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Voluntary Employee Turnover in Banking Sector

Table of Contents
1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction .................................................................................................................................... 2 Literature Review ............................................................................................................................ 3 Methodology ................................................................................................................................... 4 Participant Basic Information........................................................................................................... 6 Employment Tenure ........................................................................................................................ 8 Job Satisfaction................................................................................................................................ 9 Factors Involved in Leaving Previous Jobs ...................................................................................... 10 Promotion ..................................................................................................................................... 11 Attributes for Better Employment Opportunity ............................................................................. 13

10. Salary Package ............................................................................................................................... 14 11. Organizational Commitment.......................................................................................................... 17 12. Workload Balance and Appreciation of Work ................................................................................. 19 13. Employee Training and Development ............................................................................................ 21 14. Organizational Culture and Work Environment .............................................................................. 23 15. Interviews...................................................................................................................................... 25 16. Findings ......................................................................................................................................... 26 17. Recommendations......................................................................................................................... 27 18. Questionnaire................................................................................................................................ 29 19. Sample Interview ........................................................................................................................... 31 20. References .................................................................................................................................... 32

Voluntary Employee Turnover in Banking Sector


1. Introduction Commercial Banks play a key role in controlling the economic activity of a country, as the State Bank of Pakistan implements monetary policy with the help of commercial banks. Government of Pakistan is facilitating the investors in every sector due to which lot of multinational banks have been encouraged to invest in banking sector. The new multinational banks no doubt created lot of employment opportunities for the Pakistani youth but it also raised the phenomenon of Employee Turnover. Turnover has become a major concern for organizations especially in banks with employee shortages and competitive pressures making retention of key employees a strategic issue. There is no doubt that retaining top talent is a high priority. With the war for talent in todays 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 with you? has assumed great importance in organizations today. Simultaneously, there has been an increasing tendency to buy in the talents of professionals with cross functional skills in order to create a competitive advantage. One visible effect of this has been a consistent rise in the pay 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 for industries such as marketing, advertising, banking, finance and software where the skills are by and large transferable, from one work environment to another. Poor supervision, unproductive relationships with the boss, low salary, low career growth, too much 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 good management principles. Turnover is generally classified into two major ways i.e. voluntary and involuntary. Voluntary employee turnover is the employee intention to quit the job or decision to give resignation from the job due to several reasons which can be better job opportunity, job dissatisfaction, bad work environment, compensation packages, supervisors bad behavior, less chances of growth, personal/family reasons etc. Involuntary employee turnover is triggered by organizational policies, work rules and performance standards that are not met by employees e.g. restructuring, downsizing, needs to cut cost, low performers being fired from job or dismissals, employee death, retirement etc. Our project is focusing on Voluntary employee turnover issue in banking sector and for this reason the objective of our project will be answering these two questions:a. What are the particular reasons/ issues involved in voluntary employee turnover in banking sector?
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Voluntary Employee Turnover in Banking Sector


b. How can we get control over factors identified for voluntary employee turnover in banking sector?

2.

Literature Review a. Anonymous. (1989) suggests that Worker turnover is also a serious problem in construction and warrants attention. Poor supervision, unproductive relationships with the boss, poor planning, and generally poor management are the prime reasons cited by the workers for turnover. As in the case of absenteeism, this too can be minimized by planning, supervising, and the application of good management principles. Lower turnover offers a broad range of productivity gains. One other significant cause of turnover is the attractiveness of nearby jobs offering extended overtime. b. Becker (1975) indicated that higher paid employees are less likely to resign than lower paid employees. Human capital theorists say that firms pay skilled employees more than their unskilled counterparts, because skilled employees have higher marginal productivity. There is some evidence to support a negative relationship between wage or salary level and turnover. Harman et al., (1999) that negative job attitudes (e.g., low levels of job satisfaction) is one of the causes of leaving. In their seminal work, March and Simon (1958) proposed a psychological explanation of turnover that is based on individuals utility functions: When outcomes (such as pay or promotion opportunities) are too low relative to the employees expectations, an employee becomes dissatisfied and motivated to leave Smithers et al., (1998) found that Turnover (loss from schools) of fulltime teachers 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 and approaching 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 to expect to return to full-time teaching.

c.

d.

