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Voluntary Employee Turnover in Banking Sector

Voluntary Employee Turnover in Banking Sector

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Published by sulemanawan

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Published by: sulemanawan on Jun 09, 2011
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04/03/2013

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Voluntary Employee Turnover in Banking Sector
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Table of Contents
1. Introduction .................................................................................................................................... 22. Literature Review ............................................................................................................................ 33. Methodology ................................................................................................................................... 44. Participant Basic Information ........................................................................................................... 65. Employment Tenure ........................................................................................................................ 86. Job Satisfaction ................................................................................................................................ 97. Factors Involved in Leaving Previous Jobs ...................................................................................... 108. Promotion ..................................................................................................................................... 119. Attributes for Better Employment Opportunity ............................................................................. 1310. Salary Package ............................................................................................................................... 1411. Organizational Commitment .......................................................................................................... 1712. Workload Balance and Appreciation of Work ................................................................................. 1913. Employee Training and Development ............................................................................................ 2114. Organizational Culture and Work Environment .............................................................................. 2315. Interviews...................................................................................................................................... 2516. Findings ......................................................................................................................................... 2617. Recommendations ......................................................................................................................... 2718. Questionnaire ................................................................................................................................ 2919. Sample Interview ........................................................................................................................... 3120. References .................................................................................................................................... 32
 
Voluntary Employee Turnover in Banking Sector
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1. Introduction
Commercial Banks play a key role in controlling the economic activity of a country, as the StateBank of Pakistan implements monetary policy with the help of commercial banks. Governmentof Pakistan is facilitating the investors in every sector due to which lot of multinational bankshave been encouraged to invest in banking sector. The new multinational banks no doubtcreated lot of employment opportunities for the Pakistani youth but it also raised thephenomenon of Employee Turnover. Turnover has become a major concern for organizationsespecially in banks with employee shortages and competitive pressures making retention of keyemployees a strategic issue. There is no doubt that retaining top talent is a high priority. With
the war for talent in today’s workplace and the changes in the larger business world,
organizations have to do more than pay well.
As the paradigm of lifetime employment becomes unrealistic, the question ‘who stays withyou?’ has assumed great importance in organizations today. Simultaneously, there has been anincreasing tendency to ‘buy in’ the talents of professionals with cross fu
nctional skills in orderto create a competitive advantage. One visible effect of this has been a consistent rise in thepay packages of most organizations so as to attract and retain the most desirable employees.Such a trend over the last few years has resulted in an unstable labor market, especially forindustries such as marketing, advertising, banking, finance and software where the skills are byand large transferable, from one work environment to another.Poor supervision, unproductive relationships with the boss, low salary, low career growth, toomuch workload etc are the prime reasons cited by the employees for turnover. As in the case of absenteeism, this too can be minimized by planning, supervising, and the application of goodmanagement principles.Turnover is generally classified into two major ways i.e. voluntary and involuntary. Voluntaryemployee turnover is the employee intention to quit the job or decision to give resignationfrom the job due to several reasons which can be better job opportunity, job dissatisfaction,
bad work environment, compensation packages, supervisor’s bad behavior, less chances of 
growth, personal/family reasons etc. Involuntary employee turnover is triggered byorganizational policies, work rules and performance standards that are not met by employeese.g. restructuring, downsizing, needs to cut cost, low performers being fired from job ordismissals, employee death, retirement etc.Our project is focusing on Voluntary employee turnover issue in banking sector and for thisreason the objective of our project will be answering these two questions:-a. What are the particular reasons/ issues involved in voluntary employee turnoverin banking sector?
 
Voluntary Employee Turnover in Banking Sector
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b. How can we get control over factors identified for voluntary employee turnoverin banking sector?
2. Literature Review
a. Anonymous. (1989) suggests that Worker turnover is also a serious problem inconstruction and warrants attention. Poor supervision, unproductiverelationships with the boss, poor planning, and generally poor management arethe prime reasons cited by the workers for turnover. As in the case of absenteeism, this too can be minimized by planning, supervising, and theapplication of good management principles. Lower turnover offers a broad rangeof productivity gains. One other significant cause of turnover is theattractiveness of nearby jobs offering extended overtime.b. Becker (1975) indicated that higher paid employees are less likely to resign thanlower paid employees. Human capital theorists say that firms pay skilledemployees more than their unskilled counterparts, because skilled employeeshave higher marginal productivity. There is some evidence to support a negativerelationship between wage or salary level and turnover.c. Harman
et al 
., (1999) that negative job attitudes (e.g., low levels of jobsatisfaction) is one of the causes of leaving. In their seminal work, March andSimon (1958) proposed a psychological explanation of turnover that is based on
individuals’ utility functions: When outcomes (such as pay or promotionopportunities) are too low relative to the employee’s expectations, an employee
becomes dissatisfied and motivated to leaved. Smithers
et al 
., (1998) found that Turnover (loss from schools) of fulltimeteachers in 2002 was found to be 14.1 per cent in Spanish schools. Five main
factors were found to influence teachers’ decisions to leave: workload, new
challenge, the school situation, salary and personal circumstances. Of these,workload was by far the most important, and salary the least. Leavers tended to
be disproportionately either young with a few years’ service or older andapproaching retirement. Young leavers were more likely to cite ‘salary’ and
 
‘personal circumstances (including travel)’, older leavers ‘workload’. Young
leavers, particularly those travelling or teaching abroad, were more likely toexpect to return to full-time teaching.

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