THE IMPACT OF JOB SATISFACTION ON EMPLOYEE

TURNOVER INTENTION
‘A CASE OF BUNNA INTERNATIONAL BANK S.C’

A project Submitted in Partial fulfillment of the

requirements for the Degree of Master in Human Resource
Management

BY
ZERIHUN AYALEW

ADVISOR
NAKACHEW BASHU (PhD)
[[

ADDIS ABABA UNIVERSITY

SCHOOL OF COMMERCE
GRADUATE PROGRAM

JUNE, 2015
ADDIS ABABA
 ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE
GRADUATE PROGRAM

“THE
IMPACT OF JOB SATISFACTION ON EMPLOYEE
TURNOVER INTENTION: A CASE OF BUNNA INTERNATIONAL
BANK S.C”

BY

ZERIHUN AYALEW

Approved by Board of Examiners

___________________ ___________________ __________________

ADVISOR SIGNATURE DATE

____________________ ___________________ __________________

INTERNAL EXAMINER SIGNATURE DATE

____________________ ___________________ __________________

EXTERNAL EXAMINER SIGNATURE DATE

i
 Declaration

I, Zerihun Ayalew declare that “The Impact of Job Satisfaction on Employee Turnover
Intention’’ a case of Bunna International Bank S.C is my own work, that has not been
submitted for any degree or any other examination in any other university, and that all the
sources I have used or quoted have been indicated and acknowledged as complete reference.
It is submitted for the degree of Masters of Art in Human Resource Management to Addis
Ababa University School of Commerce Graduate Program.

Declared by:

Zerihun Ayalew ___________________ June, 2015

Student Signature Date

Confirmed by:

Nakachew Bashu (PhD) ___________________ June, 2015

Advisor Signature Date

ii
 ACKNOWLEDGMENTS
I can truly say that God has blessed me in my life and continued through this educational
journey. He is the one, which I firstly acknowledge and thank for support in terms of friends,
strength, health, endurance, faith and a positive attitude. All required ingredients for success.

I also want to thank my thesis advisor, Dr. Nakachew Bashu for his unreserved efforts and
valuable time in providing proper guidance and support throughout the entire process of my
study.
In addition, my sincere appreciation to the management of Bunna International Bank S.C for
granting permission to carry out this study and my special thanks to the respondents who
have contributed significantly by participating in the study and answering questionnaires.

Finally yet importantly, my family has been the greatest source of support I could have
throughout my education. My wife, Kidest and my kids, Ruth and Amanuel, gave me an
immeasurable amount of encouragement and support throughout the entire process. I am so
appreciative for all the joy, confusion and general frustration that you all have put up over the
years.

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 Table of Contents
ACKNOWLEDGMENTS ........................................................................................................................ iii

Table of Contents ............................................................................................................................... iv

LIST OF FIGURES ................................................................................................................................. vi

LIST OF TABLES .................................................................................................................................. vii

ACRONYMS ...................................................................................................................................... viii

A B S T R A C T ..................................................................................................................................... ix

CHAPTER 1: INTRODUCTION .............................................................................................................. 1

1.1 BACKGROUND OF THE STUDY ............................................................................................. 1

1.2 STATEMENT OF THE PROBLEM ........................................................................................... 4

1.3 RESEARCH QUESTIONS........................................................................................................ 5

1.4 OBJECTIVES OF THE STUDY ................................................................................................. 5

1.5 SIGNIFICANCE OF THE STUDY ............................................................................................. 6

1.6 SCOPE OF THE STUDY.......................................................................................................... 6

1.7 LIMITATION OF THE STUDY ................................................................................................. 7

1.8 DEFINITIONS OF TERMS ....................................................................................................... 7

1.9 ORGANIZATION OF THE RESEARCH REPORT ....................................................................... 8

CHAPTER 2: LITERATURE REVIEW ..................................................................................................... 10

2.1 INTRODUCTION ................................................................................................................ 10

2.2 DEFINITION OF EMPLOYEE TURNOVER ............................................................................ 10

2.3 SOURCES OF EMPLOYEE TURNOVER ................................................................................ 12

2.4 EFFECTS OF EMPLOYEE TURNOVER .................................................................................. 14

2.5 TURNOVER INTENTION ..................................................................................................... 15

2.6 THE MODEL OF EMPLOYEE TURNOVER INTENTION ......................................................... 17

2.7 VARIABLES RELATED TO TURNOVER INTENTION ............................................................. 18

2.8 DEFINITION OF JOB SATISFACTION ................................................................................... 22

2.9 THEORIES OF JOB SATISFACTION ...................................................................................... 25

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 2.10 FACTORS OF JOB SATISFACTION ....................................................................................... 31

2.11 THEORETICAL FRAMEWORK AND HYPOTHESES ............................................................... 34

CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY ..................................................................... 41

3.1 INTRODUCTION ................................................................................................................. 41

3.2 RESEARCH DESIGN ............................................................................................................ 41

3.3 RESEARCH LOCATION, POPULATION AND SAMPLE ......................................................... 43

3.4 DATA COLLECTION INSTRUMENTS ................................................................................... 44

3.5 DATA COLLECTION METHOD............................................................................................ 48

3.6 DATA ANALYSIS TECHNIQUES .......................................................................................... 49

3.7 ETHICS AND CONFIDENTIALITY ........................................................................................ 50

CHAPTER 4: RESULTS AND ANALYSIS ................................................................................................ 51

4.1 INTRODUCTION ................................................................................................................ 51

4.2 DATA SET AND RESPONSE RATE....................................................................................... 51

4.3 CHARACTERSTICS OF THE RESPONDENTS ........................................................................ 52

4.4 DESCRIPTIVE STATISTICS ON THE RESEARCH VARIABLES ................................................ 54

4.5 MAIN MODEL OF INFERENTIAL TESTS .............................................................................. 55

4.6 SUMMARY OF HYPOTHESIS TESTING ............................................................................... 60

4.7 SUMMARY ......................................................................................................................... 61

CHAPTER 5: DISCUSSION, CONCLUSION AND RECOMMENDATIONS ............................................... 63

5.1 INTRODUCTION ................................................................................................................. 63

5.2 DISCUSSION ...................................................................................................................... 63

5.3 LIMITATION OF THE RESEARCH........................................................................................ 69

5.4 CONCLUSIONS .................................................................................................................. 69

5.5 SIGNIFICANCE, IMPLICATIONS AND RECOMMENDATIONS .............................................. 71

5.6 FUTURE DIRECTIONS ........................................................................................................ 75

REFERENCES ...................................................................................................................................... 76

ANNEXES ........................................................................................................................................... 82

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 LIST OF FIGURES
Figure 1: Representation of the Intermediate Linkage in the Employee Turnover Process.... 18

Figure 2: Theoretical Framework……………………………………………………………. 40

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 LIST OF TABLES

Table 3.1: Employee Categories and Amount……………………………………………...44

Table 3.2: Job satisfaction Five point Likert Scale .………………………………………..46

Table 4.1: Survey Response Rate……………………………………………….................. 51

Table 4.2: Cronbach's Alpha Results …….………………………………………………...52

Table 4.3: Respondents’ Demographic Profile ……………………………………………..53

Table 4.4: Descriptive Statistics on the research variables…..……………………………..54

Table 4.5: Correlation coefficients of all variables………………………………………….56

Table 4.6: Relationship between Pay & Benefit, Promotion, Working conditions
and Turnover Intention………………………………………………………. 57
Table 4.7: Result of One-way ANOVA for Difference in Turnover Intention by Age…. 58
Table 4.8: Result of One-way ANOVA for Difference in Turnover by Tenure…………. 58
Table 4.9: Model Summary………………………………………………………………. 59
Table 4.10: ANOVA……………………………………………………………………....59
Table 4.11: Summarized the overall Beta value for each job satisfaction factors……….. .60
Table 4.12: Summary of Hypothesis Testing………………………………………………61

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 ACRONYMS

ANOVA Analysis of Variance

BIB Bunna International Bank S.C

HR Human Resources

JS Job Satisfaction

JSS Job Satisfaction Survey

MOAQ Michigan Organizational Assessment Questionnaire

PAEO Perceived Available Employment Opportunity

QWL Quality of Work Life

SPSS Statistical Package for the Social Science

TI Turnover Intention

viii
 ABSTRACT

This study, which was conducted at Bunna International Bank S.C, had two-fold objectives.
Firstly, to investigate the direct relationship between job satisfaction and employee turnover
intention. The second part of the objective examined the relationship between perceived
available employment opportunity and turnover intention. Besides, the study attempts to
determine the differences in the turnover intention based on demographic variables (age and
tenure). The study also hypothesized that there are significant differences in the turnover
intention of the clerical employees in Bunna International Bank S.C at different age and
length of service; and there is a dominant factor influencing turnover intention among
skilled personnel in the organisation. A survey instrument was used to obtain data from a
research sample containing 103 clerical employees and additionally secondary data was
retrieved from formal sources. Using SPSS version 20, ANOVA, correlation and regression
tests were performed to arrive at the findings. The research yielded evidence for a significant
negative cause-effect relationship between job satisfaction and employee turnover intention,
indicating that on average, employees who are dissatisfied reported having intentions to
leave the organization. Working condition demonstrates the strongest relationship. However,
the result shows neither age groups nor length of service groups have significant difference
with turnover intention. A significantly moderating positive relationship between perceived
available employment opportunity and employee turnover intention was identified, since the
survey results show interestingly, that employees who are satisfied and have high
perceptions of available job alternatives will still have higher intentions to quit their job in
comparison with satisfied employees who have low perceptions of available job alternatives.
Based on the findings a number of management recommendations and directions for future
research are provided.

Key words: turnover intentions; job satisfaction; perceived available employment

opportunity

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 CHAPTER 1: INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Employee turnover has become a worldwide issue that has puzzled organizations, researchers
and practitioners for years. Currently, employee turnover permeates most of the organizations
in both developed and developing nations (Tariq et al, 2013). The CIPD (2011) survey report
on employee turnover rate in the UK indicated that the nationwide turnover rate in 2006 was
18.1 per cent. According to the report, employees’ turnover varies from sector to sector. In the
average the turnover for the public sector was 13.3 percent while it was 22.6 percent for the
private sector. The report however, did not explain why such a large variation occurred
between the public and the private sectors.

Employee turnover can be conceptualized in terms of different categories which include:

demographic (e.g. gender, age, educational level), occupational (e.g. skill level, experience,
tenure, status), organizational related factors (e.g. firm size, industry, job content, working
environments, style of leadership, type of organizational structure, pay scale, reward,
advancement opportunity, job security and job involvement). (Mobley et al, 1979).

Various studies have made a clear distinction between actual turnover and the concept of
turnover intention, which relates to behavioral attitudes. According to Ajzen (1991), intentions
are a statement about a specific behavior or interest. Mobley (1977) defined turnover intention
as the intention to leave the job on a voluntary basis. Various studies have investigated this
construct and have used similar terms such as intention to leave, intention to quit and
withdrawal intention. In a more elaborate definition of this construct, turnover intention can be
understood as the intention to voluntarily change employers or to depart the entire labor
market.

1
Turnover intentions are the best predictors of actual turnover based on past studies. Horn et al.
(1992) argued in their study that intention to quit and actual turnover had a significant positive
relationship. It was argued by Gregory et al. (2007) that behavioral intention to quit is
theoretically seen as an important antecedent to actual turnover. Mobley (1977) described
turnover intention as the final cognitive step in the decision making process of leaving or
staying.

Job satisfaction has been a widely studied variable in determining turnover intention. It is
certainly a highly important variable in organizational studies (Kinicki, Schreisheim, McKee-
Ryan & Carson, 2002). In fact, most of the studies have been fragmented in identifying an
effective mix of practices that could improve the commitment, satisfaction and intention to stay
in the organization (Chew & Chan, 2008). Job satisfaction is a factor that in the long run will be
able to encourage employees to work (Mudor & Tooksoon, 2011). This is the reason why
Mudor and Tooksoon stresses that high attention is to be given to employees’ job satisfaction
as firms will encounter with cost of recruitment as employees leave the organization and these
organizations need to replace them to get the job done.

Job satisfaction can be used to predict turnover. (Spector, 1997). Hom and Kiniki (2001) also
agreed on the notion that job satisfaction can be used to understand turnover process.
According to Milkovich and Boudreau (1997), a study of Singapore accounts found that job
satisfaction is the main predictor of turnover intention.

Newstorm and Davis (1984) had recognised that high turnover at any organizational levels
constitutes a waste of human resources. Abelson and Baysinger (1984); and Dalton and Todor
(1982) in Newstorm and Davis (1984) agreed with this view and said that turnover is not a
good phenomenon for organization because valuable human resources are lost. In today’s
changing world of work, reasonable levels of employee-initiated turnover facilitated
organizational flexibility and employee independence, and they can lessen the need for
management layoff.

2
Thus, Berry (1997) initiated that the organization must go straight to the employees when they
think about job satisfaction. This is because they are involve in every single task in the
organization and therefore, they could give the necessary feedback to the employers regarding
their satisfaction to the job they have been performed.

Moreover, Seta, Paulus and Baron (2000) pointed out that by knowing the factors contributing
to the employees’ satisfaction, the organization can plan properly and take an appropriate step
to increase positive behavior among employees. However, no one would seriously challenge
the idea that mismanaging organizational change can result in people choosing to leave
(Jackofsky et al, 1986).

This investigation is important as an early preparation for the organization to deal with this
change because of work opportunities are low and turnover intention of employees will also
increase. As compared to when the economy is blooming where job opportunities are great and
immensely sought by job hunters.

Muchinsky and Morrow (1980); Muchinsky (1993) in their study believe that under good
economic conditions with plentiful of jobs, dissatisfaction could cause the turnover if other
opportunities are available in the market. On the other hand, conditions of high unemployment
will decrease the feelings of dissatisfaction among employees. The opinion is also agreed by
Rosse (1991) in Jones, Steffy and Bray (1991) that the organization should not feel overly
satisfied with the good attitudes shown by their employees during the hard economic times.
Similarly, Carrell, Kuzmits and Elbert (1992) also found that the turnover closely follows
economic swings.
Inter-linkage
In Mobley's 1977 article, he theorized that lack of job satisfaction led to thinking about
quitting, which led to job search, which could then lead to an intention to quit, or vice versa,
which could eventually result in actual turnover. Lambert, Hogan & Barton (2001) found that
job satisfaction significantly impacted turnover intentions and perceived availability of jobs
also had a relation with turnover intentions.

3
All these aforementioned findings make reference to the linkage of the variables. This linkage
informed the conceptual model, which is derived from the notion that employees in Bunna
International Bank S.C currently experience low job satisfaction, focus on external job
alternatives and subsequently develop an intention to leave their employer.

Altogether, it can be assumed that the competitive existence of an organization significantly

relies on effectively managing staff turnover and ensuring that good performers and key
personnel are motivated to stay and have no intentions to quit.

Therefore, research in job satisfaction and turnover intention can help the organization to
identify main factors that can contribute to the turnover intention and rate of turnover. Based
on finding of study an organization can make remedy action in order to create favorable
working conditions that can enhance the rate of retention.

1.2 STATEMENT OF THE PROBLEM

High employee turnover ultimately could negatively affect the performance of any
organization. Cotton and Tuttle (1986). This also holds true for Bunna International Bank S.C
(BIB). The Human Resource Directorate and the executives of the Bank have been tried to
tackle the problem but they did not be successful.

Currently the problem of employees’ turnover becomes the severe problem of the main concern
of the BIB. During the past four years, 205 employees, which is about 30% of the current
number of employees have left the bank. To curve increasing rate of employees’ turnover,
employees’ needs should be properly addressed.

Seta, Paulus and Baron (2000) pointed out by knowing the factors contributing to the
employees’ satisfactions; the organization can plan properly and take appropriate step to
increase positive behavior among employees. Proper trainings in their work settings, growth
opportunities at work; job security and good compensation benefits for example might improve
employees’ level of satisfaction in the organization.

4
The study tries to identify problems arising like pay& benefits, promotion, and working
conditions which lead to dissatisfaction among ‘Clerical staff’ in Bunna International Bank and
possible high turnover. Therefore, to reduce the turnover intention of employees, the
organization must find the factors that caused the turnover intention and affect the job
satisfaction of workers.

1.3 RESEARCH QUESTIONS

The specific research questions addressed are:

1. Do employee’s job satisfaction factors can be the main factor for turnover intention?
2. Does the prevailing external employment opportunity in labor market can affect
employee turnover intention?
3. Do demographic factors (age and tenure groups) have relationship with turnover
intention?
4. Which of the job satisfaction factors and the demographic factors influence turnover
intention?

1.4 OBJECTIVES OF THE STUDY

1.4.1 General objective:

The general objective of this study is to investigate the relationship of job satisfaction (IV)
and perceived Available Employment opportunity (MV) to turnover intention (DV)
among the clerical staff.

1.4.2. Specific objective:

(a). To identify the relationship of pay& benefit, promotion and working conditions to the
turnover intention among the clerical staff.
(b). To identify the difference in the demography factors (age and tenure groups) to the
turnover intention among the skilled clerical staff.
(c). To identify the dominant factor of turnover intention of the clerical staff.
(d). To identify the relationship between perceived available employment opportunity and
turnover intention.

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1.5 SIGNIFICANCE OF THE STUDY

The significance of this study is found in the contribution to the existing body of knowledge on
job satisfaction, perceived available employment opportunities and turnover intentions.

