EFFECTS OF STAFF WELFARE ON EMPLOYEE TURNOVER
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Staff welfare is one of the most important areas that is mostly discussed in both the service and manufacturing sectors in Nigeria. The federal government of Nigeria, being the largest employer is always looked upon to provide comprehensive welfare services to its servants (Bhupathi C., 2012).
Economic handicaps impair the productivity of a civil servant. Efficiency and effectiveness of a good public administration depends on how best the persons manning the administrative machinery are looked after (Bachner, C., & Bentley, M.T. 2003).
With a view to keeping employees’ capacity to effectively functioning on the job and in constant repair, the Government has to devise measures, which meet their economic and social needs as adequately as possible.
Employees’ welfare programs were to reduce the rate of employees’ turnover in an organization. Employee turnover is understood by human resources professionals to be the rate at which an organization’s work force terminates employment and requires replacement Kreitner (2003)
Most organizations have been successful because of the organization’s ability to retain employees. Keeping staff rather than losing them, however, is not achieved on a silver platter.
Successful organizations in this area are the ones that are whose managements have identified and put in place measures such as reward, training and development and other forms of motivation so as to encourage the employees to work whole heartedly and stay in the organization for a longer period of time. This helps to ensure consistency in the output of work.
Contrary to this, organizations which cannot identify the effort of their employees and reward them as such end up in losing them to other organization. This goes a long way to affect the productivity, growth and increases the organization’s cost of recruiting new staff; and training and developing the new staff to occupy such vacancies. High turnover, therefore, naturally affects performance Kreitner (2003).
Furthermore, Nugent (2009) concluded that employee turnover can be defined as a percentage figure which shows the rate at which employees move in and out of the organization. However, this figure most likely represents both controllable turnover (controllable by the organization) and uncontrollable turnover.
Controllable turnover is ‘’voluntary’’ by the employee, while uncontrollable turnover is ‘’involuntary’’ (For example, retirement, death, or spouse transfer). Turnover may be functional, where the employee’s departures produce a benefit for the organization, or dysfunctional,
where the departing employee is someone the organization would like to retain. High performers who are difficult to replace represent dysfunctional turnovers; low performers who are easy to replace represent functional turnovers.
The crucial issue in analyzing turnover, therefore, is not how many employees are leaving but the performance and replaceability of those who are leaving versus those who are staying. Kreitner and Kinicki (2007) also concluded that as a business manager, staff turnover is one area to keep an eye on throughout the year.
Staff welfare, today they have taken a broader scope and they include almost all aspects that relate to an employee’s wellness and personal development in the workplace (Manzini&Gwandure, 2014). Logically, the provision of welfare schemes is to create an efficient, healthy, loyal and satisfied labor force for the organization.
The purpose of providing such facilities is to make their work life better and to raise their standard of living (Padmini, 2016).
Employee welfare is a comprehensive term that refers to various services, benefits and facilities offered by the employer to employees with a purpose of enriching the life of employees, to keep them happy and contented or satisfied (Manju & Mishra, 2012).
1.2 STATEMENT OF THE PROBLEM
Staff welfare is one the effective tools that influence employees job performance; however not every organization have what it takes to meet up with staff welfare program. One of the factors that may be affecting the implementation of staff welfare program in an organization could be as a result of lack of funds, or the organizational policy;
thus leading to increase in dissatisfaction among employees. Most employees’ have the intention to quit maybe because of lack of welfare packages and other incentives which then increase the rate of employees’ turnover in an organization.
According to Grobler et al. (2006) a certain amount of turnover is expected, unavoidable and considered beneficial to the organization. New employees may inject fresh blood into the firm by introducing new ideas and methods and innovative, more effective ways of doing thing.
In addition, turnover may help rectify poor hiring and placement decisions. Such turnover is referred to as functional turnover.
Thus some turnover renews a stagnating organization. But excessive turnover creates an unstable workforce and increases human resources (HR) cost. This study seeks to assess the effects of staff welfare on employees’ turnover using AETI Ltd as the case study.
1.3 AIM AND OBJECTIVES OF THE STUDY
The main aim of the research work is to determine the effects of staff welfare on employees’ turnover. Other specific objectives of the study are:
to determine the relationship between staff welfare and employees’ turnover in AETI Ltd
to determine the extent to which staff welfare has influence employees’ turnover in AETI Ltd
to investigate on the factors affecting staff welfare and employees’ turnover in AETI Ltd
to determine the causes of employees’ turnover in AETI Ltd
1.4 RESEARCH QUESTIONS
The study came up with research questions so as to ascertain the above objectives of the study. The research questions for the study are:
What is the relationship between staff welfare and employees’ turnover in AETI Ltd?
To what extent has staff welfare influenced employees’ turnover in AETI Ltd?
What are the factors affecting staff welfare and employees’ turnover in AETI Ltd?
What are the causes of employees’ turnover in AETI Ltd?
1.5 STATEMENT OF THE RESEARCH HYPOTHESIS
Hypothesis 1
H0: there is no significant relationship between staff welfare and employees’ turnover in AETI Ltd
H1: there is a significant relationship between staff welfare and employees’ turnover in AETI Ltd
Hypothesis 1
H0: staff welfare does not influence employees’ turnover in AETI Ltd
H1: staff welfare influences employees’ turnover in AETI Ltd
1.6 SIGNIFICANCE OF THE STUDY
The study on the effects of staff welfare on employees’ turnover will be of immense benefit to AETI Ltd and other organizations (manufacturing, service sector) in the sense that the study will establish a relationship between staff welfare and employees’ turnover.
The study will help organizations to have a better understanding of what staff welfare is all about and how to implement it.
The study will serve as a repository of information to other researchers that desire to carry out similar research on the above topic. Finally the study will contribute to the body of the existing literature on the effects of staff welfare on employees’ turnover.
1.7 SCOPE OF THE STUDY
The study will cover on the effects of staff welfare on employees’ turnover and also the relationship between staff welfare and employees’ turnover with focus on AETI Ltd but the study will not cover areas of capital base of the organization.
1.8 LIMITATION OF THE STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work
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1.9 DEFINITION OF TERMS
Employees’ Turnover: Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees
Employee Welfare Scheme: In this study employees welfare scheme is also variously known as the employees welfare services. Employee scheme, the fringe benefits, which the employees receive from the organization besides his pay or salary
Motivation: Motivation is a factor which make an employee to participate to action, it is referred to as those factors which arose employee to action and could be measured by identifying various needs of the individuals workers and how such needs influences the behavior of the workers in the work situation in an organization.
Satisfaction: This is employees’ contentment about his satisfaction; it could be defined subjectively as the job reward which employee derives from the work situation done effectively. Satisfaction could be measured in terms of difference between what the employee expects from the service he or she referred to the organization and what he or she actually derives.
Incentives: These are inducements given to an employee of an organization for the purpose of carrying out organizational objectives. It could be measured by the amount of inducement which workers get from the organization and the extent to which such inducement enhances their performances.
Management: Doing things using the instrument ties of other people. It is also the process combining and utilizing or allocating organizational resource by planning, organization directing, and controlling for the purpose of achieving organization objectives.
Decision Making: This is the process whereby solution is pointed to the problem in the organizations, decision making is concerned with the formulation of policies guiding or governing the running of an organization.
EFFECTS OF STAFF WELFARE ON EMPLOYEE TURNOVER
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