ISSN: 2311-5963
Original Article
Impact of Staff
Performance
Turnover
on
Employees`
Saba Imran1, Rafia Ayub2
1
Student, Business Administration Department, Jinnah University for Women.
Professor, Business Administration Department, Jinnah University for Women.
2Assistant
Keywords: Turnover
Intention, Employees’
Performance, Organizational
Performance.
Article info
Published Dec 26,2016
Received Nov 20, 2016
Accepted Dec 09,2016
Correspondence
Rafia Ayub
Jinnah University for
Women, Karachi,
[email protected]
ABSTRACT
Employees are the assets of organizations and if they
leave the organization it creates bad impact on the
performance of the organization. This research is basically
conducting to know the key issues that are the basic
reasons of turnover intention and this research is
quantitative research. Performance of the employees
affecting the organizational performance and the turnover
high rate directly and indirectly influences the performance
of the employees that in return cause organizational
productivity. This research paper has addressed the impact
of staff turnover on employees’ performance. That type of
impact brings out the issues behind expansion of staff
turnover. This study is basically conducting to achieve the
objective to establish the main reasons that raise the
chances of employees’ intention to leave the organization
and all the variables were verified by the SPSS version 20
by using the regression test.
1. INTRODUCTION
Employee turnover is the number or the ratio of the workers those have intention to
leave the organization and have attraction toward another job. The employees’ turnover
now a day’s becoming more commonly and this is directly impacting the performance of
the organization that is return affects the organizational productivity. The measurement of
employee turnover is helpful to the employers that are willing to examine the reasons
behind turnover intention of the employees and it can be helpful to estimate the cost to
hire an employee. Employee turnover affects the organizational performance in a very
negative way.
The staff turnover is directly or indirectly influencing the performance of employees.
Turnover is among the most vital work relations results for both representatives and
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associations. Employees are the assets of an organization and their performance can
affect the success of an organization in a positive or negative manner as well. Work
fulfilment and employees’ turnover are conversely relative. With lessening in the quality of
one, there is expansion in the quality of the other. (Griffeth et al., 2000). This research
paper will address the impact of staff turnover on employees’ performance. That type of
impact bring out the issues behind expansion of staff turnover, how much turnover is
unsafe or useful and under what conditions and why?
Organizations that are using high-contribution work practice have lower rates of
stops, releases, and aggregate turnover, which thusly prompt higher rates of employees’
loyalty. Turnover aim has been a basic issue for administration for a long time (Chen,
2011) and still it is a major problem for the organization. Therefore, because of rising
issues of employees’ turnover many organizations are giving attention toward their
employees’ performance (Richer 2002). Because of higher turnover expectation,
numerous associations have considered it important and began to put resources into
their workers regarding introduction, preparing, keeping up, creating and holding them at
any cost on the grounds that turnover has bad effect on business (Ongori, 2007; West,
2007).
1.2
Problem Statement
Many researchers studied on the impact of staff turnover on employees’
performance and define a different perspective that creates effects on the staff turnover.
If labor turnover will not focus properly then it can be a risky situation for organization
sustainability. Organizations that are facing higher turnover each year so this leads
changes in the performance of the employees and this change also influence the
organization effectiveness that comes from employees’ performance. This paper
identifies the main causes of the high rate of staff turnover and suggesting some
strategies to retain the employees in an organization for improving the effectiveness of
organization and employees’ performance.
1.3
Aim of Study
The aim of this paper is to analyse the link between the variables that can
impact the staff turnover on employees’ performance. This study is aimed to achieve the
objective to establish the main reasons that raise the chances of employees’ intention to
leave the organization and to know the nature and the employees’ aim to resign the
organization. This research is conducting to formulate some recommendations based on
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the findings that how to retain the employees in an organization to move the organization
toward success.
1.4
Research Questions
The following research questions were formulated for the study:
•
What are the reasons of staff turnover?
•
What are the elements that can enhance the employee’s execution?
•
What is the effect of staff turnover on performance of employees?
•
What system can be utilized to diminish high state of staff turnover?
1.5
Scope of Study
This study is helpful to the organization for identify the impact of staff turnover
on the employee’s performance and to identify the employees’ level of satisfaction from
organization culture. This study identifies the areas where dissatisfaction of jobs of the
employees exists.
