Running Head: FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY

Factors that Leading Employee Turnover in the Egyptian Banking Industry

Purpose

Exploratory study to determine factors affecting employees’ turnover in Egyptian Banking

Industry

By

Ahmed Mohamed Omar

Jaylan Ali Maher

Mohamed Abdelaziz Attia

Mohamed Ahmed Hassan

Yasmin Ali Maher

Supervised By

Dr. Adel Sakr

Date

May 2020
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 2

ABSTRACT

“Employee turnover” is a wide problem facing private banking sector in Egypt. Although several

studies have been conducted on this topic, in this research a focus on the causes of employee

turnover. This research goes deep to test the influence of various factors on employee turnover in

ABC, CIB and Arab banks. The research aimed to achieve the following objectives: identify the

key factors of employee turnover, to find out the relationship of employee turnover and four

variables used; job satisfaction, career growth, work environment and salary. This research is

based on the responses of the employees of banks in private sector. A developed questionnaire,

measured on a Likert Scale was used to collect data from respondents. Sample size was 129

employees from ABC, CIB and Arab banks and use Quota sampling size technique. The collected

data were being analyzed using a chi-square test for association for testing hypothesis using

Minitab software. The following factors have significantly influenced employee turnover in

banking private sector: job satisfaction, salaries, career growth and work environment

Research limitations/implications the present study is limited in scope as research focus on the

private sector of banking. The sample size was 129 employees, the time was limited to do this

research.

Findings; job satisfaction, salaries, career growth and work environment consider as independent

variable have direct and significance impact on employee turnover as dependent variable on

private banking sector as per the developed questionaries’ results the salary and compensation

were the high variable affect the employee turnover followed by career growth

Key words: job satisfaction, salaries, career growth, work environment, Egypt banking private

sector.
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 3

Table of contents

1. Introduction

2. Statement of the problem

3. Objective of the study

4. Research Questions

5. Literature Review

6. Conceptual framework

7. Conceptual framework diagram

8. Hypotheses

9. Research Design and Methodology

10. Data analysis and hypotheses testing

11. References
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 4

Introduction

Employee turnover is widely used in business circles organizations spent a lot on their

workforces in terms of orientation and training, developing, preserving them in their

organization Employee turnover is the rate at which an employer gains and losses employees’.

Simple ways to describe it are “how long employees’ tend to say or the rate of traffics through

the revolving door “. Therefore, administration at all expenses must reduce workers turnover

procedure as a whole, a wide array of aspects has been initiated employee turnover (Kevin et

al.2004). Also, there is need to change occupied understanding of employees’ turnover more

especially the sources that define employee turnover effects and policies that superiors can put

in place to decrease turnover. with globalization which is cumulative competition, organizations

must carry on to develop physical goods and offer services which are constructed on approaches

formed by the employees’

These employees are particularly essential to the organizational since their value to the

organization is basically intangible and not easily pretend (Meaghan et al.2002).

The reason behind choosing banking sector for this research is; it plays a pivotal role in

capital formation and situation the level of industrialization, poverty alleviation and human

development.

Also, employee turnover is defined as the ratio comparison of the number of employees a

company must replace in a given time period to the average number of total employees. A huge

concern to most companies, employee turnover is a costly expense especially in lower paying job

roles, for which the employee turnover rate is highest especially in the entry levels in general.

Many factors play a role in the employee turnover rate of any company, and these can stem from

both the employer and the employees. Wages, company benefits, employee attendance, and job
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 5

performance are all factors that play a significant role in employee turnover. Employee Turnover

has been one of the important issue and problem for the Human Resource department in an

Organization. The purpose of H.R Manager is to select the talented and competitive employee for

an organization and also to retain that talented workforce for a long extent. Organizations do a lot

of effort to make their employee happy at workplace, so that the employee works effectively and

efficiently for an organization. But still the employee leaves the organization and joins the new

one. In the widely cited paper (white, 1995) found that the causes of Employee Turnover fall under

three categories: job dissatisfaction, errors in employee selection and poor management. Sheelan

(1995) found that the most common causes of turnover are job satisfaction & Career path.

Turnover is often utilized as the indicator of company performance and can easily be observed

negatively towards the organization’s efficiency and effectiveness (Glebbek & Bax, 2004).

However, new employees often bring positive input into the company if the turnover is handled

correctly. Bowden (1952) introduces what he calls a simple solution to the turnover problem, that

being to pay employees more than the competition. Hom & Kinicki (2001) found that employees

blame work and thus become dissatisfied with their jobs as part of the inter role conflict caused by

the combined responsibilities of work, family, community and personal.