Voluntary Employee Turnover in Banking Sector


3. Methodology Both quantitative and qualitative methods were used to carry out this study. For quantitative method, questionnaire was prepared and distributed in various branches of different banks. Commercial banks in which questionnaire were distributed are as under: a. b. c. d. e. f. g. NIB Barclays Askari Bank Ltd HSBC Standard Chartered National Bank of Pakistan Habib Bank Ltd

Total responses received from the banks were 118 and their distribution is as under: NIB Barclays Askari HSBC Standard Chartered National Bank of Pakistan Habib Bank Ltd 17 32 24 9 7 9 20

The major problem which we faced in collection of data was getting these questionnaires filled from the bank staff and getting exit interviews data from interviews with the branch managers. Due to their busy routine we had to leave questionnaires with the bank managers and then collected them after interval of 2-3 days. Moreover branch managers were reluctant to provide exit interviews data but we managed this with the help of our questionnaire as questions were targeted specifically for this purpose to know about employees viewpoint on voluntary employee turnover. Questionnaire was designed so as to cater for all the aspects of employee turnover. Our questionnaire is based on following factors: Factors Participants Basic Information Question Numbers 1, 2, 3

Voluntary Employee Turnover in Banking Sector


Job Satisfaction Organizational Commitment 5, 6 11

Work Environment/ Supervisors Behavior 12, 13, 14, 17 Less Career Growth Monetary Reward Organizational Culture Ease of Movement Better Employment Opportunity Employment Tenure Employee Training & Development 7, 10, 12 8, 10, 12, 14 17 11 9 4 15, 16

Questionnaires response was gathered from different departments within a bank to obtain a view point of every employee about voluntary employee turnover. Departments are generally the same in each bank and they are as under: a. b. c. d. e. f. g. h. i. Operations Customer service Sales Credit Initiation Banking services IT department Coordination & Administration Liability Loans initiation
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Voluntary Employee Turnover in Banking Sector


4. Participant Basic Information

74% male and 26% female responded to the questionnaires floated in different banks and their age group is as under: Age Group 18-24 25-34 35-44 Above 45 The results of gender are as under: Percentage 13% 58% 14% 15%

Gender
Female

Male

Std Chtd HSBC 0.00 20.00 Male 40.00 60.00 80.00 Female 14.29 55.56 11.11 17.65 16.67 46.88 10.00 100.00 NBP NIB Askari Barclays HBL

Std Chtd HSBC NBP NIB Askari Barclays HBL

85.71 44.44 88.89 82.35 83.33 53.13 90.00

Voluntary Employee Turnover in Banking Sector


Results of age group are as under:

What is your age group?


Over 55
45-55 35-44 25-34 18-24 0.00 10.00 18-24 Std Chtd HSBC 14.29 11.11 0.00 11.76 16.67 21.88 5.00 20.00 30.00 25-34 71.43 77.78 11.11 82.35 58.33 71.88 20.00 40.00 50.00 35-44 14.29 11.11 33.33 5.88 12.50 6.25 30.00 60.00 70.00 80.00 90.00 Std Chtd

HSBC
NBP NIB Askari Barclays HBL

45-55 0.00 0.00 55.56 0.00 12.50 0.00 40.00

Over 55 0.00 0.00 0.00 0.00 0.00 0.00 5.00

NBP
NIB Askari Barclays HBL

The results of age group shows that people falling within the age bracket of 18-24 and 25-34 have opted for commercial banks which have opened recently and people joined these banks because of company profile, chances of career growth and salary packages. Employees at NIB, Askari, Barclays, HSBC and Standard Chartered have majority of employees who are within these age brackets. Age group of majority of employees at NBP and HBL lie within 35 and above which shows that these employees needs are being satisfied by their employer and they value monetary rewards which are being provided to them.

Voluntary Employee Turnover in Banking Sector


5. Employment Tenure

Employment Tenure defines how much time an employee has spent with a particular organization in which he/she is employed. As long as the employee needs are met in that organization, he/she stays there but as soon as employee find better opportunities, they then leave the organization to pursue those opportunities. These opportunities maybe company profile, better growth chances, salary packages, domestic problem etc. Results of employment tenure are as under:

For how long you have been working for this company?
Above 10 years 6 years to 10 years 3 years to 6 years 1 year to 3 years 6 months to 1 year Less than 6 months 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 Std Chtd HSBC NBP NIB Askari Barclays

Less than 6 months


Std Chtd HSBC 28.57 0.00 0.00

6 months to 1 year
14.29 0.00 0.00

1 year to 3 years
57.14 88.89 11.11

3 years to 6 6 years to 10 years years


0.00 11.11 0.00 0.00 0.00 0.00

Above 10 years
0.00 0.00 88.89

HBL

NBP
NIB Askari Barclays

23.53
0.00 15.38 1.00

23.53
0.00 7.69 5.00

47.06
25.00 73.08 10.00

5.88
37.50 3.85 10.00

0.00
25.00 0.00 15.00

0.00
12.50 0.00 65.00

HBL

Employees at Askari, HBL and NBP have shown greater commitment with their organizations and majority of them have stayed for more than 3 years which shows that they are satisfied and their needs are being met by their organization. They value what their organization has to offer in short term and long term aspects. Standard Chartered, NIB, Barclays and HSBC have majority

Voluntary Employee Turnover in Banking Sector


of employees who have less than 3 years in their present jobs. They join these commercial banks based on these banks company profile, career progression and monetary benefits. 6. Job Satisfaction

Employee feels job satisfaction when their intrinsic needs are being met and they are given sufficient autonomy to do their job. Results of job satisfaction are given as under:

I am satisfied with my job?


