
interpersonal relations with supervisors and managers is an important aspect of conditions of
work. For employees to perform and continue working for an organization there should be a
culture that encourages positive attitude to work and promoting interest and excitement in the
jobs they do.

According to Lawler (2009), employees who are enjoying themselves, who are being
supported and developed and who feel fulfilled and respected at work will provide best
service to customers. There should be „talent relationship management‟ policies which are
concerned with building effective relationships with people in their roles, treating individual
employees fairly, recognizing their value, giving them a voice and providing opportunities
for growth. Emphasize as a core value of the organization that management at all levels must
be prepared to listen and respond to any contribution their people make.

2.2.5.3 Remuneration
Remuneration is provided for in exchange for the employees contributions to the
organization. An effective remuneration program can help shape performance and improve

13 | P a g e
job satisfaction (Armstrong, 2009). Employee compensation has long been a topic of interest
to employers and employees alike. The concept of an employment relationship implies that
employees work in exchange for some reward, and this reward is usually monetary
remuneration. Pay, pay satisfaction, and attitudes towards benefits have emerged as popular
variables for use in organizational research (Carraher, Klein and Francis, 2004, Gerhart and
Rynes, 2003; Scarpello and Carraher, 2008). They exhibit significant relationships with
organizationally important outcomes such as absenteeism, turnover intentions, perceived
organizational attractiveness for jobseekers, organizational citizenship behaviors‟‟, and job
performance (Vilma and Egle, 2007).

Businesses of all sizes are competing in a global marketplace for employees (Vilma and Egle,
2007; Welsh and Pendleton, 2006). They face the difficult task of providing competitive
compensation and benefit packages to employees in a cost effective manner (Simmons,
20012), attracting (and retaining) employees with the needed knowledge, skills, and abilities
in order to effectively perform their jobs (Sturman, 2003), and trying to have the organization
remain profitable. In some instances, employees have greater need for benefits than pay.
Employees always flock to companies who offer more benefits (Rampur, 2009). Benefits
should match employee needs; some employees may want retirement plans, whereas others
want more money. Flexible organizations address the need for benefits by allowing
employees to select from a variety of choices and benefit plans.

In addition to pay and benefits employees want to be recognized for a job well done.
According to Long, (2012) Rewards respond to this need by validating performance and
motivating employees toward continuous improvement. Through a reward program the entire
organization can experience the commitment to excellence. When reward system is credible,
rewards are meaningful. Rewards should be based on a clear set of standards with
performance verifiable or observable, (Tanner, 2012). Unrecognized and non-valued
performance can contribute to turnover. Reward for a job well done fills the employees need
to receive positive, honest feedback for their efforts. There must be positive reinforcement for
good performance which can be in terms of rewards of money, verbal praise, written awards
or special rewards. Positive behavior may not continue without reward and reinforcement.
Therefore this research assumes that

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2.2.5.4 Opportunities for Career Progression

Employee turnover rate may be affected by training, Albrecht & Andretta, (2011). According
to a study done by the ASTD in 2003, 41% of employees at companies with poor training
planned on leaving within a year, as against 12% planned departures at companies with
excellent training (Origon & Nzonzo, 2011), (Clouden, 2009). Different types of training can
play an important role in creating and reinforcing high involvement work processes
(Vandenberg, Richardson and Eastman, 1999). It is imperative for the organization to provide
development opportunities for individual employees in order enhance their skills and improve
their chances of getting higher posts, (Origon & Nzonzo, 2011). According to Werner, (2009)
Training and Development focus on changing or improving the knowledge, skill and attitudes
of individuals. Training typically involves providing employees the knowledge and skills
needed to do a particular task or job, though attitude change may also be attempted (in sexual
harassment training).

Developmental activities in contrast, have a longer term focus on preparing for future work
responsibilities while also increasing the capacities of employees to perform their current
jobs (Origon & Nzonzo, 2011). Training and development activities are planned programs of
organizational improvement, and it is important that they be planned as thoroughly as
possible, for their ultimate objective is to link training content to desired job behaviors.
According to Dessler, (2011) the training process consists of four steps. First conduct a need
analysis by identifying the specific knowledge and skills the job requires, and compare these
with the prospective trainee‟s knowledge and skills. Then determine training needs,
formulate specific training objectives, review possible training program content and estimate
a budget for the training program. The third step is to implement the program, by actually
training the targeted employee group using methods such as online training. Finally, is an
evaluation step, in which you asses the program’s success.

According to Wendell, (2007) training & development activities begin when a new employee
enters the organization, usually in the form of employee orientation and skills training.
Employee orientation is the process by which new employees learn important organizational
values and norms, establish working relationships, and learn how to function within their
jobs. Skills and technical training programs then narrow in scope to teach the new employee
a particular skill or area of knowledge. Once new employees have become proficient in their
jobs, human resource development activities should focus more on developmental activities
specifically, coaching and counseling. In the coaching process individuals are encouraged to
15 | P a g e
Accept responsibility for their actions, to address any work – related problems and to achieve
and sustain superior levels of performance.

Coaching involves treating employees as partners in achieving both personal and

organizational goals (Gary, 2011). Counseling techniques are used to help employees deal
with personal problems that may interfere with the achievement of these goals. Counseling
programs may address such issues as substance abuse, stress management, smoking cessation
or fitness, nutrition, and weight control. Human Resource Department (HRD) professionals
are also responsible for coordinating management training and development programs to
ensure that managers and supervisors have the knowledge and skills necessary to be effective
in their positions. These programs may include supervisory training, job rotation, seminars,
or college and university courses, (Vilma and Egle, 2007).

Formal training programs are an effective way of directly transferring the organizational
goals and values to a whole group of people simultaneously (Shen, 2006). Appropriate
training can develop managers at all levels including the knowledge and skills required to
gain competency in order to manage change in organization in any business environment
(John, 2000) In multinational companies, training can provide an important impetus to
achieve shared values and facilitates network building between headquarters and subsidiaries.
Helliriegel, (2001) states that training of employees in organization increases higher
productivity through better job performance, more efficient use of human resources, goals
and objectives more effectively met, reduced cost due to less labour turnover, reduced errors,
reduced accidents and absenteeism, more capable, and mobile workforce and retention of the
existing staff.

One of the main critical issues organizations facing today is to retain their employees (Allen,
2010). Career development is one of the main human resource characteristics that provide the
opportunity for employees to continuously be a part in the diverse activities in the
organization that develops employees (SHRM, 2012). Career development activities includes
succession planning (Broadbridge, 2007), talent management (SHRM, 2012), leadership
development (Day & Harisson 2007), structured career management, self-assessment (Baruch
& Peiperl, 2000) and training and development (Juhdi, Pa'wan & Hansaram, 2013).The
outcome of succession planning were development for further growth, work shadowing, job
rotation within the organization and promotion leading to employee retention (Broadbridge,
2007). Similarly structured career management improves the employee’s organizational

16 | P a g e
Commitment and behavior (Baruch & Peiperl, 2000) resulting further employee retention.
Also self-assessment enables to establish commitment to perform better in the organization
and enriches the skills of functioning in the work place (Baruch & Peiperl, 2000).
Alternatively, recent research found that combined effect of training and development along
with career development opportunities have a significant influence on employee retention
(Juhdi, Pa'wan & Hansaram, 2013)). These employees are motivated to train themselves in
order to enhance their career opportunities and develop themselves (Heathfield, 2008). This
cause employee to be motivated and retain in the organization Therefore this research
formulated the following alternative hypothesis

2.2.5.5 Reward

Reward had been seen to be a vital instrument in employee performance. A well rewarded
employee feels that he/she is being valued by the company that he/she is working for
(Markova and Ford 2011). They are also encouraged to work harder and better if they are
aware that their well-being is taken seriously by their employers, and that their career and
self-development are also being honed and taken care of by their company. Employees are
the engine of organization vehicles while reward is the fuel. No organization can achieve its
stated objectives without its employees, (Vilma & Egle, 2007).

