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CHAPTER TWO

REVIEW OF LITERATURE
2.1 Introduction
The first chapter of introduction carries the literature and references used in this dissertation ,
their causes and the many reasons behind employees turnover along with its influence on gender
and the period of their services. There are many writers who wrote various articles on the reasons
of employees turnover and not just that but the researchers also discussed the various models
related to that and the attitude of staff on the turnover of fellow employees.
2.2 Perceptions on employees turnover
Human resource management describes employee turnover as the rotation of employees in other
firms, occupations, jobs and in several conditions between employment and unemployment
(Abassi SM, Hollman KW (2000).
Price (1977) described turnover as the ratio of employees who have resign from their jobs in a
particular time period. According to the many managers, filling a vacancy is associated with
turnover of employees, that is, each time a position is vacant, managers try to hire a new
employee on that position and make him trained personnel. Turnover is also used to measure the
relationship between employees once they leave the organization irrespective of any reason.
Many people consider the increasing turnover rate because of lack of influence of employees or
workers and hence they leave the organization voluntarily and this is the reason that the
definition defined by Taylor (2002) is being widely considered and according to him turnover is
the process of termination of a worker which used to receive income from the organization
against his services.

The concept of voluntarily turnover of employees has been precisely described by Mobley and
has become the foundation for majority of the organizations (Booth and Hammer 2007). For
instance, referring to Chinese IT industry, the turnover rate and loss of motivation among
employees has been conducted by domestic scholars.
Zhang M, Li SZ (2005) described the immense employees turnover and lack of motivation based
on Mobleys definition, which is, it is the process in which employees receiving income from the
organization terminate their contracts and hence this definition best implies where the employees
are in huge numbers serving the organization without wage which is actually being practiced in
Chinese organizations. On the other hand, intent of turnover which can actually be called as
tendency to withdraw has an equal standing according to the definition presented by Mobley
(1978). Mobley tried to include various variables in the model like thinking of quitting, job
searching, intention of turnover, voluntary turnover to behavior occurring. This concept may be
termed as turnover tendency rather than turnover behavior ( Storey 2001).
2.3 Models of employees turnover
2.3.1 The turnover thinking
There are many primary studies in context with the increased turnover rate of employees in the
beginning of the 20th Century. There came many reasons behind the decision of employees
turnover, some of the common reasons are market structure, salaries, training of employees and
the various job opportunities. Good opportunities and perks will help the employees to stay in the
organization and keep them motivated: turnover theory (Vegeris, 2006 ;Zhang et al., 2006).

Integrative theory which relates to the management of employees and their retention, presented
by Booth and Hammer (2007) with respect to organizational society, psychology of an
individual, and the discussions related to economic interests and the various other factors include
(individual goal, desirability, impetus, and other available opportunities which can be perceived)
which influence people to become a part of various organizations and then organizations try and
keep the level of motivation of employees at peak so that they can serve the organization on the
long term basis. However, keeping all the aspects and variables in mind, organizations still
cannot retain their employees because of their blooming interest in high salaries and other perks
and benefits which change the behavior of employees drastically and hence this becomes the
reason of employees turnover (Zhang and Li, 2005).
2.3.2 Job-hopping phenomenon
Ghiselli (1974) was the first person who documented the concept which is actually similar to job
hopping and he named it as hobo syndrome. According to him hobo syndrome is a switching
of job to some other job or switching of place from some other place (p. 81). According to
Ghiselli (1974), this switching of job emerges from instincts rather than any logical thoughts.
Personal impulsiveness plays an immense role in switching the job from another job. Another
part of job hopping focuses on social influences or the culture of turnover. According to Griffeth,
et al (2000), the culture of turnover is the shared process among the members of an organization

which influence the decisions of the members regarding their jobs. The culture of turnover makes
the process of job hopping acceptable among the society. For instance, if an individual is serving
the organization for a long period of time, he or she will feel the immense pressure to switch the
job because of the social influence of the culture of turnover.
2.3.3 Period of job- attitude

