Abstract

The efficiency and success of an organization depend mainly on its capacity to retain its employees. High labour turnover may result in an organization not being able to meet its objectives, loss of business of millions of shillings, loss of customers and it can spoil the good reputation of an organization. Previous studies emphasise the importance of regarding human resources as the most important asset of any serious organization determined to realise its goals and objectives.

Mokaya (2010) states that recruitment, selection and training are very expensive exercises for any organization, and therefore employee retention should be the key for an organization’s survival. The purpose of this work was to determine the factors that influence labour turnover in financial institutions, with an aim of coming up with recommendations aimed at curbing or significantly reducing it and enhancing employees retention in Lobe Cooperative Credit Union Limited.

This study adopted a descriptive research method. The targeted population were the employees at Lobe Cooperative Credit Union Ltd. This includes both employees on temporary and permanent contracts of employment which is fifty(50) employees. The study uses a descriptive research design. Therefore the sample size for this study was thirty(30) and since the sample was drawn from all cadres of employees, the population were regarded heterogeneous.

The study collected primary data. Tables and other graphical presentations were appropriately used to present the data that was collected to ease understanding and analysis. From the findings, the study established that better remuneration packages discourage labour turnover in Lobe Cooperative Credit Union Limited.

The study revealed that reward and recognition discourage labour turnover in  LOCCUL. It also found out that the failure of management to provide opportunities for career progression encourages labour turnover. Workplace organization and the working environment were the most important factors that employees do consider. The study found that poor working conditions encourage labour turnover in LOCCUL.

CHAPTER ONE

INTRODUCTION

• Background of the study

In this world of globalization, there are growing changes and challenges in the society in which we leave and in which our work organization operate. There are growing changes and challenges taking place taking inside work organizations themselves. Those changes and challenges are having an impact upon the management of people in the work organization and the performance of those organizations on the one hand and upon the environment in which work organization must exist on the other hand (Ngirwa, 2005).

Labour turnover is one of the challenges that faced the work organization and have an impact on the performance of those organizations. The concept of employees’ turnover represents one of the themes in the analysis of the world of work among scholars in the field of management, organisational behaviour and human psychology. Labour turnover refers to the process whereby employees leave the organization. It can also be referring as a degree of individual movement across the membership boundary of a social system ( Haermeah and Rees 1984).

According to Muhammad, employees’ turnover in an organization is one of the main issues that extensively affects the overall performance of the organization. It is often suggested that organizations should adopt the clear standard operation procedure (SOP’s) that decrease the gap between the top management and the middle management in order to identify and resolve the issue of employee’s turnover in an organization.

Labour turnover refers to the rate of change in the workforce of an organization during a given period of time. In order words, labour turnover is the time-to-time changes in the composition of the workforce that results from hiring, release and replacement of employees. In this sense, labour includes semi-skilled labour and unskilled labour which is gear towards the production of goods and services.

If an organization has made significant investments in training and development for its employees, that investment is lost when employees leave. In addition, excessive employee turnover can hurt the overall productivity of a firm and is often a symptom of other difficulties. Every organization strives to have high productivity, lesser turnover and maximum profitability (Mello, 2016).

Managing turnover successfully is a must to achieve the above goals. The managers must recognize that employees are major contributors to the efficient achievement of organizational productivity. Therefore, there is a need to develop a thorough understanding of employee turnover from the perspective of causes, effects and strategies to minimize turnover (Hollman 2015).

The achievement of any organization is closely knotted to the job performance of its employees. The worth of the employees’ workplace environment influences their motivation level and hence performance. When workers have the desire, physically and emotionally to work, then their performance shall be improved. Having a suitable workplace environment assist in decreasing the number of absenteeism and as a result can advance the performance in today’s competitive and dynamic world. The workplace environment that is set in place impacts employee morale, productivity and engagement both positively and negatively.

1.2. Statement of the problem

NSIF has been experiencing labour turnover for a period of time, the employees no longer feel attached to the organization and when employees quit the organization, the organization has to suffer a great amount of direct and indirect cost. The expenses of staff turnover can be shocking ranging from advertising expenses, resource management expenses, loss of time and efficiency, life imbalance and training and development expenses for freshly employees (Harrie, 2015).

This can be very disturbing to the organizational performance if experienced workers who have the knowledge and have learnt the culture of the organization regularly quit the organization and look for other jobs in different companies, this, therefore, means that the organization would definitely lose its market share to the competitors.

According to Phillip (2015), employee’s turnover affects the distribution of the rules and duties in a different departments to new employees who have no capability on effective operations of organization services, and as a result low level of client or customers satisfaction is recognized.

New employees who are not experienced and do not have the capacity to function well on the roles and duties they have been assigned for, take time and money, thus exposing the organization to huge expenses on selection, hiring and training to replace the workforce gap generated by the existing employees.

The main issue to labour turnover is that the organization loses the best qualified and capable employees that the organization had capitalized seriously in training and coaching on different job tasks. This therefore means that, the company must suffer massive expenses in terms of time and finance to train the newly employed workers in order to make them efficiently and familiar with an organization working culture and show the necessary skills and experience.

Due to the high labour turnover rate, organizations have adopted various employees retention approaches such as increased rewards management, career growth, and improved health and safety. This however has headed to increased organization overheads and recognition of a deteriorated profit margin (Duncan, 2016).

The problem of labour turnover attracts a reasonable percentage of attention in an organization because labour represents the life wire of any organization. The type and number of workers who are terminated or resigning their various jobs show how effective and efficient is the management in its an operation which also determines the level of stability, growth and development of the organization.

The reasons for this are many but the most important ones are that;

– Organizations are practically run by men.

– Human resource is the most difficult resource to manage, in the sense that they have facilities of reasoning and the ability to respond or resist to stimuli.

– Human beings are dynamic, complex and unpredictable.

1.3. Research Questions.

The following are the research questions of the study.

1. To what extend does staff rotation affect organizational performance?
2. How does an employee’s workflow affect organizational performance?
3. How do working conditions influence organizational performance?