3 ijaers jan 2016 36 employee turnover – a study of its cause and effect with special reference to a

International Journal of Advanced Engineering Research and Science (IJAERS)

Vol-3, Issue-2 , Feb- 2016] ISSN: 2349-6495

Employee Turnover – A Study of its Cause and Effect with Special reference to Automobile Sector Prof. Swati Bankar1, Prof. Dr. M. D. Kakade2, Mr. Akash More3 1

MAEER’s MIT College of Engineering (CMSR) Pune, India 2 BharatiVidyapeeth University (IMED) Pune, India 3 MAEER’s MIT College of Management, Pune, India

Abstract— Productivity is the most important factor for any industry or the organization. There are number of factors on which the productivity of the organization depends upon.

And employee turnover is considered to be one of the challenging issues in the today competitive business nowadays. The employee turnover has received considerable attention by the organizations this days as it is very closely related to the growth and development of any organizations Employees turnover is an important issue for not only the automobile industry but also the service and IT industry.It has proven to be one of the most costly and seemingly inflexible human resource challenges confronting by several organizations globally All important factors such as Productivity, overall efficiency, quality etc gets affected by an issue of employee turnover. Therefore impact of turnover has received considerable attentionby senior management, professionals and industrial psychologists. This research paper focus on the different factors that are responsible for the labor turnover in an automobile industry. It also focus on the different major to be consider in order to reduce these problem from all the different sector of the industry.

Keywords— employee turnover, automobile sector,

factors.

I. INTRODUCTION The globalized world of today is very competitive, and managing employee’s performance is a quite difficult task for any organizationthe employees are not interested inperform the same task every day for years. Employees always seek for new challenging work and a good environment at a workplace.

Generally organizations go through the structured, strategically well planned work process. Therefore process becomes quit rigid, constant and it will be continuousfor years. But employees get bored for similar type of work each and every day.

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In an automobile industry also it’s very difficult to manage turnover and employees performance. An automobile industry has some different issues than that of other industrial fields like IT industries, chemical industries or pharmaceutical industries etc.In an automobile industry it requires some physical work, healthy work force and skilled employees. In addition to this now a day’s automation is used in automobile industry in larger manner, so technically aware workforce is a key requirement.

“Employees turnover can be defined as an entry of new employee in an organization and exit of existing employee from an organization”.Employee’s turnover from an organization could be due to the various reasons. But turnover affects very severelyon the productivity, cost increases, capacity decreases and overallefficiency decreases etc. That is turnover affects very negatively on different factors in an organization. Also there is loss of trained employees due to the turnover.

The rate of turnover varies from company to company in an automobile sector. And it varies region to region also. The highest rate is found where unemployment rate is very lower and it is easy to people to get alternative job.

Theemployee’s turnover affects positively when one of the poor performerleaves the job and more skilled person takes his place. Most organization always required fresh blood or fresh workforce. If there is anemployee’s turnover there is a much more possibility of entry of a fresh blood to the organization.

In today’s world technology is changing at a very fast rate and the new generation can cope up with a changing technology in a better way than that of senior or middle age workforce. Therefore there is an always requirement of new generation or youth at an organization. If turnover is there at an organization there is a chance to entry new generation at an organization. The employee’s turnover can be affect positively to the organization in a small manner but large rate of turnover is really a dangerous situation for an organization.

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International Journal of Advanced Engineering Research and Science (IJAERS)

II.

FACTORS AFFECTING EMPLOYEES TURNOVER 2.1 Organizational factors: - employees are always interested to work in such a organization which is well settled, well known and well organized etc. Because in such organizations employees could get the conformance of continuous career growth, good work environment etc. The rate of turnover decreases if such organizational factors are provided by the organization for employees.

2.2 Job related factors:-employees are always interested for better chances of advancement like good salary, payments, other benefits ensuring smooth career growth.

Such a job related factors matters a lot for employee’s turnover. Absenteeism in the basic factor increases rate of turnover. Turnover affects more at industries where work is not standardized and procedure does not exist for transmitting knowledge to new members.