Scholars have promoted the research on the movement of people within the organization and
hence this topic became important in the field of research. Since the very beginning when the
models were being developed on the rate of turnover of employees, the concept of equilibrium
theory was being considered. Lee and Mitchell et al., (2004) considered factors and recognizing
the behavior of employees and the causes behind their decision of quitting the job. According to
the organizational equilibrium theory, few of the variables are considered important which
persuade the employees to change their behavior towards the job and encourage turnover
behavior. The model of job attitude since the last 60 years maintained a stable position in the
mainstream research. The model is based on the employees attitude towards the job and focuses
on enhancing the organizational commitment of employees (Zhang et al 2006).
In the old or classic model, the reason behind turnover of employees is considered when
employees tend to get better and new job opportunities, which actually is considered as an
external factor which influences the employees to adopt turnover behavior (Lee et al., 2004). The
classical approach or the classical model is based on employees attitude towards the job and
considers the complete psychological process of an individual. Another non mainstream model
or voluntary turnover model has its own importance in the research literature (Armstrong 2009).
According to which job satisfaction is the only indicator which encourages turnover behavior
and does not involve any psychological process. This model is introduced by Price (1977) which
also regarded this model as attitude models in the literature of organizational turnover of
employees, which was published in the year 1995.

Griffith (2000) published the research on employees volunteer turnover which was published in
classic management magazine. According to him, few of the related variables turned out as
demographic predictors, sixteen variables related to organizational and working conditions
factors and also to the job satisfaction of the workers, these factors are expectations, pay
satisfaction, distributive justice, supervisory satisfaction, leader-member exchange, work group
cohesion, coworker satisfaction, role clarify; another six variables which are related to the
content of the job and environmental factors are job scope, routinisation, job involvement,
alternative job opportunities, comparison with present job etc.; there are other three types of
behavioral predictors and nine kind of neutral or adjusting variables for the process of turnover
or withdrawal from the job.
Griffith (2000) reviewed a general model of research and also analyzed the traditional model of
attitude. Hausknecht (2008) jotted down the major retention factors which also published in the
research literature for over 60 years, through which one can understand that why employees keep
on serving the organization and why they quit the job. To conclude that, in the traditional attitude
turnover model, employees turnover is increased because organizations cannot retain the
employees which encourage the turnover behavior among them and which consist of four
different sectors (Lee and Mitchell, 1999): first reason involves the dissatisfaction of job, second
is that employees look forward for the new jobs and job opportunities and then evaluation.

2.3.4 Employees Performance Rates


Murphy (2006) observed the difference between low rate of performance and high rate of
performance. They pointed out that it is important to emphasize the level of job performance and

its affect on employees turnover. According to Sears (2006), previously done researches stressed
that organizations are badly affected due to the turnover of employees and hence came up with
the turnover classification model which was based on the rewards for employees and the
appraisals of employees. Hence, the model highlighted the factors behind the voluntary turnover
of employees and its negative effect on organization and this is the reason that this topic becomes
important and the highlighted topic in the research literature.
2.3.5 Work-performance
The multi routes model, which was adapted from Allen and Griffeth (2003 pp. 525-548) in order
to improve the competitiveness of organization and clarification, while constructing this model,
the features were taken into consideration about the retained employees, their influence to
participate and the productivity of organization because of the turnover of employees (Dess et
al., 2001). Allen and Griffeth (2003) focuses on the performance level of employees and their
decision about turnover, which is actually summarized in 3 major categories.
2.3.6 Job coupling
Hypothesis made in the job attitude turnover model involves various variables which are related
to the various jobs in the organizations which leads to turnover decision and job hunting of
employees, the satisfaction level of employees and organizational commitment which results in
turnover of employees. Hence, the model tries to explore the predetermined factors which
actually influence other mediator variables and hence improve the interpretation of the overall
variables. Though, the recent analysis provided by Ngo et al (2009) on the research literature
convey that the mediator variables like job satisfaction and organizational commitment interprets
only 3.6% variance of the real behavior of turnover among employees and the tendency to

