ST.

MARY’S UNIVERSITY COLLEGE

SCHOOL OF GRADUATE STUDIES

ANALYSIS OF THE CAUSES, CONSEQUENCES AND MANAGEMENT

OF EMPLOYEES’ TURNOVER IN THE COMMERCIAL BANK OF
ETHIOPIA

BY
AYALKBET AMDEMARIAM

FEBRUARY 2013
ADDIS ABABA, ETHIOPIA
ANALYSIS OF THE CAUSES, CONSEQUENCES AND MANAGEMENT
OF EMPLOYEES’ TURNOVER IN THE COMMERCIAL BANK OF
ETHIOPIA

BY
AYALKBET AMDEMARIAM

A THESIS SUBMITTED TO ST.MARY’S UNIVERSITY COLLEGE,

SCHOOL OF GRADUATE STUDIES IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION

FEBRUARY 2013
ADDIS ABABA, ETHIOPIA
 ST. MARY’S UNIVERSITY COLLEGE
SCHOOL OF GRADUATE STUDIES
FACULTY OF BUSINESS

ANALYSIS OF THE CAUSES, CONSEQUENCES AND MANAGEMENT

OF EMPLOYEES’ TURNOVER IN THE COMMERCIAL BANK OF
ETHIOPIA

BY
AYALKBET AMDEMARIAM

APPROVED BY BOARD OF EXAMINERS

Dean, Graduate Studies Signature

Advisor Signature

External Examiner Signature

Internal Examiner Signature

 ACKNOWLEDGMENTS

My most sincere and heartfelt thanks go to Mesfin Lemma (Asst. Professor),

my thesis advisor, for his unreserved and timely support in commenting and
giving constructive advice all along my activities.
I am also grateful to Ato Seifu Tseaye, Miss. Desta Bezualem, Ato Bahiru
Wondimnew and Ato Ketema Mengesha, for their cooperation, collection and
timely submission of the questionnaires. I am also indebted to all Corporate
Human Resource Management staff of CBE for their valuable contribution in
providing me the necessary information and data. Without their unreserved
help, completion of the thesis would have been difficult.

Ayalkbet Amdemariam
Saint Mary’s University College
Addis Ababa

i
 ABSTRACT

The ability of an organization in the process of management depends largely on its

efficiency and effectiveness of utilizing its human resources. Human resource is the most
fundamental and decisive asset. On the other hand, whatever ample material and financial
resources it may have, the institution is lifeless unless it converted to some sort of outputs
with the effort of people. This is due to the fact that human resources mobilize and organize
other resources to realize organizational goals and objective. To create consistently high
levels of retention, first it is necessary to understand why people are leaving or being
terminated. This is especially true if the organization experienced high level of employee
turnover, a situation that could cripple a company in coming years.
The primary purpose of this research is to show the turnover, its consequence and
management in the Commercial Bank of Ethiopia, which is one of the largest commercial
bank in the banking industry of the country. The problem statement that initiated the
researcher to conduct the study is the increase in turnover of skilled manpower through time
(from 2005 to 2012). The major objective of the study is to find out the problems related
with this turnover and to propose retention mechanisms. To attain the above mentioned
objectives interviews will be conducted and questionnaire also be distributed to a total of
160 respondents in the selected process of Head Office organs, District Offices and
Branches around Addis Ababa. One of the major importance of the study is that
Management, especially those in the Human Resources Management Process and other
concerned organs of the Bank will get the opportunity to revise or change the current system
of the Human Resource Management of the bank; particularly on retention mechanisms of
the employee. The study revealed that the employees are found to be satisfied in certain
facets such as their current job, relationship with their coworker, with their working
environment. Conversely, employees are dissatisfied with major determinant facets such as
banks competitive pay system; the current salary and benefit; training opportunities..
Therefore, it has been recommended that training, job, promotion should be provided based
on merit as per the procedure; CBE has to revise the current pay scheme by considering the
external market. Finally, the bank has to work on retention mechanism which is highly
depends on the extent to which the adequacy of extrinsic and intrinsic factors of motivation;
since staff turnover is associated with job intrinsic and extrinsic dissatisfaction. so that
employees can feel accomplished and proud of their work environment and feel happy to
serve customers freely and do not even think to leave the bank.

ii
 TABLE OF CONTENTS
Page
ACKNOWLEDGMENT.................................................................................................. i
ABSTRACT.................................................................................................................... ii
TABLE OF CONTENTS........................................................................................... iii-iv
LIST OF TABLES...........................................................................................................v
LIST OF FIGURES........................................................................................................ vi
ACRONYMS.................................................................................................................. vii
CHAPTER ONE:INTRODUCTION............................................................................... 1
1.1. BACKGROUNG OF THE STUDY...................................................................... 1
1.2. STATEMENT OF THE PROBLEM..................................................................... 3
1.3. OBJECTIVE OF THE STUDY............................................................................. 5
1.4. SIGNIFICANCE OF THE STUDY....................................................................... 5
1.5. SCOPE OF THE STUDY...................................................................................... 6
1.6. LIMITATION OF THE STUDY............................................................................6
1.6. DEFINITION OF TERMS......................................................................................6
1.7. ORGANIZATION OF THE PAPER..................................................................... 7
CHAPTER TWO:REVIEW OF RELATED LITATURE............................................... 8
2.1. EMPLOYEE TURNOVER................................................................................... 8
2.2. TYPES OF EMPLOYEE TURNOVER AND ITS MEASURMRNT.................. 9
2.1.1. TOTAL TURNOVER RATE................................................................................. 9
2.1.2. VOLUNTARY Vs INVOLUNTARY.................................................................. 10
2.1.3. DYSFUNCTIONAL Vs. FUNCTIONAL............................................................ 11
2.1.4. AVOIDABLE Vs. UNAVOIDABLE .................................................................. 12
2.1.5. EARLY TURNOVER.......................................................................................... 13
2.2. CAUSES AND INFLUENCING FACTOR OF EMPLOYEE TURNOVER.......13
2.3. COSTS AND CONSEQUENCE OF EMPLOYEE TURNOVER...................... 15
2.4. BENEFITS OF TURNOVER ..............................................................................17
2.5. EXIT INTERVIEW AND WAYS OF REPORTING.......................................... 18
2.6. WAYS TO REDUCE EMPLOYEE TURNOVER.............................................. 18
iii
CHAPTER THREE:RESEARCH DESIGN AND METHODOLOGY............................. 21
3.1. RESEARCH DESIGN.............................................................................................. 21
3.1.1. SOURCES OF DATA..............................................................................................21
3.1.2. SAMPLE AND SAMPLING TECHNIQUE........................................................... 22
3.2. DATA COLLECTION TOOLS.............................................................................. 23
3.3. DATA ANALYSIS..................................................................................................24
CHAPTER FOUR:DISCUSSION AND RESULT............................................................ 25
4.1. RESPONDENTS’ BACKGROUND INFORMATION...........................................25
4.2. DATA PRESENTATION AND ANALYSIS......................................................... 28
4.2.1. RESPONDENTS’ PERCEPTION ON WORK,TURNOVER,PAYMENT,
TRAINING AND LABOUR UNION..................................................................... 30
4.2.2. RESPONDENTS’PERCEPTION ON BENEFIT,WORKING ENVIRONMENT,
GRIVANCE AND RETENTION........................................................................... 32
CHAPTER FIVE:SUMMARY, CONCLUSIONS AND RECOMMENDATION38
5.1. SUMMARY OF FINDINGS..................................................................................... 38
5.2. CONCLUSIONS........................................................................................................ 39
5.3. RECOMMENDATIONS............................................................................................40
BIBLOGRAPHY........................................................................................................... 42-43
ANNEX -1..................................................................................................................... vii-xi
ANNEX -2................................................................................................................... xii-xiii
ANNEX -3..........................................................................................................................xiv
DECLARATION.................................................................................................................xv
ENDORSMENT................................................................................................................ xvi

iv
 LIST OF TABLES

Pages
Table 1: Turnover in CBE (2005/12)......................................................................................... 4
Table 2: Cost of Voluntary versus Involuntary Turnover........................................................ 11
Table 3: The concept of Functionalversus Dysfunctional Turnover.....................................12
Table 4: The concept of Avoidableversus Unavoidable Turnover........................................ 12
Table 5: Turnover costs categories.......................................................................................... 16
Table 6: A Guide to Effective Employee Management..................................................... 19-20
Table 7: Sample respondents.............................................................................................. 22-23
Table- 8a: Participants’ response on work, turnover, promotion, payment,
training and retention............................................................................................................28-29
Table- 8b: Participants’ response on work, turnover, promotion, payment,
training and retention..........................................................................................................28-29
Table-9: Participants’ response on promotion, working environment,Grievance
and benefit.............................................................................................................................. 33

v
 LIST OF FIGURES

Pages

Figure 1: Distribution of Respondents by Gender.............................................................. 25

Figure 2: Distribution of Respondents by Age.....................................................................26

Figure 3: Distribution of Respondents by Educational Level..............................................26

Figure 4: Distribution of Respondents by Work Experience/Service year/........................ 27

Figure 5: Distribution of Respondents by Job Category..................................................... 27

vi
 LIST OF ACRONYMS

CBE - Commercial Bank of Ethiopia

HRM - Human Resources Management

Vii
 CHAPTER ONE
INTRODUCTION

This chapter provides a background to the study. It highlights the causes and
consequences as well as management of employees’ turnover. Considering employees turnover
as a critical issue in the ever-changing world of service delivery, be it in private and public
institution, particularly Commercial Bank of Ethiopia has a paramount importance. This chapter,
therefore, addresses the background of the study, the problem statement, objectives, the research
questions, significance, scope, limitation, and definition of key terms as well as the organization
of the study.

