Re Phrase 007

2010
Farooq Ahmad
LONDON COLLEGE OF BUSINESS (University of Wales)
9/1/2010
Impact of high employee turnover on

organisational performance; what
strategies & tools can help Employee
retention? A case study of
CAPITA:
A dissertation submitted in partial fulfillments of the

requirements for
MBA
SUBMITTED By FAROOQ AHMAD
University ID: 0911867092096
Farooq Ahmad ID # 0911867092096 Page 2

LONDON COLLEGE OF
BUSINESS
(University of Wales)
Impact of high employee turnover on organisational performance; what strategies & tools
can help Employee retention? A case study of CAPITA:
SUBMITTED
By
FAROOQ AHMAD
University ID: 0911867092096
Supervised by Ola shittu
A dissertation submitted in partial fulfilments of the requirements for the

degree of
Masters of Business Administration

Department of Business - London College of Business
(University of Wales - September 2009 – September 2010)
Date of Submission:
20th September 2010
DECLARATION
This work has not previously been accepted in substance for any degree and is not being concurrently
submitted in candidature for any degree.
(Candidate
Signed )
Date
STATEMENT 1
This thesis is the result of my own investigations, except where otherwise stated, where correction
services have been used, the extent and nature of the correction is clearly marked in a footnote(s).
Other sources are acknowledged by footnotes giving explicit references. A bibliography is appended.
(Candidate
Signed )
Date
STATEMENT 2

I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library
loan, and for the title and summary to be made available to outside organisations.
(Candidate
Signed )
Date
I hereby give consent for my thesis, if accepted, to be available for photocopying and
for inter-library loans after expiry of a bar on access approved by the University of
Wales on the special recommendation of the Member Institution concerned.
(Candidate
Signed )
Date

Student Details
Title ............................. Mr.
Surname .................... Ahmad
Forename(s) ........ Farooq
Institution ...... London College of business
Degree Taught .... MBA (Human Resource Management)
Title of Dissertation : Impact of high employee turnover on
Organisational performance; what

Strategies & tools can help Employee
Retention:
A case study of CAPITA
ABSTRACT:
This research is an effort to measure the impact of employee turnover on an
organisations ability to perform according to its goals and standards or up to the
expectations of the stake holders including shareholders, suppliers and customers
etc. the big question laid down in this research is how draw an effective policy line
and its implementation to tackle employee turnover. To achieve this it will require an
extensive scrutiny into the tools and strategies in use and an analysis of the
emerging trends, the need of innovative thinking to develop effective HR strategies
by the organisation for retention.
Employee turnover/retention is not something new for business organisations.

However, it has not been actively discussed or even understood by employers.
Researchers and business experts has done a lot of work on this subject but yet
ever evolving business environment makes it more demanding issue. Individual
attitude towards job satisfaction is the most important and sensitive variable in
determining employee turnover. The fundamentals of employee retention may
include competitive salary, benefits, recognition, on job training, growth opportunities
etc but retention of the high performing or best ones required even more.

In this research I will try to explore every possible avenue that could affect employee
retention in one way or the other. Employee retention can be seen as employers
own choice strategy and retention techniques. Employee retention is strongly linked
with the work environment in which employees undertake their responsibilities or
duties. Helpful and liberated environment is no doubt is first step towards effective
employee retention. Creating a culture where people can express themselves and
can associate themselves with the organisation would make quitting a difficult
decision for them.
Effective retention polices needs to be updated as often as possible because it has

to be adequately equipped to respond to ever changing labour market. It very
important for an organisation particularly in today’s competitive business world to
retain its highly skilled and top performing employees. High employee turnover can
be very expensive or may result in waste of precious resources of the organisation
but also undermines organisation performance in achieving its goals and targets.
Finally, in this research I will try to devise an effective and successful implementation
process to ensure that no crucial component of policy guide line is overlooked.
Hence, keeping employee turnover within acceptable limits but also improving
organisational performance in terms of productivity and customer satisfaction.

TABLE OF CONTENTS:
CHAPTER 1
1.1 Introduction:
1.2 INTRODUCTION &
COMPANY PROFILE (CAPITA):
1.3 Aims and Objectives:
1.4 DISSERTATION FORMATION
CHAPTER 2
LITERATURE REVIEW
2.1 INTRODUCTION
2.2 Employee turnover:

2.3 Retention:
2.4 Definition of Employee Retention:
2.5 Environments that Bred Turnover:
2.6 Why do people choose to leave or stay?
2.7 The Care Model for motivating and retaining the employees:
2.8 Motivation and retaining high performers:

2.9 HR Strategies:
2.9.1 Performance Appraisal:
2.9.2 Performance Appraisal Methods:
2.9.3 Financial impact of high turnover:
2.10 Strategies & tools for Retention:
2.10.1 Job Clarity:
2.10.2 Training:
2.10.3 Fair and competitive rewards:
2.10.4 The link between Motivation and Retention:
2.11 Human Capital Management (HCM):
2.12 The link between HCM and Business Strategy:
2.12.1 Race/Ethnicity and employee turnover:
SCHAPTER 3
RESEARCH METHODOLGY
3.1 INTRODUCTION:
3.2 The Purpose of Literature Review:
3.3 Structure of Literature Review:
3.4 Literature Sources:
3.5 Research Approach
3.6 Research Paradigm:
3.7 Research Design:
3.8.1 Quantitative Method:
3.8.2 Limitations of Quantitative Method:
3.8.3 Qualitative Method:
3.8.4 Limitations of Qualitative Method:
3.9 Interviews:

3.9.1 Limitations of Interviews:
3.10 Questionnaire:
3.10.1 Limitations of Questionnaire:
3.11 Sample:
3.11.1 Sample Size:
3.12 Limitation of the study:
CHAPTER 4
4.1 INTRODUCTION:
4.2 PILOT STUDY:
4.3 GENDER:
4.4 EMPLOYMENT STATUS:
4.5 AGE GROUP:
OBJECTIVE 1
OBJECTIVE 2
OBJECTIVE 3
OBJECTIVE 4
OBJECTIVE 5
OBJECTIVE 6
OBJECTIVE 7
CHAPTER 5
5.1 INTRODUCTION:
5.2 CONCLUSION:
5.3 Findings for CAPITA:
5.4 RECOMMENDATIONS:
5.5 IMPLICATIONs OF THIS RESEARCH (STUDY):
REFERENCES…………………………………………

Appendices………………………………………..

1.1Introduction:
Employee turnover is no doubt a serious issue particularly if not controlled

effectively. Employers need to understand that it could not only affect organisational
performance but could also result in waste of resources or even incur high cost of
production or services. Hence, it requires a comprehensive policy and effective
implementation process. HR managers need to consider retention from recruitment
and should extend as a coordinated effort to every single department.
Employee turnover is an alarming issue in all sectors of economy. It not only affects
organisational performance but cost of replacing workers would be huge on the top
finding suitable skilled employee would be even more difficult as a result investment
in training would be less secure.
Employee turnover/retention is not something new for business organisations.

However, it has not been actively discussed or even understood by employers.
Researchers and business experts has done a lot of work on this subject but yet
ever evolving business environment makes it more demanding issue. Individual
attitude towards job satisfaction is the most important and sensitive variable in
determining employee turnover. The fundamentals of employee retention may
include competitive salary, benefits, recognition, on job training, growth opportunities
etc but retention of the high performing or best ones required even more.

The upshot, from an organization’s perspective, is greater staff turnover or, in some
cases, the development of an ‘employee retention problem’. It has always been hard
and expensive to find a suitable replacement in a short span of time when people
leave, leading to inefficiencies and lost business opportunities. Moreover, when
employees who do more highly skilled jobs, greater potential damage may cause to
the organization when people leave. Precious knowledge and experience leaves
through the front door as they leave the organization.
It is strange that employee retention is not really understood by the employers even
in difficult times for business it would be least important thing on their mind. It is very
likely that employees lose interest in their jobs or faith in their organisation and
become de-motivated. It is important to note that employer can get best out of their
employees when they are motivated and they are more likely to stay with the
company. Employees who are motivated, committed and engaged are more likely to
stay with organisation than the bored, dejected ones. So what can be done?
The answer for this question lies in understanding of the employee needs starting
from their job itself, the work environment in which they undertake their job
motivators e.g. communication, teamwork and growth opportunities.
Job evaluation may require what sort of attitude or behaviour would be suitable to
perform a specific role and changes can be made accordingly by redeployment or by
re-distributing responsibilities or entirely jobs swapped. If it is done through proper
assessment it can bring right person to the right position.
Every individual has their own set of preferences, likes or dislikes attitudes and traits.
Hence, they have different motivators. It is a complex problem need to be dealt with
great care so it can provide every individual what he/she crave for e.g. money,
recognition, job security etc. motivation has probably most talked about subject in
business but yet has its unique importance in every aspect of employee retention.
Communication has a vital role in our lives it can make things happen particularly,
effective communication is crucial in business. It provides the basis for
understanding of what need to be done and how it should be done. Better

communication can help in building good team work even under intense pressure.
Winning team combination can help individuals to perform up to their optimum. It will
give them sense of achievement and higher job satisfaction. Continuous professional
development, on job training etc help employee to update their skills and knowledge
resulting lower redundancies but higher growth opportunities. It will increase
employee commitment with their organisation. More innovative channels of
communication within organisation will help in improving flow of information up and
down in the organisation.
POINT: An organisation which is trapped in some sort of internal malfunctioning, it’s

bound to be known as unreliable or less credible in the market. Suppliers and
customers would be reluctant to do business with such an organisation and
employees will lose interest in their jobs. It would be unavoidable for such an
organisation to retain its employees. It has been discussed earlier that people
respond to different motivators or different combinations of motivators. Money alone
cannot provide all the answers for motivation or retention but it has to be a
comprehensive plan starting from physiological need to more sophisticated aesthetic
needs. It can be done by creating an index and frequent measurement of most likely
factors of motivation or de motivation.
In this research I have tried to investigate every possible issue or factor

that can cause employee turnover. While setting up my aims and
objective for this research my focus was to highlight emerging issues
causing employee turnover along with more conventional and talked
about issues. Further, all the identified issues discussed separately and
collective e.g. impact of work environment and fair compensation or
reward system on turnover. My end objective for this research is to
devise policy guide lines to tackle employee turnover in today’s business
organisations. There are seven objectives or points set for this research

exhaustively covering employee turnover. Hence, all the objectives
collectively will try to provide an answer for my research question i.e.
How to draw policy guideline to tackle employee turnover?
One of the objectives of this research is to provide real time information and
assistance to pragmatic organisations and their managers to understand the
importance of employee retention and then to tackle it in a creative and effective
way. The organisation chosen for a case study is THE CAPITA GROUP Plc. Capita
is well known business organisation for its enormous growth particularly in the last 7-
8 years. It is also known as a specialist in outsourcing business operations. It has
successfully expanded its operations in emerging economies such as India as
outsourcing partner of business services. CAPITA is very much aware of the
importance of retaining reliable and talented employees as apparently doing
everything to keep employee turnover within limits.
The rate/amount of change in work force and the workplace has been very swift
requiring more quick and complete response, Organization need to act proactively
and even preemptively. Retention should start from recruitment may be an example
where to start when it comes to policy formulation and implementation.
Organizations may need to act more cautiously while dealing with highly skilled or
high performers because these are the people who keep such organizations in
business.
Coexisting with these trends, the budding work force is developing very complex
attitudes about their conduct at their workplaces. Family orientation, Quality of life
issues and Autonomy are high priority issues for emerging business environment:
Employers need to understand what their employees want from them, a smart
employer include it in strategic planning to address retention issue in totality.
Organisations with high employee turnover need to kick start a comprehensive and
integrated effort keeping in view their specific needs and environment. It may require
flexible approach in using established practices, tools and strategies along with more

