AN ASSESSMENT OF THE IMPACT OF EMPLOYEE

TURNOVER ON ORGANIZATION PERFORMANCE:

A CASE STUDY OF BARCLAYS BANK TANZANIA LTD
 AN ASSESSMENT OF THE IMPACT OF EMPLOYEE
TURNOVER ON ORGANIZATION PERFORMANCE:
A CASE STUDY OF BARCLAYS BANK TANZANIA LTD

By
Maryam Farid Mote

A Dissertation Submitted in Partial Fulfillment of the Requirements for the Award of

the Degree of Master of Science in Human Resource Management (MSc-HRM) of
Mzumbe University.

2014
 CERTIFICATION

We, the undersigned, certify that we have read and hereby recommend for
acceptance by the Mzumbe University, a thesis entitled; An Assessment of the
Impact of Employee Turnover on Organization Performance: A Case Study of
Barclays Bank Tanzania Ltd, in partial fulfillment of the requirements for award of
the degree of Master of Science in Human Resource Management (MSc-HRM) of
Mzumbe University

___________________________
Major Supervisor

___________________________
Internal Examiner

Accepted for the Board of……………..

_______________________________________________________
CHAIRPERSON, FACULTY/DIRECTORATE BOARD

i
 DECLARATION
AND
COPYRIGHT

I, Maryam Farid Mote, I do hereby declare that this dissertation t is my own

original work and it has not been presented and will not be presented to any other
University for a similar any other degree award.

Signature: _____________________________

Date: _________________________________

© 2014
This dissertation is a copyright material protected under the Berne Convention, the
Copyright Act 1999 and other international and national enactments, in that behalf,
on intellectual property. It may not be reproduced by any means in full or in part,
except for short extracts in fair dealings, for research or private study, critical
scholarly review or discourse with an acknowledgement, without the written
permission of Mzumbe University, on behalf of the author.

ii
 ACKNOWLEDGEMENTS

The preparation of this research report would have not been possible without
assistance from a number of committed individuals. Thus I would like to take this
opportunity to express my gratitude to those who, in one way or another, helped me
in accomplishing this dissertation.

First and foremost I would like to give special thanks to my supervisor Dr. Erasmus
Kipesha for his good supervision on my research. I also thank the Almighty God for
blessing me with wisdom, love, strength and good health and my family members for
all the support they offered me.

My special gratitude’s go to the Management of Barclays Bank Tanzania Ltd for

accepting my request to undertake my research project at their organization and also
by allowing me to use various information for the purpose of my research work. I
also extend my appreciation to other members of staff from that institution for taking
time off their daily schedules to respond to the questions I posed to them about my
study as well as answering to the questionnaires and taking their precious time in
face to face interview.

iii
 DEDICATION

I would like to take this opportunity to dedicate this work to my beloved late mother
Thuweba Mohammed and my dear family.

iv
 LIST OF ABREVIATIONS

CEO - Chief Executive Officer

DV - Dependent Variable
SOP - Standard Operation Procedures
UK - United Kingdom

v
 ABSTRACT

This study intended to assess the impact of employee turnover on organization performance
at Barclays bank Tanzania Limited in Dar-es-Salaam region. The study was conducted with
the following objectives: To assess the impact of employee turnover on organization
performance in Barclays bank Tanzania Limited; investigate the causes of staff turnover in
Barclays bank Tanzania Limited and finally recommend strategies that can be used to reduce
the high level of employee Turnover in Barclays bank Tanzania Limited

Data were collected through Questionnaires, Interviews and Documentary Review.

Questionnaires were open-ended questions, which allowed individuals to express their views
concerning the impact of employee turnover on organization performance at Barclays bank
Tanzania Limited in Dar-es-Salaam region. Interviews were conducted on the basis of
predetermined interview guide. In addition, when an organisation loses a critical employee,
there is negative impact on innovation, consistency in providing service to guests may be
jeopardized and major delays in the delivery of services to customers may occur. The
research design used in this study was the quantitative approach, which allowed the
researcher to use structured questionnaires when collecting data. The targeted population
was the employees across Dar es salaam branches which consisted a sample size of 100
employees. Simple random sampling was used in this research.

The study finding suggests that salary is among the primary cause of staff turnover in the
Barclays bank Tanzania Limited. The findings highlighted that high staff turnover increases
work load to the present employees in Barclays bank Tanzania Limited. The study finding
also showed that staff turnover causes reduction in effective service delivery to the
customers and reflects poorly on the image of the Barclays bank Tanzania Limited.

Other findings suggested that unhealthy working relationship may also be the cause of staff
turnover in Barclays bank Tanzania Limited. The recommendations highlighted that top
management should pay a marketable salary to employees and the employees must be
rewarded if they have achieved their goals. Top management should also develop
opportunities for career advancement in Barclays bank Tanzania Limited. Top management
should involve employees when they make decisions that will affect them in Barclays bank
Tanzania Limited. The study concludes with direction for future research

vi
 TABLE OF CONTENTS

Pages
CERTIFICATION ...................................................................................................... i
DECLARATION AND COPYRIGHT ....................................................................ii
ACKNOWLEDGEMENTS......................................................................................iii
DEDICATION........................................................................................................... iv
LIST OF ABREVIATIONS ...................................................................................... v
ABSTRACT ............................................................................................................... vi
TABLE OF CONTENTS.........................................................................................vii
LIST OF TABLES ..................................................................................................... x
LIST OF FIGURES .................................................................................................. xi

CHAPTER ONE ........................................................................................................ 1

INTRODUCTION AND BACKGROUND INFORMATION ............................... 1
1.1 Introduction ............................................................................................... 1
1.2 Background of the Study........................................................................... 1
1.3 Statement of the Problem .......................................................................... 3
1.4.1 General Research Objectives .................................................................... 5
1.4.2 Specific Objectives.................................................................................... 5
1.5 Research Questions ................................................................................... 5
1.6 Limitation and Delimitation of the Study ................................................. 6
1.7 Significance of the Study .......................................................................... 6
1.8 Scope of the Study..................................................................................... 6

CHAPTER TWO ....................................................................................................... 7

LITERATURE REVIEW.......................................................................................... 7
2.1 Introduction ............................................................................................... 7
2.2 Theoretical Literature Review................................................................... 7
2.2.1 Definition of Key Terms ........................................................................... 7
2.2.2 Causes of Employee Turnover .................................................................. 7
2.2.3 The Impact of Employee Turnover on Organization Performance......... 13
2.2.4 Motivation Theory................................................................................... 16
2.2.5 Herzberg’s Duality Theory of Job Satisfaction....................................... 18
2.2.6 Turnover Process Models........................................................................ 20
2.2.6.1 March & Simon’s Model......................................................................... 20
2.2.7 Mobley’s Model ...................................................................................... 21
2.2.8 Mitchell & Lee Job Embeddedness Model ............................................. 22
2.3 Empirical Literature Review ................................................................... 23
2.3 Conceptual Framework ........................................................................... 25
2.3.1 Variables of the Framework.................................................................... 25
2.3.1.2 The Underlying Theory or Assumptions................................................. 26
2.4 Hypotheses .............................................................................................. 27

vii
CHAPTER THREE ................................................................................................. 28
RESEARCH METHODOLOGY ........................................................................... 28
3.1 Introduction ............................................................................................. 28
3.2 The Research Strategy............................................................................. 28
3.2.1 Research Design...................................................................................... 28
3.2.2 Selection of the Study Area..................................................................... 28
3.3 Target Population .................................................................................... 28
3.4 Sample Size ............................................................................................. 29
3.4.1 Sampling Procedures/Techniques ........................................................... 29
3.4.2 Simple Random Sampling....................................................................... 30
3.5 Data Collection Techniques .................................................................... 30
3.5.1 Interview.................................................................................................. 30
3.5.2 Questionnaire .......................................................................................... 30
3.5.2.3 Types of Data .......................................................................................... 31
3.5.2.4 Documentation Method........................................................................... 31
3.6 Data Presentation..................................................................................... 31

CHAPTER FOUR.................................................................................................... 32
ANALYSIS OF THE DATA AND DISCUSSIONS OF THE FINDINGS ......... 32
4.1 Introduction ............................................................................................. 32
4.2 Data Reliability ....................................................................................... 32
4.2.3 Data validity ............................................................................................ 32
4.3 Analysis of Demographic Data ............................................................... 32
4.4 Study Findings ........................................................................................ 34
4.4.1 Objective 1: The causes of Staff turnover in Barclays Bank Tanzania
Limited .................................................................................................... 34
4.3.2 Objective 2; Performance Evaluation ..................................................... 38
4.3.3 Objective 3; the Impact of Employee Turnover on Organization
Performance in Barclays Bank Tanzania Limited................................... 39
4.3.4 Objective 4: Recommend Strategies that can be used to Reduce the High
Level of Employee Turnover in Barclays Bank Tanzania Limited ........ 44
4.4 Discussion of the Findings ...................................................................... 46
4.4.1 Main Reasons for Employees to Leave Their Jobs ................................. 46
4.4.2 Salary Scale ............................................................................................. 47
4.4.3 Lack of Recognition ................................................................................ 48
4.4.4 Lack of Career Advancement or Training............................................... 48
4.4.5 Lack of work-life Balance....................................................................... 49
4.5 Measures taken by Management to reduce Turnover ............................ 50

CHAPTER FIVE...................................................................................................... 52
CONCLUSION AND RECOMMENDATIONS ................................................... 52
5.1 Introduction ............................................................................................. 52
5.2 Summary of the Research Findings ........................................................ 52
5.2.1 Main causes of Employees turnover in Barclays Bank........................... 52
5.2.2 Efforts Done by the Management to Retain their Employees................. 52
5.3 Conclusion............................................................................................... 54
5.4 Recommendations ................................................................................... 55

viii
 5.5 Direction for Further Research................................................................ 56

REFERENCES......................................................................................................... 58

APPENDICES .......................................................................................................... 61
Appendix 1: Questionnaire for Master’s Degree Course Research ................. 61

ix
 LIST OF TABLES

Pages
Table 3.1: Sample Distribution .............................................................................. 29
Table 4.1: Analysis of Demographic Data............................................................. 33
Table 4.2: Gender of Respondents ......................................................................... 33
Table 4.3: Length of Service of Respondents ........................................................ 34
Table 4.4: Salary Satisfactions............................................................................... 35
Table 4.5: No Opportunity for Career Advancement (Training) ........................... 36
Table 4.6: Employee Involvement in Decision Making ........................................ 36
Table 4.7: Input not Appreciated ........................................................................... 37
Table 4.8: Work –Life Imbalance .......................................................................... 38
Table 4.9: Performance Evaluation........................................................................ 39
Table 4.10: Reduction in Work Productivity ........................................................... 40
Table 4.11: Reduction in the Quality of Product Produced ..................................... 41
Table 4.12: Wastage of Resources ........................................................................... 41
Table 4.13: Employee not Meeting Deadlines......................................................... 42
Table 4.14: Disruption of Service Delivery ............................................................. 43
Table 4.15: Loss of Customers ................................................................................ 43
Table 4.16: Increasing Work Load for each Employee ........................................... 44
Table 4.17: Employees Recognition on Goal Achievement .................................... 45
Table 4.18: Employees must be Paid Well .............................................................. 45
Table 4.19: Employee’s Work Relationship ............................................................ 46

x
 LIST OF FIGURES

Pages
Figure 2.1: Conceptual Framework ...................................................................... 25

xi
 CHAPTER ONE

INTRODUCTION AND BACKGROUND INFORMATION

1.1 Introduction
This chapter comprises background information, statement of the problem, research
objectives, research questions, limitation and delimitation of the study, significance
and scope of the study.

1.2 Background of the Study

Over the last two decades of awareness of managerial issues, the issue of employee
turnover still exists in most of the organization throughout the world. Even in the
highly developed industrial nations, the rate of employee turnover is still very high.
Moreover, looking into the gender perspective, Women pay may be less than that of
man, requiring parallel education, training, skills, and responsibility. The level of
performance or the ability of work done by the staff will only be achieved if the
employees satisfied by the internal environment of an organization. Employee
turnover in organization is one of the main issues that extensively affect the overall
performance of an organization. It is often suggested that organization should be
adopt the clear Standard Operation Procedures (SOP’s) that decrease the gap among
the top management and the middle management in order to identify and resolve the
issue of employee turnover in the organization.