2. LITERATURE REVIEW
2.1
Job Turnover
Today a Business life is playing major role in the life of people. The change in
business condition has a direct impact on performance of employees. The reason behind
the employee turnover is the physical and the harsh conditions of their jobs. These
uncertainties in the job create a bad impact on the employee performance. This situation
that employee face is known as burnout that cause employees performance. (Güllüceand
Kaygın, 2013).There are many researches that determine the relation between the job
satisfaction and stress. The term stress itself will be harshly effected by number of
different factors it may be the organization culture, employee’s promotions and workload
of an individual (David Yong Gun Fie et.al, 2009).There is negative impact of work load
and uncertain environment on employees job satisfaction (McCann, M. Hughes, Adair &
Cardwell, 2009). Demir (2002) admire that job satisfaction to employees’ feel of
gratification and dis-gratification for a job. Due to the rise in turnover intention many
organizations found it very important to study to make the organizational productivity
valuable. Many firms have explored the relationship between the turnover intention and
productivity. Researchers study that the job satisfaction is positively associated with
employees’ productivity and negatively related to employees turnover (Egan et al., 2004&
Silverthorne, 2004).In other words it is simple related as greater productivity is results
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from greater job satisfaction and greater satisfaction means lesser satisfied employees in
an organization (Silverthorne, 2004).Culture of organization is now relates to job
satisfaction, productivity ,organizational commitment and turnover intention (Lund,2003).
2.2
Turnover Intention
Turnover is a serious issue for management in 21stcentury (Batt &Valcour, 2003).
Organizations knew that the low level of turnover is the way to enhance the performance
of organizations and no turnover means , no extra cost required for the process to retain
an employees in an organization (Chen,et al. , 2011 ).Turnover is actually the intention of
positive or negative attitude of employees satisfaction (Brigham, Castro & Shepherd,
2007).According to the Beutinbach (2005) if organizations wants the organizational
productivity so it is necessary to make their employees happy. It is a fact that turnover of
employees’ badly hits the qualities of employees of an organization or indirectly hits the
organizational commitment. When employees feels dissatisfies with their jobs ultimately
they search alternative jobs, so the ratio of turnover strongly depend on the employees’
attitude toward their jobs, there is a need to give the first priority to the employees’
satisfaction to make the organizational success or employees’ commitment with
organization (Saifuddin et al., 2008).
According to the Noor and Maad (2009) attention of staff toward the employees’
performance is also the part of turnover because that attention is the cause to retain the
employees in an organization. The previous study has found a positive relationship of job
related issues, stress and job satisfaction. According to O’Neill et al (2009) there is a
relationship in between organizational productivity or employee’s satisfaction and It was
found that the culture of an organization also influence the employees to take attention
about their intention to work with an organization. Furthermore factors studied by
researchers that long time hours, extra time limitation, negative work pressure and lack of
support also the cause of employee’s turnover and these all factors also influence the
performance of the employees’ (Bauld, Brough & Timms 2009). According to Ahmed and
Omer (2010) job turnover of employees plays an important role in an organization’s future
achievements or success because the higher the retention of employees means high
level of employees’ performance. More employees’ satisfaction results the high target
achievements toward targets of the organization. According to the Hierarchy theory of
Maslow, every individual have five needs. When the basic need of work force will be
satisfied then there will be no more turnover (Hartel et al., 2007).According to Price and
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Mueller (2001) turnover intention is main cause of less organizational productivity. Job
turnover of employees plays an important role in an organizational long term commitment
and success. According to AveyLuthans and Jensen (2009) it is important for the success
of an organization to stay in contact with their employees in order to know their need that
what things can make them more commitment with organization and that will cause into
low turnover intention. It is also necessary for work place to provide work life policies to
employees because employees’ retention is only possible by employee satisfaction.
2.3
Organization Culture
In the past researches many researchers investigate the reasons behind the
employee turnover that conclude two factors are demographics and organization culture.