The turnover rate at Bunna International Bank S.C for the past four years is very high.
However, it is better for the Bank to predict the turnover intention among clerical staff by
investigating the factors of job satisfaction that will lead to turnover intention.

Furthermore, this research can also help Bunna International Bank S.C to save their budgets for
human resource functions. Pigors and Myers (1981) said that turnover is costly for an
organization. Organization needs to allocate high budget for new hires included in the expenses
during employment procedures, such as recruiting and selection, and training period. At the
same time, the cost of training consists of the job training and also cost of time taken to reach
peak of productivity.

The valuable information generated from this study also gives a clearer picture to the
organization regarding workers’ concern of turnover. It can help the organization to generate
some useful ideas during the human resource planning as an effort to increase the workers’
satisfaction and decrease the workers’ intention to leave.

1.6 SCOPE OF THE STUDY

Even though the Bank currently has 78 branches, the scope of the study will be limited only in
the head office and 31 city branches which are located in Addis Ababa due to time and other
constraints. This study will also be limited to the Bank’s employees belonging to the category
of “Clerical” staffs.

Furthermore, only three factors of job satisfaction and one other predictor that influence the
turnover intention of the workers are being investigated, namely, pay& benefit, promotion,
working conditions and perceived available employment opportunity. Besides these factors,
there might be other factors such as organizational culture, organizational commitment,

6
supervisors and Co-workers that can influence the turnover intention, which are not being
considered in this study.

There are only two variables from the demographic factors tested with turnover intention like
age and length of service. There are also other demographic factors such as educational level
and marital status that may not be measured in this study.

1.7 LIMITATION OF THE STUDY

The findings of this study may not be representative of what takes place in other sectors of the
industry and as such this limits the generalisability of the findings. This study also relies on
self-report and therefore, would be limited by the truthfulness of the participants. There is no
way to ensure the honesty of the participants which can potentially exert an influence on the
results.

1.8 DEFINITIONS OF TERMS

The research will use some conceptual and operational words that related to the research
objectives to define some of the terms in this study. The definitions are as follow:-

Turnover intention:- Turnover Intention is one's behavioral intention to quit. According to

Tett and Meyer (1993) in Rumery (1994), the turnover intention refers to the 'conscious and
deliberate willfulness of the workers to leave the organization'. Vandenberg and Nelson (1999)
defined intention to quit as the 'individual own estimated probability (subjective) that they are
permanently leaving their organisation at some point in the near future.

Employee retention (versus employee turnover) refers to the continued employment of

employees. Optimally, high-quality, productive employees are retained.

Job Satisfaction:- According to Newstrom and Davis (1984) 'job satisfaction is a set of
favorable and unfavorable attitudes with which, employees view their work. It expresses the
amount of agreement between the employee expectations from the job and rewards that the job
actually provides.

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Pay:- Pay is viewed as part of the sanction system used in the organisation to motivate
compliance with its rules and regulations (Mueller and Price, 1990). Lum, Kervin, Clark, Reid
and Sirola (1998) explained for the individual employee, pay is viewed as an important reward
and outcome.

Employee Benefits: An employee benefit is “any type of plan sponsored or initiated

unilaterally or jointly by employers and employees in providing benefits that stem from the
employment relationship that are not underwritten or paid directly by government” (Yohalem,
1977, p.19).

Promotion:- Promotion is defined as 'the movement of a person to higher level position in the
company' (Mondey & Noe, 1990). Conceptually, promotion is also defined as 'there assignment
of an employee to a higher level job within an organization' (Carrell et al., 1992).

The work itself:- Oxford Advance Learner's Dictionary (1995) defined the work as 'what is
done by somebody'. The work itself also refers to the working environment of the workers and
their perception about the job that they are responsible for.

Tenure (Length of Service):- Length of service refers to the 'period of the time lapsed since
the most recent date of hire. Therefore, if an employee has a break in the period of service, only
the break will be captured (Workforce profile, 1996). The length of service of the workers can
be divided into four groups, which are 'below one year', '1 - 2 years', '3 - 4 years' and '5 years
and above'.

Age:- Age can be defined as 'the length of time that a person has lived' (Oxford Advance
Learner's Dictionary, 1995). The age of workers can be divided into four groups, which are
'below 30 years old', '31 - 45 years old', '46 - 60 years old' and '61 years old and above'.

1.9 ORGANIZATION OF THE RESEARCH REPORT

The study consists of five chapters in which each will be discussed in depth later. Chapter one
is apprehensive in terms of preparing the whole research by concerning the various important

8
aspects such as problem statement, an illustration of the general and specific objectives of the
study. Background of the company being studied is also briefly discussed. Chapter two consists
of review of related literatures and empirical researches related to the problem being
investigated and theoretical framework of the study. Chapter three includes the methodology
and procedure applied for the study in detail. Analysis and presentation of the findings
emerging from the study are presented in Chapter four. The fifth chapter contains a summary of
the study and findings, discussions, conclusions and recommendations for further research.

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 CHAPTER 2: LITERATURE REVIEW

2.1 INTRODUCTION

This chapter discusses about turnover and turnover intention from several perspectives. It
includes the definition of employee turnover, turnover intention, sources of employee turnover;
effects of employee turnover; the models of employee turnover intention; and variables related
to employee turnover intention. Apart from that, this chapter also stated out other variables
related to employee turnover intention. Several perspectives on job satisfaction have also been
reviewed that are from dimension of job satisfaction to theoretical view of job satisfaction.

2.2 DEFINITION OF EMPLOYEE TURNOVER

Employee turnover occurs when employees leave their jobs and must be replaced. The world
web dictionary defines employee turnover “as the ratio of the number of workers that had to be
replaced in a given time period to the average number of workers” (www.wordnet-
princeton.edu). The Chartered Institute of Personnel and Development (2007:1) defines
employee turnover as the “ratio comparison of the number of employees an organisation must
replace in a given time period to the average number of total employees”. In their own
definition, Abassi and Hollman (2000: 305) define turnover as the “rotation of employees
around the labour market; between firms, jobs and occupations; and between the states of
employment and unemployment”. Turnover, according to Iverson and Pullman (2000: 980) can
be classified as voluntary (to include withdrawals out of will) or involuntary (to include layoffs
and dismissals).

Employees’ turnover is a much studied phenomenon Shaw et al. (1998).But there is no standard
reason why people leave organisation. Employee turnover is the rotation of workers around the
labour market; between firms, jobs and occupations; and between the states of employment and
unemployment Abassi et al. (2000). The term “turnover” is defined by Price (1977) as: the ratio
of the number of organizational members who have left during the period being considered

10
divided by the average number of people in that organization during the period. Frequently,
managers refer to turnover as the entire process associated with filling a vacancy: Each time a
position is vacated, either voluntarily or involuntarily, a new employee must be hired and
trained. This replacement cycle is known as turnover (Woods, 1995). This term is also often
utilized in efforts to measure relationships of employees in an organization as they leave,
regardless of reason. “Unfolding model” of voluntary turnover represents a divergence from
traditional thinking (Hom and Griffeth, 1995) by focusing more on the decisional aspect of
employee turnover, in other words, showing instances of voluntary turnover as decisions to
quit.

2.2.1 Types of Turnover

There are two types of turnover. Turnover can be categorized as voluntary turnover and
involuntary turnover. When employees decides to leave the organization their own choice, is
called voluntary turnover, while, when an organization removes an employee is called
involuntary turnover (Price & Mueller, 1981). Historically, it has been investigated that
involuntary turnover is generally good for the organizational interest (Mc Shane & Williams,
1993); but voluntary turnover is considered very detrimental for organization.

2.2.2 Measuring Turnover:

The Chartered Institute of Personnel and Development (CIPD) in the United Kingdom
developed a simple and most common way of measuring employee turnover. The method,
according to the CIPD (2007: 1) is to measure the number of leavers in a period as a percentage
of the number employed during the same period, usually on a quarterly or annual basis. This is
sometimes called the separation rate (SR). This is expressed as follows:

Number of leavers___ x 100 = Separation rate

Average number working

The CIPD (2007:1) further states that, unless there are special circumstances such as a sudden
large increases in the size of the workforce, the average number working is usually taken to be

11
the number working at the start of the period added to the number working at the end, the total
is then divided by two.

2.3 SOURCES OF EMPLOYEE TURNOVER

2.3.1 Job related factors

Most researchers (Bluedorn, 1982; Kalliath and Beck, 2001; Kramer et al., 1995; Peters et al.,
1981; Saks, 1996) have attempted to answer the question of what determines people's intention
to quit by investigating possible antecedents of employees’ intentions to quit. To date, there has
been little consistency in findings, which is partly due to the diversity of employed included by
the researchers and the lack of consistency in their findings.

Therefore, there are several reasons why people quit from one organisation to another or why
people leave organisation. The experience of job related stress (job stress), the range factors
that lead to job related stress (stressors), lack of commitment in the organisation; and job
dissatisfaction make employees to quit.( Firth et al. 2004). This clearly indicates that these are
individual decisions which make one to quit. There are other factors like personal agency refers
to concepts such as a sense of powerlessness, locus of control and personal control.

Locus of control refers to the extent to which people believe that the external factors such as
chance and powerful others are in control of the events which influence their lives Firth et al.
(2004). Manu et al. (2004) argue that employees quit from organization due economic reasons.
Using economic model they showed that people quit from organization due to economic
reasons and these can be used to predict the labour turnover in the market. Good local labour
market conditions improve organizational stability Schervish (1983). Large organizations can
provide employees with better chances for advancement and higher wages and hence ensure
organizational attachment (Idson and Feaster 1990). Trevor (2001) argues that local
unemployment rates interact with job satisfaction to predict turnover in the market.

Role stressors also lead to employees’ turnover. Role ambiguity refers to the difference
between what people expect of us on the job and what we feel we should do. This causes
uncertainty about what our role should be. It can be a result of misunderstanding what is
expected, how to meet the expectations, or the employee thinking the job should be different

12
Kahn et al. Muchinsky, 1990. Insufficient information on how to perform the job adequately,
unclear expectations of peers and supervisors, ambiguity of performance evaluation methods,
extensive job pressures, and lack of consensus on job functions or duties may cause employees
to feel less involved and less satisfied with their jobs and careers, less committed to their
organizations, and eventually display a propensity to leave the organisation (Tor et al., 1997). If
roles of employees are not clearly spelled out by management/ supervisors, this would
accelerate the degree of employees quitting their jobs due to lack of role clarity.

2.3.2 Organizational factors

Organisational instability has been shown to have a high degree of high turnover. Indications
are that employees are more likely to stay when there is a predictable work environment and
vice versa (Zuber, 2001). In organizations where there was a high level of inefficiency, there
was also a high level of staff turnover (Alexander et al., 1994). Therefore, in situations where
organizations are not stable, employees tend to quit and look for stable organisations because
with stable organisations they would be able to predict their career advancement.
The imposition of a quantitative approach to managing the employees led to dissatisfaction of
staff and hence it leads to labour turnover. Therefore management should not use quantitative
approach in managing its employees.

Adopting a cost oriented approach to employment costs increases labour turnover Simon et al.
(2007). All these approaches should be avoided if managers want to minimize employee
turnover an increase organisational competitiveness in this environment of globalization.

Employees have a strong need to be informed. Organisation with strong communication

systems enjoyed lower turnover of staff (Labov, 1997). Employees feel comfortable to stay
longer, in positions where they are involved in some level of the decision-making process. That
is employees should fully understand about issues that affect their working atmosphere
(Magner et al. (1996). But in the absence of openness’ in sharing information, employee
empowerment the chances of continuity of employees are minimal. Costly et al. (1987) points
out that a high labour turnover may mean poor personnel policies, poor recruitment policies,
poor supervisory practices, poor grievance procedures, or lack of motivation. All these factors
contribute to high employee turnover in the sense that there is no proper management practices
and policies on personnel matters hence employees are not recruited scientifically, promotions

13
of employees are not based on spelled out policies, no grievance procedures in place and thus
employees decides to quit.

Griffeth et al. (2000) noted that pay and pay-related variables have a modest effect on turnover.
Their analysis also included studies that examined the relationship between pay, a person’s
performance and turnover. They concluded that when high performers are insufficiently
rewarded, they quit. If jobs provide adequate financial incentives the more likely employees
remain with organization and vice versa. There are also other factors which make employees to
quit from organisations and these are poor hiring practices, managerial style, lack of
recognition, lack of competitive compensation system in the organisation and toxic workplace
environment Abassi et al. (2000).

2.4 EFFECTS OF EMPLOYEE TURNOVER

Employee turnover is expensive from the view of the organisation. Voluntary quits which
represents an exodus of human capital investment from organisations (Fair, 1992) and the
subsequent replacement process entails manifold costs to the organisations. These replacement
costs include for example, search of the external labour market for a possible substitute,
selection between competing substitutes, induction of the chosen substitute, and formal and
informal training of the substitute until he or she attains performance levels equivalent to the
individual who quit ( John, 2000). Addition to these replacement costs, output would be
affected to some extend or output would be maintained at the cost of overtime payment.

The reason so much attention has been paid to the issue of turnover is because turnover has
some significant effects on organisations (DeMicco and Giridharan, 1987; Dyke and Strick,
1990; Cantrell and Saranakhsh, 1991; Denvir and Mcmahon, 1992).Many researchers argue
that high turnover rates might have negative effects on the profitability of organisations if not
managed properly (Hogan, 1992; Wasmuth and Davis, 1993; Barrows, 1990).

Turnover has many hidden or invisible costs (Philips 1990) and these invisible costs are result
of incoming employees, co-workers closely associated with incoming employees, co-workers
closely associated with departing employees and position being filled while vacant. Moreover,

14
turnover affects on customer service and satisfaction Kemal et al. (2002) which ultimately
affects the profitability of the organisation.

Catherine (2002) argue that turnover include other costs, such as lost productivity, lost sales,
and management’s time. This clearly demonstrates that turnover affects the profitability of the
organization and if it’s not managed properly it would have the negative effect on the profit.

Research estimates indicate that hiring and training a replacement worker for a lost employee
costs approximately 50 percent of the worker’s annual salary (Johnson et al., 2000) but the
costs do not stop there. Each time an employee leaves the firm, we presume that productivity
drops due to the learning curve involved in understanding the job and the organization.
Furthermore, the loss of intellectual capital adds to this cost, since not only do organizations
lose the human capital and relational capital of the departing employee, but also competitors
are potentially gaining these assets Meaghan et al. (2002). Therefore, if employee turnover is
not managed properly it would affect the organization adversely in terms of personnel costs and
in the long run it would affect its liquidity position. However, voluntary turnover incurs
significant cost, both in terms of direct costs (replacement, recruitment and selection,
temporary staff, management time), and also (and perhaps more significantly) in terms of
indirect costs (morale, pressure on remaining staff, costs of learning, product/service quality,
organisational memory) and the loss of social capital Dess et al. (2001).

2.5 TURNOVER INTENTION

Turnover intention is one’s behavioral intention to quit. According to Bigliardi, Petroni and Ivo
Dormio (2005) intention to leave refers to individuals perceived likelihood that they will be
staying or leaving the employer organization. Employees with high withdrawal intentions from
the organisation subjectively assess that they will be leaving the organisation in the near future
(Mowday, et al.,1982). Intention to depart from an occupation is a much more difficult decision
than to leave the job (Blau, 2000).

Meanwhile Sousa-Poza (2007) defined ‘intent to leave’ as the reflection of the (subjective)
probability that an individual will change his or her job within a certain time period and is an
immediate precursor to actual turnover. Johnsrud and Rosser (1999) and several studies found

15
that researchers always used intention as a proxy for actual turnover because of difficulties to
study it (Bluedorn, 1982; Lee & Mowday, 1987; Steers & Mowday, 1981). The validity of
studying intentions in the workplace can be also be drawn from Sager’s (1991) longitudinal
study of sales people in which intention to quit has found to discriminate effectively between
leavers and stayers. Researchers such as Ajzen and Fishbein (1990); Igabaria and Greenhouse
(1992) cited from Firth, Mellor, Moore and Loquet (2004); believed that intentions are the most
immediate determinants of actual behavior. The study found that, the more individual
implemented behavior to quit the more likely he/she will leave the organization. Gregory
(2007) supported the idea that behavioral intention to quit has been found to be strong predictor
of personal turnover across industries and theoretically is believed to be an important
antecedent to turnover.
According to Steers and Mowday (1981), individuals’ turnover decision, generally, have been
characterized as rational choices individual make regarding their current job and organization.
Tett and Meyer (1993) cited from Park and Kim (2009) in their study on nurses in Korea two
public hospitals stated intent to turnover constitutes the final cognitive step in the decision
making process in which a nurse actively considers quitting and searching for alternative
employment.

Park and Kim (2009) added, a worker’s intentions to leave an organization include mere
thoughts of quitting the organization (thinking and quitting), and statements by the worker that
he/she actually wants to leave the organization (intent to leave). Nevertheless, behavioural
intention to quit has found to be strong predictor of personnel turnover across industries and
theoretically is believed to be important antecedent to turnover (Gregory et. al. 2007).
Turnover intention is the final stage before the actual turnover takes place. Arnold and Feldman
(1982) supported the idea that turnover intention is the final cognitive variable immediately
preceding and having direct casual impact on turnover.

