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The research paper focuses on the crucial issue of employee turnover at Packages Limited. Since the past few years Packages has been facing this problem of high attrition rate in particular amongst the trainees. I narrowed my focus down to "Flexible Business Unit" of Packages Limited where the attrition amongst the "Engineers" is the highest. The study reveals various issues facing the engineers and other employees, and highlights the reasons behind the high turnover rate. At the end I propose some recommendations for Packages in general and Flexible Business Unit in particular to get over with this issue, address the employees issue and make them more loyal to the company which is the need of the hour, as the loss of human capital in future can be humungous if not taken care of right now.
Introduction of Packages Limited:
Packages was Established in 1956 as a joint venture Established in 1956 as a joint venture between the Ali Group of Pakistan and Akerlund and Rausing of Sweden. It is the only packaging facility in Pakistan providing all the packaging solutions to individuals and businesses. Packages Limited provides premium packaging solutions for exceptional value to individuals and businesses. It has a loyal customer base and big names like Unilver and PTC are associated with them for over 50 years now. Packages employ more than 3500 employees and throughout the years have been very well managed by Mr. Tariq Hameed.
Packages is listed on all there stock exchanges of Pakistan and maintains a rating of AA. Currently it has been involved in various joint ventures and alliances which reflects their forward-looking approach, providing continuous improvement to the customers. It is an innovative company and throughout the years has pioneered various new developments. Their production capacity has seen an inclining trend throughout the years.
Source: (http://www.packages.com.pk/index.htm and interview with Miss Fatima Mehmood Assistant HR manager)
Over the years, Packages has continued to enhance its facilities to meet the growing demand of packaging products.
The Bulleh Shah Project: Packages has relocated its paper manufacturing facility to a new side which has enables them to increase their production from 100,000 to 300,000 tonnes per year. Packages is planning to relocate its paper manufacturing facilities from the existing location, which has limited capacity for expansion, to a new site 54 km from the present one.
In 2003, Packages entered into an agreement with Vimpex of Austria to provide management and technical assistance to help in the operation, production optimization and capacity expansion of a paperboard mill in Syria. A team from Packages is currently providing these services and is close to optimizing mill production.
In 1999-2000, Packages Limited successfully completed the expansion of the flexible packaging line by installing a new rotogravure printing machine and expanded the carton line by adding a new Lemanic rotogravure inline printing and cutting creasing machine. A new 8-color Flexographic printing machine was also installed in the Flexible Business Unit in 2001. Packages Limited has also started producing corrugated boxes from its plant in Karachi from 2002.
In 1996, a joint venture agreement was signed with Printcare (Ceylon) Limited for the production of flexible packaging materials in Sri Lanka. Packages Lanka (Private) Limited commenced production in 1998. Packages Limited now owns 79% of this company.
In 1994, Coates Lorilleux Pakistan Limited, in which Packages Limited has 55% ownership, commenced production and sale of printing inks.
In 1993, a joint venture agreement was signed with Mitsubishi Corporation of Japan for the manufacture of Polypropylene films at the Industrial Estate in Hattar, NWFP. This project, called Tri-Pack Films Limited, commenced production in 1995 with equity participation by Packages Limited, Mitsubishi Corporation, Altawfeek Company for Investment Funds, Saudi Arabia and the public. Packages Limited owns 33% of Tri-Pack Films Limited's equity.
Since 1982, Packages Limited has had a joint venture with Tetra Pak International in Tetra Pak Pakistan Limited to manufacture paperboard for liquid food packaging and to market Tetra Pak packaging equipment.
Packages commissioned its own paper mill with a production capacity of 24,000 tonnes in 1968. The mill produces paper and paperboard based on waste paper and agricultural by-products like wheat straw and river grass. With growing demand the capacity was increased periodically and in 2003 was nearly 100,000 tonnes per year.
... a market leader by providing quality products and superior service to our customers, while learning from their feedback to set even higher standards for our products.
... a company that continuously enhances its superior technological competence to provide innovative solutions to cater to customer needs.