Human resource is considered to be the center of all development process of economy. But

today’s competitive business scenario is deteriorating social conditions of human resources, hence

causing employee turnover. According to Price (1977) employee turnover is the ratio of the

number of organization members who have left during the period being considered divided by the

average number of people in that organization during the period. There are a range of factors that

cause employee turnover. These factors include job satisfaction, demographics, organizational

structure and culture work load, pay and communication. These predictions of employee turnover

vary from industry to industry; they are also based on individual preferences (Gustafson, 2002).
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 6

However, the aim of this paper is to investigate one aspect of the factors enumerated;

which are possible predictors of employee turnover in the case of equity bank in banking industry.

This factor is communication. It has been argued that effective communication is an important way

to retain employees as lack of communication, satisfaction can trigger exodus of employees for

greener pastures since communication mediates leadership and organizational culture, which is at

the heart of intension to leave organization (Clifton et al, 1980). Therefore, employee turnover can

be calculated by:

Number of employees leaving in a given period

Average no. of employees during the same period *1000

Thus, given the rate at which people leave and enter organizations, which impacts

organizations’ productivity and growth as a consequence it is crucial to assess this in relation to

organizations making forecast on losses and gains. Employee turnover can be low or high when

few people leave an organization and high when many people leave. However, no matter the

positions: low or high, calculating employee turnover is essential for positioning an organization

on the right path of growth and organization success. (Mullins, 1996).

Human resources is reflected the main concept of all development process of economy.

Today’s competitive business edge is deteriorating social conditions of human resources causing

employee turnover. The seeds cause of turnover arising out of the frustration related to budget cost

saving, headhunting, hiring freezes, layoffs and lack of development funds and opportunities are

more likely to be shown clearly.

Turnover harms business in general because of the costs to hire new employees; the loss of

developed employees; the loss of institutional memory and abilities; the loss of business reputation

and the loss of productivity.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 7

Statement of the Problem

Employee turnover is crucial for an organization to function effectively and efficiently

towards achieving their goals and objectives, organization should learn on how to deal with the

factors leading to high percentage of employee turnover during their service period failure to

which they will lose their customers to the other competitors in the banking industry. The prospect

of getting higher pay elsewhere is one of the most common contributors to turnover.

This can be observed at all levels of the economic ladder, from executives and generously

paid professionals in high-stress positions to entry-level workers.. However, there is an evidence

that pay is often not the root cause of turnover, even when it is a factor in an employee's decision

to quit. Moderately, it is believed that high turnover persists in certain jobs and organizations

because they have an atmosphere in which employees look for reasons to leave, and pay is a

convenient and sometimes absorbing justification. Turnover tends to be higher in organizations

where employees feel they are taken advantage of, where they feel unappreciated, ignored, or have

no career path.

High turnover can be a serious obstacle to productivity, quality, and profitability at firms of

all sizes. For the smallest of organizations, a high turnover rate can mean that simply having

enough staff to fulfill daily functions is a challenge, even beyond the consideration of how well the

work is done when staff is available.

Consequently, Employee turnover refers to the number or percentage of workers who

leave an organization and are replaced by new employees. Measuring employee turnover can be

helpful to employers that want to examine reasons for turnover or estimate the cost-to-hire for

budget purposes. Blanket references to turnover can be confusing; therefore, specific definitions

and calculations for employee turnover may be useful to human resources practitioners. Although
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 8

different types of turnover exist, the general definition is that turnover occurs when the

employment relationship ends.

Attrition generally refers to the end of the employment relationship due to retirement, job

elimination or employee death, and is distinguishable from turnover because when attrition occurs,

the position is not filled with a new employee.

Another Type of turnover is: Involuntary Employee Turnover

Employee termination for poor job performance, absenteeism or violation of workplace

policies is called involuntary turnover – also termination, firing or discharge. It’s involuntary

because it wasn’t the employee’s decision to leave the company. Layoffs could also be considered

involuntary terminations, though layoff procedures usually are handled differently from

termination.

Thus to Calculate Employee turnover rate , it may show factors of different types of

turnover, such as involuntary and voluntary, or even more specific reasons why employees leave,

such as poor performance, work environment , career growth , salaries , absenteeism or employees

accepting new jobs elsewhere. Turnover calculations are helpful to determine hiring costs, training

requirements or estimating staff time devoted to recruitment activities.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 9

Objective of the study

General objective:

The research required to establish the factors leading to employee turnover in the banking

industry in Egypt.

