THE IMPACT OF HUMAN RESOURCE PRACTICES, JOB SATISFACTION AND ORGANIZATIONALCOMMITMENT ON EMPLOYEES’ TURNOVER INTENTION (A CASE STUDY OF UFONE) By LaiqAhmad Shah 1.
INTRODUCTIONReduction of employee turnover throughretention is an area of greater importance to employers who are dependent onhighly qualified and skilled human resource. In telecom sector in recent yearsdue to tough competition and too much stress employee turnover intentions areon much higher side now. The type of skill and work type, the training needed,and small numbers of qualified and skillful applicants, it is necessary for anorganization to retain its employees and minimize turnover intentions. Thisstudy will counsel the linkage factors that may predict the probability ofrecently employed employee’s intentions to quit.Human resource practices are very influentialin job satisfaction of new employees and commitment level to theirorganization.
These factors can help inpredicting employee’s intention to quit. This study will be sharing finding ofresearch conducted in Telecom sector of Pakistan targeting Ufone. The studywill target employees with less than 5 years of employment and investigate HRpractices that are influential in employee turnover intentions, speciallyoutsourced employees. It will show a relationship between Human Resourcepractices perception and turnover intentions with mediator of organizational commitmentand job satisfaction.
This study will propose important suggestionsfor organizations or anyone who want to work in related field. Data will becollected through questionnaire. Voluntary turnover is a major concern formanagement when your skilled employee leaves your organization.
Nowadaysoutsourcing has been adapted by many organizations. A group formed new calledas emergent workers. They are different as compared to traditional workers asdue to their working situations and experience. Emergent workers resulted aftera paradigm shift as a result of downscaling and outsourcing of companies andorganizations in the 1980’s and 1990’s and as in present too (Spherion,2010). Weak economy with high unemployment rates whichis resulting in recession has restricted many employees to stay in sameorganization. However with the recovery of economy opportunity of employmentincreases, non-engaged or non-appreciated workers will be likely leaving theircurrent positions (Mc Keown, 2010). In organizations where relationships are exceptionallysignificant to the success of their operation and success, regular turnover of greatlyvalued employees can be damaging.
We will be examining the connection betweenHR practices (Recruitment and selection, evaluation, supervision, training anddevelopment), organizational commitment, job satisfaction and turnoverintentions. 1.1 PROBLEM STATEMENTTurnover intentions is a very serious concern in mostcases as it ultimately leads to employee turnover or employee dissatisfactionand lowering the productivity. And employee turnover is a very serious issuefor any organization when your top performing employees are leaving yourorganization for another organization. Some measures must be taken to retainthem. Turnover bears cost for organization such recruitment and selection,training and development etc. Highly skilled and trained employees are likelyto quit as they can easily find other opportunities so they must be retained.
Turnoveris costly for organizations. Both voluntary and involuntary turnover could bedysfunctional if the result is a loss of human capital (Campbell, Coff & Kryscynski,2012). Direct costs which includes recruitment & selection, and training ofnewly hired employees, while also having indirect costs, such as stress onresidual workers, low productivity, and low morale for organizations, can be costlyas much as totaling a two years pay and benifit (Ramlall, 2005).
With theoutsourced workers being the recent category of worker, organizations arerequired to pay special attention of these highly skilled employees as theyhave little fear of job change (Spherion, 2010). HR practices of anorganizations has a direct impact on employee’s turnover intentions. 1.2 OBJECTIVE OF THE STUDY· To examine the influence of HR practices (recruitmentand selection, evaluation, supervision, training and development) on the job satisfactionand organizational commitment of employees as they relate to turnoverintentions.
· Toinvestigate newly hired employees organizational commitment level, jobsatisfaction and turnover intentions.· To examine the connection between HR practices (recruitmentand selection, evaluation, supervision, training and development),organizational commitment, job satisfaction and turnover intentions. 2. LITERATURE REVIEWUnderstanding the importance of this study,surrounding circumstances of the outsourced workers and turnover must beinvestigated and studied. Group of the workers, factors influencing their jobsatisfaction, commitment, turnover intentions, Human Resource practices thatare leading to employee turnover and how organization is being impacted byturnover.2.1 Description ofEmergent WorkforceEmergent workers are a cluster of the employees thatis becoming more important. For the last 12 years this worker’s group has beenstudied annually by a recruitment organization called the Spherion whichexpressed that the economic issue of 2008 which was a critical moment in theworkers in going to the workforce (Spherion, 2010).
In 1980’s and 1990’sdownsizing also shaped a pattern change in the mode that people interpret theirwork life and cope with their careers (Harding, 2000). Emergent workersdifferentiate from the traditional ones as traditional workers have a trustthat the employer are solely responsible for their career and, that their commitmentlevel to the organization is grounded upon durable job security, and that they mustpermanently trail organizational rules. Lifetime employment is being consideredas reward for loyality (Spherion, 2010).An emergent worker is a kind of a product due toemployment situations of downsizing, and lack of permanent lifetime employment (Harding,2000). 2.2 OrganizationalCommitments typesOne factor that may contribute to employee connectionis known as organizational commitment. Numerous studies have been conducted onorganizational commitments.
