The Effect of Employee Turnover on performance in the Banking Industry of Addis Ababa
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Date
2015-05
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Addis Ababa University
Abstract
There are a number of factors on which performance of an organization mostly depends on and employee turnover is one of them. Employee turnover is the rotation of workers around the labor market; between firms; jobs and occupation and between the state of employment and unemployment (Abassi et al., 2000).Though this movement is seen as a normal cycle of employment, it’s a huge problem if its frequent and well qualified employees are leaving so the objective of the study is to assess the effect of turnover on performance and give possible solution to minimize it. It specifically finds out the reason to why employees leave; the effect that it has on performance; the HR attitudes with regard to turnover and the different mechanisms used to avoid it. The research is Explanatory research and the researcher have used stratified sampling method to select the sample that are representative which are 10 head quarters of different banks from the banking industry and from those banks 200 employees were selected randomly. Data from employees were collected on several variables that affect turnover including personal and demographic characteristics, job satisfaction; organization and work environment; salary and reward; and also job content using questionnaires which are composed of both close ended and open questions and data from HR managers were gathered through interview which makes the research a mixed(both quantitative and qualitative). The data that was gathered through questionnaires and interviews were analyzed by using a software package called SPSS. The researcher has found out that there is a high rate of employee turnover in the banking industry and this directly affects performance and to lose its competitive advantage and also there is a positive correlation between the level of turnover and its effect on performance. Therefore, the researcher highly recommends that the HR department should give special attention to voluntary turnover and need to make the necessary adjustment as to the attitude of their employees like using an effective way of recruitment and selection process, creating a healthy working environment, make a necessary salary increment; redesign jobs and use exit interview interviews and other methods to know why their employees leave at the right time and use the information acquired appropriately
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Keywords
Employee Turnover, Organization performance, Effect of Employee Turnover on Performance