Extremely Agree Agree

Neutral
Disagree Extremely Disagree

Std Chtd

HSBC
NBP

0.00
Extremely Disagree Std Chtd HSBC NBP NIB Askari Barclays HBL 14.29 0.00 0.00 0.00 0.00 3.13 0.00

10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00


Disagree 14.29 0.00 0.00 5.88 8.33 9.38 5.00 Neutral 28.57 44.44 22.22 52.94 25.00 37.50 50.00 Agree 14.29 55.56 77.78 41.18 62.50 50.00 45.00 Extremely Agree 28.57 0.00 0.00 0.00 4.17 0.00 0.00

NIB Askari Barclays HBL

Employees at Askari, NBP, HSBC, Barclays and HBL are satisfied with their job. They are satisfied because their needs are being met which are monetary benefits and career progression. Also employees of these banks feel freedom while performing their work. They experience less supervision in performing their job as they are given more responsibility to finish the task assigned to them in order to have better customer satisfaction.

Voluntary Employee Turnover in Banking Sector

I feel freedom while working?


Extremely Agree

Agree

Neutral

Disagree

Std Chtd HSBC NBP

Extremely Disagree

NIB
Askari 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Disagree 14.29 0.00 0.00 Neutral 42.86 22.22 33.33 Agree 42.86 77.78 66.67 Extremely Agree 0.00 0.00 0.00 Barclays

Extremely Disagree Std Chtd HSBC 0.00 0.00 0.00

HBL

NBP
NIB Askari Barclays

0.00
8.33 0.00 0.00

0.00
4.17 6.25 20.00

58.82
29.17 40.63 60.00

41.18
54.17 46.88 20.00

0.00
4.17 6.25 0.00

HBL

7.

Factors Involved in Leaving Previous Jobs

This question was specifically designed to know about those factors which compel employees to leave their job and joining new commercial banks. Employees generally communicate these factors about leaving their present jobs in exit interviews.

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Voluntary Employee Turnover in Banking Sector

Which of the following factors most influence your decision to leave the job?
Other

Domestic Problem
Low career growth Bad work condition Supervisor's negative behavior Low salary 0.00 Supervisor's negative behavior 14.29 0.00 0.00 5.88 8.33 3.13 5.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 Std Chtd HSBC NBP NIB Askari Low salary Std Chtd HSBC NBP 28.57 44.44 0.00 23.53 12.50 9.38 65.00 Bad work condition 14.29 0.00 0.00 11.76 12.50 18.75 5.00 Low career growth 28.57 55.56 0.00 41.18 58.33 59.38 0.00 Domestic Problem 0.00 0.00 33.33 0.00 4.17 0.00 0.00 Barclays Other 14.29 0.00 66.67 17.65 4.17 9.38 25.00 HBL

NIB
Askari Barclays HBL

Employees at HBL and HSBC have cited low salary as a major factor for leaving their previous jobs. Employees at NIB, Askari, Barclays and HSBC have pointed low career growth as a factor for leaving their jobs and, Bad working condition and supervisors bad behavior has been a factor for leaving job for employees at Standard Chartered, NIB and Askari. 8. Promotion

Career growth is a major factor contributing towards voluntary employee turnover. When employee do not get chances to excel in their career after putting up a hard work they feel low and then look for better job opportunity where more chances of career progression is promised

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Voluntary Employee Turnover in Banking Sector


to them. Career growth not only recognizes a hard working employee, it also gives employee more monetary benefits.

How many times you got promotion in this company?


Over 4 times 4 3 2

Std Chtd
1 None 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 HSBC NBP NIB Askari Barclays

None
Std Chtd 71.43 66.67

1
28.57 33.33

2
0.00 0.00

3
0.00 0.00

4
0.00 0.00

Over 4 times
0.00 0.00

HBL

HSBC
NBP NIB Askari

11.11
82.35 45.83 78.13 65.00

0.00
11.76 16.67 18.75 20.00

33.33
5.88 20.83 3.13 10.00

11.11
0.00 0.00 0.00 5.00

44.44
0.00 4.17 0.00 0.00

0.00
0.00 12.50 0.00 0.00

Barclays
HBL

At NBP where employees have been serving for more than 3 years, experienced more promotions as is evident from the results. But majority of employees serving in other commercial banks apart from NBP have not experienced promotion as they had expected when they joined these organizations. A major factor for this is also that majority of employees working in these banks have relatively less tenure in their present jobs. They joined these banks because of high company profile, career progression and salary package but they have yet to receive promotion. Banks will also consider these employees for promotion after they have put some years and effort in their present jobs.
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Voluntary Employee Turnover in Banking Sector


9. Attributes for Better Employment Opportunity

We asked from employees through our questionnaire about what attributes they prefer for better employment opportunity and the results are as following:

Which attribute is more important for better employment opportunity?


