BLUE MARK COLLEGE OF DISTANCE EDUCATION

RESEACH PROPOSAL -I

ANALYSIS OF THE CRITICAL CAUSE OF LABOR TOURN OVER & ITS

EFFECT ON THE ORGANIZATION PERFORMANCE
(A CASE STUDY IN DEBREMARKOS UNIVERSITY)

A Senior Essay Proposal Submitted to the Department of Management in Partial

Fulfillment of the Award of Bachelor of Arts (BA) Degree in Management

Prepared By: BANKNESH BELEW MEHERETIE

Id No DD MGT10257074/12

Submitted To;- BLUE MARK COLLEGE OF DISTANCE STUDIES AND OPEN LEARNING

AGUST, 30 20014 E.C

F/SELAM, Ethiopia

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 TABLE OF CONTENTS

CONTENT PAGE

1. CHAPTER- ONE

1. INTRODUCTION ------------------------------------------------------------------------1

1.1 Background of the study -------------------------------------------------------------2

1.2 Statement of the problem -------------------------------------------------------------2

1.4 .Objective of the study -----------------------------------------------------------------3

1.5 Significance of the study -------------------------------------------------------------3

1.6 Scope of the study ----------------------------------------------------------------------4

1.7 Limitation of the study-----------------------------------------------------------------4

1.8 Organization of the Paper----------------------------------------------------5

1.9 Work plan/time schedule/ for the research---------------------------5

1.10 Budget Schedule----------------------------------------------------------------5

1.11 Acronyms -------------------------------------------------------- 6

1.12 Reference --------------------------------------------------------7

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 CHAPTER ONE
1. INTRODUCATION
The healthy functioning of an organization depends up on the effort of its employees. Hence one can
conclude that human resource is the most valuable and important asset of an organization. Organizations can
increase their return from investments for human resource if they retain employees for a long period of time
otherwise they will lose their investment on human resource and will be open for other costs related to
human resource department activity. From this one can understand that labor turnover is a serious problem
of an organization.

Labor turnover or employee turnover is the exit of some employer and the entrances of others to cover
jobs previously hold by the leaved employees. Obviously retention of employees of an organization is a
difficult task for human resource managers. Employees of an organization leave their current job and
organization (satisfaction of employees, pay system, promotion policy etc) and uncontrollable (Job happing
and perceived alternative job opportunity factors.

Organization often fails to retain their employees when they do not concern about their employees. As
stated above labor turn over affects the healthy functioning of an organization negatively. Hence what it be
the cause for labor turns over (i.e demographic, controllable or uncontrolled causes) the human resource
management deportment is responsible to find solutions in order to reduce labor turnover and to prove the
healthy functioning of the organization.

In today’s dynamic working environment of the world, knowing and studying the major causes of labor
turn over and developing retention strategies help an organization to reduce the rate of labor turn over; that
is why the researcher is willing to conduct his research in partial fulfillment of BA, degree in management,
on analysis of the critical cause of labor turnover and its effect on organization performance in the case of
Debremarkos university.

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 1.2 BACK GROUND OF THE ORGANIZATION.

As stated earlier in the introduction, this study to analyze the critical cause of labor turn over and its effect
on the performance of an organization will be conducted at Debremarkos university main campus.
Debremarkos University (DMU) is a public higher education institution established in December 1999 .it
has a branch in burie campus. The two campuses are located 300km& 411km respectively south west of
Addis Ababa. Debremarkos University is the Ethiopia’s first innovative community oriented educational
institution of higher learning. The university adopted the city’s name for logical sound reasons.

1.3 STATEMENT OF THE PROBLEM

Whether governmental or non- governmental, profit oriented or non -profit oriented or non- profit
oriented organizations have resources listed under their balance sheet or in their payroll documents. Most of
the physical resources of organizations may differ from organization to organization. However every
organization shares a common resource, which is human resource. Hence everyone agrees with the idea that
human resource is the back bone and brain of every organization round the world. As a result for this
important asset there must be alert treatment and management. The human resource department should
make working environment more suitable or comfortable to its employees to make working environment
more suitable or comfortable to its employees to make them more satisfied and productive on their job.
Even if the human resource department tries to satisfy its employees, there are cases that let employees to be
unsatisfied by their management and current job. This result’s termination of labor forces under that specific
organization. This labor turnover has different /certain/ negative consequences to the organization. Among
these:

Loss of experienced employees /Key workers

Increases cost of organization for recruitment, selection, training etc. or other human resource related
activities.
Reduce return on investment.
Loss of good will etc.