1.1. BACKGROUNG OF THE STUDY

The ability of an organization in the process of management depends largely on its

efficiency and effectiveness of utilizing its human resources. Human resource is the most
fundamental and decisive asset. On the other hand, whatever ample material and financial
resources it may have, the institution is lifeless unless it converted to some sort of outputs with
the effort of people. This is due to the fact that human resources mobilize and organize other
resources to realize organizational goals and objective. Labor turnover is an important and
pervasive feature of the labor market Martin (2003), because, it affects both workers and the
firms performance by incurring high amount of turnover cost.

Employee turnover refers to the proportion of employees who leave an organization over
a set period (often on a year-on-year basis), expressed as a percentage of total workforce
numbers. At its broadest, the term is used to encompass all leavers, both voluntary and
involuntary, including those who resign, retire or are made redundant, in which case it may be
described as ‘overall’ or ‘crude’ employee turnover (Armstrong, 2006).

Any business is only as good as the people who comprise the organization. Therefore, an
excellent employee is a pearl of great price. However, instead of recognizing the value of their
employees, many companies still squander these precious human resources in a number of ways.
Employees leave organizations for all sorts of reasons. Some leave due to more pay, better
prospects (career move), more security, more opportunity to develop skills, better working

1
 conditions, poor relationships with manager/team leader/, poor relationship with
colleagues, harassment, pregnancy, illness, moving away from area etc (Armstrong, 2006).

Organizations invest a lot on their employees in terms of induction and training,

developing, maintaining and retaining them in their organization (Barb and Jancy, 2001).
Recruiting employee consume a great deal of time and effort, bringing employee up to speed
even takes more time, replacing employee costs money and in general high turnover often leaves
customers and employee in the lurch; departing employee takes a great deal of knowledge with
them. This lack of continuity makes it hard to meet organization goals and serve customer well
and suggested that “respect, recognition and reward while the employees are with us can bring a
positive result and increase retention”. Creating mechanisms to reduce and retain active and
skilled manpower should be the major activities of any organization to ascertain its going-
concern ideology.

The definition of total turnover is the total number of employees leaving the organization
during a month divided by the average number of employees during that month. Some
calculations use the number of employees at mid-month in the denominator. However, this can
be slightly misleading because of the surge of employees who leave at the end of the month
(many professional employees prefer to leave at the end of the month). Employee turnover can
be voluntary or involuntary, avoidable or unavoidable, functional or dysfunctional or it is early
turnover (Phillips and Lisa, 2009).

Commercial Bank of Ethiopia (CBE) is on the verge of transforming in to a world class

commercial bank. To realize its vision, CBE has re-engineered its business process and is being
transformed from a functionally-oriented bank into a processed-based bank that strives for
efficient and effective service delivery. As per the report of 2011/12 of Commercial Bank of
Ethiopia, the HRM sub-process from the total of 12,782 (in the fiscal year 2011/12) employees
77 percent are diploma and first degree holders. Having this skilled human resource CBE works
in delivering the best quality service than the rest of competitors in the industry. This experience
clearly shows that human resource is the most invaluable asset of any organization. Without the
proper handling of its human resources, it is hard for any organization to realize its short and
long term objectives and goals. Taking in to account the stated vision, Corporate Human

2
 Resource Management, as part of the process of the bank has been taking various process
level initiatives and is striving hard so that organizational effectiveness and efficiency can be
achieved.

Turnover as a concern of Human Resources is an area where much attention should be

given; hence, as part of the activity of Human Resource, Knowing the reason for employees
leaving the organization and its consequence is important. Although there is a mechanism of
identifying the reason for resignation of employees in the bank, the system is traditional and
weak so that significant result has not been achieved in this matter and the bank is unable to stop
such migration and purely cannot identify the consequence in a systemic manner. This is perhaps
due to the inability of the existing system to clearly identify the reason for resignation and
establishing the retention mechanisms.

As a service giving organizations, the quality of the Bank's service is highly dependent on
maintaining such skilled manpower to achieve its mission effectively and efficiently. Though the
bank has prepared some incentive mechanisms and established a new system of organization to
manage the turnover, its impact is still unsatisfactory. This initiates the researcher to conduct a
study to identify the root cause of the problem, its consequence and management so as to
recommend possible solutions for the subject matter. Turnover could be minimized through
considering different preventive measures by the management. These may include providing
training to the employees and line managers for an effective supervision before appointing or
upgrading them, providing security of jobs with good working environment, better salary and
benefit packages etc.

1.2. STATEMENT OF THE PROBLEM

Human resource plays a vital role in maintaining the sustainability of any organization.
For an organization to be successful it needs to have a motivated and inspired employees as well
as well articulated management since satisfied employees naturally treat the organization’s
clients very well or give quality service, hence the management’s awareness of the importance of
keeping employees satisfied and the effectiveness of the existing motivation system contributes a
lot for the quality of service and the success of the organization. Staff turnover issues

3
have reached to such a level that many industrial, service and consulting organizations are
investing a big slice of their resources under knowledge management and other retaining
mechanisms.

The Commercial Bank of Ethiopia (CBE) was legally established in 1963 as Share Company to
take over the commercial activities of the state Bank of Ethiopia. In the 1974 revolution, CBE
got its strength by merging with the private owned Addis Ababa Bank. Since then, it has been
playing a significant role in the development endeavor of the country. Currently, it has re­
engineered its business process and is being transformed from a functionally-oriented bank to a
process-based institution that strives for efficient and effective service delivery. Having one of its
missions “deploying highly motivated, skilled and disciplined employees capable of providing
banking products and services that meet international best practices and standards.” shows the
importance of the quality of the human resources (existing as well as newly employed) but the
newly and emerging private banks with their lucrative salary and benefit paying scheme, are able
to snatch CBE’s talented and trained employees. As indicated in the Table 1, from the total
employees’ 3008 employee were terminated from the bank due to different reasons. Besides,
Corporate Human Resources Process is not able to retain its experienced and skilled employee.
The following Table shows the turnover rate of the Bank:

Table 1: Turnover in CBE (2005/12)

Fiscal year Total no of Total Turnover Clerical Non-clerical
employees number of percentage
termination
2005/06 7347 366 4.98 323 43
2006/07 7684 455 5.92 422 33
2007/08 8033 329 4.10 286 43
2008/09 7955 398 5.00 343 55
2009/10 8276 514 6.21 370 144
2010/11 10753 461 4.29 337 124
2011/12 12782 485 3.79 379 106
Average/Total 62830 3008 4.79 2420 529
Source: CBE’s bu letin of 2005-2012 and quarter report prepared by HRM

The above table indicates that the magnitude of employees’ turnover in the Bank that has been
increasing year to year. This problem seems significant and worth studying so as to find out the
reasons of employees turnover. Therefore, this study tried to assess the cause, consequences and

4
 management of employees’ turnover in CBE. Keeping the aforementioned statement in to
account, this study encompasses the following basic research questions:

• What are the main reasons for employees’ turnover?

• What are the consequences of employees’ turnover in CBE?
• How does the Bank handle its human resource?
• What are the techniques of employee retention?
• What are the ways of reporting turnover in CBE?

1.3. OBJECTIVES OF THE STUDY

The study has both general and specific objective.

General Objective

The main objective of the study is to assess the cause, consequence and management of
employees’ turnover in the Commercial Bank of Ethiopia.

Specific objectives are to:

• identify the problems relating employee turnover and investigate the root causes and
consequences of the problem,
• examine the already existing retention mechanisms of the Bank; if any,
• examine the reporting systems pertaining to employee turnover, and
• suggest some possible recommendations based on the findings of the study.

1.4. SIGNIFICANCE OF THE STUDY

This study shows a practical picture of the Human Resource Management practice of
CBE in relation to employee turnover. Knowing the practice in turn is significant in helping to
point out any weakness and strengths that exist in the Bank. This also will be the basis of
ensuring best approach to handling and retaining employee turnover related issues in the CBE.
Particularly, it helps the Bank to maintain improved human resource retention mechanisms; it
provides insight for other researchers who want to study employee turnover in the Bank.

5
 Furthermore, the study adds additional knowledge in the area of Human Resource
Management by providing the causes, consequences and management of employee turnover.
Lastly, it helps the future researchers who are interested in the banking sector in Ethiopia.

1.5. SCOPE OF THE STUDY

Even though there are many Banks in the country, the study is bounded itself to study
employee turnover practices in Commercial Bank of Ethiopia. Even though, the CBE has also
different kinds of activities within the human resource management, it would have been good if
the study included all aspects of human resource management activities. Hence, this study
focuses only on one of the prominent issues in HRM; that is, employees turnover, which has
untold impact on the on the Bank’s performance. Besides, the study covers only Addis Ababa
area due to cost and time constraints.

1.6. LIMITATION OF THE STUDY

The main limitations of the study were difficulty in finding the ex-employees of the
organization which forced the study to depend on a few number of ex-employees and exit
interview data. In addition, respondents’ reluctance and lack of willingness to complete and
return the questionnaires on time, and also the data collection methods have their own natural
limitations. However, through serious follow-ups and exerting much effort, many of the
questionnaires were collected as intended.

1.7. DEFINITION OF TERMS

Employee turnover: - Employee turnover refers to the proportion of employees who leave an
organization over a set period.
Retention: - Retention relates to the extent to which an employer retains its employees.
Managerial Staff: - Staff who has subordinates under his/her control. Eg. Bole Branch Manager
Professional Staff: - Staff who are engaged in professional work. Eg. HR Officer
Clerical Staff: - Staff who are engaged in clerical activities. Eg. Secretaries

6
 Transport & Production Staff: - Staff who are engaged in technical work. Eg. Drivers,
electricians, etc.
Service workers: - Staff who are engaged in technical work. Eg. Cleaner, Security Officer,
Gardner etc.

1.8. ORGANIZATION OF THE PAPER

The study consists of five chapters. The first chapter highlights the background of the
study; the state of the problem, objectives, scope, and significant of the study. The review of the
related literature is discussed in the second chapter. It presents the conceptual frameworks or a
brief review of related studies that serve as the basis and proof to support the basic questions of
the study. Chapter three addresses research design and methodology. It explains the methods,
approaches, procedures and instruments that were used to achieve the purpose of the study. The
fourth chapter focuses on the presentation, analysis and interpretation of the data. The Fifth
chapter deals with summary, conclusions and recommendations based on the findings. Lastly,
Bibliography follows Chapter Five.