withdraw increases because of the precursor variable, which is considered as the most important
variable which encourages turnover behavior and interprets 12% of actual behavior of turnover.
A new variable which became the part of the traditional model is job coupling and is defined in
two ways, the one is called job coupling and the other one is called as off job coupling. The
variables of job coupling are defined in three broad heads, namely, linkage, fitness and sacrifice.
Fitness is defined as a persons comfort and ease while working in the organization or in a given
environment. According to this theory, a persons goals, values and his or her career plans must
be compatible with the culture of the organization and with the requirements of his or her job
like, knowledge of job, his or her skills and abilities. Moreover, an employee will also overview
that how well he is adjusted in the given work environment.
According to the study, greater the compatibility of various variables, higher the chances that an
employee will feel committed towards the organization. Linkage is the connections of employees
with the organization. According to job coupling, there are number of factors which connect
employees towards the organization and which include social, financial and psychological
factors which include friends, family, community and the environmental factors. Greater the
links higher will be the productivity of the employees. Sacrifice is the perceived value of
psychological benefits that a person loses while departing from the organization. for instance, a
person may lose a network of people, losing contacts and interaction with friends and other perks
and benefits (Murphy 2006).
Lee and Mitchell (2004) came up with the improved job coupling model. More than 92%
samples came out satisfactorily for the turnover behavior of employees by combining social and
psychological factors. Researches came up with this conclusion that job coupling has a
significant impact on employee retention rather than job satisfaction or organizational

commitment. Herman, R. (2005) asserted that the performance of employees in an organization


is based on social factors made and followed by individuals. Mitchell and Lee (2003) also
described in another model that job relationship is a binding force which binds the people.
People, who have increased characters of job coupling, tend to enjoy their jobs and network of
people.

2.4 Turnover Influence on Employees Productivity


The deviation of employees from the organization influence organization in terms of money as
well as intangible knowledge and productivity cost. According to the study of SHRM (2008) the
expense of changing and hiring new employees are as up as 60% of employees yearly salary and
the total expense of training the employees, their replacement and productivity loss can range up
to 90% to 200% of employees yearly salary. These expenses can be very difficult to absorb no
matter the organization is a big global firm or a small enterprise. This shows that how much the
organization is effected by the departures of the employees. The loss from the departure of
employees creates difficulties in terms of developing new products, interrupts relationships with
clients, and postponed the delivery of customers. These delays in production process along with
the replacement expenses of employees deviation impacts organization in a very bad way and
affects the organizations overall performance and prosperity. The Human Resource Management
writings watch employees turnover in a negative manner. According to Yi. & Lai, (2001) the
employees turnover is a big reason for the loss of firms social and human capital. Because of
employees turnover the organization have to face many changes (Carroll & Harrison 1998).
Several studies favored this negative view. For instance the Huselid (1995) took the sample of
968 U.S firms and found out that high turnover of employees leads to lower productivity.

Peterson(2005) also finds that the deviation of employees create difficulties in the study of their
high tech startups in the California in the 1990s. Lots of investigation are also did on quitting the
organization and the researchers found out that quitting of employees can creates negative
impacts of firms performance. Job matching theory suggests that the workers who left earlier
creates negative impact on the organization so there is a chance to improve performance by glade
the workforce of poor job-worker matches.

2.5 Employees approach towards turnover


There are many factors that leads an employee to leave the organization. Different Researchers
concentrated on different factors in this regard. According to Sears (2006), female employees are
given more priority and importance over male employees and females wages are high as
compared to males and because of these more male employees leave the organization. Igbaria
and Baraudi discovered the fact that the role of gender in the Turnover is very evident. Sisson &
Storey, (2000) argued that those employees who get better opportunities in another organization
are less dedicated towards the current organization and have higher turnover aims. According to
Sears (2006) those who get job alternatives can moderately foretell turnovers behavior. Robbins
(1979) said that the importance of task has the impact of ones work on anothers life. Samad
(2006) discover that there is a negative relationship between tasks significance and turnover
intentions. According to Mullins (2005) the salary is the important factor regarding employees
turnover. The employee who gets more salary is less intended to move to another organization
besides those who gets low salary. Job satisfaction is defined as the pleasing emotional feeling
from the appraisal of ones particular job, an effective response or an attitude towards ones job.