contemporary or innovative ways to retain employees. Stakeholders such as
customers, creditors, investors and employees are always keen to know about
sustainability, strength and capacity of the workforce. It can greatly influence the
perception of these stakeholders about that organisation. Clients need to have un-
shattered confidence in the ability to perform in situations that call for specialized
knowledge, fast response or appreciation of the customers’ history with the
company. It will strengthen customer confidence and improved business
relationship.
Capita claims that “Capita is a people business” and our workforce are an asset of
the organisation their services are invaluable for Capita. It is our prime objective to
retain our employee. We are will to do everything to keep our employee motivated
and happy to keep them with us for longest possible time. We are very much on
target and enjoys higher rate of retention than the industry average.
1.2 INTRODUCTION &
COMPANY PROFILE (CAPITA):
Capita is a renowned and leading business organisation in United Kingdom. The

clients and services of capita include central government, local governments,
education, life and pension, insurance, health, transport, financial services and
Business Process Outsourcing (BPO) in UK. Capita has developed great expertise
in redefining and transforming services to public.
(www.capita.co.uk)
If you look at the market and its growth in the last twenty years, you would not miss
Capita as emerging business organisation and leading from the front in different
areas of business. Capita started its operations back in 1984 with just a couple of
people. Capita started to gain size and shape in the year 1991 when its turnover
reached to £25 million. Capita joined FTSE 100 companies in the same year.
Capita started to gain the real momentum in 1999 till today. Capita’s turnover
reached £327 million and a net profit of £36.3 million in the same year. In year
2008 turnover jumped to £2,441 and profit before tax was £277.2 million. Total
number of employees exceeds 60,000. These figures show fantastic and
consistent growth of Capita.
(www.capita.co.uk)
Capita has a huge portfolio of clients and nearly providing services to 33 million
people per year for its clients. Capita has it presence at around 60 business centres.
Such a huge number of people being served require huge commitment and
expertise from its employees. It also highlights the importance of highly motivated
staff, state of the art work environment, competitive and fair rewards and growth
opportunities for ambitious and professional employees. It will ensure employee
satisfaction and hence result in increased employee retention. It is important to note
that capita has 82% retention rate generally and 88% for senior management. The
breakup for full time and part time employees is 84.5% and 15.5% respectively.
Gender breakup of employees is 52% male and 48% female which shows that equal
opportunity policy for all is successfully implemented.
(www.capita.co.uk)
Capita’s business operations are dominated by service industry operations for

customers of its clients. Providing these services extensively involve dealing with
personal and organisational data makes the job more sensitive and complex but also

requires reliable and committed workforce to carry out such operations successfully
at every level of the management. Once again it shows the significance of a useful
and bona fide retention strategy to put in place. CAPITA has taken over employees
from mergers and acquisitions. They make up 70% of the total work force of
CAPITA.
The purpose of this case study is to examine the relationship between work
environment, employee motivation and retention in CAPITA.
1.3 Aims and Objectives:
• To analyse the impact of organisational work environment, ethics and values

and behaviour on employee retention.
• To determine the consequences of high employee turnover on an
organisations performance, profitability and customer satisfaction.
• To analyse and evaluate the influence of available tools and strategies on
employee satisfaction/motivation and employee retention.
• To determine the importance of keeping highly skilled and high performing
employees and complexities involve in retaining them.
• To analyse the role of strategic HR in devising policy framework for employee
retention.
• To determine the role of managers and immediate bosses in implementation
and execution of the company policy through pragmatic and innovative
thinking.
• To determine the impact of recession or financial crises on employee
retention.
1.4 DISSERTATION FORMATION
Chapter 1: This chapter gives a synopsis about the selected subject for dissertation
and also background of the topic. The focus is on the concept of Employee

Retention and the strategies and efforts made by managers. Also discussed the
introduction of the organization (CAPITA) and different objectives of research has
been discussed.
Chapter 2: In this chapter, the literature review of the current study will be discussed
and this will tell us about the other researches and the view of different authors. It
also provides the theoretical framework which describes different theories and
research about the concept of Employee Retention Process. The discussion
provides detailed introduction to the literature of different theories of different
authors.
Chapter 3: deals with data collection and analyzing methods in order to explore
answers to our research questions, and thus satisfying the purpose of the research.
Chapter begins with the introduction of research methods, discusses different
research philosophies and research approaches and strategies. It’s progressing by
describing suitable research design and how data gathering was carried out.
Chapter 4: This chapter deals with the explanation of aims and objectives and the
relationship of those aims and objectives with the research work and the literature
review.
Chapter 5: Finally, a few limitations of the data are highlights. This chapter examine
the conclusion of this study; explain conclusion based on the manager and
employee interviews answer and ends with advices to the management of the
organization (CAPITA). Lastly the list of references of different books and websites
and bibliography is given to support the research and the literature review.

2.1 INTRODUCTION:
Literature review is the important part of any study as it enables you to find the key
aspects of the study which is taking place. Because during the study it is good to
know what different people think about the subject so that it enables you to develop
a summary of the sources, it usually has an organizational pattern and combines
both summary and synthesis. A summary is a reiterate of the key information of the
whole, but an amalgamation is a restructuring of source or subject matter. It can
give a new understanding of the historical perspective or blend new with old
account. Or it might draw the intellectual evolution of the field, including major
theories or phenomena. Sometimes depending on the circumstances; the literature
review may evaluate the sources and direct the reader on the most significant or
relevant.
I have attempted the same pattern while conducting literature review for this study
which enables me to understand the subject i.e. impact of Employee turnover on
organisational performance. Most importantly it also helped me to formulate aims &
objectives to define the research question(s) of this study.
2.2 Employee turnover:

Employee turnover is the number of employees that a company might have to
replace in a year or any other specified period as an average of the total number of
employees that organisation has. The main concern of the companies is high cost
associated with employee turnover particularly lower level of jobs and these jobs
has highest turnover. There are numerous factors in an organisation which can
affect employee turnover, and these can stem from both employer and employees.
Generally these are wages or salaries, benefits or perks, employee attendance and
work environment etc.
2.3 Retention:
As it has been mentioned above that employee turnover incur huge cost and is
very expensive. But it is also very important to note that employee turnover is
different for different organisations it means that what is acceptable or normal rate
of turnover depends on the nature of business that it does. It is not only the high
turnover that is dangerous but too low rate can also have a negative impact on the
organisation by creating an inactive workforce. Employee turnover in a real time
situation depends on a number of internal and external factors. For example a food
chain might have a high staff turnover (KFC) due to high number of casual workers
such as students that it employs on the other hand a high Tec. Company with
various roles for its employees may have very high rate of employee retention.
(Rigby,R.2003)
it is also important to note that forced retention such as a trust worthy employee or
a winning team that a employer may not allow to go or even promote may result in
stagnation or de-motivation of employees.
2.4 Definition(s) of Employee Retention:

According to Phillips and Connell (2003), employee retention is the fraction of
employees staying in an organization in a given period of time. It also states that
the retention rate must be adequate in all important of the job categories. (Page-2)
and According to Jennifer A. Carsen (2005), employee retention is the number of
existing employees keep or stay with their jobs over a fix period of time is known as
employee retention. It further suggests that the retention policy should also focus
on retaining the high performers and talented employees or losing the losers and
keeping the keepers. (Page-2)
There are several definitions of employee retention highlighting different aspects of

employee retention.
According to Branham, F. Leigh (2000), the markets or business environment has

witnessed unprecedented Change at a rapid pace in the last couple of decades in
business environment and practices e.g. management, production processes,
marketing, consumer relationship, human resource, employee motivation and
retention. It has made the role of the managers becoming more demanding in their
dealings with customers and motivating employees. It is inexorable for managers to
be more pragmatic and innovative while executing their duties particularly
developing a sense of association or loyalty in their employees with the company. As
it has been discussed that the change has taken place at an unprecedented rate
particularly in the context of information technology, it has transformed the way
business used to be conducted. It has strongly influence the basic requirements for
any managerial positions and computer literacy for other jobs. It would require
fundamental changes in job description, induction and even on job training,
automation in data processing has reduced the time to make a transaction many
times with advent of internet in early nineties, it has grown into a huge online
industry. All this has also changed the concept of customer service, buying and
selling etc. Now let’s have a look how to incorporate this change into employee
motivation and retention, use of the technology has made doing things easy and
improved the quality. It can help mangers to in better implementation and
assessment of the policies related to employee motivation/retention. Another
challenging aspect of employee retention is related to highly skilled, or talented
employee because retain them requires more sophisticated approach. Companies
involve in high Tec. Business should be able to retain their key employee otherwise
it will become a nightmare situation for them. It could affect or delay their projects or
may cause serious disruption in R&D projects as result cost will increase to complete
such project or even commercial value may reduced significantly. Hence, it is very
important for these companies to do every possible effort it may require to retain
high performers and talented employees.
Now let’s see what general statistic say about all the efforts undertaken by
companies to retain their employee. According to sources quoted below it appears to
a daunting job to keep up consistent turnover rate the statistics reveal that in year
2000 every month, around 13% of people quit their jobs to take other positions. It
means more than one in seven people compared to one in ten in 1995. According to
statistics estimated time required to fill a job opening has increased to 51days from
41days. Companies are spending between 10,000 dollars (£ 7,000) to 50,000 dollars
(£ 35,000) as a replacement cost as a result of a departing employees, it may show
only the real/tangible cost.
(Page: 15-19)

According to Pepitone and Bruce (1998), Motivation is one of the important
determinants how an individual may respond when it comes decide whether he/she
will to quit or stick with the job. If he/she is happy and satisfied according his/her
preferences it is very likely that he/she will stick with his present job. As it is an
established fact that every individual has its own set of preferences or motivator
that’s why it would be a fundamental requirement that while developing employee
retention strategies that every aspect is considered and included to make it viable for
all sort of needs to encounter any unexpected situations. Motivation is most talked
about issue and there is plenty of research material available in various forms. There
are numerous theories from classical to more contemporary style theories. They
extensively states about physiological needs or basic needs range from food, shelter
and security or safety needs. Then comes next level of needs e.g. social needs,
love/affectionate and belongingness needs on the basis of ethnic origin etc. more
developed ones, e.g. ego, self-esteem, status, prestige and recognition etc. these
needs are variable and may change with the change in circumstances or changes
with the passage of time; hence it requires the understanding of the ladder of the
needs as a guide through focusing on what drives people and how/what can satisfy
their needs. Once, basic needs are fulfilled the person will automatically moves to
next level of the needs it goes until all the needs are satisfied so the individual to feel

motivated at the end of each level and will likely stay with that work activity which
satisfy his/her needs at most for that level to which he/she relates, the greater the
motivation, higher would be the performance to carry out that activity. (Page 15-20)
According to Harris and Brannick (1999), workforce of an organization is the life

blood for that organisation as they are ones who will carry out all the functions
regardless how small or big in value. It is extremely important that employee feel
some sort of association with their organisations may be in terms of loyalty, pride or
any other affiliation it would only be possible if they feel satisfied for their individual
needs again it means that it should be the primary objective of any organisation to
ensure that its employees are well catered for according to the level of their services
because it is very likely that every individuals needs are on the same level for which
he suppose to perform. Hence, it is clear that having a committed, enthusiastic,
innovative and forward looking human resource is the most precious asset for a
company. However, it requires an intensive effort achieve real time it should start
from recruitment, every individual should be assessed thoroughly for his/her abilities
in according their job designation. It will provide valuable information about his/her
traits and the level of needs to which he/she can be associated. Next step would be
to asses his/her potential for growth so he/she can be provided with any available
opportunities to excel. On job training will get them familiar to the company goals
and objectives and what company expects from them. It is called job clarity. It is a
long and expensive process however, once done it will get motivated and self driven
staff for the organisation automatically creating a given take situation for both
employee and employer. Such an environment provides everything that it takes to
high employee retention. Failure to do so will result into low production, poor
customer satisfaction and de-motivated employee base and customers. (Page 155-
157)
Organisation are increasingly aware of the fact that their operational efficiency and
survival in cutting edge competition will largely depend on the level of satisfaction
and motivation and as result how strongly they are associated with their
organisation.

