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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