... a company that attracts and retains outstanding people by creating a culture that fosters openness and innovation, promotes individual growth, and rewards initiative and performance.
... a company which combines its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair returns to its shareholders.
... a company that endeavors to set the highest standards in corporate ethics in serving the society.
Packages has been divided into five business units:
Paper and Board which specializes in making a variety of duplex boards and paper. Over the years, they have established their name in providing quality paper and board products and they touch the consumers life in various ways every day.
Carton Business Unit whose foundation was laid with the formation of offset printing department 50 years ago. Various well known brands are associated with the carton line and the production is around 18-20 thousand tones per annum.
Corruwal business unit was established in 1974, it produces cartons which are widely used for goods distribution and export throughout the country. They are available in various sizes and the current production is around seven million cartons which is ever-increasing.
Consumer Products division includes the products which are directly linked to the end consumer like Tissue and Paper products. They also provide custom-printed products to several companies.
Flexible Business Unit which is also the focus of the study makes high quality packaging films and laminates combining different plastic films, aluminium foil and paper to produce laminates of layers. It is used where colorful package design is required or there is a need to preserve the product quality like food, tobacco, pharmaceutical industries etc.
Problem Development/Area of Concern:
The area of concern in Flexible Business Unit of Packages is related to Human resource department. This business unit is experiencing high attrition/turnover rate, and Packages is unable to retain its employees in particular the Trainee Engineers.
As I have been an intern at Packages Limited, I observed that motivation amongst employees is low, I often found the employees overburdened, at times not interested in work and applying for other jobs. This built up my interest in human resource management of Packages and while deciding my research topic, I conducted various interviews with the HR Personnel of Packages Limited and from there I learnt about this problem. At that time (initial stages) the HR department was confused over this issue, even though they had taken notice of it but they were still not able to figure out the primary cause behind it. The major damage it was doing to the company was that it made the company like a training institute in which employees were getting trained and were leaving and joining the competitor firms right after there training period. This had become a tradition of Packages but now the HR department was taking notice of it as perhaps now they very well realize that loss of human capital can harm the company in the long-run, even though in the short-run every thing looks bright.
Although the fact that trainee engineers' leaving frequently was not highlighted by the company itself, but I got lucky to observe the department's working for a few hours and get a better know how about the working condition of the department. While interviewing the Flexible Unit employees I discovered that it's not the labour class which is into leave the company that frequently but the Engineers who are leaving rapidly.
On knowing this fact, I conducted several interviews with the present trainee engineers and held telephonic conversation with trainees who left the company in the past one year and gathered useful information to form the basis of my research which will be discussed later in the study.
Objectives of the Study:
To help the company in addressing the issue of high turnover rate amongst engineers in Flexible Business Unit
To identify the primary reasons behind high attrition rate of Engineers in Flexible Business Unit at Packages limited
To assess if monetary benefits will play any role in decreasing the attrition rate
To assess if fringe benefits will play any role in decreasing the attrition rate
To find out what are the engineers' expectations from the job and what they are actually experiencing
Managerial and Academic value of research:
The managerial value of this research can be that first of all it can be used by Packages Limited to address the turnover problem in Flexible Business Unit and avoid spreading this problem to other business units. Various issues of the trainees will be addressed in this research so the company can take instant corrective measures. This research can also be used by managers in other companies who are experiencing similar problem of high attrition rate.
On an academic basis this research can be used by students who plan to investigate attrition issue in any company and can be a credible source and reference for further study in research. Secondly with time and further research in study, we might bring in new innovative schemes that can resolve turnover problem in companies. Moreover this research will be based on various other worldwide researches carried out on employee turnover problem, so it will also sum up those researches. At the same time it may bring in new issues which were not covered in the previous researches and can be used for future research work.
The issue of employee turnover all over the world has been widely discussed in the empirical literature. Researchers have reported various reasons for why employees leave an organization. This section summarizes some of the research studies that have been done on employee turnover and is arranged in an ascending order according to the year it was done in.