http://www.info-village.info/wp-content/uploads/2009/09/HRM.jpg
Accessed on 11th December, 2009 at 14.00p.m
According to Klaff and Churn (2001), how/what will provide the ingredients for a
successful and viable retention policy, quality of information used will also determine
the success or failure of the policy, the ability of the middle management to execute
any proposed policy matter will also be important because even if there is an ideal
policy but poorly implemented will diminish the chances of success. Managers need
to develop integrated implementation process for retention throughout the
organisation to have better chances of success. Let’s have a look at Industry
averages for retention it can give us a better understanding of industry trends and
comparison of statistics may help us why retention rate varies industry to industry.
In United States the average employee turnover rate is around 15 % per year, for
manufacturing sector it is around 15-20 % per year and for public sector, it is around
6-8 % per year. Klaff, L.G.Churn Costs
There is another important source of information to formulate a viable and successful

retention policy is the feedback obtained from the retained employees. By carefully
collected and analysed feedback data can also help to identify the strengths and

weaknesses in the current practices for retention and the room for any potential
changes for future trends.
It is common that employers are always interested to have the most suitable and
competent employees, same is the case with the employees they also want to have
or willing to switch to best employers.
Information obtained through exit interviews may also provide some information as
to why people quit their jobs. But such information may not be always reliable
because employees, who quit their jobs, sometimes, give misleading information in
such interviews e.g. reasons given for quitting e.g. better job opportunity, other
personal reasons as ground for leaving and intentionally omitting discussion of
unpleasant aspects of their current job.
http://www.jstor.org
According to Harrison, D., Virick M. Employers need to have a prudent retention

policy realistically addressing every aspect of employee satisfaction particularly,
when it comes to highly skilled and talented staff. These are the people with more
complex needs and hence required to deal exclusively. A poorly perceived policy
focusing employee motivation and retention related problems in seclusion, such as
monetary incentives might actually lead to an increased retention of low performers.
Work environment is the most important place where everything supposes to happen
from both the employer and the employee. Whatever policies and strategies
developed will eventually be tested or implemented on other hand employee has to
perform according to some level of expectation of his employer as result both the
parties will be testified. A state of equilibrium would be an ideal on the graph for both
the parties. Employer will get the motivated staff performing up to the mark and more
likely to stay for longer time with organisation. Employee will feel satisfies with
his/her job. Editor 2000, Employers need to focus in creating and encouraging
creating an environment which can provide employees everything which may
enhance their ability to perform and feel motivated. A secure, safe and completive
environment will facilitate the employees to make excellent progress and
contribution.
According to reasons stated in different research papers, what makes employees to
stay with an organization? It is an established fact that a large number of people i.e.
about 90 % stay with their jobs related to motivational issues that mainly include
these most important factors of motivation i.e., learning and development, career
development, stimulating work environment, appreciation and sovereignty etc. Kaye,
Beverly and Jordan-Evans, Sharon (2002)
Business outcome such as growth and production depends how effective worker
engagement. Properly engaged work force will provide their optimum. It will require
job clarity, safe environment, immediate recognition etc. further, a de centralised
approach may provide better result i.e. by addressing needs of each department
instead of the entire organisation as an entity. It will help to identify local issues in
each department. Baxter international has conducted a study completed in one and
a half year about what their employees’ value most on different geographical
locations. Editor 1998, “work/life study=respect” The common finding was that
employee wants to be respected as human being with a life further than work.
Managers are usually required to focus on the productivity and profitability and less
for their ability to improve their inter-personal skills. It is important that supervisors
and immediate bosses should be required to help their employees while carrying out
their jobs. An outcome of this would be better relationship between immediate
bosses and their staff.
2.5 Environments that Bred Turnover:

Mostly organizations who struggle with high employee turnover pointed out that it
does not exist in every department. Instead it occurs in pockets and each pocket
has its own intensity. Generally it is common in areas such as customer service
centres, clerical or lower admin positions and inventory management Positions.
Banking, insurance, Health care and communications industry, are more likely to
have high turnover statistics than other industries for various reasons but commonly
it the circumstances and the environment which causes any specific outcome of
employee turnover.

The industry sectors producing such employee patterns can be seen extensively in
healthcare, retail, and factory work (Bureau of Labour Statistics, 2004). The
commonalities in these environments include, low to moderate employee
compensation, lack of upward mobility, high-turnover due to hiring characteristics
and competitive job markets, complex training processes, and a wide range of
customer issues to be earned (EPF, 2004). As can be seen, a combination of factors
may exist, decreasing employee job satisfaction and thereby increasing turnover.
2.6 Reasons to leave or stay?

Apart from what should be the retention policies and programs, it is an established
fact and a general consensus in the HR literature about the common trends found in
any prospective HR program that adds to good retention. Most of these are directly
related to creating a satisfactory work environment for employees and thus, in turn,
to good retention. Prominent trait includes:
Beauregard and Fitzgerald, (2000)
• work environment is an important factor, a stimulating work environment that allows

people to give their best by effective use of their skills and knowledge, given a
degree of autonomy on the job, allow them to contribute ideas, so they can assess
their own contribution to influence the company’s well-being.
• Professional growth by providing opportunities for learning and skills and

subsequent progression in job responsibilities.
• Useful or meaningful communications by creating provision or channels for open

two-way communication, effective communication means employees should be
given opportunity of being heard, incorporating their views in the decisions that will
affect them.
• Competitive and fair compensation, flexible benefit/ perks plans.
• Employer should understand employee needs in terms of keeping a balance in

their work and personal life.
• Managers or supervisors treat their subordinates with dignity and honour.

Companies having a rigid approach, or having an organizational culture that is
branded by domination and autocracy are likely to have dissatisfied employees no
matter how good the incentives to stay may be (Ashby and Pell, 2001). There are
however other aspects of the work environment or particular jobs that can act as
strong ‘de-motivators’ that can cause people to leave their employment.
Beauregard & Fitzgerald, (2001)
2.7 Motivation, retention and employees (Care Model):
According to Glanz (2002), the acronym CARE is probably the best defined on that
I have come across during literature review, care itself means giving attention, time
and consideration in English language. As an acronym it also defines every vital
issue related to employee motivation and retention. C stands for the importance of
creative communication, A stands for atmosphere i.e. work environment and also
appreciation for good work, R means respect and the reason for being and finally E
stands for empathy plus enthusiasm.
The need and importance of communication in our lives has a fundamental place, it
is the communication that connects us with each other and make us understand
what/how we feel for each other. Communication provides the meaning for our
personal, social or work life. Organization with an open and two way communication
approach can help its employees to make them understand what their job requires
from them in terms of job clarity and also to understand the concerns of the
employees about the job or any other aspects of the job. Communication has to be
clear and accurate; otherwise it will lose its purpose. It is important that whatever has
been communicated has some meaning and the receiver has understood that
meaning. To assess the effectiveness of the communication take regular feedback, it
will ensure the message send is relieved and understood and the action required will
be taken accordingly and accurately. Dauten, Dale (2000),
A thoroughly professional work environment that allows every individual to contribute

in a creative and meaningful way would help the organisation to get best out of its
workforce. It would be such an environment where people can give their professional
views and may disagree in their professional opinion without being personal it will
not only help professional to do their job more professionally but also create a
healthy competition which will encourage people to excel in their profession.
Better ways communication needs to develop keeping in view the specific

organisational culture, work environment and job sensitivity it will provide the means
to make things occur on the right course. Useful and frequent communication is vital
for understanding and solving problems.
The fundamentals of a triumphant team permutation also include the ability to

communicate effectively in all directions. No team can become a winning
combination unless realistic and effective communication. Real test for such a
winning combination comes in crisis or difficult times.
It in the best interest of the company to provide opportunities for Professional

development, either by on job training courses or higher education from universities
as part and parcel of their professional growth programme. It will ensure that the
staffs are will equipped to cater the ever changing market practices. It will enhance
the degree of pledge of the employees with their job. Providing training and growth
opportunities internally may help to keep the employees engaged and inducement
for top performers. Littman, Margaret (2000),
Recognition for the good work will give motivation to those who deserve it.
Particularly to those whose basic needs are less important and they belong to the
group of more sophisticated needs. Recognition does not cost anything and easy to
dispense that there is simply no reason for failing to do so.
Companies should treat their employees with goodness, admiration and equality.
Particularly, multinational organisations operating in assorted cultural environments,
need to understand the importance of respect for other cultures and norms and if not
handled carefully, can create antipathy and counterproductive. Littman, Margaret
(2000),

It is a natural thing for all of us as humans to seek some sort of meaning for our
existence and for everything we do. “Every one of us has a dire feeling to belong to
something beyond ourselves; living or working in where you feel you belong”. Stern,
Gary M. (1996)
Every organization tries doing whatever possible to satisfy the employee needs so to
motivate the work force and engage them fully professionally and employees
emotionally with the goals of the organization.
Enthusiasm in our lives provides the energy for any cause, faith or purpose.
Whatever that human race has achieved in form of civilisation is because of this
invisible force called enthusiasm. It only comes when somebody is absolutely
convinced that whatever he is been told is true and correct. Organisations trying to
create a feeling of passion will find reliability and productivity flourishing.
Theories and models used for employee turnover can provide key information of the
factors decisive in the decisions to leave may provide a reliable source of information
for managers in quest to understand turnover problem and striving to devise
strategies to control it. There have been quite a few models presented and
implemented in last couple of decades. Some of them have been quite successful in
specific industries or areas but with passage of time and rapid change in the market
conditions they lost their effectiveness. New trends and changed life style forced
generation gap and more mechanised or materialistic approach in our lives.
Growing consumerism has changed our lives drastically and pushed us as
consumers to commit more and more even if you do not have enough cash at
present, you can spend or commit on the basis of your potential earnings etc.
whereas nobody has any control on the future events hence it causes a growing
anxiety among the people.
These sorts of things making peoples attitude or behaviour unpredictable because of

continuous pressures to meet the payments etc. anyhow it is important to encourage
more socialising within organisation and hence better relationship at people to
people level providing opportunities to better understand and console eachother in
the time of need. Barletta C. 2001.
2.8 Motivation and retaining high performers:
Motivation is word but when you want to achieve it in your organisation it will become
a complete system which has its own inputs and outputs. How to motivate the
workforce? It of course is fundamental question for every organisation and part of
the answer lies within the organisation. It has been discussed in earlier paragraphs
that motivation is all about fulfilment of needs, starting from basic needs to more
sophisticated ones. It is important to understand the employee needs their priorities
of the needs. Managers should consider employees on individual basis and on the
basis of small groups made of individuals who possess similar characteristics. It
would make difficult job relatively easy but more importantly increasing the chances
of success to maximum. These individuals or small groups of individuals if highly
motivated can increase quality and value to the organizational operational capability
productivity and profitability.
Nurturing talent requires change in management thinking, policy making and

implementation. It must seriously include the importance of innovation required to
cater the change element. It also include employee participation in decision making
process especially those directly affect them or their interests. Kaye Throne and
Andy Pellant (2007)
2.9 HR Strategies:
What HR strategies should be? How do such strategies can be formulated? What
are important elements of a successful HR strategy? The answer for these clear cut
questions will provide solutions for both employee motivation and retention. A
successful HR strategy should include both the quantitative and qualitative factors,
May linked with employee retention issues. Managers need to assess thoroughly
current practices implementation strategy before attempting to implement the new
set of policies it will help them to identify gaps needs to be filled in new
implementation process.