Other Internal Environment Medical Facility Working Condition Supervisor Std Chtd Monetary Benefits HSBC NBP NIB 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Askari Barclays Other 0.00 11.11 11.11 5.88 4.17 3.45 5.00 HBL

Company Profile

Company Profile
Std Chtd HSBC NBP NIB Askari Barclays HBL 28.57 44.44 66.67 29.41 29.17 41.38 0.00

Monetary Working Supervisor Benefits Condition


42.86 22.22 22.22 47.06 29.17 10.34 85.00 0.00 0.00 0.00 0.00 4.17 3.45 1.00 28.57 22.22 0.00 11.76 33.33 24.14 10.00

Medical Facility
0.00 0.00 0.00 0.00 0.00 3.45 1.00

Internal Environme nt 0.00 0.00 0.00 5.88 1.00 13.79 0.00

Employees of NBP, HSBC and Barclays chose company profile an attribute for better employment opportunity. NBP is one of the leading banks in the country with annual profits greater than any other bank. Clearly NBP has a very good profile and people join NBP for long term and short term benefits it provide. HSBC and Barclays are world leading banks with very strong company profile. Its no surprise that people who have joined these banks were looking for good company profile for their career progression. Employees at HBL, NIB and Standard
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Voluntary Employee Turnover in Banking Sector


Chartered chose monetary benefits for better employment opportunity and working condition was chosen by employees of Askari, Barclays, HSBC and Standard Chartered. 10. Salary Package

Salary package is one of the most important factor that decide whether an employee will leave or stay in a given organization. Employees look into salary package when they join new jobs and also after joining organization, it is an extrinsic factor which motivates employees to work hard to improve on their salary package and get more incentives. Sometimes they get their desired outcomes but sometimes they dont and when this happens it forces employee to leave job and look for better opportunity.

Salary package/monetary incentives are sufficient in my company?


Extremely Agree

Agree

Neutral

Disagree

Std Chtd HSBC

Extremely Disagree

NBP NIB

0.00 Extremely Disagree


Std Chtd HSBC NBP NIB Askari Barclays HBL 28.57 11.11 0.00 11.76 0.00 0.00 0.00

10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00


Disagree 0.00 22.22 0.00 47.06 12.50 40.63 20.00 Neutral 42.86 33.33 55.56 29.41 25.00 34.38 80.00 Agree 28.57 33.33 44.44 11.76 58.33 25.00 0.00 Extremely Agree 0.00 0.00 0.00 0.00 4.17 0.00 0.00

Askari Barclays HBL

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Voluntary Employee Turnover in Banking Sector


Employees at Askari and NBP are satisfied with salary package and incentives which are being offered to them by these banks. This will cause less employee turnover and will guarantee long term stay in these banks. A comparative analysis of salary packages of these banks was also done to find out why employees are satisfied with the salary and incentives. NBP Designations Cadre Basic Pay Range Remarks (Rs) (min-max) Askari Basic Pay Range Remarks (Rs) (min-max) Barclays Basic Pay Remarks Range (Rs) (min-max) 1)300 lit and 2400cc bank maint car for SVP. 2)200 lit and bank maint car for AVP. 3)150 lit for OG-I.

President SEVPs EVPs SVPs VPs AVPs MG(Askari) AMG(Askari) Executive Cadre

1) Salary package is after 215,700 - 500,000 43,500 - 108,750 revised every 2 years. 26,000 - 65,000 20,000 - 50,000 16,500 - 41,250 13,000 - 32,500 2) Increment in 134,800 - 350,000 Basic Pay is based on yearly 87,000 - 225,000 appraisal. 58,000 - 150,000 3) HRA is 50% of Basic Pay. 40,000 - 100,000 4) Medical Allowance is 28,600 - 70,000 8.3% of Basic 21,200 - 55,000

1) HRA is 45% of Basic Pay. 2) Utility Allowance is 10% of Basic Pay. 200,000 3) Medical Allowance is 10% of Basic Pay. 110,000 4) Fuel/ Conveyance Allowance as per existing -

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Voluntary Employee Turnover in Banking Sector


OG-I OG-II OG-III Officer Cadre 10,000 - 25,000 7,250 - 18,125 5,000 - 12,500 pay. 15,700 - 40,000 policy 60,000 45,000 30,000

5) Fuel/ 11,600 - 30,000 conveyance ceiling as per 8,900 - 22,000 entitlement 6) Education allowance as per existing policy