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As responsible body, the human resource department should not over looked these problem rather should
take /give/ more attention to solve this critical problem. Like other organizations, Debre markos University
as an organization is the victim of this problem.

As it was stated above Debremarkos University is one of the governmental organizations exposed to
labor turn over. Hence the university neither should nor over looked this problem rather should find
alternative solutions to solve or at least top minimizes the problem; because labor turn over’s have negative
relationship with organizational performance. Hence labor turn over increases organization expenses, let the
organization with less experienced workers difficulty to achieve organizational objectives, decreases the
quality of service it renders to it is customers etc. Knowing the above listed and other importance and back
draws of labor turn over the researcher will conduct this research which help to understand the main causes
of labor turn over its effect on the performance of the university and finally comments possible alternative
solutions to handle this critical problem.

1.4 OBJECTIVE OF THE STUDY.

The objective of this research will have a general objective and specific objective.

1.4.1 General Objective of the study

The general objective of this research is to analyze the critical cause of labor turn over in Debremarkos
University and its effect on the performance of the university. Hence it includes

1.4.2 Specific Objectives of the study

The specific objective of the study will includes the following

 To determine relationship of demographic variables (such as age, level of education, level of

income) with labor turn over.
 To study the relationship of controllable factors (job satisfaction which includes organizational
policy, pay system, administrative policy, coworker condition, promotion policy etc).
 To evaluation the effect of uncontrollable factors such as perceived alternative employment
opportunity & job-hopping on labor turnover.
 To find possible alternatives to tackle this problem and that helps to retain key employees of the
university.
 To give possible recommendations for the university about potential alternative that can help it to
alleviate undesirable labor turnover.

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 1.5 SIGNIFICANT OF THE STUDY

As it is stated earlier turnover of labor force is the major and common problem of organizations around
the world.

The conduct of this research will be important since it.

i. Point out the root causes of labor turnover in the university

ii. Indicates conductions, which will help the university to create smooth relationship with its
employees there by, will increase their satisfaction at job and productivity.
iii. Indicate alternative solutions to tackle this problem
iv. By doing these and others it recommend the human resource department to focus on the retention of
qualified and experienced workers/employees/
v. Solving labor turnover means reducing wastage of time on recruitment, selection, orientation,
training and other related activities of human resource department as well as wastage of resources
for such human resource activities.

1.6 SCOPE OF THE STUDY

The study will be conducted in Debre markos University main compass, which is found in Amhara
regional state, in East gojjam zone, and Debre markos town, which have 300 kms of distance from Addis
Ababa to the south west direction. The study will be assessed the critical causes of labor turnover and its
effect on the performance of the university. Among other contributors to labor turnover the study will be
focused on the three main contributor independent variables. These independent variables are demographic
variables, controllable variables. Generally it is limited to the major causes of labor turnover in Debre
markos University.

1.7 LIMITATION OF THE STUDY

The researcher will faced the following problems or limitations in doing this research.

1. Unwillingness of respondents. Most employees are not willing to fill the questionnaire. This made
the researcher not to get the required information from the required person.
2. Carelessness of respondents: some respondents may careless about their responsibility took from the
researcher to fill the questionnaire. Because of their carelessness they will be over look some
questions.
3. Failure to responded open ended questions.
4. Misunderstanding of questions by respondents reduces the quality of information from self
administered questionnaires.
5. Failure to collect all prepared and distributed self administered questionnaires. Because of their
unwillingness, carelessness and work over loads, some respondents were not able to fill and turn
back. Because of this some questionnaires remain uncollectible and this representatives of the
sample to the hall population.

