Report 2

Chapter1 : INTRODUCTION

Attrition is a very big problem not only in India but also outside the India. The

attrition rate in all industries is increasing day by day. The problem of attrition is in all

industries, but it is much higher in IT industry. In today’s cut throat competition, it is

greatest challenge for managers to control attrition or increase retention of employees.

Attrition is the key concern for small as well as large organizations. Companies invest

a huge amount on hiring, training of employees and when employees leave the

organization the companies suffer great losses. When employees leave, whole

investment of company on employees goes in vain. The companies also lose their

talented employees. The employees also take with them the knowledge, information

about the company and relationships with customers. The attrition of employees hurts

a lot to a company, because when it is the time to receive the fruit of their investment,

the employee leaves the organization. In most of cases employees leave without pre

intimation and quits organization all of sudden. It is very difficult for managers to find

immediate substitute of employees. The new employees also have to pass through

long and expensive procedure of training. They also require time to adjust in the

atmosphere of company.

Money is not only the reason for which employees leave the organization. The

organizations that are providing high salary package to their employees, are also

suffering with problem of attrition.

An Employee leaves the organization for many different reasons. Employee may leave

the organization for better job opportunity, career growth, and better working

conditions. He may also leave to have more authority, responsibility and challenging

work. Work –life imbalance, ambiguous role, stress from the work and unfair

treatment may also lead an employee to leave the organization. Competitors are also

very eager to get experienced employees and make attractive offers to them.

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In this way competitors save the cost and time on the training of employees. Whatever

the reasons of attrition may be, the consequences of attrition are not good. “Attrition

results in decreased productivity. Attrition means increase in cost and decrease in

revenues".

A high attrition rate means organization’s inability to retain the key employees. The

problem of attrition can only be minimized, it cannot be eliminated. All organizations

adopt different strategies in order to control the attrition. Providing employees perks,

bonus, increments and good work environment can help an organization to retain the

employees. The targets given to the employees should be just and achievable. The

attitude of superior towards employees should be good. Providing employees more

authority, responsibility and including employees in decision making can help in

reducing attrition.

Employees are most important assets of an organization. For the success of an

organization, it is very important that how long their employees work with them.

Longer employees serve; there are more chances of the success of the organization.

“Organizations in general are facing difficulties in retaining their best talents in spite

of salary hike, fringe benefits in these days of talent wars in retaining person or star

person in organization is more difficult than getting a person.”(Thomas gare, 2007)

“.”The cost of attrition is not just the loss of that employee but it includes an array of

hidden costs such as recruitment costs, selection costs, training costs, cost of covering

during the period and opportunity costs. So it is very important for organization to

control the attrition for an organization. HR managers make different strategies in

order to control attrition. But attrition can never be zero in any organization”.

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1.1. Defining attrition:

“A gradual, natural reduction in membership or personnel, as through retirement,

resignation, or death”

“Attrition is an unpredictable and uncontrollable, but normal, reduction of work force

due to resignations, retirement, sickness, or death.”

1.2. Defining Attrition rate:

"The rate of shrinkage in size or number"

“Attrition rate also known as ‘Churn rate’ is a measure of employee attrition, and is

defined as the number of employees who leave a company during a specified time

period divided by the average total number of employees over that same time period".

According to a HBR article (2000, issue 78) “while firms go to great lengths to hire

new employees, only 20% of them stay two years. Nearly 70% of the newly hired

seniors leave within two years .There is only a 50% chance that when someone takes

up a new job he will be with the company for more than two years. In a 3 month

period in the year 2000 alone 350 CEOs in the US left their jobs”. According to this

article 80% of a pool of executives changed their jobs within two years.

“Attrition is not a new problem and it has existed earlier and will continue to exist in

any industry. But rate is really alarming in all industries. Attrition means not include

loss of talent, but also includes the cost of training and hiring the new recruits.

Companies invest a lot of time and money in training a candidate for the first four

months. But these investments do not always get converted into actual profits”.

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‘The high percentage of females in the workforce (constituting 30-35 percent of the

total), adds to the high attrition rate. Most women leave their job either after marriage

or because of social pressures caused by irregular working hours in the industry. All

this translates into huge losses for the company, which invests a lot of money in

training them”.

If a person leaves after the training it costs the company about Rs 60,000. For a 300-

seater call centre facing the normal 30 percent attrition, this translates into Rs 60 lakh

per annum. Many experts are of believe that all these challenges can turn out to be a

real dampener in the growth of this industry. This only raises the responsibility of

"finding the right candidate" and building a "conducive work environment", which

will be beneficial for the organization.

Attrition rates

US 42%

Australia 29%

Europe 24%

India 18%

Global Average 24%

* Source-Times News New York

Staff attrition and absenteeism represent significant costs to most organizations. It is

odd, therefore, that many organizations neither measure such costs nor have targets or

plans to reduce them. Many organizations appear to accept them as part of the cost of

doing business - a sign of increasing job mobility and decreasing staff loyalty perhaps,

a matter to be regretted but just 'one of those things.' They add a sum in their budgets

for 'temp staff' and 'recruitment' and forget about it. However, it seems to be one of the

areas in which HR can make a difference - and one that can be measured in

quantifiable, financial terms against targets.

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An attrition rate in call (or contact) centers has become legendary. Indeed, the attrition

rates in some Indian call centers now reach 80%. This is an extreme figure but the

average attrition rates in Indian call centers are up around 30-40%. HR Heads are

worried about employees leaving their organizations. Not only is it costly to lose

trained employees but their replacements are not easy to come by. Hence the HR

strives hard to keep attrition at the minimum.

Greg Weiss, an HR consultant and principal of Human Management, in extensive

interviews with HR directors at 30 companies found that most companies have little

real understanding of why employees leave.

1.3. Cost of Employee Attrition

The cost of employee turnover adds hundred thousand of money to a company's

expenses. While it is difficult to fully calculate the cost of turnover (including hiring

costs, training costs and productivity loss), industry experts often quote 25% of the

average employee salary as a conservative estimate.

For example, if the average salary is $20,000/yr the cost of one employee turnover is

$5,000. If you have 30 employees terminating per month, the cost to the organization

equals $150,000/month. Multiply that by 12 months and you have $1,800,000 in

added annual expense.

Surprisingly at present less than 10% of companies calculate employee turnover (costs to be taken into account are

1. Administration costs

2. Recruitment costs

3. Selection costs

4. Induction cost of new employee

5. Cost of covering during period of vacancy

These calculations will easily reach 150% of the employee’s annual compensation

figure. The cost will be significantly higher (200% to 250% of annual compensation)

for managerial and sales positions.

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SHRM, the Society for Human Resource Management, estimated that it costs

$3,500.00 to replace one $8.00 per hour employee when all costs -- recruiting,

interviewing, hiring, training, reduced productivity, et cetera, were considered.

SHRM's estimate was the lowest of 17 nationally respected companies who calculate

this cost!. Other sources provide these estimates: It costs you 30-50% of the annual

salary of entry-level employees, 150% of middle level employees, and up to 400% for

specialized, high level employees!

