1.1.

BACKGROUND OF THE STUDY

Employee turnover is a ratio comparison of the number of employees a company must
replace in a given time period to the average number of total employees. A huge concern to
most companies, employee turnover is a costly expense especially in lower paying job roles,
for which the employee turnover rate is highest. Many factors play a role in the employee
turnover rate of any company, and these can stem from both the employer and the employees.
Wages, company benefits, employee attendance, and job performance are all factors that play
a significant role in employee turnover. Companies take a deep interest in their employee
turnover rate because it is a costly part of doing business. Ruby (2002) classified labor
turnover into internal or external. Internal turnover involves employees leaving their current
positions and taking new position within the same organization. Turnover occurs for many
different reasons. Sometimes new job attracts employees and pull them to leave the old one.
In contrary employee also pushed to leave job due to the dissatisfaction in their present
workplace or by domestic circumstances when someone reallocates with their spouse or
partner. A poor relationship with the management can be an important reason for the
employees to leave their jobs. It is relatively rare for people to leave jobs in which they are
happy even offered by higher salary elsewhere. A lack of proper training and development is
also major cause for voluntary turnover. Employees have a preference for security of their
jobs. Unskilled positions often have high turnover, and employee can generally be replaced
without the organization or business incurring any loss of performance. High turnover rates
of skilled professionals can pose as a risk to the business or organization, due to human
capital (such a skills, training and knowledge) cost. Notably, given the natural specialization
of skilled professionals, these employees are likely to be reemployed within the same
industry by a competitor. Controlled turnover can be healthy as it clears dead wood and
brings new blood and flesh ideas and approaches to the organization. Continual training and
reinforcement develops a workforce that is competent, consistent, competitive, effective and
efficient. Beginning in the first day of work, providing individual with the necessary skills to
perform their job is important. When companies hire the best people, new talents hired and
veterans are enabled to reach company goals, maximizing the investment of each employee.
Taking the time to listen to employees and making them feel involved will create loyalty, in
turn reducing turnover, allowing for growth. It is worthwhile carrying out this study because
of the numerous problems associated with labor turnover and its attendant effect on the
productivity and effectiveness of an organization.
The findings from this study cannot be generalized to other brewery industries or other
industries because the circumstances are not the same. It will require much larger study to be
able to generalize. But at least, the result can form the basis for further study and a
contribution to ongoing research experiments on the effect of labor turnover.

1.2. ORIGIN OF THE REPORT

In todays world, only academic education does not make a student perfect to become
competitive with the outside world. Industry visit is highly needed to gain idea, knowledge
and experience. The perfect coordination between theory and practice is of paramount
importance in the context of the modern business world in order to resolve the dichotomy
between these two areas. As a part of the Masters of Business Administration program
requirement, we are assigned to prepare a report on business research in service organization
in Bangladesh. For this we have chosen ACI Limited for the preparation of report.
THE RATIONALE OF STUDY
Research study investigated the effect of labor turnover in Brewery industries in Nigeria.
Labor turnover is a costly problem and an economic drain to Brewing Industries. Labor
turnover costs Brewing industries in Nigeria huge sum of money in recruiting and training
replacements. Additional costs are incurred through new employees that are more subject to
accidents causes more breakages and make more errors than experienced worker. Brewing
industries incur losses through reduced production, work disruption and increases scrap and
over-time as a result of departed workers. A cross-sectional survey was utilized to collect
data for answering research questionnaires and testing hypothesis in this research work. The
data collected from questionnaire instrument were also analyzed using percentage. The
research finding showed that the effect of labor turnover was reduced production, increase
cost of recruitment, work disruption, increased scrap and overtime and additional labor
turnover. Therefore the report has to find out effects of turnover and possible ways to
minimize the effects of labor turnover in the organization.

OBJECTIVE OF THIS STUDY

BROAD OBJECTIVE:
We do identify what are causes of labor turnover, so that we get the experiences and fun on
it. Also, we are intended to have depth knowledge about it, so doing research is the best way
to get a good idea about it in order to solve the problem.
THE SPECIFIC OBJECTIVE:
The main aim of this research is to evaluate factors of labor turnover that affect low
productivity and profit of an organization. So this study purports to:
To research into the effect of labor turnover in the organization.
To find out the most serious effect of labor turnover on the organization.

 To differentiate in pay rate in same work and responsibilities can derive lower paid
employees to quit.
To attract employees new job opportunities and push to leave old job.
To compare the effect of labor turnover.
To find out a positive relation between job insecurity, delay of promotion, irregular
payment and the propensity to exit from the organization.
To give a general discussions about the scenario of turnover on the organization.
To examine are what the consequences of the high employee turnover.

To know how to tackle the problem of labor turnover.

Lastly, provide suggestion and make improvements from effects of labor turnover.

SCOPE OF THE STUDY:

People and their collective skills, abilities and experience, coupled with their ability to deploy
these in the interests of the employing organization, are now recognized as making a
significant contribution to organizational success and as constituting a major source of
competitive advantage. Business Research covers a wide range of activities. It covers overall
business reach practices adopted by organization. In this study we focus on indentifying
problem and effect of turnover in the organization. Finally we try to show how to solve the
overall problem of an organization. This report gives an in-depth analysis on the practice of
business research methodology. Organization can use the report to tackle the problem of
labor turnover for the better practice of business research practices.

LIMITATIONS OF THE STUDY:

Limitation comes automatically in the way of doing something. A task large or small must
have to face some limitations in its completion. In a running process sometimes various
things and working incentive may be necessary but we dont get it all. Those things could be
more helpful for our work but we may not have it for several reasons are called limitations. In
the process of completing the report, some limitations were identical. They are as follows:
Due to time and cost restrictions, the study is bound to be concentrated in selected
areas of the organization.
To continue study in such a vast area requires a big deal of time. There was not
enough time to collect and analyze data.

 Organization maintains confidentiality of valuable data. As a result the study is

mostly depended on primary data.
It is very difficult to verify the accuracy of the collected data.
Employees are very busy with their works and unable to spare much time for
discussion about various topics.
Organizational confidentiality is maintained in every formal organization for the
security of their documents and competitive tools. It creates an information lack
for proper presentation of written papers.

