The Effect of Labour Turnover on Organizational Performance (Case Study of Lobe Cooperative Credit Union Ltd)
Department: Management
No of Pages: 50
Project Code: MGT3
References: Yes
Cost: 5,000XAF Cameroonian
: $15 for International students
Abstract
The
efficiency and success of an organization depends mainly on its capacity to
retain its employees. High labour turnover may result in an organization not
being able to meet its objectives, loss of business of million of shillings,
loss of customers and it can spoil the good reputation of an organization.
Previous
studies emphasis the important of regarding human resource as the most
important asset of any serious
organization determined to realise its goals and objectives. Mokaya (2010)
states that recruitment, selection and training are a very expensive exercise
for any organization, and therefore employee retention should be the key for
organization's survival.
The
purpose of this work was to determine the factors that influence labour
turnover in financial institutions, with an aim of coming up with
recommendations aimed at curbing or significantly reducing it and enhancing
employees retention in Lobe Cooperative Credit Union Limited. This study
adopted a descriptive research method.
The
targeted population were the employees at Lobe Cooperative Credit Union Ltd.
This includes both employees on temporary and permanent contracts of employment
which is fifty(50) employees. The study use descriptive research design.
Therefore
the sample size for this study was thirty(30) and since the sample was drawn
from all cadres of employees, the population were regarded heterogeneous. The
study colleted primary data. Tables and other graphical presentations were
appropriately use to present the data that was collected to ease understanding
and analysis.
From
the findings, the study established that better remuneration package discourage
labour turnover in Lobe Cooperative Credit Union limited. The study revealed
that reward and recognition discourage labour turnover in LOCCUL.
It
also found out that failure of management to provide opportunity for career
progression encourage labour turnover.
Work place organization and the working environment were the most important
factors that employees do consider. The study found that poor working
conditions encourages labour turnover in LOCCUL.
CHAPTER ONE
INTRODUCTION
1.0. Background of the study
In
this world of globalization there are growing changes and challenges in the
society in which we leave and in which our work organization operate. There are
growing changes and challenges taking place taking inside work organization
themselves.
Those
changes and challenges are having an impact upon the management of people in
the work organization and the performance of those organizations on the one
hand and upon the environment in which work organization must exist on the
other hand (Ngirwa, 2005). Labour turnover is one of the challenges that faced
the work organization and have impact in the performance of those
organizations.
The
concept of employees’ turnover represents one of the themes on the analysis of
the world of work among scholars in the field of management, organization
behavior and human psychology. Labour turnover refers to the process whereby
employees leave the organization. It can also be referring as a degree of
individual movement across the membership boundary of a social system (Haermeah
and Rees 1984).
According
to Muhammad, employees’ turnover in an organization is one of the main issue
that extensively affect the overall performance of the organization. It is
often suggested that organizations should adopt the clear standard operation
procedure (SOP's) that decrease the gap between the top management and the
middle management in order to identify and resolve the issue of employee’s
turnover in an organization.
Labour
turnover refers to the rate of change in the work force of an organization
during a given period of time. In order words, labour turnover is the
time-to-time changes in the composition of the workforce that results from
hiring, release and replacement of employees. In this sense, labour includes
semi-skilled labour and unskilled labour which is gear towards the production
of goods and services.
If
an organization has made significant investment in training and development on
its employees, that investment is lost when employees leave. In addition,
excessive employee turnover can hurt the overall productivity of a firm and is
often a symptom of other difficulties. Every organization strives to have high
productivity, lesser turnover and maximum profitability (Mello 2016).
Managing
turnover successfully is a must to achieve the above goals. The managers must
recognize that employees are major contributors to the efficient achievement of
the organizational productivity. Therefore, there is need to develop a thorough
understanding of employee turnover from the perspective of causes, effect and
strategies to minimize turnover (Hollman 2015).
The
achievement of any organization is closely knotted to the job performance of
its employees. The worth of the employees’ workplace environment influences
their motivation level and hence performance. When workers have the desire,
physically and emotionally to work, then their performance shall be improved.
Having
a suitable workplace environment assist in decreasing the number of absenteeism
and as a result can advance the performance in today's competitive and dynamic
world. The workplace environment that is set in place impacts employee morale,
productivity and engagement both positively and negatively.
1.1. Statement of the
problem
NSIF
has been experiencing labour turnover for a period of time, the employees no
longer feel attach to the organization and when employees quit the
organization, the organization has to suffer a great amount of direct and
indirect cost.
The
expenses of staff turnover can be shocking ranging from advertising expenses,
resource management expenses, loss of time and efficiency, life imbalance and
training and development expenses for freshly employees ( Harrie, 2015).
This
can be very disturbing to the organizational performance if experienced workers
who have the knowledge and have learnt the culture of the organization regulary
quit the organization and look for other jobs in different companies, this
therefore means that the organization would definitely lose its market share to
the competitors.
According
to Phillip (2015), employee’s turnover affects distribution of the rules and
duties in different department to new employees who have no capability on
effective operations of organization services, and as a result low level of
clients or customers satisfaction is recognized.
New
employees who are not experienced and don not have the capacity to function
well on the roles and duties they have been assigned for, they take time and
money to, thus exposing the organization to huge expenses on selection, hiring
and training to replace the work force gap generated by the existing employees.
The
main issue to labour turnover is that the organization loses the best qualified
and capable employees that the organization had capitalized seriously in training
and coaching on different job tasks.
This
therefore means that, the company must suffer massive expenses in terms of time
and finance to train the newly employed workers in order to make them
efficiently and familiar to organization working culture and show the necessary
skills and experience.
Due
to high labour turnover rate, organizations have adopt on various employees
rentation approaches such as increased rewards management, career growth, and
improved health and safety. This however has headed to increased organization
overheads and recognition of a deteriorated profit margin (Duncan, 2016).
The
problem of labour turnover attracts a reasonable percentage of attention in an
organization because labour represents the life wire of any organization. The
type and number of workers who are terminated or resigning their various jobs
show how effective and efficient is the management in it's operation which also
determines the level of stability, growth and development of the organization.
The
reasons for this are many but the most important ones are;
- Organizations are practically run by men.
- Human resource is the most difficult resource to manage, in the sense that they have facilities of reasoning and the ability to respond or resist to stimuli.
- Human beings are dynamic, complex and unpredictable.
1.2. Research Questions
The
following are the research questions of the study.
- To what extend does staff rotation affect organizational performance?
- How does employee’s workflow affect organizational performance?
- How does working conditions influence organizational performance?
1.3. Objectives of the
study
The
objective is divided in to Main objective and specific objective.
- The main objective of the study is to determine the effect of labour turnover on organizational performance.
Hence,
in order to achieve the objective stated above, the following specific
objectives shall be our guide.
- To investigate the extent to which staff rotation affects organizational performance
- To examine the effect of employees work flow in organizational performance
- To examine how working condition influence the organizational performance.
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