Employee Turnover in Banking Sector: Empirical Evidence
Employee Turnover in Banking Sector: Empirical Evidence
Employee Turnover in Banking Sector: Empirical Evidence
Abstract: Employee turnover as a term is widely used in business circles. Although several studies
have been conducted on this topic, most of the researchers focus on the causes of employee turnover.
This research looked at extent of influence of various factors on employee turnover in urban and semi urban
banks. The research was aimed at achieving the following objectives: identify the key factors of employee
turnover; determine the extent to which the identified factors are influencing employees turnover. The study is
based on the responses of the employees of leading banks. A self-developed questionnaire, measured on a Likert
Scale was used to collect data from respondents. Quantitative research design was used and this design was
chosen because its findings are generaliseable and data objective. The reliability of the data collected is done by
split half method.. The collected data were being analyzed using a program called Statistical Package for Social
Science (SPSS ver.16.0 For Windows). The data analysis is carried out by calculating mean, standard deviation
and linear correlation. The difference between means of variable was estimated by using t-test. The following
factors have significantly influenced employee turnover in banking sector: Work Environment, Job Stress,
Compensation (Salary), Employee relationship with management, Career Growth.
Key words: Employee Turnover, Job Stress, Work Environment, Career Growth SPSS, T-Test,
I.
Introduction:-
Human resource is considered to be the center of all development processes of economy. But todays
competitive business scenario is deteriorating social conditions of human resources, hence causing employee
turnover. According to Price (1977) employee turnover is the ratio of the number of organizational members
who have left during the period being considered divided by the average number of people in that organization
during the period. The seeds or initial causes of turnover, arising out of the frustration related to budget
cutting, hiring freezes, layoffs, and lack of development funds and opportunities, are more likely to be sown at
such times.(Sharmistha, 2010) High turnover rate is problematic and have a negative impact on an
organizations performance.
After independence, year 1991 was the marked as the significant year for Indian banking sector. In year
1969 after nationalization of 14 major banks a great reform arise in banking sector in India. Followed by
globalization, liberalization and other international events lead banking sector in India to reform and adjust to
attain competitive edge in multinationals environment. In order to cope with the changing trend as well to
provide effective and efficient service to the customer implementation of advance technology has changed the
face of banking. Installation of ATM machine, e-Banking, computer implementation and lot many inputs have
changed the work patterns of the bank employees. Directly or indirectly these reforms in policy and technology
in banking sector has deteriorated the social, economic and psychological sphere of the bank employees in
India.
According to Kevin et al (2004), although there is no standard framework for understanding
employees turnover process as whole, a wide range of factors have been found useful in interpreting employee
turnover. The pattern in Indian banking sector is also influenced with the same factors such as lack of training,
poor working condition, workplace conflict, ineffective leadership etc.
Hence in this study with the implementation of Statistical Package for Social Science (SPSS ver.16.0 For
Windows) major factor of turnover is being analyzed and hierarchy was defined.
II.
Literature Review:-
"Employee turnover is a ratio comparison of the number of employees a company must replace in a
given time period to the average number of total employees (Agnes, 1999). A huge concern to most companies,
employee turnover is a costly expense especially in lower paying job roles, for which the employee turnover rate
is highest (Samuel, 2012). Turnover refers to the amount of movement of employees in and out of an
organization, normally present in terms of the turnover rate (Chruden & Sherman, 1972). Mobley (1982) gave
the meaning of employee turnover as the discontinuance of membership in an organization by the person who
received monetary compensation from the organization. Tanke (2001) has defined turnover as the movement of
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III.
Research Methodology:-
IV.
Results:
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t = (46.45-45.36) 1.64
t =0.664
For df equal to 42, t does not reach the 0.05 level, the obtained mean difference must be marked as not
significant. Hence our assumption was correct
V.
Findings:
As evident from the results the prime factors for employee turnover in our respondent banks are job
satisfaction and work environment. The high significance level for both variables show that, whether there is a
salary compensation or not, employees have a gigantic desire to opt for new ventures in need of better work
environment and job satisfaction. Comparative to above two variables the career development is having lesser
but a quiet considerable significance. The people who counted career growth as their prime force for turnover
have put a saddle on availability of opportunities and management relations as sub-prime forces. But they turn
over for new venture for better wages or salary compensation.
So the good management can hold the employees for a longer period, by giving them satisfaction with
respect to supervision and giving them much autonomy so that may not seek for alternates too often. In current
situational study the possible solution for retaining career oriented employees would be to give them autonomy
and ease from the management side. Extremely harsh attitude of the management and excessive workload will
open the doors of alternate opportunities for career oriented employees. Employees do always seek for alternates
because everyone wants to get flourished.
We also came with an outcome that no real mean difference exists as between the new employees and
old employees responses towards turnover factor.
VI.
Limitations
The generalization of the results is limited because instead of using psychological test, the study has
evaluated on the self rating of the banking sector employees. The sample size is not large enough and do not
cover all banks. The non-serious attitude of the respondent and other delicate issues might manipulate the
responses to some extent. However, given the above mentioned limitations, the results of this study highlighted
some significant factors and brought to light the need for the future research.
VII.
Conclusion:
No organization can succeed without its man at work which is Human Assets or Human Resources.
Success of an organization depends upon its Human Resources. Due to dynamics nature of Human Resources,
retaining talent becomes more challenging. More particularly, retention of the talent became most critical area of
concern in the globalised world because of every organization competing others attracting talents with more
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