This action might not be possible to undo. Are you sure you want to continue?
UNIVERISTY OF LAGOS FACULTY OF BUSINESS ADMINISTRATION DEPARTMENT OF INDUSTRIAL RELATIONS AND PERSONNEL MANAGEMENT Proposed Title of Thesis: "The impact of Labour Turnover on Organsiation Productivity: (A study of Mutual Benefits Life Assurance Plc.)" By: Onadele Dare, Jacob Matric No: 070206062 Being a Research Proposal Submitted to the Department of Industrial Relations and Personnel Management, Faculty of Business Administration, University of Lagos. In Partial fulfilment of the Award of BSc in Industrial Relations & Personnel Management. Supervisor: Mr. A. E Badejo May 2011 1 INTRODUCTION The practice of human resource management (HRM) is concerned with all aspects of how people are employed and managed in an organisation (Armstrong, 2009). The strategic business function organ of the organisation sees to the inflow and outflow of employees in the organisaiton. The HRM function of directing the organisation system to ensure that human talents are used effectively to accomplish desired goals is very crucial, thereby not left ignored. Organisations zealous about growth would always intend to develop their respective current human capital and other potentials. But in this world of frequent upgrade and innovations in the business environment and the technological ways of doing things, organisations would commit themselves towards bringing their workforce to the task requiring intellectual and manual growth and development. The idea behind this would be to intensify the additional productivity generated by extra employee hired. All these put together would amount to organisations being cost conscious in making sure that employees with high human capital do not leave their organisations. But in order to be realistic, organizations cannot be everything to all people. No matter how great your company is, it is likely that some of your employees will eventually move
In other words. 2011). It hereby leaves us wondering what optimal number is needed for the organization’s best productivity. is the number of permanent employees leaving the company within the reported period versus the number of actual Active Permanent employees on the last day of the previous reported period (physical headcount). could eat deep into the profitability and threaten the sustainability of any organization. or resignation during a period to the number of employees on payroll during the same period makes up what is referred to as Labour Turnover. Organizations lose not just financially. monetary and time cost recorded when highly frequent labour turnover occurs. Labour or worker or employee or staff turnover has it is often referred to. . This is especially the case if those leaving are either key to its success and continuity or do so because they think you have treated them unfairly. the research on the consequences of labour turnover is inconclusive. dismissal. That may be costing you a lot and affecting your well enjoyed stabilized organization productivity. thereby affecting productivity which makes this a problem that begs for answer. This as well would reflect on the productivity of the organization concerned. many brows are raised on its persistence. Therefore curbing turnover to its optimal level for the organization is a major challenge. the ratio of the number of employees that leave a company through attrition. high turnover can be harmful to a company's productivity if skilled workers are often leaving and the worker population contains a high percentage of novice workers (Open Forum. occupation or industry. if any. The Nigerian insurance sector has not been left out as labour turnover has been disrupting their services and relatively their organization productivity. if not looked into. The Human Resource Managers and the executives of these organizations have always been on their toes to proffer solutions to labour turnover. As a global challenge as well mandatory confrontation of the technological and environmental diversities which organizations have to face. which could result in tribunal claims (Business Link. Campion 1991). 2006). This could have been due to avoidable or unavoidable reasons. (Abelson 1987. This is because at one employee’s voluntary or involuntary time they would have to leave the organization. However. An employee leaving the organization either voluntarily or involuntarily is certain to have positive or negative effects on the organization. The consciousness of hiring. or in productivity when they have an employee with huge human capital permanently departing from their organization.on to other opportunities. This means maintaining the satisfactory level of productivity might be threatened. According to Business Dictionary (2011).2 STATEMENT OF RESEARCH PROBLEM Labour turnover as noticed. 2011). 1. but an issue tackled by organizations all around the world. it fosters why researchers are becoming interested in it more. and provides little guidance on how much turnover. As turnover even poses to be a major and widely studied organizational behavior phenomenon. is optimal (Siebert. It is a phenomenon that not just affects a company.
