Determinants of Increasing Employees’ Turnover Rate: A Case Study of Ufone Pakistan.

INTRODUCTION: The company commenced its operations under the brand name of Ufone from Islamabad on January 29, 2001. Ufone expanded its exposure and h a s added new cities and highways to its coverage network. After the privatization of PTCL, Ufone is now owned by Etisalat. During the year, as a consequence of PTCL’s privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat).B e i n g part of PTCL, the m a n a g e m e n t o f U f o n e h a s a l s o b e e n h a n d e d o v e r t o Etisalat. During the years, Ufone continued on the path to success. The Company further expanded its coverage and has added new cities and highways. Ufonehas network coverage in more than 5885 locations and across all major high ways of the country. D u r i n g the year Ufone adopted the policy of simplified tariffs with no h i d d e n charges, which resulted in positive impacts on the usage trends of subscribers as well as total subscriber base, which has increased to 19.4 million. Ufone currently caters for International Roaming to more than 230 live operators in more than1 3 0 c o u n t r i e s a n d i n t r o d u c e d I n t e r n a t i o n a l r o a m i n g facility for P r e p a i d subscribers in Saudi Arabia, United Kingdom, United Arab Emirates, Singapore, Portugal, Thailand, Cyprus, Bangladesh, Uzbekistan, Tunisia, Sri Lanka, Belgium a n d K u w a i t w i t h l o w e s t r a t e s , featuring no security deposit and a c t i v a t i o n charges. GPRS Roaming facility is available with more than 115 Live Operators across 85 countries. T h e c o m p a n y h a s a l s o b e e n a w a r d e d a n e w L i c e n s e f o r p r o v i d i n g c e l l u l a r services in Azad Jammu & Kashmir and Northern Areas.

Ufone invested around $ 65 million to setup its modern technical infrastructure to provide high quality crystal clear voice and fast data transmission. Ufone started its operation from Islamabad on 29thJ a n u a r y 2 0 0 1 . Quetta and different towns. Later the service expanded to other major cities like Peshawar. by introducing low rates and different packages with Urdu names like Jazba etc to attracted lower and middle class people. Ufone targeted t h e middle class. initially they started their service in m a j o r cities like Rawalpindi. but to provide subscribers a convenient to get connections and services. stock exchange etc even live sports u p d a t e s . After e l e v e n y e a r s i n J a n u a r y 2 0 0 1 . The tariff packages have been designed keeping in mind the requirements of every segment of the society may that be a h o u s e w i f e . a n e w c e l l u l a r c o m p a n y w i t h G S M technology came into the market and they named i t Ufone. Ufone recently started GPRS through which users c a n c o n n e c t t h e m s e l v e s t o t h e g l o b a l v i l l a g e v i a I n t e r n e t . After it’s opening. Ufone is committed to care for its customers even after they have acquired a new connection. religion. Ufone has expanded its customer support in a very organized manner w i t h a p l a n n e d network of dealers. Ufone succeeded to establish itself in the market by providing quality service at low rates. Pakistan introduced its first mobile phone service called “Paktel”. horoscope. T h e g o v e r n m e n t o f P a k i s t a n granted them the license of Pak Telecom mobile limited to operate GSM 9000 all Around Pakistan. a l s o i n t r o d u c e d multimedia messaging services and worldwide SMS at flat rates. Ufone not only focused on the technical capabilities. K a r a c h i a n d L a h o r e a n d o n m a j o r highways. a trader or a student. outlets for people convenient. s p o r t s . C e l l u l a r i n d u s t r y p e r f o r m a n c e i n P a k i s t a n b e f o r e t h e l a u n c h o f Ufone was quite dismal. with one of the lowest .HISTORY: In 1990. a t a x i driver. Not only SMS but also provides Ufone Info service through which user can get latest information a b o u t n e w s . Islamabad.