It is a process to determine how employees, performing as compare to their job
expectations and also to assess a fair and competitive reward are being provided to
make sure employees are motivated and continue their good work. Performance
appraisal is frequently used as tool in administrative decision making e.g. decision
related to top promotions, sacking, layoffs and increases in monetary rewards such
as wages/salaries. There several methods or techniques used in performance
appraisal. It is a useful tool in the hands of management to get valuable information
about the needs for more training, employee strengths and weaknesses etc. it is
suggested that performance appraisal must be used on a regular basis e.g. twice or
thrice a year. Kressler and Herwig (2003)

There are quite a few methods available and are used to conduct performance
appraisal e.g. Goal setting or management by objective (MBO) and Multi rater
assessment or (360-degree feedback). Byars and Rue (2000),
Management by objective (MBO) is a frequently applied method for professional and

managerial positions. It is really a systematic way or method to assess employees it
uses plainly and specifically defined statements of purpose/goals to be achieved by
the employee, it also provides probable course of actions or actions plans, how to
achieve these objectives. It also allows them to assess or measuring achievement
made and taking corrective actions if necessary. There is a provision for regular
session or meetings to update each other about the progress made. MBO is also
known as performance management, management by outcome and work planning
and review program.
Other prevalent methods used for performance appraisal to take feedback from
other concerned parties e.g. immediate managers/ supervisors, team leaders,
customers and suppliers are ask to complete a questionnaire about how they feel
about that particular person being assessed because they are the most relevant and
suitable people to comment about his/her performance. If the answers were provided
on a professional basis then it would serve the best interest of all the parties. It will
also give an opportunity to have a say those who normally are neglected but are one
of the important stakeholders. This sort of evaluation must be done with openness,
fairness, and responsibly.
Lloyd L.Byars and Leslie W. Rue (2000),

2.9.3 Financial impact of high turnover:
High employee turnover cost huge sums of money to company it can waste precious
resources of the company. The cost of replacing an employee exceeds the amount
of a whole year salary and benefits of that employee. You have to start from scratch
i.e. advertising, recruiting, training, induction etc. plus the probable loss of profits that
may result from low production or reduced services. The situation is even worse
when you lose some highly professional or talented staff. Ramlal.S (2004)
organisations can afford to wait until the damage is done but they have strike pre-
emptively.
It can done if HR plan for long and short term strategies in such a way that all
Human Resource needs of the organisation are fulfilled including employee
retention. It may require an exclusive appointment of an HR manager to Board.
Beardewell Etal (2004)
Retention should be considered as a part of recruitment or every effort should be

made at the time of recruitment that the vacancy is being filled with someone whose
needs are most compatible with nature of the job and the salary or wages offered for
that job. His/her abilities are concurrent to the job designation etc. Risher, H and
Stopper, W (2002)
Organisations are increasingly under pressure to recruit rite people for the job to
avoid unnecessary costs associated with turnover problem. It is strongly
recommended a change of the priorities in should be brought in such a way that
retention is sorted with recruitment. Armstrong, M (2001),
According to Hacker, CA (1996), in case of certain jobs or group of jobs recruitment

itself is an expensive process because of the required qualification, experience or
unique nature of expertise rare to find then it is highly recommended that it should
done by eliminating any reasons and causes to replace such a position.
2.10 Strategies & tools for Retention:

It is important to note that strategies and tools for retention do not mean that they are
applied mathematics formulae that once numerical values are put in you will get the
straight forward results. These strategies are however does have some generalise
features or benchmarks features. But every organisation has developed its own
environment specific adjustments.
It is the basic responsibility of the company strategic management to identify their

retention needs in accordance with their operational needs. The best combination of
incentives and motivators should be used in best available combinations to suit their
needs.
2.10.1 Job description & clarity:
Adkerson (2000), Managers should be aware of the fact that their work force has
been given every smallest detail of their jobs. It means that they all the procedures,
process and routines involve in carrying out their jobs. They should be informed to
on the outcomes and not the activities. To do that manager must explain everything
in plain words by using simple language and should avoid using any jargons. To
assess their understanding they may ask questions related to different situation that
may occur while carrying out their jobs.
2.10.2 On Job Training:

Training can be the best tool to develop and change attitudes, knowledge, skills and
behaviour in accordance with goals and objectives of an organisation. It has to be
linked with needs of the organization. Provision for Training may include specific job
training, workshops, seminars, and professional courses. Breadwell (2004)
2.10.3 Fair and competitive rewards:

According to Bowen (2000), a vast majority of the people work for money, which
means it is their main source of motivation. They always strive to enhance their skills
to obtain higher positions mainly because to get higher monetary rewards. Every
individual wants to be compensated equal to his contribution. Fair and completive
reward system should be in place to avoid employee turnover.
DE-motivators:
It is important to know the possible causes of de motivation of the work force, and
provides ground for employee turnover. Few are listed here, Lack of growth
opportunities, Disparity in work pattern and salary/wages etc., as it has been

mention earlier that on job training is a vital tool in the hands of management as it
would serve dual purpose of the company; it will provide skilled workforce with better
expertise to carry out their jobs and on the other hand it will give employees better
understanding of their jobs. Ultimately it will give employee better understanding of
the organisational goals and objectives. From employees perspective it give them
opportunities for professional growth.
According to Sigler, K (1999), it is the primary responsibility of the management to

identify talented and high performing individuals in the first place and then should be
recognised on merit in every aspect including monetary rewards.
2.10.4 Motivation a source of Retention:

Organisations focusing on motivation are more likely to have higher retention rate.
Motivated work force show more commitment with their job and organisation.
Motivation provides the driving force for anything that we want to achieve in our
personal or professional lives. There is no shortage of research on motivation and
related issues. It has been most talked about issue in business circles, managers
and experts. Motivation theories discuss about the needs of individuals, hierarchy of
such needs etc. needs are defined as primary, secondary and tertiary needs. It is
important to understand that these needs are to be fulfilled or satisfied in the same
order. Once primary needs are fulfilled ones moves to next level of needs. Once
physiological needs are fulfilled you switch to more complex aesthetic, psychological
needs. Motivation is the measure of tendency towards engagement in an endeavour
Mulleys (2005)
According to Blyton, P and Tumbull, P (2004), emerging trends has shifted

employees’ perception about how he/she should be treated at work by the employer.
People want to be cared as humans instead of as a resource; they want to be a part
of the organisations and not just a tool in the hands of the management.
According to Linda (2000), satisfaction gives motivation and motivation gives

commitment. Highly motivated work force will perform up to the expectations of the
employer.
2.11 Human Capital Management (HCM) :

Human capital management (HCM) has been illustrated as the strategic policy or
approach toward employee management or human resource in connection with
issues related the specific needs for an organization’s success. It is can also be
defined as management of all the resources or the assets those can be attributed to
people of the organization e.g. knowledge and skills, expertise, indigenous
technology or formulae of an organization, customer relationship to attain a
competitive edge in the market. Human capital is a constituent part of the intellectual
capital of a company. It is different from the management of the conventional
physical assets. . Nalbantian Et al (2004),
It may be defined as HCM as, the total development intellectual capital articulated
as organizational value. Kearns (2005)
2.12 The link between HCM and Business Strategy:

According to Scarborough and Elias (2002), HCM and business strategy go hand
in hand, human capital management is about human attributed capital which is
contributing to an organisational value significantly better HCM will also help to
improve business strategy. These can defined as two distinct streams of
management and strategy i.e. HCM and business strategy.
The people of a company are the life blood of that organisation and key for every
business endeavour. All business strategic plans for innovation, growth and
price/cost leadership depend on people an organisation. If not treated appropriately
then organizations will lose track and become a heap of debris.
2.12.1 Employee Turnover & Race/Ethnicity:

Hypothetical views in organizational behaviour (OB), emphasize that because of
prejudice, either genuine or alleged members of minority groups are more likely to
quit their jobs. It also creates an unhealthy trend where minority people will feel
insecure and less motivated which will result in idle production. This may also lead to
some sort discrimination amongst staff. Roger Griffeth, R.W.Griffeth, Peter
W.Whom (2004)
Source: adopted from P.Hom and R. Griffith (1996)

Race Supervisory Bios Turnover
Pool Leader – Member Exchange

Model of potential Pay Inequity
causes of turnover
among minorities Impoverished Job Duties
Performance Pressure
It is a general Blocked Careers
perception that in
Unsupportive Colleagues
recession there is
Tokenism
lower number of jobs
as compared to
people looking for jobs and hence it would be very unlikely that people will tend to
leave their jobs. But in reality it is just opposite according to data the number of
people who quit their jobs dropped in the first of the this recession, surprisingly just
by 11% it shows that the chances are still high i.e. 89% in 2008 as sturdy as it was in
2007.
BLS 10 year projections are from Eric.B. November, 2007.
Recession is the time when usually the best time for talented and high performing
professionals to quit their jobs. The reason behind this may be their ability to work as
freelance and still make good money. However, it is also true that more people lose
their jobs and hence proportionately more applicants for any vacancy created.

3.1 INTRODUCTION:
Chapter-3 is all about the research methodologies adopted for this study. it give a
include brief account of general methodologies available to conduct different types
research. Selection of a methodology depends what type of research is being
conducted. In this research a combination of descriptive and analytical approach
has been used as it involves exploring huge number of theories, strategies and
tools related to main research theme i.e. employee turnover. It involves both
quantitative and qualitative date to analyse. The main sources of primary data are
the questionnaire and interviews conducted from CAPITA (proposed organisation
for case study) employees and management respectively. Other sources related to
CAPITA also used whenever and where ever found to be relevant and reliable e.g.
CAPITA website and other printed material. It helps me to assess the policies and
strategies of CAPITA in terms of employee retention and to measure how
successfully these policies are implemented etc...
A questionnaire was designed exclusively for CAPITA’s employees. The main

objective of this questionnaire is determined how its employee feels about their
organisation, work environment and job satisfaction etc. It will also serve as
source of primary data collection for analysis of the tendencies and reason why
and how people want to stay or quit their jobs.
The results acquire processing of data used to do a critical evaluation of the

research question in connection with set aims and objectives for this research and
for the organization under consideration as case study i.e. CAPITA.
The methodology plays an important role in the success of any research,

particularly in critical evaluation and forming a conclusion. There are two types of
approaches being used in collection of data: Qualitative and Quantitative Method.
Figure 11: The Research Process

Source: Mark Saunders, Philip Lewis and Adrian. Thorn hill, Research Methods for Business Students, 2003,
p.733roduction:al performance?.

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3.2 The Purpose and Utility of Literature Review:
The main purpose of literature review is to help you to develop a knowledge base
on the subject matter, understanding an insight into relevant previous research. It
will also help to identify the areas given less attention and need to be explored.
There are two approaches commonly used to conduct a research and are:

Deductive Approach, in which you develop a theory and hypotheses and design a
research strategy to test the hypotheses, or
Inductive Approach, in which you collect data and develop theory as a result of
your data analysis.
Deduction approach owes more to positivism and induction to interpretiveism.
These steps will be followed to elaborate the set Aims & Objectives:
• Review the literature on all related subjects those can impact directly or
indirectly employee turnover e.g. motivation and job satisfaction.
• Continue to explore present and historical aspects of employee turnover, its

reasons and causes, tools and strategies available to control it. In the light of
the information acquired from the review of literature, identify areas which
would require linkage with a questionnaire to collect data. It may include
employee perceptions about job satisfaction and employee retention.
• The population sample was taken from various departments of the

organisation, with the exception of management positions.
• The questionnaire developed for use in this study will be provided to the
target segment of the employees by selecting people from the organisation
chosen for case study but it would not be distributed to management
positions, Prior to finalization of the questionnaire, appropriate revisions will
be made.
• The information collected by questionnaire will be sorted and analyzed,

branded and appropriate inferential statistics will be generated.
• Recommendation for practice will be derived from the analysis of the data
collected.
3.3 Structure of Literature Review:
• Started with a more general approach before narrowing down.
• Make a provision of a brief overview of the key ideas.
• Link the ideas.