Akerele, (2011) blamed the productivity of workers on several factors, among them is
employer’s failure to provide adequate compensation for hard work and the indiscipline of
the privileged class that arrogantly displays their wealth, which is very demoralizing to
working class and consequently reduced their productivity. Markova and Ford (2011)
mentions that the real successes of companies originate from employees‟ willingness to use
their creativity, abilities and know-how in favor of the company and it is organization’s task
to encourage and nourish these positive employee inputs by putting effective reward practices
in place.

The importance of motivated employees cannot be highlighted enough in an organizational

context (Lotta, 2012). Motivated employees are more productive, more efficient and more
willing to work towards organizational goals than the employees who are experiencing low
levels of motivation (Hunter, 2010). Entwistle (2007) is of the view that if an employee
performs successfully, it leads to organizational rewards and as a result motivational factor of
employees lies in their performance. The highly motivated employees serve as the

17 | P a g e
competitive advantage for any company because their performance leads an organization to
well accomplishment of its goals (Rizwan & Ali, 2010).

Luthans (2010) highlights two types of rewards which are financial (extrinsic) and
nonfinancial (intrinsic) reward and both can be utilized positively to enhance employees
performance. Financial rewards means pay-for-performance such as performance bonus, job
promotion, commission, tips, gratuities and gifts etc. Non-financial rewards are
nonmonetary/non-cash and it is a social reward, praise and genuine appreciation etc. Lotta
(2012) agree that financial incentives are indeed effective in motivating employees. Also,
Ojokuku and Sajuyigbe (2009) find out that financial incentives (pay satisfactions
dimensions) have significant effect on employee’s performance. Perry, (2006) discover that
financial reward is not the most motivating factor and financial incentives have a
demotivating effect among employees (Srivastava, 2011). Nelson (2004) noted that praise
and recognition are the most efficient intrinsic reward that enhances employee’s
performance. Werner & Desimore, (2009), see intrinsic reward as a tool that motivates
employees to perform as expected.

Employees have a say on the most effective rewards. (Giancola, 2010) pointed out that, the
most important reward to any employee is; work that is appealing, good leadership, decent
remuneration and an opportunity for career progression. Studies have shown that human
resource practitioners in America have emphasized on the need to understand the various
generational groups namely the baby boomers and generation X and the combinations of
rewards that would motivate them to improve productivity (Giancola, 2010).

Reward and compensation are the forms of tangible benefits and financial returns that an
employee receives, however with the emerging economy and the present work environment
the rewards take in different forms. These include performance based rewards, employee
recognition, non-monetary incentives, extrinsic rewards, and intrinsic rewards. Performance
based pay improves employee performance in addition to motivating and engaging
employees (Nazir, et al., 2013) causing to improve employee retention. In employee
recognition process, employees are praised which is a key essential as employees seek the
need to be valued and respected. This process increases individual productivity, loyalty,
retention and high employee satisfaction (Danish & Usman, 2010). Non-monetary incentives
attract, motivate and retain competent human resource in the organization (Fogleman &
McCorkle, 2013). Extrinsic rewards increases the level of employee performance and
satisfaction also found as a strong factor for employee motivation (Saeed, et al., 2013).

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Intrinsic rewards were found to be a

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Sustainable source of motivation for employees (Saeed, et al., 2013). However according to
studies extrinsic rewards are more positive and stronger in relation to intrinsic rewards
(Edirisooriya, 2014) in retaining employees. Therefore, the following hypothesis is
formulated

2.3 Empirical Literature

According to the study conducted by Nelson, (2009), found out that salary scale is the
most common cause of the high employee turnover rate in many micro finance institutions
in Africa. Employees are in search of jobs which pay well when microfinance institutions
which they are working for don't offer good salaries; they tend to hunt for jobs that pay them
considerably well. In order to resolve this problem, the employers should make it a point to
offer salaries that would be competitive enough to retain and attract well-qualified and
talented personnel. Unsatisfactory performance appraisals are also one of the reasons for
employees leaving a company.

Felister, (2014) investigates the factor influencing employees‟ turnover intention in the
Pharmaceutical industry in Kenya. He found that better remuneration package discouraged
employees‟ turnover in Phillips group of companies. The study revealed that reward
discouraged employee turnover in Phillips group of companies. It also found out that
failure of management to provide opportunities for career progression encouraged
employees turnover in Phillips group of companies. Employment security, workplace
organization and the working environment were the most important factors that employees
do consider. The study found that poor working conditions encourages employee turnover
in Phillips group of companies

Henok,(2018) investigates factors contributing towards turnover intention in existing

employees of Development bank of Ethiopia. He used Primary data collected through the
use of questionnaire to the bank employees. The result of the study shows that there is a
high dissatisfaction with working environment and employee relationship with
management compared to other variables such as job stress, compensation salary and
career growth.

Piyasiri, S., Weerasinghe, T. D., KJM, (2022) investigate factors affecting employee
turnover intention in Free Trade Zones in Sri Lanka. The study attempts to examine the
effect of identified factors from literature, on employee turnover intention with the

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moderating role of gender on each antecedent. Predominantly adopting the deductive

21 | P a g e
Approach, quantitative strategy and cross-sectional time horizon, the study was conducted
among a sample of 194 employees of the laborer category working in Katunayake Free
Trade Zone via a survey questionnaire developed based on standard measurement scales.
A simple random sampling technique was used to select the sample while the sample size
was determined based on the Morgan table. Data analysis was done employing multiple
regression analysis and the moderator analysis with Hayes process v3.5 macro in SPSS
26.0. Findings revealed that job satisfaction and organizational commitment have a
negative relationship whereas job performance and job burnout adhere to a strong positive
relationship with the employee turnover intention regardless of gender. Further, it is found
that gender has no moderating effect on the hypothesized association.

Saba and Shehzad, (2014) investigate the factors affecting employees‟ turnover in banking
sector. A sample of 150 private and public banks of Bahawalpur was selected for the survey.
Data was analyzed by using correlation and regression. They found that work environment
and job stress having large correlated with employee turnover intention while career growth
and compensation have less influence on employees‟ turnover.

.
According to Hammerberg, H.J. (2002), in his study on reasons given for employee
turnover in a full priced department store, paints a very disturbing picture on the rate of
employee turnover. In his findings, 67.7% of all exiting employees in the store have only
served for between zero and one year. This represents a very high rate of attrition at the
initial stages of engagement which can cast doubts on their recruitment procedures.
Followed by those who have served between one and two years representing 16%. The
study also found out that job related factors were the main contributors to termination of
employment by category at 37.4%, followed by closely by individual factors at 30.3%.
This was true for both permanent and part time staff.

A study conducted by Trevor, (2004), Stated that work environment is one of the main
causes for employee turnover. Employees prefer to work in an environment which is
suitable for them. This is the most common reason why they jump from company to
company in just a few months. If they find an appropriate work environment in a specific
company, they may work in the same organization for several years. In Kenya, a study
investigated by Edwin, (2005), suggested that to manage employee turnover organizations
should analyze and alter their work procedures and policies in a way which would enable
employees to use their full potential and even gain significant work experience. There are

22 | P a g e
Many cases where employees have left the company due to non-projects or assignments
which do not require their full potential. Employees would certainly leave if they don't get
experience and are just placed on the 'bench'. These are some of the principal causes of
employee turnover which can surely be avoided by the organizations after taking some
necessary steps to better their in-house services towards employees. However, there are
many more causes which contribute to employee turnover; such as lack of employee
motivation, work pressure, job stress, partiality and favoritism, employee egos and
attitudes, poor employee management, etc.