1.4. CALCULATION OF ATTRITION RATE

There are no standard formulae for calculating attrition. The approach to this

calculation might vary from organization to organization. While a few techniques are

common, there are no proven theories. Some of the most commonly used formulae are

discussed below:

Attrition = (No. of employees who left in the year / average employees in the

year)x100

Thus, if the company had 1,000 employees in April 2004, 2,000 in March 2005, and

300 quit in the year, then the average employee strength is 1,500 and attrition is 100 x

(300/1500) = 20 percent.

Total Terminations in a month

------------------------------------------------------------------------------------

(Total Head Count at the beginning of the month) + (Total New Hires)

Total number of employee who the organization in a given year\ avg. no of staff

employed in that period

“Today there is problem in measuring turnover rate due to contractors. They are

employed till their contract is void and legal. Because they; eave on completion of

their contract, but does it have to be counted in turnover. Turnover can be reduced or

stopped using retention strategies so they are just like two sides of a coin”.

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1.5. CONSEQUENCES OF ATTRITION

Attrition normally brings decreased productivity. People leave causing others to work

harder. This contributes to more attrition, which contributes to increasing costs, lower

revenue. This often forces additional cost reductions and austerity measures on an

organization. This in turn makes working more difficult, causing the best performer

with the most external opportunities, to leave. Attrition causes bleeding to everyone.

Small firms are the real Sufferers, losing good people to larger firms even before the

employees can settle down in the company. In fact losing people has become routine

in small firms, so that if nobody leaves on a day, it is celebration time. The big players

poach on the employees of smaller companies and the smaller ones poach on yet

smaller firms and start-ups.

A company is not hurt because a certain person has left. The company is hurt because

he/she takes away certain knowledge, and there is no ready replacement in the market.

High the attrition rate the more the company goes in losses in terms of finance and

manpower.

1) The company invests a huge amount of money in advertising for the vacant

positions.

2) The company in some cases also has to pay the consultancies for getting the right

candidates

3) The company after getting the right candidate then goes for training of the

candidate. Also the company has to bear the cost of the employees who undergoes

training.

4) The problem of the attrition rate in BPOs and in normal big industries and

organizations varies a lot. In fact in short the high the attrition rate the worst the

company creates its image in market

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Attrition is not always bad, it also has some positive aspects. It allows the

underperformers to go out of the organization and also allows a good talent with

creative and innovative ideas to come in the organization. “The Brighter Side of

Attrition: Attrition is not bad always if it happens in a controlled manner. Some

attrition is always desirable and necessary for organizational growth and development.

The term “healthy attrition” or “good attrition” signifies the importance of less

productive employees voluntarily leaving the organization”.

1.6. FACTORS AFFECTING ATTRITION

The key drivers of employee turnover can be divided into two categories: push factors

and pull factors. While some perfectly satisfied employees may be tempted away by

the pull of an offer so fantastic that they just have to accept, the large majority of

departures do involve an element of push.

For some, it's simply a matter of money, and they'll move on after a year or two if they

find better salaries and benefits elsewhere. But there are usually other factors that

influence an employee's decision to leave.

The various factors that affect an individual’s decision to leave a job are.

1.6.1. Individual Factors

1. Ambitions or Career Aspirations

2. Comparisons and Equity Considerations

3. Parental and family mobility

4. Personality factors

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1.6.2. Job related factors

The job related factors that cause the decision to leave are many these include the

following:

1. Inability to use ones’ competencies

2. Lack of challenging work

3. Boss and his styles

4. Low promotional opportunities

5. Role clarity

6. Job Stress or role stress or role stagnation

7. Lack of independence or freedom and autonomy

8. Lack of learning opportunities

9. Lack of excitement and innovation, novelty etc. in the job

10. Better prospects

11. Unfair treatment

12. Ambiguous role

13. Insecurity and Uncertainty in day-to-day working

14. Inadequate non-monetary benefits

1.6.3. Economic Factors

It deals with the aspirations in relation to salary and perks, housing, quality of living,

need for savings etc. In addition to these there could be many other factors that affect

decisions:

Mobility of partner

Fatigue

Family reasons like having to look after old parents

Moving abroad

Closeness to kith and kin ROI in education

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1.7. Importance of curbing attrition

Controlling the attrition is of paramount importance for the HR Managers of any

organization. Finding, attracting, keeping good and talented employees is getting more

and more difficult. “U.S. businesses spend over $200 billion annually recruiting and

replacing employees” (brandau, 2007), as it is of primary importance to stop or reduce

the attrition of employees.

Majority of workforce is dissatisfied with their current employment situation and

could leave for better positions. “When an employee leaves, he takes with him

valuable knowledge about the company, customers, current projects and past history

(sometimes to competitors). Often much time and money has been spent on the

employee in expectation of a future return. When the employee leaves, the investment

is not realized”.

“In order to get competitive advantage and good return on investment it is important

to control attrition. The goodwill of the company is also badly affected when

employees leave after regular intervals. The goodwill of a company is maintained

when the attrition rates are low. Higher retention rates motivate potential employees to

join the organization”.

Attrition also leads to interruption to customer service. When an employee leaves, the

relationships that employee built for the company over long period of time are

damaged, which could lead to potential customer loss. In order to ensure the

customers, managing attrition becomes necessary. If an employee resigns, then good

amount of time is lost in hiring a new employee and then training him/her and this

goes to the loss of the company directly which many a times goes unnoticed. And

even after this you cannot assure us of the same efficiency from the new employee. By

curbing the attrition rate the following costs can be controlled.

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Separation Costs

1) Exit interview2) Administrative and paperwork costs3) Disbursement of benefits to separating employees4) Diminished productivity of remaining personnel

Replacement Costs

1) Job advertisements2) Recruitment activities3) Administrative processing Entrance interviews So curbing attrition is of

paramount importance in order to minimize turnover cost, which can add hundreds of thousands of money to a company's expenses.

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Industry Profile

Insurance is a federal subject in India. The insurance sector has gone through a number of phases and changes. Since 1999, when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%, the insurance sector has been a booming market. However, the largest life-insurance company in India is still owned by the government.

History

Insurance in India has its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance Society became the first Indian insurance company covering Indian lives at normal rates.

At the dawn of the twentieth century, many insurance companies were founded. In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium-rate tables and periodical valuations of companies should be certified by an actuary. However, the disparity still existed as discrimination between Indian and foreign companies. The oldest existing insurance company in India is the National Insurance Company Ltd., which was founded in 1906. It is in business. Before that, the industry consisted of only two state insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited.

Industry structure

Currently, a $41 billion industry, India is the world's fifth largest life insurance market and growing at a rapid pace of 32-34% annually as per Life Insurance Council studies.

Currently, in India only two million people (0.2 % of the total population of 1 billion) are covered under Mediclaim, whereas in developed nations like USA about 75 % of the total population are covered under some insurance scheme. With more and more private companies in the sector, the situation may change soon.