According to Gregory et al (2009) only these two variables are not only the fact that
causes the turnover but there are too many factors but these two are the main factors
that can impact the performance of the employees. Organization culture is very important
to retain an employee in organization. The fact is that employees’ dissatisfaction and
unreliable culture is the cause of the employees’ intention to leave an organization, which
in return turns into low organizational productivity or success (Gregory et al, 2009 &
Mauseth, 2008). Those employees who adjust well in an organizational culture are more
possible to stay with an organization where as those who not well able to fit in an
organization more likely to leave an organization just because of the culture of an
organization (Jenkins et al, 2008).According to Jensen et al, (2008) , Organization culture
is the one that refers to the organization’s procedures, policies and systems and the
culture of an organization make sense of employees to be committed with the
organization.
According to the Kontonghiorghes, Awbre and Feurig (2005) there are some
main features that can directly or indirectly change the organizational productivity by
employees’ perspectives. Firstly, the organizations where they have a culture is
considered as a place where employees can learn something. Secondly the culture of an
organization is the one factor that can cause the employees satisfaction. Organization
culture is very important to retain the employees in an organization that can impact the
employees’ commitment with an organization. Based on the previous research, the
organization culture includes several different impacts including sharing of knowledge,
the capacity of organizational learning, uniqueness, team participation and are so many
other factors. Particularly the organizational culture and the working conditions are
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causes of job satisfaction (Chiva & Alegre, 2008). The organization culture have
significant impact on the job satisfaction of the employees. There are many
characteristics of organization that are related to the job satisfaction.
According to Mikkelsen, Ogaard and Lovrich (2000), there is a strong
relationshipof organizational culture and job satisfaction that can be a cause of
organizational productivity and also can influence the performance of the employees. The
organization culture has a direct impact on staff turnover as satisfaction of employee
depends on team work and more important on cooperation, involvement of management
and workforce environment. According to Rowden and Ahmed (2000) work force
environment influence the satisfaction among employees and it can also be the one
factor that can develop the employee commitment more highly with an organization. The
research that have analyses the importance of job satisfaction and the influence of job
satisfaction on the turnover intention include Griffeth, Hom and gaertner, (2000) and
Jospeph ,D. (2007). According to the Griffeth, Hom and Gaertner (2000) the overall
relation of job satisfaction is relatively high with the turnover intention over the culture of
an organization. Job satisfaction is very important to retain an employee in an
organization, it directly creates an impact on employees’ mind to leave an organization
and indirectly it creates an impact on organizational productivity.
2.4
Job Stress
Stress is a natural phenomenon and it is naturally present in every organization.
There are many different reasons behind stress it may be workplace environment (Zhang
& Lee, 2010). Such factors of an organization influence job satisfaction of employees that
in turn gives rise to the intention of an employee to quiet from an organization
(Applebaum et.al, 2010). According to the Abushaikha and Sheil (2006) the factors that
immediately change the mind set of an employee ‘stress’ has two side one is positive or
other is negative, which leads an organization sometimes toward success and sometimes
it may create a harm effects on performance of an organization. Stress is commonly
known as the pressure and the depressing results from different environmental or
physical situational factors, it also depends on the working condition (Alves, Chor,
Faerstein and Werneck, 2004).There is an important role of stress or burnout in turnover
intention of employees (Moore, 2000) because there is a strong inter connection in
between emotional factors and stress, these both factors if develop at a time so it will
definitely cause the level of turnover and on the other side the stress is important to
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consider in order to decrease job dissatisfaction and turnover intention (Cote & Morgan,
2002).
Job stress gives the employees tension and mentally pressure that can cause of
low productivity and more turnover intention (Davis, Orzeck & Keelan, 2006). Job stress
has impact on the satisfaction of and environmental symptoms. Stress and performance
both has negative relationship with each other (Kavanagh, 2005). Increase in turnover is
basically due to rise in work stress and that is indirectly causing the performance of the
employee (Zhang & Lee, 2010). Stress and turnover both are directly proportional to each
other (Kavanagh, 2005; Chen, et al. 2010 and Applebaum,et al, 2010).
2.5
Employees’ Promotions
Employees are the asset of an organization and their performance or productivity of an
organization is directly related to an organization success. This means that motivated
employees performance is more important for an organization and employee’s motivation
is possible by rewards and bonus. Rewards are the employees’ motivation key and
rewards are essential for employees’ performance (Frey & Osterloh, 2012). According to
Mitchell (2001), many unexpected situations rise by the anger and frustration of
employees and the high level of satisfaction in job means low level of unexpected
situations and vice versa. Employees’ wants the attention of management toward their
need and more favourable action would like to consider as a key of positive attitude of
employees. Favourable reaction means low turnover intention that indirectly increase
organizational commitment.