The theory of organizational commitment wasestablished by Porter, Steers, Mowday and Boulian(1974). They definedorganizational commitment, a will to exercise substantial struggle on behalf ofthe organization, and a strong desire the member of the organization” (Porter,Steers, Mowday, &Boulian, 1974).Then the Meyer and Allen (1991) stretched the theoryby the addition three components of commitment: continuance of commitment,effective commitment and normative commitment. It considers the costs relatedto leaving the organization, like as the time invested by the employee forcritical economic situations. Effectivecommitment is defined as the emotive connection, identification and attachmentthat the employee has with the particular organization and its goals. Normativecommitment is a sense of responsibility and commitment to be the part oforganization.
These may include societal expectations or may befamily expectations that an employee has learned from so to be loyal to theemployer. “Communal to the three approaches is the opinion that commitment is apsychological state that (a) symbolizes the employee’s relationship with theorganization and (b) effect on the decision to either stay or leave the organization”(Meyer, Allen & Smith, 1993, p 539). Mostly the studies conducted on organizationcommitment have concentrated on effective commitment. The reason behind is itis the strongest and consistent forecaster of what outcome organization wantssuch as employee retention (Mohamed, Taylor, & Hassan, 2006, p.514). Itmakes it essential to study the effective commitment of workforce which worksas an indicator of commitment to the organization and have relation with theemployee’s intention to quit. 2.3 Job Satisfactionand Intent to QuitRobbins in addition to Determine (2013) explainedturnover intention will be that when a person will be contemplating to give upthe job.
Involved employees are excited in addition to devote strength for it,and thus reaching increased numbers of activity performance (Christian et’s,2011). Sliter et al. (2012) reportedin which turnover intentions directly effects the performance and output of anemployee and has damaging impacts of organization. Job satisfaction was definedas the attitude which includes promotion, supervision, benefits, colleagues,nature of work, operating processes and communications ( Park and Kim 2009). By improving their organizational commitmentin order to reduce employee turnover intention.
The final decision to quit isdue to when job dissatisfaction reaches a level that employee decides ordesires to move or leave the job (March & Simon, 1958). Mobley (1977)proposed a exploratory model turnover intention, considering it the final stepof leaving the job. Turnover intention is led by numerous decisions that theemployee has to make before making the final decision for quitting.Job dissatisfaction is a key which leads to turnoverintentions.
Mobley, Horner, and Hollingsworth in 1978 developed a streamlined versionof Mobley’s 1977 model which suggested the following causal linkages: jobsatisfaction and intentions to quit; intent to quit and intention to search; likelihoodof getting a reasonable alternative intentionto search; intention to search intention to quit; and intention to quit turnover(Mowday, Koberg, & McArthur, 1984). In 1978 Mobley, Horner, andHollingsworth analyzed age and tenure having an indirect effect on turnover andjob satisfaction and chances of finding a reasonable alternative. Same modelsuggested that turnover intentions are directly affected by job satisfaction,thinking about quitting, the intent to search for new or the intent to stay orquit, but having inverse effect on actual turnover.
2.4 Impact ofTurnover on Organizations Employee switching their jobs cannot possiblybe controlled by the organization. Regarding this employee Turnover eithervoluntary or involuntary movement employees in an out of work organizations -is of key significance in Ability management. It is therefore obvious thatemployee turnover remains the main concern in management literatures whether it’svoluntary or involuntary.
It’s a major issue for both types of organizationsi.e profit and non-profit. (Choi & Lee, 2011: 91). Voluntary ratio containsa additional important and negative impact on structure performance andeffectiveness than involuntary turnover (Shaw, Gupta, ; Delery, 2005;Tariq, et al., 2013). A lower ratio might cut back separation and replacementprices and increase employees’ loyalty and commitment to a company thatsuccessively may lead to raised structure performance. Indirect prices of ratioembody non continuous structure processes, low morale, adjustment time ofreplacement workers, a poor structure image, client discontent, and mostsignificantly, a loss of human capital (Grissom, et al.
, 2012; Rainey 2003;Sing & Loncar, 2010; Wang, et al., 2012). to stay a healthyorganization it’s essential to stay the workers engaged, challenged and supplythem with the expertise of development in their work (Christensen et al.,2012).Employee turnover is expensive development for firmsand organization. Direct costs area unit achievement, selection, and coachingof recent individuals.