NBP is governed by independent Board of Directors who looks after bank administration, finance, employee salary etc. NBP also maintain a revolving fund with CMH, MH and AFIC Rawalpindi by which their employees can get treatment in these hospitals at any time by just showing a reference letter. Employee and his/her family get medical treatment from these hospitals and bank pays all the expenses afterwards. Employee can also get treatment from other hospitals apart from the ones mentioned above but then all the expenses are borne by the employees and get paid afterwards by showing the expenditure bills. Also employees get different incentives, bonuses and loans which are as under:a. b. c. Hafiz e Quran Rs 25,000 Marriage Rs 50,000

Institute of Banker Exam (clearing each stage in first attempt) (1) (2) (3) Stage 1 Stage 2 Stage 3 Rs 50,000 Rs 75,000 Rs 100,000
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Voluntary Employee Turnover in Banking Sector


d. Loans without interest (Motor car loan, House Building loan, Computer purchase loan). Year end bonuses basing upon profit earned by the bank. As NBP has been achieving considerable profit over the past few years, employees get yearly bonuses on regular basis.

e.

Although basic pay of employees at NBP is much less than that of Askari and Barclays but they are much satisfied with their present jobs. Mr. Aftab Gul, an HR manger of NBP, on giving interview said this that employees at NBP get much more year end bonuses than any other bank. Also incentives as described above are much greater and the kind of medical facilities which they receive is also very good. This causes low turnover and employees show greater organizational commitment. In contrast employees at Barclays and NIB are not satisfied with the salary packages which are being offered to them. This shows that company profile was more important to these employees when they were joining these organization but after sometime there need changed and they realized that pay and incentives being offered to them was not up to their expectations. This will cause dissatisfaction among employees at these banks and voluntary employee turnover will occur more. 11. Organizational Commitment

When intrinsic and extrinsic needs of employees are not met then employees show less organizational commitment and are more likely to leave their organization. Better salary and incentive packages, company profile, career progression, working condition, domestic situation of employees are some of the factors which contribute towards organizational commitment. Organizations try to have a balance of all these elements. Any lacking in one or more of these elements will cause employees to leave that organization. By looking at the results organizational commitment, employees at HBL have greater organizational commitment. They are less likely to leave their organization whereas majority of employees in other banks are generally satisfied but they dont have any plans for the future meaning that whenever good opportunity comes in their way, they may take it.

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Voluntary Employee Turnover in Banking Sector

I have decided to stay with current employer?


Dont have Plans

More than 5 years

3-5 years

Std Chtd 2-3 years HSBC NBP Less than 1 year NIB

Askari
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Barclays HBL

Less than 1 year


Std Chtd HSBC NBP NIB Askari Barclays HBL 0.00 22.22 0.00 5.88 0.00 9.38 0.00

2-3 years
28.57 22.22 0.00 29.41 12.50 18.75 0.00

3-5 years
14.29 33.33 0.00 5.88 0.00 15.63 10.00

More than 5 years 14.29 0.00 22.22 0.00 12.50 0.00 50.00

Dont have Plans 42.86 22.22 77.78 58.82 75.00 56.25 40.00

Moreover we also asked from employees after how long they served before they left their previous organization. This shows also the organizational commitment which these employees had with their previous organizations that is organization were able to meet their employee needs or not. For employees at NBP, NIB and HBL it is their first job as majority of them have been have been working for these organizations for more than 3 years showing greater organizational commitment. Majority of employees at Askari, Barclays and Standard Chartered left their previous organization after serving less than 3 years in them. When they find better job opportunity meeting their needs, they left their jobs to join present organization.

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Voluntary Employee Turnover in Banking Sector

After how long you left the previous job?


Its my first job Over 6 years 4-6 years 2-3 years

1-1.5 years
7-12 months 3-6 months Before 3 months 0.00 Before 3 months Std Chtd 14.29 0.00 0.00 0.00 4.17 3.13 0.00 20.00 3-6 months 0.00 11.11 0.00 5.88 0.00 9.38 0.00 7-12 months 14.29 22.22 0.00 0.00 8.33 12.50 0.00 40.00 1-1.5 years 14.29 22.22 0.00 5.88 20.83 25.00 10.00 60.00 80.00 100.00 Over 6 years 0.00 0.00 0.00 0.00 20.83 0.00 0.00 120.00 Its my first job 14.29 22.22 100.00 52.94 33.33 25.00 90.00

Std Chtd
HSBC NBP NIB Askari Barclays HBL 2-3 years 4-6 years 42.86 0.00 0.00 35.29 4.17 15.63 0.00 0.00 22.22 0.00 0.00 8.33 9.38 0.00

HSBC
NBP NIB Askari Barclays HBL

12.