7
 CHAPTER TWO
REVIEW OF THE RELATED LITATURE

In order to have a good theoretical understanding of the problem under study, reviewing
related literature is necessary. Accordingly, in this chapter, definitions, the impacts of employee
turnover, the method of retaining employees are discussed in this chapter.

2.1. EMPLOYEE TURNOVER

In today's working environment, a company's human resources are truly the only
sustainable competitive advantage. Product innovations can be duplicated, but the synergy of a
company's workforce cannot be replicated. It is for this reason that not only attracting talented
employees but also retaining them is imperative for success.

There is no set level of employee turnover above which effects on the employing
organization becomes damaging. Everything depends on the type of labor markets in which the
organization competes. Where it is relatively easy to find and train new employees quickly and at
relatively little cost (i.e. where the labor market is loose), it is possible to sustain high quality
levels of service provision despite having a high turnover rate. By contrast, where skills are
relatively scarce, where recruitment is costly or where it takes several weeks to fill a vacancy,
turnover is likely to be problematic from a management point of view. This is especially true of
situations in which organizations lose staff to direct competitors or where customers have
developed relationships with individual employees as is the case in many professional services
organizations (http://www.cipd.co.uk/subjects/hrpract/turnover/empturnretent.html).

Employee turnover is usually defined as the influx and exit of individuals into and out of
the working force of the organization over a specific period of time. Movement into the
organization, ordinarily not an important part of turnover analysis, is called accessions.
Movements out of the organization are called separations; this includes voluntary resignations or
quits, dismissals, layoffs and death or retirements.

8
2.2. TYPES OF EMPLOYEE TURNOVER AND ITS MEASURMRNT

When discussing turnover and what is considered to be an appropriate rate of turnover,

several issues must be addressed. First is the misconception that a very low turnover rate (near
zero) is the most acceptable. It is virtually impossible and undesirable to achieve a continuous
zero turnover rate in an organization.

Extremely low measure and monitor turnover and retention data turnover rates can be
dysfunctional as well as unhealthy, particularly when new thinking and fresh ideas are needed.
Also, extremely low turnover rates for extended periods of time can add tremendous costs as
incumbent employees reach higher salaries.

Defining the acceptable rate of turnover is another concern. After the specific type of
turnover is defined, the economic climate considered, the expectations detailed, and capabilities
considered, a turnover rate above a certain level becomes excessive and will trigger action. More
importantly, monitoring leading indicators to the actual turnover rate is better.

There are five types of employee turnover. These are: - Total Turnover Rate, Voluntary
and Involuntary, Avoidable and unavoidable, Functional and Dysfunctional and Early Turnover
(Phillips and Lisa R, 2009). Each of them is briefly described as follows:

2.1.1. TOTAL TURNOVER RATE

The definition of total turnover is the total number of employees leaving the
organization during a month divided by the average number of employees during that month.
Some calculations use the number of employees at mid-month in the denominator. However, this
can be slightly misleading because of the surge of employees who leave at the end of the month
(many professional employees prefer to leave at the end of the month). This category includes all
the reasons for an employee’s departure, regardless of the performance of the employee or
unavoidable situations that created the departure. In reality, this value has little practical meaning
because there are so many unavoidable reasons for turnover. Also, the value includes functional
turnover, where a certain number of employees are purposely removed from the organization.
9
 Still, it does provide the absolute value, showing the total departure rate of talent in the
organization.

2.1.2. VOLUNTARY VERSUS INVOLUNTARY

Voluntary turnover usually refers to those employees who initiate their departure from
the organization i.e. caused by the interest of the employee (e.g. to take job in other organization
for better salary). Exit interviews mostly aim to establish evidence why people are leaving. Some
of the reasons for leaving can be (Phillips and Lisa R. 2009):

• Personal dissatisfaction with the job, employer, hours, or working conditions, security,
prospects (career move) Relationships with manager/team leader or with colleagues ,
payment etc.
• There are also factors in employee's personal life not related to the job that make an
employee resign. These may include family obligations, education, health, or moving to a
new location.
• Getting hired at a new job. Reasons for wanting a different job may be better working
conditions, better hours, a shorter distance to work, better pay, career progression or
preparation for entry into a new career, or a career change.
• Feared or anticipated involuntary termination. The employee may wish to take matters
into his/her own hands in order to leave more honorably either completely on their own
initiative, or as an offered alternative to being fired (this is also known as mutual consent
in some parts).

Involuntary termination is the employee's departure at the hands of the employer

(decision of management to quit employees from work e.g. dismissal for gross misconduct).
There are two basic types of involuntary termination, known often as being "dismissed" and "laid
off." To be fired, as opposed to being laid off, is generally thought of to be the employee's fault,
and therefore is considered in most cases to be dishonorable and a sign of failure.
• Dismissal is the employer's choice to let the employee leave, generally for a reason which
is the fault of the employee.
10
 • Layoff is usually not strictly related to personal performance, but instead due to economic
cycles or the company's need to restructure itself, the firm itself is going out of business,
or due to a change in the function of the employer (for example, a certain type of product
or service is no longer offered by the company, and therefore jobs related to that product
or service are no longer needed).

Both voluntary and involuntary turnover have costs, the cost associated with them is tabulated
below:

Table 2: Cost of Voluntary vs. Involuntary Turnover __________________________________________

Voluntary turnover Involuntary turnover
Recruitment, Selection, Training & Recruitment, Selection, Training &
Replacement Replacement
Cost

Lost Productivity Lost Productivity

Loss of trained employee Lawsuits
Leaving Costs(Compensation and other Work place violence
types of payment)
Sources: Phillips and Lisa R. (2009:PP. 93).

2.1.3. DYSFUNCTIONAL VERSUS FUNCTIONAL

Voluntary turnovers are further distinguished between functional and dysfunctional

turnovers. Functional turnovers are the resignation of substandard performers and dysfunctional
turnovers are refers to the exit of effective performers. They also classified dysfunctional
turnover, which is the most concern of management due to its negative impact on the
organization’s general performance, into avoidable turnover (caused by lower compensation,
poor working condition, etc) and unavoidable turnovers (like family moves, serious illness,
death, etc) over which the organization has little or no influence. Therefore, management should
gives special attention to avoidable turnover over which it has control and improves the situation
and then staffs retention.

In previous definitions, the quality of the employee’s performance is not taken into
consideration. For talent management, the issue becomes critical when high-performing talent
leave the organization versus those considered being low performers. Some organizations
11
 intentionally weed out the low performers, creating turnover. On the other extreme, the departure
of a high-performing individual can be a devastating blow to the organization.

Table 3. The concept of Functional versus Dysfunctional Turnover

Employee Performance Rating

Positive Negative
initiation of
Voluntary
Employee’s Action

Quit

Employee Remains with Employee is Terminated

No

Organization
Initiation of

Employee Leaves
Voluntary

Employee Leaves
Quit

Dysfunctional Turnover Functional Turnover

Sources: Phillips and Lisa R. (2009: PP.61)

Employees with a negative rating are either terminated for substandard performance or
quit because they see the inevitable consequences of their performance. This is called functional
turnover. When an employee leaves after receiving a positive rating, it is considered
dysfunctional turnover and should be the primary focus of attention for the organization.

2.1.4. AVOIDABLE VERSUS UNAVOIDABLE

The next definition is based on the concept of avoidable turnover. This turnover rate is
defined as the number of employee departures that are avoidable, divided by the average number
of employees during the month (or number at mid-month). This calculation requires the analysis
of turnovers that could have been avoided in some way.
Table 4. The concept of Avoidable vs. Unavoidable Turnover

Employee’s Conf rol

Organization Control

Voluntary Involuntary
Unavoida Avoidable

Better Pay Dismissal for performance

Better Working conditions Layoff
Problem with Managers Early retirement Incentives
Lack of recognition, etc. Resign Under Pressure
Move to another location(family) Severe medical disability
Carrier Change Death
ble

Stay home to care family Regular retirement

Pregnancy
Sources: Phillips and Lisa R.,( 2009: PP.61)

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2.1.5. EARLY TURNOVER

A critical time in an employee’s tenure with an organization is usually with the first few
days, weeks, and months of employment. It is during this period that mismatches are identified
and frustrations intensify. An employee may decide to leave if other opportunities are available.
This early turnover is often a function of improper selection systems, ineffective orientation
systems, and inadequate socialization processes to adapt the employee to the organization.

To understand this issue completely, it is recommended that an early turnover measure

be developed. This measure is defined as the number of employees leaving in the first sixty days
of employment divided by the number of new employees hired in the same period.

The time period for the length of employment could vary from a shorter time frame,
thirty days for entry-level unskilled employees, to a longer period for technical and professional
employees (ninety days). Monitoring and understanding this specific turnover rate provides an
opportunity for early attention to an important issue. To meet the desired goal of retaining the
skilled manpower, all of the issues discussed above are most vital.

2.2. CAUSES AND INFLUENCING FACTOR OF EMPLOYEE TURNOVER

Turnover basically arises from the unhappiness from job place for individual employee.
But being unhappy in a job is not the only reason why people leave one company for another. If
the skills that they possess are in demand, they may be lured away by higher pay, better benefits
or better job growth potential. That's why it is important to know and recognize the difference
between employees who leave the job because they are unhappy and those who leave for other
reasons. There are number of factors that contribute to employee turnover
(www.Sigmaassessement.com). Some of these factors in more details are:

The economy - in exit interviews, one of the most common reasons given for leaving the job is
the availability of higher paying jobs. Obviously, in a better economy the availability of
alternative jobs plays a role in turnover, but this tends to be overstated in exit interviews.

