Effect Of Labour Turnover On Organizational Performance

Project and Seminar Material for Human Resource Management (HRM)

Effect Of Labour Turnover On Organizational Performance


Abstract


This work examined the relationship between labour turnover and organizational performance in KadunaState water board. It adopted survey research design. Related literature review was based on conceptual, theoretical and empirical frameworks. The study was anchored on equity theory. Data were collected from primary sources. Primary data were collected with item structured questionnaire based on five point Likert scale. The population of the study was one thousand two hundred and eighty five (1285) employees of the company under study. A sample size of three hundred and five (305) was determined with Taro Yamane (1964) formula The instrument was subjected to face and content validity and its reliability was determined through test-retest Method. Data generated were presented with tables, percentages and frequencies. Data were analyzed with chi-square statistical tool. Major findings indicated that there were significant positive relationships between dependent and independent variables. The study revealed that pay (salary) dissatisfaction, employee training and development, employee absenteeism and employee motivation significantly affect organizational performance. The study concluded that there is significant positive relationship between labour turnover and Organizational performance. Based on the findings, the study recommended an upward salary review, improved training and development programmes, constant check on employees and appropriate disciplinary measures and employee motivation to reduce the incidence of employee turnover.


Chapter One


Introduction

1.1 Background of the Study

In all economic activities human effort is the key. It is the human knowledge transferred into activity that give utilizes or value to all commodities. And that means who cultivates and whether he uses a hoe or tractor. It is the same who saws, weeds, processes, store and sells. It is also man who extracts iron ore, processes it into steel.

It postulates that who invents, designs, makes and operates machines is man who creates, transmits and seeks knowledge etc. thus, every human endeavour here one earth has man’s finger print. Thus without human effort which is considered vital for production so many managerial effort would been proved abortive. This effort also is usually called labour.

Labour is the most important resources in organization. This is why labour is define as human effort both mental and physical assertion legitimately applied in production of goods and services so as to satisfy human needs for a reward known as wages and salaries.

In this sense, labour include all labour, semi skilled labour and unskilled which all gear towards the production of goods and services to earn a living through their wages and salaries.


1.2. Statement of the Problem

The problem of labour turnover attract a reasonable percentage of attention in an organization because labour represent the life wire of any organization. The rate at which employee have organization is alarming, the types and number of works who are terminated or resigning their various jobs show how effective and efficient is the management in its operation which also determined the level of stability, growth and development of the organization. Although, in some organizations, there, is extent to which mobility of workers is considered acceptable.


1.3. Objectives of the Study

Purposively, this project is to be educate whoever is concerned in its significance of the study on the following objectives:

  1. To examine the effects of labour turnover on the performance of Kaduna State Water Board.
  2. To enumerate the problems of labour turnover and how it can be minimized in Kaduna State Water Board.
  3. To examine the major causes of labour turnover in an organization using Kaduna State Water Board as a case study.

1.4. Significance of the Study

The study would be of significance to the Kaduna State Water Board in identifying the problems and causes of labour turnover. This study is expected to provide solution the research work is of benefit to the body of knowledge students and other researchers. Other organizations that have similar problems can also benefit from the research work.


1.5. Research Questions

  1. What are the effects of labour turnover on the performance of Kaduna State Water Board?
  2. What are the problems of labour turnover and how can it be minimized in Kaduna State Water Board?
  3. What are the major causes of labour turnover in Kaduna State Water Board?

1.6. Scope of the Study

The extent of this research covers all concept, the causes, problems, effects and the measures to be taken to tackle the problem of labour turnover that deserves to be minimized. This study will be restricted to the effects of labour turnover on organizational performance in Nigeria.

Limitation of the Study

This research is not lastly due to some proposition for any organization. He classified cost of turnover into direct and indirect cost.

Direct Cost

This is the cost that associated with the costs of replacing the employees and training the newly hired such as costs of communicating the vacant position cost of administering the recruitment function, cost of screening the applicant interviewing the candidates, administering selection tools tests, meeting hr candidate, concluding background investigation, cost of preparing new employee training materials, conducting training session, giving on the job training and the costs of separating former employee from the firm such as administering paper work/meeting, conducting exit interview paying several pay/packaged, vacation time etc.

Indirect Cost

Turnover also brings with indirect cost especially when the employees who are leaving were liked by the organizations client, customer loyally may be affected. Again, as the new employees learn their jobs, the quality of the product and service may suffer.

Michael Armstrong, human resources practice page 381 enumerated the following as cost of labour turnover, living cost, direct cost of replacement opportunity cost of time spent, direct cost of introducing replacement, loss of input


Chapter Five


Summary, Conclusions and Recommendations

5.1 Summary of Findings

In synopsis, the findings of the study are:

  1. Pay (salary) dissatisfaction has significant relationship with organizational performance.
  2. Employee training and development has significant relationship with organizational Performance.
  3. Employee motivation has significant relationship with organizational performance.
  4. Employee absenteeism has significant relationship with organizational performance.

5.2 Conclusion

This work examined the relationship between labour turnover and organisational performance in some selected plastic manufacturing companies in Anambra State. Data were sourced from the employees of these plastic manufacturing companies. The data generated were analyzed using simple percentage analysis and chi-square statistical technique. The study revealed that pay (salary) dissatisfaction significantly influences organizational performance. The study also found that employee training and development significantly influences organizational Performance. Finally, the study found that employee motivation significantly affects organizational performance.

This finding implies that when employees are motivated through salary and training/development, the rate of their turnover will reduce but when they are not motivated, high rate of labour turnover will be experienced. Therefore, in order to improve organizational performance, employees need to be motivated in order to reduce high rate of employee turnover. The study therefore concludes that there is a significant relationship between labour turnover and organizational performance in the selected plastic manufacturing companies in Anambra State.


5.3 Recommendations

Based on the findings, the study recommends that:

  1. Employees’ salary should be increased regularly to reflect current economic realities in order to reduce the incidence of labour turnover in organizations.
  2. Similarly, training and development should be provided to employees in order to encourage them to stay in the organization.
  3. Organizations should look into the factors that contribute to employee absenteeism in order to find out how to effectively reduce it.
  4. Organizations should ensure that employees are effectively motivated in order to reduce the incidence of labour turnover.

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