Specific objectives:

The research required to explore the following objectives:

1. To identify the key factors of employee turnover.

2. To find out the relationship of employee turnover and the four variables

used; job satisfaction, Career Growth, work environment & salary.

Research Questions

1. How does employee turnover affect organizational performance throughout job

satisfaction?

2. How does career path increase employee retention in an organization?

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 10

Literature Review

Employee Turnover

Employee turnover is a ratio comparison of the number of employees a company must

replace in a given time period to the average number of total employees within the organization in

the same period. It shows in different articles for example;

Shukla &Sinha (2013). Mentioned in his study “Employee turnover” as a term is widely

used in business circles. This research shows the influence of various factors on employee turnover

in urban and semi urban banks. The research was aimed at achieving the following objectives:

identify the key factors of employee turnover; determine the extent to which the identified factors

are influencing employees’ turnover. A self-developed questionnaire, measured on a Likert Scale

was used to collect data from respondents. Kariuki (2015) finds in his study the objective of this

study was to determine factors affecting employee turnover at Imperial bank. The study clarified

how to establish the extent career development affect employee turnover at Imperial Bank , to

determine whether motivation has any effect on employee turnover at Imperial Bank & to what

extent reward system affect employee turnover at Imperial Bank. Due to Hossain et al (2017). In

his study shows the factors that affect the turnover in banking sector are Economic factors that was

very obvious if the employee is satisfied not engaged, he will quit his job if he found better job

offer. Nowadays salaries are the most effective factor in turnover. Organizations may terminate

employees due to high salary comparing performance, also employee may quite due to the poor

salary and attractive salary in another organization.

Another variable is working environment, the author here raises up the point of different

culture and unhealthy environment as people has different chemistry which make people apart &

unsatisfied Also, performance appraisal & its effect on turnover rate in organization. Finally, the
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 11

career development& it sever impact on employee’s turnover. Regarding to Begley & Dunne 2015

(Turnover & retention research report). In this article, middle management in 2018 rate in quitting

jobs 22% & 40.6% in junior level. Lack of career progression in 2018 (63.2%). Better pay (48%),

Lack of training (25.3%), Poor relation with manager (41%). Due to the strategic vision of the

organization training & flexible work arrangement, performance appraisal & feedback system &

work life balance can affect employee turnover. According to Fitria et al (2018). shows that there

is a relation between turnover & burnout especially in work family. The banking industry is

currently experiencing a very high level of competition, banks must be managed professionally in

order to provide quality .The results show that turnover rate is 15-20% per year in Indonesia,

where the symptoms were the increase of the absence ,lack of productivity also the tendency of

breaking the workplace rules. Also shows emotional burnout due to (MASLACH) emotional

exhaustion is the depletion of emotional sources from within the individual which is characterized

by feeling of frustration despair, sadness & feeling overextended, irritable.

Khan (2014). in his article Organizational cynicism and employee turnover intention:

Evidence from banking sector in Pakistan shows how to observe the effect of organizational

cynicism (OC) on employee turnover intention (TI). Turnover caused because of organizational

cynicism and this cynicism reflects the effects on turnover intention. Further the influence of job

satisfaction (JS) and intrinsic motivation (IM) as mediating Variables were also investigated. Self-

reported questionnaire data is use as the medium of Measurement in the present study. In this

article Job satisfaction and intrinsic motivation partially mediates the relationship between

organizational cynicism and turnover intention.

As for Zulqurnain & Aqsa (2018). shows how succession planning minimize turnover

intentions through enhancing the employee job security and creates career attitude that mitigates
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 12

the risk of employee turnover, job security has become a most critical factor that influences the

employees to stay at a job. Security always engages the human mind and Job security has two

dimensions; a job setting for both reward and recognition. George & Zakkariya (2014). mentioned

that the public sector banks have lower job stress compare to private sector banks.

Ghosh et al (2015). showed the Exploring the moderating role of context satisfaction

between job characteristics and turnover intension of employees of Indian public sector banks.

Employees intensions to leave because they need to discover the mediating role of context

satisfaction between employee’s perception and job characteristics. Context satisfaction is so

critical in this article to establish a positive environment to lesson turnover intensions of

employees. It shows the positive and support work context to maximize the benefits of the jobs.