Bigliardi, Petroni and Ivo Dormio (2005), indicated that turnover is motivated by the
dissatisfaction of the individual with some aspect of the work environment (including the job,
co-workers or organization), or the organization with some aspect of the individual, such as
poor performance or attendance. Hence, an employee with high withdrawal intention to leave

16
the organization might finally leave his / her occupation. Carmeli (2005) also pointed out that;
previous researchers also acknowledged that withdrawal intention is identified as a strong
predictor of an employee’s actual turnover (Mobley, 1982; Mobley et. al., 1978). Withdrawal
decisions may also lead to actual turnover (range between r=0.58 according to Mobley et. al.
1978, and r=0.35 according to Griffeth et. al., 2000; and thus, actual turnover has a significant
impact on the organization (Mobley, 1982; Price, 1989).

Other researchers (Kalliath & Beck, 2001; Saks, 1996; Kramer et al., 1995 & Peter et al., 1992)
have attempted to answer the question of what determines people’s intention to quit by
investigating possible antecedents of employee’s intention to quit. To date, there has been little
consistency in findings partly due to the diversity of employed included by the researchers and
the lack of consistency in their findings.

2.6 THE MODEL OF EMPLOYEE TURNOVER INTENTION

Muchinsky (1993) in his book saying that ‘Mobey (1997) had proposed a model of employee
turnover based on several hypothesizes linked between satisfactions and quitting. The several
links includes thinking out quitting, looking for another job, intending to quit or stay and
actually deciding to quit or stay’. Mobley’s model premises and assumptions stated that
dissatisfaction would lead people to thoughts of quitting. If people found that the cost for
quitting is high, then they will do less thinking about quitting or show a more passive behavior.
On the other hand, if the quitting cost is not high, and the jobs are available, this situation will
lead to turnover intention and turnover. Mobley’s, model shows a major step of thinking job
dissatisfaction to turnover (Muchinsky, 1993). According to Muchinsky (1993), this model was
also tested again by Mobley, Horner and Hollingsworth in 1978. The respondents were the
employees of some hospitals and the results achieved are used as useful evidence in the model
to predict turnover. The overall job satisfaction was found to be -0.49 correlated with intention
to stay or leave and -0.29 correlate with actual turnover.

17
Figure 2.1 Representation of the Intermediate Linkage in the Employee Turnover Process
Source: Adapted from Muchinsky, P.M (1993). Psychology Applied to Work (4th ed.)
California: Brooks/Cole Publishing Company (p.310).

2.7 VARIABLES RELATED TO TURNOVER INTENTION

Although there is also standard framework in understanding the turnover process as a whole, a
wide range of factors have been found useful when it comes to interpreting employee turnover
and these have been used to model turnover in a range of different organisational and
occupational settings. Besides actual turnover, other variables have also been associated to
employee’s desires or intention to leave the organization. Tan, Vicky Tiong and Ngoh (2007) in
their study at Singaporean companies had identified variables that related to turnover intention
which are divided into three broad categories such as demographic factors (employee’s age,
gender, marital status and number of children); organisational factors (an employee’s length of
service, salary drawn and number of staff); attitudinal factors (job satisfaction, work-related

18
stress and level of commitment in the organisation). Bluedorn (1982) highlighted demographic
characteristics such as race, age, education and pay that affect job expectations and
environmental opportunities, which ultimately influence turnover and job satisfaction.
Whereas, Banister and Gritters (1986) found that employee’s intention to search for alternative
job together with his or her organizational tenure are the two related factors to his or their
intention to search for alternative jobs will be more likely to leave the organization. Meanwhile,
Arnold and Feildman (1982) had discovered several factors like organization tenure, job
satisfaction, organization commitment, net expectations, conflicting standards and job security
are precise availability of alternative.

Research also shows that gender and age are another variable that may determine turnover
decisions among employees. Female employees have reportedly shown high turnover rates than
their male counterparts. Gender biases and stereotypes are common in the workplace (Chang &
McBride-Chang, 1997; Falk & Lyson, 1988) for example male professionals’; skilled workers
are disproportionately received higher pay than women. The motion is supported by Anderson
and Tomaskovic- Devey, 1995; they claimed that pay inequity is a common problem for
women and men frequently receive greater returns to human capital. However, Pfeffer and
Ross (1990) argued that distinct gender based-wage discrimination exists across a variety of
industries. Despite women’s negative work experiences, some research indicates that women
are actually more satisfied with their job than men. This high job satisfaction may be caused by
a variety of positive workplace experiences. Ma and McMillan (1999) concluded that female
teachers were more satisfied with their jobs than their male colleagues, and this satisfaction was
a function of their perceived teaching competence. Moreover, women’s lower expectations of
justice and equity in the workplace and the low value women place on organizational rewards
have caused satisfaction in their work.
Besides, Mobley (1997) specified that negative evaluations of an employee’s present job
increases job dissatisfaction and that negative feelings increased quit intentions. Employee
turnover demands management attention because when high performing employees’ leave, it
puts pressure on the organization scarce source.

19
According to Valentine (2001), much turnover research has focused on identifying individual
characteristics that cause job separation, which include tenure, education, job satisfaction and
organizational commitment. Meyer (1993) defines career commitment as the degree of
commitment to one’s profession or occupation while Ellemer, et al. (1998) define it as
individuals’ motivation to work towards personal advancement in their profession.

Organizational commitment may determine the level of employee loyalty to the mission and
vision of an organization. The level of employee commitment may determine who leaves and
who stays in an organisation. Employees who are highly committed show a small turnover rate
and vice versa. Research such as those of Harris and Cameron (2005); Griffeth, et al. (2000);
Mueller and Price (2005) suggest that variables such as job satisfaction and organisational
commitment are mediating factors for the actual action of quitting.\

An employee who is less satisfied with his or her job would be more likely to quit. Taylor and
Weiss (1972), Porter, et al. (1974) and others found that job satisfaction predicted turnover. An
employee who is more stressed is more likely to want to quit his or her job. Taylor and Weiss
(1972) also found that stress and exhaustion on the job can induce turnover in employees.
Commitment as a variable was found by Chang, Du and Huang (2006) to be inversely related
to turnover. The intention to quit, however, has been found by Mobley (1977) as well as Steel
and Ovalle (1984), to be a useful indicator for actual turnover and serves as a criterion variable.
Previous studies also showed that intention to leave has a relationship with the affective
responses to work such as satisfaction and organization commitment. Mobley (1977), Steers
and Mowday (1981) added that the insights into these decisions are gained by understanding an
individual’s job satisfaction and commitment. This evidence is supported by Rosin and Korabik
(1995), where they identified that organization commitment, job satisfaction and position
characteristic are important predictors of turnover intention (Johnsurd & Rosser, 1999).
Turnover is motivated by the dissatisfaction of the individual with some aspect of work
environment (including job, co-workers or organisation), or the organization with some aspect
of the individual, such as poor performance or attendance (Bigliardi, Petroni & Ivo Dormino,
2005). The lost of employees in the organisation is regard as a negative index of organisational
effectiveness (Staw, 1980). In addition, Carmeli (2005) study on social workers from health

20
institutions found that organizational culture that provide challenging job, diminishes
employee’s absenteeism and withdrawal intentions from the occupations, job and organization.

As we entered the new millennium, both organisations and the labour market change at an
alarming pace. As far as the external environment is concerned, most people will not leave their
current position without possibility of finding other employment in due course. They are more
inclined to leave their present work if they perceive that there is ample opportunity for
acceptable alternative employment. For example, research has found that engineers have
diverse career aspirations that, in turn, may impact on job commitment and satisfaction (Allen
& Katz, 1986, 1992; Goldberg & Shenav, 1984; Igbaria et al., 1999).

In addition, engineers have a strong need for growth and personal development compared to
professionals in other occupations. According to Allen and Katz (1995); Gordon and Bal
(2001) they possess a high need for learning and have a strong aspiration to be challenged.
Moreover, the engineers tend to be treated as professionals thus, caused considerable tensions
and strains in engineer management relationship.

Psychological contract refer to employees’ subjective interpretations and declarations of their

deal with the organization (Rousseau, 1996; Zool, Turnley & Feildman, 1998). Many studies
conceptualise turnover to be psychological response and rest on the belief that turnover is an
individual choice of behavior (Lum, Kervin, Clerk, Reid & Sirola, 1996). Withdrawal
cognitions lead to search behaviours that involve the evaluation of labour market opportunities.
Hom et al., 1992 cited from Valentine (2001) stated that one the opportunities are assessed,
quitting follows when available jobs are more desirable than existing employment.

From an employee perspective, keeping an external labour market strategy is frequently used as
a means for achieving market-level salaries (Brett & Stroh, 1997). The labour market and the
availability of alternative opportunities have as well contributed to the high turnover among
certain professions for example health professionals; has given nurses and other healthcare
providers’ strong bargaining power in the market.

21
Alternative employment opportunities are mainly contributed by the external's environment
where the availability of alternative employment in the open market. Since it appears openly in
the market, the access to the availability and other benefits are easily to be obtained by the
candidates or future employee. Therefore, it intentionally encourages the employees of
organization to switch their career with other organization (Price 2001). Further, there is a
positive relationship between alternative employment opportunities and employee turnover
intention based on the previous literatures (Khatri et al., 2001; Hulin et al, 1985).

Commonly, earning or salary is the major concern for employee to consider in any of
employment decision. They will focus on the best-offered salary to select the organization for
them to work. Therefore, it is a main strategy that practiced by organization to attract skill and
talented employee to join their organization. However, in other case, employees are also
looking for organization that can offer work-life balance in the working environment for them
to make any decision of employment (Frank Van, 1995).

2.8 DEFINITION OF JOB SATISFACTION

The term job satisfaction figures prominently in any discussions on management of human
resources. Job satisfaction refers to a person’s feeling of satisfaction on the job, which acts as a
motivation to work. It is not the self- satisfaction, happiness or self- contentment but the
satisfaction on the job. (Rao, P. Subba, 2000).

Job satisfaction is an individual’s feeling regarding his or her work. It can be influenced by a
multitude of factors. (Murphy, 2004). The term relates to the total relationship between an
individual and the employer for which he is paid. Satisfaction does mean the simple feeling
state accompanying the attainment of any goal; the end state is feeling accompanying the
attainment by an impulse of its objective. The term Job satisfaction was brought to limelight by
Hoppock. (Mirza, S. Saiyadain, 1996). Hoppock describes job satisfaction as, “any
combination of psychological, physiological and environmental circumstances that cause and
person truthfully to say I am satisfied with my job.” Job satisfaction has many dimensions.
Commonly noted facets are satisfaction with the work itself, wages, and recognition, rapport

22
with supervisors and coworkers, and chance for advancement. Each dimension contributes to
an individual’s overall feeling of satisfaction with the job itself, but different people define the
“job” differently. There are three important dimensions to job- satisfaction:
1) Job- satisfaction refers to one’s feeling towards one’s job. It can only be inferred but
not seen.

2) Job satisfaction is often determined by how well outcomes meet or exceed

expectations. Satisfaction in one’s job means increased commitment in the fulfillment
of formal requirements. There is greater willingness to invest personal energy and time
in job performance.

3) The terms job-satisfaction and job attitudes are typically used interchangeably. Both
refer to effective orientations on the part of individuals towards their work roles, which
they are presently occupying.
Though the terms job-satisfaction and attitudes are used interchangeably, there are differences
between the two. Attitude refers to predisposition to respond. Job-satisfaction, on the other
hand, relates to performance factors. Attitudes reflect one’s feelings towards individuals,
organizations, and objects. But satisfaction refers to one’s attitude to a job. Job satisfaction is,
therefore, a specific subset of attitudes. (Hammer W. Clay and Dennis W. Organ, 1978).
Attitudes endure generally. But job satisfaction is dynamic; it can decline even more quickly
than it developed. Managers, therefore, cannot establish the conditions leading to high
satisfaction now and then neglect it, for employee needs may change suddenly. Managers need
to pay attention to job satisfaction constantly. (K. Aswalhappa,1996). Now the researcher
quotes a few definitions of job- satisfaction:
1) According to E.A. Locke: Job satisfaction is as a pleasurable or positive emotional
state resulting from the appraisal of one’s job or job experience. (E.A. Locke, 1976).
2) As defined by Feldman and Arnold Job satisfaction as the amount of overall positive
affect (or feelings) that individuals have towards their jobs. (D.C. Feldman and H.J.
Arnold, 1983).

23
 3) Kreitner and Kinicki described, Job satisfaction is an affective or emotional response
toward various facets of one’s job. This definition means job satisfaction is not a unitary
concept. Robert Kreitner and Angelo Kinicki, (1995).

4) Davis and Newstrom explained Job satisfaction is a set of favorable or unfavorable

feelings with which employees view their work.” (Keith Davis and J.W. Newstrom,
1989).

5) Andrew stated that job satisfaction is the amount of pleasure or contentment

associated with a job. (Andrew J. Du Brin, 1988).
As stated by Schultz and Shultz, job satisfaction is influenced by many work related factors and
it depends on the workers’ sense of fulfillment that they get from their daily work. This is
supported by Carrell, Kuzmits and Elbert (1992) that the work itself, co-workers, supervision
and opportunities to grow mostly influence the job satisfaction of the workers. The recent
research done by Seta et al. (2000) also found that the nature of the works, the reward systems,
relation with co-workers and supervision would contribute to the job satisfaction.

According to McCormick and Ilgen (1985), there are many previous researchers the support the
relationship between job satisfaction and turnover. One of it is from Spencer and Steers (1981)
in which they found that there is a strong negative relationship between job satisfaction and
turnover of the hospital employees who were relatively low performers. Mowday, Porter and
Steers (1982) also found that job satisfaction is consistently and negatively related to turnover.
Jackofsky and Peter (1983) in McCormick and Ilgen (1985) have another opinion on the
relationship between job satisfaction and turnover intention. They argued that the employee
would leave the job cause by dissatisfaction based on belief that that there are other
opportunities available at the job market. Data from a simple retail employees’ in several south
western cities confirmed this prediction. From the previous literature, Schermerhorn, Hunt and
Osborn (2000) stated that job satisfaction can affect turnover or decision by worker to terminate
their employment. They also agreed that dissatisfied workers are more likely than satisfied
workers to quit from their job. The first is to join and remain in an organization and the other is
to work hard in achieving high performance. Moreover, Rumery (1994) said that several past

24
literature such as done by Lucas, Atwood and Hagaman (1993) shown that factors such as age
and job satisfaction are good predictors of the intention of turnover intention of the workers.
Studies have also shown that intention to turnover can be used to predict future turnover.

Muchinsky and Tuttle (1979) summarized out of 39 studies of the relationship between job
satisfaction and turnover, 35 of it indicate that the relationship is negatively related; the average
magnitude is about -0.40. However, he still believes that the relationship between satisfaction
and turnover is also limited by economic condition (Muchinsky, 1993). The same opinion is
also reported by Lawler (1994) through his observation. Furthermore, the outcome of research
by Moynihan et. al. (1998) found that the intention to leave is negatively correlated with job
satisfaction (-0.70). The evidence from United States’ school suggests that schools with higher
overage satisfaction among teachers also have higher retention rates (Malkovich & Boudreau,
1997). According to Moynihan, Boswell and Boudreau (1998) several studies (Hulin, 1991;
Mobley, 1977: Porter & Steers, 1973) found that negative work attitudes play an important role
in model of turnover. Meanwhile, job dissatisfaction will cause the turnover cognition and the
intention of employee to escape from the job environment. Moreover, result of path analysis
based on Meta-analysis by Tett and Meyer (1993) found that the intention to leave is predicted
more strongly by job satisfaction rather than organization commitment.

2.9 THEORIES OF JOB SATISFACTION

The concept of job satisfaction underwent several changes and in course of time several
theories were advanced. There are vital differences among experts about the concept of job
satisfaction. In this section the researcher will examine some widely used theories in
contemporary job satisfaction research.
2.9.1 - Fulfillment theory:
The proponents of this theory measure satisfaction in terms of rewards a person receives or the
extent to which his needs are satisfied. Further they thought that there is a direct/ positive
relationship between job satisfaction and the actual satisfaction of the expected needs. The
main difficulty in this approach is that job satisfaction as observed by Willing, is not only a
function of what a person receives but also what he feels he should receive as there would be
considerable difference in the actual and expectations of persons. Thus, job satisfaction cannot

25
be regarded as merely a function of how much a person receives from his job. Another
important factor/ variable that should be included to predict job satisfaction accurately is the
strength of the individuals’ desire of his level of aspirations in a particular area. This led to the
development of the discrepancy- theory of job satisfaction.

2.9.2- Discrepancy theory

The proponents of this theory argue that satisfaction is the function of what a person actually
receives from his job situation and what he thinks he should receive or what he expects to
receive. When the actual satisfaction derived is less than expected satisfaction, it results in
dissatisfaction. Job satisfaction and dissatisfaction are functions of the perceived relationships
between what one wants from one’s job and what one perceives it is offering. This approach
does not make it clear whether or not over satisfaction is a part of dissatisfaction and if so, how
does it differ from dissatisfaction. This led to the development of equity theory of job
satisfaction.

2.9.3- Equity Theory

Equity theory is primarily a motivation theory, but it has some important things to say about
the causes of satisfaction /dissatisfaction. The proponents of this theory are of the view that a
person’s satisfaction is determined by his perceived equity, which in turn is determined by his
input- output balance compared to his comparison of others input-output balance is the
perceived ratio of what a person receives from his job relative to what he contributes to the job.
This theory is of the view that both under and over rewards lead to dissatisfaction. While the
under-reward causes feelings of unfair treatment, over-reward leads to feelings of guilt and
discomfort. (Edward E. Lawler III, 1973).