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http://en.wikipedia.org/wiki/United_India_Insurance_Company_Limited

http://en.wikipedia.org/w/index.php?title=National_Insurance_Company_Limited&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=National_Insurance_Company_Limited&action=edit&redlink=1

http://en.wikipedia.org/wiki/New_India_Assurance_Company_Limited

http://en.wikipedia.org/wiki/Oriental_Insurance_Company_Limited

http://en.wikipedia.org/wiki/Oriental_Insurance_Company_Limited

http://en.wikipedia.org/wiki/December_2000

http://en.wikipedia.org/wiki/General_Insurance_Corporation_of_India

http://en.wikipedia.org/wiki/General_Insurance_Corporation_of_India

http://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_India

http://en.wikipedia.org/wiki/Actuary

http://en.wikipedia.org/wiki/Kolkata

http://en.wikipedia.org/wiki/FDI

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Insurance

Specialisation

ECGC, ESIC and AIC provide insurance services for niche markets. So, their scope is limited by legislation but enjoy special powers.

Acts

The insurance sector went through a full circle of phases from being unregulated to completely regulated and then currently being partly deregulated. It is governed by a number of acts.

The Insurance Act of 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business.

Life insurance in India was completely nationalized on January 19, 1956, through the Life Insurance Corporation Act. All 245 insurance companies operating then in the country were merged into one entity, the Life Insurance Corporation of India.

The General Insurance Business Act of 1972 was enacted to nationalise the about 100 general insurance companies then and subsequently merging them into four companies. All the companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance and United India Insurance, which were headquartered in each of the four metropolitan cities.

Until 1999, there were not any private insurance companies in India. The government then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies. Furthermore, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.

In 2006, the Actuaries Act was passed by parliament to give the profession statutory status on par with Chartered Accountants, Notaries, Cost & Works Accountants, Advocates, Architects and Company Secretaries.

Authorities

The industry recognises examinations conducted by IAI (for actuaries), III (for agents, brokers and third-party administrators) and IIISLA (for surveyors and loss assessors). TAC is the sole data repository for the non-life industry.

IBAI gives voice for brokers while GI Council and LI Council are platforms for insurers.

AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU and NFIFWI cater to the employees of the insurers.

In addition, there are a dozen Ombudsman offices to address client grievances.

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http://en.wikipedia.org/wiki/Third_party_administrator

http://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_India

NEED AND OBJECTIVES

Attrition is a serious trend, especially in today’s knowledge-driven marketplace where

people are the most important assets. In this period, on an average, people would have

changed 2-3 jobs. Competitors are very eager to get experienced people and are

willing to make very fancy offers to cut short their training time and investment. Due

to attrition, profitability, cost of sales, cost of recruitment, training etc is always

impacted. Attrition and absenteeism represent significant costs to most organizations;

it is interesting to note that the attrition rates in India – and the costs associated- are so

high that they can override the benefits of lower wage costs. It is simply attrition-

people do not stay long enough to be taught or to learn the job. When it is the time of

companies to receive the fruit of their investment, the employees leave the job.

Employees, leave, either because they want more money, hate the working conditions,

hate their coworkers, want a change, or because their spouse gets a dream job in

another state.

Attrition and absenteeism represent significant costs to most organizations; it is

interesting to note that the attrition rates in India – and the costs associated- are so

high that they can override the benefits of lower wage costs. The issue is not with the

quality or education of the employees and still less with the investment in technology.

It is simply attrition- people do not stay long enough to be taught or to learn the job.

There may be countless reasons of attrition of employees, but it involves very high

cost. The cost of attrition is not just the loss of that employee but it includes an array

of hidden costs such as recruitment costs, selection costs, training costs, cost of

covering during the period and opportunity costs. So it is very important to study the

reasons and consequences of employee attrition and prepare strategies to curb

attrition.

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OBJECTIVES OF STUDY

Primary Objective

The primary objective of the present study is to identify the various

causes and consequences of attrition among employees working in

insurance industry

Secondary Objective

To draw out strategies to curb attrition.

To identify the retention strategies that influences employees’ decision

to stay with the organization.

To identify the cost involved in attrition and retention strategies.

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Chapter 2: REVIEW OF LITERATURE

Campion, 1991: Campion has discounted the use of proxy turnover measures,

particularly the use of tenure. Similar to turnover, tenure is a construct with multiple

operational definitions; for example, one can use tenure in the current position or

tenure in the facility. Thus, some caution is needed when one is using measures of

tenure. However, for use as a proxy measure of turnover, tenure is considered most

problematic because of the "unproven assumption that short-tenure employees are

equivalent to those who leave an organization". A degree of negative duration

dependence exists between turnover and tenure; however, tenure measures are prone

to length-bias sampling that is, cross-sectional studies will likely over represent long-

tenure employees and under represent short-tenure employees. Campion also

concluded in his study on labor turnover that the most important reason for voluntary

turnover is higher wages/career opportunity. The instance of voluntary turnover may

be classified as ‘avoidable’. In other words, it is a case of employee instigated

turnover which could have been prevented.

Lee and Mitchell, 1994: Lee & Mitchell’s ‘unfolding model’ of employee turnover

represented a significant departure from the previous labor market- and psychological-

oriented turnover literature. This model is based on the premise that people leave

organizations in very different ways and it outlines four decision pathways describing

different kinds of decisions to quit. Although the dimension of choice is explicitly

recognized within psychological accounts of turnover, these accounts often assume

that decisions about leaving an organization only include considerations of work

issues. Intuitively this should be seen as problematic as often the reasons people have

for leaving an organization have nothing to do with their life at work. A notable

feature of the unfolding model is its emphasis on an event or ‘shock’ (positive or

negative) that prompts some decisions to quit. It outlines four different ways in which

people may choose to leave organizations In path 1 this leads to Enactment of a pre-

existing plan of behavior or script, which precludes search or evaluation and leads

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directly to leaving. Paths 2 and 3 show how a shock leads to image violations which

cause an employee to consider their attachment to the organization. Path 3 shows how

violation leads to an evaluation of one’s job and Alternatives in the light of low

satisfaction, which leads to termination after positive assessment of the likelihood of a

job offer. In paths 4a and 4b there is no initial shock. In path 4a, over time, lower

levels of job satisfaction cause an employee to quit without considering alternatives.

Path 4b outlines the traditional account of turnover, where job satisfaction low leads to

termination after search and consideration of alternatives. The unfolding model

introduces two constructs which potentially contribute to turnover theory. The

inclusion of script enactment may help to describe how certain decisions to turnover

can bypass a stage of job search or the evaluation of alternatives. The inclusion of an

element of shock as needed to shakes employees from their lethargy.

Kirschenbaum & Mano-Negrin, 1999: Research by Kirschenbaum & Mano-

Negrin on the impact of unemployment rates as a proxy for actual opportunities in

employee turnover revealed that unemployment rates affected the

job-satisfaction/turnover intent relationship but not actual turnover. They concluded

that macro level analysis predicted turnover patterns but perceptions of opportunities

did not. This point was reinforced in their study on medical centers in various

locations used measures of perceived and objective opportunities in internal and

external labor markets. The authors concluded that objectives opportunities were a

better set of explanations of actual turnover behavior than either perceived internal or

external labor market opportunities. Much of the research on perceived opportunities

has been found to be associated with intentions to leave but not actual turnover. One

of the possible reasons is that intentions do not account for impulsive behavior and

also that turnover intentions are not necessarily followed through to lead to actual

turnover. Kirschenbaum & Mano-Negrin also indicated that turnover is affected by

organizational size, with size being the key mediator of an organization’s internal

labor market. They suggest that organizational size impacts on turnover primarily

through wage rates but also through career progression paths. Developed internal

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organizational labor markets produce lower departure rates since promotion

opportunities have a strong negative influence on departures for career-related

reasons.

