Review of Related Literature

Overview

Nursing turnover is a major issue impacting the performance and probability of

healthcare organizations. It is delineated to a situation in which employees depart the organization

for several reasons, and thus, negatively affect the organization in terms of overall expenditure and

the abilities to distribute the minimum required services (Yankeelov et. al., 2008). When the nurses

leave the hospital, this may not only impact on organization but also on workforce itself. Due to

its depressing impact, employee turnover has been considerable topic for scholars, academics and

managers.

Nurses join and quit organizations for a variety of reasons. There is no single “silver bullet”

solution that will create reductions in nursing turnover across the board. But many solutions have

been found to positively impact nursing turnover in various ways.

The reasons for individual turnover intention are age, gender, marriage, education

levels and years of working in the hospital (Liu and Wang, 2006). A report in HealthStream noted

that “Nursing school deans who were surveyed said their graduate nurses were 90% ready, but

hospital leaders surveyed that nursing graduates were 10% ready.” .

 Turnover contributes to increased recruitment and orientation cost, reduced quality patient

care and the loss of mentorship for new nurses. Some definitions include any nurse leaving an

organization; others may include involuntary and voluntary leaving. These inconsistent definitions

also result in various turnover rates. Data were collected from the new nurses, rather than from a

specific organization. A 2014 study in Policy, Politics & Nursing Practice reveals that an estimated

17.5% of new nurses leave their first job within 1 year, and one in three (33.5%) leave within two

years. Consistent and accurate measurement of turnover is an important step in addressing

organizational work environments and policies about the nursing workforce.

Financial Compensation

Payment of wage or salary to employees by the employer is mandatory by law but not just

for the fun of it. It must be noted that such wage or salary paid is an instrument of motivation or

‘driver’ for the workforce to keep the body and soul together and possibly make them a stakeholder

in the organization. It is a common knowledge that when you are a stakeholder in an organisation,

such employee will always want the survival of such organisation at all times. This is one of the

challenges of motivation within organisations. Motivation is one of the greatest challenges facing

managers across the globe because it influences workers’ performance and thus the extent to which

organisations are able to achieve their objectives and justify their existence.

Muo (2013) opined that “right from the days of Taylor and his scientific management

mentality, money has always been seen as the greatest motivator for workers. Of course, this has

to be so in a situation where money is the only means to acquire whatever one wanted/wants. The

motivational value of money is invariably high in African countries because of the circumstances
like mass poverty, lack of basic amenities which turns everyone into his own municipal

government”.

Job dissatisfaction has often been identified as an important reason that causes individuals

to leave their jobs. Empirically it can be concluded that job dissatisfaction has a direct influence

on the formation of outgoing desire. Dissatisfaction on financial compensation could lead to

employee’s intention to retire from the company. Financial compensation is divided into 2 (two)

types, namely:

1) direct financial compensation, ie payments received by employees in the form of

salaries, wages, bonuses, and commissions. Salary is remuneration paid periodically to the

employees and has a definite guarantee, whereas wages are remuneration paid to workers by

referring to the agreement of payment. Bonus is a kind of reward given that is not included in the

employee's basic salary.

2) Indirect financial compensation, ie all rewards not included in direct compensation. The

form of indirect compensation is any kind of rewards that employees receive indirectly.

Examples of these indirect financial compensations are social security, insurance, family

health benefits, leave, etc. Money is considered a highly significant motivator. Many studies have

found a negative relationship of financial compensation on employee turnover intention.

Ghafoor (2017) found negative effect of financial compensation on software industry

employee in Pakistan. Rubel and Kee (2015) asserted that the higher the level of compensation

practice the lower the level of employee turnover intention.

Voluntary Turnover
 Voluntary turnover has been a focus of concern for decades as evidenced by the growing

body of international research seeking to understand turnover determinants and its consequences

for nurses health care organization’s, and patient care (Price & Mueller 1981, Heinen et al. 2013).

Voluntary turnover refers to nurses electing to leave their current position to transfer to another

job within their employing organization, leave their organization completely, or quit the nursing

profession (Hayes et al. 2012, Tummers et al. 2013).

Theoretically turnover has been discussed as a multistage process consisting of psychological,

cognitive and behavioral components (Takase 2010) or as a throughput factor that provides

mediating effects between system inputs (e.g. patient and nurse characteristics) and outputs

(e.g. patient outcomes) (O’Brien-Pallas et al. 2010).

Nurses decisions to leave practice were influenced by several interrelated work

environment and personal factor: higher patients acuity, increased workload demands, ineffective

working relationships among nurses and with physicians, gaps in leadership support and negative

impacts on nurses’ health and well-being (Erenstein & McCaffrey 2007, Roberge 2009,

MacKusick & Minick 2010). Ineffective working relationships with other nurses and lack of

leadership support led nurses to feel dissatisfied and ill equipped to perform their job. The impact

of high stress was evident on the health and emotional well-being of nurses.

External Factors such as employment opportunities and migration have more recently been

identified as relevant (Hayes et al. 2012).

 Previous studies found that the rate of female employee turnover is higher, as compared to

male employees. It can be associated with women duty that women need to give birth and take

care of the family. Therefore, this is a pressing issue that needs to be dealt with urgently. Though

employees work in units or positions for a long period, they feel tired and tend to leave the jobs.