They argue. However. Some new fresh ideas have been witnessed with the opportunities for new transfers and promotions. For example. Also Baron. The finding on hires is interpreted in terms of turnover costs. McEvoy and Cascio’s (1987) meta-analysis of twenty-four reported correlations between performance and turnover concluded that ‘good performers are … less likely to leave … than are poor performers’. as in Batt (2002) for U. But some have since been reporting the optimistic side of the coin. Bingley and Westergaard-Nielsen (2004) look at hires and quits simultaneously in their study of personnel policies and profit in a panel of 7. Job matching theory (Jovanovic. Maliranta and Vainiomäki (2005) report a positive impact of turnover on total factor productivity growth in Finnish manufacturing. 1. but those still have to be compared to the contributions or reductions which are now available. the organizations need to plan in anticipating an optimal level of labour human capital that can yield the needed productivity in the Nigerian insurance sector which is becoming labour shortages. financial company. Human capital theories of labour turnover point to loss of firm-specific human and social capital (Dess and Shaw 2001). Huselid (1995) finds high labour turnover negatively linked to labour productivity in his sample of 968 U.The technological and business demands of electronic dealings have also affected ways in which operations are carried out in the Nigerian insurance industry.3 LITERATURE REVIEW Employee turnover has benefits and costs for organizational performance (Ableson & Baysinger.118 Danish organisations over 1992-95. This study would look into how the effects of the voluntary or involuntary labour turnover have impacted on the productivity level of the organization observed. This negative view is supported by the results of several empirical studies. Ilmakunnas.S. consistently with job matching theory that the least productive workers are more likely to leave. 1984). McElroy. the Nigerian insurance sector may be faced with such ups and downs as regards to impact of labour turnover on organisation productivity. As well to what extent. there is room for labour turnover to improve performance (productivity) by clearing the workforce of poor worker-job matches. Hannan and Burton (2001) find turnover to be “disruptive” in their study of hi-tech start-ups in California in the early 1990s. But relatively unlike most of the research on the topic. In contrast to the popular result.S. Morrow and Rude (2001) for branches of a U. The human resource management literature has traditionally viewed labour turnover in a negative light. 1979) predicts that workers less suitable for the organisation would result into leaving it earlier. In the same vain. Many studies have concentrated on quits specifically. 758). and have found a negative impact of quits on firm performance. hence. call centres. etc. they conclude that quits increase profit and hires reduce it. Williams and Livingstone’s (1994) further meta-study of turnover supported McEvoy and Cascio (1987) and proved an even stronger negative relationship between worker individual performance and voluntary turnover when pay is contingent on the organisation’s productivity. firms. since hires incur recruitment and training costs. .S. But a study is not just being carried out to have the positive sides analysed. which supports the main prediction of job matching theory (p.
The case of a firm in the Nigerian insurance sector on the impact of labour turnover on productivity may take along the practice of the HRM.4 PURPOSE OF THE STUDY The purpose of this study is to achieve the following: i. 1. iv. To investigate the impact of business diversities requirement like technology amounting to organization productivity on labour turnover. iii. Does Nigerian insurance sector witness labour turnover? ii. an organisation in the Nigerian insurance industry being studied if the earlier affirmations can be upheld or restructured to show our society’s diversified business environment. Are there measures of curbing labour turnover when organization sees it could halt productivity? . and Canadian concrete plants and U. Those were observed by W. This particular study. Glebbeek and Bax (2004) using data from offices of a temporary employment agency in the Netherlands over 1995-98 indeed find an inverted U-shape relationship between worker turnover and productivity.435 workplaces in Australia over 1995-97. reconciliation of job matching and human capital theories of labour turnover is assisted by distinguishing between quits and hires a path we will follow. However. To examine labour turnover impact on MBLA 1.S.S. transportation companies. To affirm the relationship between labour turnover and organization productivity. They are: i. Stanley Siebert. by Harris. Tang and Tseng (2002). Is organization productivity disrupted when organization labour turnover takes place? iv. Is labour turnover a challenge to organization? iii. Guthrie (2001) found a dichotomy in the impact of turnover on productivity depending on the type of human resource management (HRM) system in the organisation. Particularly. Gupta and Delery (2005: 61) report the opposite result for U.5 RESEARCH QUESTIONS The following are the research questions developed for the course of this study. Does an organization have any positive productivity advantage when labour turnover occurs? v. would look into ups and downs earlier known to rock an organisation’s productivity if it has employee turnover. ii. Arnaud Chevalier. where they conclude that the relationship between voluntary turnover and workforce performance is ‘negative but becomes attenuated as turnover increases’. however.Thus. Tarja Viitanen (2006). Nikolay Zubanov. The same relationship between labour turnover and productivity is reported in a study of 2. To investigate how organisations can reduce unfavourable labour turnover on productivity. Shaw.