Chang, 1999: Chang examined the relationship between career commitment,

organizational commitment and turnover intention among Korean researchers and

found that the role of career commitment was stronger in predicting turnover

intentions. When individuals are committed to the organization they are less willing to

leave the company. This was found to be stronger for those highly committed to their

careers. The author also found that employees with low career and organizational

commitment had the highest turnover intentions because they did not care either about

the company or their current careers. Individuals with high career commitment and

low organizational commitment also tend to leave because they do not believe that

organization can satisfy their need or goals. This is consistent with previous research

that high career committers consider leaving the company if development

opportunities are not provided by the organization. However, this group is not apt to

leave and is likely to contribute to the company if their organizational commitment is

increased. chang found that individuals become affectively committed to the

organization when they perceive that the organization is pursuing internal promotion

opportunities , providing proper training and supervisors do a good job in providing

information and advice about careers.

Griffeth et al, 2000: Griffeth noted that pay and pay-related variables have a

modest effect on turnover. Their analysis also included studies that examined the

relationship between pay, a person’s performance and turnover. They concluded that

when high performers are insufficiently rewarded, they quit. If jobs provide adequate

financial incentives the more likely employees remain with organization and vice

versa Griffeth et al. (2000) noted pay and pay-related variables have a great effect on

employee turnover. Management must compensate employees adequately. They

should pay employees based on their performance and in addition they should given

employees incentives like individual bonus, lump sum bonus, sharing of profits and

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other benefits. Hence, if these are put in place they would minimize employee

turnover. A meta analysis of some 800 turnover studies was conducted by Hom and

Griffeth. Their analysis confirmed some well-established findings on the causes of

turnover. These include: job satisfaction, organizational commitment, comparison of

alternatives and intention to quit. Again, there is a substantial body of research that

has found that organizational commitment is negatively related to intention to quit.

Meta-analysis by griffeth re- examined various personal characteristics that may be

linked to turnover. Age is found to be negatively related to turnover (i.e. the older a

person, the less likely they are to leave an organization). They concluded that there

were no differences between the quit rates of men and women. They also cited

evidence that gender moderates the age-turnover relationship (i.e. women are more

likely to remain in their job the older they get, than do men). They also found no link

between intelligence and turnover, and none between race and turnover. There is a

substantial body of literature that has reported that job satisfaction is negatively

related to turnover intention.

Tang et al, 2000: Tang examined the relationship between attitudes towards money,

intrinsic job satisfaction and voluntary turnover. One of the main findings of this study

is that voluntary turnover is high among employees who value money (high money

ethic endorsement), regardless of their intrinsic job satisfaction. However, those who

do not value money highly but who have also have low intrinsic job satisfaction

tended to have the lowest actual turnover. Furthermore, employees with high intrinsic

job satisfaction and who put a low value on money also had significantly higher

turnover than this second group. The researchers also found that placing a high value

of money predicted actual turnover but that withdrawal cognitions (i.e. thinking about

leaving) did not.

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Boxall et al, 2003: A recent study of turnover by Boxall in New Zealand confirmed

the view that motivation for job change is multidimensional and that no one factor will

explain it. In study of the British clothing industry, employer initiatives to reduce

turnover included a range of measures. Improving remuneration packages was the

single most common initiative with changes to the payments systems made so that

workers could increase their earnings. Also important were more rigorous screening

procedures for new hires, and improved training programs designed to bring new

workers up to speed so that they could maximize their piece rate earnings potential.

Various quality of working life initiatives were introduced, such as flexible working

hours and forms of employee participation (e.g. works councils).

Martin, 2003: Martin (2003) detected a complex relationship between turnover and

training. He suggested that establishments that enhance the skills of existing workers

have lower turnover rates. However, turnover is higher when workers are trained to be

multi-skilled, which may imply that this type of training enhances the prospects of

workers to find work elsewhere. The literature on the link between lower turnover and

training has found that off-the-job training is associated with higher turnover

presumably because this type of training imparts more general skills. Martin also

indicated that there is an inverse relationship between relative wages and turnover, i.e.

establishments with higher relative pay had lower turnover. Martin looked at the effect

of unions on labour turnover and found clear evidence that unionism is associated

with lower turnover. He suggested that lower turnover is a result of the ability of

unions to secure better working conditions thus increasing the attractiveness for

workers of staying in their current job. According to Martin, the relationship between

lower turnover and unionization has been well established by researchers using both

industry-level and individual data.

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Employment Policy Foundation 2004: The Employment Policy Foundation

highlights that “for the twelve months ending August 2004, average employee

turnover costs reached $13, 355, up 6.8 percent from its December 2002 level”. The

voluntary employee turnover rates released by the U. S. Department of Labor in

November, 2004 paint a similar picture. The EPF believes average turnover costs to

be 25 percent of an employee’s annual salary (2004). The cost of replacing lost talent

is even higher, as much as 70 to 200 percent of that employee’s annual salary.

Expanding on these thoughts, the EPF (2004) stated that “for a firm with 40,000 full-

time employees, the difference between a 15- percent turnover rate and a 25-percent

turnover rate is over $50 million annually. The difference between a 15-percent

turnover rate and a 40-percent turnover rate is over $130 million annually”.

Employment policy foundation noted that a number of organizations have high

employee turnover in operations such as customer contact centers, back-office

processing and inventory management positions. Health care, communications,

banking, and insurance are more prone to these high turnover characteristics than

other industries. The reasons are multifold, but in general, the environment in which

these organizations perform forces them into these employee patterns.

David pollitt, 2007: Pollitt examined the reasons high rate of attrition at the call

centre of Scottish and southern energy, a major UK energy provider. It was found that

the major reasons for attrition were: boring style of induction training, the quantity of

information they were expected to remember, the desire to become more productive

quickly, the difficulties they faced when they joined their teams and lack of interest

and support from team manager.

21

Cipd survey, 2008: A survey on turnover of uk 2008, in its report stated, labor

turnover, for all employees stands at 17.3%, which was 18.1% in 2007. The hotel,

catering and leisure industry remains the sector with the highest level of labor

turnover, with the ‘all leavers’ finding in this category being 41%. This reflects an

8.4% increase in turnover rate as compared to 2007. Almost all respondents (94%) use

exit interviews to explore the reasons why people leave the organization voluntarily. a

change of career was the most commonly cited cause (55%).Whereas 45% employees

left due to promotion outside organization. 39% employees left due to level of pay and

27% left to look after their children’s. there is a high proportion of new starters

leaving the organization within the first six months (22%).This emphasizes the

importance of the induction process, to ensure people joining the organization are able

to integrate effectively into the workplace early on. Overall, organizations reported

having the same level of employee retention difficulties as last year: 80% versus 78%

in the 2006 survey.

Sherm study, (2008): According to the SHERM study (2008) “A better career

opportunity” is the primary reason cited by 78 percent of exit interview respondents.