According to Ma et al. (2003),

“Employees with young, inexperienced and high education level tend to have low level of

satisfaction about jobs and careers, and have lower commitment to the organization, these negative

attitudes are associated with turnover intention”. One of the key factors of turnover intention is

Individual aptitude. When individuals have strong ability, or individuals are not core competent at

their job and cannot progress them completely in the organization, they are prone to turnover

intention (Chen and Li, 1998).

For employees aged over 30, individual responsibility is also a factor to consider them

leaving the organization. We can study this when the more responsibility (such as workers are the

single father or mother, or their income is the main source, etc.) persons bear in the family, the

lesser the possibility of their turnover (Zhang and Zhang, 2003)). In short, all these individual

factors directly influence the turnover intention, or indirectly affect on them through the rule of

other variables.
 Nurse turnover negatively affects hospital services because new or replacement nurses’

skills do not meet the expected standards. New nursing staff need an adaptation and orientation

process. Also, the service I likely to be less than optimal because of communication barriers

between senior and new nurses, or between new nurses and other profession. Moreover, nurse

turnover causes hospital staffing problems such as the loss of experienced and trained nurses, nurse

shortages, and an imbalanced composition of new and remaining nurses. Those staffing problems

cause difficulty in arranging work and setting schedules, necessitating increased over-time, and

finally lowering the morale of existing nurses.

Impact of Salary Structure, Employee Perception and Working Conditions on the

Organizational Commitment

Organizational commitment can be defined as the employee's psychological contract with

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the organization It is one of the attitudes of Job, other being job Satisfaction, defined as over all

feeling of an employee about the job, and Organizational Identification, taken as a 'sense of

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attachment with their organization Small and medium enterprises (SME) are one of the most

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important part of economy of a country For them to remain competitive and productive they

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require high skilled labor The skilled labor if retained by good HR practices of the company can

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gain added competitive advantage in the industry One of the best tools for HR managers to retain
 .
its skilled employees is to make them highly committed to the organization Committed employees

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are less likely to leave the organization It has been seen that less committed employees are more

absent from work than the committed ones (Tahir, 2016) .

Salary or pay is a form of episodic compensation from a firm to its worker, which is

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completely stated in an employment contract It is weighed with piece wages, where each job,

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period of job (timings) or other unit is paid distinctly, rather than on a periodic basis Pay is perhaps

striking good to most individuals because it offers them a corresponding level of purchasing

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power While running a business, salary can also be considered as the cost of gaining human

resources for running systems and operations, and they are designated at different position and

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employer bear personnel disbursement or salary expense Wage, salary or pay is considered a

significant reward to motivate the workers and their behavior towards the goals of employer

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(Shujie, 2012) All other social factors are important for enhancing and to make job satisfactory

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for employees are significant but satisfaction from pay is must Pay gratification be liable to the

adjustment between real pay and the amount of pay, a person received from his/her employer .
 .
Salary gratification is an abundant narrower construct than job satisfaction The pleasure

from pay satisfaction is also an important thing that is linked to some administrative outcomes and

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success For example, some evidence proposes that dissatisfaction with pay can lead employee to

decreased job satisfaction, decreased interest of working, and decreased the learning level of

employees, motivation and performance, increased absenteeism and turnover, and more pay-

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related grievances (Schreurs, 2013) It is also extensively studied that pay satisfaction positively

influence overall job contentment, motivation and enactment, performance, and lead to less

absenteeism and turnover behaviors of employee .

Employee positive influence of pay satisfaction on job satisfaction and it can obviously

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observe in every field of life The employee satisfaction level has little relationship to income and

is similar across most variables for example working environment, professional uniqueness,

amount of scientific activity in work, whereas income gratification showed stronger association to

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real income, at least at the higher income ranks They also originate that the association between

job satisfaction and pay satisfaction is high, whereas job satisfaction is not connected with years

as employed .

The customary rational of not relating monetary reward with the contentment is lessening.

In fact, these days‟ acquisitiveness and materialism is becoming key factor of inspiring and
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motivating persons (Ruppel, 2013) In spite of the conservative wisdom that monetary rewards

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have little significance to happiness” The applicable literature and determined that as a culture

gathers wealth, differences and modifications in wellbeing are less often due to income, and are

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more often due to factors such as people’s social relationships and pleasure at work place” It has

been observed that constancy in pay in terms of getting monthly pay is much desired by the

personnel as compared to enticement based salary packages which are adjustable in nature The .
inferior income, job contentment and income satisfaction are slightly higher. The sales people

salaried through mostly fixed salary exhibit higher levels of job satisfaction and lesser turnover

intentions than their colleagues who are paid through mostly enticement pay are at dissatisfactory

behaviors about their job (Memili, 2013) .

Effects of Nurse Turnover to Staffing

The initial effect of this would be the understaffing to the different wards and special areas

in the hospital. And since there is an understaffing there would be longer shifts of work to the

nurses. This would create another problem in the quality of healthcare to the patients. And greater

number of hospital-acquired patient illnesses and conditions that do not qualify for health financial

assistance or reimbursement.

According to a study healthcare organizations have reported having to turn away patients

to other healthcare facilities due to a lack of available staff resulting from nurse turnover.

Effects of Nurse Turnover to Hospital

 According to a study there would be an increase in loss of patients that are being

accommodated by the hospital. There would be increased contingent staff costs, many healthcare

organizations are forced to rely on contract nurses to overcome staff shortages as the effect of

turnover.