Ash forth (1996) suggested that socialization opportunities within the organization might increase job tenure among employees (especially new hires) by adjusting those employees into the existing organizational culture and consequently strengthening their organizational commitment. The foundation for this hypothesis is that perceptions of a high workload by the employee are likely to result in some form of uncertainty about the completion of work tasks. the substantial costs related with recruiting. Ufone’s strategy from the day one was to change this scenario and ensure that mobile phones are turned into an everyday business and personal c o m m u n i c a t i o n tools for all. U f o n e ’ s o w n p e r f o r m a n c e i n t h e s e t w o y e a r s h a s b e e n e x e m p l a r y . 2009). re-skilling. high turnover rates are the vital issues thatwill always being focused and highlighted (Foreman. According to Specter and Jex (1998) a high workload may result in feelings of irritation and frustration. 2003). and hidden costs such as the difficulties in completing projects and disruptive in team-based work environments may incur for losing the highly skilled staff member (Niederman and Sumner. Similarly. Despite Ufone’s strategy to provide a high standard of service rather than increasing subscriber base without capacity.al. This a p p r o a c h b r o u g h t a b o u t a r e v o l u t i o n i n t h e market. a s i t surpassed all financial and marketing goals. Employee turnover may be explained in the general definition as claimed by Mobley (1982) as the discontinuance of membership in an organization by an individual who received monetary compensation from the organization.population penetration rates in the Whole region. increasing its size five fold in a mere two years. The companies have to put some effort on reducing the unnecessary turnover and to find out the explanation for this phenomena (Udo et. LITERATURE REVIEW: In human resource strategy. it has achieved a substantial market share in a market ten years older than itself. In addition. resulting in low job satisfaction. 1999) because those employees with high skilled and knowledgeable that engaged with turnover may leave the high replacement cost and disruptive for firms. observation reveals that some Telecom employees could be motivated to stay on their current jobs by .

and intangible. Regardless of the type of organization. Hand and Meglino (1979) pointed out that turnover intent is the cognitive process of thinking. It is reasonable to assume that employees are more likely to respond favorably to fair treatment than unfair treatment. North. creative approaches to problem solving. It is easier to measure turnover intent than voluntary turnover because administrative records may be unavailable. both directly and indirectly. can be substantial to the organization’s performance. According to Blau (1964) the rewards can be tangible. through research. moving overseas or employer-initiated termination). This reciprocal exchange is grounded in social exchange theory and the mutual transaction of benefits to each party shapes the social interactions. According to Dalton and Todor (1979). planning. Cascio (1976) has defined. death. termination (such as long term sickness. controlled) by the construction of turnover intent. It is also costly. skills and abilities. Voluntary turnover can be predicted (and in turn. Mobley. such as income. productivity. such as being treated with respect. Indeed psychological theory states that the importance of fairness is a basic need for the well being and satisfaction of employees. skills and abilities. who has a high degree of knowledge. that voluntary turnover is initiated at the choice of the employee whereas employees have no choice in their involuntary turnover i. Grffeth. Rasmussen. who is employed in an area where there is a labor market shortage. or an employee. dignity. In addition. Turnover may be voluntary or involuntary.increased social activities. their knowledge.. and different working styles can enhance the social capital of the organization. and service delivery. and desiring to leave a job. moderate levels of turnover are acceptable and encouraged as the new employees may contribute fresh ideas.e. or inaccurate. Hughes and Finlayson (2005) argued that the cost of losing a high performer. incomplete. voluntary turnover is disruptive and harmful to the organization. and fairness. .

employee morale. Turnover can have a negative effect on the functioning of an organization through loss of team integration. which can lead to triggering additional turnover. Social dynamics and effective communication systems are central to the effective performance levels of work teams. in-group. According to Des and Shaw (2009). and social capital or loss of organizational memory The studies relating to employee turnover in organizations are available to identify various factors regarding their influence on the functioning of a Telecom industry. working conditions. It may also lead to increased. It is widely believed that a significant amount of turnover adversely influences organizational effectiveness and disrupts performance and productivity. William (2006) identified by relative comparison of all the important factors involved in retention of employee’s compensation: salary or wages. chance for promotion plan. The total costs of employee turnover are hard to measure. in particular the effects on the organization’s culture. Employees are believed to exploit the labor market conditions and shortage of skillful workers in this industry. benefits. Speh (1999) was the first to identify motivational and reward programs as most effective .turnover can have a negative impact on other employees by disrupting group socialization processes and increasing internal conflict. A larger number of job opportunities. one of the main consequences for organizations that have a high turnover is the financial cost. Wilson (2000) observed that a competitive salary is most useful for attracting entry-level employees of Telecom industry and also discovered that monetary incentives such as higher pay and better fringe benefits could positively influence the employee’s decision to stay on the current job. ease of job switching. and morale. because it would increase job satisfaction. Study of Abdullah (2006) showed that Employee turnover has become a very critical problem in Pakistan’s Telecom industry as is the case with many others in various countries. attractive salaries and huge demand of skilled workers are some of the highlighted reasons of this problem. cohesion. conflicts and breakdown of interaction with customers.