Money is the second most cited reason, as 65 percent of employees leave because they

were “dissatisfied with salary and benefits.” “Poor management” was a distant third

(at 21 percent), followed by “moving to follow a relocating spouse” (18 percent).

SHERM study concluded that fair and competitive salaries and benefits were very

important. They also cited many examples of “improving workplace quality” as being

important, including employee recognition plans, fun events and contests at work, and

comprehensive communication strategies with their employees to make sure that

employees felt valued and appreciated. Comprehensive training, both for new

collectors and ongoing training for all employees, was also suggested as a powerful

retention tool. Interestingly, one of the most effective employee retention plans

suggested was to improve the initial hiring and interviewing process.

22

Chapter3: RESEARCH METHODOLOGY

Every research’s success is based on the methodology adopted by the researcher.

Right methodology gives the right direction to the research to reach at the destination

and analyze the things properly. The present study is an Endeavour to identify various

factors affecting attrition of employees and factors that contribute in the retention of

employees in the insurance sector. Insurance sector have been chosen due to the

reason that there is more job insecurity, more competition to attract talented

employees, more work load and more job stress due to various factor which causes

them to quit their job at any time.

Research Instrument: For the purpose of the study, primary data collection was

done by means of a pre-tested questionnaire which was administered to all the

respondents personally. The questionnaire is divided into two main sections.

Section A (i): This section Contains 20 statements based on likert scale, where

respondents were asked to mark their degree of agreement or disagreement

ranging from strongly agree to strongly disagree. Statements in these sections

were related to explore various factors that influence employee’s decision to

leave the job and also concerned with various factors that motivate to stick with

particular organization.

Section A (ii): This section Contains 15 statements based on likert scale,

where respondents were asked to mark their degree of agreement or

disagreement in range from strongly agree to strongly disagree. Statements in

these sections were directed to explore the effect of retention strategies on

attrition i.e. these statements assess the perception of respondents regarding

retention strategies. These statements describe which factor related to retention

is more valued to employees.

23

Section B: Covered the demographical information of the respondents,

including sex, age, marital status, working experience, etc.

Sampling Plan: Sampling plan is divided into following sub-parts:

Universe of the Study: Male and female employees working in insurance sector in

Amritsar city. The Insurance players which have been included in the study are:

1. ICICI Prudential Life Insurance 2.Future Generalii Life Insurance

3. HDFC Standard Life Insurance 4.Kotak Mahindra Life Insurance

5. Tata Aig Life Insurance 6.Birla Sun Life Insurance

7. Aviva Life Insurance 8. Metlife Insurance

9. Reliance Life Insurance 10. Bharti Axa Life Insurance

11. DLF Pramerica Life Insurance 12. Aegon Religare Life Insurance

13. Max Newyork Life Insurance 14. Bajaj Allianz Life Insurance

15. Ing Vyasya Life Insurance 16. IDBI Fortis Life Insurance

Sample size: The sample size is 100 employees, who are working in above

selected insurance companies. The data is collected through a self-designed

questionnaire.

Sampling procedure: The selection of the sampling has been done on the

basis of convenience sampling technique.

24

Statistical Tools: For structural analysis of the section A(i), A(ii) a statistical

technique called Factor Analysis has been used.

Factor Analysis: It is used primarily for data reduction and summarization. Relationships among sets of many interrelated variables are examined and represented in terms of a few underlying factors.

Software used

SPSS 7.5 software has been used in the present study.

25

Chapter 4: ANALYSIS AND INTERPRETATION

The study under consideration is divided into 2 sections. In section A there are

questions related to attrition of employees and retention strategies. So, Section A is

concerned with various factors that influence employee’s decision to leave the job and

also concerned with various factors that motivate to stick with particular organization.

Section B is concerned with demographics of the respondents.

SECTION A

This part is divided into two parts.

Section A (i)

This section is related to multiple choice questions where respondents are of the view

that which factors are more important and which are less important for the

organization. In this section questions are designed in such a way, so that respondents

can answer these questions without much cognition and can get ready of further

questions.

Section A (ii) Contains 20 statements based on likert scale which respondents mark

their preferences the various factors that influence employee’s decision to leave the job

and also various motivated factors to retain the employees in the organization.

26

SECTION B

This part contains demographical information of the respondents.

DEMOGRAPHICS:

Sex

72

28

malefemale

AGE

44

46

10

years

below 2526-3536-45above 45

27

Martial status

43

51

42

marriedunmarrieddivorcedmarried but living separetely

Education

10

68

22metricundergraduategraduatepost graduate

28

Rotated Component Matrix A1 Component 1 2 3 4 5 6

VAR00001 .287 .663 .407 -.027 .162 -.114

VAR00002

.301 .302 .346 -.400 .434 .336

VAR00003 .091 .298 .753 .094 -.115 .071

VAR00004 -.055 .459 .050 .002 .704 .318

VAR00005 .783 -.017 .157 -.140 .147 .027

VAR00006 .808 .325 -.035 .049 .058 -.009

VAR00007 -.101 .602 .016 .498 .040 .388

VAR00008 -.075 .695 -.033 .405 .143 .316

VAR00009 .002 .147 .243 .753 .195 -.044

VAR00010 .007 .124 .073 .063 .035 .892

VAR00011 -.193 -.073 .062 -.173 -.771 .088

VAR00012 .634 -.021 .067 .197 .206 .444

VAR00013 -.174 -.126 -.199 -.791 -.067 -.148

VAR00014 -.180 .020 -.413 -.300 -.446 .111

VAR00015 -.604 -.045 -.466 -.132 -.038 .268

VAR00016 .594 .170 .491 .248 .115 -.018

VAR00017 .026 -.110 .597 .420 .468 .044

VAR00018 .171 -.256 .802 .174 .103 .175

VAR00019 -.338 -.367 -.186 -.072 -.557 -.310

VAR00020 .348 .786 -.132 .036 .186 -.003

Rotation converged in47 iterations

29

Total variable explained

Table 2

Factor Eigen Values Variance % Cumulative %

Factor 1 (F1) 2.952 14.759 14.759

Factor 2 (F2) 2.703 13.513 28.272

Factor 3 (F3) 2.675 13.376 41.648

Factor 4 (F4) 2.252 11.260 52.908

Factor 5 (F5) 2.239 11.193 64.101

Factor 6 (F6) 1.720 8.600 72.700

The factor with largest Eigen values explains the highest variance and so on down to

the factors with small Eigen values. All the 6 factors extracted have been given

appropriate names on the basis of variables represented in each care. The factor F1 to

F6 has been named as:

30

F1. Clarity of current job expectation with authority, compensation and career

opportunities

F2. Work culture

F3. Feedback and communication from top leadership

F4. Training and development

F5. Career development and career

F6. Atmosphere of the organization

F1: Clarity of current job expectation with authority, compensation and career

opportunities.

Label Statements Loadings

S6 Clear sense of career plan and future .808

S5 Expectation from employees by employer .783

S12 Authority to make decisions .634

S16 Compensation for the work .594

S15 Imbalance of personal and professional life .-604

This factor has come out as the most important factor that influences decision of

employees to leave the job with Eigen value of 2.952. This table reveals that variable

“clear sense of career plan and future” has the highest loading of .808. This is

followed by “expectation from employees by employees” with loading .783. The next

variable in the table is “authority to make decisions” with the loading of .664. The

next variable in this table is “compensation for the work”, with the loading of .594.