Employee turnover is a much studied research topic. There is a vast amount of literature available on the causes of employee turnover dating back to the industrial revolution. Researchers have developed multivariate models to study various factors contributing to it and have empirically tested them to find out the major reasons behind it. Price (1977) in his research defined turnover as the cessation of membership in an organization by an individual and their movement out of an organization.
Allen & Meyer (1990) investigated the nature of the link between turnover and the three components of attitudinal commitment: affective commitment refers to employees' emotional attachment to, identification with and involvement in the organisation; continuance commitment refers to commitment base on costs that employees associate with leaving the organisation; and normative commitment refers to employees' feelings of obligation to remain with the organisation. Put simply, employees with strong affective commitment stay with an organisation because they want, those with strong continuance commitment stay because they need to, and those with strong normative commitment stay because they feel they ought to. Allen and Meyer's study indicated that all three components of commitment were a negative indicator of turnover. In general, most research has found affective commitment to be the most decisive variable linked to turnover.
Naresh Khatri (1999) investigated the reasons behind employee turnover in Asian countries in particular Singapore. He divided it into three sets including demographic, controllable and uncontrollable factors. He accepts the fact that the turnover issue is giving sleepless nights to the HR Manager and the employees have developed a bad attitude because of the labour shortage and they change jobs for no reason and at times even for fun. He took age, gender, education, tenure and income level as demographic factors. Perceived alternative, employment opportunity and job-hopping were taken as the uncontrollable factors whereas pay, nature of work, supervision, organizational commitment and distributive justice were taken as the controllable factors. The analyses suggest that employee turnover problem in Singapore is more due to poor management than bad employee attitudes. Controllable factors explained greater variance in the model than the uncontrollable factors, whereas the demographic factors impact was even smaller. Findings of the study reveals that extent of controllable turnover is higher than the uncontrollable ones. And poor management practices are the major reasons of employee turnover in the organizations. This suggests that HR Managers need to overcome their feeling of helplessness in face of employee turnover as it is in there hand to reduce this problem. They have to come up with new strategies and plans to overcome this grave issue and make the employees loyal to the companies.
Chang E. (1999) examined the relationship between career commitment, organisational commitment and turnover intention among Korean workers and found that the role of career commitment was stronger in predicting turnover intentions. When individuals are committed to the organisation they are less willing to leave the company. This was found to be stronger for those highly committed to their careers. The author also found that employees with low career
and organisational commitment had the highest turnover intentions because they did not care either about the company or their current careers. Individuals with high career commitment and low organisational commitment also tend to leave because they do not believe that the organisation can satisfy their career needs or goals. This is consistent with previous research that high career committers consider leaving the company if development opportunities are not provided by the organisation. However, this group is not apt to leave and is likely to contribute to the company if their organisational commitment is increased. Chang found that individuals become affectively committed to the organisation when they perceive that the organisation is pursuing internal promotion opportunities, providing proper training and that supervisors do a good job in providing information and advice about careers.
Meenakshi Gupta (2000) carried out a rigorous research on employee turnover on two companies with a 30-item questionnaire one in software company and the other in a finance company. She took 'Intention to stay' as the dependent variable and nine independent variables including company image, pay satisfaction, nature of work, nature of peer group, comparison to peer groups, inside career opportunities, outside career opportunities, expectations-reality match and turnover perception. 71 employees from the software company and 36 employees from the finance company filled the questionnaire. The results showed that expectation reality match, length of service, turnover perception and outside career opportunity were the major independent factors responsible for intention to stay in the software company. Whereas in the finance company the independent variables identified were nature of work, age, turnover perceptions and peer comparison. Which shows that the only common predictor for the dependent factor "Intention to stay" was "Turnover perception" which means if the employees perceive that the
organization houses a large number of long serving employees than they are likely to stay in the organization as well. This shows how important it is for the company to motivate and retain its old employees because it is very valuable for the new employees, perhaps because they get a positive vibe from this.