13
The characteristics of the job - some jobs are intrinsically more attractive than others. A job's
attractiveness will be affected by many characteristics, including its repetitiveness, challenges,
danger, perceived importance and capacity to elicit a sense of accomplishment

Demographics - empirical studies have demonstrated that turnover is associated in particular

situations with demographic and biographical characteristics of workers.

The person - In addition to the factors listed above, there are also factors specific to the
individual that can influence turnover rates. These include both personal and trait-based factors.
Personal factors include things such as changes in family situation, a desire to earn a new skill or
trade or an unsolicited job offer. In addition to these personal actors, there are also trait-based or
personality features that are associated with turnover.

A bad match between the employee's skills and the job - Employees who are placed in
jobs that are too difficult, then the worker gives up concentration from working. At the time
productivity of the organization falls down.

Newly appointed employee may not be trained properly for the new position and
needed time consuming training for settle down with the new job place. Moreover, there may be
cultural differences between new employees with the previous one which slows down his / her
job performance.

A report from the HR benchmark group listed the top five factors affecting an
employee’s decision to stay or leave an organization such as:
• the quality of the relationship with their supervisor or manager;
• an ability to balance work and home life;
• the amount of meaningful work they do - giving a feeling of making a difference;
• the level of cooperation with co-workers;
• the level of trust in the workplace.
All the causes mentioned above contribute hugely to the damage of productivity of any
organizations or service sectors care, therefore, must be taken to reduce or minimize turnover
rate as minimum as possible.
14
2.3. COSTS AND CONSEQUENCES OF EMPLOYEE TURNOVER

The cost of turnover can differ across organizations, and costs associated with turnover
are difficult to estimate. For example, an organization’s geographic location may necessitate a
particularly high cost of recruiting new employees, which causes the cost of turnover in that
organization to be unusually high. Due to this it is difficult to estimate.

“Turnover” refers to the movement into and out of organization by the work force. An
excessive movement is undesirable and expensive from the view of the organization. Voluntary
quits which represents an exodus of human capital investment from organizations and the
subsequent replacement process entails manifold costs to the organizations (Flippo., 1980).
These replacement costs include the following costs:
• Hiring costs, involving time and facilities for recruitment, interviewing, and examining
a replacement.
• Training costs, involving time the time of supervisor, personnel department and trainee.
• Loss of production in the interval between separations of the old employee and the
replacement by the new. And as the new employee is learning the job, the company
policies and practices, etc., they are not fully productive. Whatever training is provided,
the employee is contributing.
• Overtime pay may result from an excessive number of separations, causing trouble in
meeting contract delivery date.
• Induction costs, all of which are concerned with preparing new employees to work as
effectively as possible and as soon as possible in their new jobs, in helping new starters to
adjust emotionally to the new workplace.
Similarly, Fitz-Enz (1997) stated that hidden cost of turnover expenses fall into four
basic categories: termination costs; replacement costs; which can include orientation and basic
training costs; vacancy costs when no one is there to do the work; and lost productivity or
opportunity costs that result from the learning curve of the new employee. Furthermore, it is
impossible to calculate exactly what turnover cost amounts to, but it is substantial and it is
possible to come up with a very good estimate.
15
 Furthermore, Fitz-Enz (1997) pointed out that a number of different costs that go up on
turnover rates. Initially to be very accurate turnover costs categorized under direct and indirect
hiring costs and direct replacement and indirect replacement costs. Each of these categories was
contain a number of cost areas to develop standard costs for different categories of jobs.
(Turnover cost model see Table 5).
Table 5: Turnover costs categories
Direct new hiring Indirect hiring Direct replacement Indirect replacement costs
cost costs costs
Advertising -Management time Applicant expenses Management time per hire
per hire
Agency and search Supervisor/lead Relocation expenses Supervisor/lead interview
fees time per hire time per hire
Salary and benefits Orientation and Salaries and benefits Training time per hire
of staff training per hire of staff
Applicants Vacancy cost Employment office Opportunity loss
Recruiter’s Opportunity loss
expense /productivity loss
per hire
Staffing office
overhead
Source: (Fitz-enz,1997)

Employees may take customers away from an organization if they have a good working
relationship upon leaving their current employer will be lost as employees leave. Staff turnover
could have a negative impact on remaining employees’ morale, which may influence them to
leave. In addition, De-motivated employees may become frustrated or defensive in their work
and feel isolated from their colleagues, which create a hostile and an unworkable environment.
Employees may become selfish and focus on their needs and not those of their colleagues or
customers. This type of behavior, and reasons for it, should be identified and discouraged.
Companies could face poor productivity and dissatisfied customers if they do not address these
issues. (http://www.cipd.co.uk/subject/hrpract/turnove/empturnretent/htm)

16
2.4. BENEFITS OF TURNOVER

According to Glebbeek and Bax (2002), the following potential advantages of labor
turnover could be listed:

Leave of relatively expensive employees: This applies especially in case a firm uses a
compensation system based on seniority or if the premiums for social security are age related. If
the rise of labor costs exceeds the increase of productivity of an employee, replacement of the
latter becomes profitable

Leave of less productive employees: This refers to workers who lose productivity due to aging,
physical and mental wear or because they cannot cope with rising work pressures.

Termination of bad matches: Even under the conditions of careful recruitment and selection
procedures, some matches turn out to be better than others. This holds true especially when
productivity and performance do not so much depend on technology as well as on social
relations and contextual skills.

Innovation: Labor turnover creates possibilities for replacing employees and therefore enables
firms to import new types of knowledge, ideas, experience and skills.

Advantage of market condition: The personnel demand of a firm is dependent on external

conditions of which the market and the business cycle are important ones. Hence, some variation
in the number of staff employed is inevitable.

Facilitating the internal Labor Market: Internal labor markets provide the opportunities
for career development of employees and are therefore an important instrument for motivation.
Turnover creates the vacancies required for the internal labor market to function properly.

The Price of Quality: Labor turnover is the price organizations have to pay for the
employment of young highly skilled and well-educated professionals. Although these ‘job
hoppers’ will leave the organization inevitably, during their stay they contribute significantly to
the organization’s success. Prevention of this kind of turnover would be the employment of more
‘average’ employees who are less attracted by the external labor market.

17
2.5. EXIT INTERVIEW AND WAYS OF REPORTING

While exit interviews or leaver questionnaires can provide some information about why
people are leaving, they do not necessarily get to the root of the problem. For example, someone
might say that they are leaving to go to a job with better pay but this does not show what led the
person to start looking for another job in the first place. In order to produce human resource
plans that address labor turnover problems, organizations need to differentiate between ‘push’
and ‘pull’ factors. The former relate to factors within the organization (e.g. poor line
management, inadequate career opportunities, job insecurity, dissatisfaction with pay or hours of
work) that weaken the psychological link between an individual and their employer. Once an
individual has decided to look for another job they are likely to base their decision on ‘pull’
factors, i.e. the attractions of the new job or organization in relation to their existing
circumstances.
The Bank has a practice of preparing report on a quarterly, semi-annually and on annual
basis. The Bank wide report prepared and issued from the Corporate HRM process. Body of the
HR report includes total number of Staff (total strength), recruitment (newly Joined) attrition
(turnover with reasons- general and specific reasons ) and the report also explained with job
title, educational level, qualification, age, service year, employment category, place of
assignment(location of work)reasons for termination. However, this crude data is not analyzed
based on different factors like market requirement, company requirement and coastwise
(Annex-3).

2.6. WAYS TO REDUCE EMPLOYEE TURNOVER

“Employee retention is a process in which the employees are encouraged to remain
with the organization for the maximum period of time or until the completion of the project or
retirement.” (Source- www.retention.naukrihub.com).

To be competitive, organizations in many industries must have highly skilled,

knowledgeable workers. They must also have a relatively stable labor force since employee
turnover works directly against obtaining the kind of coordination and organizational learning
18
that leads to fast response and high-quality products and service (R. Greer,2001). Therefore, to
reduce turnover organizations are advised to follow the following solutions (Parker, 2008).

Table 6: A Guide to Effective Employee Management

TERMINATION REASON POTENTIAL INTERVENTION
Co-worker problems • Conduct routine opinion surveys, exit interviews and focus
groups to discern issues.
• Address the matter directly with co-workers in attendance and
work for solutions.
• Meet individually with employees to determine issues, what
each seeks and how each feels the matter can be resolved.
Terminated for cause • Use progressive discipline with the intent of molding and
correcting behavior rather than punishing.
• Counsel and work with problem employees before the point of
termination.
• Ensure employees have a clear understanding of what is
required and that management understands why things are going
wrong.
Retirement • Use succession planning to identify who will be leaving, who
will replace them and who will replace that person. Plan it
before it happens.
• Automate if possible; fan-out other duties across the remainder
of employees.
• Explore how the retiree may want to work fewer hours, days or
tasks.
Dissatisfaction with work • Clearly explain the job prior to hiring candidates.
• Implement effective, comprehensive orientation programs.
• Use pre-employment testing to match the candidate with the
job.
New job/better benefits • Survey your market to determine competitiveness of pay and
benefits.
• Review demographics of workforce to determine what benefits
are best for your specific employees; shop for same with benefits
providers.
• Use a suggestion box and ask for employee input on social
and health benefits suggestions..
New job/better working • Benchmark working conditions with other retailers and make
conditions adjustments.
• Survey, inspect and improve working conditions and
equipment.
• Strive to implement new innovations in the work area.
Unhappy with working • Respond to employee comments and suggestions on
conditions conditions.
• Establish a safety committee and encourage appropriate
enhancements.
• Meet with work group to determine issues and solutions.

