Lahore College for Women University

Class B.com 5

Subject Research (Project)

Topic Impact of employee turnover on

Organizational effectiveness

Submitted To Dr. Rabia Asif

Submitted By
Uswa Naz 57
Anam Shahzadi 08

DEPARMENT OF MANAGEMENT SCIENCES, LAHORE.

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 Impact of employee’s turnover on organizational
effectiveness of Pakistan

Introduction

To study the impact of employees turnover on organization effectiveness

Employee turnover has a large impact on the productivity of the organization
and also affect other employee’s performance.

Scope of this topic

Every organization want to be successful and have desire to constant progress.

This era is highly competitive, organizations regardless of its size and
technology are facing employee’s challenges. A strong bond should be control
and maintained between employees and organization so the employees should
be motivated and lead to task fulfilment

Objective

The objective of the research project was to determine the effect of employee
turnover on Organizational Performance, the project was directed by the
following specific objectives;
 To determine the effects of Employee reward Management in the
Organizational Performance

 To establish the effect of Employee Career Growth on Organizational

Performance.

 To examine the effects of Employee Healthy and Safety on

Organizational Performance.

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Literature Review

Fredrick Herzberg established a theory of motivation that tinted the role of work
satisfaction in determining employee motivation.

Human capital theories by Durkheim, Simmel, Marx and Weber proposed that
turnover rates at any stage stress organizational performance.

Herzberg himself proposed this point in his motivation–hygiene theory that

reward is largely motivated by the way to which work is basically challenging
and offers Chances for appreciation and reinforcement.

The researcher was reasonable that companies needs to be re-energized with

new employee regularly if they are to avoid becoming stagnant in the level of
production.

This is factual at upper levels of management where new leadership style is

often needed from time to time to accept change in the organization.
Nevertheless, fresh employees bring new concepts and skills which benefit the
company more dynamic the rate of turnover benefits supervisors to regulate
over workforce expenses than would then be the case. This is actually right for
companies which have changes in corporate stages. When revenue declines it is
likely to retain workers for a period of time until starts to pick up again. This
aids companies to reduce recruitment resources while up holding revenue levels
during low periods.

Dismissal expenses are also down in companies with moderately high staff
turnover since they are talented to use accepted consumption mostly to decrease
their labor force. Lastly, it can also be debated that some workers turnover is
„functional‟ rather than „dysfunctional‟ since its lead to low productivity in the
loss of poor performers and their replacement with good staffs.

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 but little has been done on the examining
the sources of employee turnover, effects and advising various strategies which
can be used by managers in various organizations to ensure that there is
employee continuity in their organizations to enhance organizational

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competitiveness. This paper examines the sources of employee turnover. How
Succession planning effects on employee’s turnover rate and introduce some
strategies how to minimize employee turnover in organizations.

Conceptual framework

Below is a conceptual frame work that explains variables and the parameters
which Influence organizational performance.
Employee Turnover is Independent variable
Organizational effectiveness is Dependent variable
Communication and feedback is moderating.

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Hypothesis
 If rate of employee turnover increase than organizational effectiveness
decrease.
 The lower the employee turnover in the organization, the greater the
effectiveness.
 There is a relationship between organizational effectiveness and
employee’s turnover.

Justification
Gap:
Organization policies and leadership styles Effect of employees turnover on
organization succession planning
Minimize employee turnover during succession planning:
Be transparent. Communicate the succession plan and succession planning
process to all members of the organization.
Involve everyone. The board of directors, senior executives, upper
management, and succession candidates should all be informed of the
succession plan, notified of their role in the process and given the opportunity to
ask questions as needed.
Invest in development. In addition to explicit succession plans, take time to
establish a culture of ongoing coaching and development.
Ask questions. Check in with your leaders and ask them whether they are
satisfied with their job and work environment. Ask them where they would like
to see themselves in five or ten years. Finally, have your leaders check in with
their subordinates too. Taking time to talk to your employees like this is perhaps
the simplest way to ensure they feel valued and see potential for their career
with the organization going forward.

Methodology

The research project adopted a descriptive research design because the project

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Intended to collect quantitative and qualitative data that explained the
conditions and features of the effects of employee turnover on organizational
performance.
Descriptive research design is kind of design that is used to gather materials and
Evidence regarding the current status of the organization to explain the
existence of variables concerning the employee turnover on performance.
Defines descriptive research as comprising of survey and data analysis
accumulation that the main reason of descriptive research is the explanation of
the current situation of the organization as it is now. The research reflects this
design to be useful because it supported towards collecting of reliable
Information explaining the true effects of employee turnover on organization
effectiveness.
Nature:
Analyzed data quantitatively. In this research we collected the
data by using questionnaire method in which most of the questions are
structured as close-ended, so the respondent is required to choose from a
predetermined set of Responses or scale point
In this research we created Questionnaire in Google form so this method of data
collection was used, a questionnaire designed and Send email to the respondents
who will complete it in a period of time or immediately.
Further administer the questionnaire if the respondents experience any
difficulty in filling the questionnaire they can ask to the researcher.