Griffeth (2000) re-examined various personal characteristics that may be linked to turnover. They concluded that there were no differences between the quit rates of men and women. They also cited evidence that gender moderates the age-turnover relationship (i.e. women are more likely to remain in their job the older they get, than do men). They also found no link between intelligence and turnover, and none between race and turnover. Hence there is little evidence of a person's gender being linked to turnover. Griffeth also noted that noted pay and pay-related variables have a modest effect on turnover. Their analysis also included studies that examined the relationship between pay, a person's performance and turnover. They concluded that when high performers are insufficiently rewarded, they leave.
Tang T. L. P., Kim J. W. & Tang D. S. H (2000), examined the relationship between attitudes towards money, intrinsic job satisfaction and voluntary turnover. One of the main findings of this study is that voluntary turnover is high among employees who value money (high money ethic endorsement), regardless of their intrinsic job satisfaction. However, those who do not value money highly but who have also have low intrinsic job satisfaction tended to have the lowest actual turnover. Furthermore, employees with high intrinsic job satisfaction and who put a low value on money also had significantly higher turnover than this second group. The researchers also found that placing a high value of money predicted actual turnover but that
withdrawal cognitions (ie thinking about leaving) did not.
Elangovan (2001) examined that the notion of job satisfaction and organisational commitment being causally related has not been incorporated in most turnover models. His study indicated there were strong causal links between stress and satisfaction (higher stress leads to lower satisfaction) and between satisfaction and commitment (lower satisfaction leads to lower commitment). He further noted a reciprocal relationship between commitment and turnover intentions (lower commitment leads to greater intentions to quit, which in turn further lowers commitment). In summary, only commitment directly affected turnover intentions.
Abdul Rahman, S. M. M. Raza Naqvi and M. Ismail Ramay (2008) studied the issue of turnover in IT firms of Pakistan in detail because they have seen a high turnover during the past few years. The study revolves around three variables including job satisfaction, organizational commitment and perceived alternative opportunities. The study revealed that both job satisfaction and organizational commitment had negative effect on turnover, whereas perceived alternative job opportunities had a positive correlation with intention of turnover. The study suggested that managers need to increase job satisfaction to increase loyalty of the employees with the firm.
Martin C. (2003) in his paper "'Explaining labour turnover: Empirical evidence from UK establishments", detected a complex relationship between turnover and training. He suggested that establishments that enhance the skills of existing workers have lower turnover rates. However, turnover is higher when workers are trained to be multi-skilled, which may imply that this type of training enhances the prospects of workers to find work elsewhere. The literature on the link between lower turnover and training has found that off-the-job training is associated with higher turnover presumably because this type of training imparts more general skills.
Liew Chai Hong and Saran Kaur (2010) examined the relationship of organizational climate, employee personality and intention to leave in Malaysian context. They chose four dimensions of organizational climate including structure, responsibility, support and rewards. Two dimensions including dominance and sociability were chosen for personality. The study results showed that organizational climate has a great impact on employees' intention to leave. All the four dimensions of it were found to have a significant negative correlation with employees intention to leave, which means that positive organizational climate decreases the intention to leave of employees. Whereas both the personality dimensions were found significantly moderating the relationship between organizational climate and employees' intention to leave Therefore if companies create positive working environment, they can eventually reduce employee turnover. In short, the study proved the fact that organizations should promote positive organizational climate with well-defined job description, fair and equitable reward system with a good working atmosphere.
Zheng Weibo, Sharan Kaur and Tao Zhi presented the complex relationship between individual performance characters and withdrawal tendency based on the social capital theory. Considering employees as an intellectual capital, they pointed out how critical it has become for the companies to retain its employees. The identified various factors why employees leave a job and look for another, which they named as job coupling which was divided into two categories namely On-Job coupling and Off-Job coupling. On job coupling is related to the organization itself and include three variables, organizational linkage, organizational fitness and organizational sacrifice. Whereas off job coupling includes community linkage, community fitness and community sacrifice. Then they analyzed person-job fit, person-group fit, and person-organization fit. It was revealed that in the traditional attitude turnover model the process of employees' volunteer turnover is the reversed transformation process of employees' retention psychology and behaviours, primarily consisting of four sectors. First is the quit process caused by job dissatisfaction; then employees' search for substitutable jobs before turnover; is evaluation on such substitutable jobs; and result is occurrence of turnover behaviour.
