High Turnover Ratio in Commercial Banks

Topics: Employment, Talent management, Commercial bank Pages: 29 (7323 words) Published: August 31, 2010
CHAPTER I

INTRODUCTION

Commercial Banks offers the same types of products and services. It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to businesses and consumers. It also buys corporate bonds and government bonds. Its primary liabilities are deposits and primary assets are loans and bonds. They should have a competitive advantage and be distinguish to one bank from another. That is through their employee. The employee makes company grow. “In a global marketplace driven by ideas where information freely flows, brainpower remains the source of competitive advantage” (Kaye, Jordan-Evans & Career Systems International, 2002, p. 4).[1]

Pfeffer (1998) says,

Success comes from successfully implementing strategy, not just from having one. This implementation capability derives, in large measure, from the organization’s people, how they are treated, their skills and competencies, and their efforts on behalf of the organization. A people-centered strategy facilitates higher levels of customer service and enables firms to compete on the basis of knowledge, relationships, and service, not just price. (p. 17). [2] Smart (1999) says,

Proactively seeking out and employing the most talented people can have a multiplier effect on the creation of the competitive advantages. High performers, the A players, contribute more, innovate more, work smarter, earn more trust, display more resourcefulness, take more initiative, develop better business strategies, articulate their vision more passionately, implement change more effectively, deliver higher quality work, demonstrate greater teamwork, and find ways to get the job done in less time with less cost. (p. 12).[3]

Employees need great attention from the management. To discover how long an employee stays with in the bank determined by his or her relationship with his or her immediate supervisor. This research provides commercial banks with the reason why employees leave the company, and the remedy being to ensure that the management provide supports to there employees.

A high turnover affects commercial banks in several ways, not only banks, but also other companies. When long-time employees leave, they often take valuable institutional knowledge or intellectual assets with them. Seasoned staff members serve as morale boosters for work teams and help new employees progress more quickly. Having to replace these assets costs employers a lot in both time and money.

High employee turnover often forces commercial banks to focus their own efforts on staffing. Whether the employees being replaced are rank-and-file employees like teller, new account clerk, accounting staff bank owners often bear the responsibility of recruiting, interviewing and training new hires. And this is at a great cost.

Companies’ costs of losing employees are expensive, but the costs can be even higher if the employee is a talented contributor in the company. Some of the cost factors are obvious, such as productivity loss due to a vacant position. However, there are often unseen costs, like the reduced productivity from the departing employee who is inevitably distracted during his or her job search and therefore contributes less during this time period.

There is no one simple solution to avoid high turn-over. There are many factors that affect an employee’s reasons for staying with in the company.

Some prefer an employment relationship that allows them to try a number of different jobs as a way to gain experience and develop a broad skill set. Others want balance between work and commitments beyond work. Still others are looking for a fast track that offers challenging work, quick advancement and high rewards. Attitudes and expectations such as these determine, in turn, which factors attract, retain and engage employees,...

References: American Workplace Report 2001: Building America’s Workforce for the 21st century. (2001). Washington, DC: Employment Policy Foundation. Retrieved December 21, 2007. http://www.epf.org//abor01/getpdf01.asp.
Axelrod, E.L., Handfield-Jones, H. & Welsh, T.A. (2001). War for talent: Part two. McKinsey Quarterly Number 2. Retrieved December 18, 2007. http://www.mckinseyquarterly.com
Booz-Allen & Hamilton
Caplan, Gayle, and Mary Teese. Survivors: How to Keep Your Best People on Board after Downsizing. Palo Alto, CA: Consulting Psychologists Press, 1997.
Capelli, P. (1999). The new deal at work: Managing the market-driven workforce. Boston, MA: Harvard Business School Press.
Drucker, P. F. (1992, September-October). The new society of organizations. Harvard Business Review, 95-104.
Encyclopedia of Business, 2nd ed., Employee Turnover. Ads by Google. Retrieved December 19, 2007. http://www.referenceforbusiness.com/encyclopedia/Eco- Ent/Employee-Turnover.html
Fields, M
Griffeth, Peter Hom, and Rodger Griffeth. Employee Turnover. Cincinnati: South-Western Publishing, 1992.
Harris, Jim, and Joan Brannick. Finding & Keeping Great Employees. New York: AMACOM, 1999.
Kinnie, N., Hutchinson, S. & Purcell, J. (1997, October). Downsizing: is it always lean and mean? Personnel Review, 27:4, 296-311.
Landry, J.A. (n.d.). Valuing human capital: A guide for the information age. HR Director. Retrieved December 23, 2007. http://www.andersen.com/resource2.nsf/PDFs/HC_Valuing_Humancap.pdf.
Management Development Core. (2000, May). Workforce recruitment and retention in the 21st century. Retrieved December 18, 2007. http://www.recr-web.pdf.
McKeown, L. (2002). Retaining top employees. NY, NY: McGraw Hill.
Pfeffer, J. (1998). The human equation: Building profits by putting people first. Boston, MA: Harvard Business School Press.
Purcell, P. (2000, October). Older workers: Employment and retirement trends. Monthly Labor Review, 19-30.
Smart, B. D. (1999). Topgrading: How leading companies win by hiring, coaching and keeping the best people. Paramus, NJ: Prentice Hall Press.
Smith, G. (2001). Here today, here tomorrow: Transforming your workforce from high-turnover to high-retention. Chicago, IL: Dearborn Trade Publishing.
Spreitzer, G.M., McCall, M. W. & Mahoney, J. (1997). Early identification of international executive potential. Journal of Applied Psychology, 82(1), 6-29.
Stevens, J.P. (2002). Applied Multivariate Statistics for the Social Sciences, 4th ed. Lawrence Erlbaum Associates, Inc.
Towers Perrin. (2001). New Realities in today’s workforce: The towers perrin talent report 2001. Retrieved December 16, 2007. http://www.towers.com/towers-publications/publications/tp_research/pdfs/talent_mgmt_report_2001.pdf.
Tulgan, B. (2001). Winning the talent wars. NY, NY: W.W. Norton & Co.
Ware, B.L. & Fern, B. (1997). The challenge of retaining top talent: The workforce attrition crisis. Integral Training Systems. Retrieved December 16, 2007. http://www.itsinc.net/retention-research.htm.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Turnover in the Bank Essay
  • High Turnover Essay
  • Analysis of High Turnover Rate Essay
  • The Valley Winery
  • Commercial Banks Essay
  • commercial banks Essay
  • Commercial Banks Essay
  • A Commercial Bank Essay

Become a StudyMode Member

Sign Up - It's Free