LITERATU RE REVIEW:
Labor turnover affects both workers and organizations. Workers experience disruption, they
need to learn new job specific skills and find different career prospects (Alogoskoufia et al.,
1995). Organizations suffer the loss of job-specific skills disruption in production and incur
costs of hiring and training networkers.

In this research work, demographic classification of respondents were done to help the
researcher and the reader to understand the characteristic of the samples in which the research
questionnaire or instrument were administered (Onwe, 1998). The responses on the variables
that have effect as a result of labor turnover on the two Breweries were analyzed. A cross
sectional design was used to collect data to answer research questions and relationship among
variables (Asika, 1991). It was used to collect data for hypothesis testing. Descriptive method
of analysis was used to distribute the relevant research variables using percentages. This
research work is investigating the extent each variables, such as increase cost of recruitment
and training, reduced production, work disruption, increased scrap and overtime as a result of
labor turnover has effect on Guinness Brewery Plc and Bendel Brewery Limited. We have
not come across where this method of investigation was adopted in the literature on the effect
of labor turnover in organizations. The literature have always cited the effect of turnover and
hiring cost in organizations as earlier mentioned on the sporadic research on this issues.

Turnover occurs for many different reasons. Sometimes new job attracts employees and pull
them to leave the old one. In contrary employee also pushed to leave job due to the
dissatisfaction in their present workplace or by domestic circumstances when someone
reallocates with their spouse or partner. A poor relationship with the management can be an

important reason for the employees to leave their jobs. It is relatively rare for people to leave
jobs in which they are happy even offered by higher salary elsewhere. A lack of proper
training and development is also major cause for voluntary turnover. Employees have a
preference for security of their jobs.

Garino and Martin (2007) analyzed the impact of labor turnover on profit using the efficiency
wage model of Salop (1979) by separating incumbent and newly hired workers in the
production function. They showed that an exogenous increase in turnover rate can affect
increase in profit, but only where organizations do not choose the wage. This effect of
turnover varies across organizations as it depends on turnover costs.

Bureau of Labour Statistics (2008) when accounting for the costs of labor turnover in
organizations, has estimated the cost of employee turnover to for-profit to be up to 150% of
employees remuneration package. These are both direct and indirect costs. Direct costs are
leaving costs, replacement costs and transition costs and indirect costs are loss of production,
reduced performance levels, unnecessary overtime and low morale. The extent of the effect
of these costs is what we want to study in Brewery industries in Nigeria, namely Guinness
Brewery Plc and Bendel Brewery Limited.

(Bolton, 1991). Bolton went further to state that turnover rate may not be a problem if staff
can be cheaply and effectively replaced and that low turnover rate will be a problem if it is
expensive to replace staff and if training staff takes sometimes. Bolton (1991) gave the
formula for calculating turnover as labour turnover is equal to the number of employee
leaving, divided by the average total number of employee multiplied by 100 (in order to give
a percentage value). The number of employees leaving are measured over one calendar year.

Testa (2008) in his research work, noted that high turnover rates of skilled professional is not
desirable and can pose as a risk to organization due to human capital cost. He emphasized
that these employees by their skillful ability are likely to be re-employed within the same
industry by the competitor.

Chruden (1980) corroborated the findings of Testa (2008) by stating that the cost of turnover
for competent people is high, since replacement of key employee means that a new employee

must be able to carryout to those rules and responsibilities which were formally performed by
the employees. And to undergo a learning process may take 3 to 6 months, depending on
replacement ability to acclimate to new job. For an outsider, this involves learning the
business, culture and workflow within an enterprise, for an insider it may involve new
responsibilities and tools.
Although, labor turnover increase organizational cost, disrupt organization plan, ongoing
projects and cause untold hardship to organization, but there are some advantages to it. These
advantages are replacement of separated employees with new ones who could bring
experiences, knowledge, practice and skill. Turnover can be driver to organizational renewal.
Although high turnover is expensive, low rate can be cost saving. Also competent ones with
lower remuneration could replace employees with higher remuneration. The organization can
undergo some form of restructuring, merger of some positions, which can improve bottom
line. Turnover can enable organization eliminate poor performances, unmotivated workers
and people who are difficult to get along with.

RESEARCH METHODOLOGY
In this study business research methodology in a manufacturing organization in
Bangladesh ACI Limited has been selected.

3.2. DATA SOURCE

The study input was collected from two sources:
a) Primary sources:

Questionnaire

Face to face conversation with the officer.

Direct observations.

b) Secondary Sources:
The secondary data has been collected from different conceptual matters & the sources
include:
Internal Sources:
Annual report of ACI Ltd.
Prospectus and other documents of ACI Ltd.
Prior research report.

 Web sites.

3.3. SAMPLE SIZE AND SAMPLING TECHNIQUE

This study covers 30 employees. Data are collected from the employees through in this
organizations. Convenience sampling technique is used to select these employees.

3.4. QUESTIONNAIRE DESIGN

To collect primary data, structured questionnaire is used. The questionnaire has two sections.
Personal details consists of respondent name, organizations name, educational level,
experience, income etc. In the second section factors showing business research methodology
are given. These variables are as follows

salary scale

Salary Scale
Welfare Packages
New Job Opportunities
Poor Relationship
Absence of a Training Program
No Room for him to Grow
Substandard Working Conditions
Unqualified Manager
Job Insecurity
Lower Paying Job
Unsatisfactory Performance Appraisals
Lack of Employee Motivation
Increasing Crime Rate

Too Difficult Job

Labor
Turnover

ANALYZING OF DATA:
To arrange data properly, it includes three steps:
Editing: Editing of data is process of examining the collected raw data to detect errors and
to correct these when possible. This is done on survey questionnaire.
Coding: coding refers to the process of assigning numerals or other symbols to answer so
that responses can be put into a limited number of categories or classes. This is shown on
tools for presenting analysis.
Tabulation: When a mass of data has been assembled, it becomes necessary to arrange the
same in kind of concise and logical order. This procedure is referred to as tabulation. This is
presented in demographic section.