"Identifying the reasons behind high attrition rate amongst the employees of Flexible Business Unit at Packages Limited"
Once it was clearly indicated that this department is experiencing a high turnover rate, I formed my research question as identifying the reasons behind this high attrition rate. The literature review helped me indicating various causes that may be related to this high attrition rate. I took into account various articles that were indicating somewhat the same issues that I observed from the initial interviews, for instance controllable and uncontrollable factors investigated by Naresh Khatri (1999), pay satisfaction, career opportunities, expectation-reality match studied by Meenakshi Gupta(2000), intrinsic job satisfaction and attitude towards money examined by Tang (2000), organizational commitment and perceived alternative opportunities studied by Abdul Rehman and M.Ismail Ramay (2008). From these I picked out the hottest issues prevailing at Packages Flexible Business Unit. The research previously done on this HR issue highlighted various determinants of this problem in various cases, and so that I don't miss out on the major ones, I made a list of the sub questions that will be a guideline for the whole research. The issues like monetary benefits, non-monetary benefits, working environment, job satisfaction are addressed in these sub-questions and they will be a part of the focus group as well as the questionnaire to get a better feedback on all of these.
Are there any internal factors related to this high attrition level?
Is the attrition prevailing because of low monetary benefits?
Is the turnover increasing because of the work environment of this department?
Will fringe benefits play any role to reduce the level of turnover?
What are the employee's expectations with the job in this department and how they can be fulfilled so the turnover can be reduced?
To get the answers for my research questions, this is how I went about the research:
Firstly, I collected data from the internet regarding the employee turnover issues all around the world, this helped me forming the background of the research and I came to know about various reasons why employees leave an organization. I read various articles and researches done by various authors to get an idea about the reasons that have been identified till now by the researches on this very important issue. Secondary data was collected from various websites including Jstore and various other online research resources that will appear in the references at the end.
The literature review helped me in gathering all such causes but at the same time I never remained stuck to them, I was always aware of the fact that there can be more to it, perhaps there might be some issues which were never previously addressed that can emerge in my research.
Then I had an in-depth interview with the HR Assistant Manager Miss Fatima Mehmood to identify what she feels about this problem. From there I collected some factual information and got an idea about issues prevailing in the department. Even though she was not so sure about the reasons behind the turnover issue but was concerned over this issue.
Then I carried out a focus group with 3 trainees and 3 engineers to get an open idea about their problems and got a better know-how about why their colleagues left the organization. I also conducted telephonic interviews with some of the engineers who recently left the department. :
Sample Size: From these unstructured interviews, I made a structured questionnaire entailing various questions about the work related issues, monetary benefits, motivation, job satisfaction etc. I floated the questionnaire to all the trainees, engineers and the managers of the Flexible business unit and got it filled by 30 respondents in total.
From the filled questionnaire I tabulated the data and analyzed the research results and came up with various interesting findings which will be of great interest to the company in general and the HR department in particular.
Findings of the in-depth Interview:
Policy of not firing employees
Frequent job shifts from one department to another
High turnover amongst trainees
Highest attrition in Flexible business unit
Trainee Engineers leaving frequently (2 out every 5 joining in leave the firm)
Basic pay of Rs.25000
Family like working environment
Health and safety at work considered
Source: (Interview with Fatima Mehmood, Assistant HR Manager)
Findings of the Focus Group
Intention to stay
Care for Employees rights
Exposure of other departments
Health and Safety at work
Intention to leave:
Overload of work
No time management
No technical work for engineers
No application of the studied degree
Calls from office even after going home
Stuck in packaging field
(Source: Focus Group with 6 Engineers of Flexible Business Unit at Packages Limited)
Outside Career Opportunity
Intention to leave
DATA TABULATION AND ANALYSIS
The results to this question reveal that a very high percentage of the employees in the survey are working at Packages for less then 1 year i.e. 53%, as most of them were trainee engineers. This in itself is an alarming situation that a smaller percentage 47% fall under the category of more than one year, which indicates that the level of loyalty amongst the employees might be low or Packages is into injecting more fresh blood in the company. None of the workers fall under the category of 7 or more than 7 years working, which means that Packages might be missing out on experienced individuals.