• Narrowing down further, highlighting the work which is more relevant to the
research.
3.4 Literature Sources:
These sources are categorised into three streams.
Primary Secondary Tertiary

Reports. Books. Indexes.
Thesis. Journals. Abstracts.
E mails. Newspapers. Catalogues.
Conference proceedings. Some Govt. Encyclopaedias.

Publications.
Company reports. Dictionaries.
Unpublished Manu Script Bibliographies’.

resources.
Citation Indexes.
Some Govt.
Publications.
Source Page 64:
3.5 Research Approach
It has discussed in earlier paragraphs that there are several methods a research
can be approached Opung (2002) depending on what is appropriate in accordance
with the research type it can be either deductive and quantitative or inductive and
qualitative. There is and other approach called applied or basic approach it would
be best when the purpose of the research is to improve general knowledge or
knowledge Base about a particular subject matter. (McGee P, 2005).

According to Bryman and Bell (2003) qualitative research focuses on the
characteristics of data e.g. taste, colour, odour etc whereas, quantitative research
is more about figures and facts, or simply numbers.
In such a research qualitative factors allowed more weight because of the

qualitative topic of the research itself. The topic was aimed at measuring
something which cannot be expressed as a percentage. However quantitative
factors were not left un-touched and may be used for the final outcome.
3.6 Research Paradigm:
Research paradigm describes the basis of assumption that would suggest specific
set of philosophic beliefs about the topic or theme of the research that provides
principal and direction in which research is be carried out (Robert and Richard,
2008). There are two main streams philosophical tactics often influence the
research analysis. Known as Positivist (means scientific) and Interpretivism
(means anti-positivist) (Saunders,et al 2007). First one is the most commonly used
approach in natural sciences. It talks about general explanation such as patterns
and regularities in events. According to David Carson, (2001) positivist research is
all about rationalization and depiction of thoughts and views dominated by
unambiguously stated hypothesis and theories. Positivist methodology based on a
conviction that research should be carry out in the way as conducted in natural
sciences (Collis and Hussey, 2003).it is recommended that the researcher and
participant should be detached from research resulting in the research findings to
be more objective.
According to Saunders, et al, (2007), On the other hand the Interpretivism is just
an epistemological position that deals with the nature of knowledge or its origin and

validity. It also focuses on understanding on the difference between humans as
characters and consequences of their actions and perceptions
It is an approach that gave more emphasis on reasoning to study the situation and
its details to comprehend authenticity working behind these phenomena.
Interpretivism philosophy can help in achieving the research goals and effectively
address the issues raised by the research question. It may also help to explore the
facts relating to complex and unique human behavior and business environments.
(Remeny et al, 1998)
Some may squabble that an interpretive is highly appropriate in the case of

business and management research, particularly in fields such as organizational
behavior, marketing and human resource management, (Saunders et al. 2007).
3.7 Research Design:
Research design is the master plan of the research and the architecture that helps
in collecting and analysing data (Zikmund, 2000). According to Sanders et al.
(2003) research design is divided into;
 Exploratory: This design is used when deep understanding of the subject is

required (Malhotra, 2004). According to the Proctor (2005) this design requires
formulating question in a different way. It also facilitate when it is difficult to make
quantitative assessment.
 Descriptive: According to the Proctor (2005), as it clear from its title that involves
detailed scrutiny into the profile of people and situations. It also helps. It would be
more suitable when there is need of organised and accurate description of the
events under study.
 Casual: It helps in getting the cause and affect evidence. Casual research helps
us to come across the affect of variable on another variable. It helps us to
determine how the step which is taken today will affect the business later in the
future.
3.8.1 QUANTITATIVE METHOD:

The quantitative’ method deals with figure, numbers, measurement and amounts
etc these facts and figure collected in raw form from different sources and
processed by using statistical techniques or mathematics formulae. After being
processed data can provide valuable information in the form trends, averages, and
other more advance features e.g. regression and correlation etc. Robert Murray
Thomas (2003)
The use of quantitative method will help to make predictions, make comparisons,
sampling, and other experimental measurements aimed to produce the generalize
result. This sort of data analysis helps to conclude study that is commercially viable
and help to improve things within the framework of the subject under study. Data
collected and used should not be contaminated, biased or influenced in any way.
To avoid such limitation in data every possible effort should be taken while
collected such data. (Page 1 & 2)
3.8.2 DISADVANTAGES OF QUANTITATIVE METHOD:
Like any other method quantitative method also has its limitation or disadvantages
associated with it. Ronald A. Nykiel (2007)
• Time factor is an apparent problem with this method as it requires or take time
in every stage i.e. collection, processing and evaluating.
• Sample size is important to obtain reliable information from the data processed.
It requires due diligence while selecting a sample size it can undermine the
reliability of the data if the sample size is either too big or small. The information
obtained may be misleading.
• Limitation of the formulae used can also effect the credibility of the information
obtained. (Page 56)
3.8.3 QUALITATIVE METHOD:
Qualitative data is of diverse form and nature. It includes virtually any form of data
or information that is of qualitative nature and can only be classified as non
numerical in nature. It may include interviews, observations and content analysis of

any document. This refers to purpose of qualitative research either explicitly or
implicitly. There are four major qualitative approaches: Deborah Padgett (1998),
• Ethnography comes largely from the field of anthropology i.e. studying cultures.
The most common ethnographic approach is participant observation as a part
of field research.
• Phenomenology is sometimes considered as a philosophical perspective as

well as an approach to qualitative methodology.
• Ground Theory is a multifaceted course of action. It starts with raising generic

queries which help to guide the research. For example core theoretical
concepts are identified then a linkage is developed between the theoretical
concepts and generative question evolved during the research.
• Field Research is typically about intensive field work and study which
subsequently coded and analyzed in a variety of ways.
3.8.4 LIMITATIONS OF QUALITATIVE METHOD:
Again there are few disadvantages or limitations associated with qualitative

methods: Rosalyn Benjamin Darling (2000)
• Interviews provide significant amount of such data but the circumstances in

which these interviews were conducted may affect the quality and credibility of the
information obtained e.g. Busy hours and tight schedule, timing and quality of the
question asked etc.
• Respondent may feel reluctant to disclose all the relevant information may
be due to company policy or the sensitivity/privacy involved.
• Misunderstood answers may give misleading or out of context information.

(Page 125 & 126)

Let’s start with the following two important sources of qualitative data also used in
this research.
• Questionnaires.
• Interviews.
3.9 INTERVIEWS:
In this research interviews has been used to obtain useful information from
different levels of management. These interviews were conducted face to face in
small sessions mainly because of managers’ busy schedules. However, it was the
most difficult and delicate issue to get reliable and relevant people for interviews. It
is important to note that it has always been my first preference to get hold on HR
managers but I have also reached other managers to find out departmental work
environment impact etc. on retention. Once the interviews were completed the
information obtained, processed and analysed in such a way that core aspects of
the subject matter are addressed and hence provided a clear picture of CAPITA
regarding its policies, strategies to control employee turnover within acceptable
limits. I would like mention that these interviews has been the main source of
information about CAPITA apart from other relevant printed material provided by
different managers including the CAPITA website references.
Interviews are considered a source of primary data. According to the nature how
an interview is designed and conducted they can be classified in to three
categories Interviews may be conducted face to face on the phone or by using the
internet. J. Amos Hatch (2006) (Page 236 & 237)
• Informal interviews.
• Formal or structure interviews and
• standardise
3.9.1 DISADVANTAGES OF INTERVIEWS:

There are certain built in limitations attached with interviews. David E. McNabb
(2004)
• It is a difficult job to catch relevant people because they are sitting on

responsible position hence, always busy. It requires prior appointments which may
result in prolong delays. Such appointments may be cancelled on short notice or
get squeezed. Page (152 & 153)
3.10 QUESTIONNAIRE:
For this research a questionnaire was also design for the general employees of the
CAPITA. This questionnaire provides an opportunity to interact directly with the
employees of capita to obtain primary data for analysis with other sources of
secondary data. It has 10 questions ranging from gender to age etc. employee
need to choose from predefined options (as multiple choice) given for each
question. Nearly 100 employees were approached and provided with this
questionnaire out of which 35 people participated and completed the questionnaire.
These questionnaires were designed carefully keeping in view that no relevant

issue is missed or ignored. Questionnaires provide very useful first hand
information of the CAPITA employees as they were free to choose their answers
resulting in a more realistic view of the said organisation.
According to Zoltán Dörnyei (2002), it is a structured form of data collection

method. Generally, a questionnaire has close ended questions giving pre-defined
options as multiple choices; respondents need to select the most appropriate
according to them. It important that before starting to compile a questionnaire one
has to developed a thorough understanding of every aspect of the subject and the
lucidity of anticipated aims and objectives in mind. (Page 11)
3.10.1 LIMITATION OF THE QUESTIONNARE(S):
• Because these questionnaires are given to respondents to complete in their

own time hence, it is very likely that they may forgot or event lost them altogether.

• Even if they are asked to fill in on the spot they might feel reluctant to spare few
moments to complete them.
• In some cases the respondents may find it difficult to understand the contents of a
questionnaire consequently giving misleading information. Stephen Moore, (Page
27)
A questionnaire may be a reliable source and good source of primary data

collection. The difficulties with this process can be overcome through coordinated
efforts with the interviewees. These reasons why there are two methods are being
used for data collection. On one side we have the process of collection of data in
the rapid speed an also we also have the in-depth knowledge about this research.
This could be achieved by this process not by any other process. Also all these
processes are easily to manage as well.
3.11 SAMPLE:
A sample is a random selection of events or outcomes taken from a large

population. A sample is normally small in size. Sample should be collected or taken
with great care otherwise it might lead to nowhere.
3.11.1 SAMPLE SIZE:
It is very important to determine what would be the most suitable size of a sample.
It should reflect the size of the population. The sample size cannot be big instead I
would be more than happy if I can manage interview a couple of relevant
managers. A total of 100 people were given the questionnaire out of which 35

people returned completed questionnaire. Hence, responses received were only 35
% of the total number of respondents contacted through different mediums.
3.12 Limitations of the study:
The research has some limitations in connection with analytical issues and
scrutinizing the existing studies. These can be defined as methodological:
➢ It is recommended to verifying the data sources in case any contradiction or

seems inaccurate; source of the data can always be checked.
➢ Data may be taken from a source/company whose reliability or reputation may

be questioned.
➢ My financial resources were minimal and time constraints am also be

considered as a limitation of this research.

INTRODUCTION:
Chapter 4 is the core part of this research. It includes analysis and interpretations
of the data collected through the questionnaires and interviews in the light of the
stated research question. Then it will extend to the integral peripherals parts of the
research question derived as aims and objectives of the research. It will also
provide a meticulous assessment of the results of the questionnaires and the
interviews conducted. A comparative analysis of the different perspectives
obtained through surveys and literature review in 2nd chapter of this study. It will
help to develop a conclusion and recommendations or suggestions in the
upcoming chapter. It will also focus as to how CAPITA is operating its policy for
employee retention; an attempt will also be make to determine the strengths and
weaknesses in the policy.