Population:

We conduct a study in overall organization of Pakistan analyzes the

impact of employees turnover on organizational effectiveness.

Sample:
Employees of organization of JDC Welfare Organization, Ministry of
Industries & Production, National Productivity Organization and Chhipa
Welfare Association.

Variables

Independent variables

Employee’s turnover
Dependent variable

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 Organizational effectiveness
Moderating
Communication and feedback

Symbol of IV
ET
Symbol of DV
OE
Symbol of MV
C&F

Dimensions
When turnover rate decrease then performance of organization
increase. Accounting returns, growth, and stock market performance increase.

Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .343a .118 .080 .60156

a. Predictors: (Constant), EMM, HSM, CGM, ERM

As we can say that R-square value is 0.343, which means that our independent
variable that is turnover because 34.3% change in the dependent variables
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 4.582 4 1.146 3.166 .001b
Residual 34.378 95 .362
Total 38.960 99
a. Dependent Variable: EET
b. Predictors: (Constant), EMM, HSM, CGM, ERM
Anova results shows that p-value is 0.001which is less than 0.05, hence we can
say that there is a significance relationship between our independent variable
and dependent variable.
Coefficients

Unstandardized Standardized
Model Coefficients Coefficients t Sig. Collinearity Statistics

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 B Std. Error Beta Tolerance VIF
1 (Constant) 5.675 .660 8.597 .000

ERM -.134 .098 .246 -1.363 .176 .286 3.497

CGM .014 .102 .021 .140 .889 .406 2.462
HSM .357 .144 .441 2.487 .015 .295 3.388
EMM -.104 .094 .117 -1.107 .271 .835 1.198
a. Dependent Variable: EET

Coefficients results shows that beta value is 0.117, which means that
change in independent variable by one unit will bring the change in the
dependent variable

By 0.117 furthermore, the beta value is positive, which indicate the positive
relationship.

Collinearity Diagnostics
Condition Variance Proportions
Model Dimension Eigenvalue Index (Constant) ERM CGM HSM EMM
1 1 4.889 1.000 .00 .00 .00 .00 .00

2 .070 8.355 .03 .02 .13 .02 .04

3 .024 14.373 .00 .08 .78 .24 .02
4 .013 19.378 .04 .76 .05 .41 .02
5 .004 34.296 .93 .13 .04 .33 .92
a. Dependent Variable: EET

Correlations
ERM CGM HSM EMM EET
ERM Pearson Correlation 1 .735** .792** .188 .097
Sig. (2-tailed) .000 .000 .061 .335
N 100 100 100 100 100
** **
CGM Pearson Correlation .735 1 .705 .180 .131
Sig. (2-tailed) .000 .000 .072 .195
N 100 100 100 100 100
** **
HSM Pearson Correlation .792 .705 1 -.047 .267**
Sig. (2-tailed) .000 .000 .646 .007
N 100 100 100 100 100
EMM Pearson Correlation .188 .180 -.047 1 -.180
Sig. (2-tailed) .061 .072 .646 .074

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 N 100 100 100 100 100
EET Pearson Correlation .097 .131 .267** -.180 1
Sig. (2-tailed) .335 .195 .007 .074
N 100 100 100 100 100
**. Correlation is significant at the 0.01 level (2-tailed).
Reliability

Case Processing Summary

N %
Cases Valid 100 97.1
Excluded 3 2.9
Total 103 100.0
a. List wise deletion based on all variables in the
procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.713 5

Cranach alpha is 0.7 that is acceptable

References

Ahmed, U., Umrani, W. A., & Chauhan, A. A. (2018). Motivation and Retention of Teachers in a
Family Business in
Education a Case Study from South Asia. International Journal of Family Business Practices, 1(2),
160-173.
Bjuggren, C. M. (2018). Employment protection and labor productivity. Journal of Public Economics,
157, 138-157.
Gjerløv-Juel, P., & Guenther, C. (2019). Early employment expansion and long-run survival:
examining employee
Turnover as a context factor. Journal of Business Venturing, 34(1), 80-102.
Hussain, J., Saeed, M. Z., Ibrahim, M., & Iqbal, M. Impact of Motivation on Employee Performance
and Turnover in
Pakistani Educational Institutes. Journal of Education and Practice, 9
Jung, H. S., & Yoon, H. H. (2014). Antecedents and consequences of employees’ job stress in a
foodservice industry:
Focused on emotional labor and turnover intent. International Journal of Hospitality Management, 38,
84-88.
Mabindisa, V. (2014). Impact of staff turnover on organizational effectiveness and employee
performance at the Department of