Zeffane & Bani melhem (2017). they show Public sector employees that are most affected

by their perception of the performance of their organization, work experience and education; in

contrast private sector employee’s turnover intensions was most significant affected by feeling of

trust & job satisfaction. Sattar& Ahmed (2014). as a whole they need to change occupied

understanding of employee personal turnover procedures. The source what defines employee

turnover effects and polices that superiors can put in place to decrease turnover. It is a descriptive

study so he used survey method for collecting data to find out to factors a sample of 150private

and public banks of Bahawalpur was selected for the survey. The mentioned variables used in this

study which are work environment, job stress having the largest number of turnover employees

while career growth and compensation have less effect. She finds in her study that work

environment have large correlation with turnover and finds that good relation with supervisors and

lightening stress environment can effect on employee turnover intention and can retain employees

in case they are working in a friendly atmosphere working conditions.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 13

ElEssawy et al (2019). it is a different type of study as it is a type of how to investigate the

factors that affect the private sectors employee’s decision to leave their work. The variables

mentioned in this study are Job satisfaction, trust, organization performance, gender, age (to be

more specific) and educational level. Concentrate on the bank workers to increase awareness

among policy and decision makers on how to keep employee’s retention in the private sector.

Gberevbie (2010). through his study the author used a survey through questionnaire and

structured interview to obtain primary and secondary data from relevant books, journals and

internet were accepted. Accordingly, the author finds that employee retention strategies such as

good organization image, staff participation in decision making, enhanced salary package are

strategies for organizational performance which support employees to be retained successfully

Work environment:

Hossain et al (2017). showed in his study that work environment is one of main factors for

employee’s turnover intention in midland Bank in Bangladesh, his findings recommend bank

management to work on this factor as it affect directly on turnover intention ,he get that result

through sample of 100 employee through self-developed questionnaire. Sattar &Ahmed (2014).

Finds in her study on factor affecting employee turnover in banking sector that work environment

have large correlation with turnover and finds that good relation with supervisors and lightening

stress environment can affect employee turnover intention and with friendly environment can

make high percent of employee retention. Shukla& Sinha (2013).Finds that work environment

significantly influenced employee turnover in banking sector in India and found that work

environment is a prime factor for employee turnover and says that “so the good management can

hold the employees for longer period, by giving them satisfaction with respect to supervision and

giving the much autonomy, so that may not seek for alternates too often”.
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 14

Career Growth

Shukla & Sinha (2013). Showed in their research that career growth significantly

influenced employee turnover in banking sector, they says” the people who counted career growth

as their prime force for turnover have put a saddle on availability of opportunities and management

relations as sub-prime forces”. They get that result through sample of 44 employee through self-

developed questionnaire based on a Likert Scale. Sattar and Ahmed (2014). The study was carried

to the private and public banks in Bahawalpur district (Pakistan). Number of populations is 250

that consist of employees of banks of Bahawalpur district with a random sampling technique with

a sample size of 150 employee. The instrument used for data collection was questionnaire on 5-

point Likert scale from strongly agree to strongly disagree. The research takes the Employee

turnover as a dependent variable and studies career growth impact as an independent variable on it.

The research calculations shows according to Sattar “ Career growth has correlation value 0.453

which shows that there must be an impact on turnover but there is less influence of career growth

on employee turnover”. Kariuki (2015).Has made his study with a sample of 950 employees of

Imperial bank, with target population being 450 employees within bank Nairobi branches. In

career development chapter, he finds that there is a strong significant positive correlation exists

between career planning and employee turnover where his calculations indicate that 57.8% of

variation in employee turnover can be explained with variation in career development. This result

was achieved through data collection questioner and quantitative analysis of this data. Hossain et al

(2017). They have carried a research to determine factors affecting employee’s turnover intention

in a private sector commercial bank. Data for the study were collected from the responses of 100

employees through a self-developed questionnaire measured on a 5-point Likert scales. Analysis

founds that career development factor is significantly correlated with the employee’s turnover

intention. Zulqarnin & Aqsa (2018). shows as findings that “succession planning provides job
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 15

security and creates positive career attitude which in turn mitigate the turnover intentions among

banks employees”. They run their research with a sample of 239 participant of different ages. They

concluded that Succession planning is reported to have a negative and significant impact on

turnover intentions among branch banking employees.