2.9.4- Herzberg’s Motivation/ Hygiene Theory (Two factors theory)

This theory was developed by Herzberg, Manusner, Peterson and Capwell who identified
certain factors as satisfiers and dissatisfies. Factors such as achievement, recognition,
responsibility etc, are satisfiers, the presence of which causes satisfaction but their absence
does not result in dissatisfaction. On the other hand, factors such as supervision, salary,

26
working conditions etc are dissatisfiers, the absence of which causes dissatisfaction. Their
presence however, does not result in job satisfaction. The studies designed to test their theory
failed to give any support to this theory, as it seems that a person can get both satisfaction and
dissatisfaction at the same time, which is not valid. (Daftuar, Chittranjan N, 1982). Fredrick
Herzberg’s motivation/hygiene theory assumes that one group of factors, motivators, accounts
for high level of motivation. Another group of factors, hygiene or maintenance factors can
cause discontent with work. Figure 4.1 compares Herzberg’s motivators and hygiene factors
with Maslow’s needs of hierarchy. The implications of Herzberg’s research for management
and HR practices is that although managers must carefully consider hygiene factors in order to
avoid employee dissatisfaction, even if all these maintenance needs are advanced, people may
not be motivated to work harder. Only motivators cause employers to exert more effort and
thereby attain more productivity, and this theory suggests that managers should utilize the
motivators as tools to enhance employee performance.

2.9.5- Maslow’s Hierarchy of Needs Theory

One theory of human motivation that has received a great deal of exposure in the past was
developed by Abraham Maslow. Until the more basic needs are adequately fulfilled, a person
will not strive to meet higher needs. In this theory Maslow classified human needs into five
categories that ascend in a definite order as follows:
1) Physiological needs

2) Safety and security needs

3) Belonging and love needs

4) Esteem needs and

5) Self- actualization needs.

As assumption often made by those using Maslow’s hierarchy is that workers in modern,
technologically advanced societies basically have satisfied their physiological, safety and
belonging needs. Therefore they will be motivated by the needs for self-esteem, esteem of
others, and then self-actualization. Consequently, conditions to satisfy these needs should be
present at work; the job itself should be meaningful and motivating.

27
 2.9.6- Process Theories of Motivation
Process theories suggest that a variety of factors may prove to be motivating. Depending on the
needs of the individual, the situation the individual is in, and the rewards the individual expects
for the work done. Theorists who hold to this view do not attempt to fit people into the single
category, but rather accept human differences. One process theory by Lyman Porter and E.E
Lawler focuses on the value a person puts on a goal as well as the person’s perception of
workplace equity, or fairness, as factors that influence his or her job behavior. In a work
situation, perception is a way an individual views the job. If expectations are not met, people
may feel that they have been unfairly treated and consequently become dissatisfied. Using the
Porter and Lawler model, suppose that a salesclerk is motivated to expend efforts on her job,
from this job he/she expects to receive two types of rewards: intrinsic (internal) and extrinsic
(external). For this sales- clerk intrinsic rewards could include a feeling of accomplishment, a
feeling of recognition, or other motivators. Extrinsic rewards might be such items as pay,
benefits, good working conditions, and other hygiene factors. The salesclerk compares his/her
performance with what he/she expected and evaluates it in light of both types of rewards he/she
receives. He/she then reaches some level of job satisfaction or dissatisfaction. Once this level is
reached, it is difficult to determine what he/she will do. If he/she is dissatisfied, he/she might
put forth less effort in the future, he/she might work harder to get the rewards he/she wants, or
he/she might just accept his/her dissatisfaction. If he/she is highly satisfied, it does not always
mean he/she will work harder. He/she may even slack off a bit, saying, “I got what I wanted.”
The essence of a Porter and Lawler view of a motivation is perception.

2.9.7- Expectancy Theory

Expectance theory concentrates, as the name implies, on the expectations which employees
bring with them to work situation and the context and manner in which these expectations are
satisfied. The underlying hypothesis is that “appropriate levels of effort, and hence
productivity, will only be extended if employees‟ expectations are fulfilled”. It does not
assume a static range of expectations common to all employees but rather points to the
possibility of different sets of expectations. Rewards are seen as fulfilling or not fulfilling
expectations. Expectancy theory challenges management to demonstrate to employees that
extra effort will reap a commensurate reward. The link between effort and reward needs to

28
encompass both the pay packet and a variety of other extrinsic or intrinsic rewards. Reward
schemes must therefore create a positive link between the size of the pay packet and the effort
expended for employees primarily motivated by money. For others links must be created
between effort and rewards which include job satisfaction and praise and other forms of
recognition. (Cowling, Alan and Chloe Mailer, 1998).

2.9.8- Variance Theory

Variance theory is based on a simple idea: if you want x from your work then you are satisfied
to the extent that it provides you with x. The major problem for variance theorists is defining
what it is that people want from their jobs. One way of solving this is to borrow concepts from
motivation theory so that variance in what is wanted and what is available from a job occurs:
for example, in the extent to which self-actualizing needs can be fulfilled. This means that by
borrowing from motivation theory some researchers can specify in advance the variations in
job satisfaction that employees could meaningfully report in their jobs. Another approach
assumes the relevant variances depend on the nature of the work and thus differ from
occupation to occupation. This provides a more flexible framework with which to analyze
problems of low job satisfaction within occupations. Either approach, specifying in advance the
relevant facets of job satisfaction or identifying them through investigation, enables researchers
to establish whether there are significant individual differences present in reported levels of job
satisfaction or whether there is a high degree of consensus among staff about what aspects of
work lead to high levels of satisfaction and dissatisfaction. By identifying what aspects of a job
give rise to high and low levels of satisfaction, managers are better placed when considering
what changes can be made to improve job satisfaction.

2.9.9- Job Characteristics

If variance theory suggests the cause of job satisfaction is subjective, the job characteristics
model suggests the opposite: the cause of job satisfaction is be found in the objective
characteristics of a job. Job design studies explored a new field when behavioral scientists
focused on identifying various job dimensions that would improve simultaneously the
efficiency of organization and job satisfaction of employees. Hackman and Oldham first
outlined this view in1975; their model has inspired thousands of research papers and its key

29
concepts still provide the foundations of much job satisfaction and job characteristics research.
The job characteristics model proposes that three psychological states of a jobholder result in
improved work performance, internal motivation, and lower absenteeism and turnover. The
motivated, satisfied, and productive employee is one who (1) experiences meaningfulness of
work performed (2) experiences responsibility for work outcomes, and (3) has knowledge of
the results of the work performed, Achieving these three psychological states serves as
reinforcement to the employee and as a source of internal motivation to continue doing the job
well. According to Hackman and Oldham five core dimensions of job characteristics are as
follows: (Fincham Robin and Peter S. Rhodes, 1999).
1) Skill Variety: The degree to which a job entails a variety of different activities, which
demand the use of number of different skills and talents by the jobholder.

2) Task Identity: The degree of which the job requires completion of a whole and identifiable
piece of work that is doing a job from beginning to end with a visible
outcome.

3) Task Significance: The degree to which the job has a substantial impact on the lives or
work of other people, whether in the immediate organization or in the
external environment.

4) Autonomy: The degree to which the job provides substantial freedom, independence, and
discretion to the individual in scheduling the work and in determining the
procedures to be used in carrying it out. (Bohlander George, Scott Shell and
Arthur Sherman, 2002). Autonomy deals with the amount of freedom that
employee can exercise in their job. (Stein, Barry A.,1983).

5) Task Feedback: The degree to which carrying out the work activities required by the job
results in the individual being given direct and clear information about the
effectiveness of his or her performance. It is important to realize that each of
five job characteristics affects employee performance differently. Therefore
employees will experience the greatest motivation when all five
characteristics are present, since the job characteristics combine to produce
the three psychological states. (Bohlander George, Scott Shell and Arthur
Sherman, 2002).
30
Further, when these critical psychological states are experienced, work motivation and job
satisfaction will be high. Furthermore, behavioral outcomes, such as the quality of work and
attendance, may also be improved. Thus, the theory encompasses not only job characteristics
and job satisfaction, but also work design principles, psychological studies and motivation. The
attraction of such an ambitious model has been amplified by its clear specification of concepts
and relationships between them and readily available measuring instrument. Particularly well
established are the relationships between job characteristics and job satisfaction. (Robin
Fincham and Peter S. Rhodes, 1999).

2.10 FACTORS OF JOB SATISFACTION

After explaining the theories of job satisfaction surveys the researcher now wants to turn his
attention to another important point of his study namely factors of job satisfaction. Most
research on job satisfaction has focused on the effects of job enrichment and job design, or the
quality of work life. As a human resource manager is concerned about balancing job
satisfaction with performance, he needs to know how to foster an organizational climate that
contains these elements.

2.10.1- Job enrichment

An “enriched” job is one in which an employee has opportunities for achievement,
recognition, advancement, responsibility, and growth. Enriched jobs are those in which
employees can be involved in the production of goods or services from beginning to end. They
are not a series of limited, specialized activities, repeated over and over. Rather, enriched jobs
are those in which the workers have the opportunity to see processes or tasks through from start
to finish. Enriched jobs contain five core work dimensions: task identity, task significance, skill
variety, autonomy, and feedback. The presence of these components within the job will then
lead to critical psychological states of meaningfulness of work, responsibility for work
outcomes, and knowledge of work outcomes. The presence of these psychological states leads
ultimately, to motivation, high quality performance, low absenteeism and turnover and high job
satisfaction. An employee who can point to a product and brag, “I made that” or “my efforts
produced that” is expecting task identity. If employees also consider the fruit of their labors to

31
be important, then task significance is part of their job. A task is significant when employees
believe that what they have done makes a real difference to someone or to society. Autonomy
is experienced by those who are encouraged to the work without close supervision; skill variety
means they do a lot of different things on the regular basis; and feedback presupposes regular
and accurate information on how work is perceived by those for whom it is done. An example
of an enriched job is that of a small city municipal employee who has responsibility for the
general operations of government. The municipal employee’s job requires the traditional duties
of a manager; planning; organizing, staffing, directing, coordinating, reporting, and budgeting
(POSDCORB). Job enrichment among managerial and professional employees is often inherent
in the nature of their work. Those who perform support functions and operate the
organization‟ s technology are those for whom job enrichment is difficult, though not always
impossible.
Hospital employees are examples of those for whom routinized, specialized job requirements
are being changed. Today, in many medical facilities, a patient is assigned a “Nurse
Coordinator” who is involved from the beginning to end of treatment and is thus able to derive
satisfaction from seeing a patient improve as a result of his or her ministrations. Responsibility
for a maternity patient used to move from labor room staff to delivery room to recovery room
to maternity ward, with no one knowing what happened after she left their case. In a situation
in which employee jobs are enriched, the pregnant woman comes to a birthing area where the
same staffs provide continuity of service and see the results of their labors. This atmosphere
enriches both the lives of the employees and the situation of the woman.

2.10.2- Quality of work life

Another way to increase job satisfaction among employees is to provide a high quality of work-
life (QWL) environment, in which employees may be productive because their work situations
is one in which they find satisfaction. A QWL environment may contain either routinized jobs
or enriched jobs. Elements of QWL that can influence directly are total life space, good
managerial relations, fair and adequate compensation, and safe and healthy work environment.
The researcher considered above and explains them one by one as follows:

32
 2.10.2.1- Total Life Space:
The idea of “total life space” is a new concept for human resource managers, growing in
importance as the number of employees grow. Employees want to be able to balance the
demands of work and home. To do this, they want their managers to expect a reasonable
amount of work, but not so much that the job interferes with personal life.

2.10.2.2- Good Managerial Relations:

The second most important factor in fostering job satisfaction is “good managerial relations”.
Those who act to maintain good relations with their employees exhibit the following behaviors:
help with job related problems, awareness of employee difficulties, good communication, and
regular feed-back about the performance so that employees always know where they stand.
Employees want to have input into decisions that affect them and to feel important. They want
to be informed and involved. When a job brings recognition and respect, employees experience
satisfaction with it. This is an easy condition to create with feedback.

2.10.2.3- Fair and Adequate Compensation:

Adequate compensation is another important influence on employee job satisfaction.
Employees do expect fair and adequate compensation- a day’s pay for a day’s work. The
component of compensation that influences satisfaction appears to be “equity” rather than
amount however. Satisfaction with wages is more dependent on relative than on absolute pay,
on comparison with others, and on perceptions of fairness. While within organizations there is a
correlation between job satisfaction and pay, it is very small. Employees are consistently more
satisfied because of equity than they are because of high wages. Employees at work have a
clear idea of what they ought to be paid in comparison with others, and in relation to their skill,
and experience, and so forth. They want their performance, seniority, age, and education to be
recognized and rewarded.

2.10.2.4- Work Environment:

Employee job satisfaction is also influenced by the quality of the working environment both its
physical attributes and the degree to which it provides meaningful work. While a comfortable
physical environment is correlated with job satisfaction, the relationship is not merely as strong

33
as the relationship between satisfaction and managerial behavior. Employees want certain
conditions in their work they want to believe that what they do will ultimately make a
difference to someone in some way. They want to participate in decision making, opportunities
to grow and develop, and same opportunities for their coworkers regardless of race, sex, or
age.( Willa M. Bruce and J. Walton Blackburn, 1992).

The Role of Managers: The evidence that “good management” plays a part in affecting
employee job satisfaction puts a responsibility on both the managers and the supervisors in the
organization.( Willa M. Bruce and J. Walton Blackburn, (1992). Management needs
information on employee job satisfaction in order to make sound decision, both in preventing
and solving employee problems .A typical method used is a job satisfaction surveys, also
known as a morale, opinion, attitude, or quality-of-work-life survey. A job satisfaction survey
is procedure by which employees report their feelings towards their jobs and work
environment. Individual responses are then combined and analyzed.( Newstorm John W. and
Keith Davis,1999)

2.11 THEORETICAL FRAMEWORK AND HYPOTHESES

The purpose of this study is to investigate the relationship between job satisfaction and turnover
intention among the “Clerical” staffs at Bunna International Bank. Figure 2.4 shows theoretical
framework that has been developed from this study. The independent variable is job
satisfaction which consists of three components which are pay&benefit, promotion, and
working conditions. The other independent variables include: the demographic factor which
consists of age and length of service (tenure); and Perceived Alternative Employment
Opportunity (PAEO). The dependent variable is turnover intention.

2.11.1 Relationship between Job Satisfaction and Turnover Intention

Past researches have stated that job satisfaction is related to individual reactions of work
environment (Abdel-Halim, 1984; Choo, 1986; Rasch & Harrell, 1990). It had been found that
that there is a relationship between job satisfaction and turnover intention. Similarly, Schoeder,
Harrel and Stahl (1984) pointed out that previous literature review in job satisfaction and

34
turnover shows that an individual who experiences relatively low job satisfaction has an
intention to change their job.

The belief that satisfied employees are more productive than dissatisfied employees has been a
basic belief among managers for years, though only now has research begun to support this
theory after decades of questions about job satisfaction-performance relationship (Judge,
Thoresen, Bono & Patton, 2001). However, organizations also have a responsibility to provide
employees with jobs that are challenging and intrinsically rewarding (Robbins & Judge, 2007).
According to McCormick and Ilgen (1985), there are many previous researchers that support
the relationship between job satisfaction and turnover. One of it is from Spencer and Steers
(1981) in which they found that there is a strong negative relationship between job satisfaction
and turnover of the hospital employees who are relatively low performers. Mowday, Porter and
Steers (1982) also found that job satisfaction is consistently and negatively related to turnover.
Jackofsky and Peter (1983) in McCormick and Ilgen (1985) have another opinion on the
relationship between job satisfaction and turnover intention. They argued that the employee
would leave the job cause by dissatisfaction based on belief that there are another opportunities
available at the job market. Data from a simple retail employees’ in south western cities
confirmed this prediction. Schermerhorn, Hunt and Osborn (2000) stated that job satisfaction
can affect turnover decision by workers to terminate their employment. They also agreed that
dissatisfied workers are more likely than satisfied workers to quit from their job.

The first is to join and remain in an organization and the other is to work hard in achieving high
performance. Moreover, Rumery (1994) said that several past literature such as done by Lucas,
Atwood and Hagaman (1993) shown that factors such as age and job satisfaction are good
predictors of the turnover intention of the workers. Studies have also shown that intention to
turnover can be used to predict future turnover.

Muchinsky and Tuttle (1979) summarized out of 39 studies of the relationship between job
satisfaction and turnover, 35 of it indicate that the relationship is negatively related, the average
magnitude is about -40. However, he still believes that the relationship between satisfaction and

35
turnover is also limited by economic condition (Muchinsky, 1993). Lawler (1994) also share
his opinion through his observation.

According to Moynihan, Boswell and Boudreau (1998) several studies (Hulin, 1991; Mobley,
1977: Porters & Steers, 1973) found that negative work attitudes play an important role in
model of turnover. Meanwhile, job satisfaction will cause the turnover cognition and the
intention of employee to escape from work environment. Moreover, two-meta analysis found
that job satisfaction and turnover are negatively related (Tett & Meyer 1993; Griffeth & Hom,
1995). Spector and Jex (1991) in Valentine (2001) found that job satisfaction and turnover
intentions were negatively related among a sample of state civil service
employees.Furthermore, the outcome of research by Moynihan et. al (1998) found that the
intention to leave is negatively correlated with job satisfaction (-0.70). The evidence from
United State’s School suggests that school with higher coverage satisfaction among teachers
also have higher retention rates (Malkovich & Boudreau, 1997).