Workload Balance and Appreciation of Work

Employees usually prefer an environment where they feel that equity is maintained in their work. They will be more satisfied in an organization where their work is appreciated and they get paid equally on the basis of their workload. In comparison to reward/ facilities, employees at HSBC, Askari and HBL feel their workload is equal whereas workload is more at Standard Chartered, NIB, Barclays and NBP. This may result in employee turnover and job dissatisfaction. When employee start to have this feeling that his workload is more as compared to other

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Voluntary Employee Turnover in Banking Sector


employee working with him and also he is not getting paid accordingly, then he will be looking for better job opportunity.

In comparison to reward or facilities, my work load is . . .


Extremely more

More

Equal Std Chtd HSBC Extremely Less 0.00 Extremely Less Std Chtd HSBC NBP NIB Askari Barclays HBL 14.29 0.00 0.00 0.00 10.00 20.00 Less 0.00 0.00 0.00 5.88 30.00 Equal 14.29 66.67 0.00 41.18 40.00 50.00 More 57.14 33.33 55.56 41.18 60.00 70.00 NBP NIB Askari Barclays Extremely more 14.29 0.00 44.44 11.76 HBL

Less

0.00
3.13 0.00

12.50
9.38 10.00

54.17
43.75 65.00

20.83
31.25 20.00

12.50
12.50 5.00

Similarly the employee wants recognition from their supervisor and bosses. The amount of effort they put up also results in company success. From our surveys we found out that generally all employees agree that their immediate boss/supervisor appreciate their work. This will also cause fewer turnovers as it influences the working environment and organizational culture. Employees will take more responsibility when risk taking will be encouraged and will show results. Employees will respond more to supervisors who will be guiding, coaching and appreciating their work.

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Voluntary Employee Turnover in Banking Sector

Your immediate boss encourages/appreciates your work?


Always

Sometimes yes

Neutral Std Chtd HSBC Not at all 0.00 Not at all Std Chtd HSBC NBP 10.00 20.00 30.00 Neutral 40.00 50.00 60.00 70.00 NBP NIB

Usually not

Askari
Barclays

Usually not

Sometimes yes

Always

28.57
11.11 0.00 5.88

0.00
0.00 0.00 11.76

14.29
33.33 33.33 29.41

28.57
33.33 55.56 35.29

28.57
22.22 11.11 17.65

HBL

NIB
Askari Barclays HBL

0.00
0.00 0.00

12.50
6.25 0.00

20.83
34.38 35.00

29.17
21.88 60.00

37.50
37.50 5.00

13.

Employee Training and Development

Training and Development is an important part of any organization success. It helps in employee retention and shows that organizations value its employees. Employees feel this as a part of their career progression so they also value training and development a lot. It encourages employee to put on more effort when that training is directly centered towards the goals and objectives of employee and organization. Employees at Barclays, HBL, Askari, NIB and HSBC agree that they are given training for the job at hand.

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Voluntary Employee Turnover in Banking Sector

Are you given training for the job at hand?


Extremely Agree

Agree

Neutral

Disagree
Extremely Disagree 0.00 Extremely Disagree Std Chtd HSBC NBP NIB Askari Barclays HBL 0.00 0.00 0.00 0.00 20.83 3.13 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Disagree 14.29 11.11 22.22 11.76 0.00 6.25 0.00 Neutral 57.14 33.33 77.78 52.94 33.33 40.63 55.00 Agree 28.57 55.56 0.00 23.53 33.33 43.75 40.00 Extremely Agree 0.00 0.00 0.00 11.76 12.50 6.25 5.00

Std Chtd HSBC NBP NIB Askari Barclays HBL

Training and development can only succeed when it is carefully planned by the HR department. Also HR department efforts in resolving employees issues, conducting career counseling and career progression will also help in employee retention. Generally employees in all banks agree that HR department needs to do more in their career progression and, training and development. Employees will feel more job satisfaction and there will be less chances of them leaving their jobs.

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Voluntary Employee Turnover in Banking Sector

Does HR department provide career counseling on your job progression?


Extremely Agree

Agree

Neutral

Disagree

Std Chtd HSBC

Extremely Disagree 0.00 Extremely Disagree Std Chtd HSBC NBP 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Disagree Neutral Agree Extremely Agree

NBP NIB Askari Barclays HBL

14.29
22.22 0.00 11.76

14.29
11.11 77.78 47.06

42.86
44.44 22.22 29.41

0.00
22.22 0.00 11.76

28.57
0.00 0.00 0.00

NIB
Askari Barclays HBL

33.33
9.38 0.00

33.33
28.13 10.00

16.67
46.88 65.00

12.50
15.63 25.00

4.17
0.00 0.00

14. Organizational Culture and Work Environment Organizational culture is the shared values and beliefs in an organization. Good organizational culture affects attention and retention of competent employees. Organizational culture is seen as a climate of the organization which employees, manager, customers and other experience. This culture affects service and quality, organizational productivity, and financial results. Results of this question are as under:

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Voluntary Employee Turnover in Banking Sector

Overall, I am happy with organizational culture and work environment?