31

The last variable in this table is “imbalance of personal and professional life” with the

loading of.-604. If the employees have clear sense of their career plans and they know

what is expected from them as an employee with appropriate authority and

Compensation, then it will help to reduce attrition. Above table shows, employees

value a lot to these variables. Proper balance between personal and professional life is

also of great importance for employees.

F2: work culture

Label Statements Loading

S20 Referring a person to apply in the organization .786

S8 Cooperation among staff .695

S1 Likeliness for coworkers .663

S7 Management of conflict .602

The factor has come out as the second most important factor that influence decision of

employees to leave the job with Eigen value of 2.703. A total of four statements were

loaded in this factor. This table reveals that variable “Referring a person to apply” has

the highest loading of .786. This is followed by “cooperation among staff” with

loading .695. The next variable in the table is likeliness of coworkers with the loading

of .663. The last variable in this table is “management of conflicts”, with the loading

of .602.

32

The work culture of organization must be supportive in order to minimize the attrition

in any organization. If there is cooperation among the coworkers and the conflicts

among employees are managed effectively then employees must have sense of

likeliness for their coworkers and they would also like to refer other persons to apply

for the job in their organization. The conflict among employees should be managed

effectively and employees in the organization should be cooperative in order to make

the work culture of organization healthier. If the work culture is healthy then

employees will be gladly ready to give their 100 percent.

F3: Feedback and communication from top leadership


S18 Understanding of measurement of performance .802

S3 Feedback about quality of work .753

S17 Communication among staff and upper leadership .597

Factor analysis reveals that factor i.e. “feedback and communication from top

leadership” with an Eigen value of 2.675 is an important factor. This table reveals that

variable “understanding of measurement of performance” has the highest loading

of .802. This is Followed by “feedback about quality of work” with loading .753. The

last variable is “communication among staff and upper leadership” with loading

of .597.

This table shows that if employees receive feedback of their performance and they are

also aware of how their performance is measured, then communication between staff

and upper leadership is bound to be effective. This table reveals majority of the

employees receive feedback for their performance. They are in favor of continuous

performance feedback so that they can come to know about their weak points and try

to overcome those. The employees are also aware of how their performance is

measured. The communication among staff and top leadership is also there.

33

This helps in clear understanding of goals and employee will give their whole hearted

effort to the organization.

F4: workload and training


S13 Unequal distribution of workload -.791

S9 Training and development activities .753

Factor analysis reveals that the factor “workload and training” with Eigen value of

2.252 is a significant factor. The factor “Unequal distribution of work” has highest

loading of-.791. This is followed by “training and development” with the

loading .753. The loading pattern on this table reveals that unequal distribution of

workload is not acceptable to employees and is one of the de-motivational factors for

them. It shows that they are not satisfied with their job. The high loading upon

unequal distribution of workload reveals unfair treatment to employees by the

organization, which may be the reason of attrition of the employees. High loading on

the variable training and development shows its importance to keep the employees in

the organization. With the help of training they will come to know about the recent

trends in business world, how they can improve their skills, how they can provide

better customer service and how they can make a customer a loyal customer of the

company.

F5: Career development


S11 Lack of growth opportunities -.771

S4 Employees are valued part .704

S19 Unwillingness of employees to continue job -5.57

34

Career development has been identified an important factor with Eigen value of 2.239.

The table indicates that the variable “lack of growth opportunities” has got the highest

loading of .771. This is followed by “employees are valued part” with loading of .704.

The last variable in this table is “unwillingness of employees to continue the job” with

the loading of 5.57.

The loading pattern of above table shows the factors that influence the decision of

employee to leave the job. The table shows if there is lack of growth opportunities the

employee would not wish to continue his job in the coming time. The factor “career

development” is related to opportunities for growth and advancement and recognition

of employees as a valued part in the organization. Means if the growth opportunities

are lacking it would lead to the attrition of employees. This table also shows that

employees give the high priority to their recognition as a valued part of organization.

F6: work environment


S10 Friendly work environment .892

“Work environment” has been identified an important factor with as Eigen value of

1.720. The table reveals only one factor that has a loading of .892. The high loading

for “friendly work environment” shows that for majority of employees, there is a high

priority for friendly working environment. If the environment of organization is

friendly, the employees are automatically motivated to give their best.

35

ROTATED COMPONENT ANALYSIS A2

1 2 3 4 5

VAR00001 .178 .314 .080 -.088 .855

VAR00002 .209 .101 .743 .135 .156

VAR00003 -.107 .823 .033 -.028 .230

VAR00004 .176 -.029 .096 .711 .002

VAR00005 -.085 -.014 .772 .010 .067

VAR00006 -.061 .801 .152 .196 .032

VAR00007 .237 .091 .625 .203 -.416

VAR00008 -.449 .285 .115 .681 -.019

VAR00009 -.023 .132 .449 .628 -.197

VAR00010 .221 .435 .452 .229 -.213

VAR00011 .842 .115 .107 -.085 .041

VAR00012 .629 -.398 .072 .345 .386

VAR00013 .741 -.158 .073 .071 .078

VAR00014 .288 .502 -.092 .531 -.108

VAR00015 .631 .245 .126 .132 -.450

36

Total Variance Explained

The factor with largest Eigen values explains the highest variance and so on down to

the factors with small Eigen values. All the 5 factors extracted have been given

appropriate names on the basis of variables represented in each care. The factor F1 to

F5 has been named as:

F1: Appropriate job with required authority and feedback

F2: Work Environment and Benefits

F3: Relationship with superior and growth

F4: Working conditions and opportunity

F5: High salary

37

Factor Eigen Values Variance % Cumulative %

Factor 1 (F1) 2.570 17.136 17.136

Factor 2 (F2) 2.234 14.892 32.028

Factor 3 (F3) 2.043 13.617 45.645

Factor 4 (F4) 1.952 13.013 58.657

Factor 5 (F5) 1.443 9.618 68.276

F1: Appropriate job with required authority and feedback


S11 Match between job and skills .842

S13 Authority to make decisions .741

S15 Feedback .631

S12 Balance between work and personal life .629

“Appropriate job with required authority and feedback” has been identified as very

important factor with the Eigen value of 2.570. This table shows that the variable

“match between job and skills” has the highest loading with .842. , followed by

“authority to make decisions” loading with .741. The next variable in this table is

“feedback” with the loading of .631. The last variable in table is “balance between

work and personal life” with the loading of .629. This factor shows appropriate job

according to skills of employee with appropriate authority, feedback and balance

between work and professional life plays a major role in retention of employees. The

loading pattern of table reveals that employees value a lot to work and personal life

balance, feedback and authority to make decisions. A match between job and skills of

employees is most valued variable in this table.