Based on the literature discussed above, there are strong negative relationship between job
satisfaction and turnover intention. Therefore, the hypotheses can be concluded as follows:-
H1: There is a significant negative relationship between job satisfaction and turnover
intention
2.11.2 Relationship between Demographic Factors and Turnover Intention
Employee may be satisfied with some aspect of their jobs, while being dissatisfied with others.
According to Poling (1990), the best predictor of job satisfaction is when the employees’
personal values match those of the organisation. Employees’ motivation towards work is
extremely high when they first start their work. The morale subsequently ‘decreases during the
next few years and remains relativelylow level until workers are in their late twenties or early
thirties’ (Scott, Swortzel & Tylor, 2005). However, the longer an employee stays in the
organisation his / her level of job satisfaction increases and continue to raise through the
reminders of the workers’ career. Reuters, 2007 reported on American labour indicates that 80
percent of people questioned between 1972 and 2006 said they were content with their work
and only 4 percent were not satisfied. The study also show that workers over 65 years old were

36
the most satisfied while people under 29 were the least happy in their work. Thus, this shows
that job satisfaction increases with age and reduce intention to quit.

Moreover, as the people grow older they move up the career ladder and get into better position.
The report also shows that the older people also sort through different alternative careers and
find something that matches their talents and ability better. They are goal oriented and strive
hard to move forward. VandeWalle (2001) suggested that good orientation has important
implications for the enhancement of employee and organizational performance. Besides,
performance oriented people strive to demonstrate, and hereby gain favourable judgements of
their competence (Dweck & Leggett, 1988).
However, Kegan (in Wagner & Rush, 2000) suggested different interpersonal orientation for
younger and older adults. Moral obligation is said to shape the older adult behaviour. By
contrast, younger adult tend to relate themselves with others in more transactional manner
(Kanugo & Conger, 1993). Older worker also tend to have lower needs of achievement and
higher need for affiliation than younger workers (Wagner & Rush, 2000). According to Kanugo
and Conger (1993), younger individuals may be influenced by norm of reciprocity, which is the
expectation for a fair exchange in return for assistance. If the employee perceived that they
have been fairly supported by the organisation (e.g fairness in distribution of reward),
employee will reciprocate – thus exhibiting a high level of organisational commitment. On the
other hand, for older employees their commitment is the result of social responsibilities, that is
helping others without regard of personal benefit (Kanungo & Conger, 1993) and social
exchange relationships (Blau, 1964).
A longer tenure is normally associated with a positive feeling toward the employer, a high
degree with employee identification and ownership with the organisation, which in turn cause
them to render meaningful contributions to the organisation by reducing turnover intention and
absenteeism (Turnipseed & Murkison, 2000). This have been supported by studies like
Alotaibi, 2001; Hochwarter, James, Johnson & Ferris, 2004; Morrison, 1994; Heidi, 2001). As
tenure increases within the organisation, so does the employee’s potential for both formal
benefits such as promotion and informal benefits such as status as compared to less tenured
employees (Hellman, 1997). The high tenure employees typically receive more money, have

37
more close friends, investments, are better informed and have more power-all of which reduce
their turnover (Price, 1995).
There is considerable evidence of an inverse relationship between tenure and actual turnover
(Bannister & Griffeth, 1986; Batt & Valcour, 2003; Bidir, 2002; Cotton & Turtle, 1986;
Somers, 1986) and turnover intention (Flaherty & Pappas, 2002; Schulz et al, 1987; Weisberg
& Kirschenbaum, 1991),
Based on the literature discussed above, there are significant relationship between demographic
factors (age and length of service) and turnover intention. Therefore, the hypotheses can be
concluded as follows:-
H2: There is a significant difference between demographic factors (age and length of
service) and turnover intention

2.11.3 Dominant Factors Influencing Turnover Intention

The interest in employee turnover is generally caused by negative financial and operational
implications of separation (Gomez-Meija & Balkin, 1992; Griffeth and Hom, 1995; Hom,
1992) as turnover can decrease customer service levels, lower company profits and cause
training expatriation losses (Hom et. al., 1988; Reichheld, 1993). Employee turnover is
precipitated by withdrawal from work which is generally related to low participation in work-
related activities and increased absenteeism rates (Hom & Griffeth, 1995). Withdrawal
cognitions lead to search behaviours that involve the evaluation of labour market opportunities.
From an employee perspective, keeping an external labour market strategy is frequently used as
a means for achieving market-level salaries (Brett & Stroh, 1997 in Valentine, 2001).
Much turnover research has focused on identifying individual characteristics that cause job
separation, which include age, tenure, education, job satisfaction and organisational
commitment. Mobley (1977) specified that negative evaluations of employee’s present job
increases job dissatisfaction, and that these negative feelings increase quit intentions. Price and
Mueller (1981) stated that various factors such as pay, promotion opportunity and general
training increase job satisfaction and subsequent intentions to stay. Bluedorn (1992) highlighted
demographic characteristics such as race, age, education and pay that affect job expectations
and environmental opportunities, which ultimately influence turnover and job satisfaction.
Home and Griffeth (1995) also had identified several antecedents of job satisfaction such as job

38
scope, compensation, and negative affectivity that indirectly affect withdrawal cognition and
job search.
Based on the literature discussed above, there is significant influence between job satisfaction
factors and demographic factors (age and length of service) and turnover intention. Therefore,
the hypotheses can be concluded as follows:-
H3: There is significant influence between job satisfaction factors and demographic
factors with turnover intention

2.11.4 Perceived Alternative Employment Opportunities (PAEO) and Turnover

Intentions
Another possible predictor of turnover intentions is perception of alternative job opportunities
among the employees. PAEO refers to an individual’s perception of the availability of
alternative jobs in the organization’s environment (Price & Mueller, 1986), and it is the
function of labour market conditions. Employees perceive more alternative job opportunities
when the job market is tight and less alternative job opportunities when there is unemployment.
It should be noted, however, that PAEO is not the same thing as actual labour market
conditions. If organizations fail to provide substantial growth opportunities, the employees
actively start searching for an alternative job and their search is based upon the perceived
opportunities in external market (Negrin & Tzafrir, 2004). Findings of Ing-San Hwang & Jyh-
Huei Kuo (2006) revealed a significant positive correlation between perceived alternative job
opportunities and turnover intention in the public sector organizations. The same has been
proved by Lambert, Hogan & Barton (2001) in a study that focused on impact of job
satisfaction on turnover intent. It was revealed that job satisfaction had the largest impact on
turnover intentions and perceived availability of alternate jobs had positive correlation with
turnover intentions of the employees. Thatcher, Stepnia & Boyle (2003) have conducted a
research on turnover of information technology workers and found a strong positive correlation
between perceived alternative job opportunities and turnover intention. Past research suggests
that both PAEO and labour market conditions are positively associated with turnover (Hulin et
al., 1985). Although labour shortage is considered one of the most important factors
contributing to employee turnover, none of the studies have yet examined the effect of PAEO
and job stress on turnover intention.

39
Alternative employment opportunities are mainly contributed by the external's environment
where the availability of alternative employment in the open market. Since it appears openly in
the market, the access to the availability and other benefits are easily to be obtained by the
candidates or future employee. Therefore, it intentionally encourages the employees of
organization to switch their career with other organization (Price 2001). Further, there is a
positive relationship between alternative employment opportunities and employee turnover
intention based on the previous literatures (Khatri et al., 2001; Hulin et al, 1985).
Commonly, earning or salary is the major concern for employee to consider in any of
employment decision. They will focus on the best-offered salary to select the organization for
them to work. Therefore, it is a main strategy that practiced by organization to attract skill and
talented employee to join their organization. However, in other case, employees are also
looking for organization that can offer work-life balance in the working environment for them
to make any decision of employment (Frank Van, 1995). Study by Belinda (2011) has verified
that there is a significant relation between the alternative employment opportunities with
turnover intention. Therefore, the researcher develops the following hypothesis.
H4: There is a significant positive relationship between perceived available employment
opportunity and turnover intention
Independent Variables Dependent Variable

Job satisfaction factors:

 Pay & Benefits
 Promotion
 Working Conditions

Demographic Factors:
 Age Turnover Intention
 Tenure

Perceived Alternative
Employment opportunities

Figure 2.2 Theoretical

aaaaa Framework

T
40
 CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION

This chapter presents the design and methodology, which was used to conduct this research.
The two-fold aim of this research is to investigate the Job satisfaction (JS)-Turnover Intention
(TI) and; Perceived Available Employment Opportunity (PAEO) - Turnover Intention (TI)
relationship.

The research was designed to obtain primary data from clerical employees in Bunna
International Bank and secondary data from relevant existing documentation. The analysis of
the obtained information was used to answer the research questions. Information regarding the
research design, the research approach, the population, sample and the measuring instruments
follows beneath.

3.2 RESEARCH DESIGN

3.2.1 Type of Study

The research is focusing on relationship between Turnover Intention and job satisfaction. The
study used a descriptive survey design. The purpose of using descriptive surveys was to collect
detailed and factual information that describe an existing phenomenon. Data was collected
based on the concepts defined in the research model and hypotheses tested. This study is a
descriptive survey because it adopted the use of questionnaire aimed at finding the impact of
Job satisfaction on Turnover Intention.

This study is a quantitative in nature by using survey method to examine the relationship
between independent and dependent variables. The findings and conclusion of the study will
depend on the fully utilization of statistical data collected and analyzed using SPSS version 20.

Based on the identified theoretical framework in chapter two, this research will adopt a
deductive research approach. This approach comprises of the scientific testing of the proposed
theory and formulated hypothesis. The use of quantitative data for these purposes is important

41
to the deductive approach. This quantitative method will finally determine the characteristics,
strength and direction of the hypothesized relationships.

3.2.2 Sources of data

Primary data and secondary data were used in this study.

3.2.2.1 Primary Data

According to Sekaran (2006), data that gathered for research from the actual site of occurrence
of events are called primary data. For the purpose of this study, questionnaire used as the
research instrument and distributed to the staff of Bunna International Bank (BIB).

3.2.2.2 Secondary Data

Secondary data refer to the data that gathered through existing sources by someone than the
researcher conducting the current study such as company record, publication, industry analysis
offered by the media, web publications and so on (Sekaran, 2006). The advantage of using this
type of data is the fact that the data is accurate and ready to be used. Besides that, it is less time
consuming and cheap to obtain the secondary data as it is already prepared by other experts.

At times, secondary data can also give an insight to the researcher on the subject matters from
difference perspective. For this study, researcher gathered the secondary data from
organization’s website, annual reports, and articles which are relevant and able to support the
literature review. The secondary data consists of both internal and external data sources.
External Sources: Journals, articles, books while internal sources such as organisation website,
brochure and etc.

3.2.3 Unit of Analysis

This study focuses on identifying the relationship between turnover intention and job
satisfaction among “clerical” staff in Bunna International Bank S.C. Thus, the unit of analysis
is at individual level among employees in BIB.

42
3.3 RESEARCH LOCATION, POPULATION AND SAMPLE

This research was conducted at Head office and 30 branches of the Bank found in Addis Ababa
only. The Bank has also 45 outlying branches located in different regions of Ethiopia.

Bunna International Bank S.C (BIB) currently employs 680 employees who are working in the
head office and its 75 branches. The employees are mainly categorized as "Clerical" and "Non
Clerical" employees. This categorization is based on the job characteristics and the hierarchical
level. "Clerical" staff comprise of top management, management, executive staff,
administrative and professionals. They have a moderate to very high educational level. These
employees mostly function on tactical and management levels. From the total of 680
employees, 449 employees are currently working in Addis Ababa. Among these employees,
375 of them are “Clerical” staffs and the remaining 74 are “Non Clerical” Staffs. The 375
"Clerical" employees of the Addis Ababa region are adopted as the research population in this
study. The study focused on this employee category because they are assumed to be more
critical to the operational sustainability in addition to the strategic direction of the Bank.
Especially their level of education, leadership roles and professionalism increases their value
and makes them hard to find in the labor market. Another reason for the choice is the current
increase of voluntary turnover in the "Clerical" worker category. The last three years a number
of critical "Clerical" employees voluntarily quit their job. Based on the below table the
"Clerical" category consists of 375 employees, which is about 83% of the total staff in Addis
Ababa.

The sample size is very important in order to be representative of the population which
ultimately enables to draw generalizable conclusions from selected sample members.
According to Field (2009) a random sampling method will give every "Clerical" employee
an equal chance to be selected in the sample; thus ensuring a proper representation of the
research population. Moreover, in this study all the "Clerical" employees were selected and
solicited for data. This was done after receiving approval from the HR Directorate of the
Bank.

43
Table 3.1: Employee Categories and Amount

Category Number of staff

"Clerical" 375
"Non Clerical" 74
Source: Author generated table.

In order to calculate the necessary minimum sample size, enabling valid assessments of the
population, the following formula was used:
n = t2 x p (1-p)

m2

Based on this calculation the required minimum sample was 138 respondents. The following
paragraphs will give insight in the data collection instruments that were used to gather data
from the respondents. Where your population is less than 10 000, a smaller sample size can be
used without affecting the accuracy. This is called the adjusted minimum sample size. (
deVaus, D.A. (2002). It is calculated using the following formula:

Based on this calculation the required adjusted minimum sample size was 101
respondents. The following paragraphs will give insight in the data collection instruments
that were used to gather data from the respondents.

3.4 DATA COLLECTION INSTRUMENTS

This study uses both primary and secondary data using respectively self-administered
questionnaires and relevant company documentation. The survey method used to obtain primary
data was chosen due to its appropriateness and practicality in terms of being a well-accepted
diagnostic tool for employee information. As mentioned before, this study focuses on the three
research variables, namely: turnover intention, job satisfaction and perceived available job
alternatives. All these variables have been measured in different turnover research with a
relatively wide variety of items. Examples are widely available and show relatively good
reliability and validity in terms of the Cronbach's Alpha. Cronbach's Alpha was designed by Lee

44
 Cronbach and is a coefficient used to interpret the reliability and validity of the items one uses to
measure research variables.

In organizational behavioral research people's opinions and statements reflecting attitude and
behavior are important to draw conclusions. Attitudes and behavior are often measured with Likert
type scales. Maniram (2007) cited from Zikmund (2003) that the Likert scale is a "measure of
attitudes designed to allow respondents to indicate how strongly they agree or disagree with
carefully constructed statements that range from very positive to very negative toward an
attitudinal object".

This study utilized a structured self-administered five point Likert scale that is developed based on
existing instruments used in past turnover literature. The questionnaire was divided in four
sections:
Personal demographic data
Job satisfaction
Turnover intention
Perceived available employment opportunities

The first section of the survey was designed to obtain general demographical information from the
sample. This section contained five items regarding gender, age, tenure, education level and job
position level.
The second section was designed to measure the employees' degree of job satisfaction with their
current employment. This section contains twenty four items. During the years, job satisfaction has
been measured by different scales from which the most notable and most relevant are the:

Job Descriptive Index (Smith, Kendall & Hulin, 1969 as cited by Aziri, 2011)
This questionnaire has been used significantly and measures job satisfaction in five facets: work in
present job, pay, opportunities for promotion, people on your present job and supervisor.

Minnesota Satisfaction Questionnaire (Weiss et al., 1967 as cited from Aziri, 2011)
This questionnaire exists in long form (100 items) and in short form (20 items). It is divided into
three subscale categories: intrinsic job satisfaction, extrinsic job satisfaction and general job
satisfaction. This five point Likert questionnaire is very elaborate and thus measures 20 different
facets of job satisfaction.

45
Job Satisfaction Survey (Spector, 1985)
This survey contains 36 items, which measure nine facets of job satisfaction. Some of these facets
are: nature of work, operating conditions, pay, promotion, fringe benefits, supervision and others.

Job in General Scale (Ironson, et al., 1989 as cited from Maniram 2011)
This scale is an improvement on the Job Diagnostic Survey and is focused on a variety of facets
and doesn't measure general work satisfaction.

The items in this thesis are adapted from the Job Satisfaction Survey (JSS). Twenty four items
regarding the selected job satisfaction facets where adapted from the JSS.

This scale is modified as five point Likert scale as shown in Table 4. In order to answer an item,
employees were requested to select a choice which best matched their opinion, thus confirming
their level of agreement with the statement. Each choice is given a score from one (l=total
disagreement) to five (5=total agreement). The originally reported Cronbach's alpha was 0.89

Table 3.2: Job satisfaction Five point Likert Scale

Strongly Disagree 1 Agree 4

Disagree 2 Strongly Agree 5
Neutral 3

The choice to extract items from the JSS is based on the fact that the JSS provides good items
which are relevant to the selected job satisfaction facets in this study. Furthermore, the JSS shows a
Cronbach's Alpha of 0.89; which indicates good reliability and validity. Lastly, the five point
Likert scale limits the respondent's bias in terms of the phenomenon of central tendency in the
answer ratings while still providing enough answering options.

The third section of the survey contains items to measure employees' intent to leave the
organization. The vast amount of turnover literature provides various reliable scales to measure
intentions to leave the organization.
Examples of some relevant and widely used scales are:

46
• The three item scale from the Michigan Organizational Assessment Questionnaire (Cammann
et al., 1979). An example from one of the items is: "I will probably look for a new job in the
next year".
• The Staying or Leaving Index (Bluedorn, 1982 as cited from Griffeth et al., 2005). This index
requests respondents to determine their likelihood of still being in the organization for a
specified period of time. An example of an item used by Bluedorn was formulated as follows:
"How do you rate your chances of still working for [company name] six months from now?"
This seven point scale provided the answer range from one (excellent) to seven (terrible).
• The three item scale designed by Horn and Griffeth (1991) as cited from Griffeth et al., 2005.
This is a five point Likert scale. An example of an item is: "I intend to quit my present job".
• The four item scale used by Kim et al. (1996). An example of an item is "I plan to leave the
organization as soon as possible".