Extremely Agree

Agree

Neutral

Disagree

Std Chtd HSBC

Extremely Disagree 0.00 Extremely Disagree 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00

NBP
NIB Askari Barclays

Disagree
14.29 0.00 0.00 11.76 12.50 15.63 5.00

Neutral
42.86 33.33 77.78 76.47 33.33 21.88 70.00

Agree
28.57 66.67 22.22 11.76 50.00 46.88 25.00

Extremely Agree
14.29 0.00 0.00 0.00 4.17 12.50 0.00

HBL

Std Chtd
HSBC NBP NIB Askari Barclays HBL

0.00 0.00 0.00 0.00 0.00 3.13 0.00

From the results, it is evident that employees of Standard Chartered, HSBC, Askari and Barclays are satisfied with their organizational culture and working environment. These banks are providing an open, free and family like environment to their employees. They are doing a number of things to retain their valuable employees. a. These banks have free way work environment, for entertainment they had small entertainment corner where Cable and television facility was available for employees. And its a mutual understanding between employees that they know if they avail these facilities whenever they will be having some free time or lunch breaks, and everyone understands their responsibilities.

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Voluntary Employee Turnover in Banking Sector


b. These banks arrange family picnics and get-togethers, to make employees feel like a part of one family, getting to know each other.
They have arranged for small sports facilities like Tennis table, carom, playing cards

c.

etc. d. Freedom of work is promoted in these organizations and risk taking is encouraged. Immediate supervisor and bosses helps and guide their subordinates. They also act as mentors for their subordinates. These banks reward and recognize high performing employees. They create a sense of pride in their employees about their organization values and beliefs. Employees consider meeting organizational goals and objectives as their personal goals.

e.

f. g.

h.

Apart from these above mentioned banks, other banks are also trying hard to have a culture where they attract more employees and have fewer turnovers. 15. Interviews a. Satisfaction with recruitment and selection i. We interviewed different employees and managers about the process of recruitment and selection process and most of the employees at all banks were satisfied with the recruitment and selections process at NBP, HBL and Askari. ii. In banks like NIB, Barclays and HSBC, most of the recruitment is done on Referral basis as concluded after interviews. iii. It was also told that most of the times when one senior employee moves, his all team moves with him to the new bank thus increasing the turnover rate. This behavior is mostly observed at banks like Barclays, NIB etc. b. Measures Adopted for Reducing Voluntary Turnover i. At Barclays what they do for retaining their employees is that they give special performance Appraisals or promotions.
25

Voluntary Employee Turnover in Banking Sector


ii. At NIB it was told that some measures like shifting an employee to his desired department where he may feel comfortable and be more productive, giving him his desired responsibilities. iii. At Banks like HBL, NBP and Askari there are not many efforts for reducing employee turnover. c. Reasons For Voluntary Employee Turn Over i. At Barclays and NIB main reasons were Changing Company Policies in a sense that would result in a constructive discharge sometimes. ii. Sometime Conflicts with management is also main reason for turnover in banks like NIB, HSBC etc. d. Feed Back Systems i. At Barclays they have Employees feedback surveys conducted by a third party and these surveys are conducted once a year in all branches at all over the world. ii. At NIB employees feedback surveys are conducted by the HR and then improvements are made based on the findings of those surveys. 16. Findings Most common reasons observed after conducting surveys and Interviews were:In overall survey Barclays has shown to be an employer in terms of Work environment, Organizational Culture, Rewards and facilities, Employee satisfaction as far as these private banks are concerned. If we compare it to NIB, NIB still has to improve itself in these above mention areas where Barclays has proven to be better in order to control its employee turnover. At NBP compensation given are excellent and their employees are very satisfied with it, where as if we compare it to Askari, it needs to improve in that respect. Better working condition is a desire and right of every employee, and a very important factor for employee satisfaction, motivation and thus reduction of employee turnover. At NIB and HBL management needs to focus on providing better working conditions to employees as according to employees demand in interviews.

26

Voluntary Employee Turnover in Banking Sector


Most Banks do not have Exit interview policies, after our interview we came to know that HR management at Askari will be starting exit interview process soon. It is observed that most employees that switch between 1 to 2 years of experience in order to get early promotions as, in most of the banks there are no promotions at early stages up to 3 years (i.e. promotions are done after 3 years of service). 17. Recommendations After going through the survey results, interviews and findings, we have come to following recommendations: a. b. HR department should play a key role in retaining their valuable employees. HR department should carry out career progression based upon performance appraisal. It should include training and development of employees after observing weaknesses and shortfalls in their performance appraisal. With new commercial banks opening in the Pakistan banking sector, already established banks should opt for pay for performance incentive plan to attract and retain employees more. Banks should also introduce bonuses based upon performance appraisal and improved benefits for all. Employees should be included in the organization goal and objective setting so that they feel valued and work hard to achieve those goals. Employees should then be rewarded and recognized when banks achieve those targets. More freedom at work be provided to employees so that they are able to perform much better and take risk when necessary to achieve organizational goals. Supervisors and managers should act as coach, rather as bosses and they should appreciate good performance and guide employees when they fail to reach goals. Organizational culture and work environment plays a very important part in having less employee voluntary turnover therefore banks should create a culture
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c.

d.

e.

f.

g.

h.

i.

j.

