Employee Turnover in Egypt free essay sample

The measures for analysis are the factors affecting this phenomenon (company image, the pay satisfaction, nature of work, nature of peer group, peer self-comparison, internal career/growth opportunity, outside career opportunity, the degree of match between what was expected and what was achieved in the present job) and its impact on the performance of organizations. It was found that Labor Turnover affects negatively the performance of organizations and the most important factors affecting turnover are; internal career/growth opportunity, the pay satisfaction, outside career opportunity and the degree of match between what was expected and what was achieved in the present job. Introduction Labor turnover is a term that is widely used by many human resource practitioners. The term â€Å"turnover† is defined by Price (1977) as: â€Å"The ratio of the employees of organization who left in a particular period of time with the average number of employees in that organization during the same period of time†. According to Currivan (1999), â€Å"Turnover is a behavior which describes the process of leaving or replacing employees in an organization†. to the comment given by Becker (1999) that the most common cause of employees leaving their jobs is inability of the employees to match their skills against the skills demanded by the job. According to Kevin et al (2004), although there is no standard framework for understanding employee’s turnover Processes as whole, a wide range of factors have been found useful in interpreting employee turnover. Turnover has considerable impact on an organization performance as it should be properly addressed and measured. In a survey conducted by Chartered Institute of Personnel and Development (CIPD) in 2005, different responses towards turnover were revealed as follows: 52 % of the respondents felt that labor turnover had a minor negative effect on organizational performance. 21 % stated that there was no effect. 17 % stated that a serious negative effect. And 9 % that there was a positive effect. Past researches concluded that employee turnover has very negative effect on the operating performance of an organization with the help of theoretical and empirical analysis and this is due to interruption of daily organizational routines (Dalton and Todor 1979, Bluedorn 1982). On the other hand, many other researchers found that organization gets benefit due to fresh blood and innovative thinking and also increases the motivational level of employees that bring to a new job (Abelson and Baysinger 1984, Mowday et al. 1982). Fahad Abdali. (2011), Most turnover research has been carried out in the United States and is predominantly quantitative theory testing using cross-sectional designs. It is dominated by studies in the psychological tradition that place turnover as a dependent variable and explore its antecedents in private sector contexts. There is much less work on turnover as an independent variable and hence its relationship to organizational performance and there is relatively little research on turnover in the Gulf region where there are big social, cultural and labour market differences in relation to the West. STEPHEN SWAILES SALEH AL FAHDI. (2010)) The reason that why, this research topic was selected because in our environment most of the workers are not satisfied with their jobs and most of them are quiet their jobs when they find relatively better job than that one. The reason is not that they are not competent but there are few factors the effect the commitment and satisfaction of the employee towards their j ob, some are employee workload, work stress, salary, job satisfaction, and work to family conflict. Muhammad Naeem Tariq. (2013) Problem identification The reason that why, this research topic was selected because in our country many of workers are not satisfied with their current job and there was observed high rate for Labor Turnover especially in private sector where this study takes place. Research objectives †¢ Identifying the relation between labor turnover and organization performance in the Egyptian private sector. †¢ Finding solutions for labor turnover problem. Literature review Muhammad Naeem Tariq. (2013), suggested that job satisfaction and affective commitment as the basic variables with turnover intentions. He further argues that no support was found in the results for continuance dedication as a variable with turnover intentions. The results also concluded that significant positive correlations were found for the distal variables workload, work stress, employee salary, job satisfaction, and work to family conflict. Also suggested that the first, quitting is a salient, major life event, and people remember the details surrounding such events relatively easily. Second, quitting tends to be associated with affective arousal, be it negative or positive; such events are more easily remembered than those with little accompanying affective arousal. Moreover, people often remember such events better after a long rather than a short period of time. Also, time since quitting was unrelated to decision type; lessening the chance that memory decay had an effect on the findings. They further analyze that it is fair to say that lecturers will put in their best when the work environment is conducive; when there are good welfare packages like good houses, adequate health and medical insurance, training and development opportunities and other relevant fringe benefits. In the absence of these, it can only be expected that frustration and eventually quits will result. Given their role in society, there is a strong case to pay special attention to university academics while not constituting them into a special class. However, it is important to further explore opportunities to provide more incentives to enable lecturers maximize their role in the development process. In doing this, we have also shown that economic incentives on their own do not provide sufficient motivation for university teachers. Another possibility is that the relationships discovered could be partially due to employee schemata or implicit theories of turnover. However, if such schemata reflect reality or are widely held by employees, they may not threaten the validity of our findings. Also defines that the top management change or employee turnover is to be any change in the set of individuals holding the title of chief executive officer (CEO), president or chairman of the board. His major hypothesis is that the probability of a top management change is inversely related to performance of an organization. Using a random sample of listed firms, He tested the hypothesis with a