Sutherland, (2002) And Nawaz, (2007), conducted a study on perceived significant causes
of leaving of employees from different management hierarchy and how "Job-to-job
turnover and job-to-non-employment establishment-based data do set the voluntary quits.
Their studies give us the picture that job recognition and appreciation, desire to return to
school, better paying jobs, unhappiness with the job and alternative employment have
significance impact on turnover decision.

Table 2.1: Summary of Empirical Literature

N Author Main objective Findings
o
1 Nawaz, To Investigate significant He found that job recognition and
(2007) causes of leaving of appreciation, better paying jobs,
employees from different unhappiness with the job and
management hierarchy alternative employment have
significance impact on turnover
decision
2 Trevor, To Examine the causes The study found a negative
(2004) of employees‟ turnover contribution of suitable working
form organization environment on employee
turnover
3 Saba and To investigate the factors They found that work environment
Shehzad,(201 affecting employees‟ and job stress having large
4) turnover in banking correlated with employee turnover
sector while career growth and
compensation have less influence
on employees‟ turnover

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4 Henok,(2018 investigate factors The study found that high

24 | P a g e
 ) affecting employee dissatisfaction with working has
turnover intention in positive effect on employee
Development Bank of turnover
Ethiopia
5 Felister, To investigate the factor He found that better remuneration
(2014) influencing employees‟ package discouraged employees‟
turnover intention in the turnover. The study revealed that
Pharmaceutical industry reward discouraged employee
in Kenya turnover. The study also found that
poor working conditions
encourages employee turnover
6 Nelson, Factor influencing found out that salary scale is the
(2009) employee turnover in most common cause of the high
Africa employee turnover rate in many
micro finance institutions

2.4 Conceptual Framework

The main variables of the thesis proposal include working conditions, work remuneration,
opportunities for career progression and reward. These variables are considered independent
and are to be analyzed in relation to how they affect employee turnover National Bank of
Ethiopia. Conceptual framework is a set of broad ideas and principles intended to assist the
researcher to develop awareness and understanding of the situations under scrutiny and to
communicate the same.

25 | P a g e
 Independent variables Dependent variable

Working Condition

Remuneration

Employee
Career Progression Turnover Intention

Rewards

Leadership

Source: Developed by the researcher

Figure 2.1: Conceptual Model

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 CHAPTER THREE

RESEARCH METHODOLOGY

Introduction
This chapter focused on research approach, research design, sampling design, instruments of data
collection, procedures of data collection, data analysis procedures, validity, ethical
considerations and reliability test.

3.1. Research Design and Method

3.1.1 Research Design

Research design is the blueprint on how one goes about answering the objectives of the study
(Bryman and Bell, 2007). It refers to the way in which the study is design and the method that
were used in carrying out the research. In this study, both descriptive and causal research design
is used in order to achieve the objectives of the study. Descriptive research attempts to define or
describe a subject often by creating a profile of a group of problems, people or events through
the collection of data using the tabulation of the frequencies on research variables or their
interaction. Causal research design helps the researcher to examine the relationship between
independent variable (IV) and dependent variable (DV).

3.1.2 Research Approach

In this study, the researcher used a quantitative research approach/method to quantify attitudes,
opinions, behaviors and other defined variables and generalize results from a larger population.
Quantitative research most often uses deductive logic, in which researchers start with
hypotheses and then collect data which can be used to determine whether empirical evidence to
support that hypothesis exists or not.

3.2. Sources and Types of Data

3.2.1 Types of data

There are two types of data, primary and secondary. The primary data are those which are
gathered for the first time and afresh and thus collected for the case at hand (Kothari, 2004).

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Secondary data is defined as data that have been previously collected for some purpose other
than the one at hand. For the purpose of this study in order to obtain relevant information
primary data is used. For the sake of finding the cause or factors that determine the professional
employee’s turnover in National Bank of Ethiopia, collection of quality primary data is
nonnegotiable and mandatory.

3.2.2 Sources of data

In this study the main sources of primary data was professional employees of the bank and
collected through well-structure questionnaires. The research further used secondary sources of
data such as books, personal sources, journal, newspaper, website, annual report of the bank,
different articles and research.
3.2.3 Target Population
The target population of the study is mainly all permanent professional employee of National
Bank of Ethiopia. National Bank of Ethiopia consists of a total of 240 professional employees.
Those staffs of the organization workers who have technical knowhow about causes of employee
turnover and its activities have been taken to the study.

3.3 Sampling Method and Sampling Size

While developing a sampling design for this study, the researcher gives attention to the following
point: The target populations, sampling technique or method and sample size.

3.4 Data Collection Method

The method of data collection should be chosen to achieve a high participation rate and collect
data that are as complete and accurate as possible while minimizing the burden to the respondent
and satisfying the researcher budget and operational constraints. Even if there are two basic
methods of collecting survey data, self –enumeration and interview-assisted, the study will use
self-enumeration since this Bank employees are usually busy. The researcher therefore left the
questionnaires for the respondents to complete at their own free time but to be collected at an
agreed time. The distinct features, the rationale for choosing and the development of these
instruments are given as follows.

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A questionnaire is a data collection instrument which is prepared and distributed for the purpose
of securing responses to questions from respondents. According to Kothari (2004), a
questionnaire can take two general forms, structured and unstructured questionnaire. The
questions may take in the form of either closed or open-ended, but they were stated in advance,
not during questioning. The questionnaire was designed in three main parts. The purpose of the
first section is to gather general information about respondents. The second and third sections of
the questionnaire are designing to gather both quantitative and qualitative data relating to the
subject matter of the study. Closed-ended questionnaires is developed from already prepared
questionnaires by different authors (Belete Getnet et al, 2014) as intended to answer objectives
researcher wants to examine. Further, the questionnaires are designed accordance with to Likert-
scale type that respondents have to indicate whether they strongly agree, agree, neutral, disagree,
and strongly disagree for each statement. Numeric values (5, strongly disagree and 1 strongly
agree) was assigned to enable the quantitative analysis of the results.

3.4.1 Sampling Method

Even though it is known that more reliable information, accurate & success full result was
obtained from the large sample size or by conducting censuses survey on the findings. But by
considering the availability of budget, cost, time and human resources the researcher enforces to
determine the sample size by using the appropriate sampling techniques. As we know there are
two types of sampling techniques. Those are random and non- random sampling techniques. For
this study the researcher used random /probabilistic/ sampling techniques, because in probability
sampling, every element in defined population has a known, non-zero probability of being
selected. Form the probability sampling technique the researcher used simple random sampling
methods and stratified sampling methods. Simple random sampling is a method of sampling in
which the sampling unit consists of homogeneous group or strata of smaller units that we have
called elements or sub units. Stratified random sampling in selecting the representatives
following the method of proportional allocation under which the sizes of the samples from
different strata are relatively kept proportional to the sizes of the strata. The reason behind the
use of stratified sampling is that the respondents will stratify into three categories i.e. senior and
manager, middle level employee (officers) and low level management(junior and assistant
officers)

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3.4.2 Sample Size Determination
Representative sample size is very essential to obtain consistent and unbiased estimates of the
population. Therefore, in order to minimize resource constraints and maximize research accuracy the
representative respondents /participant size from the total amount of 240 professional Employees/
target population is determined using sample size formula developed by Yamane‟(1967 ). The
samples drown from each professional employees are the main samples form which information or
relevant data was obtained or collected to achieve research objectives and answer research questions.

