Factor Contributing to High Employee Turnover

Topics: Employment, Job satisfaction, Employment compensation Pages: 15 (5091 words) Published: November 15, 2012
Service plays a crucial role in the developed countries and it is a growing economic driver in developing countries. Since it offers more work opportunities than product based commodities, the service sector has been taken seriously in Malaysia as it is the key driver towards its growth. The main focus of this study is to look at the service industry that faces a major problem of employee turnover. In a much smaller scope; the focus would be on employee turnover in the hotel, retailing, call center, kitchen department which had not been explored quite significantly. The study would attempt to discover aspects which actually perceived by the employees as important for them to retain employment in the service sector.

The exit of low performing employees is beneficial to an organization. However, the exit of important and valuable human resources from the organizations leads to loss of the knowledge possessed by the leavers, and also has a huge effect on the cost of operation, as a result of the high cost of filing the positions that are vacant. The total costs of employee turnover are hard to measure, in particular the effects on the organization’s culture, employee morale and social capital or loss of organizational memory. Hence, turnover contradicts the benefit that should have derived by organizations when they spend scarce resources attracting, selecting, socializing employees, and developing and retaining performing employees (Wright & Bonett 2007). Turnover can be defined as the rate of change in the working staff an organization during a defined period. There will be voluntary and involuntary turnover intention. Practitioners can differentiate between instances of voluntary turnover, initiated at the choice of the employee and those involuntary instances where the employee has no choice in their termination (such as long term sickness, death, moving overseas or employee-initiated termination). Typically, the characteristics of employees who engage in involuntary turnover are no different from job stayers. However, turnover can be predicted and controlled by the construct of turnover intent. The problem of employee turnover in service sector (eg; Security Force, Customer Service, Call Centre people which all these people are working in private sector) which was highlighted in mass media, has lead to an alarming issue of increased employee turnover rates in a number of private organizations in Malaysia. It has also become a major issue to company’s top management as it can be directly related to organizational ineffectiveness. The ineffectiveness could be in terms of lowering in productivity and also in terms of the cost incurred in the organizations for direct investments in human capital, recruitment and manpower training.

Another factor of turnover is the idea that there is controllable versus uncontrollable turnover. Controllable turnover does not include things such as death or retirement (Van der Merwe & Miller, 1975). Turnover for purposes of studying the potential correlation to organizational stress, strain and coping refers to “individuals who voluntarily leave organizations” (Price, 1977). During this century, a variety of conceptual models for the turnover process have been developed. Organizational support theory has received a lot of attention in its examination of the employee-employer relationship (Eisenberger, Huntington, Hutchison, & Sowa, 1986; Rhoades & Eisenberger, 2002). Turnover has been defined as “the degree of individual movement across the membership boundary of a social system” (Price, 1977). Besides, turnover can be refer to a person who has voluntarily “quit” or “resigned”, or it can be used to refer to an individual who has involuntarily “retired”, “died”, been “laid off”, or “dismissed” (Price, 1977).

Mobley (1977) developed a model of employee’s turnover decision process that begins with the evaluation of one’s current position and...
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