prediction procedure to exploit information on firms that do not experience a management change. At last he found that change in top management inversely related to the efficiency of the organization. And reported that the rate at which staff change jobs has posed a serious problem for employers in the private and public sectors. Since, staff employee turnover generally breaks the stability, consistency and continuity of work, makes long-term planning more difficult, it leads to shortages of staff which in turn can raise the workloads of other employees, and raises the costs of recruiting and training staff. They further analyze that it is fair to say that lecturers will put in their best when the work environment is conducive; when there are good welfare packages like good houses, adequate health and medical insurance, training and development opportunities and other relevant fringe benefits. In the absence of these, it can only be expected that frustration and eventually quits will result. Given their role in society, there is a strong case to pay special attention to university academics while not constituting them into a special class. However, it is important to further explore opportunities to provide more incentives to enable lecturers maximize their role in the development process. In doing this, we have also shown that economic incentives on their own do not provide sufficient motivation for university teachers. Boondarig Ronra (2008), defines job satisfaction as â€Å"a collection of feelings that an individual holds towards his or her job. † In summary, job satisfaction is a collection of positive feelings or an emotional state that a person perceives based on a variety of aspects of the work itself or work environment. Job satisfaction is correlated to life satisfaction which means that people who satisfied with life will tend to be satisfied with the job and people who are satisfied with their job will tend to be satisfied with their life. Ellen S. Kehoe. (2009) , People are important component of any organization. Successful organizations strive to maintain a low level of employee turnover because of its associated organizational impacts and costs. Thomas Korankye. (2012), that it cost twice the employer to get a new employee than to retain an existing employee. Most of these costs can be attributed to mistakes, errors and poor service the newly recruited employee will provide to customers whilst learning on the job. Ellen S. Kehoe. (2009) ,All organizations need to focus on attracting potential employees who will become productive members of the organization. Thomas Korankye. (2012), employees are seen as major contributors to organizations competitive advantage and as such for the competitive advantage to be maintained, labour turnover should be discouraged by management. Whilst their literature points to the fact that labour turnover can have a negative impact on organization’s performance, it is not everyone who will abide by that idea and as such part of the literature will examine what causes employee turnover and the impact it has on organizations. The banking industry in any economy is considered as crucial and as such poor performance of the industry can have a diverse effect on the economy as a whole. Organization with strong communication systems enjoyed lower turnover of staff. This is based on the idea that employees feel comfortable to stay longer in positions where they are involved in some level of the decision-making process. That is employees should fully understand about issues that affect their working atmosphere. Apart from non-involvement in decision making. Boondarig Ronra (2008), the way of measuring employee turnover is to measure the number of leavers in a particular period as a percentage of the number of total employees during the same period. The organization will usually calculate employee turnover rate on a quarterly or annual basis. Turnover rate is sometimes called the separation rate, and it is revealed as below: (Number of leavers\ Average no. working) x 100 = Separation rate This formula will present a percentage rate of employee turnover for the organization, and can also be used for a comparative relation over the time. This method too can be used as the indicator to compare particular organization to the industry’s average turnover rate. This is known as benchmarking. Fahad Abdali. (2011),Employee turnover may be classified into five categories a) Functional Vs Dysfunctional Turnover: Functional turnover can be defined as â€Å"A turnover in which poor performers leave† while Dysfunctional turnover can be defined as â€Å"A turnover in which good performers leave† b) Avoidable Vs. Unavoidable Turnover: A turnover that happens in avoidable circumstances is called ‘Avoidable Turnover’, where as â€Å"A turnover that happens in unavoidable circumstances is called ‘Unavoidable Turnover’ c) Voluntary v/s Involuntary Turnover: Voluntary turnover can be defined as â€Å"The turnover in which employee has own choice to quit or instances of turnover initiated at the choice of employees† where involuntary turnover can be defined as â€Å"The turnover in which employees have no choice in their termination e. g. sickness, death, moving abroad or employer’s initiated termination†. d) Internal Vs External Turnover: Turnover can be classified as ‘internal turnover’ or ‘external turnover’. Internal turnover happens when employees send-off their current position and getting a new position within the same organization. It is related with the internal recruitment where organizations filling the vacant position by their employee or recruiting within the organization. e) Skilled Vs Unskilled Turnover Untrained, uneducated and unskilled positions often face high turnover rate. Without the organization or business incurring any loss of performance, employees can generally be replaced. On the other hand skilled and educated positions may create a risk to the organization while leaving. Therefore turnover for skilled and educated professionals incur replacement costs as well as competitive disadvantage of the business. Research Hypotheses Main Hypothesis: H0: The labor turnover positively affects the performance of the organization. H1: The labor turnover negatively affects the performance of the organization. Other hypotheses: H1: pay satisfaction influence labor turnover intentions negatively. H2: internal career/growth opportunity provided by organization influence labor turnover negatively. H3: outside career opportunity influence labor turnover intentions negatively. H4: The degree of match between what was expected and what was achieved in the present job positively influence labor turnover intentions.