N
n 
(1  N * e2 ………………………………………………………………………3.1
)

Where, N is target population size, n is sample size without considering response error, e is
desired margin of error. In this study the desired margin of error value for branches at 95 %
confidence level (  0.05 ) is used to determine representative sample size

N
n 
240
(1  N * e2 )  (1  240 *(0.05)2  150
)

Table 3.1 Sample Size Allocation

Stratum Target population Proportional sample size allocation

size
60
Seniors 60 n *150  37
1
240

80
Officers, Assistance 80 n *150  50
1
240

100
Juniors 100 n *150  63
1
240

Total 240 150

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3.5. Data Analysis Methods

Descriptive and inferential statistics were used to analyze the data. Descriptive statistics such as
means, modes, percentages and standard deviation are used to analyze the data. These are used to
show the distribution of responses and the presentations are based on tables, figures and charts.
In addition Correlations and multiple regression analysis were performed to test the formulated
hypothesis and establish the relationship and magnitude between dependent variable (employee
turnover) and independent variables such as working condition, remuneration, career
progression‟ reward, leadership. Regression analysis helps us to understand how the typical
value of the dependent variable changes when any one of the independent variables is varied,
while the other independent variables are held fixed. The regression analysis results are
presented using regression model summary and coefficient tables. The data collected through
questionnaire is analyzed using Statistical Package for Social Sciences (SPSS) Version 25.

3.5.1 Linear Regression Model Specification

In this research, linear regression model is performed to examine the effect of working condition,
remuneration, career progression and rewards on employees‟ turnover.

Yi  0  1WC  2R  3CP  4R  5L  6RC  i                    3.1

Where, i Is a residual error term respectively  ' s Are the parameters of the explanatory?
Variables to be determined. This equation is designed to examine the impacts of independent
variables (working condition, remuneration, career progression and rewards) on dependent
variable (turnover and retention). Y is Employees Turnover and retention; WC is working
condition; R is remuneration, CP is career progression and Rc is rewards and L is leadership.

3.6. Reliability and Validity

According to Zikmund (2010), scale with coefficient alpha between 0.6 and 0.7 indicates fair
reliability. A Chronbach‟s alpha score within 0.7 ranges are considered acceptable. To assure
validity to the research, the researcher will use Cronbach‟s Alpha test. The result of the test will
be obtained by using SPSS version 25. Validity result for each independent variable will be
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Presented. Validity is the degree to which a test measures what it purports to measure (Borg and
Gall 2003). To test the validity of the questionnaires, the study sought expert judgment from the
supervisors who sought to validate and enhance the value and content of research data collection
instruments. Any statement in the questionnaire that found to be unclear in eliciting relevant
information is modified and restructured.

3.7. Ethical Considerations

The necessary precaution has been taken to make the study ethical. In order to keep the
confidentiality of the data given by respondents, the respondents are not required to write their
name and assured that their responses were treated in strict confidentiality. The purpose of the
study is disclosed in the introductory part of the questionnaire. Respondents were informed
ahead about the purpose of the data they were providing. They were told that the information
they provide via the questionnaire is going to be used only for the purpose of academic study and
remain confidential. They also assured that their identity will be anonymous for a research. The
researcher avoided misleading or deceptive statements in the questionnaire. Lastly, the
questionnaires were distributed only to voluntary participants.

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 CHAPTER FOUR
RESULT AND DISCUSSION

4. Introduction
This chapter presents data analysis, findings and discussion of the study in line with the
research objective. The research objective was to examine factors affecting professional
employees‟ turnover. Descriptive analysis, correlation analysis and multiple regression analysis
are presented to achieve the research objective. Descriptive statistics was used to analyze the
data and results presented in form of tables for easy, simple and clear interpretation of data.

4.1 Response Rate

Form the total of 150 questionnaires distributed to the respondents all questionnaires filled and
returned. Therefore, the response rate was 100% which is what the study needs to achieve the
objectives of the study

4.2 Respondents’ socio-demographic characteristics

This section provides a profile of the respondents. This information is presented on several
basic characteristics, including age at the time of the study and gender. This information is
offers general understanding about the population under the study. An analysis of these
variables provides the socio-demographic context within which other subsequent factors falls.

From the data analyzed in table 4.1, 69(46%) of respondents were female and 81(54%) males.
59(39.3%) the respondents were aged 21-30, 70(46.7%) are between 31- 40 years of age,
18(12%) are fall over the range 41 -50 and 3(2%) was above 50 years. The implication is that
all respondents are mature and their observations on factors affecting professional employees‟
turnover are based on personal experience and it is a good ground for the study. 61(40.7%)
respondents had master’s degree and above, 20(13.3%) diploma and 69(46.0%) had first
degree. The Finding also showed that 58(38.7%) of respondents have 1-5 years working
experience, 56(37.3%) of the respondents have 6 to 10 years work experience, 20(17.3%) have
11-15 years of service in the organization and10 (6.7%) have above 15 years of work
experience. The implication is that most of the respondents are more experienced, and the

Page | 33
Information gathered from them expected to address the research objectives and it is good
ground for the study to generalize research population from the sample estimation.

4.1: Analysis of socio-demographic variables

Frequency Percent (%)

Gender Female 69 46.0%

Male 81 54.0%

Total 150 100%

Education Diploma 20 13.3%

level
degree 69 46.0%

Master & above 61 40.7%

Total 150 100.0%

Age group 21-30 59 39.3%

31-40 70 46.7%

41-50 18 12.0%

above 50 3 2.0%

Total 150 100.0%

Work 1-5 58 38.7%

experience
6-10 years 56 37.3%

11-15 years 20 17.3%

above 15 years 10 6.7%

Total 150 100.0%

Your Assistant 21 14.0%

position
Officer 75 50.0%

Senior 27 18.0%

Manager 21 14.0%

Total 150 100.0%

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 4.3 Percentage Analysis and Descriptive Statistics for study variables
Table 4.2: employees’ turnover
Strongly Strongly
Disagre Neutral Agree
Items Disagree Agree Mean SD
ee2 3 4
1 5
Because of good 0 37 40 51 22
leadership my 0.0% 24.7% 26.7% 34.0% 14.7% 3.386 1.015
1
turnover intension
has decreased
2 Because of good 0 18 29 72 31
working condition
my intension to leave 0.0% 12.0% 19.3% 48.0% 20.7% 3.773 0.913
the bank has
decreased
Because of attractive 0 46 30 62 12
remuneration my 0.0% 30.7% 20.0% 41.3% 8.0%
3
turnover intension has 3.266 0.987
decreased
4 Because of good 0 8 21 100 21
Opportunities for 0.0% 5.3% 14.0% 66.7% 14.0%
Career Progression
my intension to quit 3.899 0.696
the bank has
decreased
5 Because of Reward 0 28 28 28 28
my turnover intension 0.0% 18.7% 20.0% 53.3% 8.0%
3.506 0.888
has decreased
Overall Mean and SD of Organizational Performance 3.565 0.900

Table 4.2 indicates the Percentage Analysis and Descriptive Statistics for the decrease in
professional employees‟ turnover intention. From the result, 34.0% and 14.7% of the respondents
agreed and strongly agreed that leadership practice in bank decreased their turnover intention,
26.7% were neutral and 13.3% respondents disagreed with the statement “Because of good
leadership my turnover intension has decreased”. Likewise, almost 68.7% of the respondents agreed
that working condition in the bank decreased their turnover intention, 19.3% were neutral and the

Page | 35
Rest 12% of respondents disagreed with the statement. The result also revealed that 48.3% the
respondents agreed with the statement “Because of attractive remuneration my turnover intension
has decreased‟‟, 20% of the respondents were neutral and the rest 20% of the respondent disagreed
with the statement. 80.7% of the respondents agreed that opportunities for career progression in the
bank decreased their intention to quit the bank, 14% were neutral and 5.3% of the respondents
strongly disagreed with the statement. Further, the result showed that 61.3% of the respondents
agreed with the statement “Because of Reward my turnover intension has decreased”, 20% of the
respondents were neutral while 18.7% of the respondents were disagreed.
Table 4.3: Remuneration
Strongly Strongly
Disagree Neutral Agree
Items Disagree Agree Mean SD
2 3 4
1 5
I think that the salary 40 30 0 80 0
that my organization 26.7% 20.0% 0.0% 53.3% 0.0% 3.266 0.856
1
pays me is competitive
and appropriate.
2 I believe that the 20 30 10 90 0
position, fuel and 13.3% 20.0% 6.7% 60.0% 0.0%
housing allowances
3.333 0.945
that my organization
provides is
satisfactory
The health insurance 0 30 20 100 0
that my organization 0.0% 20.0% 13.3% 66.7% 0.0%
3
covers is attractive and 3.466 0.808
appropriate
4 The subsidized cafeteria 0 40 10 100 0
service that my 0.0% 26.7% 6.7% 66.7% 0.0%
organization provides is 3.400 0.882
satisfactory
5 The education 0 20 70 50 10
opportunity available by 0.0% 13.3% 46.7% 33.3% 6.7%
my organization 3.333 0.791
motivates employees
Overall Mean and SD of remuneration 3.360 0.856