19
Lack of work • Cross train employees in other departments or jobs.
• During slack periods utilize vendor training and in-house skills
training.
• Consider alternative work schedules
Job elimination • Explore all alternative work arrangements to maximize
flexibility;
e.g., temporaries, contractors, students, leased
employees, etc.
• Strive to phase-down rather than abruptly eliminate the job
so as to facilitate employees into other jobs
Relocation to another • Constantly keep job candidates in the pipeline to fill vacancies
city/family need and/or hire ahead of opening so a trained replacement is
available.
• Know employees well enough to know of changes before they
happen.
• Ask for replacement referrals from departing employee
Health/medical problems • Explore light work, reduced hours, working from
home/telecommuting, other accommodations for health matters.
• Always have doctors’ and workers’ compensation authority
input.
• Consider alternatives such as job sharing, other employee
assistance on selected tasks and seek advice on what other
organizations have done.
No advancement opportunity • Determine employee aspirations and plan a career path.
• Employ cross-training, job rotation, job enlargement and
similar means.
• Establish advancement levels in jobs, e.g., starting,
intermediate, senior; set requirements for each and have
employees advance through the levels
Took another job Determine from co-workers what may have been the issues.
• Encourage candid exit interviews.
• Use opinion surveys and suggestion boxes
Other • Determine what the reasons were using exit interviews,
opinion surveys and other employee feedback means.
• Genuinely use an open door policy to keep abreast of what is
on employees’ minds.
• Seek out best practices at other employers
Source, (Parker, 2008)

20
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY

This chapter deals with the methods, the sources of data, the population, the sampling
techniques and the sample size of the study and how respondents have selected. Besides, the
research instrument and how it was administered are also effectively dealt.

3.1. RESEARCH DESIGN

The study employed descriptive survey research method to reveal the current state of
turnover, consequence and management in CBE. Descriptive survey design helps the study to
gather varieties of data to achieve the objectives of the study by describing the situation as it is. It
helped in assessing the practices by addressing the size of population and describes the situation.
Therefore, a descriptive survey design was found to be appropriate and relevant in describing the
existing situation of employees’ turnover.

Descriptive survey research method also employed both qualitative and quantitative
approach. This method was selected because it is planned method of data collection which helps
to gather the necessary information on the issue under study. Thus, the descriptive survey
method was employed to achieve the objectives of the research, since it shows prevailing
conditions of particular trends. Also it is one of important tool to use quantitative approach in
manageable form. The researcher is also use qualitative purposive explanation.

3.1.1. SOURCES OF DATA

The data for the study was collected from primary and secondary sources. Secondary
sources of data were also obtained from review of various documents such as, books, research
journals and articles and various internet sources. Moreover, other internal documents found in
the Bank such as, magazines, guidelines, annual reports and exit interview were used.
In an attempt to obtain first hand information, the data were collected from the subjects
through questionnaire, observation and interview. Both close and open-ended questionnaires
were prepared and administered to gather primary data from the sample of the study. This
21
instrument was preferred because it enables to secure information at a time. The questionnaires
were prepared in English and Amharic language (Annex 1); because some of the samples of the
study are not qualified and only able to read and write Amharic and it will be translated
accordingly.

3.1.2. SAMPLE AND SAMPLING TECHNIQUES

The data collection instruments that were drafted on the basis of the reviewed literature
and the intended data collected on some potential respondents of currently working staff for the
validity and clarity of the items. Furthermore, in order to maximize the rate of return, attempts
are made to distribute the questionnaire at convenient time for respondent. Moreover, a close
follow-up is made to obtain reliable data return.

The sampling process will be based on the categorical classification of the Human
Resources Management Process of the bank; i.e. Administrative & Managerial, Professional,
Clerical, Transport & Production and Service Workers are included with a total number of 160
population sample size. Stratified sampling was used to select the population surveyed because
stratified sampling allows the researcher to obtain a greater degree of representativeness; it
reduces the probable sampling error to ensure that both groups in a population are adequately
represented in the sample, by randomly choosing subjects from each stratum. Thus, the
population was stratified into six groups, i.e., Head office, East, West, North South Addis Ababa
District Offices and five city Branches. The total sample distribution is presented in the
following Table:
Table- 7: sample respondents
No. of
Job Title Category employee Percent
Managers and Directors Administrative/Managerial 20 12.5%
Human Resource Experts and Officers Professionals 20 12.5%
Internal Auditors Professionals 10 6.25%
Customer Relationship Managers Professionals
20 12.5%
Human Resource Clerks Clerical 10 6.25%
Customer Services officers/CSO/ Clerical 40 25%
Secretaries Clerical 10 6.25%
22
 Drivers and Technicians Transport & Production 10 6.25%
Security Officers & Office Service Service Worker
10 6.25%
Attendant
Staff who had left the bank with known address and those who are in
10 6.25%
the process of resignation
Total 160 100
Source: HRM Sub-Process report, Dec. 2012

3.2. DATA COLLECTION TOOL

The main data gathering instruments were questionnaire, interviews and document analysis.

Questionnaire

Data were obtained through personally administered questionnaires that are prepared
based on literature review to address the research questions. The questionnaire has three parts.
Section I, of the questionnaire contains respondents’ information. Section II, of the questionnaire
contains instruction. Section III, contained statements designed to assess the turnover, allocated
to five point Likert Scales. A total of 160 Questionnaires in English and Amharic language were
distributed to randomly selected staff of the Head Office, District (East Addis Ababa) and
Branches.

Interview

Semi-structured interview was held to obtain data for further clarity and credibility of
the research with some selected employees based on purposive sampling. Ten different Process
and Sub-Process directors and managers at the Head Office and seven selected branches were
interviewed. The information obtained using interview has used to substantiate the responses
obtained through questionnaires.

Document analysis
Furthermore, data concerning the employee turnover were gathered from detailed
review of various documents such as, books, journals, and internet, and policy manuals, reports
produced by the Bank and exit interview reports. This empirical data were also be used to
23
 support the credibility of the information obtained through questionnaire and interview and also
used as comparison for the findings.

3.3. DATA ANALYSIS

In order to analyze the quantitative data obtained through questionnaire, first the data
were tabulated analyzed and interpreted by using the appropriate statistical tools (descriptive
statistics) like; frequencies, percentage and mean supported by SPSS software version 17.00. The
data obtained through interview and document analyses were analyzed qualitatively. Besides, the
data collected using open-ended questions of the questionnaire and exit interviews were
processed through qualitative discussion. The data obtained via interviews and document
analysis has been analyzed qualitatively. Consequently, the data collected from the respondents
are analyzed; interpreted on the base of which major findings have been summarized and
presented.

24
 CHAPTER FOUR

DISCUSSION AND RESULT

This chapter deals with the data presentation and analysis. The first section of this
chapters deals with the demographic characteristics of the respondents in terms of sex, age,
education, year of service and job category. The second section discuses the main part of the
study; that is, employee turnover variables; the analysis, interpretation of data that are gathered
through questionnaires, interview, observation and document analysis.

4.1. RESPONDENTS’ BACKGROUND INFORMATION

The figure below presents the background information of respondents who completed
the questionnaire, such as sex, age, and educational qualification, job category and work
experience in CBE.
Figure 6: Distribution of Respondents by Gender

Source: Own survey, December 2012 N=146

The characteristics of respondents shows that from the total respondents majority of
respondents 90 (62%) are male and the remaining 56 (38%) are female.

25
Figure 7: Distribution of Respondents by Age

18-30 31-40 41-50 51-60

Age

Source: Own survey, December 2012 N=146

Regarding the respondents age category indicated in figure three above, 70 (48%) are
found to be 18-30 years of age and about 52 (36%) of respondents are found to be 31-40 years of
age; 15 (10%) are found to be in the age range of 41-50; whereas, the rest 6% of respondents are
found to be age group of 51-60. From this one can infer that majority of respondents, i.e, 84%,
are found to be in age group of 18-40 that CBE is composed of a very young and productive
work force.
Figure 8: Distribution of Respondents by Educational Level

40%

30%

20%
u
Ol
a.
10%

0%
H. School Diploma First Degree Second Certification
Certificate Degree
Educational Level

Source: Own survey, December 2012 N=146

26
Concerning employees’ educational level as shown in the above Figure Three, the majority that
is 88 (60%) respondents have first degree in different qualification while 35(24%) have diploma
and about 12 (8%) and 8(6%) have high school certificate and second degree respectively. The
remaining 3(2%) have certification like ACC A and CISCO-Microsoft.

Figure 9: Distribution of Respondents by Work Experience/Service year/

Source: Own survey, December 2012 N=146

Regarding work experience/Service years/ in the CBE, majority of respondents 64
(44%) have served the Bank for less than five years, 24 (16%) have served for 6-10 years, about
39 (27%) have served for 11-20 years, 11(7%) have served for 21-25 years and the rest 8 (6%)
have served the Bank less than one year.

Figure 10: Distribution of Respondents by Job Category

Job Category

27
 As indicated in the above figure 6, about 64 (44%) are professionals and 49 (32%) are
clericals and 11(7%) and 15(10%) are administrative and managerial and service workers the rest
7(5%) are transport and production workers. From this we can infer that majority of respondents
are professional staffs.

4.2. DATA PRESENTATION AND ANALYSIS

The research aims to assess employees’ turnover of Commercial Bank of Ethiopia.

Employees as well as documents are the main sources of data. Questionnaires, interviews,
document analysis and observation were used as data gathering tools. Based on this, 160
questionnaires were distributed to respondents, of which 146 i.e, over 90% usable questionnaires
were returned. Data obtained through questionnaire were analyzed using descriptive statistics
such as frequency, percentage and mean. Whereas, lastly, the findings of the study are presented
in such a way that the leading research questionnaires are ensured.

