Compensation and benefits

CHAPTER 3

RESEARCH METHODOLOGY

Introduction

The chapter begins with an introduction that explains the research framework. The intention of this study is to analyze the relationship between compensation and benefits and others independent variables towards the employee turnover. Then, it proceeds about the hypothesis development. The theoretical framework and hypothesis development examine the relationship between dependent variable and independent variables. Next, it goes to data collection methods that consist of primary data and secondary data collection. Next, the size and number of respondents and sampling method will be explained. After that, it goes to the data analysis method for qualitative and quantitative data in this study.

Research Framework

Since all the variables are being determined, the factors that cause the employee turnover in the working place will be developed through the framework. In this framework, it will consist of dependent variable and independent variables only. The independent variables are compensation and benefits, organization cultures, supervisor, job analysis and characteristics, and career development. On the other hand, the dependent variable is employee turnover that deeply discuss in this research. All the independent variables are being measure with the relationship with employee turnover.

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Hypothesis Development

In this study, I will be using the null and alternate hypotheses. Null Hypothesis states a definitive and an exact relationship between two variables whereas it states the population correlation between two variables are equal to zero or that the difference in the means of two groups in the population is equal to zero. In broad-spectrum, the null statement is expressed as no relationship between two variables or no difference between two groups. The alternate hypotheses however is a statement expressing a relationship between two variables or indicating difference between groups (Sekaran, 2003).

1. Hypothesis 1: Compensation and benefits

2. The review of literature had provided an insight to us that compensation and benefits may influence to employee turnover in real working environment. Lack of recognition and lack of competitive compensation systems are some reasons for employee turnover in the organization, (Abassi and Hollman, 2000). Hence, the hypothesis of compensation and benefits had been developed in order to determine the relationship between it and turnover among the employees in the real working place. However, we have an expected result of the compensation and benefits no matter for direct cash or non-direct cash do have significant relationship towards the employee turnover.

   H0: The compensation and benefits should positively influence to employee turnover.

   H1: The compensation and benefits should negatively influence to employee turnover.

3. Hypothesis 2: Organization Culture

4. The review of literature had provided an insight to us that the organization culture may influence to employee turnover in real working environment. Tharp, (2009) examined that the culture of an organization extremely influences its countless decisions and actions. Employees think, feel, and act are quite often unconsciously regarded to a company’s prevailing ideas, values, attitudes, and beliefs. Hence, the hypothesis of organization culture had been developed in order to determine the relationship between it and turnover among the employees in the real working place. However, through this research, we have an expected result of the organization culture in term of different cultural, social, religious and economic set-up, large and capable workforce do have significant relationship towards the employee turnover.

   H0: The organization cultures should positively influence to employee turnover.

   H1: The organization cultures should negatively influence to employee turnover.

5. Hypothesis 3: Supervisor

6. The review of literature had provided an insight to us that the supervisor may influence to employee turnover in real working environment. Emotional support from supervisors and self-esteem mediated the impact of stressors on stress reactions, job satisfaction, commitment to the organization and intention to quit, (Mellor, Moore, & Loquet, 2004). It is recommended that to restructure intention to quit and in turn reduce turnover, managers need to actively keep an eye on workloads and the relationships between supervisors and subordinates. Hence, the hypothesis of supervisor had been developed in order to determine the relationship between it and turnover among the employees in the real working place. However, through this research, we have an expected result of the supervisor in term of different supervisor-subordinate relationships do have significant relationship towards the employee turnover.

   H0: The supervisors should positively influence to employee turnover.

   H1: The supervisors should negatively influence to employee turnover.

7. Hypothesis 4: Job Analysis and Characteristic

8. The review of literature had provided an insight to us that the job analysis and characteristic may influence to employee turnover in real working environment. According to McCormick, 1979, the job analysis is a process of obtaining information about jobs. The employees will do observation in order to obtain some information based on their job characteristic. Hence, the hypothesis of job analysis and characteristic had been developed in order to determine the relationship between it and turnover among the employees in the real working place. However, through this research, we have an expected result of the job analysis and characteristic in term of different information that observe based on their job characteristic respectively do have significant relationship towards the employee turnover.

   H0: The job analysis and characteristics should positively influence to employee turnover.

   H1: The job analysis and characteristics should negatively influence to employee turnover.

