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Chapter 1: Introduction
1.1 Overview of the research
The topic of the research is the study of the effects of employee turnover on the business performance of the organization. Companies invest lots of money on their employees for induction, training and development, maintaining and retention. Therefore their main objective be to obtain out services as much as the investments. As suggested by Hancock et al. (2013, p.592), the importance and contribution of the employees is immeasurable and intangible which cannot be replicated. Therefore it is highly imperative that managers must try to minimize employee turnover. There are several factors at play that comprehend employee turnover. Employees within an organization may be unsatisfied with the functioning and governing of the management or may not agree to their business procedures. According to Hausknecht and Holwerda (2013, p.214), globalization and more prosperous opportunities are also responsible for making it difficult for managers to retain employees. Therefore there is a greater need to understand employee turnover and sources, such as what causes employee turnover, their concerns and thoughts and identify strategies to be adopted to retain them. For research purpose, the study has been conducted in the context of ASDA.
1.2 Aim of the Study
The aim of the study is to investigate the causes of the employee turnover in Asda. Employees are integral to organization and crucial for its business performance. They are the most contributing factor in organizational profitability. So the study tries to understand what are the factors that results into employee retention and how does the company deal with it. It also try to highlight what are the impacts of employee turnover on organizational effectiveness and employee performance.
1.3 Objectives of the research
- To investigate the causes of employee turnover in Asda
- To understand the effect of employee turnover on business performance
- To determine its effect on other employees and their performance
- To identify the strategies useful in reducing employee turnover and promoting employee retention
1.4 Research questions
- What are the causes that lead to employee turnover within Asda?
- What is the lack in the process of the management that they cannot resolve them?
- What are the adopted methods by the management to minimize employee turnover?
- How does the organization resolve any issues leading to employee turnover?
- What are the effects of
1.5 Rationale of the research
The following research project on employee turnover is useful in understanding the causes and effects of it on the company and its goals. Employee turnover and its effects on organizational profitability is wide area of study and entail many facts and theories that amount to the practice. Employee turnover is a hot topic in business sector and companies have, if not often but once, have witnessed this in their organization. As cited by Abbas et al. (2014, p.1820), it cripples the budget as they have to induct new recruit and take them through the whole process of training and development. On top of it, the recruits may take years to gain knowledge and experience possessed by left employees. It hurts their business. Employee turnover is major concern for Asda as it has experienced slower growth and low motivation in existing employees. Its causes and effects in Department of Home Affairs in Eastern Cape, South Africa also makes it a relevant topic to be addressed and researched upon. The purpose of the project is to determine why employee turnover does occurs in the first place and how does it negatively impact the overall business sector throughout the world. The research highlights the background issue encompassing employee turnover within a business environment, taking an example of Asda. A study on this topic would help in addressing internal concerns and identifying correct measures in order to resolve by both organization and employees. The research would enable others organizations to draw parallels from it and benefit them in making recommendations for improving employee performance and retention.
Asda releases its annual report which mentions its sales and profit against the employed workforce. This data is to be taken account of in the research study. Company magazine released by Asda also includes its employee count against last year. So this would enable to draw distinction among earlier workforce and currently employed. Then personal interactions are to be taken place with the managers and executives of Asda and their responses are noted for collection for further data and analysis.
Chapter 2: Literature review
Employee turnover is much discussed phenomena. It is considered as one of the problems that persist in the business sector. Sometimes it is referred to rotation of employees around the labour market. It has harmful impacts in business perspective and consistency if an organization do not stresses on it. According to Mathieu et al. (2016, p.121), a company gaining knowledgeable employee gives it a competitive advantage. So it is threat to company which witness’s employee turnover. It adversely affects their profitability and company face time constraints in meeting consumer demand. Service productivity and quality are compromised and company is left at the behest of some of its best performing employees.
Sources of employee turnover are believed to be job related factors, organizational factors and voluntary or involuntary turnover. Analysts have attempted to answer the question of what drives the employees to quit by assessing their personal antecedents as the reasons. They state that employees quit due to job stress or lack of commitment from organization. As entwined by Qureshi et al. (2013, p.769), employees feel like they do not get what they deserve, although they give their full potential to the job. Sometimes they are overburdened with the job that they cannot handle anymore and switch over to other companies which provide them relaxation. Flexibility is also an issue that promotes employee turnover. Employee turnover could also be on voluntary or involuntary basis. Voluntary turnover could be dissatisfaction and involuntary accounts need to provide care to children or aged relatives. Quantitative approach imposed by management for managing employees is one of the factors that create dissatisfaction and concerns and forces employee to quit. But the carried researches by analysts have little consistency to their findings as their area of research has been limited. They do not include economic reasons and personal agency as possible reasons for motivating employees to quit their job.