Job Satisfaction

Zeffane & Bani melhem (2017). It seems that studies have reported significant differences

in satisfaction and turnover between public and private sector employees are those that focused

on intrinsic Satisfaction. In contrast, studies that focused on extrinsic satisfaction tended to

produce mixed results. For instance, Schneider and Vaught (1993). found and argued that public

Sector employees tend to be more satisfied with the extrinsic factors of their job, such as pay

satisfaction. In their view, public sector professionals tend to feel that maintenance or extrinsic

factors are more satisfying. At the same time, they report no significant differences between

public and private sector, employees with regard to other aspects of JS included in the Job

Descriptive Index scale they used (see Schneider and Vaught, 1993). The rationale given for

greater JS and less turnover in the public sector is that employees in the public sector tend to

enjoy far greater job security than their private sector counterparts. This tendency is not shared

by several other studies reporting greater dissatisfaction and Intentions to quit among employees

in that sector. The differences in findings appear to be largely contextual and in many cases

Country specific. For example, in a recent study comparing the JS and TIs of private and public

Sector employees in Serbia & Mihajlov (2016) found that public employees have higher JS and

lower TIs compared to their counterparts in the private sector. Interestingly, the vast majority of

studies examining the satisfaction and turnover of public sector employees in Middle Eastern in

general and the UAE in particular have tended to report positive satisfaction and lower TIs.
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 16

George & Zakkariya (2015). Indicated that employees of different sectors of bank had

different level of job satisfaction and job-related stress. Further it was revealed that public

sector banks have lower job-related stress when compared to private sector banks and new

generation banks; and higher job satisfaction when compared to new generation banks.

Elessawy et al (2019). Argues that UAE nationals/citizens (in particular) tend to

consider that the private sector offers relatively little career opportunity and low wages in

comparison to the Public sector. This certainly explains why Emirati nationals, in particular,

prefer to work in the public sector. In contrast the UAE private sector’s business model is

largely dependent on the creation of low wage jobs which are more likely to engender high

turnover.

Ghosh et al (2015). Showed that an employee’s satisfaction with the work context may

affect perception of the organization and may hence be a predictor of his/ her intension to leave.

The purpose of this paper is to explore the possible meditating role of context satisfaction

between employee’s perception of job satisfaction and their turnover intension.

Shukla &Sinha (2013). Showed the results of the prime factors for employee turnover in

our respondent banks are job satisfaction and work environment. The high significance level for

both variables show that, whether there is a salary compensation or not, employees have a

gigantic desire to have better work environment and job satisfaction. Comparative to above two

variables the career development is having lesser but a quiet considerable significance. The

people who counted career growth as their prime force for turnover have put a saddle on

availability of opportunities and management relations as sub-prime forces. But they turn over

for new venture for better wages or salary compensation. So, the good management can hold

the employees for a longer period, by giving them satisfaction with respect to supervision and

giving them much autonomy so that may not seek for alternates too often. In current situational
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 17

study the possible solution for retaining career-oriented employees would be to give them

autonomy and ease from the management side. Extremely harsh attitude of the management and

excessive workload will open the doors of No organization can succeed without its man at

work, which is Human Assets or Human Resources. Success of an organization depends upon

its Human Resources. Due to dynamics nature of Human Resources, retaining talent becomes

more challenging. More particularly, retention of the talent became most critical area of concern

in the globalized world because of every organization competing others attracting talents with

more alternate opportunities for career-oriented employees. Employees do always seek for

alternates because everyone wants to get flourished. We also came with an outcome that no real

mean difference exists as between the new employees and old employees’ responses towards

turnover factor attractive perks and opportunities. Talents are the future leaders. For betterment

of the organization proper conglomeration of organizational requirements and the expectations

of the human resources are to be strategically planned and implemented. Talents (HR) can save

the organization in any short of problems. They can drive forward in any condition of the

workplace and in any condition of the organization, if they are properly motivated, working

with good environment and cooperation with co-workers. The relation with the workers and

Manager should be positive, close and good. It is imperative for the firms to provide congenial

and friendly environment for retaining and developing talents. Development of talent is the

ultimate development of organization. As for Khan (2014). The major purpose of the research

was to explore the alternative relationship between OC and TI in the incidence of multiple

mediating variables such as (Job Satisfaction and Intrinsic motivation). Among the key findings

independent variable OC directly effect on dependent variable TI. The association between

independent variable OC and dependent variable TI is partially mediated by JS; similarly, the

association between independent variable OC and dependent variable TI is partially mediated

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 18

by IM. This study provides additional support to the opinion that organizational cynicism may

decrease the job satisfaction, intrinsic motivation, and increase stress among bank’s staff. Most

significant part of the present study is the examination of JS and IM as mediators. Such

programs must be organized for the employee through whom they can experience positive

development because it increases their motivation level which will ultimately results in

decreases TI. The Results indicated that employees of different sectors of bank had different

level of job satisfaction and job-related stress. Further it was revealed that public sector banks

have lower job-related stress when compared to private sector banks and new generation banks;

and higher job satisfaction when compared to new generation banks.