9. Hypothesis 5: Career Development

10. The review of literature had provided an insight to us that the career development may influence to employee turnover in real working environment. Lack of meaningful work and opportunities for promotion significantly affected employees’ intentions to leave an organization, (Miller and wheeler, 1992). . Hence, the hypothesis of career development had been developed in order to determine the relationship between it and turnover among the employees in the real working place. However, through this research, we have an expected result of the career development in term of different opinions to the job position and opportunities that been offered do have significant relationship towards the employee turnover.

    H0: The career developments should positively influence to employee turnover.

    H1: The career developments should negatively influence to employee turnover.

Data Collection

According to Sekaran, (2003) data can be composed in a diversity of ways, in different setting-filed or lab and from different sources such as primary and secondary. Data collection methods can be comprised as interviews- faces to face interview, telephone interview, computer-assisted interview and interview through the electronic media; questionnaire that are either personally administrated send through the mail or electronically administrated; observation of individuals and proceedings with or without videotaping or audio recording and multiplicity of other motivational techniques such as projective test. Interviewing, administrating questionnaire and observing people and phenomena are the three main data collection methods in investigation research.

Based on the study of Sekaran, (2003), a questionnaire is a pre-formulated written set of questions to which respondents record their answers, usually within rather closely defined alternatives. However, questionnaire can be administrated personally, mailed to the respondents or electronically distributed. Therefore, I will focus in administrating questionnaire in collecting my data during my study.

Sekaran, (2003) stated that the main motive of using personally administrated questionnaire is it can collects all the accomplished feedbacks with a short period of time and any uncertainties that the respondents might have or any matter could be clarified on the spot. Apart from that, administrated personally questionnaire is the best device in collecting data from large group of people compared to other tool. Therefore, personally administrated questionnaire will be utilized through my study because it is extremely efficiency in making the data collection.

Furthermore, questionnaire can be arranged in open-ended or closed ended question when distribute to the employees. Sekaran, (2003) stated that open-ended questions allocate respondents to answer them in any way they prefer. On the other hand, close-ended question would request the respondents to answer their choices among a set of alternatives given. In this project, close-ended questionnaire will be selected in getting opinions from all the employees regarding my study topic. It is been preferred is due to it assisting the respondents to make fast decisions to choose any the several alternatives before them. Yet, it also assists to code the information easily for the following analysis later.

Other than that, scale is also one of the vital issues in the data collection section. Sekaran, (2003) stated that scale is a device or instrument by which individuals are distinguished as to how they diverge from one another on the variables of interest to my study. Besides, there are four essential types of scales such as nominal, ordinal, internal and ratio and each form have their own rating technique. There are dichotomous scale, category scale, likert scale, nominal scale and so on.

Moreover, after bearing in mind and analyzed the purpose of my study, likert scale is chosen to scrutinize how strongly subjects agree or disagree with statement on a 5 point scale with the successive anchor such as strong disagree represented by number 1, disagree represented by number 2 and so on. Sekaran, (2003) stated that the responses over a number of items tapping a particular concept on variable are then summated for every respondents and this is one of the ratings in the interval scale.

However, the questionnaires will cover some aspects to analyze the respondents’ opinion. The section was considered to construct the portfolio of the respondents; those included their gender, age, education level, company name, and year and so on. Nevertheless, the questionnaire also will be reviewed the general factors which is the independent variables such as compensation and benefits, organization culture, supervisor, job analysis and characteristic and career development as demonstrated in Figure 3.1. However, English language will be selected to distribute questions in the questionnaire sheet due to the basis of it is the international language for local and foreigner employees.

Sources of Data

All data can be attained from primary or secondary sources. Sekaran, (2003) examined that primary data defined as information that attained first hand by researcher on the variable of concern for the specific purpose of the study. In contrast, secondary data can be referred to information gathered from the sources that already subsisted.

1. Primary Data

2. The primary data can be gained through the respondents in this study when they contributing their opinions towards factors in influencing the turnover rate in their real working place. Besides on that, all the data that gained through the survey are considered as primary data such as the questions and any doubts that ask by respondents during their answering period towards my personally administrative questionnaire session. All the queries that ask by respondents are categorized to first hand data. Therefore, all the collecting data can be send and use as data analysis and aid to make the conclusion in flowing part.