Employee turnover in organizations has received substantial attention from both

academics and managers. Much of this attention has been focused on understanding
its causes. Implicit in this approach is the assumption that turnover is driven by
certain identifiable characteristics of workers, tasks, firms, and markets, and that, by
developing policies to address these characteristics, managers might reduce the
occurrence of turnover in their respective organizations. As noted by several
observers, however, the consequences of turnover have received significantly less
attention from researchers (Staw 1980, Mobley 1982, Glebbeek and Bax 2004). This
lack of academic attention is particularly surprising given that industry studies have

1
estimated the cost of turning over one employee earning $8 per hour at $3,500 to
$25,000 (Zeynep, 2008).

According to Prefer and Sutton (2009) managerial concern on employee turnover has
suddenly become heightened. This concern is further excercabated as a result of the
growing cost of replacing employees, or other general costs typically associated with
employees like recruitment and training (Collins and Smith, 2006). Some of the
specific concerns of managers and other concerned stakeholders are the negative
consequences of high employee turnovers which are often reflected in product and
service quality, consistency and stability of services exchanged for money with
clients and customers in general (Trevor and Nyberg, 2008). Other consequences of
unchecked growing rate of employee turnover could also be an increase in the
client`s level of dissatisfaction with products and services being offered by such
organization (Lin and Chang, 2005). Other related costs that emanate from an
increase in the rate of employee turnover are described as the costs of voluntary
turnover by Morrell et al (2004).

Moreover, Morell et al (2004) identifies direct and indirect costs of voluntary

turnover as replacement, recruitment and selection, temporary staff, management
time, morale, pressure on remaining staffs, costs of learning, product or service
quality, organizational memory, and the loss of social capital (Dess and Shaw, 2001).
Anders and Bard (2010) proposed the development of processes intrinsically
motivate employees as a potential solution to the unusual high turnover rates
recorded globally, while Zimmerman and Darnold (2009) relate job performance
with employee turnover rate. Zimmerman and Darnold (2009) are particularly of the
opinion that employees who leave their jobs might have done so in either an
environment so poor to induce a high level of job performance, or they might have
quit their job when there is a consistent poor level of job performance over a period
of time. Indeed, Zimmerman and Darnold (2009) are strongly of the opinion that an
assessment of employee turnover that precludes a study of job performance might be
referred as a huge oversight on the part of the management of such organization.

2
Within this context the study of employee turnover as well as its attendant problems,
costs and consequences has been comprehensively studied (Shaw et al, 1998), and a
recent empirical and meta-analysis study of the phenomenon observed its influence
in 800 different cases (Iverson, 1999). But within the scope discussed above the
impact of employee turnover on the rate of knowledge diffusion in organizations has
received very little research focus (Madsen et al, 2002). Madsen and McKelvey
(1996) argue that management research interests should however been shifted to the
balance between a firm`s variation and its retention activities. Retention here refers
to the ability of the firm to drastically reduce the turnover rates of its knowledge
workers as they are largely responsible for the distribution of tacit knowledge and
skills, or human capital across space and time (Almeida and Kogut, 1999 cited in
Madsen et al, 2002). This situation is particularly crucial since the knowledge
production mechanism of any firm us closely connected to the tacit knowledge and
skill held by a firm`s members whether they are new members of established
members (Madsen et al, 2002).

1.3 Statement of the Problem

The problem of employee turnover has been an enigma for decades. Almost
universally many executives have been ostensibly complacent regarding the issue of
employee turnover. Few have made attempts to understand what drives employees
out of their organizations, and far fewer have invested concerted efforts into
improving it. This seems nonsensical since even medium sized companies can lose
large amount of money as a result of low employee retention. The fact is, the
problem of employee turnover is not an enigma. Its causes can, and have been
determined, and effective strategies for reducing turnover can be implemented (Dess
and Shaw, 2001).

Employee turnover remains one of the most widely researched topics in

organizational analysis. Despite the significant research progress, there still remains
a great deal of confusion as to what might actually cause employees to leave or
remain in their organizations. Also, the lack of convergence among the models
proposed in previous research has added to this confusion. Fundamentally, these

3
models were aimed at enlightening our understanding and predictions of employee
movements within and out of the organizations. However, the significance
divergence among these models seems to militate against uniformity and hence
generalizations. Among those factors are external factors mainly the labor markets
and institutional factors such as physical working conditions, pay, job skills,
supervision and so on. Others are employee personal characteristics such a
intelligence and aptitude, personal history, sex, interests, age, length of service and
may more. There are also factors related to employee’s reaction to job, including
aspects as job satisfaction, job involvement and job expectations.

Many business owners mistakenly believe that the cost of replacing employees is
merely the proce of newspaper or website advertisements. However, both direct and
indirect costs must be taken into consideration. Furthermore, employers may need to
hire a search firm or a head hunter to find the right candidates to fill vacant positions.
An often overlooked indirect cost of turnover is its effects on other staff members.
While a position remains vacant, other employees usually takes on additional
responsibilities. Without proper implementation and management, this can result in
low moral productivity (Arthur, 1994).

It is argued that high employee turnover affects companies in several ways. First and
foremost, when long time employees leave the organization, they often take away
valuable institutional knowledge or intellectual assets with them. Seasoned staff
members serve as morale boosters for work teams and help new employees progress
more quickly. Second, high employee turnover forces business owners to focus their
efforts on staffing. Whether the employees being replaced are senior-level
executives, middle managers or entry level staff, business owners often bear the
responsibility of recruiting, interviewing, and training new hires. And this is a great
cost typically the equivalent of 50 percent to 150 percent of the salary for the
position that is open (Dess and Shaw, 2001).

Barclays bank Tanzania Limited is faced with a high rate of employee turnover each
year and this leads to poor organization performance which in turn impacts on

4
organizational effectiveness. When an employee leaves the organization the present
employees have to fill the gap until a new employee is appointed. Employees’
turnover impacts on employee performance because they get disrupted on their daily
work performance. The organizations spend lot of money on the recruitment and
training of new staff members each year due to high turnover rates (Dlamini-Zuma,
2009). There are numerous complaints from the community regarding the
performance of employees at the Barclays bank Tanzania Limited, for example, there
are long queues and long waiting periods for bank services.

From the above arguments, this study intends to investigate the impacts of employee
turnover, causes of the high rate of employee turnover and proposes strategies to
reduce the high rate of employee turnover or recommendations for improving
organizational performance.

1.4.1 General Research Objectives

The main objective of the study was to assess the impact of employee turnover on
organization performance at Barclays bank Tanzania Limited in Dar-es-Salaam
region.

1.4.2 Specific Objectives

The study was guided by the following specific objectives:-
(i.) To assess the level of employee turnover and its practices in Barclay Bank
(ii.) To assess the performance of Barclay bank Tanzania Limited
(iii.) To assess the impact of employee turnover on bank performance
(iv.) To assess the determinant factors for employees turnover in Barclays bank.

1.5 Research Questions

The study was guided by the following research questions:-
(i.) What is the level of employee turnover and its practices in Barclay banks?
(ii.) What is the performance of Barclay bank Tanzania Limited?
(iii.) What is the impact of employee turnover on bank performance?
(iv.) What are the determinant factors for employees’ turnover in Barclays bank?

5
1.6 Limitation and Delimitation of the Study
The study was delimited to focusing on the assessment of the impact of employees’
turnover on organization performance at Barclays bank Tanzania Limited in Dar-es-
Salaam region. Time was one of the constraints faced by the researcher. Respondents
could not be available all the time as planed due to tight schedule of their work. The
researcher therefore ought to reschedule meeting time with respondents in order to
fulfil the demand. Moreover, the researcher resolved the problem of time constraints
by developing an action-plan and abided to it in order to manage time effectively. In
addition, the researcher restricted himself into collecting data that are useful and are
more likely to be processed later by developing effective data collection tools and
come up with the dissertation.

1.7 Significance of the Study

The researcher contends that the findings of this study make concrete
recommendations to the Barclays bank Tanzania Limited to reduce employees’
turnover. It is hoped that this study also benefits other financial institutions in
Tanzania and make recommendations for improving organizational performance.

1.8 Scope of the Study

This study based in Barclays bank Tanzania Limited in Dar es Salaam region. All
employees working in Barclays bank Tanzania Limited offices included in this study.
The findings of this study are useful in addressing problems associated with
employees’ turnover in Barclays bank Tanzania Limited.

6
 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction
In this chapter detailed literatures review on employee turnover impact on
organization performance is given. This chapter presents both theoretical and
empirical literature that aims at developing an understanding of the employee
turnover impact on organization performance.

2.2 Theoretical Literature Review

2.2.1 Definition of Key Terms

Employee Turnover
Employee turnover is often referred to, as the number of permanent employees
leaving the company within the reported period versus the actual active permanent
employees on the last day of the previous reported period (Derek et al., 2007)

2.2.2 Causes of Employee Turnover

The following discussion highlights some various causes of staff turnover as
described by various authors.
Remuneration
The main objective of a compensation system is to attract and retain high quality
staff. In order to be able to retain staff, the rewards that employee receive for their
compensation must be satisfactory. Grobler, Warnich, Carrell, Elbert and Hartfield
(2002) state that compensation refers to all forms of financial returns and tangible
benefits those employees receive as part of their remuneration package. Robbins
(2003) agrees that the classical objectives of any compensation system are to attract,
retain and motivate employees. Poor remuneration is one of the reasons of staff
turnover. If employees are not satisfied with what they are paid, they normally leave
to seek greener pastures. Moreover, the working conditions, motivation, recognition
and an opportunity to grow must also be feasible. An employee may still leave even

7
if another job offers a lower salary as long as he or she enjoys job satisfaction.
Although financial incentives will encourage employees to stay over the short term,
over the long term they need opportunities for growth (Tyani, 2001).

Job Dissatisfaction
Job dissatisfaction is one of major causes of absenteeism. Robbins and Decenzo
(2001) state that a person with high job satisfaction holds positive attitudes towards
the job. It is the people with negative attitudes that absent themselves. In a study
conducted in a Military Health Care Facility by Mullins (2005), it was found that
there was a positive relationship between job dissatisfaction, employee turnover and
levels of absenteeism.

Training and Development of Employees

According to Ichniowski (2004) another tool for staff retention is staff training.
Training may help staff to become more competent and to enjoy their work even
better. They may gain confidence in their work which in turn may boost their morale.
Reducing staff turnover will benefit business and save money (Mullins, 2005).
Moreover, replacing staff is costly and valuable skills are lost. By providing staff
with training and development they are more likely to be keen to take on greater
responsibilities more suited to promotion or career progression.

Staff may become confident and motivated and they may not rely too much on
supervision. The costs associated with staff turnover are simply huge, taking into
account the costs of recruitment, training and absence combined with average
salaries and attrition rates (Tyani, 2001).

Career development requires formal action by an organisation to ensure that

employees with appropriate qualifications and experience are available when the
organisation requires their services. According to Nel, et al. (2004), the reasons for
career development in organisations are the following:
(i.) The quality of employee’s work life is improved when he/she has the
opportunity to progress in his/her career.

8
(ii.) Employees are able to learn new skills with the result that there is always a
demand for them.
(iii.) Career development of employees decreases an organization’s employee
turnover rate
(iv.) The personal job satisfaction of the employees is enhanced when their
abilities have been developed and when they are placed in positions that suit
their ambitions and abilities.

Job Satisfaction
Derek et al. (2007) suggested that job satisfaction and affective commitment as the
basic variables with turnover intentions. He further argues that no support was found
in the results for continuance dedication as a variable with turnover intentions. The
results also concluded that significant positive correlations were found for the distal
variables workload, work stress, employee salary, job satisfaction, and work to
family conflict. Magnus at al. (2001) resulted that the job insecurity is interrelated
primarily to exit and devotion reactions, but not to voice. In terms of exit, a striking
pattern in our results concerns the connection obtained between job insecurity and
organizational turnover intention. Although the magnitudes of effect sizes differed
across countries, there was a positive relation between job insecurity and the
propensity to exit from the organization.