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Table 4.3 indicates the Percentage Analysis and Descriptive Statistics for remuneration. From the
result, 53.3% of the respondents agreed that the salary that the bank paid to them is competitive and
appropriate, and 46.7% respondents disagreed with the statement “I think that the salary that my

Organization pays me is competitive and appropriate”. Likewise, almost 60% of the respondents
agreed that the position, fuel and housing allowances that the bank provides to them is satisfactory,
6.7% were neutral and the rest 33.3% of respondents disagreed with the statement. The result also
revealed that 66.7% the respondents agreed with the statement “The health insurance that my
organization covers is attractive and appropriate‟‟, 13.3% of the respondents were neutral and the
rest 20% of the respondent disagreed with the statement. Likewise, 66.7% of the respondents agreed
that the subsidized cafeteria service that the bank provides to them is satisfactory, 6.7% were
neutral and 26.7% of the respondents disagreed with the statement. Further, the result revealed that
40% of the respondents agreed with the statement “The education opportunity available by my
organization motivates employees”, 46.7% of the respondents were neutral while 13.3% of the
respondents were disagreed.

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Table 4.4: Working Condition
Strongly Strongly
Disagre Neutral Agree
Items Disagree Agree Mean SD
e2 3 4
1 5
I believe that in 0 27 37 58 28
my organization
there are
1 appropriate
0.0% 18.0% 24.7% 38.7% 18.7% 3.580 0.991
facilities and
services such as
offices, equipment,
clean restrooms
2 There exist 0 23 36 59 32
comfortable
working hours for
0.0% 15.3% 24.0% 39.3% 21.3% 3.666 0.980
employees in my
organization
My organization 0 28 37 56 29
attempts to make
3 available safe
0.0% 18.7% 24.7% 37.3% 19.3% 3.573 1.005
working area and
safety provisions.
4 The mutual respect 0 27 38 56 29
and trust that exist
among employees in
my organization can 0.0% 18.0% 25.3% 37.3% 19.3% 3.868 0.998
be factors for keeping
on working
5 The mutual respect 0 22 33 61 34
and trust that exist
between superiors and
employees in my
0.0% 14.7% 22.0% 40.7% 22.7% 3.713 0.978
organization can be
factors for keeping
on working
Overall Mean and SD of working condition 3.680 0.991

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Table 4.4 indicates the Percentage Analysis and Descriptive Statistics for working condition. From
the result, 57.4% of the respondents agreed that in their organization there are appropriate facilities
and services such as offices, equipment, clean restrooms, and 24.7% respondents were neutral and
18.0% of the respondents disagreed with the statement “I believe that in my organization there are
appropriate facilities and services such as offices, equipment, clean restrooms”. Likewise, 60.3% of
the respondents agreed that there exist comfortable working hours for employees in their
organization, 24% were neutral and the rest 15.3% of respondents disagreed with the statement. The
result also revealed that 56.6% the respondents agreed with the statement “My organization
attempts to make available safe working area and safety provisions‟‟, 24.7% of the respondents
were neutral and 18.7% of the respondent disagreed with the statement. Similarly, 56.6% of the
respondents agreed that the mutual respect and trust that exist among employees in their
organization can be factors for keeping them on working, 25.3% were neutral and 18% of the
respondents disagreed with the statement. Further, the result revealed that 63.4% of the respondents
agreed with the statement “The mutual respect and trust that exist between superiors and employees
in my organization can be factors for keeping on working”, 22% of the respondents were neutral
while 14.7% of the respondents were disagreed with the statement.

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Table 4.5: Leadership
Strongly Strongly
Disagre Neutral Agree
Items Disagree Agree Mean SD
e2 3 4
1 5
I want to continue 0 6 19 103 22
working in my
organization since the
1
leadership 0.0% 4.0% 12.7% 68.7% 14.7% 3.940 0.657
Demonstrates
high level of
integrity.
2 I want to contribute 0 27 30 80 13
my best for the
organization since
there exists 0.0% 18.0% 20.0% 53.3% 8.7% 3.526 0.887
inspirational
Leadership style.
I feel comfortable 0 27 31 70 22
with my
organization’s
3 leadership style of
0.0% 18.0% 20.7% 46.7% 14.7% 3.580 0.950
effective delegation
to build trust on
lower- level
managers
4 I believe that the 0 29 30 80 11
leadership style of my
organization’s
communication with 0.0% 19.3% 20.0% 53.3% 7.3% 3.486 0.887
employees facilitates
mutual cooperation
5 In my organization, 0 20 30 90 10
superiors are confident
in couching their
employees, giving 0.0% 13.3% 20.0% 60.0% 6.7% 3.600 0.802
appropriate and timely
feedback
Overall Mean and SD of leadership 3.626 0.837

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Table 4.5 indicates the Percentage Analysis and Descriptive Statistics for leadership. From the result,
83.4% of the respondents agreed with the statement “I want to continue working in my organization
since the leadership demonstrates high level of integrity‟‟, 12.7% respondents were neutral and 4.0%
of the respondents disagreed with the statement. Likewise, 62% of the respondents agreed that they
want to contribute their best for the organization since there exists inspirational leadership style, 20%
were neutral and the rest 18% of respondents disagreed with the statement. The result also revealed
that 61.4% the respondents agreed with the statement “I feel comfortable with my organization’s
leadership style of effective delegation to build trust on lower-level managers‟‟, 20.7% of the
respondents were neutral and 18.0% of the respondent disagreed with the statement. 60.6% of the
respondents agreed that they believe that the leadership style of their organization’s communication
with employees facilitates mutual cooperation, 20% were neutral and 19.3% of the respondents
disagreed with the statement. The result further revealed that 66.7% of the respondents agreed with
the statement “In my organization, superiors are confident in couching their employees, giving
appropriate and timely feedback”, 20% of the respondents were neutral while 13.3% of the
respondents were disagreed with the statement.

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Table 4.6: Opportunities for Career Progression
Strongly Strongly
Disagree Neutral Agree Mea
Items Disagree Agree SD
2 3 4 n
1 5
My organization 20 87 19 13 11
provides work related
1 on-job training that 3.38
13.3% 58.0% 12.7% 8.7% 7.3% 1.060
creates an opportunity 6
For career
progression.
2 My organization 10 20 60 60 0
provides work related
off-job training that 3.63
6.7% 13.3% 40.0% 40.0% 0.0% 0.887
creates an opportunity 3
For career
progression.
My organization 0 30 20 70 30
allows participation in
3 industry-related 3.66
0.0% 20.0% 13.3% 46.7% 20.0% 1.014
training for career 6
progression
4 My organization provides 0 30 40 60 20
formal education
opportunities such as
3.46
BA/BSc, MA/MSc and 0.0% 20.0% 26.7% 40.0% 13.3% 0.960
PhD for career 6
progression.
5 My organization provides 0 20 30 70 30
different inter personal
3.73
skills training for career 0.0% 13.3% 20.0% 46.7% 20.0% 0.931
Progression. 3
Overall Mean and SD of Opportunities for Career Progression 3.57 0.970
7

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Table 4.6 indicates the Percentage Analysis and Descriptive Statistics for opportunities for career
progression. From the result, 16% of the respondents agreed that in their provides work related on-
job training that creates an opportunity for career progression, 12.7% respondents were neutral and
71.3% of the respondents disagreed with the statement “My organization provides work related on-
job training that creates an opportunity for career progression”. On the other hand, 40% of the
respondents agreed that there organization provides work related off-job training that creates an
opportunity for career progression, 40% were neutral and the rest 20% of respondents disagreed
with the statement. The result also revealed that 66.7% the respondents agreed with the statement
“My organization allows participation in industry-related training for career progression‟‟, 13.3%
of the respondents were neutral and 20% of the respondents were disagreed with the statement.
Similarly, 53.3% of the respondents agreed that the organization provides formal education
opportunities such as BA/BSc, MA/MSc and PhD for career progression, 26.7% were neutral and
20% of the respondents disagreed with the statement. Further, the result revealed that 66.7% of the
respondents agreed with the statement “My organization provides different inter personal skills
training for career progression”, 20% of the respondents were neutral while 13.3% of the
respondents were disagreed with the statement.