In other words job satisfaction means that how much a person fancy or loves his job. Weiss
(2002) stated that job satisfaction is a stance; it invokes to how an individual is comfortable with
his particular job. Job satisfaction is very important as far as the long term performance of the
organization is concern. Job satisfaction is firmly related to effectiveness and efficiency and it
has been observed that many teachers fail to build self-efficacy in educational settings.
2.6

Employees motivation

Managing the employees training, motivational activities, work schedules, performance reports,
employees behavior, hiring and firing, putting right person at the right place are the usual
activities of the Human Resource Management department of any expand organization. All over
the world the companies or organizations has comprehend that skilled labor and dishonored
people harmed the organizations for better pay incentives because they understand that human
resource is the most important asset for the organization. In evolving countries the skilled labour
and dishonored people are economically and intellectually captured from their competitors with
two plus two packages to contest the market and more than often they prosper to strap the
organization with the stakeholder (Taylor 2002). These type of practices urges the employees to
go for better employment opportunities. How the employees turnover intent can be reduced is a
big dare for the head of Human Resource Management. The purpose for this study is to realize
the effect of job stress, job satisfaction, job involvement, and job organizational commitment on
employees turnover intent. This study is an effort to make strategies regarding the behavioral
intentions of employees towards turnover to survive in the current competition of the world
(Mullins 2005).

Employee turnover is the very important concern for the organizations. Human capital refers as a
key to organizational performance, the reduction of workforce strength can create a big effect on
organization performance, income, and the growth. The factors of comparison include cost of
entering other employees in the organization, productivity factors, and the number of positions
filled. The employees deviation is defined as the rate at which employees comes in and out of the
organization. Human Resource officers and organizational professionals analyze the turnover for
three main motives: it has important cost allegations, it disturbs overall business growth and it
has the potential to become hard to manage, resulting in talent crises, where it is very difficult to
discover the skillful and talented candidates with the skills needed to fill the position (Taylor et al
2003).
The deviation of employees from the organization influence organization in terms of money as
well as intangible knowledge and productivity cost. According to the study of SHRM (2008) the
expense of changing and hiring new employees are as up as 60% of employees yearly salary and
the total expense of training the employees, their replacement and productivity loss can range up
to 90% to 200% of employees yearly salary. These expenses can be very difficult to absorb no
matter the organization is a big global firm or a small enterprise. This shows that how much the
organization is effected by the departures of the employees. The loss from the departure of
employees creates difficulties in terms of developing new products, interrupts relationships with
clients, and postponed the delivery of customers. These delays in production process along with
the replacement expenses of employees deviation impacts organization in a very bad way and
affects the organizations overall performance and prosperity.
The empty positions also become a reason of reduction in overall productivity. Those employees
that are a part of organization are less productive when they are forced to do tasks of the vacant

job positions in addition to their job responsibilities. Once an empty positions are filled with the
new 41 employees, those employees were less redound or contributing to their main
responsibilities and thus the organization was in immediate need to train those employees. The
organizations that do not make policies and strategies to face the employees turnover issue then
they will have to face the consequences in the future. According to Manpower Inc, the labor
force is changing radically, with demographic shifts, increasing outsourcing and rising
entrepreneurship, exact skills sets and competencies moving out quickly from the organization.
The affect is also felt in todays world. According to SHRM survey of HR specialists, 75% of the
respondents have found difficulties in hiring those employees that match the skills that were
needed for the job and the skilled worker had to do the additional tasks to make up for them.
SHRM noted the recruiting problems since December 2009 (SHRM 2010).
Performance, Organizational culture, goal orientation are forecasted as career satisfaction while
the career satisfaction is the very important factor of the organizational commitment and
organizational commitment is the forecaster of the employees turnover intention. The employees
turnover intention has the negative relationship with the leadership behavior and the satisfaction
as the intercede have a negative effect on employees turn over intention and leadership behavior.
Distinguished service quality of employees has negative and important affect on employees
turnover rate while the affect of role clarity, empowerment and coaching plays a positive
interceding role between perceived service quality and employees turnover rate (Legge 2005).
The most general cause for an employees turnover is the salary packages that the company
offers. Employees are always in search for those organizations that pays well. Those people who
are in desperate need of a job take the first one while searching for the better jobs side by side.
The employees also leave the organization because of the bad performance appraisal system.