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1.8 Organization of the Paper

This research paper will be organized in to five chapters. The first chapter is about
introduction aspect i.e. include back ground of the study, back ground of the organization
statement of the problem, objective of the study, and limitation of the study, significance of the
study, scope of the study and limitation of the study. Chapter two to includes review of related
literature which written in various books other related documents. Chapter three is about
research methodology that is data methodology, source of data, method of data collection,
sample size & sampling technique, methods of data processing & analyzing .Chapter four will be
about data presentation and analysis based on the collected data information from and
recommendation. The last chapter which is chapter five will includes a summary conclusion
regarding recruitment and selection.

1.9 Work plan/time schedule/ for the research

The researcher will perform the paper in the following time schedules

N Activities Month Remark

1
o Writing proposal From July 15--20/2014 E.C
2 Writing review literature From July 21-30/2014 E.C
3 Preparing questionnaires From August 1-15/2014 E.C

3 Distributing to respondents & From August 16-30/2009E.C

4 collecting the data
5 Analyzing the data
6 Writing conclusion&
7 Reporting the paper to the college
recommendation
From September 1-30/2015 E.C
From November 1 -30/2015 E.C
From December 1 to 30 /2015 E.C

1.10 Budget Schedule

For the successful accomplishment of this study, the researcher will spend 825 birr for the
following purpose.
Item cost
 Buying different writing materials such as
Paper, pen, pencil etc…………………………………… birr 75
 Writing research paper with photocopies……………………… 600

 For transportation or taxi……………………………………….. 50

 Contingency expense…………………………………………… 100

Total ………………………………………….. Birr 825

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 CHAPTER -TWO

2. LITRATURE REVIEW

Most theories of turnover maintain that employees leave their current job when their need are not
satisfied at their present place of work and an alternative job becomes available those they will believe more
of their needs. Turnover is the net results of exit of some employees and the entrance of others in place of
them. Employees attitude towards the job are extremely important in the decision to leave an organization.
Hence the intention to quite is an important predictor of actual quitting (Jhon M.Ivancevich, 1998).
Employees generally consider three basic factors when they deciding to change jobs. These are

 Job satisfaction of the current job

 Expected satisfaction of alternative employment
 Investment
There are many aspects to job satisfaction such as pay system co worker condition, supervisions
relationship, and the work itself are among the most important considerations. Obviously the more satisfied
you are, the less likely to change your present job (Michaek Haeeis, 1997). Most scholars focused on job
satisfaction as the major course of turnover. However putter Et. also study highlights the importance of
commitment in explaining turn over. Like job satisfaction organizational commitment is negatively related
to labor turnover (Mong Chung, 1996). Satisfaction is the pleasure when somebody fulfils its desires. Job
satisfaction is the difference between the amounts of rewards workers receives. Employees could generate
satisfaction from various things like policy of the organization, practice of the organization, the workers
with whom one works, including supervisors and the work itself satisfaction can also be generated from
working gin conductive environment, cooperative pears and supervisors, doing moderately challenging
works, interest in the work itself and others (Robbins, 1996). Employee’s attitude towards their job is an
important element in the decision to leave or not to leave an organization. Hence the intention of quite is an
important predictor of actual quitting (Jhon. M.Ivaceevich, 1998). Hence one can easily understand that the
relationship of job satisfaction and labor turnover, they are always inversely related with each other.

According to daft (1997), the policy of an organization is one source of employee’s satisfaction on
their job. For instance he lists the recruitment policy of an organization on an example. He said, “Internal
recruiting” or “Promotion from within” is one means of filling an open job positions. It gives current
employees preference when positions open. Using job positing employees are informed about openings and

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required qualifications and invite qualified employees to apply. This has several advantages: it is less costly
than external sources and it generates high employees’ commitment, development, and satisfaction, because
it offers opportunity for carrier advancement to employees rather than out sliders”. David Babcock,
chairman of the board and chief excusive officer of the may company phrases “Building and protecting the
most valuable assets of the enterprise, people,” this shows that the human resource manager should provide
well trained and well-motivated employees is an organization (Jhon M.Ivancevich, 1998).

Turnover can be quite costly to an employer. One estimate is that it cost American industries $11 Billion
dollar a year. The cost of turnover include increased cost for social security, and unemployment
composition, terminal vacations severance pay, underutilized facilities until the replacement is hired,
employment costs, such as recruiting; selecting, orienting costs and moving expense and administration
costs of notification and payroll changes, interview time, test costs, computer record costs etc. are costs of
replacing the leaving employee. Obviously there are also loss of productivity until the new employee
reaches the performance level of the one who leaves/left/ his job. (John.M.Ivancevich, 1998).