The results also swell previous research by indicating that job insecurity may have
similar cost for union turnover intention. Outsourcing is more prevalent under
condition of high scientific uncertainty and high information exchange; research
gained some tentative insights into the fact that higher outsourcing under these
conditions leads to higher performance of individual. Fogarty at al. (2004) results
that the employee turnover increases due to individuals in offices were mostly at
fault, making errors because they failed to follow procedures and were ineffectually
supervised the circumstances; put the employees of the organization in, such a
pressure created by poor planning and results in increase in turnover and
organizational performance decrease. Bloom at al. (1991) concluded that the

9
organizational analysis of turnover is due to organizational and ecological variables
like the crime rate in the area may increase nursing turnover.

The study strongly argued that the base of increase in turnover is only environmental
basis. Beverly & Philip (2006) recognize that the extant research on employee
engagement demonstrates its relationship to outcome variables important to every
organization, such as productivity, safety, and employee retention and customer
service. They further explore that the Increases in knowledge as to how to create high
performance workplaces are always welcome by practitioners and academics. What
the field does not need, however, is another fad term. We call for continued research
into employee engagement in order better to understand and to capture its
contribution to organizational and individual performance. According to Camp
(1993), the organizational commitment found to be a significant predictor of
organizationally relevant behavior, in his case, turnover. This certainly lends support
to the position of organizational commitment.

Conversely, He further justify that there was no evidence from this study of workers
in one public sector agency that job satisfaction has any effect on voluntary turnover.
The correct in that even when combined with the other relevant control variables, the
explanatory power of the models containing organizational commitment is fairly low.
It should be kept in mind that organizational commitment was typically measured
months before the respondents actually quit work. Even so, the results of this and
related studies suggest that even though we have additional insight about the
theoretical relevance of organizational commitment, we still do not seem to
understand much about the processes that generate turnover.

Maertez & Campion (2004) suggested that the first, quitting is a salient, major life
event, and people remember the details surrounding such events relatively easily.
Second, quitting tends to be associated with affective arousal, be it negative or
positive; such events are more easily remembered than those with little
accompanying affective arousal. Moreover, people often remember such events
better after a long rather than a short period of time. Also, time since quitting was

10
unrelated to decision type; lessening the chance that memory decay had an effect on
the findings.. Another possibility is that the relationships discovered could be
partially due to employee schemata or implicit theories of turnover. However, if such
schemata reflect reality or are widely held by employees, they may not threaten the
validity of our findings. Ologunde at al. (1999) concluded that the employee turnover
in schools and universities are due partly to the low morale of the teachers, which in
turn has increased the rate of labor turnover from the system.

They further analyze that it is fair to say that lecturers will put in their best when the
work environment is conducive; when there are good welfare packages like good
houses, adequate health and medical insurance, training and development
opportunities and other relevant fringe benefits. In the absence of these, it can only
be expected that frustration and eventually quits will result. Given their role in
society, there is a strong case to pay special attention to university academics while
not constituting them into a special class. However, it is important to further explore
opportunities to provide more incentives to enable lecturers maximize their role in
the development process. In doing this, we have also shown that economic incentives
on their own do not provide sufficient motivation for university teachers.

Harris at al. (2002) theory asserts that high turnover lowers firms‟ incentives to
provide staff training programs and, therefore, reduces productivity. On the other
hand, job matching theory postulates that turnover can help employers and
employees to avoid being locked in sub-optimal matches permanently, subsequently
increases productivity. The conflict between retaining workforce stability on the one
hand, and flexibility on the other, gives rise to the quest of an optimal turnover rate.
Klasen (1999) uses multinational cross panel regressions to explore the extent of
employee turnover in the organization which may trim down growth and
development of any organization and the overall economy. His paper finds a
substantial impact of employee turnover on economic growth based on data from
East Asia, Africa, South Asia and the Middle East.

11
His results suggest that employee turnover in education and management has a direct
impact on economic growth through throbbing change in management lowering the
average quality of human capital. Michael & Steiner (1997) concluded that the
annual managerial employee turnover of an organization is 18.6 per cent for the
combined sample and their costs are very high on per employee turnover incident
while conducting his research. They further reported that chain restaurants report
higher employee turnover ratio and more costly managerial employee turnover for
independents. Bradley & Stuart (1998) uses cross-section study of the inter-industry
variation in male and female employee turnover in UK manufacturing companies,
The number of discharges over four weeks found very high.

The annual rate of employee turnover was estimated by taking an average of the
quarterly observations. This shows a wide variation, the annual male employee
turnover rate was lowest at 8.5 per cent in Mineral Oil Refining (262) and highest at
77 per cent in Jute (415) in American corporate companies. Similarly the female rate
ranged from 12.4 per cent in Mineral Oil Refining to 81.9 per cent in Fruit and
Vegetable Products (218). The male employee turnover rate across all manufacturing
was 29.9 per cent. Employee turnover is clearly greater among females. Seven in
every ten MLHs had a female rate in excess of 40 per cent. Research by Knapp at al.
(1998) reported that the rate at which staff change jobs has posed a serious problem
for employers in the private and public sectors. Since, staff employee turnover
generally breaks the stability, consistency and continuity of work, makes long-term
planning more difficult, it leads to shortages of staff which in turn can raise the
workloads of other employees, and raises the costs of recruiting and training staff.

Wrucka (1998) defines that the top management change or employee turnover is to
be any change in the set of individuals holding the title of chief executive officer
(CEO), president or chairman of the board. His major hypothesis is that the
probability of a top management change is inversely related to performance of an
organization. Using a random sample of listed firms, He tested the hypothesis with a
prediction procedure to exploit information on firms that do not experience a
management change. At last he found that change in top management inversely

12
related to the efficiency of the organization. Guthrie (1999) reports a positive
association between the use of high involvement work practices (HIWPs) and
employee retention and firm productivity. He further indicated the disordinal
interaction, also he found that employee turnover is associated with decreased
productivity when use of HIWPs is high, and increased productivity when use of
HIWPs is low. He further reports that there is insignificant relationship between
efficiency of overall organization and the individual employee as well.

Performance Appraisal and Feedback

Performance Appraisal is the method by which the performance of an employee is
measured. Employees need to be appraised in order to rate their performance and
improve competence. Nel, Van Dyk, Haasbroek, Schulltz, Sono and Werner
(2004:46) argue that successful organisations are characterized by performance
inclined, innovative and creative employees. They state further that this is a
challenge to Human Resource Management to retain such committed employees as
well as less successful employees and to develop them further to the advantage of the
organisation and its stakeholders. Mullins (2005:454) states that people must be
given recognition and credit where it is due. According to Cohen (2000:63),
managers are often unresponsive to good performance, but they are quick to critisize
on the few occasions when performance falls below expectations. Robbins (2003:74)
adds that positive feedback on good performance is a strong motivator and staff
members are more likely to accept and respond to constructive criticism.

2.2.3 The Impact of Employee Turnover on Organization Performance

According to Page (2001) the escalltion in the rate of labour turnover is a major
concern for businesses and is clearly impacting on organisational performance.
Clients begin to doubt the management of such an organisation and unsure whether
they should continue to do business with an organisation with higher staff turnover.
Mullins (2005) maintains that the costs of recruiting and engaging new members of
staff are considerable. He adds that this affects the direct costs like advertising,
agency fees, paper work and interview time. Robbins and Decenzo (2001) state that
there are many hidden or indirect costs, like the expenses incurred in training and

13
supervising new entrants, as well as those they are replacing and overtime that may
have to be paid during staff shortages. Other costs may include increased wastage
and losses while new staff settles in.

Moreover, customer irritation and low staffing morale leads to high staff turnover
(Cohen, 2000). The impact of staff turnover results in an extra work load for the
remaining staff member’s performance and on organisational effectiveness. Mathis
and Jackson (2007) state that employees have to work extra hours to compensate for
the work of those that have resigned. Russell and Bvuma (2001) state that cost is not
only financial but must also be measured in terms of the damage to staff morale and
deficits in meeting customer demand. The increased workload leads to low morale
and high levels of stress which in turn leads to absenteeism amongst employees.

Steers (2002) states that staff turnover is costly and disruptive. Costly, as it reduces
the output and disruptive, as it requires that schedules and programmes to be
modified. This is true in the Department of Home Affairs as staff turnover causes the
organisation to lose a lot of money because they have to employ other agency staff to
come and help. The agency staff is paid from the organisation’s coffers and it
becomes very expensive.

According to Robbins (2003), staff turnover is costing South African organisations

millions of rands in decreased efficiency. He further states that in the United States,
staff turnover is estimated at $40 billion a year, in Canada $12 billion and in
Germany DM 60 billion (Robbins, 2003). The cost of staff turnover and the impact
thereof on productivity alone is enough to depress any human resource manager and
the organisation. There might be a delay of service delivery while waiting for the
replacement staff to arrive. In addition, there might be production losses while
assigning and employing replacement staff (Ziel and Antointette, 2003). Often the
organisation experiences a waste of time due to inexperienced replacement of staff.
Management and other staff spend valuable time not doing their job but trying to
orientate the replacement staff.

14
According to Nel, et al. (2004), the following are some of the factors that impact on
staff turnover and organisational effectiveness: Increased customer complaints about
the service; the quality of service is decreasing because of staff shortage, the
replacement staff may be unfamiliar with the unit and task or duties to be performed;
therefore inefficiency and errors may result, sometimes a personnel member in the
unit is in the lower categories of staff. Therefore they are restricted by their scope of
duty. They can perform certain duties under the direct supervision of a trained
member or sometimes they are completely forbidden to do certain duties.

Gardner (2009) asserts that staff turnover may have devastating effects on service
rendered by the organisation and these may bring deficits in meeting customer
demand. This leads to customer irritation and increase in complaints. Mullins (2005)
states that organisations that create work environments that attracts, motivate and
retain hard working individuals will be better positioned to succeed in a competitive
environment that demands quality and cost efficiency. Ekinci and Riley (2000) also
agree that it is critical to understand that interdependent relationship exists between
employee satisfaction and customer satisfaction and that the organization needs to
focus on both these components.

Staff turnover can also have a negative impact on other employees by disrupting
group socialization processes and increasing internal conflict, which can lead to
triggering additional absenteeism (Neo, Hollenbeck, Gerhart and Wright, 2006). In
addition, the interpersonal bond that is developed between employees is central to the
communication patterns that are characteristic and unique to any organisation. People
grow professionally and personally, and good employers are able to accommodate
these changes in the circumstance. A highly satisfied workforce is far more capable
of meeting organisational goals and customer needs than an apathetic and uninspired
one (Swanepoel, Erusmus, Van Wyk and Schenk, 2003). Tyani (2001) states that
cost is not only financial but must also be measured by the damage to staff morale
and deficits in meeting community demand.

15
2.2.4 Motivation Theory
Motivation
Motivation is an important element in understanding, studying and analyzing human
behavior. It helps of an executive or a manager to identify the motives which
influence the behavior of employee at work to attain organizational objectives.
Motivation is a personal and internal feeling. The feeling arises from needs wants.
Human needs are unlimited. Fulfilment of one set of needs give rise to the other
needs. Therefore, motivation is a continuous process.

Motivation can be defined as the processes that account for an individual's intensity,
direction and persistence of efforts toward attaining a goal .In most cases motivation
stems from a need which must be fulfilled, and this in turn leads to a specific
behavior. Fulfilment of needs results in some type of reward, which can be either
intrinsic or extrinsic. The former are derived from within the individual, e.g. taking
pride and feeling good about a job well-done, whereas the latter pertain to rewards
given by another person.

Types of motivation:
There are two main broad categories of motivation; intrinsic and extrinsic
motivation.
Intrinsic Motivation
Intrinsic motivation is motivation that arises from within. It comes from the personal
enjoyment and educational achievement that we derive from doing that particular
thing. For example, people who love music, their motivation to practice the
instrument, attend classes etc. is intrinsic motivation.

Non monetary Incentives

The purpose of non-monetary incentives is to reward associates for excellent job
performance through opportunities. Non-monetary incentives include flexible work
hours, training, pleasant work environment, and sabbaticals.