According to the Bandiera, Barankay and Rasul (2006) the employees’ performance has
relationship with the bonus, which helps them to become satisfied with their jobs. The
relation of pay and performance is also linked tightly with each other. The organizations
who are considering the employees’ promotions are able to improve the productivity and
are able to retain the employees with them. Anemployee’s become more satisfied with an
organization if they receive better reared and promotions by organization and employee’s
level of satisfaction will become more as compare to others and all such conditions gives
better results in form of high productivity level of organization and a worker productivity
depends on rewards. According to the Chhabra (2001), the basic success of an
organization depends on employees’ willingness to do work in positive ways and with full
of efforts and all these things possible by the inputs and promotions activities of an
organization. The importance of employees’ motivation is not only enough for
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organization productivity but the satisfaction level of employees is also much important to
reduce the level of turnover in an organization. A research says that Rewards is the very
important fact to realize the employees’ importance to them for an organization
(Dewhurst et al, 2010). The reward makes them (employees’) feel to become more
efficient and do work with more innovation in order to boost the organization performance
in form of financial and non-financial as well(Simon, 2001).
According to Hendrie (2004), all the basic reasons behind turnover are the employees
‘policies and management promotion tactics. Low concern about employee’s promotion is
the way of turnover of employee. Employees’ motivation can become more by providing
them the promotion facilities which improves the performance of the organization. The
employee performance and promotion criteria are interlinked with each other, if they will
get the expected rewards on their performance and more the productivity will be that in
turns reduce the turnover intention of the employees.
2.4
Work Load
It is strongly believed by Karsh, Booske and Sainfort, (2005), the job satisfaction
and organizational commitment are caused by the turnover intention, more turnover
intentions leads to job dissatisfaction and staff turnover, whereas the less intention of
turnover leads to organization commitment and staff satisfaction. Organizational aspects
are the cause of the Job stress it may include low organizational support, unstable
working hours, and frequent changes in organizational policies, lack of support from
management side and uncertain environment is the cause of the job stress (A.K.
Srivastava, 2008). Employees contribute toward organization through their work and their
work nature or work load gives them a better way to decide either to stay in an
organization or to leave an organization. If employees feels work load and if management
not gives them opportunities to grow or explore new opportunities so it will actively
become a cause of turnover intention so employees definitely start searching for an
alternative job and their opportunities because for everyone their opportunities and career
development is very important (Nergin & Tzafrir, 2004).
According to Akersted and Nilsson (2003), Work load also rise due to late
working hours. Late working hours are not only the cause of high staff turnover but it is
also the cause of the negative employees’ performance. Long working hours are linked
with risk of organizational performance. Person’s ability and resources are highly
influencing by stress. More work load gives the employees more stress and stress leads
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to high turnover indirectly, it also affects organizational productivity or performance. Work
load gives more tension to the employees and with more work load employees cannot be
able to perform the task effectively. Work load leads absenteeism, laziness, lack
involvement in the job and frequent of late joining. Job stress id basically rising because
of different aspects of an organization including the long or infrequent working hours, less
organizational motivational strategies, or frequent changes in organizational policies and
procedures (Davey, et al., 2001).
2.7
Theoretical Framework
Fig; 01 Conceptual Framework
(Shahzad, Rehman, Shad, Gul and Amanullah Khan,2011: Dare & Jacob,2011: Mansoor, Fida,
Nasir and Ahmed, 2011: Rehman, Irum, Tahir, Ijaz, Noor and Ume Salma,2012)
2.8
Statement of Hypothesis
Hypotheses to be used in validating this study project are stated as follow:
Ho1: There is no significant relationship between organizational culture and employees’
performance.
HA1: There is a significant relationship between organizational culture and employees’ performance.
Ho2: Job stress has no impact on the employee’s performance.
HA2: Job stress has impact on the employee’s performance.
Ho3: There is no relationship between employees’ promotions and employee performance.
HA3: There is a relationship between employees’ promotions and employee performance.
Ho4: Work load has no impact on employees’ performance.
Ho4: Work load has an impact on employees’ performance.
