Effects of Labour Turnover on Organizational Performance

Categories: Labour Day

I would like to thank almighty God for the divine protection, guidance and the opportunity of a memorable and fruitful period at Kirinyaga university. I would also like to extend my heartfelt gratitude to my family members especially my parents for their support both financially and advice wise. I sincerely thank the kirinyaga university lectures and the whole institution at large for giving me a chance to be part of the institution and also for their invaluable support and guidance that I got throughout the period that have stayed in the institution.

I also express my deep gratitude to my supervisor Violent Njeru for her guidance, remarks and relevant suggestion during my research proposal exercise. I also would like to thank my colleagues for their support support during the exercise. I would like to dedicate this project proposal to my parents and my siblings due to the support that they gave me throughout my academic journey.

The research will be addressing effects of labour turnover on organizational performance.

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The study will focus on Joy milllers Limited ,kutus.The study will be guided by particular objectives such as;To determine factors that affect employee turnover in Joy millers limited located in kutus, To find out the effects of employee turnover on the organizational image,To examine how working conditions affect the flour milling industry,To examine how labour turnover affects organizational efficiencyand lastily to examine how labour turnover affects employee satisfaction in Joy millers limited.

This chapter entails Background of the study, statement of the problem, objectives of the study; that is general and specific objectives, Research questions, justification of the study, scope and limitation of the study.

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Performance is a very critical issue in every organization .Organizational performance is influenced by a number of factors such as labor turnover.Labour turnover is one of the great challenges facing most organizations today especially those provide poor working conditions and low salaries to employees . labour turnover lowers employee morale and this leads to unsuccessful organizational activities.

Nowadays employee move from one organization to another especially in the flour milling industry no matter the amount of salary and compensation that employees gets in case of an hazard or any unsafe acts which can affect the health of employees.loossing an employee is a big loss to the organizatio.

Abasssi and Hollman (2000), described labour turnover as the revolution of employees around the labour market between works and professions, and between the situations of employment and unemployment. Armstrong (2010) described employee turnover as the ratio of the number of employees who leave the organization within a specific period of time, to the average sum of personnel hired within a specific period of time. Turnover is described as the extent to which people leave the organization . labour turnover has both negative and positive effects to the organization, employees and the whole society.

According to Armstrong (2010) labour turnover is mostly categorized as voluntary or involuntary. Voluntary turnover arises when a worker leaves an organisation by choice and this can be triggered by a number of factors while involuntary can be caused by management policies or actions. Causes include rises of new opportunities in other firms, salary, management, working conditions physical location and stress, retirements and death.

In view of Mitchel, Holton and Lee, (2001) when the workers leave the firm ,its cost the firm both time and money to replace them ,the total expenses for replacing them range from90%-200% of the yearly .These expenses includes; recruiting and selection cost, orientation cost, training cost, administrative cost, lost productivity and loss of human capital. According to the provision of the industry and the profession duties, yearly salaries and wages vary in between 30-200% of a single employer (Trevor. (2004). This is mostly affect lesser paying jobs and its likely to cost more replacement cost on high rank jobs than the less paying jobs .Due to these reasons, a number of organization emphasis on employee retention strategies irrespective of salaries (McClelland, 2003). labour turnover is very critical area in the organization that requires deep understanding of its causes.

Martin (2005) most organizations are much concerned with labour turnover because it is costly especially to the organization that flourishes and values sustainability of the business. Employees’ salaries and remunerations, company benefits, employee turnout, and job performance are all factors that contribute to employee turnover (Dessler, 2009). Organizations are much interested in their employee turnover rate because turnover disrupts day-to-day activities of the organization which will lead to decrease in profits and productivity at large (murphy ,2009).

According to Oregon (2004) most companies find that employee turnover can be reduced when issues affecting employee’s morale are addressed. This is mainly through offering employees benefits such as reasonable flexibility with work and family balance, performance reviews, and performance based incentives, along with traditional benefits such as paid holidays or sick days (Murphy, 2009).

Hill and Trist (1955) as cited in Beardwell (2004) identified three phases on labour turnover namely; induction crisis, differential transit and settled connection. Hill and Trist allude that employees are more likely to leave during the first few months if the relationship between the individual and the organisation is unsettled and insecure and less likely to leave if they manage to fit well hence the longer they stay in the organisation.

Joy millers limited has been undergoing high labour turnover of both semi-skilled and skilled employees in the last 3years (2015 – 2018) such employees includes; accountants, procurement officers, Total quality assurance managers, secretaries of various department, H.O.D s and finance officers. At the same time, there is low turnover of unskillful employees whereby the management is planning to downsize. It has also been noted that these specific employees go to work in other organizational that are in the flour milling industry. In additional, the organizational is incurring high cost replacing the forgone employees, organizational image is being damaged and there low productivity and decrease of profits. Thus I have decided to investigate the root cause of labour turnover and its effects to the organizational performance.

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Effects of Labour Turnover on Organizational Performance. (2022, Jan 02). Retrieved from https://studymoose.com/effects-of-labour-turnover-on-organizational-performance-essay

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