4.2.1. RESPONDANTS’ PERCEPTION REGARDING WORK, TURNOVER, PAYMENT,

TRAINING AND LABOUR UNION

Employees will be committed and loyal to their organization if the organization treats
and gives its attention to them well. In order to know the employees’ perception towards their
Bank, current work, training, turnover, retention and other parameters the relevant data are
gathered and presented as follows:

Table- 8a: Participants’ responses regarding work, turnover, promotion, payment, training and retention
ITEMS RESPONSE FREQUENCY PERCENT
Yes 102 69.9
1) Satisfied with current work No 44 30.1
Total 146 100.0
Yes 126 86
2) Existence of high turnover No 20 14
Total 146 100.0
Yes 137 93.8
3) Aware of Bank’s Vision, Mission and Value No 9 6.2
Total 146 100.0
28
 Yes 108 74

4) HR is performed as per the Bank’s mission

No 38 26
Total 146 100.0
Yes 134 91.8
5) Orientation is necessary after recruitment No 12 8.2
Total 146 100.0
Yes 59 40.4
6) Expectations in Joining CBE are met? No 87 59.6
Total 146 100.0
Yes 30 20.5
7) Satisfied with amount of payment No 116 79.5
Total 146 100.0

Respondents were asked to express their opinions related to satisfaction on their present
job, and about 69.9% of respondents are greed that they are satisfied on their present job and
about 30.1 % of are not satisfied with their current job. From this data it is possible to
understand that even if majority of respondents are satisfied with their current job, almost more
than a quarter employees are shown their dissatisfaction. The major reason for their
dissatisfaction on their current job, as stated in the open ended question are the routine nature of
their work, lack of reclassification to other post for a long time, place of assignment and also the
risk of the work and the benefit are not taking in account the level of work they have performed.

Concerning item 2, around (86%) of respondents are agreed that there is high turnover
in CBE; whereas, nearly around 14% of respondents disagreed for the existence of high turnover.
From this response, it is possible to infer that majority of employees feel that CBE is currently
facing a high turnover. Based on their response the respondents are requested to select the
reason/s (one respondent can choose one or more answer) for turnover and 105 respondents in
number payment made by the bank is inadequate,103 responded as benefit package, 23
respondents stated due to lack of smooth communication, 38 believe that the location
convenience (where the employee is assigned), 64 respondent perceive that lack of opportunity
for advancement, 37, 42 and 23 respondents stated that recognition for work, work environment
and supervision qualities are the main reasons for employees’ turnover respectively. This is also
supplemented by exit interview held with resigned employees revealed that pay is one of their
resignation reasons. During interview with thirteen members of management except one member
29
the rest has responded that their exist turnover with an increasing rate and the reasons are similar
with the above response.

In addition, respondents were asked to rate whether they are aware of the mission,
vision and value of the Bank, about 94% of respondents are agreed that they are well aware of
the Bank’s mission, vision and value; whereas, 6% of respondents are not well aware. From the
overall response of this item we can infer that most of the employees are well aware of the
Bank’s mission, vision and value. Knowing this make the staff to effectively discharge their
duties and responsibilities in line with the Bank’s requirements.

On the question whether the respondents believe that HR process is working as per the
Bank’s mission or not (item 4), about 74% of respondents agreed where as 26% of respondents
respond as no. On their open ended questions opinion the 26% of respondents stated that as the
human resource activities are decentralized to fifteen district and to one office centrally that
handle that case of Head Office staff they observe there is lack of knowledge in HRM activities
theoretically as well as practically since the mission require CBE to deploy highly motivated,
skilled and disciplined employees capable of providing Banking products and services that meet
international best practices and standards.

On the question whether the respondents agree for the necessity of orientation after
recruitment (item 5), about 92% of respondents agreed and about 8% disagreed on the
requirement. This question was included it is sometimes observed in that bank that orientation is
not conducted keeping the right time properly or may be ignored. But the staff believes the need
for orientation since the face the newly employed staff intact at work place and this is also
supported by the principles of human resources employment.

With regard to item 6, about (60%) of respondents replied that their company (CBE)
does not able to fulfill their expectations; whereas, around 40% of respondents are comfortable
on this issue. From this response, it is possible to infer that majority of employees feel that CBE
is unable to satisfy their need; particularly, as some say, they are not able to continue their
second degree whereas others stated that the benefit package is not in line with their expectation
and the remaining stated other things. This raises a question of the CBE’s commitment to give
30
attention to listen its employees. This needs serious consideration because this feeling of
employees gives serious signal to take care of them before losing them.

With regard to salary an attempt were made to know whether employees are satisfied
with their current salary or not item 7, about 80% of respondents have shown their disagreement
on the statement; at the same time about 20% of respondents have agreed that they are satisfied
on their current salary. To understand the issue more, interviews have conducted with some
selected employees about their perception on their current salary. All of them replied that their
current salary was not enough to cover the current cost of living as well as the volume of work
they have been performing.

Table- 8b: Participants’ responses regarding work, turnover, promotion, payment, training and retention
ITEMS RESPONSE FREQUENCY PERCENT
Yes 38 26.0
8) Ever had training in CBE No 108 74.0
Total 146 100.0
Yes 123 84.2
9) Member of Labor Union No 23 15.8
Total 146 100.0
Yes 24 16.4
10) Labor union suggest about the turnover No 122 83.6
Total 146 100.0
Yes 38 26.0
11) The Bank has Retention Mechanisms No 108 74.0
Total 146 100.0
In relation to training as discussed in literature review, organizations offer job-specific
training to provide employees with the relevant skills to enable them perform their duties
efficiently and effectively. The immediate application of skills acquired through such training
may boost employee confidence and productivity. Through effective training employees will
become more aligned to career growth. In line with this, respondents are asked to give their
response whether they have got enough relevant training item 8, only 26% of respondents have
got training in CBE, while 74% of respondents do not get adequate training. It raises a question
of the CBE’s commitment to provide adequate training to employees that enables them to do
their job. In relation to the above idea, interview (informally) conducted with some respondents
31
 indicate that they are highly complain about the training opportunity that they have not given
adequate job specific and on time training that enables them to perform their tasks well.
Respondents were asked whether they are the members of labor union item 9, about
84% of respondents are member and 16 % of respondents are not members of labor union. From
this, the researcher inferred that about this 16% of the employees is managerial staff because by
default when an employee joins CBE he/she becomes the member of labor union and when one
is appointed as a managerial staff he/she is made out of the union immediately.

Concerning item 10, about 84% of respondents believe that labor union does not
present suggestion for HRM process; whereas, around 16% of respondents replied that the union
provide suggestion to the process. As it is clearly seen in the open ended responses that majority
of the respondent do not have such information because labor union does not say anything in
meeting with employee as well as in its magazines which is published quarterly .However, some
respondents stated that they do not have faith in the Labour union because the association is not
working in favor of the employees rather it works in favor the of management.

To know whether respondents’ recognize and acknowledge the existence of retention

mechanism or not (item 11), the responses have shown that only 26% of respondents know the
existence of staff retention mechanism from their friends and from Human Resource
Development Process (informally) and the rest 74% of respondents do not know. The researcher
came to know that CBE has employed a consultant from Frankfurt School of Finance and on
their advice the CBE has prepare retention strategy and got approval for implementation but the
HRD process does not communicate this to other processes and sub processes. The
implementation of the strategy has not fully started.

4.2.2. RESPONDENTS PERCEPTION ABOUT BENEFIT, WORKING ENVIRONMENT,

GRIVANCE HANDLING AND RETENTION

Securing Bank’s service and retaining well skilled employees through favorable
working condition (promote friendship at work), good grievance handling and related benefits
than competition become necessary. The researcher has prepared the questions in Likert Scale
32
form so as to get the response on promotion, working environment, grievance, and benefit and
retention mechanism.
Note that the interpretations were made for all five point scale measurements based on
the following scale: 5= Strongly Agree; 4= Agree; 3= Neutral; 2= Disagree; 1=Strongly
Disagree. Accordingly, the researcher made interpretation taking a neutral attitude ‘3’ as a
reference point by averaging the scales; that is, the mean scores as above 3 (neutral) if opinions
tend to be favorable to the given point of view; and below 3 (neutral) if opinions tended to be
unfavorable to the given point of view. This corresponds to what Best and Kahan (1995) explain
about Likert Scale interpretation.

Table- 9: Participants’ response on promotion, working environment, grievance, benefit etc.

No Items Response (N= 146)

5 4 3 2 1 M
1 I believe that turnover exist N 59 61 7 12 7 4.05
% (40%) (42%) (5%) (8%) (5%)
2 Benefit provided by CBE is better than N 6 16 18 56 50 2.12
private Banks % (4%) (13%) (12%) (37%) (34%)
3 Promotion & Transfer is as per HR N 12 39 46 29 20 2.96
procedure % (8%) (27%) (32%) (20%) (14%)
4 Salary of CBE is better than private N 2 20 24 48 52 2.12
Banks % (1%) (14%) (16%) (33%) (36%)
5 Satisfied with promotion prospect N 5 30 34 55 22 2.60
% (3%) (21%) (23%) (38%) (15%)
6 Working environment (relationship) N 45 61 22 12 6 3.87
effect on turnover % (31%) (42%) (15%) (8%) (4%)
7 Employee turnover affect N 45 76 15 8 2 4.05
belongingness % (31%) (52%) (10%) (6%) (1%)
8 The job is matched with your interest N 16 52 31 37 10 3.18
% (11%) (36%) (21%) (25%) (7%)
9 Adequate training facilities exist N 9 46 29 43 19 2.88
% (6%) (32%) (20%) (29%) (13%)
10 Good grievance handling exist N 4 21 43 51 27 2.48
% (3%) (14%) (30%) (35%) (18%)
11 Decision making is participatory N 5 19 55 43 24 2.58
% (3%) (13%) (38%) (30%) (16%)
12 CBE has good retention mechanism N 7 12 29 51 47 2.18
% (5%) (8%) (20%) (35%) (32%)
5= Strongly Agree; 4= Agree; 3= Neutral; 2= Disagree; 1=Strongly Disagree.

33
 During the study an attempt was made to investigate current employees’ perception
about the existence of turnover in their Bank; and hence, item 1 gives a summary of the
respondents’ views. In this regard, about 82% of respondents have shown their agreement that
CBE is facing high turnover one of the best companies to work for, 13% of respondents have
shown their disagreement and 5% of them neither agreed nor disagreed. From this one can
conclude that respondents believed the existence of high turnover in CBE. The mean value
(M=4.05) of respondents indicate that their agreement on this issue. As indicated in part 1 and 2
response the existence of turnover is undeniable but regarding its consequence all members of
management commonly agreed that it is very damaging consequence which means losing highly
trained, dependable employees and which creates dissatisfaction, lack of trust in the Bank,
damages the quality of service, incurring unnecessary cost and also has bad impact on customers.