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3. METHODOLOGY
3.1
Research Design and Approach
This portion of research is providing close activities outlook that has done to
complete this research work. The aim of study is to identify the impact of staff turnover on
employees’ performance. Specifically, this research is to explore the major factors that
are the cause of staff turnover that directly cause the organizational performance or
commitment. This study is roaming around different statistical facts or figures of
dependent variable (employee performance) and various independent variables. This
research is quantitative research and this is descriptive study that is providing
relationship among variables.
3.2
Data Collection Method
This is quantitative research and the technique that has used to gather data is
(online) questionnaire filling, In this study finalize close ended questions are include
which is in scaling form and all the questions into categories as (agree or disagree).To
get the output questionnaire was distribute in different companies and this study include
random answers and these all answers and additional comments are highly valuable.
3.3
Sampling Techniques and Size
In this study, non-probability sampling technique has used and this study based
on convenience sampling techniques. In this research, Samples are collected from 20 to
40 above age group. Questionnaires were distributed online to the official web sites of
companies, social network site, LinkedIn, Google documents and other resources. In
sample technique, random companies were selected and study get responses from well
know working place. Data collection method is questionnaire to finalize the research
work. Study got many responses but few responses were uncertain for research
completion.
3.4
Data Collection
As per according to requirement of data gathering questionnaire were sent
randomly,
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3.4.1
Analysis Tools
The statistical tool that is used in this research is SPSS (Statistical Package for
Social Sciences) version 20 and study formulate the data from excel sheet and to
analyze the data study based on linear regression method in order to identify the relation
of employee performance with independent variables.
3.4.2
Model of Research
In this study, linear Regression method has applied, in order to explore the
finding results of topic. Through linear regression study explains the relationship of
dependent variable with independent variables. In this research, dependent variable
includes employees’ performance and independent variables include organizational
culture, job stress, work load and employees’ promotion.
3.4.3
Hypothesis Testing and Data Analysis
Fig; 02: Respondents Data Result
Respondent data shows that generally employees are of 20-30 age group and
they all are staff members on job positions. This shows that there is a need to see the
employees’ action on behind of turnover rate and to decrease the intention of employees
to leave an organization.
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3.4.4
Reliability Testing
This table is showing the reliability testing of this research; Table 02 shows that
the reliability of all these responses is 0.901 that is of 13 numbers of items. All the
responses are highly valuable to analyze the results and for the completion of this
research and value of Cronbach’s Alpha value is 0.901.
3.4.5
Variables Testing
Hypothesis: 01
Table 3 is showing that I have entered independent variable. Here it is clearly
mention that the variable that is entered in this table is OC (organization culture).
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This table 4 is about R-value “which is called the coefficient of determination it
gives the adequacy of model”. In this table I got R-square value that is 0.199 which
means 19.9% variance is predictable in dependent variable by independent variable.
This table is showing the one way ANOVA test results. Here the results are
representing in three rows respectively. In this table regressions presenting variability
model and F-value in this table is 106.507 and here P-value is less than 0.000 which is
less than 0.005 which is showing that null hypothesis is rejected and alternative
hypothesis is accepted, so it means there is a relationship between organizational
cultures and employees’ performance.
Employee performance = 2.473 + 0.402 (Organization Culture)
This table analyzes the positive relation of staff turnover on employees’
performance. According to that table organizational culture if increases one unit, so
employees’ performance will rise 0.402 times, which means both dependent and
independent variables, are directly proportional to each other rand employee
performance is depending on organizational culture. P-Value is 0.000 which is not more
than 0.05, so that means it rejecting the null hypothesis. R-square value is1.99 that is
representing that regression has explanatory power and employee performance is
approved by organizational culture.
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Hypothesis: 02
The table 07 showing regression model used to enter job stress variable. In this
table it is clearly shows that the independent variable that is enter this time is JS (job
stress), that I have enter for interpretation.
Table 8 showing R square value of another variable that I have entered that is
Job stress. In this table r-square is 0.392 for job stress which means 39.2% variance is
predictable in dependent variable.
The Table 09 shows the analysis of one way ANOVA. F-value is 137.377 and
here P-value is 0.000 which is not greater than 0.05, so that is showing that alternative
hypothesis is accepted that conclude that there is a relationship of job stress and
employees’ performance.