4.4 Descriptive Analysis for Overall Sample

To describe the mean score of the participants, mean score measurement used by Pihie (2009)
was applied where mean score of <3.39 considered as low, mean score of 3.4-3.79 as
moderate and mean score of >3.8 as high.
Table 4.7: Overall Descriptive Analysis result the study variable

No. Variable Mean SD Remark

1 Employee turnover 3.565 0.900 Medium ET
2 Working condition 3.680 0.991 Medium WC
3 Leadership 3.626 0.837 Medium L
4 Opportunities for Career Progression 3.577 0.970 Medium CP
5 Reward 3.465 1.079 Medium RC
6 Remuneration 3.360 0.856 Medium RN

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From Table 4.3, items having a higher mean score referred to the perception of the effect of
training and development practices on organizational performance presented on following
ascending order:

Remuneration measurement scales such as, “I think that the salary that my organizations
pays me is competitive and appropriate, I believe that the position, fuel and housing allowances
that my organization provides is satisfactory, the health insurance that my organization covers is
attractive and appropriate, the subsidized cafeteria service that my organization provides is
satisfactory, the education opportunity available by my organization motivates employees”
(mean=3.36, SD= 0.856). This mean value indicates Remuneration in the organization is low.

Reward measurement scales “My organization writes formal letters of appreciation to

appreciate best performance, My organization uses verbal phrases to appreciate best
performance, My superiors in my organization send congratulation cards when necessary, In
my work place, peers appreciate each other when there is outstanding performance, In my
organization, I think that there is appropriate employee engagement and participation”
(mean=3.465, SD=1.079). This mean value indicates that reward in the Bank is moderate.

Employee turnover measurement variables such as, “Because of good leadership my

turnover intension has decreased, Because of good working condition my intension to leave the
bank has decreased, Because of attractive remuneration my turnover intension has decreased,
Because of good Opportunities for Career Progression my intension to quit the bank has
decreased, Because of Reward my turnover intension has decreased” (mean= 3.565; mode,
SD=.0.900). Likewise, this mean value indicates that turnover intention in the organizational is
moderate.

Opportunities for Career Progression measurement variables “My organization provides

work related on-job training that creates an opportunity for career progression, My organization
provides work related off-job training that creates an opportunity for career progression, My
organization allows participation in industry-related training for career progression, My
organization provides formal education opportunities such as BA/BSc, MA/MSc and PhD for
career progression, My organization provides different inter personal skills training for career
progression.” (Mean=3.577, SD= 0.970). It indicates that Opportunities for Career Progression

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is medium in the organization.

Leadership measurement variables “I want to continue working in my organization since

the leadership demonstrates high level of integrity, I want to contribute my best for the
organization since there exists inspirational leadership style, I feel comfortable with my
organization’s leadership style of effective delegation to build trust on lower-level managers, I
believe that the leadership style of my organization’s communication with employees facilitates
mutual cooperation, In my organization, superiors are confident in couching their employees,
giving appropriate and timely feedback” (mean=3.62, SD= 0.837). Similarly, this mean value
indicates that Leadership is moderate in the Bank.

4.5 Reliability and Validity Analysis

4.5.1 Reliability Analysis
According to Cronbach (1984) it is possible to evaluate the reliability of the data (otherwise
speaking its internal consistency) by Cronbach‟s α, which follows Nunnally (1978) and
Anastasiadou (2006) supposed to be one of the most important coefficients of reliability that
doesn’t depend on the arrangement of variables. This coefficient is based on included in the
scale items and their correlations. Moreover, the reliability of instrument that is measured by
alpha determines the level to which attained results are instantiated by retentiveness and not
aligned with measurement errors. Kline (1999) suggests that acceptable value for Cronbach‟s α
is 0.70 and higher, what makes it possible to infer that the scale is reliable. In this case to
determinate the value of Cronbach‟s α, the “Reliability Analysis” in SPSS 25 was conducted.
Moreover, using the function “Scale if item deleted” Cronbach‟s α for each item of the scale was
defined to be convinced that no item causes a significant decrease in the overall Cronbach‟s α. The
results are presented in Table 4.3.

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 Table 4.8: Reliability Analysis Result

No. of Items in Cronbach’s Alpha

Scale the Scale(N) Result

(α)

Overall model 30 .952

Employee turnover 5 .879

Working condition 5 .976

Leadership 5 .913

Opportunities for Career Progression 5 .741

Reward 5 .959

Remuneration 5 .811

Source: Own computation using SPSS 25

As it can be seen from the Table 4.4, the Cronbach‟s alpha for all the scales is above the
established threshold of .70, what signifies about their good internal consistency. Thus, there
is no need in quantity input of new variables. It should be mentioned that the scales of
“working condition” has the best reliability coefficients (.976 correspondingly), which
exceed the level of .90 and indicate extra good value. The worst reliability index among all
the scales is at “Opportunities for Career Progression” (.702), which is still higher than the
threshold.

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 4.6. Correlation Analysis of the Study Variables

Table 4.9: The correlation analysis results for all variables under study

ET WC RN CP L RC
Pearson Correlation 1
ET Sig. (2-tailed)
N 150
Pearson Correlation .660** 1
WC Sig. (2-tailed) .000
N 150 150
Pearson Correlation .635** .189* 1
RN Sig. (2-tailed) .000 .021
N 150 150 150
Pearson Correlation .722** .337** .513** 1
CP Sig. (2-tailed) .000 .000 .000
N 150 150 150 150
Pearson Correlation .883** .403** .695** .665** 1
L Sig. (2-tailed) .000 .000 .000 .000
N 150 150 150 150 150
Pearson Correlation .656** .215** .601** .379** .643** 1
RC Sig. (2-tailed) .000 .008 .000 .000 .000
N 150 150 150 150 150 150
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

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Table 4.9 illustrates the correlation coefficients of the relationship between the independent
variables and the dependent variable. To describe the strength of the correlation, the suggestion
of Evans (1996) for the absolute value of r was used: 0.00-0.19: “very weak”, 0.20-0.39:
“weak”, 0.40- 0.59: “moderate”, 0.60-0.79: “strong”, and 0.80-1.0: “very strong”.

From the correlation result it is found that working condition has a significant and strong
positive relationship with the decrease in employees turnover in bank (r =.66, p < 0.01).
Likewise, a significant and strong positive relationship was found between opportunities for
career progression and the decrease in employees turnover (r =0.722, p < 0.01). Remuneration
is also found to be statistically significant and strong positive correlation with the decrease in
employees turnover (r =0.635, p < 0.01). Likewise, the result showed a very strong positive and
significant correlation leadership and the decrease in employees turnover (r =.883, p <
0.01).The result further revealed a significant and strong positive correlation between reward
and the decrease in employees turnover (r =0.656, p < 0.01).
4.7 Multiple Regression Analysis
In this section the four hypotheses proposed in this study were tested statistically using
regression analysis. Multiple linear regressions were carried out to determine the explanatory
power of independent variables (working condition, remuneration, leadership, reward, and
opportunities for career progression) in the variance of dependent variable (employees‟
Turnover intention). The test result for classical linear regression assumptions and the

Estimated model results are presented below.