a condition of quantitative overload exists. an overburdening workload will require an increase in time and energy to fulfill the job requirements. The voluntary turnover can be described as an action of quit or . bonus. When employees perceive that they have too much work to do. Mobley (1982) also noted that the blocking career development paths. and displace poor performers´. Generally. and individual (pay scale. advancement opportunity) variables for their potential influence on Telecom employee turnover. organizational (firm size. fringe benefits. job security. and their impact on Telecom employee turnover. it was not investigated. or they just have too much to do regardless of how much time they have. however. Overload may be of two different types: quantitative or qualitative. Alternatively. Work overload is therefore very subjective in nature. Min (2002) examined various incentives that could help to reduce employee turnover and identified key obstacles for the successful implementation of Telecom employee recruitment and retention strategies. Therefore. family-friendly atmosphere). qualitative overload occurs when employees feel that they lack the ability to complete their jobs or that performance standards are too high. job satisfaction. In addition. infusing newideas and technology. Mobley (1982) argued the turnover will create opportunities for promotion. One employee may feel that the workload is reasonable whereas another may perceive it as over burdening. which factors are attributed to employee turnover. Autry and Daugherty (2003) examined the relationship between person-organization fit. turnover can be classified in two types which are voluntary and involuntary turnover.for Telecom employees. Cardenas and Bernas (2004) have mentioned that work overload is another facet of work-environment and defined as a stressor when the employees feel that they have too many responsibilities or tasks in a defined period. coping behavior. Griffeth (2004) have discussed key occupational (experience). Overload results from an interaction between the employee and his/her environment. entrenching dated methods. Retention. or insufficient time to complete assigned work. and accumulating poor performers are some of problems created from the lack of turnover. too many different things to do.

Lawler. Warehouse Operations Employees: Linking Person-Organization Fit.. W. Furthermore. 1981). Session 2B. Todor. Griffeth. and Fair Employment Practice. 1979. Psychological Bulletin. International Journal of Stress Management. New York: Wiley.D. H. involuntary turnover is the action that happened because of the reasons such as dismissed for cause as well as unacceptable performance. P.. 24(1):171-197. 39:149-78. K. 1976. insubordination. Turnover. Job Satisfaction.. 1964.S. The turnover intention will be a main issue that will be discovered for this research. Job Satisfaction and Turnover Intentions: A Study among Academicians. Journal of Applied Psychology. Shi. Chad W. D. B. Dalton. 2004. Dagherty. R.H. Turnover Turned Over: An Expanded and Positive Perspective. Academy of Management Review. 61: 576-580. Socialization Tactics: Longitudinal Effects on Newcomer Adjustment.resignation (Ukwendu. Cascio. 2006. Journal of Business Logistics. 2003. 86: 493-522. In:Wang. theft and incapable in fulfilling the job aspects (Stumpf & Dawley. and A. 2009).The turnover intention can be illustrated as the perceived in probability of staying or leaving on their current employer organization by the employees (Bigliardi et. Work Family Conflict and Job Withdrawal Intentions: The Moderator Effects of Cultural Differences. al. 1980). J. Ashforth. W. Abdullah. W. 4: 225-235. R. F. 11: 392-412.M. References: Blau. Human Resource Management. In contrast. Autry. Academy of Management Journal. W. a consistent predictor towards turnover behavior is the turnover intention (Ajzen and Fishbein. According to Mobley (1982) the best predictor for the actual voluntary turnover is turnover intention. Biographical Data... Exchange and Power in Social Life. and Coping Responses. Saks. . H. F. Review and Conceptual Analyses of the Employee Turnover Process. and Patricia J. 1996. 1979. Mohammad. Walumbwa. This study will focus the voluntary turnover among the employees in Ufone.D. Mobley. 1997) such a quit for the reason of dissatisfaction on thecurrent job or work environment.. Meglino. Hand and B. P.

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