Sattar & Ahmed (2014). They mentioned variables used in this study which are job stress

& job satisfaction having the largest number of turnover employees. They finds in the study that

job satisfaction have large correlation with turnover and finds that good relation with supervisors

and lightening stress environment can effect on employee turnover intention and can retain

employees in case they are working in a friendly atmosphere working conditions.

Salaries

Kariuki (2015). As the Article Discussed as Response when asked if they would quit

Imperial bank because of inadequate salary. This was followed by respondent’s description of their

current salary as bad compared to the market rate with a mean of 3.39 and SD of 1.153. A

correlation analysis Which indicated a strong positive and significant relationship exists between

bonuses and employee turnover .And the article Go through the fact that, “better salaries do inspire

loyalty to an organization; employees often scramble to develop their careers so as to attain the

coveted salary scales . The research focused only on salary and bonuses within the banking sector
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 19

at Imperial bank and uses intrinsic motivation theory to Approve that banks rewards system will

enhances employees’ commitment to their organizations, or significantly enhances turnover rates.

Most organizations consider salary as an adequate reward, and employees should be grateful they

get paid.

Salary and associated benefits are an integral factor that influence employee turnover. The

major reason to work is to have a monthly income to fulfil their basic needs such as food, clothing

and shelter. Satisfaction through income leads to employee retention. In the banking sector,

salaries consider as a competitive advantage for the bank enabling the bank to curtail any salary

related turnover since the market would be unattractive to employees seeking to leave.

The Article mentioned that on the other hand, holds to the view that employee turnover is

as a result of salary scale; usually, employees quit or search for jobs that would pay them better

than the previous ones. So, as conclusion It is important for banks to realize the correlation

between salary payments and employee motivation and turnover.

However, salary compensation must be designed properly to eliminate contentions, and

office politics. The main objective of these payments is to enhance motivation and elicit loyalty

and commitment to the bank. Gberevbie (2010). The article findings go to the extent that both the

resigning employee and co-worker at the same level and salary grade there is influence of a co-

worker’s intention to leave the organization.

The bank contributes 12.5 per cent of basic salary as its counterpart contribution to the fund

Zenith Bank (2005). The bank’s counterpart contribution of 12.5 per cent of employee basic salary

to the mandatory 15 per cent pension fund instead of the normal 7.5 per cent provided for by the

Pension Act of 2004, loans for cars and houses, extensive network of hospitals and clinics on

retainer ship for the use of employees, and humane treatment of employees through words of

encouragement retains staff for performance. All of the above observation Show High relation
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 20

between salary and Employee Turnover intension. The Report stated that there is relation between

“Employee satisfaction in relation to work/life balance and salary/benefits and their individual

role, and how that contributes to achievement of the organization's strategic objectives” The

Report Mentioned that Excellent pay is only rated sixth as an effective retention method by

respondents, and competitive salary is rated ninth among strategies that respondent organizations

have in place to encourage retention.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 21

Conceptual framework

The conceptual framework represents the relationship between the independent’s variables

and dependent variable.

The researchers have developed a conceptual framework based on vision gained from the

literature review; the following variables were chosen as the basis of the analysis of the research

problem. There are some factors namely work environment, job satisfaction, salaries & carrier

growth which can influence the employee’s turnover intension regarding the entry level.

Conceptual framework diagram

The Conceptual Frame work represents the relationship between the independent variables & the

dependent variable.

Dependent Independent

Job Satisfaction

Career Growth

Employee Turnover

Salaries

Work environment
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 22

Hypothesis

H0: There is no relationship between job satisfaction and employee turnover.

H1: There is a significant relationship between job satisfaction and employee turnover.

H0: There is no relation between Career Growth and employee turnover.

H2: There is a significant relationship between Career Growth and employee turnover

H0: There is no relationship between Salaries and employee turnover

H3: There is a significant relationship between Salaries and employee turnover

H0: There is no relationship between work environment and employee turnover.

H4: There is significance relationship between work environment and employee turnover.