III. CAUSES OF EMPLOYEES TURNOVER:3.1 Work dissatisfaction: -Work dissatisfaction is one of the major aspects of employee turnover. Employees who are not satisfied with their current jobs they are more likely to leave their job. Many factors make employee satisfied about his job like work environment, interpersonal relationship, field of interest of employees etc. Job dissatisfaction have a large contribution in an employee’s turnover. Even though employees having small problems with their current jobs and if there is an availability of alternatives then employees prefer to quit their current job.

3.2 Salary & wages:-Salary or payment is nothing but remuneration or consideration given for the work or services provided by employees. Salary and wages have an important role in retaining and rewarding key importance employees. By binding pay with performanance an employer can monitor and control specific activities and level of performanance. Payment and wages given to employees strongly related with job satisfaction.

3.3 Praise, Promotions, Awards &Rewards:-All business use tact of promotion, bonuses or other type of rewards to encourage high level of performance. It is studied that lack of bonuses, rewards promotion increases dissatisfaction among the employees and denotive themabout the job or a work. Further this can lead to employees’ turnover.

3.4 Other benefits: -Other benefits like fringe benefits are a kind of rewards given to an employees or a group in an organization such benefitsmotivates employees to work very efficiently and with full dedication. Many type of

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Vol-3, Issue-2 , Feb- 2016] ISSN: 2349-6495

benefits can be given to an employee’s like an accommodation, transportation facilities etc.

3.5 Management: -Lack of good management at an organization affects organization very negatively;all the important decisions are taken by management at the organization. All the decision has a direct impact on employees. Actually all the procedures, rules, methods etc. are decided by management and rest of people have to follow it. Therefore there is a possibility of taking these decided procedures in a negative manner by a work force and this may lead to employees turnover. Therefore management performs a very crucial role from the employees turnover point of view. So the wrong decision making can lead to the higher rate of employee’s turnover.

3.6 Manager: -Employees always wish that the manager should be trustworthy, supportive, reasonable etc..The relation between manager and employee has a strong impact on performance of employee. ifemployees are not compatible and comfortable with their bosses or the treatment getting them from manger is not fair It makes employee very dissatisfactory .This is one of the cause affects in a large manner on a turnover rate. If the manager shows interest in well being of employees and is supportive and sensitive to words employees emotionally, employee’s job satisfaction increases.

3.7 Work suitability: -The one of the important factors affecting the job satisfaction is work suitability. If an employee suits or well fit with his work employee will be satisfied and the turnover will be lowered. But if the work profile doesn’t suits to the employees field of interest, attitude, personality, education background etc. Then it makes employee mentally disturbed, dissatisfied, and thus the performis effected.

3.8 Personality: -Different Aspects of personality like attitude, characteristics, preferences, motives, needs leads to tendency to respond to the situation in a specific way.

Therefore personality has a great impact on a turnover rate.

For an example, an emotionally mal adjusted employee is more likely to be dissatisfied in all situations.

3.9Alternative opportunities:-Perceived alternative employment opportunity also known as perceived ease of movement. It is the perception of the availability of job alternatives; this perception factor is an uncontrollable factor for an employee which distracts employee from work and reason of job turnover many times.

3.10 Educational background:-It is studied that a work force with a higher qualification has a belief that they have a more job opportunities than that of a quite lower qualified people. They think the higher qualification is extra Page | 12

International Journal of Advanced Engineering Research and Science (IJAERS) advantage they got. This factor distracts them from their current job, further it may be reason for job turnover.

IV. REMEDIES TO TURNOVER Retaining employees is a very important task; employees are nothing but precious asset and the important part of organization. The best organization always tries to retain, sustain the organizational asset. Human resource is such an asset without which organization can’t work, therefore management of the organization always has to take care of their workforce.

Globally there are some common reasons of turnover like payments, job satisfaction, interpersonal relationship, job fit etc..Finding solution for these factors is very important task, to minimize the effect of turnover on an organization.

1. Recruit suitable employee:-To minimize the effect of turnover firstly the organization has to select right person for the right work. That is job fit or work suitability is very important aspect for the efficient performance of the employee.

