Controllable vs. Uncontrollable Factors of Employee Turnover Intentions: An Empirical Evidence from Textile sector of Pakistan. DR. MAHMOOD A. BODLA 1 ABDUL HAMEED 2 Abstract Employee turnover has substantial cost as it is a loss of social capital. The paper examines one of the major human resource issues i.e. employee turnover intentions in to two dimensions: controllable and uncontrollable factors. Controllable factors are the organizational factors and uncontrollable factors are the environmental factors. Five variables are used for the measurement of controllable factors which include satisfaction with pay, satisfaction with working conditions, satisfaction with supervision, organizational commitment, and Job stress. Job hopping and perceived alternative employment opportunities are the two variables used for measurement of uncontrollable factors. The data is collected from 252 first line managers and supervisors of textile sector of Pakistan for ascertaining the reasons of employee turnover. The statistical tools employed to analyze the data are correlation and regression analyses. In the end, paper suggests guidelines for the Human Resource Managers and Researchers. Key Words: Employee Turnover Intentions, Controllable and Uncontrollable Factors Introduction Employee is a valuable asset for the organization. Employee means the individual who performs certain tasks and duties for the accomplishment of organizational goals. Turnover means voluntary cessation of membership of an organization by an employee of that organization. (Morrell et al 2001). Turnover intention is broadly defined as attitudinal (thinking of quitting), decisional (intention to leave), and behavioral (searching for a new job) processes proceeding voluntary turnover (Sager et al., 1998, Khatri 2000). Employee turnover incurs significant cost, both in terms of direct costs (replacement, 1 Director COMSATS Institute of Information Technology, Sahiwal,Pakistan 2 Lecturer Management Sciences, COMSATS Institute of IT. Islamabad, Pakistan
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Controllable vs. Uncontrollable Factors of Employee Turnover Intentions: An Empirical Evidence from Textile sector of Pakistan.
DR. MAHMOOD A. BODLA1
ABDUL HAMEED2
Abstract Employee turnover has substantial cost as it is a loss of social capital. The paper examines one of the major human resource issues i.e. employee turnover intentions in to two dimensions: controllable and uncontrollable factors. Controllable factors are the organizational factors and uncontrollable factors are the environmental factors. Five variables are used for the measurement of controllable factors which include satisfaction with pay, satisfaction with working conditions, satisfaction with supervision, organizational commitment, and Job stress. Job hopping and perceived alternative employment opportunities are the two variables used for measurement of uncontrollable factors. The data is collected from 252 first line managers and supervisors of textile sector of Pakistan for ascertaining the reasons of employee turnover. The statistical tools employed to analyze the data are correlation and regression analyses. In the end, paper suggests guidelines for the Human Resource Managers and Researchers. Key Words: Employee Turnover Intentions, Controllable and Uncontrollable Factors Introduction Employee is a valuable asset for the organization. Employee means the individual who
performs certain tasks and duties for the accomplishment of organizational goals.
Turnover means voluntary cessation of membership of an organization by an employee of
that organization. (Morrell et al 2001). Turnover intention is broadly defined as
attitudinal (thinking of quitting), decisional (intention to leave), and behavioral (searching
for a new job) processes proceeding voluntary turnover (Sager et al., 1998, Khatri 2000).
Employee turnover incurs significant cost, both in terms of direct costs (replacement,
1 Director COMSATS Institute of Information Technology, Sahiwal,Pakistan
2 Lecturer Management Sciences, COMSATS Institute of IT. Islamabad, Pakistan
recruitment and selection, temporary staff, management time), and also (and perhaps
more significantly) in terms of indirect costs (morale, pressure on remaining staff, costs
of learning, product/service quality, organizational memory) and the loss of social capital
(Dess and Shaw, 2001).
Employee turnover is a major issue for companies in many Asian countries such as
Singapore, Hong Kong, South Korea, Malaysia, and Taiwan (Syrett, 1994; Barnett, 1995;
Chang, 1996; Khatri 2001). The importance of workforce turnover as a sustainability
issue has been recognized by the Global Reporting Initiative (GRI), which has included
turnover as a core social performance indicator in its Sustainability Reporting Guidelines
(GRI 2002).
Employee turnover is giving sleepless nights to human resource managers in textile
sector of Pakistan. The textile sector is selected due to two reasons. First of all, there is
an alarming employee turnover rate i.e. 12% (Majid et al 2000). Second reason is that
textile industry represents Pakistan’s largest employer as well as key sector for the
economy having almost 68% of total export earning (Bukhari 2005) is the largest sector
of Pakistan.