Many other scales were developed by various researchers. Noteworthy is that in the items the
following wording and formulations were frequently included: probability; likeliness; thinking;
intending; planning; looking and searching. Most of these actions are part of Mobley's turnover
model, wherein the sequence of these actions has ignited a discussion, which is still ongoing.

The turnover intention scale in this thesis contains three items. These three items were adapted
from the Michigan Organizational Assessment Questionnaire (MOAQ).The choice of the
turnover scale used in this study is not based on a specific preference but mostly on the reported
reliability values (0.87) and based on the approach to be in line with some of the aforementioned
formulations of the items of previous researchers. Horn & Griffeth (1991) argue that MOAQ
turnover intention subscale represents distinct withdrawal cognitions: intentions to quit; search
intentions and thoughts of quitting. Answer options were based on a six point Likert scale and
ranged from one (total disagreement) to six (total agreement). Similar to the job satisfaction
scale, a higher score represents a higher intention to leave.

The last section of the survey measures the perception of available employment opportunities.
This section contains three items. Review of related literature resulted in a moderate amount of
reliable instruments to measure PAEO. It must be noted that according to Griffeth & Horn
(1988) theoretical and methodological improvement of the external opportunity concept is
needed, because it brings about slightly different conceptualizations and put emphasis on

47
 different facets, which can probably lead to inconsistent findings. They argue further that
although different formulations of items were used in scales measuring the external opportunity
concept, significant findings have still been produced which provided insight in the effects and
workings of external opportunities. Some examples of scales are:

• Six item Perceived Alternative Employment Opportunities Likert type scale collaborate
developed by Mowdey et al. (1984) and others (as cited by Griffeth et al., 2005). An example
of an item is: "The chance of finding another job that is acceptable is high".
• Fourteen item Likert type scale developed by Griffeth et al. (2005) and known as the
Employment Opportunity Index. An example of an item is: 'I can think of a number of
organizations that would probably offer me a job if I was looking'.

This thesis uses the Perceived Alternative External Opportunities scale, mainly due to the fact
that the other options were to lengthy in terms of items. In addition, the scale promised good
reliability as the original scale reported a 0.76 Cronbach's Alpha.

3.5 DATA COLLECTION METHOD

In this study, data was collected using a structured questionnaire which consisted of 30 items.
The questions are written in English. The permission from Human Resource Directorate was
set before distributing the questionnaires. After permission had been granted, the researcher
will brief the employees as to what the study is about in order to get the needed attention,
support and co-operation of the staff. The questionnaires were hand-delivered to all the
respondents by the researcher. The researcher then guided the respondents to complete the
instrument without inferring with the choice of responses. The assistance just involved the
explanation of instructions or terminologies so as to get the most valid data for inclusion in the
analysis. Respondents were given one day to complete the instrument. To ensure an effective
return rate, follow up telephone calls as well as personal visits were made to encourage the
respondents to complete the questionnaires.

48
3.6 DATA ANALYSIS TECHNIQUES

From the questionnaires, a few procedures can be done such as checking the data for accuracy.
Besides that the questions were being coded to enable for analysis using Statistical Packages
for the Social Science (SPSS) version 20.

This is followed by the examination and presentation of demographic profile of respondents

using Descriptive Statistics. According to Zikmund (2000), descriptive analysis refers to the
transformation of the raw data into a form that will make them easy to understand and interpret.

Secondly, the Cronbach Alpha testing will be used as it is the most well accepted reliability test
tools applied by social researcher (Sekaran, 2006). In Cronbach’s Alpha reliability analysis, the
closer Cronbach’s Alpha to 1.0, the higher the internal consistency reliability.
Cronbach measures;

1. Reliability less than 0.6 considered poor.

2. Reliability in the range 0.7 is considered to be acceptable.

3. Reliability more than 0.8 are considered to be good

Thirdly, in order to determine whether there are significant relationships among the
independent variables and dependent variable, Pearson Correlation Coefficient analysis will be
carry out. The scale model suggested by Davies (1971) used to describe the relationship
between the independent variables and the dependent variable, are as shown below:

1. 0.7 and above – very strong relationship,

2. 0.50 to 0.69 – strong relationship,
3. 0.30 to 0.49 – moderate relationship,
4. 0.10 to 0.29 – low relationships and
5. 0.01 to 0.09 – very low relationship.

49
Finally, Multiple Regression Analysis is conducted to examine which among the three
dimensions in independent variables is the most important in explaining the relationship
between turnover intention and job satisfaction among employees.

3.7 ETHICS AND CONFIDENTIALITY

While the current study utilized data from primary and secondary sources, the agency
collecting data did take several ethical concerns into consideration involving the current study
as suggested by Babbie (1973). Ethical concerns included the following: voluntary
participation, no harm intended to participants, anonymity and confidentiality of participants
ensured, and conveyance of purpose and sponsors of the study. The findings of this study would
be reported in aggregated form, thus no individual respondent can be identified. Each participating
individual was assigned a unique code number to distinguish it from other individual for analysis
purposes.

50
 CHAPTER 4: RESULTS AND ANALYSIS

4.1 INTRODUCTION

This chapter presents the results and findings of the research. The chapter mainly includes
data results from the statistical tests conducted on the gathered primary data. It also contains
information regarding the survey response rate in addition to the quality of the data set. The
chapter includes test results on the control and research variables and other descriptive
statistics. In addition, it includes the inferential statistics, which presents statistical results on
the total conceptual model.

4.2 DATA SET AND RESPONSE RATE

Based on the minimal sample requirement, 101 respondents were needed to conduct a valid
survey.
Table 4.1: Survey Response Rate
Solicited 150 100%
No response 43 29%
Response 147 71%
Invalid 4 3%
Qualified Response 103 69%
Source: Author generated table

The researcher decided to solicit 150 "Clerical" employees. No response was received from 43
employees, thus the amount of responsive employees was 107. From the 107 received surveys
four were invalid based on the fact that less than 15% of the relevant items were completed;
thus missing critical information. Finally, a 69% effective response rate was achieved.

The completed surveys provide measured data of the four variables from the conceptual
model including the control variables. It is important to assess the internal reliability of these
measurement instruments in terms of the Cronbach's Alpha. Below table provides insight in
the reliability test results. The reliability is provided per variable.

51
The JS variable has an overall 0.769 alpha; thus shows acceptable reliability. The TI has a
0.792 alpha and therefore shows good reliability. Finally, the PAEO variable shows a 0.726
alpha and therefore has an acceptable reliability. It can be concluded that the items are well
correlated with each other and show good reliability and consistency.

Table: 4.2: Cronbach's Alpha Results.

Variables Item Thesis Cronbach's

Alpha
Job Satisfaction (JS) 1-24 0.769

Employees turnover intention (TI) 25,26,27 0.792

Perceived available Employment 28,29,30 0.726

Opportunity (PAEO)

Source: Author generated table.

Finally, we can conclude that in general, the scales of the survey utilized for this research show
acceptable to good reliability according to the rule of thumb alpha value range mentioned in
chapter 3.

4.3 CHARACTERSTICS OF THE RESPONDENTS

As part of the descriptive statistics, a frequency distribution analysis was performed on the
control variables. These variables relate to the nominal data or demographical characteristics
obtained from the research sample. There are 103 respondents in the sample. Frequency
distributions are obtained for all demographic characteristics.

52
 Table 4.3 Respondents’ Demographic Profile

Frequency Percentage

Gender

Male 79 76.7
Female 24 23.3
Age

18- 30 22 21.4
31- 45 71 68.9
46-60 10 9.7
Educational Level

Higher degrees 25 24.3

Bachelor 78 25.7
Marital Status

Married 71 68.9
Single 32 31.1
Tenure
< 1 year 22 21.4
1year & < 3 years 36 35.0
3 years & < 5 years 24 23.3
5 years and above 21 20.3

Source: Author generated table.

The result of age distributions in Table 4.3 above suggest that the greatest numbers of the
respondents are in their 31 - 45 (68.9%) age group followed by respondents aged 18 - 30
(21.4%). The lowest reading 9.7 % represents age group between 46 - 60.

Out of 103 respondents, about 79 or 76.7% of the ‘Clerical’ staffs working at Bunna
International Bank are male, the rest are female which represent 24 or 23.3%.

The education level of respondents is as suggested in Table 4.3 above. The highest level of
education of respondents shows that 78 or 75.7% of the respondents have first degree;
meanwhile 25 or 24.3% of the respondents have received their Master’s degree.

53
The majority of the respondents are married which represent 68.9%; that is about 71 employees
out of 103 respondents. Meanwhile, 32 or 31.1% respondents are single.

The result of tenure distribution of 103 respondents in this study shows that 21 or 20.3%
respondents already working for more than 5 years in the bank, 24 or 23.3% of the respondents
have been working for 3 - 5 years; meanwhile, 36 or 35.0% of the respondents are working less
than three years that is 1 - 3 years. About 22 or 21.4% of the respondents are new employees
who have been working for less than one year in the BIB.

4.4 DESCRIPTIVE STATISTICS ON THE RESEARCH VARIABLES

Below table provides descriptive statistic results of the JS, TI and PAEO variable. For the JS
variable, the facets are also included.

Table 4.4: Descriptive Statistics for the Research Variables

JSJJJS TIJS ITI IPAEO IPay & IPromotion IWorking

Benefit Conditions
N 103 103 103 103 103 103
Mean 3.18 3.19 4.07 3.03 3.11 3.45
Std. Deviation .39 .89 .69 .44 .71 .49
DDDeviation
Source: Author generated figure

Table-4.4 above reflected the average (mean) responses of total sample size of 103. The mean
value of job satisfaction was calculated as (mean=3.18.). It is evident that the average "clerical"
employee reports to be slightly dissatisfied but possibility of deviation exist between 2.8 and
3.6, e.g. from disagree to agree. Turnover Intention data (mean value of 3.19) indicates that
most clerical employees of the bank are neutral about having turnover intention but possibility
of deviation exist between 2.3 and 4.1 which means between disagree and agree. Thus, the
average "clerical" employee reports slight agreement in having intentions to leave BIB.

54
Mean value of 4.07 for PAEO shows that most clerical employees of the bank have agreed in
perceiving available employment opportunities but possibility of deviation exist between 3.38
and 4.76 which means between neutral and agree. Pay & Benefit data (mean value of 3.03)
indicates that most clerical employees of the bank are neutral about having turnover intention
but possibility of deviation exist between 2.69 and 3.47 which means between disagree and
neutral. Promotion in BIB has been rated neutral by employees as the mean value of 3.11
indicated in this research. It explains that the Promotion will have no effect on employees’ job
satisfaction but still the possibility of deviation is there and the results could fall between the
range of 2.4 to 3.82 which means from disagree to neutral. Mean value of 3.45 for working
condition shows that the employees in service sector are neutral about working condition and
consider the no effect of working condition on job satisfaction. But there is a possibility of
deviation in results ranging from 3.0 to 4.0 e.g. which means from disagree to agree.

4.5 MAIN MODEL OF INFERENTIAL TESTS

The main model is comprised of the JS, PAEO and the TI variable. This main model relates to
the first and fourth hypothesis of the study. Firstly, the degree of association between these
three variables is tested and secondly the impact of JS and PAEO on TI is examined.
The other model relates to the second hypothesis of the study. In this model, the differences of
turnover intention based on age group and length of service group is tested.
The last model relates to the third hypothesis of the study. In this model dominant factor among
the three factors in job satisfaction and demographic factors that have closer relation with
turnover intention is tested. The parametric tests used in this case are:
The Pearson Correlation test for correlations between the research variables and the
control variables.
One-way ANOVA:- to determine the differences of turnover intention based on age
group and length of service group.

The Linear Regression:- to identify dominant factor among the three factors in job
satisfaction and demographic factors that have closer relation with turnover intention.

55
4.5.1 Pearson Correlation Test

a, Relationship between JS, PAEO , TI and Control variables

Table 4.5 represents the correlation coefficients of the research variables including the
control variables. Thus, these correlations include the effect of some control variables. This
means that the control variables could have associations with the research variables, which
has effect on the strength of the relations between the research variables.
Based on these correlations the researcher concludes age is weakly and negatively related to
TI. Furthermore, gender, tenure and education did not yield any significant evidence of being
related to TI.

Related to the correlations between the research variables (JS, PAEO and TI) the researcher
found the following:

• JS is strongly and negatively related to TI (R= -.665, P<.01)

• PAEO is moderately and positively related to TI (R= .298, P<.01)

Table 4.5: Correlation coefficients of all variables

Variables JS PAEO TI Gender Age Tenure Education

JS 1
PAEO -.193 1
TI - .665** .298** 1
Gender .037 -.037 .056 1
Age .126 -.063 -.216* -.135 1
Tenure .088 -.198 -.122 .271** .088 1
Education -.038 -.116 -.077 -.205* .121 .029 1
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Author generated figure

56
b, Relationship between Pay & Benefits, Promotion, Working conditions and Turnover
Intention

Variables Pearson (r) Level of Significance (p)

Pay& Benefit -0.335** 0.001
Promotion -0.378** 0.000
Working Conditions -0.717** 0.000
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Author generated figure

Table 4.6 Relationship between Pay & Benefit, Promotion, Working conditions and Turnover
Intention

The result shows that the turnover intention is significantly and negatively correlated to pay &
benefit, promotion and working conditions. Therefore, the results support the hypothesis that
satisfaction with pay & benefit is negatively related to turnover intention among the ‘Clerical’
employees in BIB (r= -0.335, p<0.01).

The correlation analysis above shows that promotion is a significant predictor of turnover
intention (r=-0.378, p<.01). Thus providing supports for hypothesis that satisfaction with
promotion is significantly and negatively related to turnover intention of ‘Clerical’ employees
at BIB. The correlation of p=0.378, p<0.01 also indicates that promotion has low relationship
with turnover intention.

In Table 4.6, the correlation analysis for working conditions (r=-0.717, p<0.01) supports the
hypothesis that satisfaction with the working conditions is significantly and negatively related
to turnover intention of ‘Clerical’ employees at BIB. Thus, support the hypothesis that
satisfaction with working condition has strong influence in determining turnover intention
among ‘Clerical’ employees at BIB. The strength indicates very strong negative relationship
between working condition and turnover intention.

57
4.5.2 The Difference in Turnover Intention by Demographic Variables
(a) Difference in Turnover Intention based on Age

Table 4.7 Result of One-way ANOVA for Difference in Turnover Intention by Age

Turnover Intention

Sum of Mean
Squares Df Square F Sig.
Between Groups 4.110 2 2 .055 Sig. 2 .664 .075

Within Groups 77.150 100 .772

Total 81.260 102
Source: Author generated figure

The researcher had performed ANOVA with four groups corresponding to turnover intention.
The result of One-way ANOVA as shown in Table 4.7 (F=2.664, p=0.075) illustrates that there
is no significance difference between the turnover intention among different age group of the
‘Clerical’ employees at BIB. Thus, the hypothesis that there is a significant difference in the
turnover intention of the ‘Clerical’ employees at BIB at four different age groups cannot be
accepted.

(b) Difference in Turnover Intention based on Tenure

Table 4.8 Result of One-way ANOVA for Difference in Turnover by Tenure

Turnover Intention
Sum of Mean
F Si
Squares Df Square g.
Between Groups 1.473 3 .491 .609 .0611

Within Groups 79.787 99 .806

Total 81.260 102
Source: Author generated figure

The result of One-way ANOVA as shown in Table 4.8 (F=.609, p=0.611) demonstrates
that there is no significant relationship between turnover intention among different length
of service of the ‘Clerical’ employees at BIB. Thus, the hypothesis that there is a
significant difference in the turnover intention of the ‘Clerical’ employees at BIB from the
four different length of service (tenure) cannot be accepted.
58
4.5.3 Dominant Factor that Influence the Turnover Intention

Table 4.9 Model Summary(b)

Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .767(a) .588 .562 .59086
a Predictors: (Constant), promotion, age, tenure, pay & benefit, perceived available
employment opportunity, working conditions b Dependent Variable: Turnover
Intention

Source: Author generated figure

The model summary as shown in Table 4.9 above explains the value of R Square which
represents 0.767 or 76.7% of six variance for job satisfaction factors, namely pay& benefit,
promotion, working condition, perceived available employment opportunity, age and tenure
(length of service).
Table 4.10 ANOVA(a)
Model Sum of Df Mean F Sig.
Squares Square
1 Regression 47.745 6 7.957 22.793 .000(b)
Residual 33.515 96 .349
Total 2116.667 102
a. Dependent Variable: Turnover Intention

b. Predictors: (Constant), Promotion, Age, Tenure, Pay and Benefit, Perceived Available
Employment Opportunity, Working Condition
Source: Author generated figure

The result shows in Table 4.10 indicates that the predictors (Promotion, Age, Tenure, Pay
and Benefit, Perceived Available Employment Opportunity and Working Conditions) are
significantly and negatively related to turnover intention. The model in this study reaches
statistical significance of 0.05 (p<0.05).

59
 Table 4.11 summarized the overall Beta value for each variable in the job satisfaction
factors.
Coefficients(a)
Unstandardized Coefficients Standardized Coefficient

Model B Std. Error Beta T Sig.