Concerning item 2, about 17% of respondents agreed that their bank (CBE) is providing
benefits better than private Banks; whereas, and around 71% of respondents disagreed and the
rest 12% neither agreed nor disagreed to this issue. From these responses, it is possible to
conclude that majority of employees feel that CBE does not provide better benefit package than
Private Banks. This needs serious consideration because this feeling gives serious signal to take
care of them. Besides, the mean value (M=2.12) of the view of the respondents about benefit
issues gives the general picture that respondents have shown that they are not comfortable with
the benefit package.

In addition, respondents are asked to rate whether they believe that the management is
doing promotion and transfer as per the HRM procedures (item 3), about 35% of respondents
agreed; whereas, 32% of respondents neither agreed nor disagreed. However, the rest 34% of
employees disagreed. From the overall response of this item we can conclude that majority of
employees do not have any idea regarding HR’s implementation of promotion and transfer. It is
also seen in the mean value (M=2.96) that the dissatisfaction is somewhat significant. In the
interviews interview with thirteen management members of the bank, four out of the thirteen said
that there is equal promotion opportunity in CBE as per the HR procedure, however the
remaining 69% did not agree to this view as individual can be promoted by the interest of the
34
process and sub-process owner, due to his/her political attitude, friendship and other different
aspects. Therefore, the Bank has to take corrective actions.

With regard to salary an attempt was made to know whether employees get got better
salary than private Banks’ (item 4). About 69% of the respondents showed their disagreement to
the statement and at the same time about 15% of respondents agreed that the CBE pays better
salary than other private Banks’ and 16% of respondents neither agreed nor disagreed to this
issue. Therefore, the mean value (M=2.12) of respondents response on this item support this
result and indicated that the CBE pays a salary lower than private Banks. In the interview made
with thirteen members of management, all responded that the financial as well as the non
financial benefit couldn’t comparable with CBE and they are not satisfied with the current
payment.

However, respondents’ perception for the statement that request them whether they are
satisfied with the promotion activities (item5), about 24% have shown their agreement; whereas,
53% of respondents have shown their disagreement and about 23% are neither agreed nor
disagreed on the issue. The mean value (M=2.60) of respondents indicates that their
disagreement on this issue. The opinion and views of respondents, generally speaking, are
supported by interview conducted with the employees. They revealed that they are not
comfortable with the selection process of promotion.

Concerning item 6 of the above Table, about 73% of the respondents said that working
environment (their relationship with their coworkers and supervisors) have effects on turnover.
About 12% of respondents disagreed and about 15% have no opinion. From this it is possible to
say that respondents are very much interested to have smooth relationship in their working
environment. Similarly, the mean value (M=3.87) support the response of the 73% respondents.
Besides, in the interview process about 78% of the management staff stated that there is good
relationship between the management and other staff but they are afraid that currently due to lack
of follow-up from the Bank’s side there is some signals that this culture may be eroded. The
remaining 22% disagree to this statement.

35
Respondents were asked to tell their opinion related to effect of turnover on belongingness
(item 7). About 83% of respondents agreed that turnover has poor effect on belongingness and
about 7% of respondents disagree to the statement. However, the rest of the respondents i.e; 10%
neither agreed nor disagreed on the statement. From this it is possible to say that the employees’
turnover has a great adverse impact on belongingness; the mean value confirms so (M=4.05).

Respondents were asked to tell their opinion related to matching of the job with their
interest, and about 47% of respondents agreed that their present job is based on their interest
(item 8), about 32% of respondents also revealed that their jobs are not interesting and 21% of
the respondents are neutral. From this it is possible to conclude that the employees are relatively
satisfied with their current jobs and believe that their jobs are interesting. Mean Value of their
responses is (M=3.18)

In line with adequate training facility (item 9), respondents were asked to give their
opinion whether CBE has adequate training facilities; only 38% of respondents have shown their
agreement while 42% of respondents have shown their disagreement to the statement. On the
contrary, 20% of respondents became unable to say anything about the facility. It raises a
question of the CBE’s commitment to provide adequate training to employees that enables them
to do their job more perfectly. The mean value (M=2.88) of this item also indicate that
respondents’ disagreement about the training facility of the organization.

Regarding item 10 of the above Table, about 17% of respondents have shown their
agreement for the existence of good grievance handling in CBE; whereas, about 53% have
shown their disagreement and the rest about 30% have neither agreed nor disagreed. The mean
values (M=2.48) of respondents also indicated their disagreement on the issue.

Regarding participation in decision making, about 16% of respondents replied that their
managers encourage them to participate in decision making related to the work of the branch
(item11) and 46% of respondents replied disagree with the statement. However, 38% neither
agreed nor disagreed. From this it is possible to conclude that a manager in CBE does not
36
encourage the staff to participate in decision making of the Branch. The result of the mean value
supports this response (Mean=2.58).

In relation to the existence of good retention mechanism in CBE, only 19% of

respondents agreed that there is good employee retention mechanisms in the Bank; whereas
about 67% of respondents disagreed on the existence of good retention mechanism in the Bank
with mean value of (M=2.18). The rest 29% are neither agreed nor disagreed. During interview
with thirteen management staff of the Bank except two mangers the remaining has no
information for the existence of retention mechanisms in CBE. From this result it can be
conclude that the Bank has a problem of communicating what has been done by the Bank. But, I
confirmed that the Bank has prepared retention strategy by the consultant who are employed
from Frankfurt School of Finance but do not communicate to the staff accordingly.

Similarly, the interviewees were requested to give comments or suggestions (Annex-2)

on how to retain employees. Majority of them responded that the top management is reluctant
and believe that there is many educated staff in the market. This thinking damages the bank since
talented and trained staff is leaving the Bank. Moreover, they responded that the HR has to revise
its policy and procedure and also implement them properly without bias, giving value to the
employees as per the Bank’s mission, better working environment and better packages are the
major comment of the respondents.

37
 CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

This chapter deals with summary of the findings, conclusions and recommendations of the study.

5.1. SUMMARY OF FINDINGS

Regarding the demographic characteristics of respondents the study found out that the
majority of respondents are male. Majority of respondents are found to be in age group of 18-30
and thus the CBE is composed of young energetic and productive work forces. Besides, those
who have diploma, first and second degree total about 90%. Similarly, majority of respondents
have served the Bank for less than five years; and also majority of respondents are clericals and
professionals.

The results of the study indicate that majority of the respondents said that they are
satisfied with their current jobs but they also believe that there is high turnover in CBE with a
mean value of (M=4.05). Still majority of the respondents are well aware of CBE’s mission,
vision and value and do believe that HR is doing its job as per its mission.

Concerning employees training and its facility, the study indicates that respondents are
not happy about the training in the Bank with mean value (M=2.88) and also they are dissatisfied
with the promotional prospects of the Bank with mean value (M=2.60). The study indicates that
the relationship between respondents and supervisors/managers are found to be good position
with mean value of (M=3.87).

Concerning salary and benefits, the study indicates that respondent are found to be
dissatisfied with their current salary and benefit scheme (M=2.12 and M=2.16). All groups of
respondents are found to be dissatisfied with their current salary and benefit.

The study found that respondents are not satisfied with grievance handling system of
the bank (M=2.48) and also they do not get a chance to participate in any types of decision
making (2.58).Generally, seventy percent of the respondents stated that their expectations while
joining CBE are not met accordingly.
38
Finally, regarding retention mechanism the researcher believes that in any organization, staff
retention is depending up on the extent to which the adequacy of extrinsic and intrinsic factors of
motivation. Staff turnover is associated with job intrinsic and extrinsic dissatisfaction. The
insufficiency of extrinsic factors such as salary and non salary benefits, promotion, financial and
non- financial rewards, poor administration and supervision practices, polices, work overload
which are external to the job and located in the work place had more effect on the staff turnover
because dissatisfied staff are more likely to quit. However, the intrinsic part depends on the
individual perception and attitude.

5.2. CONCLUSIONS
Among the factors that contribute for termination of employee is employees’ attitude
about their Bank, current job, career development opportunities (growth), relation with
managers, training facilities, relationship with coworkers’, salary and benefits packages and
working environment. Accordingly, from the findings of the study it can be concluded that
employees’ are found to be satisfied with working in CBE, their current job, and relationship
with their manager as well as coworkers, with their work environment.

On the other hand, employees are dissatisfied with Bank’s initiative to maintain
competitive pay system; the current salary and benefit; development opportunities (promotion),
such as the training opportunities. If employees are unsatisfied with these basic factors, it may
negatively affect the quality service provision which adversely affects customer satisfaction and
if such dissatisfying factors are not mitigated on time, employees may not perform their tasks as
expected or may leave the bank and this may have bad effect on the operation of the Bank.
Finally, as commented by 82% of the respondents the turnover is high. Besides, respondents’
opinion indicates that they love (satisfied) with their current job and wants to work in CBE if
their expectations are met and their problems are solved. The respondents believe that the bank
has no good retention mechanism that can handle those who are working currently who wants to
leave it. The reporting mechanism of the Bank is not help the management to be conscious of the
problem because it is presented only in a general way; like the number of staffs who left the bank
during that period, the reasons for their resignation, dismissal and so on. It does not give detail
analysis for decision making. The research shows that, generally, employees are continuously
39
leaving the Bank and most of them are not satisfied with the benefits. The Bank does not work
on retention mechanisms as expected.