Indirect costs area unit such things as redoubledworkloads and overtime expenditures for coworkers, still as reducedproductivity related to low worker determination. Taking under considerationeach the direct and indirect costs of turnover, the minimum price equates to 1year’s pay and advantages and a most of 2 year’s pay and advantages (Ramlall,2005).But not all turnovers are bad for organizations. Turnover is a normalpart of organizational operations; less than five percent turnover is actuallyconsidered unhealthy (Hurley, 2010).Turnover bargains chance to stay the organization spiritedby introducing workers with new thinking, new skills and traits. Itadditionally permits a chance to exchange marginal employees with additionaldynamic employees.
2.5 Human Resources (HR) Practices that Contributeto TurnoverThere are several potential causes for turnover;generally the causes are associated with the human resource practices of theorganization and might be managed. These embody such things as non-competitivecompensation, high stress, operating conditions, monotony, poor direction, poorrelationship between the worker and also the job, inadequate coaching, poorcommunications, and different organization practices (Mushrush, 2002).
So as tohandle these problems, structure leaders ought to bear in mind of therequirements and environmental circumstances close to their workers. Most highlevel managers take into account retention of the most effective workers to bea vital a part of their future business strategy. However, several corporationsdon’t have a framework in situ to effectively retain their workers (McKeown,2010). Commitment of the organization, to the worker, may be expressed through humanresource practices and impact retention. High commitment human resourcepractices that have an effect on worker commitment include: “staffing, processappraisal, competitive and equitable compensation, and comprehensive coachingand development activities” (Whitener, 2001). Considering the substantialprices related to turnover, employers ought to implement human resource practicesthat cut back turnover the maximum amount as attainable. 2.
6 DifferentialTurnover by Position TypeHigh frequency of ratio could be a downside thatfaces many alternative corporations and organizations. The prices transcendaccomplishment, hiring, and coaching of the employee; they embody loss ofproductivity. Some organizations are additional acceptive of turnover thanothers. For 2006, the overall voluntary turnover for the us was twenty three.4%(Nobscot Corporation, n.d.). The industries with the 3 highest annual turnoverrates were: accommodation and food service at fifty six percent, leisure and cordialreception at fifty two percent, and retail trade at thirty four percent.
Theindustries reportage the 3 lowest turnover rates were: government at eightpercent, academic services at thirteen percent, and finance and insurance atfifteen percent.The significant variation in turnover rates from onetrade to a different is also attributed partly to the kinds of positionsobtainable, for example in food and nutrient service, many roles involverepetitive actions, square measure half time with no advantages, and have fewinstructional needs. Coaching for many of those jobs is conducted on the taskunderneath shut management by a full-fledged worker and infrequently lasts afew of weeks or less.
Coaching usually covers topics like daily operations,menu, eating place history, safe food handling and sanitation. employees forthese jobs square measure plentiful and that they tend to be low-skilled, highschool or school age and don’t expect to stay within the position for anextended amount of your time (United States Department of Labor (U.S. DOL),2010).On the opposite finish of the spectrum, there’s a lotof less turnover within the government and academic services trade that tend todraw in what’s called an information employee.
“An information employee issomebody World Health Organization is used attributable to his or herinformation of an issue matter, instead of ability to perform manual labour.They perform best once authorized to create the foremost of their deepestskills” (Serrat, 2008, p. 12).The government and academic services business employsa number of the foremost extremely arch and educated staff within the workingclass.
Concerning sixty four percent of workers have a minimum of a academicdegree. Several skilled occupations additionally need an academic degree oracademic degree, significantly for jobs at postsecondary establishments or in administration.The positions area unit typically full time with smart advantages and earningspotential (U.
S. DOL, 2010). These positions area unit generally publicpositions with answerability to tax payers. Positive relationships withbusiness and client service area unit vital for continuing public support.
These positions need intensive coaching and investment by the leader. Therealso are additional resources invested with within the achievement and hiringof those workers as a result of the distinctive nature of skilled work. Afterthey resign, it takes longer to fill the position with a professionalindividual as a result of application needs that successively createsadditional loss to the organization in terms of labor productivity. 2.7 CONCEPTUALFRAMEWORKTurnover in my research will focusing effect by organizationalcommitment, job satisfaction, and intention to quit.
JOB SATISFACTION TURNOVER INTENTIONS HR PRACTICES (Recruitment and selection, evaluation, supervision, training and development) 3. HYPOTHESISH01: There is no significantrelationship between HR practices and turnover intentions.H02: There is no significantrelationship between job satisfaction and turnover intentions. 2. METHODOLOGYThe study is descriptive cumcorrelational in nature.
4.1 POPULATIONEmployees of telecom sector (Ufone) are my sample size ofthis study. 4.2 SAMPLEThe sample of this study will include the employeesworking in north region of Ufone. 4.
3 DATA COLLECTIONDescriptivestudy will be conducted using questionnaire. Employees will be given questionnairein Ufone (PTML) a telecom operator of Pakistan. Dependent variable is employeeturnover intention. Independent variables are HR practices of recruitment andselection, evaluation, supervision, training and development, organizationcommitment and job satisfaction. 4.
4 DATA ANALYSISData will be analyzed by using SPSS20.