16
Extrinsic Motivation
Extrinsic motivation is motivation that comes from things or factors that are outside
the individual. For example, being motivated to work hard at the office because you
are looking for a promotion is a type of extrinsic motivation. Social recognition,
money, fame, competition or material achievements are all examples of extrinsic
motivation.

Monetary Incentives
The purpose of monetary incentives is to reward associates for excellent job
performance through money. Monetary incentives include profit sharing, project
bonuses, stock options and warrants, scheduled bonuses (e.g., Christmas and
performance-linked), and additional paid vacation time. Traditionally, these have
helped maintain a positive motivational environment for associates.

Motivational Theories
Various theorists in social sciences have put forward their own suppositions or
theoretical views which provide on insight into human behavior. These theoretical
views are, in fact, known as theories of motivation in organization. There are two
main broad categories mentioned here: Traditional and Modern theories.

Traditional Theories

17
The American motivation psychologist Abraham H. Maslow developed the
Hierarchy of needs consistent of five hierarchic classes. It shows the complexity of
human requirements. Maslow says that first of all the basic requirements have to be
satisfied. The basic requirements build the first step in his pyramid. They decide
about to be or not to be. If there is any deficit on this level, the whole behavior of a
human will be oriented to satisfy this deficit. Subsequently we do have the second
level, which awake a need for security. Basically it is oriented on a future need for
security. After securing those two levels, the motives shift in the social sphere, which
form the third stage. Psychological requirements consist in the fourth level, while the
top of the hierarchy comprise the self- realization

The needs, listed from basic (lowest-earliest) to most complexes (highest-latest) are
as follows:

Source: www.googlescholar

2.2.5 Herzberg’s Duality Theory of Job Satisfaction

In 1968, Behling, Labowitz, and Kosmo reviewed the controversy surrounding
Herzberg’s duality theory and the more conventional uniscalar approach to
measuring satisfaction. The debate began with the publication of Herzberg’s book
The Motivation to Work (1959), in which interviews with 200 engineers and

18
accountants were outlined. Subjects were asked to describe ‘‘any kind of story you
like either a time when you felt exceptionally good or a time when you felt
exceptionally bad about your job’’ (1959). Over the course of twelve investigations
in similar organizations, Herzberg classified the work dimensions into motivators
and hygiene factors. Motivators were the satisfying events described in the
interviews. They included achievement, recognition, work itself, responsibility,
advancement, and growth.

When employees recalled a story where they felt ‘‘exceptionally bad’’ they often
spoke of the following factors: company policy and administration, supervision,
relationship with supervisor, work conditions, salary, relationships with peers,
personal life, relationships with subordinates, status, and security. Herzberg
classified these ten events as hygiene factors and he noticed that they were primarily
disruptions in the external work context, while the motivators dealt with internal
states of mind. Thus, Herzberg concluded his duality theory of job satisfaction which
contrasted with the traditional notion of factors impacting employees on a uniscalar
continuum. For example, traditionally it was thought you could increase salary,
supervision, or company policy and that would increase an employee toward greater
job satisfaction. In Herzberg’s mind you could not improve job satisfaction by
improving any of the 10 hygiene factors; you could only improve job satisfaction by
increasing the six motivators.

Furthermore, the absence of the motivators would not lead to job dissatisfaction, just
not job satisfaction. For example, if an employee did not have recognition or
achievement this would not lead to job dissatisfaction, but they were unlikely to be
motivated either. Essentially, the six motivators and ten hygiene factors were
working in two different realms in affecting job attitudes. Herzberg’s concept was a
radical departure from current thinking (Behling et al., 1968) and is summarized in
Herzberg’s statement that, ‘‘The opposite of job satisfaction is not job dissatisfaction
but, rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is not
job satisfaction, but no job dissatisfaction’’ (1987).

19
A number of other researchers were able to verify Herzberg’s motivator- hygiene
duality, and they were summarized in his 1966 book Work and the Nature of Man.
However, Herzberg was highly criticized by psychologists who said he had
investigated a narrow range of jobs, and used only one measure of job attitudes
(Ewen, 1964). Researchers also argued that Herzberg was uncovering people making
themselves ‘‘look good’’ by attributing positive events to internal factors and
negative experiences to external events (Vroom, 1964). Ultimately, the two camps of
psychologist diverged dramatically, and in the end, different results would come
from different research techniques. When Herzberg’s critical-incident method of
interviewing employees was used it gave results that supported his duality theory.
Just as consistently, research gathered using a uniscalar model would conflict with
Herzberg’s theory (Behling et al., 1968).

2.2.6 Turnover Process Models

Several studies were already conducted that focused on developing and estimating a
causal model specifying the factors of voluntary turnover. The common theme which
can be observed from the following described models is that turnover behavior is a
multistage process that includes behavioral, attitudinal, and decisional components
(Barak et al., 2001. Three turnover models are presented below. These key models
have shaped the research on turnover behavior and therefore need to be discussed.

2.2.6.1 March & Simon’s Model

Many studies of voluntary turnover are to some degree descendants of the March and
Simon (1958) framework (e.g. Mobley, 1977/Lee et.al, 1999). Their model can be
traced back to Barnard-Simon’s theory of “organizational equilibrium” where they
argued that all employees confront with decisions through their interaction with the
company (Mano, 1994). A special concern in this study is the “decision to
participate” with the key variable “desirability and ease of movement in and out of
the organization” (Bowen&Siehl, 1997). The theory specifies that employees’
decision to resign is influenced by two factors: their “perceived ease of movement”,
which refers to the assessment of perceived alternatives or opportunity and
“perceived desirability of movement”, which is influenced for instance by job

20
satisfaction (Morrell et al., 2001). This describes how balance is struck both for the
organization and its employees in terms of inducements, such as pay, and
contributions, such as work, which ensures continued organizational efficiency.
When inducements are increased by the company, this will lower the tendency of the
worker to leave and vice versa (Morrell et al., 2001).

Many limitations of March and Simon’s model exist. Their model more presents a
static rather than a procedural view of turnover. They also failed to include important
variables that influence the turnover process, such as role stress or different forms of
organizational commitment (Morrell et al., 2001). Some theorists asserted, that
March and Simon’s model has overly influenced further studies about employee
turnover and that their success may have constrained other aspects (e.g. Lee and
Mitchell, 1999).

2.2.7 Mobley’s Model

The employee turnover decision process by Mobley (1977) has shaped the course of
turnover studies for the past decade. He pioneered an extensive explanation for the
psychological turnover process. Mobley’s model is based on several former
preceding studies, for instance March and Simon’s theory (1958) about ease and
desirability of work concept and Porter and Steer’s model (1973) of met-expectation
and intent to leave; The model is heuristic rather than descriptive (Mobley, 1977).

The termination decision process can be described as a sequence of cognitive stages

starting with the process of evaluating the existent job followed by the emotional
state of satisfaction or dissatisfaction. One consequence of dissatisfaction is to
initiate thought of quitting. The next step is the evaluation of the expected utility of
search (e.g. desirability of possible alternatives travel or lost work time) and of the
cost of quitting (e.g. loss of vested benefits). If perceived possibility of finding an
alternative is available and if the costs are not that high, the next step would be
behavioral intention to search for alternatives followed by an actual search. If
alternatives are existent, then an evaluation of alternatives will proceed. Afterwards a
comparison of the present job to alternatives will follow. If the comparison favors the

21
alternative, then behavioral intention to quit will be stimulated, followed by the final
decision to quit. (Mobley, 1977)

Other later studies extended Mobley’s model by including other variables, such as
organizational commitment (e.g. Kim et al., 1996) or examined factors that affect job
satisfaction more precisely (e.g., Price&Mueller, 1981).

Mobley’s model features frail on empirical evidence for the conceptual

differentiation among his explanatory constructs (Hom&Griffeth, 1991). Subsequent
models enhanced Mobley’s construct. One of the established theoretical alternatives
was Hom et al.’s model in 1984 (Hom&Griffeth, 1991). They argued that Mobley’s
theory had a lack of empirical evidence for the conceptual distinction among his
explanatory constructs. However, their findings to some extent showed a similar
possible intermediate step in the turnover process, yet a major distinction exists.
Their study resulted that the “Intention to Quit” takes place before an “Intention to
Search”.

2.2.8 Mitchell & Lee Job Embeddedness Model

Job embeddedness was first introduced by Mitchell and colleagues in an effort to
improve traditional employee turnover models. According to these models, factors
such as job satisfaction and organizational commitment and the individual’s
perception of job alternatives together predict an employee’s intent to leave. Since
the researchers suggest that models only modestly predict turnover; thus Mitchell et
al. proposed job embeddedness as an alternative model and incorporated “off-the-
job” factors (e.g. attachment to family) and other organizational factors (e.g.
attachment to working groups) that have also been shown to affect employee
retention, but were not included in these traditional models.

When creating this alternative model for explaining why employees stay on a job,
Mitchell and colleagues drew on research from Lee and Mitchell's unfolding model
of turnover.

22
This line of research suggests that many of those who leave a job are
(i.) Mostly satisfied with their jobs,
(ii.) Do not search for an alternative position before leaving,
(iii.) Quit due to some sudden off-the-job event;

Results of the initial study indicated that job embeddedness predicted both intent to
leave and actual turnover, and was a better predictor of voluntary turnover than job
satisfaction, organizational commitment, and job search alternatives.

Mitchell and colleagues describe job embeddedness as “a net or web in which an

individual can become stuck”. Those who are highly embedded have many closely
connected ties in both the community and the organization. These individuals are
more likely to remain at a current job than those who have fewer connections. As
mentioned above, job embeddedness as originally introduced is conceptualized as
having three components.

2.3 Empirical Literature Review

A study done by Koh and Goh’s (1995) in Singapore on “The effects of various types
of job satisfaction on turnover intention”, classified ob satisfaction into eight
categories namely: supervision, company identity, kind of work, amount of work,
physical working conditions, co-workers, financial reward, and career future. Their
findings based on the job satisfaction and organization commitment.

A research on “Major factors behind voluntary graduate labour turnover in the

National Bank of Commerce” by Gwarasa (1992) concluded that the problem of
misallocation of graduates in the National Bank of Commerce prevails at a
significant magnitude. The author pinpointed at his conclusion that, staff were not
satisfied with working conditions of the bank.

Research done by Joe Gideon on Labour Turnover in Tanzania Prisons Service; the
sample size were 100 respondents and it was a case design research. His findings
shows that inadequate salaryand low income of graduates in the Tanzania Prisons

23
Service, prevails a significant magnitude. He also pinpointed out the existing prison
scheme of services and salary in relation to ranks and not level of education, does not
suit the labor market competition for graduates. He recommended further research on
factor behind voluntary labour turnover for non graduates for Tanzania Prions
Sevices, An assessment of the impact of labour turnover in the Tanzania economy,
Graduates mobility within the laobour market and reasons for this mobility.

Mboya Deogratius (2009) research on investigation of the impact of labour turnover

in Public organizations, in his case study research design, sampled 250 respondents
in Ilala Municipal. He concluded that differences in payment of salaries and
provision of fringe benefits forced those who are lowly paid to seek for greener
pastures in other organizations, also lack of working facilities and equipment leads to
turnover, for example, lack of teaching and learning facilities in school forced
teachers to seek for alternative jobs.

He recommended that work environment in all municipals sections should be

improved and also improved management styles in all sections, training on better
management practice should be done to management staffs.

Research done by Milanzi (2008) on Assessment of the causes and effects of labour
turnover on banking industry, the case study design sampled 82 respondents to
represent a population of Tanzania Investment Bank staff, she found out that the
turnover was mainly caused by lo remuneration packages, unequal treatment among
TIB employees and lack of communication between the management and staff of
other department.

She recommends that promotion and salary increments should be clear and open to
every employee. Employees should be encouraged to read and understand human
resources policy. Also all members of staff need to have information about
organization production, its customers, its performance compared to the competitors,
the strategy to win the market and their benefits.

24
The researchers have tried to find out the reasons for employee turnover in which
their conclusion based on the job satisfaction. However, they did not indicate the
effects of employee turnover. For that case, this study tried to embark intensively to
investigate the effects of labour turnover in financial institutions.