Employee expectation is another motivating factor that causes employee turnover. As suggested by Ling et al. (2014, p.183), employees expect from organizations they work for, in terms of remuneration, financial stability, job growth and salary. But when they are not met, they start to distance themselves from the organization. They start withdrawing from work on the pretext of excuses such as being sick or family responsibility. They expect they be rewarded when certain levels of performance are achieved and organizational goals are met. But on contrary to it, if they find no link between performance and rewards, employees may set minimum standards of performance to retain their and would not exhibit interests and enthusiasm in their job role. But rewards do not necessarily drive turnover as some employees still continue to improve their performance and remain committed to the organization despite not being rewarded to their efforts.
High labour demand increases employee turnover. When there is demand for specific types of job role, experienced employees use this opportunity to more prosperity and growth. As cited by Cahuc et al. (2016. p.572), employees are well paid and better than in their former organization. In retail industry, there is greater demand for experienced employees. They are more respected and taken care of as they possess valuable knowledge and experience of the operational methods. But high labour demand may not always be a prosperous for the employees, as newly inducted employees may face stiff competition from other potential employees. Some of them do not go by this, as they have to reestablish their name and position in a new environment.
Among the causes and influential factors contributing to employee turnover include better economy. According to Murphy et al (2013, p. 97), employees tend to switch over when the economic stability of the current organization is falling or is at risk of falling. They are always at the lookout for better prospect. Lack of opportunity, distinction between employee skills and job, characteristics of job, unequal wages and salary are factors that causes employee turnover. Then lack of opportunity for growth is also termed as an essential factor. Employees change their organizations in search of better opportunity and growth. But skills possessed by employees when do not match with ones required specific to the job, they feel discouraged while their potentials are unutilized and ultimately they quit.
Assessing and understanding the above factors would enable to look beyond the horizon that covers the risk and reasons and employee turnover and take note of hidden aspects that are left out of the research. This would help in identifying strategies that companies can implement to address employee grievances and develop partnership and relationship with the employees.
Chapter 3: Research methodology
3.1 Research philosophy
Research philosophy is vital and selection of it should be effective as it enables the readers and assessors to understand the research topic properly. Each of research philosophy type has its own advantages and disadvantages. The type of research philosophy selected for this topic is post positivism which deals with theories and background information related to the topic.
3.2 Research approach
Research approach employed should be such that it clearly conveys the idea of the topic. It helps to develop a constructive format of the research. The research can be conducted with implementation of both inductive and deductive approach. Inductive approach is useful in the way that it helps gain relevant information regarding the topic. Thus it has been used to study employee turnover to build new theory and models. While deductive approach discusses practical applications of theories and models to gain detailed knowledge about the topic. The idea behind deductive approach used is to discuss theories and models against the backdrop of data analysis.
3.3 Data sources
The source of data collection that defines the research is of two types. One is primary and the other secondary. The data were collected from both primary and secondary sources.
Primary data source: Primary data source entails direct interaction with the data sample and accounting data through direct participation (Stanek et al. 2016, p.285). Here, for the research purpose, the primary data is collected through face to face interview with the employees and managers of Asda. Some of the interviewed managers were initially reluctant to interact and disagreed to disclose internal facts and figures. While the staffs and employees were cordial and helpful in providing responses. But they were also restricted within the company norms and policies. Here the interviewees are presented with some questionnaires regarding their views and beliefs about the employee turnover and its result in Asda.
Secondary data source: Secondary data sources are third party data sources. Secondary data are collected from journals and magazines, business reports and yearly reports released by government and private agencies. Secondary data are collected and assessed by someone else and these are used to ensure quality of the research (Roth et al. 2013, p.139). For the collection of secondary data books, company magazines and government reports were reviewed and evaluated. The used secondary sources are not totally dependent upon as they cannot be authenticated with the company sources. The government report on the other hand is a reliable source, which highlights companies’ performance depicting country’s economic policy and stability.
3.4 Data collection methods
For the research purpose, views and opinions of both executives and employees in Asda have to be taken, as employee turnover and retention is a collective approach. Employee turnover arises due to employee concerns which involve executives’ inefficiencies and company inadequacies. It helps in accounting factors that have given rise to employee concerns and what is done on their part to contain these (Creswell, 2013, p.142). For collection of data from both employees and executives and managers, both qualitative and quantitative research methods would be employed.
Quantitative research method is used to collect data in terms of statistical analysis and evaluation. In quantitative method, employees’ responses are taken through questionnaires distribution among at least 20 employees.
This method has been employed to identify views and concerns of the employees and to know their take on rewards policy and operations within Asda.