Low pay is a good cause as to why an employee is lacking in performing job tasks. (Rampur
2009). Unequal distribution of salary come under this category is well. When two or more
employees execute same tasks and have similar duties then difference in their salaries can drive
the lower employed to quit the organization. If you pay lower wage to the employee for the
similar kind of work that the others are doing then the employee are more likely to jump for
higher pay, if other factors are equal (Handelsman, 2009).
According to Stephen A. Laser, writer of Dealing with the Problem of Employee Turnover, Most
scholars feel that the major reason for employees turnover is the salary that the organization
offers. While there is some hold up for this view, its significance has been greatly overstated; it is
broadly held because individuals are making excuse of salary for leaving the organization,
making the organization a clear target for employee frustrations. This is largely due to the
circumstance that some workers wants to give more personal causes for leaving the organization
and they also risk the chance to get the good reference at the later date. Another major
misunderstanding is that employees turnover is because of the work ethics of the nation. It is
fact that the attitudes of the employees have vividly changed in the last thirty years. The main
reasons of the employee deviation are the problems that are occur within the organization not the
attitude of the new employees. The laziness on the part of the employers to look into the inner
matter of the organizations cannot resolve the turnover problems (Laser, 1980). Another
important reason of the employees turnover is the lack of benefits they get from the
organization. High employees deviation is also because of the no possible developments or
promotion opportunities. Employees give more priority to those organizations who gives them
more salary with good incentives. If the job is essentially the dead end proposal, so it is the duty
of the employer to explained this to employee earlier so he could not be misguided or goes to the

wrong path. It is the duty of the employer to explained the job responsibilities very precisely,
without raising wrong hopes for the prosperity and growth in the position. The employees
usually want to perform better but they also wants that their work should be appreciated and
recognized by the employer. The most consistent worker also needs some kind of appreciation
for their jobs, it increases morale and satisfaction (Shamsuzzoha, 2007).
Some workers move company to company because they favor a working environment thats suits
their needs. If working conditions are poor such as bad furniture, poor lighting, no cleanliness,
mismanagement, then the worker is keener to deviate from the job to another. If the working
conditions are better such as proper lighting, good furniture, well dressed staff, proper
management then he is keen to work with the organization for a longer period of time
(Handelsman, 2009). Assigning tasks that are beyond their reach is also an important reason for
the employees turnover. Employees would definitely leave the organization if they are not
utilized at all because employees are more keener to gain experience by performing tasks. There
are many causes of employees turnover such as favoritism, job stress, work pressure, lack of
employee motivation, poor employee management etc. (Rampur). A bad connection between the
employees abilities and the job responsibilities can also leads to turnover. Employees who are
located in jobs that are too hard to them to handle or whose skills and abilities are less utilized
can become dishearten and quits. Inappropriate knowledge about skill requirements that are
required to fill a position may result in the appointment of under skills or overqualified workers
(handelsman, 2009).
2.7