2.3 Conceptual Framework

Figure 2.1: Conceptual Framework

Psychological Factors

Demographic Factors Employee Organization

Turnover Performance

Economic Factors

2.3.1 Variables of the Framework

(i.) Psychological Factors
These include factors like:
Job satisfaction
If the employees are satisfied with their jobs in terms of roles and duties then there
will be no need for them to leave the organization they will work extra hard and
hence good performance of the organization.

Job insecurity
Every employee would like to have a sense of security at their work place. They all
like to feel that the employment that they have will last a while, this ensures a stable
income. If one is assured of table income every month then the rate of turnover is
reduced and organization performance improved.

25
(ii.) Demographic Factors
Age
Age matters a lot to most of the organizations. There are specified ages for some of
the roles. For instance, roles preformed by young employees are different from the
roles performed by aged employees. There is also a certain age when an employee
reaches, then he is forced to retire.

Death
Losing ones life also leads a reduction in the number of employees in an
organization.

(iii.) Economic Factors.

Salary
The amount of salary an employee gets will have a great influence whether he will
stay or leave the company. An employee who is satisfied with salary he gets then it
likely that he will work for that company for quite some time and vice versa.

External opportunities
Employees will be forced to move to other companies in search for greener pastures
in terms of wages, better working environment and benefits.

2.3.1.2 The Underlying Theory or Assumptions

The underlying assumptions in this research is that “employee turnover and
productivity will mediate the relationship between systems of high performance,
work practice and corporate financial”. Accurate employee turnover predictions
models are critical in the early detection of anticipated turnover, and thus giving
managers sufficient time to deal with turnover management issues. The logit and
prohibit models have been successfully applied to solve voluntary turnover. The
models assume that all employees are not created equal as alternative methods of
assessing employee turnover. Accordingly, these two models also provide a
promising alternative for predicting employee turnover in human resource
management.

26
2.4 Hypotheses
H1: There is a positive relationship between employee turnover and organization
performance.
H2: Poor organization performance is as a result of increased employee turnover.
H3: The effect of employee turnover on organization performance is negative.

27
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction
This chapter discusses the methodology and procedures to be used in this study. It
also explains the research design, methods of data collection, analysis and
presentation.

3.2 The Research Strategy

3.2.1 Research Design

Research designed shows the detailed plan of how the research work will be
conducted. For the purpose of this study, case study design was used. This research
design was found to be useful as it narrowed the area of study and provided adequate
and relevant information to the research problem. A case study design is simple and
in expensive as compared to other research designs.

3.2.2 Selection of the Study Area

This research study was conducted in Barclays bank Tanzania Limited to assess the
impact of employee turnover on organization performance in Dar-es-Salaam region.
The head office of the bank is located at Ohio street, Barclays house building in Dar-
es-salam city. The rationale for choosing Barclays bank Tanzania as a case study is
that: the bank has been facing a serious problem of employee turnover since 2007 to
date in both managerial and clerical positions.

3.3 Target Population

The targeted groups for this study were the Barclays bank Tanzania Limited
employees in Dar es Salaam. However given both time and resources constraints,
deliberate sampling techniques were used to obtain one work are, that is Dar-es-
salaam, thus a target population of 300 employees but the sample compromised of a

28
total of 100 respondents for this study of which number is as follows: executive
directors, (5), Human resources (10), Finance and Accounts (10), Procurement and
Supplies( 10), Sales Department (20), Trade and Insurance ( 25), Learning and
Development( 10), and Credit & Risk (10).

3.4 Sample Size

Sample size depends largely on the degree to which the sample approximates
qualities and characteristic of the overall population, including the degree of
precision required. In addition, sample size depends on population variability and
sampling methods together with analysis to be applied and operational feasibility.

A representative sample helps to generalize results. It must be chosen at random,

large enough to satisfy the needs of the investigation undertaken and unbiased. Some
studies consider that sample size larger than 30 and less than 500 is appropriate of
any research study.

This study used 100 respondents from Barclays bank Tanzania Limited as shown
below:

Table 3.1: Sample Distribution

Respondents Population Sample
Executive Director 5 5
Human resource 50 10
Finance & accounts 25 10
Procurement & supplies 15 10
Sales department 100 20
Trade and insurance 30 25
Learning & development 50 10
Credit & Risk 20 10
TOTAL 300 100
Source: Researcher’s Work, 2014

3.4.1 Sampling Procedures/Techniques

29
In order to reach the desired number of the respondents, both simple random
sampling and purposive sampling techniques was used. The benefit of this approach
is customizing the benefits of both techniques while reducing the chance of biasness
and improving the quality of data to be collected.

3.4.2 Simple Random Sampling

Simple random sampling was used so as to enable the researcher to choose the
respondents basing on the fact that they have desirable characteristics and variable
related to the issue being studied (Kothari, 2002). So, by using Simple random
sampling the researcher was able to get respondents from Banking Officials. This
assured the quality of information to be collected

3.5 Data Collection Techniques

This study involved a number of techniques of data collection in order to achieve
both primary and secondary data. These techniques include interview and
questionnaires through personal (face to face) interviews, or self administered
questionnaires.

3.5.1 Interview
This is a method in which the subject or unit of study is interviewed. In this method
probing questions will be asked and conversation between the researcher and the
respondents done. Therefore, this method allowed face-to face conversation and
therefore it was used in order to control ambiguities between interviewer (researcher)
and interviewee. Interview was conducted with some of the top employees like the
executive directors, some of the human resource and a few from the finance and
accounts department.

3.5.2 Questionnaire
This study adopted self administered questionnaires, whereby lists of questions were
given to a number of persons for them to answer and give their opinions accordingly.
Questionnaires secure standardized results that can be tabulated and treated
statistically.

30
The questionnaire was pre-tested for accuracy and completeness. The pre- test of the
questionnaire was intended to enable the researcher to improve the questions as their
accuracy was essential in collecting good quality information.

3.5.2.3 Types of Data

(a.) Secondary Data
Secondary data were gathered through documentary source like, journals, books,
articles,official bank’s reports, various government reports published and
unpublished, online source and bank’s magazines.

(b.) Primary Data

The reasons of using this method are to get original information from the field which
is very useful in addressing the problem under this study. This is the best way of
knowing how the situation is in the field, and unlike the published information, this
source gave valid information which was specifically collected for purpose of this
study. Primary data was collected through questionnaires and interviews.

3.5.2.4 Documentation Method

Documentation method will be used by gathering data from secondary source. The
documentary sources of data for research purposes include published books,
manuscripts, journals, research reports, newspapers and other unpublished literally
works (Ndunguru, 2007).The researcher used this method to collect already gathered
information from books, reports, and written materials from respective organizations.

3.6 Data Presentation

Data collected from interview, questionnaire, and documentary sources were
presented using various statistical tools such as tables. The reason of using these
approaches is to simplify the interpretation and understanding of the findings which
is an important quality of any good research work.

31
 CHAPTER FOUR

ANALYSIS OF THE DATA AND DISCUSSIONS OF THE FINDINGS

4.1 Introduction
In this chapter the analysis and discussion of the findings are presented. The analysis
and discussion in this chapter is based on the responses from research questionnaires,
interview questions and secondary data information. The research intended to assess
the impact of employee turnover on organization performance at Barclays bank
Tanzania Limited in Dar-es-Salaam region. Main areas of concern in the research
were to assess the impact of employee turnover on organization performance in
Barclays bank Tanzania Limited; investigate the causes of staff turnover in Barclays
bank Tanzania Limited and finally recommend strategies that can be used to reduce
the high level of employee Turnover in Barclays bank Tanzania Limited and this was
according to the research objectives.

4.2 Data Reliability

To ensure reliability, this study employed interviews and documentation. Also a pre-
test of questionnaire was carried out to guarantee a common understanding of
questions among respondents.

4.2.3 Data validity

To ensure validity of measures, the study employed interviews and documentation.
Also data was gathered from higher rank, middle rank and lower staff as units of
analysis. The different units ensured adequate representation of age, gender, and
seniority of respondents hence validation.

4.3 Analysis of Demographic Data

This section analyses the demographical details of the respondents using appropriate
baseline computations.

32
Table 4.1: Analysis of Demographic Data
Age Gender Total
Male Female Count Percentage
Count Percent Count Percent
18 - 25 years 3 0.03 7 0.07 10 1%
26 - 35 years 12 12 19 19 31 31%
36 - 45 years 18 18 11 11 29 29%
46 - 55 years 7 0.07 14 14 11 11%
56 and above 11 11 7 7 18 18%
Total 51 41.1 58 51 99 100%
Source: Analyzed Data, 2014

As illustrated in Table 4.1 above, a total of 10% of the respondents who participated
in this study were between the ages 18-25 years old, while 31% of respondents were
between the ages 26-35 years old. A total of 29% were respondents between the ages
36-45 years old. Only 11% of respondents were between the ages 46-55 years old
and the remaining 18% of respondents were between ages 56 and above.

Table 4.2: Gender of Respondents

Age Gender Total
Male Female Count Percentage
Count Percent Count Percent
18 - 25 years 3 0.03 7 0.07 10 1%
26 - 35 years 12 12 19 19 31 31%
36 - 45 years 18 18 11 11 29 29%
46 - 55 years 7 0.07 14 14 11 11%
56 and above 11 11 7 7 18 18%
Total 51 41.1 49 51 99 100%
Source: Analyzed Data, 2014

Table 4.2 above illustrates the gender of respondents. A total of 51% of respondents
participated in this study were male employees and 49% of respondents were female
employees

33
Table 4.3: Length of Service of Respondents
Age Years of No. of Actual No. of % of scores Total
Service respondents respondents percentage (%)
18 – 25 years 1–5 83 100 83 100
26 – 35 years 6 – 10 71 100 71 100
36 – 45 years 11 – 15 65 100 65 100
46 – 55 years 16 – 20 51 100 51 100
56 and above 21 and above 49 100 49 100
Source: Analyzed Data, 2014

As illustrated in Table 4.3 above, a total of 83% of the respondents participated in

this study were between 1-5 years of service, while 71% of the respondents were
between 6-10 years of service. A total of 65% of the respondents were between 11-
15 years of service. While, 51% of the respondents were between 16-20 years of
service and the remaining 49% of the respondents were 21 years and above

4.4 Study Findings

4.4.1 Objective 1: The causes of Staff turnover in Barclays Bank Tanzania

Limited
(a) Salary Satisfaction.
According to primary and secondary data the following are the causes of employee
turnover in Barclays Bank Tanzania Limited:-
Salary Satisfactions, No opportunity for career advancement, Satisfaction with
working conditions, Employee involvement in decision making, input not
appreciated, and lack of work-life balance are among the causes of employee
turnover in Barclays Bank Tanzania Limited.

34
Table 4.4: Salary Satisfactions
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 0 100 0 0
Agree 93 100 93 100
Neutral 72 100 72 100
Disagree 54 100 54 100
Strongly Disagree 23 100 23 100
Source: Analyzed Data, 2014

Table 4.4 above illustrates that a total of 93% of the respondents agreed that they
were satisfied with the salary they get in the organization, while 72% of the
respondents were neutral. The remaining the respondents disagreed. Grobler, et al.
(2002), state that the main objective of compensation system is to attract and retain
high quality staff than that of the competitors. In order to be able to retain staff, the
rewards that the staff members get from their compensation must be satisfactory.
Grobler, et al. (2002) state that compensation refers to all forms of financial returns
and tangible services and benefits employees receive as part of an employment
package. According to Nel, et al. (2004), the classical objectives of any
compensation system are to attract, retain and motivate employees in the
organization. According to Nel, et al. (2004), although financial incentives will
encourage employees to stay over the short term, over the long term they need
opportunities for growth. According to Grobler, et al. (2002), employee
compensation and retention is directly related to employee satisfaction. In good times
and bad, employees have a basic need to work where they feel their efforts, expertise
and input are appreciated. According to Nel, et al. (2004), remuneration is one of the
causes of absenteeism and staff turnover, if employees are not satisfied by what they
are paid then they normally leave to seek greener pastures (Nel, et al., 2004).

35
(b) Opportunity for Career Advancement ( Training).