The employee’s field of interest has to be taken in consideration while recruiting an employee, because it is observed that employees are more likely to work in their field of interest. Any human being can work enthusiastically and satisfactorily in his field of interest.

Personality, attitude, thoughts etc.. Makes every human being different than that of others therefore while recruiting employee’s organization has to take in consideration these aspects of individual employee.

2. Retain valuable employees: -The reputed organizations always attract and hire employees who will make meaningful contribution towards organizational goals.

Companies striving to hire best employees have a competitive edge over others. Organizations have to be scrutinize employees very thoughtfully considering all the important aspects. Employees are the very valuable ingredient of organization, therefore keeping employees busy isimportant.

For retaining, sustaining employees motivating employees is very important. Motivation can be done by experts; employees can be motivated by providing bonuses, fringe benefits, awards, rewards etc. The other ways to motivate is giving responsibilities, taking suggestions for the changes, promotion etc. Participating in decision making process is also motivating for employees.

3. Work environment:-Work process matters lot from the employees point of view. Creating such Workplace Environment whereemployees love to work

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Vol-3, Issue-2 , Feb- 2016] ISSN: 2349-6495

Organizational culture, organizational values, ethics followed at organization, organizational structure, affects greatly on the mindset of employees. Therefore providing these factors properly in organization is very important.

4. Economic factor:-Salary, wages, economical benefits given to the employees is the most important and motivating factor to the employee. For an example Fords car plant was experiencing significant employee turnover often reaching at levels of 300% to 400% per year after study decision was taken to double basic wages from $2.5 to $5 per day and the turnover was drastically minimized.

5. Training and development:-One of the essential requirements at an organization, where the basic training about the work profile is given by the experts and the important information, knowledge easily communicated.

Training and development motivates, inspires employees.

The work of employees is properly utilized in a required manner due to training and development process. Due to Training and development, employees can give more superior work performance.

6. Fulfilling Needs and wants:-Fulfilling needs and wants of employees is quite important and difficult task for an organization. If individual’s needs and wants not satisfied then it make him dissatisfactory which may lead to job turnover. Therefore organization has to fulfill needs and some wants of employees to retain staff.

7. Job satisfaction:-Job satisfaction is very important factor for retaining staff. Many times employee can adjust with other factors like fringe benefits, bonuses etc.. But it’s very difficult to work in an organization with dissatisfaction for a long time for employees. With job dissatisfaction employee can’t give his best performance. Job dissatisfaction leads to decreased efficiency, decreased productivity, and higher turnover rates.Therefore job satisfaction is important for that giving some responsibilities and authorities to an employees is required.

Motivating and supporting to employees is needed, taking into consideration about employee’s field of interest and personality is required.Process of participating in decision making procedure to an employee in his related respective field should be provided. In this way employees can be satisfied about organization.

8. Proper management and managers:-It is very important that the management of the organization should be supportive one towards employees stressful job. Therefore the lack of support decreases the workers ability.

9. Balancing job and private life:-Organization should find ways to help employees successfully manage their commitment at a home and at a work place and by doing so Page | 13

International Journal of Advanced Engineering Research and Science (IJAERS) many retention problems can be avoided. The flexible time table can be very helpful to balance work and personal life.

Therefore organization can provide flexible work schedule so that employees can balance their work and personal life in a proper manner.

V. CONCLUSION Employee turnover is the most burning issue for any organization it is essential to maintain its skilled workforce But it is very difficult for maintain the turnover rate every organization must be aware about employees turnover ratio and various factors that are responsible for the employees turnover, effects of employees turnover and possible solutions to minimize it. People are the most precious asset for an organization and utilization of workforce in a best possible way is very important. There are many different causes for an employees turnover which are explained above from them work dissatisfaction is one of the major cause having direct negative effect on productivity. So the employee’s dissatisfaction should be avoided. Employees are essential ingredients of any organization they need to be motivated, inspired to perform their best. Then only organization can become more competitive, well managed and can provide quality products and services. Most of the work in this paper is theoretical and practical based research can be carried out with the help of the mathematical model and in future research.

Vol-3, Issue-2 , Feb- 2016] ISSN: 2349-6495

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