A limitation of questionnaire is that it might leave out certain important factors and aspects which are unknown to the researcher but impacts immensely to employees. Responses of small section of the employees are considered to be the overall response which may not be the case.
Qualitative data have been collected through conducting interviews. For qualitative method, 2 management heads from distinct departments of Asda have been interviewed. Interview process has been selected as the most employable one because it would allow direct interaction with the managers and take their views regarding why have they failed to retain employees.
Limitations: The selected approach has also certain limitations including that some of the managers are reluctant to provide detailed information as per the company norms and the process is limited due to time constraints (Smith, 2015, p.73).
3.6 Research Action Plan
Chapter 4: Data findings and analysis
For the data collection and analysis, the implemented methods are quantitative and qualitative.
4.1 Quantitative data collection (20 employees)
Q1. For how long have you been working in Asda?
Finding and analysis: The chart shows that almost 60% of employees are have remained within Asda for more than 5 years while the rest 40% have been reshuffled. This shows that employee retention is not very much practiced within Asda.
Q2. How much do you agree with Asda’s recruitment and retention policies?
Figure 3: Responses on ASDA’s recruitment and retention policies
Finding and analysis: It can be seen from the chart that 50% employees relate to recruitment policies, other 50% do not strongly feel so. This shows that Asda’s recruitment and retention policies are not very effective and there are usual occurrences of employee turnover.
Q3. Are you satisfied with your salaries according to the nature of the job?
Finding and analysis: This shows that only 40% of the workforce is satisfied with their salaries which are very important factor to understand the reasons for employee turnover. Thus Asda do very little on their part to address salary issues and increase employee satisfaction in accordance to nature of their job.
Q4. Does employee turnover increase your workload?
Figure 5: Concerns of workload due to employee turnover
Finding and analysis: We can see from the chart that 70% of the workforce is subjected to work overload due to employee turnover. This shows that major part of the workforce in Asda is affected with employee turnover in terms of work overload and that its impacts are high on Asda.
4.2 Qualitative data collection (2 managers)
Q1. How does the employer turnover affect your business?
In reply, the first manager gave negative response to the question. He said that employee turnover has been affecting their business for a while and Asda has been facing issue in taking over its competitors who have been using this to their advantage by recruiting them. Asda is witnessing slow growth and they are unable to meet market demands.
Q2. How do you try to identify factors behind it and what are your propositions to retain them?
In response to this, the second manager said that they have started group sessions and counseling their employees where they listen to their grievances and analyse the factors that drive to switch over. He also said that they are trying to implement remunerations and lower work stress so that employees feel comfortable in their job role.
Chapter 5: Recommendations and conclusion
Thus we can conclude from the above research findings that employee turnover is caused due to insufficient salary on par with the job role, lower employee motivation, inconsistent recruitment and retention policies. Asda do not engages in motivating employee to promote retention, although it does not believe in hire and sack policy and get assignment help for us.
We also see that impact of employee turnover on company is both financial and organizational, as company loses on prospective customers and increases the workload of the working employees.
Based on data and analysis some of the methods recommended which can be proposed for Asda to increase employee retention includes,
1. Management should pay the workforce in accordance to their job role and efforts given by them.
2. Involve employees in decision making process concerning them so that they can make suggestions in benefit of them but within company policy.
3. Management should reduce work boredom by revisiting their job description to make it more engaging, challenging and interesting.
5.3 Future scope
In quantitative approach, few of the employee responses have been accounted which do not denote the overall view of total workforce. So in future researches, more employees should be engaged and responses covered to bring out a general view of them.
The further research should also be conducted to investigate employee turnover concepts and mechanisms of retention to understand the handling of human asset. This would increase the quality of the research.
- Abbas, M., Raja, U., Darr, W. and Bouckenooghe, D., 2014. Combined effects of perceived politics and psychological capital on job satisfaction, turnover intentions, and performance. Journal of Management, 40(7), pp.1813-1830.
- Cahuc, P., Charlot, O. and Malherbet, F., 2016. Explaining the spread of temporary jobs and its impact on labor turnover. International Economic Review, 57(2), pp.533-572.
- Creswell, J.W., 2013. Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.
- Hancock, J.I., Allen, D.G., Bosco, F.A., McDaniel, K.R. and Pierce, C.A., 2013. Meta-analytic review of employee turnover as a predictor of firm performance. Journal of Management, 39(3), pp.573-603.
- Hausknecht, J.P. and Holwerda, J.A., 2013. When does employee turnover matter? Dynamic member configurations, productive capacity, and collective performance. Organization Science, 24(1), pp.210-225.
- Hussein, A., 2015. The use of triangulation in social sciences research: Can qualitative and quantitative methods be combined?.Journal of Comparative Social Work,4(1).