Table 4.5: No Opportunity for Career Advancement (Training)

Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 0 100 0 0
Agree 67 100 67 100
Neutral 41 100 41 100
Disagree 34 100 54 100
Strongly Disagree 11 100 11 100
Source: Analyzed Data, 2014

Table 4.5 above illustrates that a total of 67% of the respondents agreed that there
was no opportunity for career advancement and 41% of the respondents were neutral
while 45% (34%+11%) of the respondents disagreed. According to Ichniowski
(2004) another tool for staff retention is staff training. Training may help staff to
become more competent and to enjoy their work even better. By providing staff with
training and development they are more likely to be keen to take on greater
responsibilities more suited to promotion or career progression. Staff may become
confident and motivated and they may not rely too much on supervision (Ichniowski,
2004). In a study by Nel, et al. (2004), more than 40 percent of the respondents said
they would consider leaving their present employer for another job with the same
benefits if that job provided better career development and greater challenges.

(c) Employee Involvement In Decision Making

Table 4.6: Employee Involvement in Decision Making
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 5 100 0.05 0
Agree 68 100 42 100
Neutral 19 100 19 100
Disagree 51 100 51 100
Strongly Disagree 32 100 32 100
Source: Analyzed Data, 2014

36
Table 4.6 above highlights that a total of 68% of the respondents agreed that they
were not satisfied with working conditions and 19% of the respondents were neutral.
A total of 51% of the respondents disagreed. Grobler, et al. (2002) state that steps
should be taken to identify and eliminate workplace hazards and to train and educate
workers in job safety and health. Crow and Hartman (2007) state that when the work
environment is not conducive to the employee’s wellbeing and expectations it can
contribute to job dissatisfaction and employee turnover. If employees are happy with
the current working conditions they will enjoy coming to work every day, but if the
working conditions are not conducive they will leave the organisation.

Working conditions include the organisation of the work such as: working hours,
work schedules, work shifts, overtime, daily and weekly rest periods, emergency
work, weekend work and holidays to mention just a few (Nel, et al., 2004).
According to Crow and Hartman (2007), job satisfaction and conditions of work has
revealed the need for balance in work schedules to ensure that employees have
adequate time for both work and private life in a concept known as work life balance.
If the shifts are not well organized and coordinated, they can result in overworking
some employees leading to low morale and dissatisfaction

(d) Input not Appreciated.

Table 4.7: Input not Appreciated
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 8 100 0.08 0
Agree 81 100 81 100
Neutral 31 100 31 100
Disagree 24 100 24 100
Strongly Disagree 12 100 12 100
Source: Analyzed Data, 2014

Table 4.7 above illustrates that a total of 81% of the respondents agreed that the
employee’s input was not appreciated in the organisation, while 31% of the
respondents were neutral and the remaining 36% (24% +12%) of the respondents

37
disagreed. According to Crow and Hartman (2007), money and benefits may attract
people to the front door, but something else has to be done to keep them from going
out the back. According to Gardner (2009), people have a basic human need to feel
appreciated and proud of their work. Recognition and incentive programs help to
meet these needs. A successful reward and recognition programmes does not have to
be complicated or expensive to be effective (Gardner, 2009).

(e) Work- Life Imbalance

Table 4.8: Work –Life Imbalance
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 34 100 34 0
Agree 57 100 57 100
Neutral 17 100 17 100
Disagree 19 100 19 100
Strongly Disagree 33 100 33 100
Source: Analyzed Data, 2014

Table 4.8 above highlights that a total of 57% of the respondents agreed that work-
life imbalance is the cause of staff turnover and 17% of the respondents were neutral.
The remaining 52% of the respondents disagreed. Ivancevich and Matteson (2004),
state that work that is boring and lacks challenges may lead to job dissatisfaction.
When new employees start to work for an organisation, they have expectations and it
becomes a problem if those expectations are not met. Such expectations include
being offered an opportunity to apply their skills and abilities, while also receiving
the same treatment and respect as similar employees and enjoying good working
relationship (Ivancevich and Matteson, 2004). They also expect that they will have
some time off to spend with their families.

4.3.2 Objective 2; Performance Evaluation

Employees’ satisfaction with performance evaluation is very important. Employees
were asked about visibility and level of understanding of performance evaluation
methods. The responses are as shown below.

38
Table 4.9: Performance Evaluation
Description No. of Respondents % of Respondents
Agree to understand the methods 38 38%
Disagree to understand the methods 50 50%
Methods are ambiguous 8 8%
Methods are very ambiguous 4 4%
Total 100 100%
Source: Analyzed Data, 2014

As seen in the table above, only 38% of the respondents agreed that performance
evaluation methods were visible and understandable. Almost 50% of the respondents
were of the view that these methods were not very visible and understandable, while
8% indicate that the performance evaluation methods were ambiguous and the other
4% of the respondents said the performance evaluation methods were very
ambiguous and not understandable. Therefore, this analysis shows the dissatisfaction
of employees with the performance evaluation methods.

4.3.3 Objective 3; the Impact of Employee Turnover on Organization

Performance in Barclays Bank Tanzania Limited
According to primary and secondary data the following are the impacts of employee
turnover on organization performance in Barclays Bank Tanzania Limited:-
Reduction in work productivity, reduction in the quality of product produced,
wastage of resources, employee not meeting deadlines, decline in service delivery,
loss of customers, increasing work load for each employee, increasing work stress to
present workers, work overtime as the cause of high staff turnover rate, and high
staff turnover affects team work are among the impacts of employee turnover on
organization performance in Barclays Bank Tanzania Limited.

39
Reduction in Work Productivity
Table 4.10: Reduction in Work Productivity
Responses No. of respondents Actual No. of % of Total percentage (%)
respondents scores
Strongly Agree 14 100 14 0
Agree 47 100 57 100
Neutral 17 100 17 100
Disagree 9 100 9 100
Strongly Disagree 11 100 11 100
Source: Analyzed Data, 2014

Table 4.10 above shows that a total of 61% of the respondents agreed that high staff
turnover causes reduction in work productivity, while 17% of the respondents were
neutral. The remaining 20% of the respondents disagreed. According to Neo, et al.
(2006), organisations that do not retain a loyal base of employees then they
constantly place an inexperienced group of non cohesive units in the front lines of
the organisation. Ensuring the good employee stays with the organization will help
them compete effectively within an industry.

In addition, when an organisation loses a valuable employee, there is a negative

impact on innovation, consistency in providing service to guests may be jeopardized,
and major delays in the delivery of services to customers may occur. A decline in the
standard of service provided to customers could also adversely affect the satisfaction
of internal and external customers and consequently, the profitability of the
organisation (Neves, 2009). According to McConnell (2004), companies having an
investment perspective of human resource management view training as an
opportunity to increase long-term productivity. According to Neo, et al. (2006),
training may also be viewed as a solution to a number of problems, such as
substandard quality resulting from skills deficiencies and voluntary turnover of
employees seeking more rewarding jobs.

40
Reduction in the Quality of Product Produced
Table 4.11: Reduction in the Quality of Product Produced
Responses No. of Actual No. of % of scores Total percentage (%)
respondents respondents
Strongly Agree 4 100 4 0
Agree 57 100 57 100
Neutral 19 100 19 100
Disagree 12 100 12 100
Strongly Disagree 21 100 21 100
Source: Analyzed Data, 2014

Table 4.11 above highlights that a total of 61% of the respondents agreed that high
staff turnover causes reduction in the quality of product produced, while 19% of the
participants were neutral. The remaining 33% of the respondents disagreed.

According to Taylor (2007), the quality of service in the organization decreases as a

result of staff shortage. According to Taylor (2007), customer’s evaluation of service
quality is affected not only by the end service received, but also by the service
delivery process itself, which includes waiting time. Allen, et al. (2007) state that it is
a straight forward case that dissatisfied employees cannot give their best performance
as their mind is on the things that make them dissatisfied and they feel their effort is
not appreciated. Such employees produce not only poor quality work but also less
amount of work to the detriment of the organisation and clients (Allen, et al., 2007).

Wastage of Resources
Table 4.12: Wastage of Resources
Responses No. of Actual No. of % of scores Total percentage (%)
respondents respondents
Strongly Agree 32 100 32 0
Agree 44 100 44 100
Neutral 11 100 11 100
Disagree 12 100 12 100
Strongly Disagree 1 100 1 100
Source: Analyzed Data,

41
Table 4.12 above demonstrates that a total of 76% of the respondents agreed that
high staff turnover causes too much wastage of resources when new staff settles in,
while 11% of the respondents were neutral. The remaining 13% of the respondents
disagreed. Rothwell and Kazanas (2006), state that new staff members make too
many mistakes as they are settling in the organisation. Johnson and Redmond (2006)
state that new employees cause a great deal of wastage. Moreover, organisations
experience wasted time owing to inexperienced replacement staff. Management and
other staff spend valuable time not doing their job but trying to train and orientate the
replacement staff. Kreitner and Kinicki (2007) state that if an employee is not
familiar with the organisation, errors may occur while learning to use equipment.

Employee not Meeting Deadlines

Table 4.13: Employee not Meeting Deadlines
Responses No. of Actual No. of % of scores Total percentage (%)
respondents respondents
Strongly Agree 12 100 12 0
Agree 7 100 7 100
Neutral 9 100 9 100
Disagree 18 100 18 100
Strongly Disagree 2 100 2 100
Source: Analyzed Data, 2014

Table 4.13 above shows that a total of 19% of the respondents agreed that staff
turnover causes employees not to meet their deadlines, while 9% of the respondents
were neutral. The remaining 20% of the respondents disagreed. According to Taylor
(2007), employees were not meeting deadlines because there was a lack of
manpower due to staff turnover. There might be delay in terms of response while
waiting for the replacement staff to arrive. Again there might be some delays while
assigning and aligning replacement staff. Gaylor (2001) states that lack of resources
and too much workload in the organization can contribute to employees not being
able to meet their deadlines in the organisation.

42
Disruption of Service Delivery
Table 4.14: Disruption of Service Delivery
Responses No. of Actual No. of % of scores Total percentage (%)
respondents respondents
Strongly Agree 23 100 23 0
Agree 4 100 4 100
Neutral 15 100 15 100
Disagree 19 100 19 100
Strongly Disagree 0 100 0 100
Source: Analyzed Data, 2014

Table 4.14 above highlights that a total of 27% of the respondents agreed that staff
turnover causes a disruption in service delivery, while 15% of the respondents were
neutral. The remaining of the respondents disagreed. According to Hopkins (2005),
employee’s disruptions while performing their work have a negative impact on the
service delivery. If there are employees who are not at work, the service provided
will be reduced compared to when all employees are at work. According to
Raliphada (2007), employees in the organization are working hard to balance their
work but the quality in the service delivery is not easy to avoid if there are still staff
members who are not on duty.

Loss of Customers
Table 4.15: Loss of Customers
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 1 100 1 0
Agree 34 100 34 100
Neutral 15 100 15 100
Disagree 29 100 29 100
Strongly Disagree 5 100 5 100
Source: Analyzed Data, 2014

43
Table 4.15 illustrates that a total of 35% of the respondents agreed that poor service
provided results in loss of customers, while 15% of the respondents were neutral.
The remaining of the respondents disagreed. Duchessi (2002), states that one of the
reasons for consumer frustration is waiting for efficient service. Locke (2009) states
that a programme to measure customer satisfaction should be a permanent ongoing
process that satisfies what customers want.

Increasing Work Load for each Employee

Table 4.16: Increasing Work Load for each Employee
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 8 100 8 0
Agree 44 100 44 100
Neutral 23 100 23 100
Disagree 16 100 16 100
Strongly Disagree 3 100 3 100
Source: Analyzed Data, 2014

Table 4.16 above illustrates that a total of 52% of respondents agreed that high
turnover increases work load for each employee, while 23% of the respondents were
neutral. The remaining of respondents disagreed that high turnover increases work
load. Tyani (2001) states that high staff turnover places unnecessary pressure on staff
that are at work. According to Russell and Bvuma (2001), shortage of staff in an
organisation at any given time implies that the quality and quantity of service is most
likely to be different if compared to the time when an organisation has all the staff it
needs to meet its strategic objectives.