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 4.7.1 Classical Assumption Test Results.
A classic assumption test aims to determine whether the regression model obtained can produce
a good linear estimator. The regression model obtained is free from symptoms of
multicollinearity, heteroscedasticity, and normal distribution. The classical assumption test
consists of the following.

Normality Test Results: The normality test aims to determine whether a variable on the
regression model or residual has a normal distribution (Ghazali, 2011). The data, which are
distributed normally, can minimize the possibility of bias. In this study Normality test
employed using histogram and normal P-P plot of regression residuals. Residual distribution is
normal if the level of significance is greater than 0.05. Based on normal P-P Plot test and
histogram, the data processed can be concluded as approximately normally distributed data.
Thus, the normality test is presented in the figure 2 below

Figure
4.1:

Normality test

Multicollinearity Test Results: The multicolinearity test aimed to show whether a correlation
exists (A correlation may exist, but it should not be above the minimum threshold) between
independent variables in a multiple regression model. If a correlation exists, then,

Page | 49
multicolinearity problem exists. A good regression model should not be correlated with
independent variables (Ghozali, 2011). Based on the results, the calculation using SPSS 25.0
indicated that the VIF value is less than 10 (VIF < 10) for all independent (free) variables for
model. The formulated regression model equations can be concluded to have no
multicolinearity problem. Thus, no multicollinearity exists among the independent variables in
regression model formulated there by considering the equations feasible for further analysis
(Table 4.12).
Heteroscedasticity Test Results: The heteroscedasticity test aimed to determine whether in the
regression model of the residual variance, inequality occurred from one observation to another.
If the residual variance from one observation to another remains, then, it is called
Homoscedasticity; otherwise, it is called, heteroscedasticity (Ghozali, 2011). The
heteroscedasticity test in this study employed the Gleijser method. From the results,
heteroscedasticity is observed because Sig. > 0.05. Therefore it is one of the limitations the
study.
Independence: Assumption of independence of observations (i.e., absence of autocorrelation)
signifies those multiple observations are not applied in accordance with outside effect. It
should be mentioned that according to Stevens (2002) violation of this assumption may
substantially impact the level of significance and statistical power of the test. Independence in
this study is evaluated by Durbin-Watson test. This test uses studentized residuals to estimate
the assumption that the residuals from linear regression are independent. According to
Hanushek and Jackson (1977) the value of the test (d) may vary from 0 to 4. Values that are
close to 0 designate the presence of high positive autocorrelation, while those close to 4 signify
extreme negative autocorrelation. Values that are close to 2 indicate the absence or low
autocorrelation. The table with all the values is presented in Table 4.10. For this model the
value is 1.659, what is a perfect coefficient signifying that the measurement of one variable is
not influenced by another or any outside impact for every single case.

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 4.7.2: The Estimated Result of the Regression Models

Table 4.10: Result of model summary for model 3.1

Model R R Square Adjusted Std. Error of the Durbin-
R Estimate Watson
Square
1 .936a .87 .872 .27956 1.659
6
a. Predictors: (Constant), RC, WC, CP, RN, L
b. Dependent Variable: ET

R-Square (coefficient of determination) is a commonly used statistic to evaluate model fit. R-

square is 1 minus the ratio of residual variability. The adjusted R², also called the coefficient of
multiple determinations, is the percent of the variance in the dependent explained uniquely or
jointly by the independent variables (Robert and Richard, 2008). From table 4.10, the adjusted
R2 of the model is 0.872, which shows that approximately 87.2% of variance in dependent
variable (Employees turnover intention) can be explained by the linear combination of the
independent variables (RC, WC, CP, RN, and L).

Table 4.11: The result of ANOVA

Model Sum of Df Mean Square F Sig.
Squares
Regression 79.786 5 15.957 204.182 .000b
1 Residual 11.254 144 .078
Total 91.040 149
a. Dependent Variable: ET
b. Predictors: Constant, RC, WC, CP, RN, L

From the analysis of ANOVA, it is noted that the probability value of 0.000 (p < 0.05)

indicates that the regression relationship was highly significant in predicting how working

condition, remuneration, leadership, reward, and opportunities for career progression affect

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professional employees turnover. Further, the analysis shows that the value of F is significant

(204.182) which means that overall, the model is statistically significant.

Table 4.12: The results of regression coefficients between dependent and

independent variables

Model Unstandardized Standardized t Sig. Collinearity

Coefficients Coefficients Statistics
B Std. Error Beta Tolerance VIF
(Constant) -.565 .144 -3.931 .000
WC .194 .027 .235 7.230 .000 .811 1.234
RN .004 .052 .003 .06 .946 .46 2.174
1
CP .264 .046 .230 7 .000 0 1.857
5.75 .53
6 9
L .548 .057 .509 9.571 .000 .303 3.299
RC .150 .031 .193 4.805 .000 .534 1.874
a. Dependent Variable

The result shows all the variables except remuneration in the model have statistically
significant effect on employees‟ turnover at 5% level of significance (p < 0.05). More
specifically, the result revealed that working condition has a significant positive effect on
the decrease in employees‟ turnover in the bank at 5% level of significance (p < 0.05).
The result supports hypothesis 2(H2) which stated that working condition has a
significant positive effect on in employee turnover. The studies conducted by Saba and
Shehzad, (2014) and Trevor, (2004) come up with the similar results and found that a
significant positive effect of work environment on employee retention or the decrease in
employee turnover.

Similarly, the regression result showed a significant positive impact of leadership on

employee retention or the decrease employee turnover at 5% level of significance (p <

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0.05). Hypothesis 1 (H1) which stated that leadership has a significant positive effect on

the decrease employee turnover is not rejected at 5% level of significance.

The regression results also revealed a significant positive impact of opportunities for

career progression on the decrease employee turnover at 5% level of significance (p <

0.05). The result supports Hypothesis 4 (H4) which stated that opportunities for career

progression have a significant positive effect on the decrease in employee turnover in

bank. Nawaz, (2007) come up with the similar results and found that a significant

negative effect opportunities for career progression on employee turnover.

The result further revealed a significant positive effect of reward on the decrease in

employee turnover at 5% level of significance. The result supports hypothesis 3(H3)

which stated that reward has a significant positive effect on the decrease in employee

turnover.

4.8 Summary of Findings

Form the descriptive statistics, the study found moderate working condition, remuneration,
reward, leadership, employee turnover and opportunities for career progression in the bank.

From the correlation result it is found that

 Working condition has a significant and strong positive relationship with the decrease
in employees‟ turnover in bank.
 Strong positive relationship was found between opportunities for career progression
and the decrease in employees‟ turnover.
 Remuneration is also found to be statistically significant and positively correlated with
the decrease in employees‟ turnover.
 Likewise, the result showed a very strong positive and significant correlation between
leadership and the decrease in employees‟ turnover. The result further revealed a
significant and strong positive correlation between
 Reward and the decrease in employees‟ turnover.

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 From regression analysis, the result shows all the variables except remuneration in the model
have statistically significant effect on the employee turnover intention at 5% level of
significance. The result revealed that of working condition, leadership, reward and
opportunities for career progression had a significant positive effect on employee retention or
the decrease in employee turnover at 5% level of significance. The studies conducted by Saba
and Shehzad,(2014), Nawaz, (2007) and Trevor, (2004) come up with the similar results come
up with the similar results and found that a significant positive effect of working condition,
leadership, reward and opportunities for career progression on the decrease employee turnover.