F2: work environment and benefits


S3 Good work environment .823

S6 Hike in compensation and fringe benefits .801

S14 Promotion .502

38

“Work environment and growth” has been identified as very important factor with the

Eigen value of 2.234.this table shows that the variable “good work environment” has

the highest loading with .823 followed by “Hike in Salary and fringe Benefits”

loading with .801. The Last variable in this table is “promotion” with the loading

of .502.The loading pattern of table reveals that employees value a lot to good work

environment and opportunity for growth. The variable Hike in compensation and

fringe benefits is also given due consideration by employees. If employees are getting

the promotions, there is hike in their salary and perks it shall conduct a good work

environment with the possibility of growth for employees. So it shall lead to retention

of employees.

F3: Relationship with superiors and Growth


S5 Healthy superior subordinate relationship .772

S2 Job security .743

S7 Training and development .625

The factor analysis has revealed that factor F3 “relationship with superiors and

growth” is most important with an Eigen value 2.043. The table shows that variable

“Healthy superior subordinate relationship” has the highest loading of .772 that shows

this is one of the most important variables to retain the employees. This is followed by

variable “job security” with Loading .743. The last variable in this table is “training

and development” with loading .625.The loading pattern of above table reveals that

the employees value a lot to healthy superior subordinate relationship. If there is good

superior subordinate relationship then the employees have a sense of job security.

Helping employees in their growth like providing them training and development

helps organization to retain employees.

39

F4: working conditions and opportunities


S4 Work with latest technology .711

S8 Stock options .681

S9 Recognition .628

S14 Promotion .531

“Working condition and opportunities” has been identified an important factor with an

Eigen value of 1.952. The variables forming this factor with respective labels and

loading are shown in this table. The table indicates that the variable “work with latest

technology” has got the highest loading of .711.this variable is followed by the

variable “stock options” with loading of .681.the next variable in the table is

“Recognition of employees” with the loading of .628. The last variable in this table is

“promotion of employees” with the loading of .531. The loading pattern of this table

shows the working conditions provided to employees has an impact on their retention.

If the employees are given opportunities like work with latest technology, stock

options and promotions; then they will feel recognized part of organization and all this

shall lead to the retention of employees.

F5: High salary


S1 High salary .855

Factor analysis reveals that the Eigen value of f5 “High Salary” is 1.443. In this table

there is only one factor “High salary “with the loading of .855. The high loading on

this factor shows, it is a very important motivator which helps them to work more and

keep them in the organization, it means higher salary than industrial standards is the

important factor to retain the employee in the organization.

40

Q1: The organization provides a creative and challenging job

Response PercentagesStrongly Agree 50%Agree 20%Neutral 10%Disagree 15%Strongly Disagree 5%

41

50%

20%

10%

15%5%

Strongly Agree Agree Neutral Disagree Strongly Disagree

Interpretation: From the above discussion it is clear that majority of the respondents are

strongly agree(50%) that the organization provides a creative and challenging job and only

5% respondents are strongly Disagree.

Q2: I receive feedback about quality of my work


42

50%

20%

10%

15%5%


Interpretation: From the above discussion it is clear that I am strongly agree (50%) that I receive

feedback about quality of my work and 5% strongly disagree.

Q3: I have a clear sense of development plan and future career prospects

in this organization


4360%

30%

2% 5% 3%


Interpretation: From the above discussion it is clear that I am strongly agree (60%) that I have

a clear sense of development plan and future career prospects in this organization and 3% strongly

Disagree.

Q4: I feel fairly compensated for the work I do in this organization


44

60%

30%

2% 5% 3%


Interpretation: From the above discussion it is clear that I am strongly agree (70%) that I

feel fairly compensated for the work I do in this organization and only 2% disagree.

Q5: Conflict among employees is managed effectively


45

70%

25%

3% 2%


Q6: I have clear understanding of how my job performance is measured


46

40%

30%

10%

10% 10%


Interpretation: From the above discussion it is clear that majority of the respondents are strongly agree(40%) that the Conflict among employees is managed effectively and only 10% respondents are strongly Disagree.

Interpretation: From the above discussion it is clear that I am strongly agree (55%) that I

have clear understanding of how my job performance is measured and only 3% disagree.

Q7: Increasing the compensation packages and fringe benefits periodically can effectively tackle attrition


47

55%32%

10% 3%


Interpretation: From the above discussion it is clear that majority of

respondents are strongly agree (75%) that Increasing the compensation packages and fringe benefits periodically can effectively tackle attrition and only 1% are strongly disagree.

Q8: Salary structure which is higher than industrial standards will help to control

attrition

48

75%

20%3% 1% 1%



Interpretation: From the above discussion it is clear that majority of respondents are

Strongly agree (55%) that Salary structure which is higher than industrial standards will

help to control attrition and only 2% are strongly disagree.

Q9: Healthy superior subordinate relationship can control attrition


49

55%32%

8% 3% 2%


Interpretation: From the above discussion it is clear that majority of respondents strongly

agree(70%) that healthy superior subordinate relationship can control attrition and only 2% are

strongly disagree.

Q10: Training and development program play an important role in retaining employees

50

70%

20%

5%3% 2%




agree(60%) that training and development program play an important role in retaining employees

and only 5% are strongly disagree.

Q11: Providing employees proper recognition of their work is an important tool

51

60%20%

10%5%

5%


to reduce attrition

Response PercentagesStrongly Agree 60%Agree 20%Neutral

10%Disagree 5%Strongly Disagree 5%


agree(60%) that providing employees proper recognition of their work is an important tool

to reduce attrition and only 5% are strongly disagree.

Q12: Proper feedback at regular intervals to employees helps in retaining employees

52

60%20%

10%5%

5%


Response PercentagesStrongly Agree 65%Agree 25%Neutral 5% Disagree 3% Strongly Disagree 2%


agree(65%) that proper feedback at regular intervals to employees helps in retaining

employees and only 2% are strongly disagree.

53

65%

25%

5%3% 2%


Chapter 5: CONCLUSION

The present study is based on primary data collected from the employees of Insurance Industry in Amritsar city. The study attempts to find out the scope provided by the present jobs of the respondents to use the various work related characteristics like compensation, cooperation, work environment, growth opportunities, authority, recognition, promotion, job security etc. experienced by the employees during their jobs. The data was collected through personal interviews by using a questionnaire containing closed ended questions whose responses were based on 5 point likert scale (1 being strongly agree and 5 being strongly disagree). It contained the factors related to attrition and retention of employees. After the analysis of the survey I have found that there are mainly six factors that influence decision of employees to leave the organization. There are also other five factors helping the employees to a great extent to stay in the organization. According to the analysis lack of growth opportunities, unequal distribution of workload, work life imbalance are most determining factors causing attrition of employees. Work environment, job security, salary, recognition, promotion are valued a lot by the employees for the purpose of retention. The successful organizations realize that employee retention and performance management are integral to sustain their leadership and growth in the marketplace. The organizations are practicing and adopting various techniques and strategies to retain their talent as attrition can deter the performance and profitability of any organization. So the organization should focus intelligently on the employees and their needs and thus try to retain them by providing them with the incentives which are most suitable to them. Today organizations are investing a lot to make employees feel like home, comfortable and happy and thus retained with the organization and minimize attrition. All the reasons for which employees leave, should be removed and the atmosphere of trust be created in organization in order to ensure progress.

54

Limitations Of The Study

The limitations of the study are as follows:

1) The accuracy of the results is limited to the reliability of the tools of

investigation and analysis of the data.