1 (Constant) 7.486 .708 10.573 .000

Age -.174 .109 -.107 -1.598 .113
Tenure -.090 .059 -.105 -1.513 .134
PAEO -.256 .092 .117 1.651 .102
WC -1.197 .139 -.668 -8.587 .000
Pay&benefit .112 .157 -.055 .711 .479
Promotion -.186 .093 -.148 -2.005 .048
a Dependent Variable: Turnover Intention
Source: Author generated figure
There are six significant factors in the coefficient test. As can be seen from the results,
the Beta value for pay& benefit is (Beta=0.055, <0.05, promotion (Beta=-0.148,
p<0.05), working condition (Beta=-0.668, <0.05), perceived available employment
opportunity (Beta= 0.117, <0.05), age (Beta=-0.107, <0.05) and tenure (Beta=-0.105,
<0.05). However, above all working condition shows the highest significant result
compare to other job satisfaction factors (Beta=0.000, <0.05). Thus, working condition
factors prove to be a dominant factor influencing the turnover intention of the ‘Clerical’
employees at Bunna International Bank S.C. The result can support the hypothesis that
there is a dominant factor of turnover intention of the clerical staffs at BIB.

4.6 SUMMARY OF HYPOTHESIS TESTING

This chapter has analyzed each of the hypothesis which already been discussed in Chapter
2. The results of hypothesis testing are as summarized in Table 4.12.

60
Table 4.12 Summary of Hypothesis Testing

Hypothesis Result

H1 There is a significant negative relationship between Supported

job satisfaction and turnover intention

H2 There is a significant difference between Not Supported

demographic factors (age and length of service)
and turnover intention.

H3 There is significant influence between Job Supported

Satisfaction factors and Demographic factors with
turnover intention

There is a significant positive relationship between

H4 perceived available employment opportunity and Supported
turnover intention

4.7 SUMMARY

This
H4 chapter explained the respondents' characteristics and the degree of turnover intention in
Bunna International Bank S.C. The data was computed and analyzed using SPSS version 20.
H4 findings of the study were analyzed by Pearson Correlation Coefficient, Multiple
The
Regression
H4 and One-way ANOVA.
The main findings can be summarized as follows:-
H4 is a significant strong negative relationship between job satisfaction and employees'
There
turnover intention (R= -.665, P< 01).
There is no significance difference in the turnover intention of the ‘Clerical’ Staffs based on
age and tenure (length of service) groups.

61
Working Condition is a dominant factor in influencing turnover intention of the ‘Clerical’
staffs.
There is also significant moderate positive relationship between perceived available
employment opportunity and employees' turnover intention (R= .298, P< .01)
Based on these correlations the researcher concludes age is weakly and negatively related to
TI. Furthermore, gender, tenure and education did not yield any significant evidence of being
related to TI.
Other relevant findings related to the dependent variable and the control variables are:
Employees' turnover intention is weakly and negatively related to age (R= -.216, P< .05).
Gender, tenure and education did not yield any significant evidence of being related to TI.
Perceived available employment opportunity is weakly and negatively related to tenure (R=-
.196, P<.05)

Secondary findings are that the ‘Clerical’ employees of BIB indicate:

The mean value of job satisfaction was calculated as (mean = 3.18) resulting into a neutral
response regarding job satisfaction; thus the average "clerical" employee reports to be slightly
dissatisfied.
Turnover Intention data (mean value of 3.19) indicates that most clerical employees of the
bank are neutral about having turnover intention; thus the average "clerical" employee reports
slight agreement in having intentions to leave BIB.
(Mean value of 4.07) for PAEO shows that most clerical employees of the bank have agreed in
perceiving available employment opportunities; thus they have perceived available
employment opportunity

Pay & Benefit data (mean value of 3.03) indicates that most clerical employees of the bank are
neutral about pay & benefit; thus, no effect of pay & benefit on job satisfaction.
Promotion in BIB has been rated neutral by employees as (the mean value of 3.11) indicated in
this research; thus, promotion will have no effect on employees’ job satisfaction.
(Mean value of 3.45) for working condition shows that the clerical employees in the bank are
neutral about working condition and thus, no effect of working condition on job satisfaction.

62
 CHAPTER 5: DISCUSSION, CONCLUSION AND RECOMMENDATIONS

5.1 INTRODUCTION

This chapter elaborates and concludes on the findings of this study in the impact of job
satisfaction and perceived available employment opportunity on turnover intentions. The study
began with formulation of the research questions based on the presumed problem statement.
After a literature review, a conceptual model was identified and set as the basis of the study.
Bunna International Bank S.C was chosen as the research context. More than 100 managerial
and professional executives were solicited for their responses through questionnaire survey.
The received data was processed and analyzed with the use of SPSS version 20. The results
and findings were used to test the formulated hypotheses and to answer the posed research
questions. Paragraph 5.2 will discuss the data results and findings obtained from the gathered
data as provided in chapter 4. Based on the results the research findings will be concluded by
answering the research questions in paragraph 5.3. The remaining paragraphs will focus on the
significance of the research, the practical implications, and recommendations for the
organization and finally some proposals for future research.

5.2 DISCUSSION

The ultimate goal of this study is to examine the impact of job satisfaction and perceived
available employment opportunity on turnover intention among the clerical employees of
Bunna International Bank S.C. The study also aimed to identify the difference in turnover
intention based on age and length of service groups and to find out any of the independent
factors influence turnover intention among Clerical employees at Bunna International Bank
S.C. The results during hypothesis testing support the general objective of this study; that is job
satisfaction has a relationship with turnover intention. The study also identifies that all factors
in job satisfaction and perceived available employment opportunity have influence on turnover
intention. The findings also demonstrate that working condition is the dominant factor which
determines the turnover intention to quit among Clerical employees in BIB.

63
5.2.1 Relationship between Job Satisfaction and Turnover Intention
Job satisfaction was measured as a summation of the facets: pay&benefit, promotion and
working condition. Based on the descriptive statistics on job satisfaction, the "clerical"
employees of BIB reported a mean of 3.18 on the 5-point Likert scale. It is evident that the
average "clerical" employee reports to be slightly dissatisfied. More specifically the "clerical"
employees report to be slightly dissatisfied with their pay&benefit and their promotion
opportunities. Conversely, they report to be slightly satisfied with their working condition.
Employees' turnover intentions were measured as a single variable. Based on the descriptive
statistics, the "clerical" employees of BIB reported a mean of 3.19 on the 5-point Likert scale.
Thus, the average "clerical" employee reports slight agreement in having intentions to leave
BIB.

Based on the correlation test it became evident that the average respondent who reported levels
of disagreement with being satisfied also reported levels of agreement with having turnover
intentions to leave BIB. Thus in the case of Bunna International Bank S.C, the correlation test
results prove the existence of a significant strong negative relation between JS and TI.

This significant negative cause-effect relationship is supported by similar findings mentioned

in the theoretical framework. Noteworthy is one of the most traditional turnover theories,
which was developed by Mobley (1977). He theorized that job satisfaction, or lack thereof, led
to thinking about quitting, which led to job search, which could then lead to an intention to
quit, or vice versa, which could eventually result in actual turnover.

The measurement of job satisfaction and turnover intentions is a snapshot and can change. In
BIB's case, the existing feeling of slight job dissatisfaction is associated with slight intentions
to quit. The current "clerical" employees at BIB mostly have good educational backgrounds,
attractive skill-sets and have relatively high expectations towards attractive pay levels,
promotional opportunities and attractive jobs. If the high expectations are not met, job
dissatisfaction in its various facets could be the effect to turnover intentions and actual turnover
could be the final result.

64
The correlation tests in chapter 4 confirm that the three job satisfaction facets: pay& benefit,
promotion and working condition have high correlation coefficients with TI.

Moreover, there was a strong negative relationship between TI and these three facets meaning
that these facets are associated the most with intending to leave the organization based on job
satisfaction

Noteworthy is also the fact that from these three facets of which the respondents have high
expectations, pay& benefit and promotion were the facets on which the "clerical" employees
reported dissatisfaction.

Based on the earlier theories like Maslow's (1954) hierarchy of needs theory and Herzberg's
(1959) theory, pay, promotion and working condition are very influential facets when it comes
to JS (Maniram, 2007).

The JS facet- working condition has yielded a reported score indicating satisfaction. Especially
working condition seems to be satisfying for the "clerical" employees. The current operational
mode has probably maintained or increased the appeal and attractiveness of their work in terms
of new challenges and learning opportunities. Therefore staying in line with Maslow's (1954)
hierarchy of needs theory, a sense of fulfillment, self-actualization and achievement are needs,
which are probably to some extent, being satisfied by their work they do.

Finally, it can be concluded that the findings regarding the negative relationship between JS
and TI concurs with the findings of similar traditional turnover studies conducted by Mobley
(1977), Lee and Mitchell (1999) and Lambert, Hogan & Barton (2001).

5.2.2 Relationship between Demographic factors and Turnover Intention

William and Hazer, 1986 in Samad, 2006 stated that empirical studies indicate that
demographic variables are relevant to turnover intentions. Age, income and tenure are
identified as negatively related to turnover intentions (Cotton and Turtle, 1986; Morrow, 1983;
Gregersen & Black, 1982).

65
There were no age and length of service group differences detected in this study. The intention
to turnover does not differ significantly by age groups or length of service groups. Thus, the
second hypothesis stated that there is a significant difference in the turnover intention at four
different age groups and there is a significance difference in turnover at four different length of
service group cannot be accepted. A research done by Parasuraman (1989), and Rosin and
Korobik (1995) in Rumery (1997) also show a non-significant relationship between age and
turnover. Moreover, Hellriegel and White (1973) in Mobley et al. (1979) found no difference
between age groups and turnover among the certified public accountants.

In contrast, the research done by Mobley, Horner and Hollingsworth (1978) on hospital
employees found a negative relationship (-0.22) between age and turnover (Mobley et al.,
1979). This findings also supported by George (1989) and Lucas et al. (1993) in Rumery
(1997) which shows that age is negatively related to the intention to turnover. The result
indicated that older workers have lower intention to leave. Salmon, Crews and Scanlon et al.
(1999) found that that the younger nurses are more likely to resign. Furthermore, Neri (2000)
in her article stated that there is a difference in turnover intention based on age groups. The
older workers show lower rate of turnover intention and higher level of job satisfaction than
younger workers. Cotton and Tuttle (1986) in Fisher et al. (1993) said that the longer the
workers stay at an organization, the lower the turnover intention. This is supported by Gregson
(1990) and George (1989) in Rumery (1987) who found a significant difference in intention to
leave from the different length of service level of accounts and sales persons. As they gain
more experience, their intent of leaving decreased. Sharpnak and Funsten (1999) in their
research stated that turnover and length of service have a negative relationship at -0.502.

In relation to this research, the finding is consistent with that of Mobley (1979) that found no
difference between age groups and turnover among the certified public accountant.

5.2.3 Dominant Factors Influencing Turnover Intention

In chapter 4, working condition proved to be a dominant factor influencing the turnover
intention of the ‘Clerical’ employees at Bunna International Bank S.C. The result can support
the hypothesis that there is a dominant factor of turnover intention of the clerical staffs at BIB.
This finding was also supported by Robbins (2001) that working conditions will influence job

66
satisfaction, as employees are concerned with a comfortable physical work environment. In
turn this will render a more positive level of job satisfaction. The worker would rather desire
working conditions, which will result in greater physical comfort and convenience. The
absence of such working conditions, amongst other things, can impact poorly on the workers
mental and physical well-being, (Baron and Greenberg, 2003).

Arnold and Feldman (1996), promotes that factors such as temperature, lighting, ventilation,
hygiene, noise, working hours, and resources form all part of working conditions. Bankers may
feel that poor working conditions will only provoke negative performance; since their jobs are
mentally and physically demanding.

Moreover, the employee may use poor working conditions as an excuse to get back at
management because they may feel that management does not appreciate or acknowledge their
efforts or work done, Arnold and Feldman (1996).

5.2.4 The Relationship between Perceived Available Employment Opportunity and

Turnover Intention
"Clerical" employees' reported data show a positive relationship between PAEO and TI. The
strength of this relationship is moderate; but this relationship is in line with findings of Mobley
(1977). Based on his theory the concept of alternatives is part of the various sequential steps
before having intentions to quit. As mentioned earlier, most "clerical" employees of the bank
reported having perceptions of available employment opportunities. As most "clerical"
employees reported slight agreement in having turnover intentions, the researcher can only
conclude that these employees have a specific labor market strategy. This is in line with the
search theory (Morrell et al., 2001) and concurs with the assertion of Negrin et al. (2004)
whereby it is concluded that searching for and having external opportunities, increases the
employees' bargaining power when trying to achieve market conformity in terms of wages and
rewards. As dissatisfaction with pay& benefit and promotion was reported by the respondents,
"clerical" employees strategically start contemplating available employment opportunities.

67
Levels of perceptions about available employment opportunities do have effect on how
"clerical" employees' job satisfaction levels relate to their turnover intention. This finding
complies with findings of earlier similar studies from Price (1977); Hulin (1985) and Wheeler
(2007).
In relation to the research context of this study, the researcher notes that the current local labor
market in the banking industry is growing as result of the potential expansion in the banking
sector. The development in private banking sector can have influenced perceptions of available
job alternatives. However, as already mentioned, perception does not mean having factual
information of the labor market.

While keeping focus on the PAEO variable during interpretation we can conclude that the TI
of "Clerical" employees is always higher when high levels of PAEO are reported than when
low levels of PAEO are reported. This observation does not change dramatically whether the
job satisfaction is high or low. This is also explained by the earlier mentioned significant
relationship between PAEO and TI and a weak, but still significant relationship between
PAEO and JS.

Overall, this means that even if "Clerical" employees' JS is high, their TI will be higher when
they report high PAEO in comparison to when they report low PAEO. This means that an
employee who is overall satisfied with pay& benefit, promotion and working condition and
with high perceptions of available employment opportunities will still have higher intentions to
quit his job in comparison with a satisfied employee with low perceptions of available
employment opportunities. On the other hand, it also means that "Clerical" employees
reporting low JS will also report lower TI when they do not perceive available employment
opportunities in comparison with when they did perceive employment opportunities. Thus,
unsatisfied "Clerical" employees will show lesser intent to leave the organization if they do not
perceive that there are available employment opportunities.

68
5.3 LIMITATION OF THE RESEARCH

This study is restricted by the factors such as the respondents did not involve all staffs at BIB
and only involves only a sample from the population. Job satisfaction and turnover intention of
the overall staffs at the organisation did not measure properly.

In this study, only three factors of job satisfaction (namely, pay& Benefit, promotion and
working condition); and perceived available employment opportunity that influence the
turnover intention of the workers are being investigated. Besides these factors, there might be
other factors such as organisational commitment, relation with supervision and relation with
coworkers that can influence the turnover intention, which are not being considered in this
study.

5.4 CONCLUSIONS

The main purpose of this study was to examine employee voluntary turnover intentions. This
was done in relation to job satisfaction and perceived available employment opportunity.
Turnover intentions are not explicit, but mere statements, indicators and predictors of actual
turnover behavior.

The perceived problem that initiated the idea of this study was the notion of a constant threat
that Bunna International Bank S.C could lose valuable employees due to low job satisfaction,
better perceived external opportunities and consequently voluntary turnover. The bank could
thus face consequences like: difficulties to retain remaining key employees; low employee
motivation; significant turnover cost; loss of critical human capital (intangible critical
knowledge); decreased productivity; operational disruptions and finally decreased
organizational effectiveness.

The formulated objective of this study was two-fold, firstly to investigate the direct
relationship between job satisfaction and employees' turnover intent and secondly to examine
the relationship between perceived available employment opportunity and turnover intention.
Based on the results and findings presented in chapter 4, it is evident that this two-fold

69
objective has been achieved completely. Meanwhile, no significance difference found between
demographic variables to turnover intention.

In regard to the first part of the objective it can be concluded that the investigation has yielded
significant evidence that is in line with the theoretical assumptions on which the study is based.
The posed research question related to the first part of the objective was: “Does employee’s job
satisfaction can be the main factor to turnover intention?” The evidence shows that there
exists a strong negative relationship between job satisfaction and employees' turnover intention.
Based on the evidence, job satisfaction including its facets pay& benefit, promotion and
working condition all have a significant negative relationship with turnover intentions. The
answer to the first research question is proven by the acceptance of the first hypothesis (H1):
“There is a significant negative relationship between job satisfaction and turnover intention”.

In regard to the second part of the objective of this study it can be concluded that the examination
of the relationship between perceived available employment opportunity and turnover intention
resulted in strong evidence which is in line with and contributory to the theory underpinning this
study. The related research question was: “Does the prevailing external employment opportunity
in labor market can affect employee turnover intention? “The evidence presents a significant
moderating positive relationship between job satisfaction and turnover intentions. This is proven
by the acceptance of the fourth hypothesis (H4): “There is a significant positive relationship
between perceived available employment opportunity and turnover intention”. Further
investigation also yielded evidence that the effect strengthens the positive relationship between
perceived available employment opportunity and turnover intentions. This means that if perceived
available employment opportunity increase then employee turnover intentions also increase. Hence,
the existence of a positive relationship between perceived available employment opportunity and
employee turnover intentions.

This research endorses the existence of relationship between job satisfaction and turnover
intention. Statistical results demonstrate that the independent variables like pay & benefits,
promotion, working conditions, and perceived available employment opportunity influence the
turnover intention; hence the statement upheld in hypotheses is supported by evidences
furnished in study. Study also reveals that role of working environment is the predominant

70
factor that effect the turnover intention. So if this aspect is focused and addressed in the Bank’s
organizational setup it may improve the satisfaction level of employee that in turn lead to
reduce turnover intention. All other variables influence the turnover intention however their
impact is marginal. Briefly it is concluded that the finding of study not only have identified the
factors that affect the employee turnover intention but also discovered that working conditions
significantly impact turnover intention.

