The Effect of Labour Turnover on Organizational Performance (Case Study of Lobe Cooperative Credit Union Ltd)

Thursday, November 24, 2022

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

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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.




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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