This study has three main objectives. First and foremost objective is to explore the
reasons and intentions of employee turnover. Most of the studies on turnover were
conducted in the Western Organizational context (Khatri et al., 2001) and there is a vast
difference in economic, social, and cultural environments. Therefore, second objective is
to find out the implications in the Asian context.
The last objective is to partition the effects of controllable factors (such as satisfaction
with pay, working condition and organizational commitment), and uncontrollable factors
(such as alternative employment opportunities and job-hopping) on turnover intention.
The partitioning of the effects would lead to better analysis of the turnover problem.
Theoretical Framework & Hypothesis There are two schools of thoughts on employee turnover research: the labor market
school and psychological school. The labor market school deals with the issues such as
demand & supply, job search, availability of job opportunities or perceived alternatives.
The psychological school concerns with those issues principally related to psychological
accounts such as job satisfaction, organizational commitment, organizational climate, and
job stress. Both schools of turnover research are unable to predict and explain the
adequately reasons and measures for organization to manage turnover effectively (Morrel
et al., 2001).
The framework for the study is presented in Figure 1. It includes two groups of
independent variables which include controllable and uncontrollable factors. Controllable
factors are the organizational & psychological factors i.e. job satisfaction, organizational
commitment, and job stress. Uncontrollable factors are the environmental or labor market
factors i.e. perceived alternative employment opportunities and job hopping. Turnover
Intention is the dependent variable in the study.
Mobley (1982) indicates that there are four primary determinants of turnover: Job
satisfaction-dissatisfaction; expected utility of alternative internal work roles; expected
utility of external work roles; and nonwork values and contingencies.
Job satisfaction describes how content an individual is with his or her job. There are a
variety of factors that can influence a person's level of job satisfaction; some of these
factors include the level of pay and benefits, the perceived fairness of the promotion
system within a company, the quality of the working conditions, and the job itself.
for Employee Turnover Model Including Controllable and Schematic Diagram: 1re FiguUncontrollable Factors
Regression equation explains the variance and factors responsible for employee turnover
intention. Satisfaction with pay is responsible in employee turnover intention is – 18.3%,
-24.4% satisfaction with work, -9.6% satisfaction with supervision, -13.5%
organizational commitment, 14.3% job stress, 16.9% job hopping and 20.3% Alternative
employment opportunities.
The values listed under “Beta” represent an alternative set of coefficients that would be
used instead if all variables were first converted to Z-scores.
Satisfaction with pay is negatively associated with turnover intention and regression co-
efficient is -0.183. Satisfaction with nature of work, and supervision also negatively
associated with turnover intention and regression co-efficient is -0.244, -0.096,
respectively. Organizational commitment is negatively associated with turnover intention
and regression co-efficient is -0.135. Job stress, job hopping and alternative employment
opportunities are positively associated with turnover intention and their regression co-
efficients are 0.143, 0.169, and 0.203 respectively.
Discussion and Conclusion
Employee turnover intention is a major issue for the human resource managers and has a
significant cost of hiring and replacement. Employee has intention to switch when he is
dissatisfied from his pay, supervision and nature of work. A satisfied employee is more
committed to the organizational work and has strong loyalty and affiliation with the
organization. Job stress is the mental tension caused by the workload, working condition,
and lack of means to perform job. So, job stress is another reason for switching job from
one to another organization. Job hopping and alternative employment opportunities are
the environmental factors who responsible for employee turnover intention.
Job satisfaction and organizational commitment are negatively associated with turnover
intention. Job stress, job hopping and alternative employment opportunity is positively
associated with turnover intention.
Controllable or organizational factors (job satisfaction, organizational commitment, job
stress) are more responsible for the intentions of employee turnover as compare to
uncontrollable or environmental factors (job hopping, alternative employment
opportunity).
Human resource personnel can manage employee turnover by providing competitive pay
package, inspirational supervision, and congenial working condition which ultimately
produce committed and loyal employees. Job stress can be managed by proper division of
work and counseling service for the solution of stress related problems.
The researchers can extend this research by adding more variables just like organizational
change and its impact on employee turnover intentions, managers’ leadership style and
employee turnover intention. They can compare this study into two dimensions
manufacturing vs. service sector employees by increasing sample size which will give
broader view and comprehensive frame work of employee turnover intention.
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