Variables Conceptual Definition Operational

Dependent The total number of employees;
who voluntarily or involuntarily
Staff Turnover want to leave their jobs in search
of another job. It is used to
understand attrition and
retention in the organization.
Independent It is the extent to which
employees are happy with their
Job Satisfaction jobs at the bank. It is concept
based on the premises that the
happiest employees are also the
most productive employee and
that to people happy in their
work, their jobs don’t feel as if it
is work at all.
Career Growth Career Growth usually refers to
manage one’s career in the
organization. it involves training
on new skills moving to higher
job responsibilities, making a
career change within the same
According to the data collected from 14
literature reviews respondents, it was
evident that there are certain factors
which can lead to staff turnover in the
banking industry and gave the
responses as discussed before. They
are; Job satisfaction, career growth,
salary & work environment.
Business review report attached.
Attitude toward present jobs,
satisfaction with pay, satisfaction with
promotion opportunities, satisfaction
with their leaders and boss.
A survey was done to measure the job
satisfaction between employees at ABC
Bank for example; communication,
listening to others & leadership.
attached
The researcher’s objective is to
measure & build for the young talents a
career development action plan and to
encourage filling higher positions from
within, improve efficiency,
productivity and build ready successors
at Bank ABC as an example. Updated
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY
organization moving to a
different department.
Salary The definition of a salary is a
regular fixed payment that a
person earns for performing
work during a specific month.
It is agreed upon a contract.
Work Environment
23
Talent Action Plan Document after
being discussed with all departments
Heads then reviewed & approved by
CEO MD to manage one’s career in the
organization and it involves training on
new skills technical and soft skill.
Also having a Summary of Gap
Analysis Issues for Key & Control
Positions.
Talent action plan Dox is attached
Can raise up this factor through
statistics done in the bank in the last
few years reflected in the exits
interview in the following points:
-Transferring from Mohandessin
premises to 5th settlement premises, it
affected many employees and irritated
them due to the far distance for home
living in Giza district.
-Bullying attitude and childish behavior
from the peers with no controlling and
monitoring from seniors.
-Poor communication among peers and
managers so unclear task and unclear
vision.
-Discrimination which shown in
preferring special employee more than
others.
Example (corporate sales more than
back office).
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 24

Research Design and Methodology

Introduction:

The research describes the methodology used to understand staff turnover rate in the

workplace and determine the factors leading to staff turnover.

The research conducted assumes that staff turnover is led by different factors and the Job

satisfaction is viewed as being important in the workplace and to the benefit of the organization

enhancing reduction of the number of employees who want to leave their work.

Research Design:

The research design for the study was the hypothetico-deductive approach. This descriptive research

design was selected for this specific research study to understand the factors that influence employee

turnover at the workplace using analysis through a survey of questionnaires to sample of individuals.

This design will assist the researcher to obtain pertinent information concerning the phenomenon

and whenever possible draw general conclusions from the facts obtained.

Study Location

The study area or location was private sector banks (ABC Bank, Arab Bank, CIB Bank) Cairo Egypt

as they show high rate of turnover.

Study population

The study population included the Entry level especially those involved in the retail banking,

operations and top management head office.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 25

Data Collection methods

The respondents of the study are stated in Egypt at Bank ABC , Arab Bank & CIB Bank

Conventionally, was conducted to evaluate the factors of employee turnover so the employees are

selected as respondents due to convenience and get better results.

The researcher used questionnaire as an instrument of data collection.

Research Instrument

The instrument used for data collection was questionnaire on 4-point Likert scale from

strongly agree to strongly disagree, where point-1 indicate strongly agree, 2 agree, 3 disagree and 4

strongly disagree.

Questionnaire

A questionnaire is a list of questions drafted by the researcher to be filled by the

respondent. This was the basic tool the researcher used in data collection. The questionnaire

contained both close ended and open-ended structured questions and the variables therein were

measured using Likert scaling technique. The reason for use of this method was that it minimized

bias.

Data Analysis techniques

The questionnaire was checked for error and omission

Sample Size:

Population includes employees 542 employees at ABC Bank in Egypt as of April 2020.

Will take samples from Entry level in different banks as it is shown a greatest number mentioned

regarding the turnover. Therefore, all the entry level at ABC bank is 250 whereas the sample size

according to total number of 542 employees will be approx. 90 samples.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 26

Also, will take 15 samples from Arab Bank & 21 samples from CIB Bank.

Shows the number of respondents from each department

Banks names No of respondents

ABC 91
CIB 23
Arab Bank 15
Total 129

Sample Design

In this study, Quota sampling technique is used.