3.6. DATA PROCESSING AND ANALYSIS:

Data are analyzed using MS Excel and SPSS software. Hypotheses are tested through chisquare test.
3.7. TOOLS FOR PRESENTING ANALYSIS:
The analysis has been presented through mean, mode, standard deviation, regression and chisquare test based on survey questionnaire shown on appendix. The answers have been
categorized on following scales:

Strongly agree = 5

Agree = 4

Neutral = 3

Strongly disagree = 2

Disagree = 1

The result 5 or close to 5 means that respondents agree with the factor that this factor is very
important decision areas for profitability and result close to 1 means that respondents believe
with the factor is not at all important for profitability. The result of correlation shows
relationship among independent and dependent variables.

3.8. HYPOTHESIS:

For Chi-square test, following hypotheses have been taken:

H0 = There is no problem of labor turnover in the organization
H1 = There a problem of labor turnover in the organization.

Demographic Characteristics
Gender
Male

20

Female

10

Total

30

Experience
1-3 (years)

4-8(years)

More

than Total

8(years)
Male
Female
Total

Education

Higher
secondery
Male
Female
Total

Graduate

Post Graduate

Total

ANALYSIS AND PRESENTATION OF DATA

1. Salary scale A common reason for high employee turnover
Frequency

Percent

Valid Percent

Cumulative Percent

Disagree

3.3

3.3

3.3

Neutral

13.3

13.3

16.7

Agree

12

40.0

40.0

56.7

Strongly Agree

13

43.3

43.3

100.0

Total

30

100.0

100.0

Source: Survey
Table: Salary as a factor of turnover

From the above table, we can see that 43.3% strongly agree, 40% agree, 13.3% neutral, 3.3%
disagree. Also from the table above, majority of the respondents strongly agree that salary
scale is the most common reason for labor turnover in this organization.

2. Absence of good welfare packages and other relevant fringe benefits creating
frustration and leading to quit.
Frequency

Percent

Valid Percent

Cumulative
Percent

Disagree

6.7

6.7

6.7

Neutral

10.0

10.0

16.7

Agree

13

43.3

43.3

60.0

Strongly Agree

12

40.0

40.0

100.0

Total

30

100.0

100.0

Source: Survey
Table: Welfare packages as a factor of turnover

From the above table, we can see that 40% strongly agree, 43.3% agree, 10% neutral, 6.7%
disagree. Also from the table above, majority of the respondents agree that absence of good
welfare packages is another cause for labor turnover in this organization.

3. New job opportunities attract employees and pull them to leave the old one
Frequency

Percent

Valid Percent

Cumulative
Percent

Disagree

3.3

3.3

3.3

Neutral

6.7

6.7

10.0

Agree

15

50.0

50.0

60.0

Strongly Agree

12

40.0

40.0

100.0

Total

30

100.0

100.0

Source: Survey
Table: New job opportunities as a factor of turnover

From the above table, we can see that 40% strongly agree, 50% agree, 6.7% neutral, 3.3%
disagree. Also from the table above, majority of the respondents agree that new job facilities
is the most common fact for labor turnover in this organization.
4. A poor relationship with the management
Frequency

Percent

Valid Percent

Cumulative
Percent

Disagree

6.7

6.7

6.7

Neutral

16.7

16.7

23.3

Agree

15

50.0

50.0

73.3

Strongly Agree

26.7

26.7

100.0

Total

30

100.0

100.0

Source: Survey
Table: Poor relationship as a factor of turnover

From the above table, we can see that 26.7% strongly agree, 50% agree, 16.7% neutral, 6.7%
disagree. Also from the table above, majority of respondents agree that A poor relationship
with the management can be an important reason for the employees to leave their jobs.

5. The absence of a training program

Frequency

Percent

Valid Percent

1
1
3
10
15
30

3.3
3.3
10.0
33.3
50.0
100.0

3.3
3.3
10.0
33.3
50.0
100.0

Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Total

Cumulative
Percent
3.3
6.7
16.7
50.0
100.0

Source: Survey
Table: Training program as a factor of turnover

From the above table, we can see that 50% strongly agree, 33.3% agree, 10% neutral, 3.3%
disagree. Also from the table above, majority of respondents strongly agree that absence of
training program can be an important reason for the employees to leave their jobs.
6. No room for career growth

Strongly Disagree

Frequency

Percent

Valid Percent

Cumulative
Percent

3.3

3.3

3.3

Disagree

6.7

6.7

10.0

Neutral

10.0

10.0

20.0

Agree

12

40.0

40.0

60.0

Strongly Agree

12

40.0

40.0

100.0

Total

30

100.0

100.0

Source: Survey
Table: No promotion level as a factor of turnover

From the above table, we can see that 40% strongly agree, 40% agree, 10% neutral, 6.7%
disagree and 3.3% strongly disagree. Also from the table above, majority of respondents
strongly agree that no room for him to grow in a certain organization can be an important
reason for the employees to leave their jobs.
7. Incompatible manager.
Frequency

Percent

Valid Percent

Cumulative
Percent

Strongly Disagree

3.3

3.3

3.3

Disagree

6.7

6.7

10.0

Neutral

16.7

16.7

26.7

Agree

13

43.3

43.3

70.0

Strongly Agree

30.0

30.0

100.0

Total

30

100.0

100.0

Source: Survey
Table: Unskilled manager as a factor of turnover

From the above table, we can see that 30% strongly agree, 43.3% agree, 16.7% neutral, 6.7%
disagree and 3.3% strongly disagree. Also from the table above, majority of respondents
agree that no one wants to work under manager who fails to provide regular feedback.
8. Substandard working conditions
Frequency