9
Home Affairs in the Eastern Cape Province (Doctoral dissertation). Retrieved from:
http://openscholar.dut.ac.za/bitstream/10321/956/3/MABINDISA_2013.pdf
Mote, M. F. (2014). An assessment of the impact of employee Turnover on organization performance:
A case study of Barclays
Bank Tanzania ltd (Doctoral dissertation, Mzumbe University).
Nasurdin, A. M., Ling, T. C., & Khan, S. N. (2018). THE RELATION BETWEEN TURNOVER
INTENTIONS, HIGH
PERFORMANCE WORK PRACTICES (HPWPs), AND ORGANISATIONAL COMMITMENT: A
STUDY
AMONG PRIVATE HOSPITAL NURSES IN MALAYSIA. Asian Academy of Management
Journal, 23(1).
Nag, R. (2015). Assessment of employee turnover on organizational efficiency: a case study of
International Livestock Research
Institute (ILRI) (Doctoral dissertation, United States International University-Africa).
Savanevičienė, A., Vaitkevičius, S., Čiutienė, R., & Meilienė, E. (2015). The linkage between the
sources of employment
and employee turnover: The role of labour exchange. Procedia economics and finance, 23, 1466-1470.
Sexton, R. S., McMurtrey, S., Michalopoulos, J. O., & Smith, A. M. (2005). Employee turnover: a
neural network
Solution. Computers & Operations Research, 32(10), 2635-2651.
© 2020 by the author(s). Published by Annals of Contemporary Developments in Management
& HR (ACDMHR), under the terms and conditions of the Creative Commons Attribution (CC
BY) license which can be accessed at http://creativecommons.org/licenses/by/4.0/.

Ahmed, U., Umrani, W. A., & Chauhan, A. A. (2018). Motivation and Retention of Teachers in a
Family Business in
Education A Case Study from South Asia. International Journal of Family Business Practices, 1(2),
160-173.
Bjuggren, C. M. (2018). Employment protection and labor productivity. Journal of Public Economics,
157, 138-157.
Gjerløv-Juel, P., & Guenther, C. (2019). Early employment expansion and long-run survival:
examining employee
Turnover as a context factor. Journal of Business Venturing, 34(1), 80-102.
Husain, J., Saeed, M. Z., Ibrahim, M., & Iqbal, M. Impact of Motivation on Employee Performance
and Turnover in
Pakistani Educational Institutes. Journal of Education and Practice, 9
Jung, H. S., & Yoon, H. H. (2014). Antecedents and consequences of employees’ job stress in a
foodservice industry:
Focused on emotional labor and turnover intent. International Journal of Hospitality Management, 38,
84-88.
Mabindisa, V. (2014). Impact of staff turnover on organizational effectiveness and employee
performance at the Department of
Home Affairs in the Eastern Cape Province (Doctoral dissertation). Retrieved from:
http://openscholar.dut.ac.za/bitstream/10321/956/3/MABINDISA_2013.pdf
Mote, M. F. (2014). An assessment of the impact of employee Turnover on organization performance:
A case study of Barclays
Bank Tanzania ltd (Doctoral dissertation, Umzumbe University).
Nasurdin, A. M., Ling, T. C., & Khan, S. N. (2018). THE RELATION BETWEEN TURNOVER
INTENTIONS, HIGH
PERFORMANCE WORK PRACTICES (HPWPs), AND ORGANISATIONAL COMMITMENT: A
STUDY

10
AMONG PRIVATE HOSPITAL NURSES IN MALAYSIA. Asian Academy of Management
Journal, 23(1).
Nag, R. (2015). Assessment of employee turnover on organizational efficiency: a case study of
International Livestock Research
Institute (ILRI) (Doctoral dissertation, United States International University-Africa).
Savanevičienė, A., Vaitkevičius, S., Čiutienė, R., & Meilienė, E. (2015). The linkage between the
sources of employment
and employee turnover: The role of labour exchange. Procedia economics and finance, 23, 1466-1470.
Sexton, R. S., McMurtrey, S., Michalopoulos, J. O., & Smith, A. M. (2005). Employee turnover: a
neural network
Solution. Computers & Operations Research, 32(10), 2635-2651.
© 2020 by the author(s). Published by Annals of Contemporary Developments in Management
& HR (ACDMHR), under the terms and conditions of the Creative Commons Attribution (CC
BY) license which can be accessed at http://creativecommons.org/licenses/by/4.0/.

11