2) The study confines to Amritsar city only. The findings of this study may not be

representative of the entire population.

3) The probability of sampling error can’t be ruled out as the samples are drawn

by convenience sampling.

4) The study is based on a pre-designed questionnaire, so there is a possibility of

error due to gap between the truth and observation.

5) Poor response from some of the respondents also adds to ineffective results.

6) Some questionnaires had to be ignored due to incomplete or invalid

information.

55

SUGGESTIONS/RECOMMENDATION

As per our study employees leaves the job because of personal and professional

life imbalance. So in order to control attrition of the employees, organization

should try to balance their personal and work life.

The study also reveals that another reason for employees to leave the job is

unequal distribution of work. So we recommend that organizations should

divide the work fairly and equally so that the load of work should not be with

only few persons.

The study about factors influencing attrition of employees reveals that the

major reason for employees to leave the job is lack of growth opportunities. So

organizations should provide their employees ample growth opportunities so

that they can reach at higher positions during their careers.

The study about factors that helps organization to retain their employees

reveals that if employees are given job matching their skills with appropriate

authority and feedback, it will help organizations to retain their employees. So

organization should provide their employees appropriate job with proper

authority and feedback.

It is also found that employees value a lot to good relationship with superiors

and growth. So if relationship with superiors is good and ample growth

opportunities are there, employees will feel job security. So good relationship

with superiors, training and development and job security should be provided

to employees to retain them.

Study also reveals that to retain employees working conditions should be good.

So organization should provide their employees recognition, promotion, stock

options and opportunity to work with latest technologies.

It is also recommended that organization should provide salary hike and fringe

benefits to retain the employees.

56

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WEBSITES

http://www.hindu.com/biz/2008/07/14/stories/2008071450111700.htm

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http://www.wisegeek.com/what-is-an-attrition-rate.htm)

http://www.tvrls.com/research_and_publication2.php?article_id=1

http://www.indianmba.com/Faculty_Column/FC404/fc404.html

http://www.qaiindia.com/news room/dilemmas.htm

http://www.bpoindia.org/research/attrition-rate-big-challenge.shtml

http://www.citehr.com/102931-who-responsible-attrition.html

www.zdnet.com.au

http://retention.naukrihub.com/importance-of-employee-retention.html

http://www.nobscot.com/library/retention.cfm

http://www.chillibreeze.com/articles/AShortWhitePaper.asp

http://www.isquare.com/turnover.cfm

http://www.webpronews.com/expertarticles/2006/07/24/employee-retention-

what-employee-turnover-really-costs-your-company

http://retention.naukrihub.com/attrition-rate.htm

http://www.thehindubusinessline.com/ew/2004/08/23/stories/

2004082300080100.htm

http://www.citehr.com/36131-attrition.html

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http://www.employee-retention-guide.com/Employee-Retention-Plan.pdf

http:)//www.nfib.com/object/3488557.html


http://www.pr.com/press-release/43692

www.mintrac.com.au/files/newsletter/research%20turnover%20and%20retention%20.pdf

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http://www.mintrac.com.au/files/newsletter/research%20turnover%20and%20retention%20.pdf

http://www.mintrac.com.au/files/newsletter/research%20turnover%20and%20retention%20.pdf

http://www.pr.com/press-release/43692


http://www.citehr.com/36131-attrition.html

http://www.thehindubusinessline.com/ew/2004/08/23/stories/2004082300080100.htm

http://www.thehindubusinessline.com/ew/2004/08/23/stories/2004082300080100.htm

http://retention.naukrihub.com/attrition-rate.htm

http://www.isquare.com/turnover.cfm

http://www.chillibreeze.com/articles/AShortWhitePaper.asp

http://www.nobscot.com/library/retention.cfm


http://www.citehr.com/102931-who-responsible-attrition.html

http://www.qaiindia.com/news

http://www.indianmba.com/Faculty_Column/FC404/fc404.html

http://www.tvrls.com/research_and_publication2.php?article_id=1

http://wordnetweb.princeton.edu/perl/webwn?s=attrition%20rate

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Annexure

Dear Respondent, I am Sania Gupta, MBA (HRM) Trainee, Swami Satyanand College of Management And Technology, Amritsar. I am pursuing a survey on “Attrition in Insurance Industry” .The information provided by you will be used for academic purposes only and will be kept fully confidential. Please spare sometime and respond the following questions.

Please tick the appropriate option with respect to your level of agreement

with the statements given below using the scale ranging from Strongly

Agree (SA), Agree (A), Neither agree nor disagree (NAND), Disagree (D),

Strongly Disagree (SD).

Statements SA A NAND

D SD

I like the people I work withThe organization provides a creative and challenging jobI receive feedback about quality of my workI feel a valued part of the organizationI know exactly what is expected from me as an employeeI have a clear sense of development plan and future career prospects in this organizationConflict among employees is managed effectivelyThe spirit of cooperation among staff is highOrganization provides regular training and development activitiesThe atmosphere of organization is generally friendlyOrganization do not provides valuable growth opportunities Organization provides reasonable authority to make necessary decisionsThe workload in the organization is not distributed equitablyI often think about seeking employment elsewhere I am unable to balance my personal and professional life I feel fairly compensated for the work I do in this organizationCommunication among staff and upper leadership is effective in my organizationI have clear understanding of how my job performance is measuredI would not like to continue my job in this organization for next two yearsI would like to refer a friend to apply for a job in this organization

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Please tick the appropriate option for the following questions that deal

with controlling attrition.

Statements SA A NAND

D SD

Salary structure which is higher than industrial standards will help to control attrition

SA A NAND

D SD

Job security is an important factor for retaining employeesGood work environment provided by organization can effectively tackle attritionGiving an opportunity to work with latest technology may facilitate reduction in attritionHealthy superior subordinate relationship can control attritionIncreasing the compensation packages and fringe benefits periodically can effectively tackle attritionTraining and development program play an important role in retaining employeesStock option provided by organization helps in retaining employeesProviding employees proper recognition of their work is an important tool to reduce attrition Providing employees proper authority helps in retention of employeesProviding employees the job that they can do best is an important tool to reduce attritionHarmony between personal and professional life helps in reduction of attrition Including employees in decision making helps in retaining employeesPromoting employees from within company helps in reducing attritionProper feedback at regular intervals to employees helps in retaining employees

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Demographic Profile

Please complete the following information. This information will only be used for statistical

purposes only.

Age ( ) Below 25 Years ( ) 26-35 years ( ) 36-45 years ( ) 46-55 years ( ) above 55

years

Sex ( ) Male ( ) Female

What is your length of service with the organization ________________________

Total family salary per month

( ) less than 15000 ( ) 15001-25000 ( ) 25001-35000 ( ) 35001-45000 ( )

45001-55000 ( ) above 55000

Marital status

( ) married ( ) unmarried ( ) divorced ( ) married but living separately

Educational background

( ) metric ( ) under graduate ( ) graduate ( ) post graduate ( ) doctorate

(I am highly thankful for your cooperation)

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Report 2

Documents

feel fairly

development

life insurance

fringe benefits

allowing private

indian call

intrinsic

future career