Percent

Valid Percent

Cumulative
Percent

Strongly Disagree

3.3

3.3

3.3

Disagree

6.7

6.7

10.0

Neutral

13.3

13.3

23.3

Agree

11

36.7

36.7

60.0

Strongly Agree

12

40.0

40.0

100.0

Total

30

100.0

100.0

Source: Survey
Table: Substandard working conditions as a factor of turnover

From the above table, we can see that 40% strongly agree, 36.7% agree, 13.3% neutral, 6.7%
disagree and 3.3% strongly disagree. Also from the table above, majority of respondents
strongly agree that working conditions in an organization can be another fact for the
employees to leave their jobs.
9. Job insecurity, delay of promotion, irregular payment
Frequency

Percent

Valid Percent

1
4
13
12
30

3.3
13.3
43.3
40.0
100.0

3.3
13.3
43.3
40.0
100.0

Disagree
Neutral
Agree
Strongly Agree
Total

Cumulative
Percent
3.3
16.7
60.0
100.0

Source: Survey
Table: Job insecurity as a factor of turnover

From the above table, we can see that 40% strongly agree, 43.3% agree, 13.3% neutral, 3.3%
disagree. Also from the table above, majority of respondents agree that the relation between
job insecurity, delay of promotion, irregular payment and the propensity encourage
employees to exit from this organization.

10. Differences in pay rate

Frequency

Percent

Valid Percent

Cumulative
Percent

Strongly Disagree

6.7

6.7

6.7

Disagree

6.7

6.7

13.3

Neutral

20.0

20.0

33.3

Agree

11

36.7

36.7

70.0

Strongly Agree

30.0

30.0

100.0

Total

30

100.0

100.0

Source: Survey

Table: Differences in pay rate as a factor of turnover

From the above table, we can see that 30% strongly agree, 36.7% agree, 20% neutral, 6.7%
disagree and 6.7% strongly disagree. Also from the table above, majority of respondents
agree that discriminated pay structure in similar job is another fact for employees to exit from
this organization.
11. Unsatisfactory performance appraisals

Neutral
Agree
Strongly Agree
Total

Frequency

Percent

Valid Percent

5
15
10
30

16.7
50.0
33.3
100.0

16.7
50.0
33.3
100.0

Cumulative
Percent
16.7
66.7
100.0

Source: Survey
Table: Unsatisfactory performance appraisals as a factor of turnover

From the above table, we can see that 33.3% strongly agree, 50% agree, 16.7% neutral,. Also
from the table above, majority of agree that unsatisfactory performance appraisals is the most
common reason for employees to leave their jobs.

12. Lack of projects or assignments

Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Total

Frequency

Percent

Valid Percent

1
2
8
13
6
30

3.3
6.7
26.7
43.3
20.0
100.0

3.3
6.7
26.7
43.3
20.0
100.0

Source: Survey
Table: Projects as a factor of turnover

Cumulative
Percent
3.3
10.0
36.7
80.0
100.0

From the above table, we can see that 20% strongly agree, 43.3% agree, 26.7% neutral, 6.7%
disagree and 3.3% strongly disagree. Also from the table above, majority of respondents
agree that lack of projects or assignments motivate employees to leave their jobs.
13. Too difficult job
Frequency
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Total

Percent

1
2
4
14
9
30

Valid Percent

3.3
6.7
13.3
46.7
30.0
100.0

3.3
6.7
13.3
46.7
30.0
100.0

Cumulative
Percent
3.3
10.0
23.3
70.0
100.0

Source: Survey
Table: Skill underutilized as a factor of turnover

From the above table, we can see that 30% strongly agree, 46.7% agree, 13.3% neutral, 6.7%
disagree and 3.3% strongly disagree. Also from the table above, majority of respondents
agree that the relation between job insecurity, delay of promotion, irregular payment and the
propensity encourage employees to exit from this organization.

14. Lack of employee motivation, work pressure, job stress, partiality and favoritism
Frequency

Percent

Valid Percent

Cumulative
Percent

Strongly Disagree

6.7

6.7

6.7

Disagree

10.0

10.0

16.7

Neutral

13.3

13.3

30.0

Agree

10

33.3

33.3

63.3

Strongly Agree

11

36.7

36.7

100.0

Total

30

100.0

100.0

Source: Survey
Table: Job stress as a factor of turnover

From the above table, we can see that 36.7% strongly agree, 33.3% agree, 13.3% neutral,
10% disagree and 6.7% strongly disagree. Also from the table above, majority of respondents
strongly agree that working pressure, job stress, poor employee management contribute to
employee turnover.
15. Clashes of personalities
Frequency

Percent

Valid Percent

Cumulative
Percent

Strongly Disagree

3.3

3.3

3.3

Disagree

10.0

10.0

13.3

Neutral

20.0

20.0

33.3

Agree

13

43.3

43.3

76.7

23.3

23.3

100.0

30

100.0

100.0

Strongly Agree
Total
Source: Survey

Table: Clashes of personalities as a factor of turnover

From the above table, we can see that 23.3% strongly agree, 43.3% agree, 20% neutral, 10%
disagree and 3.3% strongly disagree. Also from the table above, majority of respondents
agree that clashes with employees or superiors are another reason for turnover.

16. Increasing crime rate in working area

Frequency
Disagree
Neutral
Agree
Strongly Agree
Total

1
6
14
9
30

Percent

Valid Percent

3.3
20.0
46.7
30.0
100.0

Source: Survey
Table: Crime as a factor of turnover

3.3
20.0
46.7
30.0
100.0

Cumulative
Percent
3.3
23.3
70.0
100.0

From the above table, we can see that 30% strongly agree, 46.7% agree, 20% neutral, 3.3%
disagree. Also from the table above, majority of respondents agree that increasing crime rate
in working area may increase turnover.
17. Employees are leaving from this organization

Frequency
Disagree
Neutral
Agree
Strongly Agree
Total

2
5
14
9
30

Percent

Valid Percent

6.7
16.7
46.7
30.0
100.0

Cumulative
Percent

6.7
16.7
46.7
30.0
100.0

6.7
23.3
70.0
100.0

Source: Survey
Table: Turnover

From the above table, we can see that 30% strongly agree, 46.7% agree, 16.7% neutral, 3.3%
disagree. Also from the table above, majority of respondents agree that turnover happen in
this organization as common factor.