4.3.4 Objective 4: Recommend Strategies that can be used to Reduce the High
Level of Employee Turnover in Barclays Bank Tanzania Limited
According to primary and secondary data the following are the recommended
strategies that can be used to reduce the high level of employee turnover in Barclays
Bank Tanzania limited.
Employees Recognition on Goal Achievement

44
Table 4.17: Employees Recognition on Goal Achievement
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 6 100 6 0
Agree 46 100 46 100
Neutral 27 100 23 100
Disagree 13 100 13 100
Strongly Disagree 7 100 7 100
Source: Analyzed Data, 2014

Table 4.17 above illustrates that a total of 52% of respondents agreed that employees
must be recognised when they achieve goals, while 27% of respondents were neutral.
The remaining of respondents disagreed that employees must be recognised when
they achieve their goals. Smit and de Cronje (2003) state that after achieving their
goals, employees like to be recognised by the organisation. Recognition can be in the
form of praising an employee or can be placed on a notice board in the organisation
as employee of the month. Recognition motivates employees to feel that they are the
part of the organisation at large (Luthans, 2002).

Employees must be Paid Well

Table 4.18: Employees must be Paid Well
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 16 100 16 0
Agree 38 100 38 100
Neutral 25 100 25 100
Disagree 13 100 13 100
Strongly Disagree 0 100 0 100
Source: Analyzed Data, 2014

Table 4.18 above highlights that a total of 54% of respondents agreed that employees
must be paid well, while 25% of respondents were neutral. The remaining of
respondents disagreed. Herzberg, et al. (2002) state that factors like work
environment, pay and company policies are factors that eliminate dissatisfaction;

45
While pay is not the only reason for satisfaction or dissatisfaction, it should be noted
that employees’ perception of the level of reward they receive in return for their
contribution is extremely important to the success of the organisation. According to
McConnell (2004), if employees’ needs are fulfilled, then this increases their
commitment to employee performance.

Employee’s Work Relationship

Table 4.19: Employee’s Work Relationship
Responses No. of respondents Actual No. of % of scores Total percentage (%)
respondents
Strongly Agree 16 100 16 100
Agree 33 100 33 100
Neutral 36 100 36 100
Disagree 22 100 22 100
Strongly Disagree 2 100 2 100
Source: Analyzed Data, 2014

Table 4.20 above highlights that a total of 49% of respondents agreed that working
relationship between employees must be improved while 36% of respondents were
neutral. The remaining of respondents disagreed that working relationship must be
improved between employees. Smit and de Cronje (2003) state that sometimes
workers absent themselves just to avoid being in contact with a particular individual
because they are angry at each other or fearful of each other. Dalton and Mesch
(2001) state that unhealthy competition and lack of team spirit among the employees
themselves may cause lowered group cohesiveness leading to staff turnover.

4.4 Discussion of the Findings

4.4.1 Main Reasons for Employees to Leave Their Jobs

During the course of data collection, the researcher noted that, the impact of turnover
had received considerable attention by senior management. In short, turnover proved
to be one of the most costly human resource challenges confronting the bank. The

46
main research objective was to find out the causes and later impact of employee
turnover at Barclays bank.

The question sought opinions from the respondents as to what they thought were
reasons for their colleagues to leave the organization. Based on the findings, several
factors were attributed to the phenomenon; it included salary scale, unsatisfactory
performance evaluation, job satisfaction, lack of recognition, poor working condition
and work boredom.

4.4.2 Salary Scale

This is the most common cause of employee turnover proved by respondents.
Employees are in search of jobs which pay well. If the companies in which they
work do not pay well, they tend to hunt for jobs that pay them considerably well.
Management alienates staff by promoting someone who lacks training and or the
necessary experience to supervise. Employees tend to favor an organization in which
the opportunities for advancing are wisely managed. The findings exemplified that
promotional procedures are not clear and fair to all employees. An employee in the
organization might have the proper qualifications to fill a vacant position but the
organization will hire a fresh employee for the position.

It was found that, the most common reason for leaving is the availability of higher
paying jobs. It was discovered that an employee could leave the current job for the
increase of salary between 5% and 10%. It was explained by one of the respondents
that ‘in a better economy the availability of alternative jobs plays a role in employee
turnover’.

Griffen et al. (2000) noted that pay-related variables have a modest effect on
turnover. Their analysis also included studies that examined the relationship between
pay, a person’s performance and turnover. They concluded that when high
performers are insufficiently rewarded, they leave. They cite findings from
Milkovich and Newman (1999) that introduction of reward programs may lead to
higher turnover among high performers.

47
4.4.3 Lack of Recognition
Poor recognition methods make employees leave their employer the study noted. The
desire for fair recognition and improved status is very essential to everyone
regardless of position, age, sex, education and the like. Every employee needs to be
recognized by his peers, supervisors and other people. It I kind of embarrassing when
someone’s effort is not recognized or appraised.

It was found that people want to work in a place where they can succeed and feel
their contribution is appreciated. The absence of this environment can push people to
explore other opportunities, hence employee turnover rate increases.

4.4.4 Lack of Career Advancement or Training

When employees were asked about career advancement and training effectiveness,
they seemed to be unsatisfied. Some employees explained that due to lack of job
rotation, the employer did no give them time to attend training because they knew
that business would not continue due to time spent on training, as a result, they
thought of finding another job where they hoped they could get career advancement.

The study discovered that employees frequently named career advancement as a top
consideration in choosing and staying with an employer. The same result was
obtained by a survey conducted by AON Consulting and The society of human
resource management, which determined that opportunity or lack of career
development is one of the top reaons cited by employees who voluntary leave an
organization for another.

Martin (2003) detected a complex relationship between turnover and training. He

suggested that establishments that enhance the skills of existing workers have lower
turnover rates. However, turnover is higher when employees are trained to be multi-
skilled, which may imply that this type of training enhances the prospects of workers
to find work elsewhere. The literature on the link between lower turnover and career
advancement has found that off-the-job training is associated with higher turnover
presumably because this type of training impacts more general skills, Martin (2003)

48
4.4.5 Lack of work-life Balance
It was discovered that lack of work life balance is a source of employee
dissatisfaction. Some of the respondents complained that after job, they do not get
enough time to spend with their families and for their personal activities, they are
therefore de-motivated and this fact forces them to think of leaving their employers.
They argued that every person in life has his/her own life to which they want to give
proper time other than work life, so whenever employees find any conflict in
between both lives they prefer to move to somewhere else, where they could avoid
such conflicts. In the present conditions of competition among different employers in
the banking industry, there is a possibility that the employees are stretched to give
maximum output and this may cause imbalance between work and employee’s
personal life.

It was further noted that form the interview that, employees turnover was lower when
employees had a shorter working hours and were given a choice of work schedules,
even though their work load was higher. It was advised that organizations that
provide employees with flexible work schedules had the advantage of reducing
employee turnover.

Employers can offer a range of different programs and initiatives, such as flexible
working arrangements in the form of part-time, casual and telecommuting work.
More proactive workers can provide employees not to work after official working
hours. The study also found out that some employees including the managerial
workers, take work at home almost everyday.

In the review of documentary sources, the researcher found that there is a legal
provision issued in the Tanzania labor law to govern work-life balance. The exiting
provisions include, annual leave, such that all employees be entitled to a minimum of
28 days of paid annual leave.

49
Similarly, the working week is limited to 40 hours that is 8 hours a day. All women
are also entitled to 84 days paid leave on the time of child birth. However, the
important point to note is, an effective work –life balance strategy is not simply
about complying with the law, it is actually finding out about employees’needs and
priorities and considering how they can be met in ways that are consistent with the
needs of the business. Employers are increasingly concerned to protect their
reputation and employer’s brand. Work-life balance policies are an important way
for employers to identify their commitment to quality and social responsibility.

4.5 Measures taken by Management to reduce Turnover

Respondents were asked whether they were any efforts made by the management to
retain employees. The findings showed that the management had started retaining
qualified employees by giving them an increment in salary once they presented their
resignation letters as one of the retention strategies. However, this caused low morale
to other staff as it created a big income gap. The management also started to
effectively use the exit interview procedure to identify reasons for employees leaving
the organization, but this study noted that some employees were not saying the truth
while filling the forms.

To overcome the problem of career advancement, the bank opened a learning and
development centre that operated within the bank, with the purpose of providing
various job related training to their employees. This centre has not been fruitful much
enough since the managers and staff are very much occupied with the business as
usual in such a way that there was not enough time for training. Even when the
centre organized training for some days, managers were not ready to release their
employees due to workload.

At the training level, the bank had started to conduct specialized training programs
besides regular on-the-job training. The training programs include modules on
customer service, team effectiveness and quality consciousness.

50
As for performance appraisal system, the bank had started to adopt a joint process in
which both the supervisor and subordinate sat together set common goals and targets
to be achieved for the year, compared performance versus targets to be achieved in
that year, and identified training needs. The supervisor was also encouraged to
counsel the subordinates and make them aware of their respective strengths and
weaknesses.

51
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Introduction
In this chapter, summary of the study findings, conclusions, recommendations and
need for further research are presented. The main objective of the study was to assess
the impact of employee turnover on organization performance in Barclays bank
Tanzania Limited specifically in Dar is Salaam region. The study was conducted
through secondary literature review and data were collected and analyzed. Four
important areas of the study concern were to assess the impact of employee turnover
on organization performance in Barclays bank Tanzania Limited; investigate the
causes of staff turnover in Barclays bank Tanzania Limited and finally recommends
recommend strategies that can be used to reduce the high level of employee Turnover
in Barclays bank Tanzania Limited.

5.2 Summary of the Research Findings

5.2.1 Main causes of Employees turnover in Barclays Bank

The research findings indicated that employee turnover is a major problem with
financial institutions, not only Barclays bank as evidenced by some employees but
also other banks like Standard Chartered, Commercial bank and many other banks.
This was caused by various factors such as poor salary packages, too much work
load, work stress, lack of career advancement, lack of job rotation, work stress and
unfair promotion subjective performance evaluation done by supervisor.

5.2.2 Efforts Done by the Management to Retain their Employees

The findings showed that the management was more concerned with the quality of
the personnel leaving the bank, which were considered as the key talents of the bank,
who had left no room for negotiations. It was discovered that, the management
concern was not merely the number of employees leaving the bank that was relevant,
but rather the quality of personnel who left the bank. As a result, high rate of

52
turnover increased work load and stress to others, reduced morale to team work and
at the end, employees whom management believed were high performer also
resigned. This increased the rate of turnover of the bank.

Retention strategies should be based on understanding the factors that determine

whether the employees leave or stay. For early-career employees (less than 30years
of age) career advancement is significant. For mid career employees (between age of
31 and 50 years old) the ability to manage their career and satisfaction from their
work are important. Late career employees (over 50 years old) will be interested in
security. It is also the case that a younger workforce will change jobs and employers
more often than an older workforce, and workforce with a lot of part-timers are less
stable than those with full time employees.

The researcher also noted that from the study of Holbeche (1998) of high flyers, who
found out that the factors that aided the retention and motivation of high performers
included providing challenge and achievement opportunities, mentors, realistic self
assessment and feedback processes. The study also summarized three employee
retention explained below:

Exit turnover survey: This survey found out why employees left the organization,
where they went and why, what could have been done to improve their work
experience and keep them with the company, and other pertinent information and
insight. These surveys are typically conducted semi-annually or annually and may be
sent to all former employees that left the organizations on their own initiative.

Exit interview survey: In this type of survey, employees complete the employees exit
interview survey prior to leaving the organization. Exit interview survey establish
why employees are leaving the organization, where they are going and why, what
could have been done to improve their work experience at the organization and other
pertinent information and insight.

53
Employee retention survey: This survey is highly effective for an organization with
high employee turnover throughout the organization, or with high turnover in one
particular department such a sales, or call centre etc. This survey assesses the key
employees’ satisfaction and employees’ engagement and the likelihood that the
employees with stay with the organization for the foreseeable future. This employee
survey also identifies reasons employees are likely to eave your organization and
what can be done to reduce voluntary employee turnover.

These surveys provide a wealth of information and insight regarding why employees
are thinking of leaving your organization. Acting on this information, the
organization can reduce unwanted employee turnover, generating a strong payback
on the survey and bottom line results.