5.3. RECOMMENDATIONS
Based on the findings of the study, the following recommendations have been
forwarded. Employees of the CBE have favorable attitude towards CBE. Employees have a
sense of belongingness to the CBE; that is, every employee feels that CBE is his/her company
and later each employee assumes responsibility for his/her own job performance. Thus, this is a
positive trend that must be encouraged further. However,
• Employees are satisfied with their present job; they are satisfied the kind of work they do,
they know what is expected of them from their work and this leads to good job
performance that increases the quality and quantity of work accomplished. Therefore, this
is a positive practice that must be encouraged further.

• Training and training facilities should be developed and each employee has to get the
chance. Doing this enables to enhance each employee's current job performance, enables
individuals to take advantage of future job opportunities and fulfill CBE's goals for a
dynamic and effective workforce. In addition as skill and knowledge is obsolete like
equipments and technologies, enough relevant training has to be provided periodically to
enhance their knowledge, skill and attitudes by assessing the training needs of employees.
If employees are trained well, they will be able to take the responsibility of making
decisions (It is also one area of compliant) that are necessary to achieve desirable results.
If not, expecting results without giving proper training is unjust for the employer.
• Internal promotion another method of maintaining employee within a given company
enables exiting employees that they are valued and appreciated. To this end, the study
found that employees are dissatisfied with the exiting promotion practice. Thus, to reduce
this problem promotion should be provided for those who deserve it based on merit; the
HRM has to revise procedures as soon as possible; the HRM has to make effort to let
each candidate know the selection result through notice boards and using CBE’s
websites. Doing this may enable to convince applicants upon the results obtained by
comparing themselves with the selected candidate.

40
 • On the other hand, the CBE’s effort to fill vacancies from within before recruiting from
outside is a good practice that must be continued in the future because it creates a feeling
of having opportunity to grow in the Bank and be recognized.
• The study revealed that there is a conducive (employee-manager-coworker) work
relationship; i.e., there is a spirit of team working in CBE this good practice must be
encouraged.

The study also found out that employees are not satisfied on their current salary scheme. Based
on the preceding facts it is good to recommend that CBE should provide their level best to give
due attention for this sensitive issue through revising the current pay structure by considering
factors such as the current cost of living, the CBE’s paying capacity and banking industry’s pay
system by balancing the Bank’s plans and programs with employees need in collaboration with
appropriate organs.

The researcher would like to recommend that CBE has to act implement consultant’s
(Frankfurt School of Finance) recommendation on retention strategies as soon as possible. Until
then the bank has to revise the salary and benefit package, strengthen the good relation among
the supervisor, subordinate and peers, provide recognition and encourage innovations rather than
sticking to the rule of thumb.

41
 Biblography

- Armstrong Michael (2006).A Handbook of Human Resources Management Practice.

Cambridge University Press, United kingdom.

- Barb W. and Janice B. (2001).Retaining Your Employee. A Fifty-Minute Series. Boston

MA

- Best, W.J. & Kahan, V.J. (1995). Work Method in Education. New Delihi: Prentice-Hal

- Commercial Bank of Ethiopia (2005/06- 2011/12). Annual Report. Addis Ababa.

th
- E. B.Flippo, (1980). Personnel Management: 5 Ed. McGraw Hill Book Company

- Raymond A. Parker,(2008). A Guide to Effective Employee

Management,Indianapolice,USA.

- Glebbeek, A. & Bax ,E. (2002),Is high employee turnover really harmful? An empirical

test using company records. Academy of Management Journal, Groningen University,

Netherlands.

- J. Fitz-enz (1997). “It's costly to lose good employees”, Workforce, August Vol. 76 No. 8

- Jack J.P and Lisa E. (2009). Managing Talent Retention, John Wiley & Sons,Inc. San

Fransisco, CA.

- Martin C(2003), “Explaining Labour Turnover :Empirical Evidence from UK

Establishments”, Labour Vol 17 No 3

42
- Micheal Losey,SueMersinger and Dave Ulrich. (Ed).(2005). The Future of Human

Resource. John Wiley and Sons, Inc.

- R.Greer Charles (2001).Strategic Human Resources Management. Prentice-

Hall,Inc.New Jercy..

- http://www.cipd.co.uk/subjects/hrpract/turnover/empturnretent.htm, Employee retention,

Dec2012.

- www.retention.naukrihub.com, Retaining the employees, Dec2012.

- www.Sigmaassessement.com.

43
 ANNEX - 1
Saint Mary’s University College
School of Graduate Studies
MBA Program

Questionnaire
The objective of this questionnaire is to collect data from CBE employees which help me
to evaluate the Cause, Consequence and Management of Employees’ Turnover, as a partial
fulfillment of MBA program.

Your cooperation and honesty is valuable in filling this questionnaire and forwarding it
back to me. In addition, all responses will be held strictly confidential and no information
which could reveal your organization’s or your own identity will not be used in any data
reporting, nor will it be shared in its individual form with any outside party without your
expressed permission to do so. Therefore, your genuine, honest, and prompt response is a
valuable input for the quality and successful completion of the project.
Thank you for your cooperation and timely response in advance

PART I: - Please tick in only one of the boxes.

1. Age
□ 18 - 30 □ 41 - 50
□ 31 - 40 □ 51 - 60
2. Gender
□ Male □ Female
3. Education
□ High school certificate □ Masters Degree
□ College diploma □ Other
□ University degree
4. Job Category
□ Administrative and
Managerial
□ Professional
□ Clerical □ Service Worker
□ Transport & Production

viii
 5. Service year
□<5 □ 21-25
□ 6 - 10 □ >25
□ 11 - 20

PART II: Please put tick mark ,it is possible to tick more than one box and to give
-

explanation at the end of the questions

1. Are you satisfied with your work?

□ Yes □ No
2. If your answer is no to the above question, what are your reasons?

3. Do you believe that there is high turnover in CBE?

□ yes □ No
4. What is the reason/s for this turnover?
□ Pay □ Recognition of work
□ Benefit □ Work environment
□ Communication) □ Quality of supervision
□ Convenient location □ Other______________
□ Opportunity for _______________
advancement
5. Are you aware of the Banks mission, Vision and Value?
□ yes □ No
6. Do you believe that the Bank has acting as per the mission regarding HR?
□ Yes
□ No
ix
7. If your answer is NO to the above question, what do you think is the reason?

8. Do you think orientation is necessary after an individual is recruited?

□ yes □No

9. After joining at CBE, Is your expectation met?

□ Yes n No
10. Are you satisfied with the amount of pay?
□ Yes □ No
11. Have you ever had training in CBE?
□ Yes □No
12. Are you the member of labor union?
□ Yes □ No
13. Is the labor union has any suggestion for the turnover?
□ Yes □No
14. If your answer is yes to the above question, how it presents its suggestion?

15. Do you know that the Bank has a retention mechanism?

□ Yes □ No

x
Part III: Please put tick mark for the variable
-

Strongly Neutral Disagree Strongly

No Variables Agree Disagree
agree
I believe the existence of
1
turnover
Benefit provided by CBE
2 is better than private
Banks
Promotion and transfer is
3 carry out as per the HR
procedure
Salary of CBE is better
4
than private Bank's
Satisfied with
5
promotional activities
Relationship( Working
6 environment) has effect
on turnover
Employee turnover affect
7
belongingness
The job is matched with
8
your interest
Adequate training
9
facilities

10
Good grievance handling
Decision Making is
11
participatory
CBE has good retention
12
mechanisms

Xi
 ANNEX - 2
Saint Mary’s University College
School of Graduate Studies
MBA Program

Questionnaire to be filled by Directors /Managers/Professional

The objective of this questionnaire is to collect data from CBE employees which help me
to evaluate the Cause, Consequence and Management of Employees’ Turnover, as a partial
fulfillment of MBA program.

Your cooperation and honesty is valuable in responding to these interview questions. In

addition, all responses will be held strictly confidential and no information which could reveal
your organization’s or your own identity will not be used in any data reporting, nor will it be
shared in its individual form with any outside party without your expressed permission to do so.
Therefore, your genuine, honest, and prompt response is a valuable input for the quality and
successful completion of the project.
Thank you for your cooperation and timely response in advance

INTERVIEW QUESTIONS

1. What do you feel about the turnover in CBE? Increasing, Decreasing or Constant?

2. If your answer is increasing, decreasing or constant, what would be the reasons?

3. What are the main reasons for employees’ turnover?

4. Do you feel that there is equal opportunity for promotion?

xii
5. Do you expect that the benefit (financial and non-financial) is adequate/ comparable with
similar industry? If not, how do you evaluate it?

6. Do you think that there is smooth relationship between management & other staff?
If not, what would be the reason/s?

7. What are the consequences of turnover (high or low) in the Bank’s activity?

8. Is there proper human resource handling practice in Commercial Bank of Ethiopia?

9. Do you know whether CBE has established standards (Procedure) for retention of
employee?

10. What is your expectation that the top management think while an employee leave the
organization voluntarily?

11. What mechanism are you suggesting to retain employee?

12. If you have any comment, suggestion or message that you want to transfer, please.

Xiii
ANNEX-3
Service Year
or
Occupational Early Grand
Category Deceased Detained Disappeared Dismissed Retirement Pensioned Resigned Total %

Total

Service year is expressed with interval; like 0-5,6-10 years etc....

Administrative Clerical Transport & Service

Reason For Resignation Worker Professional Workers Production Worker Grand Total %

Disappointment
Further Education
Personal Reason
To Go Abroad
To Join Other
Organization
To Join Private Banks
To Run Own Business

Grand Total

xiv
 DECLARATION

I, the undersigned, declare that this thesis is my original work, prepared under the

guidance of Mesfin Lemma (Asst. Professor). All sources of materials used for the

thesis have been duly acknowledged. I further confirm that the thesis has not been

submitted either in part or in full to any other higher learning institution for the

purpose of earning any degree.

Name Signature

St. Mary’s University College, Addis Ababa February,2013

xv
 ENDORSEMENT

This thesis has been submitted to St. Mary’s University College, School of

Graduate Studies for examination with my approval as a university advisor.

Advisor Signature

St. Mary’s University College, Addis Ababa February, 2013

xvi
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