Analysis Based on Mean & Correlation

S.

Particulars

S.D.

Decision

4.233

.817

.1938

4.167

.874

.0906

L.

Common reason for employee turnover rate being so

high is the salary scale.

Absence of good welfare packages like good houses,

adequate health and medical insurance and other
relevant fringe benefits create frustration and
eventually quit will result

4.267

.740

.214

3.967

.850

.000

4.233

1.00

.118

4.066

1.05

.227

3.9

1.03

.0385

4.033

1.07

.2599

4.2

.805

.196

3.766

1.17

-.169

4.166

.699

.2266

3.7

.989

.0401

their full potential.

Employees who are placed in jobs that are too
13
difficult for them or whose skills are underutilized
may become discouraged and quit.

3.933

1.01

-.312

14 Lack of employee motivation, work pressure, job

3.833

1.23

-.193

New job opportunities attract employees and pull

them to leave the old one.

A poor relationship with the management can be an

important reason for the employees to leave their jobs.

The absence of a training program may cause workers

to fall behind in their level of performance and feel
them to leave.

If one feels that there is no room for him to grow in a

certain organization, he will look for a place where he
can grow further.

No one wants to work for a manager who cannot

adequately complete the tasks of his or her job & fails
to provide regular feedback.

If working conditions are substandard or the

workplace lacks important facilities such as proper
lighting, furniture, restrooms, employees will not be
willing to put up with the inconvenience for long time

There is a positive relation between job insecurity,

delay of promotion, irregular payment and the
propensity to exit from the organization.

10 Two or more employees perform similar work and

have similar responsibilities; differences in pay rate
can drive lower paid employees to quit.
11 Employees tend to leave a company because of
unsatisfactory performance appraisals.
12 Employees may leave an organization is due to the
lack of projects or assignments that do not require

stress, partiality and favoritism, employee egos and

attitudes, poor employee management contribute to
employee turnover.

15 Employees may opt to leave the organization due to

3.733

1.04

-.075

4.033

.808

-.049

clashes of personalities with their fellow employees or

his superiors.
16 Increasing crime rate in working area may increase
turnover.

DATA INTERPRETATION BASED ON MEAN

Above table indicates that items 1, 2, 3, 5, 6, 8, 9, 11, 12, 16 are rated over 4 in scale of 5.
This represents that respondents are strongly supporting that these are the main causes of
labor turnover whereas items 4, 7, 10, 13, 14 & 15 are rated above 3 in scale of 5. These
mean scores are showing that these factors are moderately correspond labor turnover in this
organization.

DATA INTERPRETATION BASED ON CORRELATION

From above table, it is found that salary, welfare packages, relationship, training program,
incompatible manager, working conditions, unsatisfactory performance appraisal, lack of
career growth are positively associated with labor turnover. This means increasing in above
factors will necessary increase labor turnover in this organization whereas other factors like
job difficulties, job stress, personality clashes, crime rate are negatively related with labor
turnover.

Regression Coefficient
Model

Unstandardized

Standardize

Coefficients

Sig.

1.442

.173

Coefficients
B

Std. Error

Beta

(Constant)

6.964

4.830

Salary scale

.147

.358

.137

.409

.689

Absence of good welfare

.042

.286

.043

.148

.885

packages
New job opportunities

.180

.295

-.153

-.610

.552

Poor relationship with the

.028

.341

.027

.082

.936

-.361

-.249

-.417

-1.449

.171

No room for career growth

.275

.243

.331

1.129

.279

Incompatible manager

.024

.224

.028

.107

.917

Substandard working

.158

.255

.194

.621

.545

-.249

.370

-.230

-.673

.513

.083

.214

.111

.386

.706

.054

.391

.043

.138

.892

-.170

-.284

-.193

-.598

.560

-.387

.239

-.451

-1.620

.129

.278

.251

.394

1.111

.287

.018

.253

.021

.071

.945

-.117

-.449

-.109

-.261

.798

management
Absence of training
program

conditions
Job insecurity, delay of
promotion, irregular
payment
Differences in pay rate in
similar work
Unsatisfactory performance
appraisals
Lack of projects or
assignments that do not
require full potential
Difficult job &
underutilized skill
Lack of employee
motivation, work pressure,
job stress etc. contribute to
employee turnover
Clashes of personalities
with fellow employees or
his superiors
Increasing crime rate in
working area

Factor Analysis
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity

.328

Approx. Chi-Square

132.026

Df
Sig.