Sources of Data

Primary data source

This refers to raw facts collected or generated in a given research for the first time. This data was

generated from the sample population by use of questionnaire

Data Analysis

As per the questionnaire results it yields attribute data, this data was entered, edited and analyze by

using Minitab software applying Chi-square test of association to test the relation between the

independent variables and the independent variable predetermined in the conceptual frame work of

this research by accepting or rejecting the hypothesis formulated after drawing the conceptual

frame work.
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 27

- The relation between job satisfaction as an independent variable and employee turnover as
an dependent variable

Hypothesis:

H0: There is no relationship between job satisfaction and employee turnover.

H1: There is a significant relationship between job satisfaction and employee turnover.

The Chi-square test of association shows that the P-Value of the test equal 0.001 which is less than

0.05 so the null hypothesis is rejected indicating that there is a significant relationship between job

satisfaction and employee turnover.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 28

- The relation between career growth as an independent variable and employee turnover as a
dependent variable

Hypothesis:

H0: There is no relation between Career Growth and employee turnover.

H2: There is a significant relationship between Career Growth and employee turnover

The Chi-square test of association shows that the P-Value of the test equal 0.019 which is less than

0.05 so the null hypothesis is rejected indicating that there is a significant relationship between

career growth and employee turnover.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 29

- The relation between salary as an independent variable and employee turnover as an

dependent variable

Hypothesis:

H0: There is no relationship between Salaries and employee turnover

H3: There is a significant relationship between Salaries and employee turnover

The Chi-square test of association shows that the P-Value of the test equal < 0.001 which is less

than 0.05 so the null hypothesis is rejected indicating that there is a significant relationship

between salary and employee turnover.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 30

- The relation between work environment as an independent variable and employee turnover
as an dependent variable

Hypothesis:

H0: There is no relationship between work environment and employee turnover.

H4: There is significance relationship between work environment and employee turnover.

The Chi-square test of association shows that the P-Value of the test equal 0.005 which is less than

0.05 so the null hypothesis is rejected indicating that there is a significant relationship between

work environment and employee turnover.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 31

Conclusion

The job satisfaction, career growth, work environment and salary as independent variables

have a direct and significant impact on employee turnover as dependent variable in banking sector

in Egypt.

As per the questionnaire, the salary was the most important factor affecting employee

turnover followed by career growth which means that top management in banking sector should

give great attention and apply strategies based on this conclusion to achieve high retention rate for

their employees, specially in entry levels as these two factors demonstrates the highest concern for

entry level who is considered greatest sector in turnover.

Employee turnover affects organizational performance through job satisfaction as the

employee is considered the main asset of organization, where the organization invest a lot of

money, time and effort to develop their employees to the desired level of job performance and all

these investments threatened by high employee turnover rates.

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 32

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FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 34

Appendix

Factors leading to Employee Turnover in banking sector

The purpose of this questionnaire is to determine the factors leading for employee turnover in

banking sector as part of research project to determine this factor, this research is part of MBA

program and all information will be provided will be confidential and used for research purpose

only

I-General

1- Age
☐ less than 20
☐ 21-30
☐ 31-40
☐ 41-50
☐ above 50
2- Gender
☐ Male
☐ Female
3- Bank name
☐ ABC Bank
☐ Arab Bank
☐ CIB Bank
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 35

4- current position

II- Turnover

5- How many years in current job?

☐ 0-1
☐ 2-3
☐ 3-4
☐ more than 5 years

6- Total years’ work experience

☐ 0-1
☐ 2-3
☐ 3-4
☐ more than 5 years
7- Which of the following factors most influence your decision to leave the job?

☐ Low salary
☐ Low career growth
☐ Bad work condition
☐ Low job satisfaction

☐ other --
8- am actively looking for another job outside my organization
☐ Yes
☐ No
III- Job satisfaction

9- I am satisfied with my job

FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 36

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
10- I will properly not be looking for a job outside of this organization

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
11- I seldom think about quitting

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree

IV- Career growth

12- I have clear career path and development plan in my organization

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
13- Generally, I am satisfied by my career growth plan
☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 37

14- I would seriously consider leaving for even a slightly better position elsewhere

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
Work environment
15- My organization has a safe work environment

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
16- My Organization provides us with healthy atmosphere

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree

17- I am satisfied with the culture of my workplace

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree
FACTORS THAT LEADING EMPLOYEE TURNOVER IN EGYPTIAN BANKING INDUSTRY 38

Salary
18- Do you feel like you are paid fairly for your position?

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree

19- I would seriously consider leaving my job for a position where i could earn more

☐ Strongly disagree
☐ Disagree
☐ Agree
☐ Strongly agree

Thank your time

happy Ramadan