This question was particularly investigates if all the employees of flexible department were there from the start or has there been rotation amongst them. It revealed that Flexible business unit has more freshies in it as 67 percent of respondents fell under the category of less then 1 year, which means a few of them are recently shifted to the flex department, hence more trainees in this department. Again none of respondent fell in the category of 7 or more than 7 years working, and a very small 30 percent above 1 year.
This question produced a mixed response, but the weight fell towards the positive side. It indicated that respondents are satisfied working at Packages limited. Although 26 percent fell in the negative category but majority were satisfied working at Packages Limited, which can be taken as a positive sign for the company as a whole.
The result to this question further clarified the issue, a heavy majority responded that they are not satisfied working at Flexible Business Unit, now this can be a cause of concern, where at one point majority indicated that they are satisfied working at packages limited, on the other hand the majority was dissatisfied working at flexible business unit of the same company, which indicates that something is certainly wrong with the department's working.
When asked about the monetary benefits importance, that 87% considered it either very important or important and only 13% considered it somewhat important but none of the respondent went for not important or not at all important. This can be very beneficial for the HR department as they can motivate the employees with monetary benefits which are considered important by them.
When questioned on non-monetary benefits, it produced a mixed result. But again the majority 58% fell under the band from very important to somewhat important, whereas 42% didn't consider it important. This indicates that while choosing between monetary benefits and fringe benefits, the company should give more weight to monetary benefits.
After getting a clasp of the weights attached with monetary and fringe benefits, the respondents were questioned on the level of satisfaction with the monetary benefits of their current job which produced interesting results. Although majority of the respondents attached a high weight to monetary benefits but the level of satisfaction with the monetary benefits of Flexible business unit is low, as 60% were either dissatisfied or very dissatisfied with the monetary benefits. This is a major cause of concern when respondents attach a high weightage with monetary benefits.
When questioned about the fringe benefits of Flexible business unit, the percentage of dissatisfaction was lower than that of monetary benefits, but still the weight age fell towards dissatisfaction. 60% were not satisfied or not at all satisfied with the non-monetary benefits. But this might not be a major problem as importance attached to fringe benefits by the respondents is low.
When asked about the workload at Flexible unit of Packages 87% of the respondents considered it as a heavy workload. This can also be referred to the focus group findings where the respondents complained about late sittings and remaining in touch with office work even after office time. This issue certainly needs attention of the HR department as well as the management of flex department.
This question was asked to judge upon the job satisfaction associated with the respondents current job at flexible business unit, the results showed that 75% of the respondents disagree or strongly disagree with the statement which means the job is not up to their expectation and they are also not satisfied with their current job. Throughout the business education, we study the importance of job satisfaction, if it's low then the motivation will also be low and employees are likely to leave, so the issue of job satisfaction should be addressed immediately.
This question was asked to measure the 'Intention to leave' of the employee which showed positive results, majority of the respondents have an intention to leave as 86% of respondents agree to the statement that they think about quitting their job and only 14% disagree to the statement, which is a dangerous sign for the department and the company as a whole.
When asked about opportunity of finding a better job, the response was mixed, 40% considered it likely to find a job and 60% considered it not likely, which means a heavy percentage fell towards the 'Not Likely' category. This can be attributed to two factors, either to the economic conditions of Pakistan and referring to the focus group where respondents said 'Stuck in packaging field' whereas Packages is the largest packaging company in Pakistan, so they might not be able to find a better job then the current job.