PILOT STUDY:
In order to explore in depth the research objectives of the research and appropriate
answer for the research question and the surveys and interviews conducted. It
includes designing a questionnaire which can provide clear cut picture of the
subject matter. It was designed to collect data for the objectives of the study. It
includes 10 questions related to the different aspects of the research given to 100
people, out of whom 35 completed questionnaires could be obtained from
employees of the CAPITA GROUP PLC, from various departments and roles.
Every possible effort has been made that all the ethical issues which may possibly
arise are accounted for in detail so that they do not affect the quality of the data
obtained in the survey. Apart from surveys, an interview was also design (set of
questions) asked from the key managers from the CAPITA. These interviews were
conducted face to face. However, it has been a daunting task to get appointments
from relevant managers due to their busy schedule. These interviews were aimed
to obtain an insight of the approach, course of action adopted in their execution,
and to assess their viability, strengths and weaknesses etc. it may include a
scrutiny of the CAPITA’s internal data about employee retention.
In this part of the study a detailed scrutiny of the data and its analysis is included. It
has been critically analysed and compared with other available data where
possible.
GENDER BREAK UP OF CAPITA WORK FORCE:
During this survey it is taken in the account that all the people get the same chance
to express and on the other hand that we should have the view point of both male
and female. Survey revealed the gender break up of CAPITA employees, it shows
that 57% are the male and about 43% are the female of the total employees.
CHART FOR GENDER PERCENTAGE

EMPLOYMENT STATUS:
The main reason for conducting this to find out how the work force is built up in the
organization this part may not affect the study significantly yet it would be important
to note that female employees may have different motivators from their male
counterparts. It has been accounted for in latter part of the research. Apart from
this it also gives the readers a clue as to how CAPITA providing opportunities on
an equal basis for all without any discrimination what so ever.
Survey also shows that there are about 26 % part timer and about 74 % are full
time employees in CAPITA.
CHART SHOWING TYPE OF CONTRACT
As percentage
AGE GROUP PERCENTAGE:
8
O
1
2
3
4
5
A
5
4
%
8
v6
g
-%
e
e
2
3
4
5
r6
5
6
5
Objective 1:

• To analyse the impact of organisational work environment,
organisational ethics and values and organisational behaviour on
employee retention.
when thinking of a problem and looking for a solution it would be critical to accept
that problem in totality no solution can be sought unless the problem is recognised
as a problem once accepted its existence next would be to develop an attitude to
counter that problem by developing policies, procedure and tools to stop it in the
place and from reoccurrence. Employee retention is a huge task in front of the
company managers and it requires real and continuous efforts. Retaining employee
means keeping them satisfied and happy with every aspect of their jobs. In
organisational literature employee motivation has given great importance as it would
be the rout to success or fiasco. Motivation is one word but it includes everything
that it takes to make an employee happy or satisfied in a point in time that he/she
would serve the best interest of the organisation. Employee retention cannot be
achieved unless the organisation has included motivation of its work force on top of
the company agenda. It is a fundamental issue in resolving any problem that the root
causes of that problem should be addressed, no cosmetic solution will work for long
term or sustainable cure. Dealing with human beings requires dealing humanely.
When aimed to bring a change in humans one has to change himself to some
degree, and the required change may include a change in values, conduct and
attitude in such a way that it would facilitate the change process. Employers may
also need to change some if not whole to make the employees feel like accepting or
adopting the required change.
Let’s discuss its details such as work environment, whatever is the job of an
employee he/she has carry out that job in the environment prevailing in the
organisation. So, it means that there is no escape from that environment. Hence, if
the environment is harsh and uncaring it will put more exertion on the employees
apart from what would be a natural outcome of their physical or mental work done on

the job. A helpful, secure and creative environment will make them relax and easy
on the job inevitably improving quality of their work.
Survey result reveals for this question that a 40% of the people believe that the most
prominent reasons for quitting a job may be there supervisors/immediate bosses,
which is highest among other reasons stated in the question. It is in accordance with
the generals statistics given in other research material. Employees who think that
their organization (as an entity) can be the reason for quitting jobs were only 35%,
which shows that Organizational environment does have strong influence on
employee turnover more precisely it is their departmental environment in which they
work and mingle every day, again pointing at the immediate bosses etc. 18% People
think that disparity in monetary rewards e.g. wages and salaries etc. may also be the
reason to quit a job, and 7 % people responded none of them can be a reason to
quit a job. Probably they are the people who think that quitting a job is more
associated with personal grounds for example, change in surroundings or errands.
The response obtained from the management people or managers of CAPITA in the
interviews is that CAPITA they are well aware of all the potential reasons may cause
employee turnover. Capita is committed to do every possible effort may require to
keep its employees at the highest possible level of motivation. Policy to tackle any
possible reason that may cause de-motivation or dissatisfaction is exclusively and
collectively to make sure no stone is left unturned. At CAPITA we are trying to
provide a healthy, competitive and creative culture which helps professional share
ideas and to express their professional views. CAPITA group pursuing a policy which
ensures opportunities for professional growth are there for everyone without any
discrimination.
It is clear from the outcome of this study that creative, helpful managers in an open
environment can play an important role for employee retention. Organizations
focusing on these issues are more likely to have high retention rate.

Objective 2:
• To determine the consequences of high employee turnover on an

organisations performance, profitability and customer satisfaction.
It is somehow a natural instinct that people attach to each other around them. It
gives people an opportunity to understand each other and may result in some level
of comfort among people who share some personality traits. The same is true for
business relationship. People working in the same company may also develop
personal relationship apart from their work relationship. Clients and customers may
develop bit informal relations particularly if they are dealing over the period of time. It
would be frustrating for them if somebody quit his/her job with whom they used to
deal normally. It might take some time before they get use to with the new person
because they have to start it all over again with an absolute unknown value. If this is
every day phenomenon then it would be less about comfort or personal
understanding but more about scepticism about the credibility of the organisation or
company they are dealing with. It is also harmful for the Organization in terms of low
productivity or poor services rendered will also incur huge cost of replacement both
in terms of money and time i.e. the turnover cost. Consistency is barometer that will
determine the success or failure of any business policy, consistency may be required
in both; in policy and people. Reasonable length of time should be given prior to any
fundamental changes may be introduced. Frequent manipulation with core policy
lines will create misunderstandings and lack of trust among employees. It would
have negative impact on organisation performance and customer satisfaction.
It is critically important that employers should be vigilant and always ready to take
some sort of pre-emptive action if they foresee any potential problems may lead to
dissatisfaction of the employees. Consistency is essential in policy formulation and
implementation to avoid any outburst situations.

Now let’s explore that what survey has obtained of the related questions. It states
that 37 % people think that if the work environment is counterproductive than it can
force people to switch and hence may result in high turnover. A 34% of the
respondents think that if the supervisor or immediate bosses are uncooperative or
autocratic it may cause resentment in their lower staff that can cause them to quit
their jobs. Again one can predict a significant correlation between choices made for
two different questions with one similar option i.e. supervisors or immediate bosses if
not helpful may cause employee turnover. Unfair compensation chosen by 26 %
reveals trends for money as motivator has strong connection with retention.
One directly asked question about employee turnover revealed clear cut option as
9% people responded positively that if an organisation has high employee turnover it
will strongly affect its ability to operate profitably because of poor customer
satisfaction and confidence.
Objective 3:
• To analyse and evaluate the influence of available tools and strategies

on employee satisfaction/motivation and employee retention.
Every business leader knows the impertinence of motivation or to have motivated

people in their organisation. There is no excuse for the management not to develop
highly motivated work force. It is highly unlikely that an organisation can achieve any
success if their work force is not happy and satisfied with its policies related to
employee welfare and betterment. So, it is the primary responsibility of the
management to understand employees’ material, sentimental or aesthetic needs.
Best way to start from finding the every possible answer for the question why do
people choose to leave or remain with an organisation? It has to be done in the
context of the unique environment of every organisation. It will help the management
to identify areas and direction in which action may be required. Managers should
always try maintaining a balance in between employee performance and rewards
paid. It is a established phenomena that motivated employee will show loyalty and
likely to stay with their job and company for longer periods.
As far as the survey result is concerned nearly 80% respondents strongly agree that
no organisation can flourish without having motivated and consequently committed
workforce. Such a workforce is most likely to look after their organisation interests
and will strive to give their best. Better quality products or services may be provided
with motivated employees and hence improved customer satisfaction may be
achieved.
Coming back to the interview response Manager clearly attributed CAPIT’s growth to
the intensive efforts of the company’s strategic management and the policies
developed and implemented to cater the needs for employee motivation by
improving quality of the work environment, excellent pay rates, attractive and
benefits, and excellent growth opportunities for all.
Organisations focusing on motivation are more likely to have higher retention rate.
Motivated work force show more commitment with their job and organisation.
Motivation provides the driving force for anything that we want to achieve in our
personal or professional lives.
Objective 4:
• To determine the importance of keeping highly skilled and high

performing employees and complexities involve in retaining them.
It is an age of intense competition business has to compete on every front e.g.

providing best quality products or services at competitive prices, environment issues;
innovation and sustainability etc are the emerging challenges for the businesses.
Organisations are increasingly under pressure to meet these demands. To achieve a
competitive edge it is paramount that organisation has the right people, who can
provide vibrant leadership and perform up to highest standards. Acquiring such
talented people is a hard job on one hand and keeping or retaining them with the

organisation for reasonable length of time is a challenge. It may require huge efforts
on the part of organisations. Retaining talent is a process (intellectual capital
management) which requires serious efforts and insight. Talent is volatile in nature
such people may not like to work or stay in stagnant environment, because they
knows it will deteriorate their creative skills.
Professionals or high skilled people are always in demand and there is no dearth of
opportunities for them as they are people who keep organisation in business. Talent
need nurturing like plants, they need daily watering and clean environment to grow, if
they are to flourish.
Managers need to participate actively in talent management. They should be given a

task to Develop an environment facilitating, and couching talent.
Managers can help individuals attain their optimum by providing a coaching style
environment. It is entirely different from of management or managing people, coach
means who gives direction rather than instruction. Catering for individual needs
using coaching techniques may provide better results than by conventional
management approach.
Manager responded when asked about talent management that CAPITA is one of
the best and attractive employers in the industry. It is not just claim by the CAPITA
but also awarded a state of the art standard with a score of 85% in an employee
satisfaction survey done by a leading UK assessment company. Due to CAPITA’s
financial and institutional strength it can provide sustainable work environment and
hence, successfully retain our employees. It will ensure that our employees feel
associated with the company and remain loyal by bringing their best at work.
CAPITA aims to provide employees with a creative and healthy work environment to
help them excel up their potential, especially for talented professionals and with
specific expertise. CAPITA is well aware of the fact that keeping high performers
motivated and focused, is essential for our operational growth.
CAPITA has expended enormously both in size and operations. CAPITA has
acquired its competitors business through mergers and acquisition. CAPITA has
acquired thousands of employees from mongering companies. CAPITA has an 82%
employee retention rate where as industry statistics is 82.7% (in 2008) generally
and 88 % for senior managers again higher than the industry average.
Objective 5:
• To analyse the role of strategic HR in devising policy framework for

employee retention.
Strategic (HR) has an important place for devising policy framework for employee
retention but unfortunately it is misread and often spoiled in organizations. HR
directors and head of learning and development needs to identify building blocks of a
successful, effective and innovative policy that is capable of delivering for any
present and future needs for employee retention. It can be achieved by developing a
good comprehension of its overall aims and objectives, business approach and
successfully putting them together with employee retention needs.
HR and need for innovation for future demands:
Future role of strategic HR would shift from human resource management to human
resource development, human capital developer, strategic partner, functional expert,
employee advocate and HR leader. All these demanding and challenging role for
future strategic HR can be fulfilled only if new expertise are developed, more
innovative and futuristic approach is adopted. HR needs to develop partnership with
other departments to understand their specific needs. Any HR plan, strategy and
idea will only inspire if they are grown from within the business.
HR function has translated into a reformer of manpower. HR strategies should focus

on organizational mores, recruitment, and employee enlargementand employee
retention.