Effective human resource planning addresses to get more satisfied and better developed employees.
Employees who work in an organization which have good human resource planning have a better chance to
share in training and development programs. Thus they are likely to feel that their talents are more useful to
the employer and they have a better chance to utilize those talents. This situation often leads to greater
satisfaction among employees and its consequence. Lower absenteeism, lower turnover, and high quality of
work. Its environment can alter the effective functioning of human resource department. Environment may
be understood as all those forces which have their bearing on the functioning of the human resource
department either positively or negatively. The environment can be internal environment or external
environment.

The external environment includes:

 Government law and regulations

 Economic conditions of the surrounding
 Labor unions
 Diversity and composition of the labor force
 Geographic location of the organization
 Leader style and experience are among the important contributors (Teaching material; Zelealem
Gebre Tsadik, 2007).

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 Hence the environment have an effect on the function to the human resource department means, the
negative effect of this environment will affect the human resource function negatively. Consequently
workers of an organization will become unsatisfied by one or another reason and hence they will have more
tendency to leave their current job. The health condition of an employee also has a contribution in deciding
to change ones current job. In some jobs worker may experience physical or mental health problems. This
physical or mental health problem may force them to leave their present job assignment. Work related
accidents and illness have many causes, but the major causes of occupational accidents are tasks. Poorly
designed and inadequately maintained? Repaired machine, lack of protective equipment, presence of
dangerous chemicals and gases, excessive working hours, noise lack of proper lighting, boredom are the
main contributors to accidents resulted from working conditions. This shows that the working condition has
its own bearing to labor turnover.

On the other extreme organizational pay system has also its own contribution to employee’s
termination at work. Pay compression occurs when employees perceive to narrow the gap between their
own pay and that of their colleagues. Many of the united states companies face a narrowing of gap between
senior and junior employee and between supervisor and subordinates. Differentials of 10% or less are not
unusual and in same instance junior employees are brought in at a salary greater than those of their
supervisors. The resulting low moral can lead to decreasing productivity and higher absenteeism and
turnover. One way to identify pay compression is to examine the relationship between salaries and
incumbents years of experience with company. (John M.Ivancevich, 1998). Employees motivation, training
and development programs, income level & work environment have inverse relationship with labor
turnover. The higher the satisfied, the employee is not likely to leave his present organization; the more the
suitable the working environment is the higher the employees are to work within that organization. On the
other hand, the higher the benefit or the income those employees get in their present organizations are less
likely to leave their present job.

 Provide better rewards as wages and salary

 Provide non-financial rewards such as attractive and valuable finger benefit, promotions, transfers
and recognitions. (Obtained from a research done by Nega Ezezew, 2006)
Pay system of an organization, firing benefits, job descriptions (unrelated jobs given to employees
without consideration of their profession), working conditions are among the important factors that let
employees to leave their organization. Job description and routine jobs are also among the most important

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contributories. Job description describes the nature of the work to be done. It specifies the working
environment, the required skill and so on. Hence poorly described job may result to failures to chive goals. This in
turn will result dissatisfaction and turnover. (Adapted from a research done by Kaleabe Hadush, 2006).

Employee’s turnover is the exit of some employee’ entrance of others. An organizations employee
leave their working place due to different reasons often the employee ability and skills do not match the
positions they hold or believes do not match those of the organizations, poor leader ship, pay relationships,
and alternative job opportunities and others are the causes of employees turnover. Organizations often fail
to keep their employee, when they do not concern about their employees, always an excessively high rate of
turnover to organizations is a symptom of problems within the organization. The cause of employees
turnover can be within or out of the control of the employing organization. Therefore companies have try to
reduce the problem based on their controllability and uncontrollability.