Analysis of Question.13 and 14
100% of the respondents were males. And 93% fall in the age bracket of 21-30, which means a very high percentage is youth, who have an urge to earn more and more, hence if not loyal and satisfied with their job, they are likely to leave. Hence corrective actions are instantly required.
OVERALL ANALYSIS AND FINDINGS
In this section I will be taking into account all the findings of the research and will be analyzing how they intermingle. Starting of with the final in-depth interview with Miss Fatima Mehmood where she highlighted the facts like Rs.25000 basic salary, taking into account the inflation rate prevailing in Pakistan, the salary in itself is not sufficient enough for a graduate to meet the basic needs and for this very reason this issue was highlighted not only in the focus group but also in the tabulation of the questionnaire where more then 70% respondents were not satisfied with the monetary benefits.
It was also indicated by the study that health and safety at work is not an issue behind the high turnover rate, as Miss Fatima said that family like environment exists at Packages, but she didn't highlight that there are late sittings in this environment because of which employees are really feduped and on reaching home they tend to receive calls from office which can be really annoying and even at late night they have to keep a check on the production, therefore they won't be living a very peaceful family life and the balance between work and family life will surely be disturbed. This could be a major reason why 2 out of every 5 trainees leave the firm within 1 year, because they might not see a bright peaceful future with the firm in particular this department.
It was also highlighted that the company doesn't have a policy of firing employees until and unless there is a serious issue, that was also indicated in the questionnaire, as there was difference between the percentages of respondents working at Packages and working in flexible business unit, hence there may be frequent shifts which may be harmful for the company in the
long-run as they might not get the team work out of the departments.
Another issue that was addressed in the focus group was that there was not much of a technical work for engineers and the application of the studied degree is also less, hence there was also a gap between expectation and reality of the job, which needs to be filled to decrease the intention to leave of the employees.
The research produced another interesting finding where mostly employees felt satisfied working at Packages limited in general but when asked about Flexible business unit in particular the response turned out to be negative and a heavy majority said that they are dissatisfied working in this department, so the label of Packages does matter.
Although as much as 60% are dissatisfied with the fringe benefits, but the importance attached to the fringe benefits is less compared to that of monetary benefits so the company should also give more weight to monetary benefits as 42% respondents didn't consider it important.
A majority of the respondents i.e. 60% took a negative view regarding an outside career opportunity, which means they are pessimistic in finding a better job but at the same time they are not very satisfied with their current job, not only that the company has to think about these 60% but more importantly they have to think about the remaining 40% who are of the view that they can find a better job in the time to come.
My research also supported and negated various studies done on this topic before, for instance it supported the study done by Naresh Khatri (1999) which concluded that employee turnover is prevalent more due to poor management than bad attitude of employees, this was very much seen in the case of Flexible business unit of Packages Limited.
It supported Elangovan (2001) research who found out that there are strong causal links between stress and satisfaction, so was the case in Flexible business unit where heavy workload was leading to lower job satisfaction and high intention to leave.
My study also supported Tang & Kim's (2000) research as they investigated that voluntary turnover is high among employees who value money regardless of their intrinsic job satisfaction, employees at Packages also valued money and were dissatisfied because of lower monetary benefits offered by the company.
It the same time my research negated Change E.(1999) study which proved that role of career commitment was stronger in predicting turnover and when individuals are committed to an organization they are less willing to leave, but in case of Packages where although employees were satisfied working with the company but not satisfied working in a particular department i.e. flexible business unit, hence my study doesn't support his findings.
My research also negated Meenakshi Gupta (2000) research results which showed that turnover perception and outside career opportunity were major independent factors responsible for intention to stay in a company, but this was not the case in Packages, as respondents didn't consider outside career oppurtunity as a major factor behind their intention to leave the department.
To sum it up, all this explains that a very important element of the company i.e. the Human Capital, which can be considered as the major strength of Packages Limited is not very much
satisfied with their jobs at Flexible Business Unit, it presents an alarming situation as the loss might seem little at present but can turn out to be a major disaster if the department keeps on loosing employees at this pace.