120
.213

Total Variance Explained

Co

Initial Eigenvalues

mp

Extraction Sums of Squared

Rotation Sums of Squared

Loadings

Loadings

one Total

% of

Cumulati Total

% of

Cumulati Total

% of

Cumulati

nt

Variance

ve %

Variance

ve %

Variance

ve %

2.433

15.209

15.209

2.433

15.209

15.209

1.859

11.621

11.621

2.208

13.800

29.008

2.208

13.800

29.008

1.832

11.453

23.074

1.778

11.112

40.120

1.778

11.112

40.120

1.809

11.306

34.380

1.765

11.028

51.149

1.765

11.028

51.149

1.772

11.075

45.455

1.529

9.558

60.706

1.529

9.558

60.706

1.723

10.768

56.223

1.261

7.881

68.587

1.261

7.881

68.587

1.573

9.834

66.056

1.077

6.730

75.317

1.077

6.730

75.317

1.482

9.260

75.317

Component Matrix
Component
1

Salary scale

.156

.507

.087

-.447

.526

-.197

.164

Absence of good

.143

.506

.415

.216

.415

.015

-.336

New job opportunities

.386

.104

.148

.075

-.468

-.406

.140

Poor relationship with

-.230

-.339

-.151

-.293

.613

-.155

-.119

.458

-.399

-.309

.295

.409

-.190

-.014

.439

.386

-.193

.002

.083

.579

-.167

welfare packages

the management
Absence of training
program
No room for career
growth

Incompatible manager

-.506

-.251

.234

-.380

-.357

.155

-.151

Substandard working

-.660

.234

-.295

-.078

.110

-.009

.433

.060

-.564

.590

-.058

.071

.205

-.362

.390

-.074

.469

-.136

.394

-.012

-.210

-.037

.608

.406

.032

-.330

.262

.232

.676

-.103

.002

-.230

-.318

-.279

.442

-.264

-.454

-.248

-.285

-.266

-.239

-.060

-.332

-.463

.669

.083

.079

.030

.461

-.083

.007

-.496

-.065

.364

.413

.714

-.172

.353

.213

.043

.145

.399

conditions
Job insecurity, delay
of promotion,
irregular payment
Differences in pay rate -.260
in similar work
Unsatisfactory
performance
appraisals
Lack of projects or
assignments that do
not require full
potential
Difficult job &
underutilized skill
Lack of employee
motivation, work
pressure, job stress
etc. contribute to
employee turnover
Clashes of
personalities with
fellow employees or
his superiors
Increasing crime rate
in working area

Rotated Component Matrix

Component

Salary scale
Absence of good

.132

.861

-.121

.044

-.207

.059

.096

.214

.493

.077

.500

.320

.176

-.319

.079

.056

.683

-.215

.059

-.238

.092

.108

.199

-.741

-.219

.005

-.169

-.115

.763

-.140

-.206

-.280

.166

-.040

.044

.158

.101

.102

.134

.072

.811

.149

-.773

-.164

-.171

-.067

.111

-.148

-.014

-.207

-.007

-.273

.218

-.772

-.142

-.053

-.204

-.115

-.267

.058

.827

-.164

.107

-.048

-.295

.168

.550

-.225

.325

-.207

.065

.010

.180

.486

.134

-.683

-.042

.045

.386

.585

-.105

-.130

.252

-.410

.131

-.094

.172

-.811

.081

.146

-.015

welfare packages
New job opportunities
Poor relationship with
the management
Absence of training
program
No room for career
growth
Incompatible manager
Substandard working
conditions
Job insecurity, delay
of promotion,
irregular payment
Differences in pay rate
in similar work
Unsatisfactory
performance
appraisals
Lack of projects or
assignments that do
not require full
potential
Difficult job &
underutilized skill

Lack of employee

.503

-.680

-.152

.055

-.140

.020

-.169

-.079

.170

.020

-.204

.007

.255

.794

.451

.007

.296

.146

.371

-.058

.662

motivation, work
pressure, job stress
etc. contribute to
employee turnover
Clashes of
personalities with
fellow employees or
his superiors
Increasing crime rate
in working area

It appears from the table that labor turnover is related to internal strategy - salary structure,
motivation, internal factors- career growth, personality clashes, nature of job- too difficult,
external factors- high salary job offer, increasing crime rate etc.

Chi-Square Test
Table

Strongly Agree

Agree

Neutral

Disagree

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

13
12
12
8
15
12
9
12
12
9
10
6
9
11
7
9
166

12
13
15
15
10
12
13
11
13
11
15
13
14
10
13
14
204

4
3
2
5
3
3
5
4
4
6
5
8
4
4
6
6
72

1
2
1
2
1
2
2
2
1
2
0
2
2
3
3
1
27

Strongly
Disagree
0
0
0
0
1
1
1
1
0
2
0
1
1
2
1
0
11

Total
30
30
30
30
30
30
30
30
30
30
30
30
30
30
30
30
480

Expected Frequency
166
204
72
27
11

Formula

30
30
30
30
30

480
480
480
480
480

10.375
12.75
4.5
1.6875
0.6875

Calculation Table
O

O-E

(O-E)2

(O-E)2 / E

13
12
4
1
0
12
13
3
2
0
12
15
2
1
0
8
15
5
2
0
15
10
3
1
1
12
12
3
2
1
9
13
5
2
1
12
11

10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75

2.625
-0.75
-0.5
-0.6875
-0.6875
1.625
0.25
-1.5
0.3125
-0.6875
1.625
2.25
-2.5
-0.6875
-0.6875
-2.375
2.25
0.5
0.3125
-0.6875
4.625
-2.75
-1.5
-0.6875
0.3125
1.625
-0.75
-1.5
0.3125
0.3125
-1.375
0.25
0.5
0.3125
0.3125
1.625
-1.75

6.890625
0.5625
0.25
0.472656
0.472656
2.640625
0.0625
2.25
0.097656
0.472656
2.640625
5.0625
6.25
0.472656
0.472656
5.640625
5.0625
0.25
0.097656
0.472656
21.39063
7.5625
2.25
0.472656
0.097656
2.640625
0.5625
2.25
0.097656
0.097656
1.890625
0.0625
0.25
0.097656
0.097656
2.640625
3.0625

0.664157
0.044118
0.055556
0.280093
0.6875
0.254518
0.004902
0.5
0.05787
1.6875
0.254518
0.397059
1.388889
0.280093
0.6875
0.543675
0.397059
1.055556
0.05787
0.6875
2.061747
0.593137
0.5
0.280093
1.142045
0.254518
0.044118
1.5
0.05787
0.142045
1.182229
0.004902
0.055556
1.05787
0.142045
1.254518
0.240196

4
2
1
12
13
4
1
0
9
11
6
2
2
10
15
5
0
0
6
13
8
2
1
9
14
4
2
1
11
10
4
3
2
7
13
6
3
1
9
14

4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75
4.5
1.6875
0.6875
10.375
12.75

-0.5
0.3125
0.3125
1.625
0.25
-0.5
-0.6875
-0.6875
-1.375
-1.75
1.5
0.3125
1.3125
-0.375
2.25
0.5
-1.6875
-0.6875
-4.375
0.25
3.5
0.3125
0.3125
-1.375
1.25
-0.5
0.3125
0.3125
0.625
-2.75
-0.5
1.3125
1.3125
-3.375
0.25
1.5
1.3125
0.3125
-1.375
1.25