There are different types of employees’ turnover. Some employees leave themselves (voluntary
turnover) and some others leave invaluably because of management decisions and other causes, others leave
the organization because of natural factors of age factors. (Adapted from a research study, proposed by
Nega Ezezew, 2006). In timely, through better communication the manager can motivate his subordinates
for archiving better results. A proper system of motivation, which to came down the top management, will
undoubtedly result in greater understanding and better willingness for participation. Managers have come to
realize that motivated and satisfied work force can derived powerfully to the bottom line profit. Motivations
is a better a major part of manager’s job. Hence abilities to motivate are critical for advancement (Robers N.
Lussier, 1997).

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 CHAPTER- THREE

3. METHODOLOGY

3.1 DATA SOURCE

The study will conducted at the main campus of Debre markosUniversity to investigate the critical
causes of employee’s turnover and its effect on the performance of the university used both primary and
secondary sources. The primary sources will be collected from employees of the university and from
employees who take management position at different levels and the secondary sources will collected from
any documents related to labor description, published documents, manuals, periodic reports and other
written materials which have related sources to the subject matter.

3.2 METHOD OF DATA COLLECTION

The primary data for the study will be collected through self-administered questionnaires (a questionnaire
field by the respondents themselves) and through unstructured interview questionnaire which will filled by
the researcher a long with the respondents. The self-managed questionnaire will distributed to those
respondents who are operational workers of the university. This is because self-administered questionnaire
save the time of the researcher as well as gives freedom to the respondents to fill what they feel and enables
the researcher to gather more data within a short period of time.

The interview questionnaire will collected from those respondents who assume management positions
this enables the researcher to ask questions like how and why questions based on their respondents. This
enables the researcher to find out more data from these respondents. Interview questionnaires important to
address those information’s which are not collected from annuals reports, manuals and any documentary
records which are have related information to the subject matter.

3.3 SAMPLING TECHNIQUES

The sampling technique that I will use for this study is non-probabilistic sampling techniques. Non-
probabilistic sampling technique is important since it enables the researcher to select respondents who are
assumed to have the necessary information based on the researcher’s personal judgment. Among the non-
probabilistic sampling techniques judgment sampling was applied for this research. This is because as it was
stated above this helps the researcher to select respondents who have the necessary information based on

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their experience and educational level. In other words it helps the researcher to select respondents who have
use full information for the study, which they accumulated from their experience and education.

The researcher will prepare and distributed questionnaires to self-administer respondents. In additional to
self-administer questionnaires the researcher also will use interview questionnaires along with manages at
different level.

3.4 METHOD OF DATA ANALYSIS AND INTERPRETATION

After both primary and secondary data will be obtained from the necessary sources the researcher
processed the data in a way that help the researcher for effective analysis and interpretation. In data
processing, data will be edited for possible errors and omissions as soon as possible in the process of data
collection and these data will be sorted in different categories. Using different categories like charts, tables
percentages the researcher will summarize the processed data. Based on these summarize data the researcher
will analyzed and interpreted the results. Finally the researcher presents his findings or the output of the
study using different forms.

3.5 DEPENDENT AND INDEPENDENT VARIABLES OF THE STUDY

3.5.1 Dependent variable

The dependent variable of this research is employees’ turnover. Because turnover is an appropriate
variable caused by different independent variables.

3.5.2 Independent variables

The independent variables of the study are those variables which are causes for labor turnover. In
Debre markos University these causes can be categorized as controllable, uncontrollable and demographic
variables. Controllable variable:- includes dissatisfaction by organizational policy, nature of work,
promotion act, unfair payment, supervisors act and working conditions.

Demographic variables:- which includes age, level of education and level of income.

Uncontrollable variables:- perceived alternative job opportunity is one of the most important factor

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REFERENCE

1. Daft, Richard, L. Management. 4thed. New York. The Dryden press, 1997

2. John, M. Ivancecich. Human Resource management. Irwin /MC Graw Hill capanies, Inc; vonh

affiant press, inc.

3. Kale-ab Hadush. Research for parial fulfillment of BA in business management. Jimma

University, 2006

4. Michael, Harris, Human Resource Management a practical approach. The Dryden press Harcourt

brace collage publisher, 1997

5. Nega Ezezew, research for partial fulfillment of BA in Business management Jimma: University,

2006.

6. Robbers, N. Lussier. Management concept, application and skill development. 1st ed.

7. Robbins, Stephen, P. Organizational behavior. 9th ed. New York: MC Graw hill, 1996

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