An empirical examination of the survey questions discloses that 46% of the people
think that CAPITA has successful retention strategies. Employees feel happy with
their jobs and satisfied with their employer. Only 11% believe that employee
retention policies are not so good or unsuccessful and rest 43% do not know or
unable to comment. CAPITAs own statistics reveals that it has an employee
retention rate of 82% generally and 88% for senior management.
In an interview I have been told about an internal survey done in 2009 by CAPITA
design specifically to assess its policies and how employee feels about them, nearly
68 % of people who has sent the survey returned the completed survey. Employees
were happy and satisfied the way CAPITA dealing its employees specifically
diversity issues, accommodating new employees, autonomy, fair and equal
treatment for all. Employees appreciated a lot health and safety issues. However, it
was identified that CAPITA need to focus more on the range of the employee
benefits and rewards and suggested regular reviews.
It seems CAPITA is more concerned about those employees who are joining in as a
result of mergers and acquisitions. They are provided with training opportunities so
they can improve their skills and understand their new work environment. So, new
employees get used to with the culture of CAPITA.
Objective 6:
• To determine the role of managers and immediate bosses in

implementation and execution of the company policy through pragmatic
and innovative thinking.
Immediate bosses are of fundamental importance; these are the people who are
always in contact with a vast majority of employees under their supervision in
different departments. Most of the time they are in contact while on job. They are the
ones who translate company policies and strategies for a vast number of employees
working under their supervision, Success or failure of policies for employee retention
hugely dependents on managers and supervisors. Managers should be able to
pinpoint and use motivational variables in such way that every individual is

accounted for it motivational needs. These managers are also an important source
of feedback to higher level management while they are in a process of formulating or
updating employee related policies such as motivation and retention.
Everything is changing so quickly that it may cause frustration at times. One of the
biggest challenges now days, is to keep you updated with the changes occurring all
around you. Same applies for the managers as they also need to understand and
grasp the change or changes happing around them. What action may be required to
take it? It means that the room for improvement is always there. Retention starts
with recruitment it means the best time to fix retention problem is when you hire
people, make sure right person is chosen and no over commitment has been made
from either side.
The survey questions asked in connection with objective 7 of the study reveals a
clear cut picture about the role of managers/supervisors and their ability to influence
the success or failure of the policies of an organisation to help motivate and retain its
employees. 60% of the respondents think that employee do not give right causes for
quitting their jobs in their exit interviews. This is very much the same as found in
other research literature. It indicates that the data taken from exit interviews may not
be a reliable source for policy making. Whereas 26% people think that the reasons
given to quit job in exit interviews are genuine.
The interview extracts of the question asked in this context can be summarized as;
asked to attend regular meetings where they discuss plans and procedures to
implement policies and update their knowledge of company guide lines for their code
of conduct. So, they act like a carrier in implementation process and not as obstacle.
CAPITA has a formal grievance procedure for any unpleasant situations to deal with
e.g. If someone complaints that he feels that he/she have been discriminated
against, harass or bullied. He can follow simple and clear well published procedures

in place, such matter are treated with discretion, solemnity and investigated fully and
swiftly
Objective 7:
• To determine the impact of recession or financial crises on employee

retention.
Employee retention in difficult economic time for one particular company or industry
or even for economy the need to retain employees does not change. In reality it may
be even more critical to retain employees to avoid additional cost of recruitment.
There is a general perception that in recession people tend to stick with their jobs it
may be a correct perception but only in the context of employees but it does not
eliminate the cost to replace for an employer in case people quit jobs. In recession
cost of turn will be even more and undesirable as it would consume precious and
scarce resources. Once economy starts to recover starts to recover company might
go into further malfunctioning if still facing turn over issues.
It is very likely that recession will slow down economic activity hence affect cash
flows. But at the same time the only way to minimise its impact to stimulate
economic activity that requires cutting down cost or staff but it has nothing to do with
employee motivation or retention, it is as important as in economic boom to keep
employees motivated, committed with their organisations.

5.1 INTRODUCTION:
In this chapter I will try to conclude the whole discussion, observations and findings
into a realistic and commercially viable matter. I will also try to correlate this
chapter with the results drawn from the analysis of primary & secondary data and
compare them with the literature review which is done in 2nd chapter. I will also try
to highlight areas need to improve by putting forward recommendation. Finally, a
conclusion reflecting industry trends etc.
5.2 CONCLUSION:
This research is composing of seven objectives which directly derived from the one
research question. In other words all of the seven meant to explore different
avenues related to the research question. Every objective has successfully
explored valuable information to enhance understanding of the subject matter. It
has been a deliberate effort to focus on real time issues and environment to
develop some sort of applied side of the subject instead of just theoretical aspects.
It is an effort to measure the impact of employee turnover on an organisations ability

to perform according to its goals and standards or up to the expectations of the stake
holders including shareholders, suppliers and customers etc. the big question laid
down in this research is how draw an effective policy line and its implementation to
tackle employee turnover. To achieve this it will require an extensive scrutiny into the
tools and strategies in use and an analysis of the emerging trends, the need of
innovative thinking to develop effective HR strategies by the organisation for
retention.

I have also tried to link employee retention with other employee related issues such
as motivation and loyalty etc. I strongly believe that employee retention cannot be
achieved unless the organisation has included motivation of its work force on top of
the company agenda. It is a fundamental issue in resolving any problem that the root
causes of that problem should be addressed, no cosmetic solution will work for long
term or sustainable cure. Dealing with human beings requires dealing humanely.
When aimed to bring a change in humans one has to change himself to some
degree, and the required change may include a change in values, conduct and
attitude in such a way that it would facilitate the change process.
It is critically important that employers should be vigilant and always ready to take
some sort of pre-emptive action if they foresee any potential problems may lead to
dissatisfaction of the employees. Consistency is essential in policy formulation and
implementation to avoid any outburst situations.
Professionals or high skilled people are always in demand and there is no dearth of
opportunities for them as they are people who keep organisation in business. Talent
need nurturing like plants, they need daily watering and clean environment to grow, if
they are to thrive. Managers need to participate actively in talent management. They
should be given a task to Develop an environment facilitating, and couching talent.
Kaye Throne and Andy Pellant (2007)
Immediate bosses are of fundamental importance; these are the people who are
always in contact with a vast majority of employees under their supervision in
different departments. Most of the time they are in contact while on job. They are the
ones who translate company policies and strategies for a vast number of employees
working under their supervision, Success or failure of policies for employee
motivation and retention hugely dependents on immediate bosses and supervisors. I
have pinpointed that motivation or satisfaction may be the root cause of all or most
of the employee related issue. Imagine that if the work force of an organisation is
struggling with their needs and feel that they are not treated fairly it will cause
frustration, any rational person can think that such a work force will show any signs
of loyalty or commitment with organisation or it goals etc. so, the first and for most
priority for the management should be to assess and understand the needs of their
employees. Then a series of actions should be taken to fulfil these needs. At this
point effective and open communication is very important it may help to fill any gaps
between the actions taken and unfulfilled needs of the employees. Here, they can be
given assured that any remaining demands will be met and company’s commitment
to continue its efforts in the right direction, a time frame may be given by the
management. Nalbantian Et al (2004)
It is clear from the outcome of this study that creative, helpful managers in an open
environment can play an important role for employee retention. Organizations
focusing on these issues are more likely to have high retention rate.
5.3 Findings for CAPITA:
Capita is a renowned and leading business organisation in United Kingdom. The

clients and services of capita include central government, local governments,
education, life and pension, insurance, health, transport, financial services and
Business Process Outsourcing (BPO) in UK. Capita has developed great expertise
in redefining and transforming services to public.
CAPITA has grown enormously in size both in terms of Business operations and
hence number of employees to carry out such operations. Diverse Business
operations to culturally diverse customers require state of art HR polices. However,
CAPITA has successfully managing the diversity issue within the organization and
as consequence to the customers. Recruiting and keeping high performers is our
core policy concern which results in 88% retention rate higher than the industry
average. CAPITA is aware of the importance of clear understanding of the employee
motivational issues e.g. their needs, expectations etc. that is why capita has
achieved an unprecedented success in the market and within the organisation.
It seems CAPITA is well aware of the Importance of the stakeholder groups

(customers, creditors, investors, employees) watch workforce stability and capacity
carefully. Workforce strength, capacity, and dependability influence the confidence of
all these constituents. In case of out sourcing activities CAPITA, involves providing
services to clients’ customers of leading brands. Such Customers are increasingly

concerned about the quality and service levels they get from them as it will directly
affect the business of those Brands.
CAPITA claims it is people organization and I found it to be true. CAPITA is

committed to provide conducive work environment to its employees by keeping them
continuously motivated through recognitions and competitive reward system for their
services
CAPITA aims to provide employees with a helpful and caring work environment to
help them to excel and grab growth opportunities. especially for high performers and
multi talented employees.
5.4 RECOMMENDATIONS:
Despite the fact that CAPITA is an exemplary organisation and has better average
employee retention rate than the industry yet there are certain areas need to be
improve particularly in the context of its sheer size and in the diversity in its business
operations.
Employee benefits and reward system need to be reviewed on an ongoing basis as

part of retention policy. It will ensure prompt recognition and reward for those who
has exceeded the bench mark standards. Bowen (2000),
Communication has a vital role in our lives it can make things happen particularly,
effective communication is crucial in business. It provides the basis for
understanding what need to be done and how it should be done. Better
communication can help in building good team work even under intense pressure.
Winning team combination can help individuals to perform up to their optimum. It will
give them sense of achievement and higher job satisfaction. Continuous professional
development, on job training etc help employee to update their skills and knowledge
resulting lower redundancies but higher growth opportunities. It will increase
employee commitment with their organisation. More innovative channels of
communication within organisation will help in improving flow of information up and
down in the organisation. Glanz (2002)

Work environment is an important factor, a stimulating work environment that allows
people to give their best by allowing them to contribute positively and productively,
by providing a degree of autonomy/open communication on the job, allow them to
contribute ideas, professional opinion which helps them to grow and give their best
to the organisation.
Every effort should be taken to ensure that opportunities of professional growth are
there for all. Every individual can avail such opportunities. Employ retention and
motivation can be increased by providing opportunities for learning and skills and
consequent advancements in job responsibilities.
It is strongly recommended that employees should be given freedom to express their

professional/personal views, companies having a inflexible approach, or having an
organizational culture that is characterized by domination and autocracy are likely to
have dissatisfied employees no matter how good the incentives to stay may be
(Ashby and Pell, 2001).
Companies should deal their employees with nobility, admiration and equality
especially, multinational organisations operating in diverse ethnic environments,
need to understand the importance of respect for other cultures and norms and if not
taken seriously, it may cause antipathy and counterproductive environment.
5.5 IMPLICATIONs OF THIS RESEARCH (STUDY):
This research is comprehensive effort done in an organized way to develop a

mechanism that can provide the fundamental basis on which a policy can be build to
get motivated, loyal workforce. One of the objectives of this research is to provide
real time information and assistance to pragmatic organisations and their managers
to understand the importance of employee retention and then to tackle it in a creative
and effective way
This research may help to explore every possible avenue that could affect employee
retention in one way or the other. Employee retention can be seen as employers
own choice strategy and retention techniques. Employee retention is strongly linked
with the work environment in which employees undertake their responsibilities or
duties. Helpful and liberated environment is no doubt is first step towards effective
employee retention. Creating a culture where people can express themselves and
can associate themselves with the organisation would make quitting a difficult
decision for them.
• This study may bestow valuable information about the bearing of turnover on
organizational recital. Productivity, profitability and other stake holder’s
confidence.
• This study provides an insight into employee satisfaction and motivation

needs and their relationship with employee retention.
• This study highlights what makes people feel motivated, how motivated
people can help organisation to improve retention.
• This study mainly focuses on the real time issues and applied side of the
policy instead of just theoretical aspects.
BOOK REFERENCES:

Literature Review:
• Rigby, R. (2003) The churning curve Human Resources. London: Oct 2003
• “Employee Retention”, Jennifer A Carsen , CCH Incorporated, 2005 (page-2)

• “Managing employee retention”, by Jack J. Phillips and Adele O. Connell,
published by Butterworth-Heinemann, 2003 (page-2)
• “Keeping the people who keep you in business: 24 ways to hang on to your
most valuable talent”: Branham F.leigh (author), 2000, (Page: 15-19)
• “Motivating Employees” by Pepitone , James S.(Author) Bruce Ann (author),
1998 (Page 15-20)
• “Finding and keeping great employees” by Harris , James (author) Brannick,
Joan (author) in 1999, (page 155-157)
• Klaff, L.G.Churn Costs: Productivity, morale fall when employees leave, the
Detroit Free Press, 26th January 2001, 1C, 8 C. accessed on 15.01/2010 at
19.07.
• Harrison, D., Virick M., and William S. Journal of applied psychology, 81:
Page: 331-335, 2000.
• Editor 2000, “new perks won’t solve all your retention problems.” HR
magazine, July. Page-10.
• Kaye, Beverly and Jordan-Evans, Sharon (2002), “Love’Em or loose Em’:

getting good people to stay”. Page- 6 published by berrett-koeler
• Editor 1998, “work/life study=respect”, employee service management (ES)

magazine, page- 6.
• Glanz (2002), “Handle with care: motivating and retaining your employees”,
page- 31-45, published by McGraw-Hill publishers.
• Dauten , Dale (2000), “Given workers freedom to be productive provides

incentives to stay”, section- 5, page- 8.
• Littman , Margaret (2000), “best bosses tell all”, working women, page-55.

• Littman, Margaret (2000), “best bosses tell all”, working women, page-51.
• Stern, Gary M. (1996), “Soul at Work”, New age, Page- 73
• Barlett C. 2001. Microsoft: Competing on talent (A). Boston MA: Harvard

Business School Publishing.
• Kaye Throne and Andy Pellant (2007), “The essential guide to managing
talent”, published by Kogan Page, London. Page-128.
• Kressler and Herwig (2003),
• Lloyd L.Byars and Leslie W. Rue (2000), “Human Resource Management”,

pubished by Mcgraw hills. Page 275-278.
• Ramlal, S (2004), “A review of employee motivation theory and their

implication for employee retention”: journal of American academy of
business, Cambridge.
• Beardwell, I. et al. (2004) (4th Edition) Human Resource Management a

Contemporary Approach Prentice Hall, Harlow
• Risher, H and Stopper, W (2002)
• Armstrong, M. (2001) (8th Edition) The Handbook of Human Resource

Management Practice, Kogan Page Limited London,
• Hacker, C.A.. (1996) (2nd edition) The Costs of Bad Hiring Decisions &
How To Avoid Them St Lucie Press, Florida.
• D.Mischelle Adkerson (2000), “The company you keep: Four key tools for
employee retention”, page: 22, published by M.lee smith publishers.
• Beardwell, I. et al. (2004) (4th Edition) Human Resource Management a

Contemporary Approach Prentice Hall, Harlow
• R.Brayton Bowen (2000), “Recognizing and awarding employee”, page-38,

published by McGraw Hill.
• Sigler, K. (1999) Challenges of employee retention

Management Research News, Patrington: 1999.Vol.22, Iss. 10; pg. 1

• Mullins, L (2005) (7th Edition) Management and Organisational Behaviour
Prentice Hall, Pearson Education, Edinburgh
• Blyton, P & Turnbull, P (2004) (3rd edition) The Dynamics of Employee

Relations Macmillan, Basingstoke
• “Managing to motivate” by Evans & Linda (2000), Page: 10-12, published by

continuum international publishers.
• Nalbantian, R, Guzzo, R, A, Kieffer, D and Doherty, J (2004), “Play to your

strengths: managing your internal labour markets for lasting competitive
advantage”, by McGraw Hill, Page:
• Kearns, P (2005), “Human Capital Management” reed business information

Sutton, surrey.
• Scarborough H and Elias J (2002),”Evaluating human capital”, by chartered

institute of personnel and development, London.
• Roger Griffith, R.W.Griffeth, Peter W.Whom (2004), “Innovative theory and

imperatal research on employee turnover”, by information age publishing,
Page: 214
• BLS 10 year projections are from Eric.B. Figueroa and Rose A Woods,
“industry output and employment projection to 2016”, monthly labour review
November, 2007.

WEBSITE REFERENCES:
Introduction
• Employee Retention Figure, World Wide Web. Site visited accessed on 13th
December, 2009 at 14:20.
http://www.checkbox.com/images/Survey_Software_Icons_Logos/newsoluti
ons/employee connect. jpg
• About CAPITA, World Wide Web. Site visited accessed on 29th October,
2009 at 17:35.
http://www.capita.co.uk/about-us/pages/our-company
• About CAPITA, World Wide Web. Site visited accessed on 13th December,
2009 at 10:45.
http://www.capita.co.uk/about-us/pages/our-company
• About CAPITA History, World Wide Web. Site visited accessed on 14th
November, 2009 at 13:15.
http://www.capita.co.uk/about-us/pages/our-history.aspx
• Employee Benefits Figure, World Wide Web. Site visited accessed on 18 th

November, 2009 at 12:35.
http://www.capita.co.uk/corporate-responsibility/Pages/report
centre.aspx?fullReport=true

Literature Review:
• HRM Diagram taken from http://www.info-village.info/wp-

content/uploads/2009/09/HRM.jpg Accessed on 11th December, 2009 at
14.00p.m
• http://www.jstor.org/stable/4165849 accessed 15/01/2010

BIBLIOGRAPHY
• Taylor. S. (2002). The Employee Retention Handbook, CIPD Publishing.
• Phillips.J.J., Connell.O.A. (2003). Managing Employee Retention,

Botterworth-Heinemann.
• Bruce. & Ann. (2002). How to motivate every employee, McGraw-Hill Trade.
• Bratton, J. & Gold, J. (2001). Human Resource Management: Theory and

Practice, 2nd ed. Routledge.
• Armstrong. S. & Appelbaum. M. (2003). Stress-Free Performance Appraisals,

Career Press.

APPENDICES:
Capita (Outsourcing Company)
Type Outsourcing
Founded 1984
Headquarters London (United Kingdom)
• Paul Pindar (CEO Capita

Group)
Key people • James Parkhouse (Capita

offshore services)
• Claire Neal (Capita Group
HR)
Outsourcing, Life and pension
Industry
services and Insurance services.
Revenue ▲ £2,441m
Net income ▲ £277.2m
Employees 60000 employees
Website www.capita.co.uk

INTERVIEWS:
1. In the context of CAPITA employee retention policy, how do you see the
impact of your policies and practices, are you satisfied with the results,
briefly explain the strengths and weakness?
2. What do you think that through effective communication you can console
and convince employees with some level of frustration at work place?
3. What are the common issues related to employee motivation in your

organization in the context of work environment in CAPITA?
4. Would you like to share any real time issues you dealt with in the past and
successfully resolve the problem and if not what causes you to fail?
5. In the context of CAPITA, how do you see employee retention in case of

acquisition and mergers?
6. Briefly explain the mechanism available to keep the turnover level within
acceptable limits?
7. How do you see generally employee retention issue particularly in the

context of recession?
8. What are the most common reasons to quit in CAPITA stated by

employees in their exit interviews?
9. Do you think that CAPITA is successfully maintaining the employee

turnover within an acceptable limit?
10. How do you differentiate CAPITA in terms of creating employee motivation

and loyalty as compared to the industry (particularly competitors)?

QUESTIONNAIRE:
QUESTIONNAIRE
PARTICIPANT’S NAME:
PARTICIPANT’S JOB POSITION:
1. GENDER?
a. Male
b. Female
2. Employment Status?
a. Full Time
b. Part Time
3. Age Group?
a. from 18 to 25
b. from 26 to 35
c. from 36 to 45
d. from 46 to 45
e. from 56 to 65
f. Over 65
4. If you had quit a job was it because of?
a. Supervisor/immediate boss.
b. organization.
c. Unfair compensation.
d. None.
5. What do you think is the most common reason for high employee turnover?
a. Unfair compensation
b. Poor working conditions
c. Immediate boss
d. Better job option
6. Does high employee turnover impinge on productivity, profitability, and

customer satisfaction?
a. It does.
b. It does not.
7. Do you think that undesirable turnover can impact on the credibility of a

business organisation?
a. Improve credibility
b. Lower credibility

c. None
8. Do you recognise that motivated workforce will better demonstrate

organisation’s proposition resulting improved customer loyalty?
a. Agree
b. Strongly agree
c. Disagree
d. None
9. Do you think employee retention policy is successfully implemented in your

organisation?
a. Successfully
b. Unsuccessfully
c. Don’t know
10. Do you think people give true reason(s) to quit in their exit interviews?
a. Yes
b. No
c. Don’t know


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Impact of high employee turnover on

A dissertation submitted in partial fulfillments of the

SUBMITTED By FAROOQ AHMAD

University ID: 0911867092096

Farooq Ahmad ID # 0911867092096 Page 2

Supervised by Ola shittu

A dissertation submitted in partial fulfilments of the requirements for the

Masters of Business Administration

Farooq Ahmad ID # 0911867092096 Page 4

Farooq Ahmad ID # 0911867092096 Page 5

Title ............................. Mr.

Surname .................... Ahmad

Forename(s) ........ Farooq

Institution ...... London College of business

Degree Taught .... MBA (Human Resource Management)

Title of Dissertation : Impact of high employee turnover on

Organisational performance; what

Farooq Ahmad ID # 0911867092096 Page 6

A case study of CAPITA

Employee turnover/retention is not something new for business organisations.

Farooq Ahmad ID # 0911867092096 Page 7

Effective retention polices needs to be updated as often as possible because it has

Farooq Ahmad ID # 0911867092096 Page 8

1.2 INTRODUCTION &

COMPANY PROFILE (CAPITA):

1.3 Aims and Objectives:

1.4 DISSERTATION FORMATION

2.2 Employee turnover:

2.6 Why do people choose to leave or stay?

2.8 Motivation and retaining high performers:

3.2 The Purpose of Literature Review:

3.3 Structure of Literature Review:

3.4 Literature Sources:

3.5 Research Approach

3.6 Research Paradigm:

3.7 Research Design:

3.8.1 Quantitative Method:

3.8.2 Limitations of Quantitative Method:

3.8.3 Qualitative Method:

3.8.4 Limitations of Qualitative Method:

Farooq Ahmad ID # 0911867092096 Page 10

3.10.1 Limitations of Questionnaire:

3.11.1 Sample Size:

3.12 Limitation of the study:

4.2 PILOT STUDY:

4.4 EMPLOYMENT STATUS:

4.5 AGE GROUP:

5.3 Findings for CAPITA:

5.5 IMPLICATIONs OF THIS RESEARCH (STUDY):

Farooq Ahmad ID # 0911867092096 Page 11

Farooq Ahmad ID # 0911867092096 Page 12

Employee turnover is no doubt a serious issue particularly if not controlled

Employee turnover/retention is not something new for business organisations.

Farooq Ahmad ID # 0911867092096 Page 13

Farooq Ahmad ID # 0911867092096 Page 14

POINT: An organisation which is trapped in some sort of internal malfunctioning, it’s

In this research I have tried to investigate every possible issue or factor

Farooq Ahmad ID # 0911867092096 Page 15

How to draw policy guideline to tackle employee turnover?

Farooq Ahmad ID # 0911867092096 Page 16

1.2 INTRODUCTION &