Table 4.13: Summary of the hypothesis test results

Number Hypothesis Result

Leadership has a significant positive effect on the decrease in employee
H1 turnover(employee retention) Confirmed
Good working condition has a significant positive effect on the decrease in employee
H2 turnover(employee retention) Confirmed
Remuneration has a significant positive effect on the decrease in employee
H3 turnover(employee retention) Confirmed
opportunities for career progression has a significant positive effect on the decrease in
H4 employee turnover(employee retention Confirmed
Reward has a significant positive effect on the decrease in employee turnover(employee
H5 retention) Confirmed
Source: Primary data processed, 2023

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 Chapter Five
Conclusion and Recommendation
5.1 Conclusion
The main purpose of the study was to investigate Factors Affecting Professional
Employee Turnover for the Case of National Bank of Ethiopia. Based on the analysis
result the following conclusion is forwarded.
The study found moderate working condition, remuneration, reward, leadership,
employee turnover and opportunities for career progression in the bank. Working
condition was found to have a significant Positive impact on employee retention or the
decrease in employee turnover in the bank. Leadership found to be statistically significant
and positively influencing the decrease employee turnover ore employee retention.
The model estimation result also revealed a significant positive effect of reward on the
decrease employee turnover ore employee retention. The study further found a significant
positive effect of opportunities for career progression on the decrease employee turnover
ore employee retention.

5.2 Recommendation
As the focus on factors affecting employee turnover continue to grow, it is important to
understand what attributes and supporting mechanism is needed to improve employee
retention. This research has proven that many factors can positively impact employee
retention or the decrease employee turnover. Therefore, based on the findings of the
study, the following recommendations are forwarded
This study showed that career growth opportunity affects both turnover and
turnover intention. Thus the management should give attention to develop
structures and systems that will help employees plan their short and long term
careers. Since, free educational opportunity is one of the career growth
opportunities that employees wish to get, if possible, the management should
consider giving the educational opportunity to the employees in long term
payment.
Since reward for good work is significantly associated with turnover
intention, the management has to establish or setup a reward program for its

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Employees. The reward can take any form, not only in monetary terms. When
an employee has achieved something, a supervisor/head can call him or her to
an office to congratulate the person. Meetings can also be utilized to make
others aware of their colleague’s achievements. Publications on boards may
also help.
Since working condition was found to be a positive predictor of the decrease
in employee turnover, the managements and CEOs of the organization should
engage in increasing the qualities working environment to retain their
employees.
Also the banks allow the employees‟ on-job training that creates an
opportunity for career progression and formal education opportunities such as
BA/BSc, MA/MSc and PhD for career progression.
The subsidized cafeteria of the bank service should satisfy the employees and
also the health insurance should be attractive.
The salary, allowances, health insurances and other rewards give to the
employees should be equal or comparatively good from the same sectors with
the bank.
The leadership style of the bank should be comfortable to communicate and
also facilitate mutual cooperation.

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 LUNAR INTERNATIONAL COLLEGE
Department of Business Administration
Questionnaire 1

Dear Respondents,

I am Hewan Kebedom an MBA student at Lunar International College. Currently I am

conducting a research work entitled “Determinants Factors for Professional
Employees Turnover Intention: The Case of National Bank of Ethiopia” as a partial
fulfillment of the requirements for Masters of Business Administration (MBA). The
purpose of this questionnaire is, therefore, to collect data from the employees and
management bodies of the Bank on the issues of Professional employees‟ turnover.
Thus, you are kindly requested to cooperate in filling the questionnaire since your
genuine, complete, and timely responses are crucial for the success of the study.
Besides, I would like to assure you that the data collected will be used for academic
purpose and your responses will be held confidential and anonymous. Hence, the
researcher kindly requests you to respond each item prudently.

Thank you for your cooperation in advance!

Hewan Kebedom
Tel. No.: +251989163427
Email: hewan.kebedom12@yahoo.com

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Section I: Respondents Information

1. Your position (e.g., Director, D. Director, Manager, Asst.

Manager, Supervisor, Researcher, etc.)
2. Your age
3. Your gender
4. Your highest level of education
5. Your work experience in NBE years
Section II: Factors Affecting Employees Turnover Intention
Instruction: Please rate the factors listed below using the scale from 1-5 to express your level
of agreement or disagreement regarding the effect of each factor on employees‟ turnover.
Where the scale from 1-5 signifies, 1 – Strongly Disagree, 2 – Disagree, 3 – somewhat agree, 4
– Agree and 5 – Strongly Agree.
Factors Measurement Scale
No. Leadership 1 2 3 4 5
I want to continue working in my organization since the
1
leadership Demonstrates high level of integrity.
I want to contribute my best for the organization since there
2 exists Inspirational leadership style.
I feel comfortable with my organization’s leadership style
3 of Effective delegation to build trust on lower-level
managers.
I believe that the leadership style of my organization’s
4 Communication with employees facilitates mutual
cooperation.
In my organization, superiors are confident in couching
5 their employees, giving appropriate and timely feedback
Working Condition 1 2 3 4 5
1 I believe that in my organization there are appropriate
facilities and services such as offices, equipment, clean
restrooms
2 There exist comfortable working hours for employees in
my Organization?
3 My organization attempts to make available safe working area
and Safety provisions.
4 The mutual respect and trust that exist among employees in
my organization can be factors for keeping on working
5 The mutual respect and trust that exist between superiors and
employees in my organization can be factors for keeping on
Working.
Remuneration 1 2 3 4 5
1 I think that the salary that my organizations pays me is
competitive And appropriate.

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 I believe that the position, fuel and housing allowances that
2 my Organization provides is satisfactory.

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 The health insurance that my organization covers is attractive
3 and Appropriate.
The subsidized cafeteria service that my organization provides
4 is Satisfactory.
5 The education opportunity available by my organization
motivates Employees.
Opportunities for Career Progression 1 2 3 4 5
My organization provides work related on-job training that
1 creates An opportunity for career progression.
2 My organization provides work related off-job training that
creates An opportunity for career progression.
My organization allows participation in industry-related
3 training For career progression.
4 My organization provides formal education opportunities such
as BA/BSc, MA/MSc and PhD for career progression.
My organization provides different inter personal skills
5 training For career progression.
Reward 1 2 3 4 5
1 My organization writes formal letters of appreciation to
appreciate Best performance.
2 My organization uses verbal phrases to appreciate
best Performance.
3 My superiors in my organization send congratulation cards
when Necessary.
4 In my work place, peers appreciate each other when there
is Outstanding performance.
5 In my organization, I think that there is appropriate
employee Engagement and participation.

Section III: Professional Employees’ Turnover Intention

What do you think about the professional employees‟ turnover in National Bank of Ethiopia?
Please put tick mark “√” in the column that best reflects your answer. Please pay attention to the
responses you provided in the above.
Levels of Turnover 1 2 3 4 5
Because of good leadership my turnover intension has decreased
Because of good working condition my intension to leave the
bank has decreased
Because of attractive remuneration my turnover intension has
decreased
Because of good Opportunities for Career Progression
my intension to quit the bank has decreased
Because of Reward my turnover intension has decreased

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Section IV: Additional Information (You can write on the space provided some additional
information which you think is relevant for the purpose.)

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Appendix 2

Tests of Between-Subjects Effects

Dependent Variable: RW

Source Type III Sum of df Mean Square F Sig.

Squares

Corrected Model 79.786a 5 15.957 204.182 .000

Intercept 1.208 1 1.208 15.456 .000
WC 4.085 1 4.085 52.274 .000
R .000 1 .000 .005 .946
CP 2.589 1 2.589 33.134 .000
L 7.160 1 7.160 91.612 .000
ET 1.805 1 1.805 23.092 .000
Error 11.254 144 .078
Total 1949.600 150
Corrected Total 91.040 149

a. R Squared = .876 (Adjusted R Squared = .872)

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