0.25
0.097656
0.097656
2.640625
0.0625
0.25
0.472656
0.472656
1.890625
3.0625
2.25
0.097656
1.722656
0.140625
5.0625
0.25
2.847656
0.472656
19.14063
0.0625
12.25
0.097656
0.097656
1.890625
1.5625
0.25
0.097656
0.097656
0.390625
7.5625
0.25
1.722656
1.722656
11.39063
0.0625
2.25
1.722656
0.097656
1.890625
1.5625

0.055556
1.05787
0.142045
0.254518
1.004902
0.055556
0.280093
2.6875
0.182229
0.240196
0.5
2.05787
2.505682
0.013554
0.397059
1.055556
1.6875
0.6875
1.84488
0.004902
2.722222
0.05787
2.142045
0.182229
1.122549
0.055556
0.05787
0.142045
1.037651
0.593137
0.055556
1.020833
2.505682
1.097892
0.004902
0.5
1.020833
0.142045
1.182229
0.122549

6
1
0

4.5
1.6875
0.6875

1.5
-0.6875
-0.6875

2.25
0.472656
0.472656
Total

0.5
0.280093
1.6875
69.44708

Chi-square X cell = 69.44708

Degree of freedom= (r-l) (c-l)
(5-1) (16-1)
4x15
=60
Level of significance
Degree of freedom of 60 with a level to significance 0.25
X Tab= 66.981
Final Decision
From the above, X calculation value of 69.44708 is greater than X table value, which is
66.981 at 0.25 level of significance and at a degree of freedom of 60. Therefore, alternative
hypothesis H1 is accepted but H0 is rejected, which means that these factors have significant
impact on labor turnover.
FINDINGS ON ANALYSIS OF LABOR TURNOVER
The effects of labor turnover were reduced production, increased cost of recruitment,
work disruption, increased scrap and overtime, additional turnover and difficulty to
employ good worker.
Reduced production was found to have foremost effect on labor turnover and this
affects output and profit.
The rate at which staff changes 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.
he employee turnover increases due to individuals in offices are mostly at fault,
making errors because they fail to follow procedures and are ineffectually supervised
the circumstances; put the employees of the organization in, such a pressure created
by poor planning and results in increase in turnover and organizational performance
decrease.
In terms of exit, a striking pattern in our results concerns the connection obtained
between job insecurity and organizational turnover intention. Although the

magnitudes of effect sizes differed across countries, there was a positive relation
between job insecurity and the propensity to exit from the organization. The results
also swell previous research by indicating that job insecurity may have similar cost
for union turnover intention.
The Performance of an organization is negatively and insignificantly associated with
employee turnover, workload, work stress, salary, and family to work conflict.
The variables that were hypothetically tested as the effect of labor turnover has
significant effect on the brewery industries, and the variables are increase cost of
recruitment, hiring and training replacements, reduced production, decreased output
and profit, work disruption, increase scrap and overtime, accidents, breakage of
equipment and more mistakes.

CONCLUSION

Turnover is a burning issue for any organizations. For the steady productivity of an
organization it is essential to maintain its skilled workforce. But most of the times it is very
difficult to control the turnover rate within organizations. There are so many factors that
affect turnover. According to the theoretical discussion and the case studies many solutions to
reduce turnover has been discussed. First of all, obviously satisfactory salary structure helps
to reduce turnover though job security also an important issue too. But it is not the only and
always the solution for the authority. A person does not stay in an organization only for
salary but he/she may stay for many other reasons such as, rearranging employees, good
stream relation, better working environment, preferable job location etc.
Productivity of an organization depends on the skills or expertise of its workforce. A skilled
worker may be an asset for any organization. If a skilled person leaves an organization the
effects will be very high where as in case of a semiskilled or un-skilled person the effect will
be less. As a result, a vacant place of a skill labor may be filled by another new worker but
production falls due to their skill difference. On the other hand, five or six semi-skilled or
unskilled labor may be turnover but those empty places can be filled by one or two skilled
labors. It is therefore, crucial to maintain a constant workforce particularly for the skilled
ones in an organization to reduce turnover for the betterment of the organization.
Most of the work of this paper is obviously theoretical but a complete mathematical model to
measure this turnover rate can be done in future research. If the skill of the employee or
worker is expressed in terms of weight or in percentage, a mathematical model then could be
possible to measure the direct relationships of turnover and productivity. To develop such
model we have to consider so many factors such as; relationships among wage and salary
structure, compensations, fringe benefits, location advantage, job security, social and
economic factors to turnover etc. To integrate all these factors in a model could show a new
way to control turnover for the managerial concern.

RECOMMENDATIONS
Standard salary structure is one of the major factors to reduce labor turnover for an
organization. Standard increment and medical facilities are also attracts more
employees too. The organization should try to establish the reasonable and balanced
salary frame work.
Employee turnover is one of the most important issues to organizations, and one that
needs special attention. Organizations should make large investment on their
employees concerning the training, developing, maintaining and the efforts to
retaining them.
There may be an offer for re-training the existing managers who have a poor record at
keeping their staff happily. Supervising managers could be accountable for employee
turnover in their teams.
We recommend competitive and adequate compensation to the brewery staff in order
to maintain stable workforce. Brewery industries should ensure that there are no
discrepancies in pay and that employees are paid based on their certificate, experience
and job output.
We also recommend offering of challenging job and hope for future prospects to
workers in order to increase their loyalty and commitment to the organization. A loyal
and committed staff hardly leaves the organization.
Workers should be offered promotability opportunities, fair and equal treatment to
maintain a stable workforce and reduce turnover.
Brewery industries should attach interest in providing good supervision, reduction of
stress, and unpleasant physical and interpersonal working conditions in order to
reduce turnover.
Management in an organizations should encourage goal-setting technique and work
autonomy in the execution of tasks by employees.
Offering voluntary benefits can help further important objectives for both employers
and employees. Voluntary benefitssuch as dental, long-term care and life
insurancecan improve employers employee retention and cost control objectives,
while also addressing employees growing concerns about a variety of financial
issues.