Voluntary Employee Turnover in Banking Sector


which truly represent their shared beliefs and values, and employees also believe in those values and beliefs.

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Voluntary Employee Turnover in Banking Sector


18. Questionnaire VOLUNTARY EMPLOYEE TURNOVER IN BANKING SECTOR QUESTIONNAIRE

Hello, we are doing research on factors that affect Voluntary Employee Turnover (VET) as partial requirement of our MSc Engineering Management program at CASE, Islamabad. We are interested in your views on VET. Please spend five minutes to fill the following questionnaire. ______________________________________________________________________________ 1. 2. Gender: A) Male B) Female

What is your age group? A) 18-24 B) 25-34 C) 35-44 D) 45-55 E) Over 55

3.

Please mention your department below: ______________________________________________

4.

For how long you have been working for this company? A) Less than 6 months B) 6 months to 1 year D) 3 years to 6 years E) 6 years to 10 years C) 1 year to 3 years F) Above 10 years

5.

I am satisfied with my job? A) Extremely Disagree E) Extremely Agree B) Disagree C) Neutral D) Agree

6.

I feel freedom while working? A) Extremely Disagree E) Extremely Agree B) Disagree C) Neutral D) Agree

7.

How many times you got promotion in this company? A) None B) 1 F) Over 4 times C) 2 D) 3 E) 4

8.

Salary package/ monetary incentives are sufficient in my company? A) Extremely Disagree E) Extremely Agree B) Disagree C) Neutral D) Agree

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Voluntary Employee Turnover in Banking Sector


9. Which element is more important for better employment opportunity? A) Company Profile E) Medical Facility 10. B) Monetary Benefits F) Internal Environment C) Supervisor D) Working Condition G) Other

After how long you left the previous job? A) Before 3 Months E) 2-3 Years B) 3- 6 Month F) 4- 6 Years C) 7-12 Month G) Over 6 Years D) 1-1.5 Years E) Its my first job

11.

I have decided to stay with current employer? A) Less than 1 Year E) Dont Have Plan B) 2-3 Years C) 3-5 Years D) More Then 5 Years

12.

Which of the following factors most influence your decision to leave the job? A) Low Salary B) Supervisors Negative Behavior D) Low Career Growth E) domestic Problem C) Bad Work Condition F) Other

13.

Your immediate boss encourages / appreciates your work? A) Not At All B) Usually Not C) Neutral D) Sometimes Yes E) Always

14.

In comparison to reward or facilities, my work load is. . . . A) Extremely Less B) Less C) Equal D) More E) Extremely More

15.

Are you given training for the job at hand? A) Extremely Disagree E) Extremely Agree B) Disagree C) Neutral D) Agree

16.

Does HR department provide career counseling on your job progression? A) Extremely Disagree E) Extremely Agree B) Disagree C) Neutral D) Agree

17.

Overall, I am happy with organizational culture and work environment? A) Extremely Disagree E) Extremely Agree B) Disagree C) Neutral D) Agree

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Voluntary Employee Turnover in Banking Sector


19. Sample Interview SAMPLE INTERVIEW Section One: a. b. c. Section Two: d. e. f. g. h. i. j. k. l. Are you satisfied with recruitment and selection process in this company? How do you identify employee training needs? Have you implemented any skill enhancement program for employees? How you measure efficiency or performance of individual employee? Which measures you are adopting to minimize Voluntary Employee Turnover? How you make work environment healthy for employees? How you maintain salary slabs at different levels of employees? What are the main reasons for Voluntary Employee Turnover? Do you have any feedback system to know about employee needs? Introduction of the interviewer and interviewee. Briefing about company and interviewee position in the company. Overview of employee turnover in the company (Voluntary & Involuntary)

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Voluntary Employee Turnover in Banking Sector


20. References Anonymous. (1989). Absenteeism and turnover, Business roundtable. Becker, G. (1975). Human Capital. New York: National Bureau of Economic Research. Harman, W.S., Lee, T.H., Mitchell, H., Felps, W. and Owens, B.P. (1999). The Psychology of Voluntary Employee Turnover. Psychological Science. Smithers, A. and P. Robinson. 1998. Profession. Research Report. Human Resource Management 11th edition by Robert L. Mathis and John H. Jackson Factors Affecting TeachersDecisions to Leave the

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