3. Secondary Data

4. Sekaran, (2003) has stated that secondary data can be used as an instruction for us in assisting my research towards the study topic. The secondary data always been taken by somebody in order to do as new purpose. The secondary data can be categorized as several sources in our study such as books, periodicals, government publication, abstract, the media, article, magazine and reports as well as journals that regarding the issue of how the compensation and benefits ways in minimizing the employee turnover. Hence, saving time and cost acquiring information are the fundamental and advantages in using secondary data. Thus, it is significant to refer to the sources that offer current up-to-date information.

Population

According to Sekaran, (2003) population can be defined as the entire group of people, events or things of interest that researcher desires to examine. The population of this research covered the employees in diversified industries and we interested in explaining and drawn a conclusion of the factors that cause the turnover among the employees that work in different industries.

Sampling Method

Sekaran, (2003) examined that sampling is the procedure of selecting an adequate number of elements from the population, so that a study of the sample and an understanding of its properties or characteristics would make it for us to simplify such properties. Self-evident is the main reason to facilitate in using a sample rather than collecting data from the entire. There are hundred even to thousand numbers of elements during the investigation. Therefore, it would be practically impossible to collect all the data and examine every single of elements in the research. The time, cost and other human resources are extremely constraint even if it were possible. Study of sample rather than the entire population is also sometimes likely to create more reliable result.

Sekaran, (2003) discussed that there are two major types of sampling designs which is probability and non-probability sampling. The fundamentals in the population have some known chance or probability of being selected as sample subjects in probability sampling. Meanwhile, the elements do not have a known pre-determined chance of being selected as subject in non-probability sampling. Probability sampling designs are conducted when the representativeness of the sample is vital in the interests of wider generalization. Besides, when time or other factors, rather than generalization are become critical, non-probability sampling is commonly be used.

Moreover, probability sampling will be focus in designing our sampling in order to deal with the motive of interests of wider generalization towards employee turnover issue. Sekaran, (2003) stated that probability sampling can be categorized into simple random sampling, complex probability sampling, systematic sampling, cluster sampling, single stage and multistage cluster sampling, area sampling and also double sampling.

Nevertheless, there are some advantages and disadvantages in every sampling method. Therefore, we decided to choose cluster sampling as our sampling method in this research project. In this study, Sekaran, (2003) discussed that cluster sampling can be explained as grouping the members at random chosen group. When some of the groups with intra-group heterogeneity and inter-group homogeneity are established, then a random sampling of the cluster or groups can ideally be done and information gathered from each of the members in the randomly chosen clusters.

It has its own advantages and disadvantages as well. The advantages are reduced costs, simplified the file work and the administration is more convenient. In contrast, since subsets of the clusters are more homogeneous than heterogeneous so its disadvantages are the least reliable and efficient among all probability sampling designs. Nevertheless, in conducting a cluster sampling toward the employee turnover, all the employees will be cluster into different industry, level of seniority as well as their department. Therefore, by randomly sampling the cluster, we would able to draw conclusion in our study.

Pilot Testing

The first round was conducted on two employees in certain industry (one male and one female). Based on that feedback from this first round, some questions were rephrased to be more clarify. The second round of pre-testing was conducted with three other employees (two females and one male). They found the questions generally clear, thus, the questionnaire was deemed ready for data collection and analysis process.

A pilot test was conducted on the preliminary questionnaire to confirm the factors that lead to employee turnover. The questionnaire was distributed to several people in order to get their feedback. Two rounds of pre-testing were conducted in the study.

Data Analysis

s we have mentioned before, the data was collected through personally administrated questionnaires. There is 100% result in the collection of the questionnaires while it were filled and collected with the presence of the researcher. After collecting the questionnaires, the data will be analyzed after being transmit to Microsoft Excel spreadsheet. The following step is the data in Microsoft Excel spreadsheet will import into Statistical Package for Social Science (SPSS). In this method, we will able to derive a result or priority of the respondents place on each factor after the data organized and analyzed by the SPSS software.

Yet, reliability testing will be conducted in testing the consistency and stability of the responses that had been collected. Moreover, demographic profile analysis will be examined as well. In addition, description statistics analysis such as means, standard deviations and variance were gained for the interval scale independent and dependent variables will be conducted and as well as setting up a ranking table for the independent variables by allocating the sequences of highest to lowest mean value.

Furthermore, the call for the use of Pearson Correlation analysis has been using in testing the hypothesis part to investigated the relationship between the independent variables and dependent variable. Besides that, the linear regression analysis also will be conducted in order to model the function of the independent variables, corresponding parameters and an error term through equation.