REFERENCES
C R Kothari, Research Methodology (methods and techniques), New Age
International (p) Limited, New Delhi-11002.
S P Gupta & M P Gupta, Business Statistics, Sultan Chand & Sons, New Delhi11002.
CAMPION, M.A.: Meaning and Measurement in Turnover: Comparison of
Alternative Measures and Recommendations for Research. Journal of Applied
Psychology, 1991, 76: 199-212.
Beam, J. (2009, November 12). What is Employee Turnover? Retrieved November
13, 2009, from WiseGEEK: http://www.wisegeek.com/what-is-employeeturnover.htm
Colema, W. (1987). Stabilizing the Workforce: A Complete Guide to Controlling
Turnover. In J. E. Gardner, Personnel Psychology (pp. 40(4), 877-879).
Westport:Quorum Books, a division of Greenwood Press.
Alogoskoufia, G.B., C. Bertola, G. Cohen, D. Dolado and G. Saint Paul, 1995.
Unemployment Choice Europe(EPR London).
Asika, N., 1991. Research Methodology in the Behavioural Sciences. Longman Plc.,
Nigeria, pp: 12-30.
Bolton, T., 1991. Human Resource Management: An Introduction. Blackwell
Publishers, London, pp: 17-19.
Burgess, S. and J. Dolado, 1989. Intertemporal rules with a variable speed of
adjustment, an application to UK Manufacturing employments. Econ. J., 99: 347-365.
Bureau of Labour Statistics, 2008. Job Openings and Labor Turnover Survey.
Retrieved from: http// data.bls.gov/PDO/servlet/survey output servlet? Data tool =
latest number series id = JTS00000000TSR.
Chruden, S., 1980. Personnel Management. The Utilization of Human Resources
Florida South West Press, U.S.A., pp: 54.
Costello, D., 2006. Leveraging the employee life cycle. CRM Magazine, 10(12): 4848.
Garino, G. and C. Martin, 2007. The Impact of Labor Turnover: Theory and Evidence
UK Micro-Data. Working Paper No 05/10 May 2005 updated to May
2007. gg44@ Leicester, ac. UK Department of Economics, University of Leicester.
UK.
Hammermesh, D., 1995. Labour demand and the structure of adjustment costs. Econ.
J., 105: 620-634.

 Hammermesh, D. and G. Pfann, 1996. Turnover and dynamics of labour demand.

Economic, 63: 359-368.
Haskel, J. and C. Martin, 2001. Technology, wages and skill shortages. Evidence
from UK Micro data. Oxford Econ. Pap., 53: 6442-6458.
Hutchunson, S.V. and M. Jand Beruvides, 1997. Effects of high turnover in a serial
assembly environment. Int. J. Prod. Res., 35: 3201-3223.
Kersley, B. and C. Martin, 1997. Productive growth, participation and
communication. Scot. J. Polit. Econ., 44: 485-501.
Martin, C., 2003. Explaining labour turnover: Evidence from UK establishment.
Labour, 17(3): 291-412.
Onwe, O.J., 1998. Element of Project and Dissertation Writing: A guide to Effective
Dissertation Report. Impressed Publishers, Lagos, pp: 27.
Salop, S., 1979. A model of the natural rate of unemployment. Am. Econ. Rev., 69:
117-125.
Testa, B., 2008. Early engagement, long relationships? Workforce Manag., 15: 27-31.

Appendix

Dear Sir/Madam,
We, MBA student of Department of Management, University of Dhaka, are preparing a
report on The Practice of Business Research Methodology in a Manufacturing Firms in
Bangladesh. We have chosen your organization for this study. Your response is very essential
for this study. This is to be used only for academic purpose and is to be kept confidential. We
are hopeful that you will help us by providing your valuable response.
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

5
4
3
2
1

Please give tick () mark to answer the questions.

Section -1
1. Name (Optional) :.
2. Contact No. (Optional) :..
3. Position (Optional) :
4. Gender :

Male

Female

5. Education Level
Higher Secondary

Graduate

Post Graduation

Others

6. Experience
1 to 5 years

5 to 10 years

More than 10 years

7. Salary
10000 to 30000

30000 to 50000

50000 to 70000

More than 7000

Section -2
1

3
4
5

10

11

12
13

14

15

16

17
18

The most common reason for employee turnover rate being

so high is the salary scale because employees are usually in
search of jobs that pay well
Absence of good welfare packages like good houses,
adequate health and medical insurance and other relevant
fringe benefits create frustration and eventually quit will
result
New job opportunities attract employees and pull them to
leave the old one
A poor relationship with the management can be an
important reason for the employees to leave their jobs
The absence of a training program may cause workers to
fall behind in their level of performance and feel them to
leave
If one feels that there is no room for him to grow in a
certain organization, he will look for a place where he can
grow further
No one wants to work for a manager who cannot adequately
complete the tasks of his or her job & fails to provide
regular feedback.
If working conditions are substandard or the workplace
lacks important facilities such as proper lighting, furniture,
restrooms, employees will not be willing to put up with the
inconvenience for long time.
There is a positive relation between job insecurity, delay of
promotion, irregular payment and the propensity to exit
from the organization.
Two or more employees perform similar work and have
similar responsibilities; differences in pay rate can drive
lower paid employees to quit.
Employees tend to leave a company because of
unsatisfactory performance appraisals.
Employees may leave an organization is due to the lack of
projects or assignments that do not require their full
potential.
Employees who are placed in jobs that are too difficult for
them or whose skills are underutilized may become
discouraged and quit.
Lack of employee motivation, work pressure, job stress,
partiality and favoritism, employee egos and attitudes, poor
employee management contribute to employee turnover.
Employees may opt to leave the organization due to clashes
of personalities with their fellow employees or his
superiors.
Increasing crime rate in working area may increase turnover

Potential negative consequences of employee turnover include (Answers may be

multiple):
1.
2.
3.
4.
5.
6.

Operational disruption.
Demoralization.
Negative public relations
Strategic opportunity costs
Decreased social integration.
Cost like advertising, headhunting fees, human resource costs, new hire
training increase.
7. Loss of productivity & customer retention.
8. Jeopardize the realization of organizational goals
9. Decreased innovation, delayed services
10. Improper implementation of project.