Employees Turnover and Mobility in China

State owned enterprises (SOEs) played an important role in Chinese economy before economic
reform. The management and decision making process of SOEs were highly influenced by
Chinese culture and ideologies. The key factors in Chinese culture are collectivism and
Confucianism along with importance of hierarchy, in-group harmony, reciprocity, and loyalty
These values along with the tight control of government created HRM system in SOEs, which
emphasized job security, in-group harmony, reciprocity, and loyalty (Zhu et al 2008).
2.7.1 Culture and Values
Culture and values play an important role in motivating the employees to retain within the
organization. Comfortable culture and work environment help the employees to maintain their
loyalty and commitment with the firm. China emphasizes on its cultural values and social well
being, and it is being practiced since many years and remains unchanged. HR professionals now
realize the importance of western HR practices and are aware that these western policies cannot
be imposed on workers. In order to understand the business system, understanding Chinese
system is very significant (Zhao, 1991).
2.7.2

Human Resource Problems in China

Since many years, researches are being conducted to understand the many problems being faced
in an organization, especially the managers of HR department. As china is a hub of investment
and many multinational companies are increasing rapidly and hence there are many issues
related to recruitment and maintaining a strong workforce. Retention of employees has always
been a tough task for majority of the organizations. In many organizations, managers try to focus
on the compensation and benefits of employees in order to keep their morale high. In many of

the Chinese companies, managers take control of motivating employees and compensation
policies in order to retain good and professional employees ( Yu, & Egri 2005).
2.7.3

Work Performance and Employee Management

In Chinese organizations workers are not provided with the prompt feedback about their
performances. The importance of time is neglected and quality of content is also neglected.
Moreover, ethics are also lacking in Chinese enterprises. Hence, the probability of failure
increases and the companies become risk aversive. The increased wages of workers have
negatively affected the cost structure of the firms. Professional and talented employees are
difficult to search and there is a lack of time to train the younger people. Firms are continuously
making effort to remain competitive while continuously making efforts to retain the trained and
motivated employees. There are few employees who consider values, culture and stability as
important factors then training and high wages. As international ventures stay for a shorter period
of time in china hence, loyalty of employees and good will diminishes with the passage of time.
2.7.4

Human Talent drain from enterprises

Chinese enterprises have seen an immense turnover along with problems in retaining the
experienced and professional employees. This turnover is an alarming sign for the HR
professionals, and it has become important for them to know the reasons behind this decision of
employees so that they can keep this level of turnover at minimum. HR managers hardly expect
any of the employees to retain and keep on serving the organization for a longer period of time.
On the other hand, this practice of employee turnover is considered as a normal practice among
Chinese workers and organizations. Two major reasons which came out after analyzing the
reasons behind employees turnover in Chinese organizations are lack of opportunities and career

growth. Moreover, employees are also not happy with the compensations and benefits.
Employees usually blame external factors for leaving their job because they dont want to expose
their real reasons for quitting the job. They keep on maintaining the positive relationship with
employers even after quitting the job ( Yi, & Lai 2001).
Higher the satisfied employees greater will be the possibility that he or she will serve the
company for a longer period of time. Good and strong leadership have this power to retain the
trained professional into the organization. People who serve the organization for a longer period
of time are those who have good bosses or managers and who provide them good working
opportunities. Opportunities are considered as a key to retain employees. Compensation and
benefits are also considered important drivers for retention. Though, salary is not considered as
an important aspect in retaining employees. Organizations and the managers need to be aware
about the present market conditions and reward their employees accordingly ( Zhu 2004).
2.7.5

Employee Motivation in China

Chinese organizations need to develop incentive schemes which western countries and
companies follow and should also focus on job designing and redesigning, greater opportunities,
analytical decision making, promotion opportunities and pay scale. Though, due to the difference
in culture and values, some of the concepts might not be applicable. Traditional Chinese culture
has some particular aspects which are only applicable in Chinese corporate world. Chinese work
culture does not promote competitiveness and independence. National unity is considered
important even before psychological needs. This becomes even more important for the foreign
managers to understand the values prior to making policies and practices. Zhu et al (2008)
describe that Chinese organizations have certain paradigms while making strategies and policies

like external awards and various motivational tactics to keep the employees motivated. External
rewards include material incentives, which are considered as one of the major motivator in order
to increase the productivity.

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