In a nutshell, the study reveals a worrisome situation for the Flexible business unit, where the intention to leave is around 86% which is rather very high and needs immediate attention. The analysis reveals that amongst the independent variables, pay satisfaction, workload and jobs satisfaction are the ones which require immediate attention as the represent a strong linkage with intention to leave.
A majority of the respondents attached a high weight to monetary benefits but the level of satisfaction with the monetary benefits of quite is low, as 60% were either dissatisfied or very dissatisfied with the monetary benefits. This is a major cause of concern when respondents attach a high score to monetary benefits and has to be resolved immediately as the management just have to make the salaries more competitive and no other rocket science is involved in it except for giving a market rate.
Work load as indicated in the focus group as well is considered 'heavy' by 87% which is a huge majority indeed, therefore workload has to be reconsidered and more staff needs to be hired. Moreover, job dissatisfaction is a major concern, where 75% of the respondents are not satisfied with their current job, which means there is a high gap between expectation and reality, hence the job on the whole may have to be redesigned.
On the other hand 'Outside career opportunity' and 'Fringe benefits' are amongst the one that can be addressed later on as the respondents attached lesser weight to them, hence they are not amongst the grave problems. Although outside career opportunity is an external factor, but making the current job more lucrative, this variable can certainly be eliminated.
Once the monetary benefits will be enhanced, stress at work and after work will be reduced it will enhance the job satisfaction, from which the working environment will improve, the motivation level will increase and hence the intention to leave will drop and so will the employees turnover.
After the whole research, I have come up-to certain recommendations which I have divided in three part, short-term, medium-term and long-term strategies.
Short term strategies:
Exit interview with the employees and trainee engineers leaving the company, to better understand the problems they faced because of which they are leaving.
Communicate effectively with the employee to understand their concerns.
The department must consider work-life balance issue and must not overload employees with late sittings.
The company must do costing of employees leaving at such a high pace (Both direct and indirect costs associated with the turnover)
Medium term strategies:
Packages must keep pay inline with the market rates to avoid high attrition rate particularly in flexible business unit
They must offer an attractive benefit packages to the engineers.
HR department should recruit the employees effectively
Long term strategies:
The department should provide clear career path so that the employees don't think about outside career opportunities.
Loyalties with the department and the company as a whole need to be built so that the company doesn't loose upon precious human capital.
Source: (Ideas taken from Chapter.11 Managing Careers, Human Resource Management 11/E by Gary Dessler) and IDS (2000), Improving staff retention, IDS Studies No. 692, July 2000.
Abdul Rahman, S. M. M. Raza Naqvi and M. Ismail Ramay (2008), 'Turnover Intention: A Study of IT Professionals in Pakistan'
Allen N. J. & Meyer J. P. (1990), 'The measurement and antecedents of affective, continuance and normative commitment on the organization'
Business Units of Packages Limited
Chang E. (1999), 'Career commitment as a complex moderator of organizational commitment and turnover intention'
Elangovan (2001) 'Causal ordering of stress, satisfaction and commitment, and intention to quit: a structural equations analysis'
Griffeth (2000), 'A Meta-analysis of antecedents and correlates of employee turnover: Update, moderator tests, and research Implications for the next millennium'
History of Packages Limited
Introduction to Packages Limited
Liew Chai Hong and Saran Kaur (2010), 'A Relationship between Organizational Climate, Employee Personality and Intention to Leave'
Martin C. (2003) 'Explaining labour turnover: Empirical evidence from UK establishments'
Meenakshi Gupta (2000), 'To Be Or Not To Be? A Study of Employee Turnover'
Mission Statement of Packages Limited
Naresh Khatri (1999),'Employee turnover: Bad attitude or poor management?'
Tang T. L. P., Kim J. W. & Tang D. S. H (2000) 'Does attitude toward money moderate the relationship between intrinsic job satisfaction and voluntary turnover?'
Zheng Weibo, Sharan Kaur and Tao Zhi, 'A critical review of employee turnover model (1938- 2009) and development in perspective of performance (2010)'