the other population are either their marketers or ther junior workers. the employees of the organisation would be unbiasedly picked. H0: There is a significant relationship between labour turnover and organization productivity of MBLA.8 RESEARCH METHODOLOGY 1.1. analysis and addition to the current existing body of knowledge. However the organisation has about 500 staff with about 15 of them taking charge of the executive functions of the company.8.2 Population of the Study Due to the uneasy access to the entire population of this study. This would be enforced among both the senior and junior employees of the organisation. a population is the whole collection of all elements that a research is studying and from which generalization will be drawn from. According to Levin and Rubin. 1. Besides. All these effort is to have a reasonable conclusion from which generalisation would be ascertained.6 STATEMENT OF HYPOTHESES The hypotheses to be used in validating this study project are stated as follows: H0: There is no significant relationship between the labour turnover and organization productivity of MBLA. Knowing the costly effect of an unchecked labour turnover on the organization productivity. a sample would be drawn up.3 Sampling and Sampling Techniques With application of a stratified sampling. The study would make use of a branch of MBLA and a generalisation would be utilized. (2002). 1. this study would help HR managers on other logical steps to militate against employee turnover. 1. By using this study different organization can reduce the rate of employee turnover and increase their productivity and profitability. H0: There is no impact on labour turnover and organization productivity of MBLA H0 : There is an impact of labour turnover on organization productivity of MBLA.8. Also the administrative functions are run by over 60 of their staff.7 SIGNIFICANCE OF THE STUDY The significance of this study is tailored towards the evaluation. . It would assist the human resource managers in capturing adverse labour turnover effect which could halt their organization’s effectiveness and efficiency. The recommendations can be used in helping organizations not just in the Nigerian insurance sector but as well other sectors of the economy.
median.businesslink.6 Test of the Conjuctural Statement With the use correlation. the hypotheses of the study would be put to test. Also. The mean. regression and t-test. the fifth chapter would see to the conclusion and recommendation of the project.1. 2002. Besides that. and .9 SYNOPSIS The outline of this five-study would wear the face of having the first chapter introducing the topic and its subject matter of labour turnover and its corresponding effect on organisation productivity.gov.uk/bdotg/action/detail? itemId=1074411249&type=RESOURCES http://www. the third chapter would have the methodology to apply in carrying out this study.8. These would be used in getting the necessary source of data in generating findings on the impact of labour turnover on organisation productivity in the Nigerian insurance sector. REFERENCES http://www. This is where the findings and results of the study would be concluded and any recommendation suitable for MBLA and other organisations of its kind would be issued for their discretional adoption. Also.4 Strategy for the Collection of Data The primary data generation would be through dissemination of quesstionaires and some other additional interview briefs. The other earlier publications would be added to have a concrete information. 1. frequency and percentiles would be explored for a clearer data presentation 1. This would enhance the genuineness of this study. SPSS. the fourth study would look at the data presented and analysed in the format that is generally acceptable.8.com/idea-hub/topics/money/article/the-high-cost-of-employeeturnover-scott-allen Batt. in other to have a good research work in the study. The instruments and sources of data that would be applied at MBLA in assuring that the right information are gathered within the confinement of the ethical stands. However. From this some theories and standings of previous scholars would be incorporated into this particular present topic. the second chapter of the study would contain the prior knowledge and study done on this topic. mode. 1.5 Data Presentation The new advancement in statistical analysis. quit rates.openforum. would be utilized in presenting the data generated. Managing customer services: Human resource practices.8. R.
P. 26 1-275.. F. S. Hayes (2002). Batt.. (2002).. M.” Business-Unit. human resource practices. A. Psychological Bulletin. A. & Keefe. Colvin. James K. MAYHEW.. & PACK. Prentice Hall” GREEN. & GRONHAUG. Wilkinson (2001). Thoresen. (2000). Harter. Employee Engagement. 2006.” The job satisfaction–job performance relationship: A qualitative and quantitative review”. K.. Becker. J. Kogan Page. 55: 573–594. A. E. & Patton. Armstrong (2006). T. J. Employee voice. J. 127. 32: 898–925. London. Business School Research Series. Industrial and Labour Relations Review. Loan-Clarke and A. Morrell. “Unweaving Leaving: The Use of Models in the Management of Employee Turnover”..Level Relationship between Employee Satisfaction. Academy of Management Journal. No.. G. Schmidt. Bono. & Huselid. J. 87. FELSTEAD. and Business Outcomes: A Meta-Analysis”. J. Loughborough University. B.”The impact of training on labour mobility: individual and firm-level evidence from Britain” British Journal of Industrial Relations. K. 2. 268–279 Judge. 38.”Research Methods in Business Studies: a practical guide. M. Strategic human resource management: Where do we go from here? Journal of Management. Theodore L. 45: 587–597. United Kingdom . and quit rates: Evidence from the telecommunications industry.sales growth. C.376–407. Human Resource Management. Vol. Frank L. K. (2001).. K. R. GHAURI. A. 2002.