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Employee performance = 0.974 + 0.652(Job Stress)
Regression equation representing the relationship of job stress and employee’s
performance. That, when job stress is increases one unit, so employees’ performance will
increase 0.652 times, which is representing that job stress is directly related to
employee’s performance. Employee performance is depending on job stress. In the
above table, P-Value is 0.000 which is showing clear result that means it rejects the null
hypothesis. The value of R-square is 3.92 which show that employee performance is
approved by job stress.
Hypothesis: 03
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In this table entering variable are clearly shown that I have used the regression
method. Here it is clearly mention that the independent variableis (Work load) is entered
for interpretation.
In the table 12, the R-value is given which is the coefficient of determination that
is representing competence of model. Here the estimation of r-square is 0.345 that
means independent variable in the model can foresee 34.5% of the difference in the
dependent variable.
Table 13 ANOVE is representing the variables relations, which shows the
analysis of one way ANOVA. Here the F-value is 112.440 and in this table P-value is
0.000 which means that alternative hypothesis is accepted that conclude that there is a
relationship between work load and employees’ performance.
Employee performance = 1.376 + 0.451(Organization Culture)
Table 14 is presenting relationship of staff turnover and employees’ performance.
Organizational culture if increases one unit, so employees’ performance will increase
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0.451 times, here P-Value is 0.000 so that means it reject the null hypothesis and Rsquare value (0.345) presenting that employee performance is accepted by work load.
Table 15 I have entered another independent variable that is employees’
promotions to analyze the regression test.
Hypothesis: 04
In
value
table 16 Rshowing
relationship of dependent and independent variable. In table 16, the r-square value is
0.607 which means 60.7% variance is predictable in dependent variable.
Table 17 is representing the variables relations, which shows the analysis of one
way ANOVA. F-value is 330.313 and here P-value is 0.000 that is clearly showing that
null hypothesis has been rejected that conclude that there is a relationship between
employees’ promotions and employees’ performance.
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Employee performance = -1.24 + 0.910(Organization Culture)
Table 18 Regression table shows the coefficient of variables. Employees
promotions if increases one unit, so employees’ performance will increase 0.910 times,
which means that employee performance is depending on employees’ promotions. Here
P-Value is 0.000 which clearly means that null hypothesis is rejected.
4. CONCLUSION
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This research was conducted with the objective to find the relationship of staff
turnover with work load, job stress, employees’ promotions and organization culture. Now
concluding this research that by hypothesis testing study found the relationship among all
variables. Study based on the regression test which is clearly presenting that staff
turnover creates impact on employee’s performance through organization culture, work
load, job stress and employees’ promotion.
According to this study employees’ performance is highly effecting by the high
rate of employees’ turnover and organizations that are facing staff turnover problem is
just because of lack of working policies including employees working load, Employees’
frustration level is becoming high that is the cause of job stress for employees. This study
says that work load and work place stress has a significant impact on employees’
performance. For low turnover, there is a need to improve the management side policies.
Organization culture has compelling impact on employees’ performance and
employees’ promotion is also highly correlated with employees’ performance. The entire
null hypothesis has been rejected in this research and all alternative hypotheses are
accepted.
Recommendation
On the bases of all the respondent this research now recommending some
alternative strategies to reduce the turnover rate. According to the sampling data most of
the employees are focusing on one statement that for organization success it is
necessary to make their employees’ satisfied from every aspect. In this current situation
when employees are leaving an organization very frequently due to undesirable
environment of an organization, unstable culture of organization and basically because of
lack of facilities, so all such factors are need to be consider very important to retain an
employee in an organization. This is justified statement that Employees’ satisfaction not
comes only from these factors but there is a big role of management that is very essential
part to retain an employee in organization. Majority of employees are mutually suggesting
that Employees of any organization wants flexible environment and friendly relation with
management so there is a need to make some new strategies to communicate in a
friendly manner with employees that strategy will help the organization to be successful
and employees will become satisfied. This study found that Employees’ satisfaction is
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very important for the organization because employees’ self-satisfaction gives them
motivation to do work with efforts that in turn gives the benefit to organizations’
productivity or employees’ commitment. This all strategies will also low the turnover rate
and organization can enjoy the success with experienced employees’.
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