5.5 SIGNIFICANCE, IMPLICATIONS AND RECOMMENDATIONS

5.5.1 Significance, Practical and Theoretical Implications

The significance of this study is found in the contribution to the existing body of knowledge on job
satisfaction, perceived available job alternatives and turnover intentions.

The results of this study have implications for the theoretical assumptions and practical
perspectives of dealing with turnover intentions. The results of this research show that all factors
of job satisfaction are significantly and negatively related to the turnover intention of the
Clerical staffs of the Bank. The management should have closer look at these three factors as an
initiative action to reduce the turnover intention of the clerical staffs and to prevent high
turnover in the organisation.

The result of working condition as the dominant factors of turnover intention gives a guideline to
the Bank to continuously maintain the present working environment. The organisation can also
conduct further research to specify the components in the working condition that can contribute
to job satisfaction of the employees.

Although the pay & benefit factor has low relationship with the turnover intention of the
employee at Bunna International Bank, organisation should not deny the importance of this
factor. The reason to force organisation to emphasis on this factor is supported by the research
done by Newman and Hodgetts (1998) among the hospitality associates found that good wages
are the top work factors that influence the motivation of the employees.

71
Further understanding is increased especially as the study contextually relates to a banking industry
and especially, to Bunna International Bank S.C. It can be noted that the theoretical assertions
about the negative relationship between job satisfaction and turnover intent are validated and hold
true in this research context. Furthermore, the concept of external opportunities plays a very
significant role in this research context.

In this case, the research attempts to support the Bunna International Bank’s management to get a
better picture of the status of their valued "clerical" employees concerning turnover intentions. The
valuable results generated from this study can be used to enhance theoretical understanding and to
guide management policies.

5.5.2 Recommendations
Based on the observed data and the studied literature, the researcher provides some
recommendations for management practices in below sections. The issue of turnover and
turnover intentions seems to be topical among the professional high performance employees
and HR managers. Management should first of all, constantly be aware of employee turnover
intentions. Knowledge of the potential tangible and intangible turnover costs should lead to
prioritization of this issue on the managers "to-do" list. Periodical measurement of intentions
should be done informally through interactions on the work floor and formally through
surveys. Implementation of monitoring systems tracking turnover within specific demographic
groups would be even better. In addition, effective exit interviews should be conducted to
understand the factors that led to actual turnover. This information should then be linked back
to data achieved from the monitoring systems. Thus, the organization should research the link
between turnover and turnover intentions. Furthermore, the turnover intention data should be
used to identify and target valuable high-risk employees who have high intentions of leaving.
These employees' job satisfaction should then be assessed and enhanced if possible.

Based on this study and on similar literature, job satisfaction is a very good predictor of
turnover intentions. Thus, management focus on job satisfaction should be high. Job
satisfaction facets that yielded scores representing satisfaction were pay & benefit, promotion
and working condition. Management practice should at least focus on consolidating and
monitoring these ratings (Firth et al., 2004). The human relations and interactions should be

72
enhanced by effective communication strategies, which foster awareness and trust. This could
increase team cohesion, commitment and loyalty. Lack of information, at the same time as
sudden organizational changes, such as task renewals, restructuring, new leadership and new
teams, could damage the human relations and cause dissatisfaction with work environment.

Pay&benefit and promotion were facets for which "clerical" employees reported
dissatisfaction. Satisfaction with pay and promotion can be enhanced through smart
organizational restructuring, by creation of special teams of high performers and by assigning
them to special projects which require job enrichment, leadership and increased responsibility.
Assignment to these projects should be compensated by performance rewards. In the end if
these employees have performed well, they would have experienced the feel of more pay and
promotion whilst the organizations would have benefited from the employees' optimized
contributions.

The issue of perceived available employment opportunity looks like a matter that is less within
the control of management. It is important that management understands the reality of the labor
market and the related perceptions of the employees. The understanding that a satisfied
employee with perceptions of available job alternatives can still have higher turnover
intentions than a satisfied employee without perceptions confronts management with the harsh
reality of this phenomenon. The notion is that a satisfied valuable employee with high
perceptions can still leave after management interventions have led to higher satisfaction.
Employees with high educational levels perceive higher marketability and thus higher
perceptions of available job alternatives. Pragmatic management practices, although not yet
conclusively validated, report that education on the job in terms of specialized training can
subtly tie an employee to his job. This type of training could make the employee so specific
and fit for only his current job and thus not for the external market.

Steel et al. (2002) argue that organizations should hug their best performers and be aware of
the attractive alternatives appealing to their valued employees. A two-fold strategy, which
focuses on career development on one end, and removal of career obstructions on the other
end, should have some effect. The understanding is that if the current employment prospects

73
are relatively close to the external perceived available employment opportunity in terms of
attractiveness, than the employee will probably stay. Their research shows that there is higher
probability that if confronted with a choice, the employee prefers the familiar stable status quo
(and related prospects) over a future job alternative (with attractive opportunities). This, due to
an inherent resistance to change.

Other measures of reducing turnover intention besides through increase of job satisfaction can
be done by specifically focusing on employee retention. Attracting and retaining valuable and
high performance talent should be a strong focus especially for human resources management.
This implicates that the struggle to reduce unwanted employee voluntary turnover or turnover
intention should start at the process of attracting the right employees. Based on Wheeler (2007)
a good person-organization fit (P-O fit) should be achieved. Meaning that the characteristic of
the prospective employee should not diverge much from the characteristics of the organization;
thus enabling a good match. Assessing the P-O fit should be part of an effective recruitment
and selection process.

Finally, effective focused retention strategies should be formulated based on a formal

retention policy, which is reliant on organization and industry turnover data. Steel et al.
(2002) have argued that based on their research there are only some retention practices which
have shown consistent effect on retention these are: realistic job previews; survey feedback
and job enrichment. Accordingly effectively presenting the job to prospective candidates will
not create false expectations and P-O mismatch. Providing the employees with constructive
feedback after soliciting them for information is also important and elevating the employee's
job results in fewer intentions to leave. Furthermore, James and Kowske (2009) argue that
especially during times of economic downturn, management should devote extra time to
engage employees. Last but not least, Schultz and Grimm (2008) advocate for a collaborative
"out of the box" approach whereby all relevant industry stakeholders jointly identify general
resolutions and organizational specific solutions.

Altogether, it can be assumed that during the economic downturn, the competitive existence of
an organization significantly relies on efficiently managing staff turnover intentions and
ensuring that good performers and key personnel are satisfied and have no intentions to quit.

74
Thus, the key driving force behind all the different forms of job withdrawal is job satisfaction
(Noe, Hollenbeck, Gerhart & Wright, 2003).

5.6 FUTURE DIRECTIONS

Direction of future research on the topic of turnover intention should go to the research
context, the research sample, conceptual model expansion and the research approach.

In regard to the research context, it is important for more turnover research to be conducted in
the banking industry. In addition, it would be interesting if turnover intentions would be
measured in related banks. This would enable comparative turnover studies. Concerning the
sample it would be good for future studies to include the total employee amount, thus including
"clerical" and "non- clerical" employees. This would also enable comparative studies between
these two groups in terms of turnover intention, job satisfaction and perceived available
employment opportunity.

Expanding the conceptual model by including other job satisfaction facets should be
considered. As mentioned before there are various job satisfaction facets used in previous
studies. Other popular variables, which can be included, are commitment; engagement;
performance; achievement, recognition and social relations. The variables could be either used
as independent, moderating or mediating variables.

Lastly, it is recommended to conduct a study on turnover intentions using a qualitative

approach, whereby the factors affecting turnover intentions are identified inductively.
Subsequently, the results, a conceptual model of turnover intentions, would be quantitatively
tested. In addition to this study, an explorative study on the tangible and intangible cost of
turnover in the banking industries would increase awareness and importance of the topic of
turnover.

75
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81
ANNEXES

ANNEX A: QUESTIONNAIRE

ADDIS ABABA UNIVERSITY

SCHOOL OF COMMERCE GRADUATE PROGRAM
MASTERS IN HUMAN RESOURCE MANAGEMENT
Questionnaire for Employees of Bunna International Bank S.C.

Dear Respondent!
First of all, I would like to express my gratitude for your willingness to commit your valuable
time by responding this questionnaire.

This questionnaire is designed to request information for purely academic purposes. This is to
enable the researcher, Zerihun Ayalew, a final year student of Addis Ababa University School of
Commerce to complete his thesis on the topic; The Impact of Job Satisfaction on Employee
Turnover Intention; the case of Bunna International Bank S.C., in pursuance of Master of
Human Resource Management Degree.

The researcher realizes how valuable your time is. The enclosed survey should take only ten to
fifteen minutes to complete. Please make responses directly on the questionnaire. Your response
will be a great help for my study. Please feel free to express your honest opinions.
The researcher assures you that every response will be kept confidential.

If you have any questions concerning the study, please do not hesitate to write or contact me on
the under mentioned address:
Once again thank you so much for your cooperation.

Tele No.: 0911 - 72 63 00 Email Address: [email protected]

N.B:
1. You don’t need to write your name.
2. The researcher has scheduled to get the filled questionnaire back within three days.
3. All information given would be treated with utmost confidentiality.
4. ‘BIB’ represents Bunna International Bank S.C.

82
SECTION A: BASIC DEMOGRAPHIC DATA (PLEASE PUT “” INSIDE THE BOX)
1. Age

18 – 30 31 – 45 46 – 60 >60

2. Gender

Male Female

3. Educational background

High School Complete Diploma

First Degree Master’s Degree

Other please specify, _________________________________________________

4. Marital status

Single Married Separated Widowed Divorced

5. Please indicate your current position in BIB

Non-Clerical Clerical Managerial

6. How long have you been working with Bunna International Bank?

<1 year 1-2years 3-4 years ≥5 Years

83
 SECTION B: JOB SATISFACTION (JS) Please Tick “” on one of your answer and
there is no right or wrong answers.

No Questions / descriptions Strongly Strongly

Agree Neutral Disagree
agree Disagree

Pay and Benefits

1 I feel I am being paid a fair amount for the work I do.
2 Raises are too few and far between,
I feel unappreciated by the organization when I think
3
about what they pay me.
4 I feel satisfied with my chances for salary increases.
5 I am not satisfied with the benefit I receive
I am satisfied with long term benefit & insurance
6
policies of the company.
The benefits we receive are as good as most other
7
organizations offer.
8 The benefit package we have is equitable.
9 There are few rewards for those who work here.
10 There are benefits we do not have which we should have.
Promotion
There is really too little chance for promotion on my
11
job.
Those who do well on the job stand a fair chance of
12
being promoted.
13 People get ahead as fast here as they do in other places.
14 I am satisfied with my chances for promotion.
Working Conditions
15 I sometimes feel my job is meaningless,
16 I like doing the things I do at work.
17 I feel a sense of pride in doing my job.
18 My job is enjoyable.
Many of our rules and procedures make doing a good job
19
difficult.
20 Communications seem good within this organization.
21 The goals of this organization are not clear to me.
22 I have too much to do at work.
I often feel that I do not know what is going on with the
23
organization.
24 Work assignments are not fully explained.

84
 SECTION C: TURNOVER INTENTION (TI)

Strongly Agree Neutral Disagree Strongly

No Questions or descriptions
agree Disagree

25 I often think of leaving this organization.

26 It is very possible that I will look for a

new job next year
27 Recently, I often think of changing my
current job

SECTION D: PERCEIVED AVAILABLE EMPLOYMENT OPPORTUNITY (PAEO)

Strongly Agree Neutral Disagree Strongly

No Questions / descriptions
agree Disagree

If I quit my current job, the chances that I

28 would be able to find another job which is
better than my present one is high
There is no doubt in my mind that I can find
29 a job that is at least as good as the one I now
have

30 I feel that the market availability for my job

is very high

THANK YOU!!!

85
ANNEX B: RELIABILITY TEST RESULT

i, Reliability test result on JS

Reliability Statistics

Cronbach's N of Items
Alpha

.769 24

ii, Reliability test result on TI

Reliability Statistics

Cronbach's N of Items
Alpha

.792 3

iii, Reliability test result on PAEO

Reliability Statistics

Cronbach's N of Items
Alpha

.726 3

86
ANNEX C: DESCRIPTIVE STATISTICS ON THE RESEARCH VARIABLES

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation Skewness

Statistic Statistic Statistic Statistic Statistic Statistic Std. Error

Job Satisfaction 103 2.21 3.79 3.1824 .38671 -.573 .238

Turnover Intention 103 1.00 5.00 3.1877 .89256 .037 .238
Perceived Available
103 2.33 5.00 4.0744 .69221 -.559 .238
Employment Opportunity
Pay and Benefit 103 2.00 3.90 3.0320 .44086 -.272 .238
Promotion 103 1.67 4.33 3.1068 .70821 .070 .238
Working Condition 103 2.30 4.30 3.4485 .49821 -.628 .238
Valid N (listwise) 103

87
ANNEX D: CORRELATION COEFFICIENTS OF ALL VARIABLES

Correlations

Age Gender Education Tenure Job Satisfaction Turnover Perceived

Intention Available
Employment
Opportunity
*
Pearson Correlation 1 -.135 .121 .088 .126 -.216 -.063

Age Sig. (2-tailed) .174 .223 .377 .203 .029 .527

N 103 103 103 103 103 103 103

* **
Pearson Correlation -.135 1 -.205 -.271 .037 .056 -.037
Gender Sig. (2-tailed) .174 .038 .006 .710 .575 .708
N 103 103 103 103 103 103 103
*
Pearson Correlation .121 -.205 1 .029 -.038 -.077 -.116
Education Sig. (2-tailed) .223 .038 .773 .704 .439 .243
N 103 103 103 103 103 103 103
** *
Pearson Correlation .088 -.271 .029 1 .088 -.122 -.198
Tenure Sig. (2-tailed) .377 .006 .773 .375 .220 .045
N 103 103 103 103 103 103 103
**
Pearson Correlation .126 .037 -.038 .088 1 -.665 -.193
Job Satisfaction Sig. (2-tailed) .203 .710 .704 .375 .000 .051
N 103 103 103 103 103 103 103
* ** **
Pearson Correlation -.216 .056 -.077 -.122 -.665 1 .298
Turnover Intention Sig. (2-tailed) .029 .575 .439 .220 .000 .002
N 103 103 103 103 103 103 103
* **
Pearson Correlation -.063 -.037 -.116 -.198 -.193 .298 1
Perceived Available
Sig. (2-tailed) .527 .708 .243 .045 .051 .002
Employment Opportunity
N 103 103 103 103 103 103 103
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
88
ANNEX E: CORRELATION RELATIONSHIP BETWEEN JS FACETS AND TI

Correlations

Pay and Benefit Promotion Working Turnover

Condition Intention
** ** **
Pearson Correlation 1 .304 .466 -.335

Pay and Benefit Sig. (2-tailed) .002 .000 .001

N 103 103 103 103

** ** **
Pearson Correlation .304 1 .296 -.378
Promotion Sig. (2-tailed) .002 .002 .000
N 103 103 103 103
** ** **
Pearson Correlation .466 .296 1 -.717
Working Condition Sig. (2-tailed) .000 .002 .000
N 103 103 103 103
** ** **
Pearson Correlation -.335 -.378 -.717 1

Turnover Intention Sig. (2-tailed) .001 .000 .000

N 103 103 103 103

**. Correlation is significant at the 0.01 level (2-tailed).

89
ANNEX F: RESULT OF ONE-WAY ANOVA FOR DIFFERENCE IN TURNOVER INTENTION BY AGE

ANOVA
Turnover Intention

Sum of Squares Df Mean Square F Sig.

Between Groups 4.110 2 2.055 2.664 .075

Within Groups 77.150 100 .772
Total 81.260 102

90
ANNEX G: RESULT OF ONE-WAY ANOVA FOR DIFFERENCE IN TURNOVER INTENTION BY
TENURE

ANOVA
Turnover Intention

Sum of Squares Df Mean Square F Sig.

Between Groups 1.473 3 .491 .609 .611

Within Groups 79.787 99 .806
Total 81.260 102

91
ANNEX H: DOMINANT FACTOR THAT INFLEUNCE TURNOVER INTENTION

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate
a
1 .767 .588 .562 .59086

a. Predictors: (Constant), Promotion, Age, Tenure, Pay and Benefit,

Perceived Available Employment Opportunity, Working Condition

a
ANOVA

Model Sum of Squares Df Mean Square F Sig.

b
Regression 47.745 6 7.957 22.793 .000

1 Residual 33.515 96 .349

Total 81.260 102

a. Dependent Variable: Turnover Intention

b. Predictors: (Constant), Promotion, Age, Tenure, Pay and Benefit, Perceived Available Employment
Opportunity, Working Condition

a
Coefficients

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) 7.486 .708 10.573 .000

Age -.174 .109 -.107 -1.598 .113

Tenure -.090 .059 -.105 -1.513 .134

Perceived Available
1 .151 .092 .117 1.651 .102
Employment Opportunity

Working Condition -1.197 .139 -.668 -8.587 .000

Pay and Benefit .112 .157 .055 .711 .479

Promotion -.186 .093 -.148 -2.005 .048

a. Dependent Variable: Turnover Intention

92