5.3 Conclusion
The objective of this study was to assess the impact of employee turnover on
organization performance in Barclays bank Tanzania Limited specifically in Dar is
Salaam region. Data were collected and analyzed. The study revealed the following
basing on the purpose of the study. Staff turnover may be caused by lack of
opportunities for career development, remuneration and working condition. Staff
turnover if not taken into consideration will damage the image of the organisation,
where customers will lose trust in the organisation. Moreover, productivity of the
organisation will also decrease, while employees will be demotivated to work for a
company with high staff turnover rate. Paying employees a market related salary may
help management in retaining valuable employees. The service provided by Barclays
bank Tanzania Limited will end up being compromised due to high staff turnover
and this may cause customers to move to other organisations for better service. This
study therefore makes recommendations arising from the empirical analysis, to
reduce staff turnover in the Barclays bank Tanzania Limited.

According to Ivancevich and Matteson (2004), personal interest and background may
be the cause of staff turnover. Awareness programs to employees about the retention
strategies in the Barclays bank Tanzania Limited play an important role in staff

54
turnover reduction. Although staff turnover has cost effects in organisation, it also
results in lots of customer complaints about the service that is not up to standard.
According to Kleiman (2003), front line staff is often the ones who set the image of
the company. It is therefore very important to ensure that front line staff members are
empowered to deal with customer requests efficiently, since the ability or inability of
the front line staff to respond to these requests reflects on service delivery offered by
Barclays bank Tanzania Limited

5.4 Recommendations
Arising from the empirical analysis of results, the following recommendations are
made for the Barclays bank Tanzania Limited:
(i.) Top management should create opportunities for career advancement in the
organisation. Creation of opportunities for career advancement may help staff
to become more competent and to enjoy their work even better.

(ii.) Top management should give due recognition to its internal employees when
there are new positions within the organisation. Clear, achievable goals and
standards for each position should be set and should be known to employees.
Individuals should also receive regular, timely feedback on how they are
doing and should feel they are being adequately challenged in their jobs
(Mathis and Jackson, 2007).

(iii.) Top management should improve working conditions within the organisation.
The working environment should be conducive for employee’s health and
safety in the department. To motivate the workforce, it is important to ensure
a hazard free and safe environment which also enhances efficiency and
productivity. When the adverse effects of the physical work environment are
not attended to by management, employees may lose interest in the work and
might leave the organisation (Del Val, and Fuentes, 2003).

55
(iv.) Top management should involve employees in the decision making process.
Top management should involve employees in any issue that will affect them
in the organisation. Employee involvement may be through meeting with
their representatives.

(v.) Top management should develop employee assistance programmes in the

organisation to assist employees with problems to eliminate absenteeism or
staff turnover. Top management should also make sure that employees are
aware of these programmes in the organisation.

(vi.) According to Erasmus, et al. (2003), the introduction of Employee Assistance

Programme is of vital importance whereby troubled employees could get-in-
house assistance in order to be able to cope with problems that have a
negative impact on their performance that may affect service delivery.

(vii.) Top management should also appreciate employee’s input in the organisation
when they meet organisational goals. Appreciation can be through
announcement or writing a letter of commendation and placing it in the notice
board or provide some incentives.

(viii.) Top management should reduce work boredom to employees by revisiting

employee’s job description in order to add some challenge job tasks on the
employee’s job description. If there is no match between employee and the
job, the employees become bored by the job that provides no challenges or
one that provides unrealistic challenges. These realities are the ones that
make people leave the organisation (Erasmus, et al., 2003).

5.5 Direction for Further Research

A quantitative approach was employed in this research and questionnaires were used
to collect data from the respondents. In this study, the majority of respondents had
different opinions on the impact of employee turnover on organization performance
and there is also a need to conduct further research which can focus on employee

56
retention strategies. Further research could be done in this field of study using
qualitative methods.

Qualitative methods could allow the researcher to use interviews to collect rich data
from the respondents.

57
 REFERENCES

Abbott, J. (2003). Does employee satisfaction matter? A study to determine whether

low employee morale affects customer satisfaction and profits in
the business-to-business sector; Journal of Communication
Management, 7(4), 333– 339.

Allen, J., Jimmieson, L., Bordia, P. and Irmer, E. (2007): Uncertainty during
Organisational Change: Managing Perceptions through
Communication. A Journal Change Management, 7(2), 36-48.

Avery, Derek R.; McKay, Patrick F.; Wilson, David C. (2007), “Engaging the aging
workforce: The relationship between perceived age similarity,
satisfaction with coworkers, and employee engagement.”
Journal of Applied Psychology, Vol 92(6), 1542-1556.

Bhattacharyya, D.K. (2003). Research Methodology. New Delhi: Excel Books.

Bhengu, D.S. (2007). Impact of Organisational Change: A case Study of Aventis

Pharma. Pretoria. MBA Thesis. Tswane University of
Technology

Birdi, C.; Clegg, C.; Patterson, M.; Robinson, A.; Stride, C.; Wall, T. D. and Wood,
S.J. (2008) The Impact of Human Resource and Operational
management Practices on Company Productivity. Personnel
Psychology, 61(3), 67-70.

Bittel, L.R. and Newstrom, J.W. (2002). What every supervisor should know. 6th
Edition. New York: McGraw Hill Publishing Company.

58
Buch, D., & Swanson, S. M. (1986): Moonlighting by psychiatric residents; Journal
of Psychiatric Education, 10(4), 247-254

Bureau of Labor Statistics (2005): The Employment Situation: August 2005; News
Release. United States Department of Labor

Charles C Thomas, Publisher. Crawford, R. L. (1978). Moonlighting: New look at an

old practice. Supervisory Management, 23(8), 2-9.

Cohen, R. L., Conley, R. R., & Henderson, P. B. (1987): Moonlighting: A realistic

approach. In R. L. Cohen & M. K

Culler, S. D., & Bazzoli, G. J. (1985): The Moonlighting Decisions of Resident

Physicians. Journal of Health Economics, 4(3), 283-292.

Davey, P. J., & Brown, J. K. (1970): The corporate reaction to "moonlighting". The
Conference Board Record, 7(6), 31-35.

Dempster-McClain, D., & Moen, P. (1989): Moonlighting Husbands: A Life-Cycle

Perspective. Work & Occupations, 16(1), 43-64.

Dulcan (Eds.), Basic handbook of training in child and adolescent psychiatry (Vol.
xviii, pp. 308-320). Springfield, IL, USA

Glebbek, A. E. Bax. 2004. Is high employee turnover really harmful? An empirical

test using company records. Acad. Management. J. 47 (2)
227-28

James Guthrie, (2001) "The management, measurement and the reporting of

intellectual capital", Journal of Intellectual Capital, Vol. 2 Iss: 1,
pp.27 – 41

59
Jan Mouritsen, Per Nikolaj Bukh, Bernard Marr, (2004) "Reporting on intellectual
capital: why, what and how?", Measuring Business Excellence,
Vol. 8 Iss: 1, pp.46 – 54

Johnny, H., Magnus, S. (2003) Does job insecurity lead to impaired well-being or
vice versa? Estimation of cross-lagged effects using latent
variable modeling, Journal of Intellectual Capital, Vol. 5 Iss: 2,
pp.36 – 41

Mark Saunders, Phillip Lewis and Adran Thorn hill. (2003). Research Methods for
Business Students, Third edition: Delhi Pearson
Education(Singapore) Pte. Ltd.

Milanzi M. M. (2008), “Assessment of the causes and effect of Labour turnover on

Banking Industry. A case of Tanzania Investment Bank
Limited” Unpublished.

Mobley, W. 1982 Employee turnover : Causes, Consequences and Control. Addison

Wesley, Reading M. A

Staw, B. 1980. The consequences of turnover J. Occupational Behav. 1(4) 253-273

Toby, M., E,; Baiyin., Y.; Kenneth R. B. (2004) The effects of organizational
learning culture and job satisfaction on motivation to transfer
learning and turnover intention, DOI: 10.1002/hrdq.1104

60
 APPENDICES

Appendix 1: Questionnaire for Master’s Degree Course Research

To Barclays bank Tanzania Limited Employees/Others
Dear Respondent
The following is the questionnaire intending to collect data basing on the following
topic: Assessment of the impact of employee turnover on organization
performance at Barclays bank Tanzania Limited in Dar-es-Salaam region. You
are requested to assist in responding questions as you know them.
The information contained in the questionnaire will be confidential, and only for
research purposes
I anticipate my gratitude to your assistance

PART A: GENERAL INFORMATION

RESPONDENTS SHOULD COMPLETE THIS PART
1. Name: ________________________________________________________
2. Organization: ___________________________________________________
3. Name and position of a person completing this questionnaire
______________________________________________________________

4. Company Address:
P.O. Box ______________________________________________________
Region ___________________________ District ______________________
Telephone Number __________________ Fax ________________________
Web site _________________________ Email ________________________
5. Date of employment _____________________________________________
6. Date of commencement __________________________________________

61
PART B
Questionnaire to respondents
1. Please tick one of the correct answers
2. Answer all questions.
Section A: Demographic factors
1. Age
Year
1.1 18-25 years
1.2 26-35 years
1.3 36-45 years
1.4 46-55 years
1.5 56 and above

2. Gender
Gender
1 Male
2 Female

3. Length of service
Years
1 1-5 years
2 6-10 years
3 11- 15 years
4 16-20 years
5 21 and above

62
SECTION B
Please tick the correct answer
STRONGLY AGREE= SA
AGREE= A
NEUTRAL= N
DISAGREE= D
STRONGLY DISAGREE= SD
1. Please indicate your response regarding causes of employee turnover
No. ITEM
1 I’m satisfied with the salary I’ m getting in my
organisation
2 In my organisation there is no opportunity for career
advancement.
3 I’m not satisfied with working conditions
4 Staff members are not involved in decision making.
5 There is a lack of employee assistance programmes
6 My input is not appreciated
7 Work boredom is the causes of staff turnover.

2. Please indicate your response regarding the impact of employee turnover on

organisational performance in Barclays Tanzania Limited
1 High staff turnover causes too much wastage of resources
when new staff settles in.
2 High staff turnover causes reduction in work productivity.
3 High staff turnover causes reduction in the quality of
product produced.
4 High staff turnover cause employee not to meet their
deadlines.
5 Staff turnover causes a decline in services provision.

63
 6 Staff turnover disrupts service delivery.
7 Service provided results in loss of customers.
3. Please indicate your response regarding ways that can be used to reduce staff
turnover.
1 Work relationship between employees must be improved.
2 Employees must be recognised when they achieve goals.
3 Employee must be paid well (reasonable salary).

Appendix II: Interview for Master’s Degree Course Research

To Barclays bank Tanzania Limited Employees/Others
Dear Respondent
The following are the interview questions to be asked intending to collect data basing
on the following topic: Assessment of the impact of employee turnover on
organization performance at Barclays bank Tanzania Limited in Dar-es-Salaam
region. You are requested to assist in responding questions as you know them.
The information obtained in this interview session will be confidential, and only for
research purposes
I anticipate my gratitude to your assistance

PART A: GENERAL INFORMATION

RESPONDENTS SHOULD COMPLETE THIS PART
1. Name: ________________________________________________________
2. Organization: ___________________________________________________
3. Name and position of a person completing this questionnaire
______________________________________________________________

4. Company Address:
P.O. Box ______________________________________________________
Region ___________________________ District ______________________
Telephone Number __________________ Fax ________________________

64
 Web site _________________________ Email ________________________
5. Date of employment _____________________________________________
6. Date of commencement __________________________________________

SECTION B: INTERVIEW QUESTIONS.

1. What inspired you to join this organization?
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................

2. Do you think of leaving your current employer? If yes, why?

.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
3. In your opinion, what do you think are the reasons why your colleagues
choose to leave this organization?
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
4. What makes you continue working with this organization?
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
5. How do you think employee turnover has affected the bank?
.............................................................................................................................
.............................................................................................................................

65
 .............................................................................................................................
.............................................................................................................................
6. What measure does the management take to reduce the level of turnover in
this organization?
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
............................................................................................................................

7. In your opinion, what makes an employee stay with one employer until the
end of the prescribed contract?
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................

Thank you in Advance for your Cooperation

66