ABSTRACT
This study analyzed the effects of labour turnover on productivity in Nigerian Bottling Company Plc and 7up Bottling Company Plc, Aba, Nigeria. Specifically, the study determined the effect of workers retention (pay and allowance) on quantity of sales in Nigerian Bottling Company Plc and 7up Bottling Company Plc Aba; determined the effect of training of workers on profit in Nigerian Bottling Company Plc, and 7up Bottling Company Plc Aba; investigated the effect of promotion on output in Nigerian Bottling Company Plc, and 7up Bottling Company Plc, Aba; and determined the effect of skills of workers on customers satisfaction in Nigerian Bottling Company Plc, and 7up Bottling Company Plc, Aba. Primary and secondary data were used for the study. The secondary data covered between 2010 and 2019. A total of 345 respondents consisting of 190 respondents from Nigerian Bottling Company Plc and 155 respondents from 7up Bottling Company Plc were used for the study after retrieving the questionnaire. Also, a total of 345 customers consisting of 190 customers that patronizes the Nigerian Bottling Company Plc and 155 customers that patronizes the 7up Bottling Company Plc were used for the study. Data obtained were analyzed using simple regression technique and mean score. Pearson product moment correlation coefficient (r) and simple regression were used to test the various formulated hypotheses for the study. Findings shows that retention (pay and allowance) of workers has significant positive effect on quantity of sales in both Nigerian Bottling Company Plc and 7up Bottling Company Plc, Aba. Training of workers have significant positive effect on profit in both Nigerian Bottling Company Plc and 7up Bottling Company Plc, Aba. Promotion of workers have significant positive effect on output in both Nigerian Bottling Company Plc and 7up Bottling Company Plc, Aba. Skills of workers have significant positive effect on customers’ satisfaction in both Nigerian Bottling Company Plc and 7up Bottling Company Plc, Aba. The study recommends that efforts aimed at tackling labour turnover in Nigerian Bottling Company Plc and 7up Bottling Company Plc should focus more on developing the proficiency of workers through a need-identified training. Prompt promotion of workers and the use of other compensation incentives that should increase the willingness of employees to remain at work is strongly advocated. Many bottling industries such as the Nigerian Bottling Company Plc and 7up Bottling Company Plc, Aba require a formidable workforce to have a competitive edge amidst her competitors.
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
In today's global environment, each business must have a strong labour turnover avoidance policy in place to guarantee that the finest minds and well-experienced employees contributing to the organization's overall growth and development are kept. Employer turnover should be reduced as a result of this. This is because labour turnover is one element that may impact employee retention, organizational profit, production, and customer satisfaction with the organization's products and services in a positive or negative way. The sort of labour turnover prevention program that will encourage employees to perform well will be determined by how well it meets their needs for status, job security, and survival, as defined by Maslow's hierarchy of needs (1943 and 1954). Managerial and supervisory turnover has long been a key human relations issue, and its importance in any particular company cannot be overstated. Almost all employers of labour confront a big problem with labour turnover nowadays, all around the world (Barmase and Shukla, 2013). This is due to the fact that it creates a significant financial strain on businesses and has a negative impact on productivity. Labour turnover is a serious workplace problem that cannot be overlooked by any meaningful and target driven organisation.
Organizations all around the globe must endeavor to regulate and reduce labour turnover since it has both economic and psychological implications on production. In terms of psychological consequences, labour turnover has been associated with a number of negative job attributes such as low level of job satisfaction, low esteem for promotion opportunities, mental stress on the part of management on how best to sort and replace exited experienced workers etc. As a result, when a person departs abruptly, it throws the entire organization's production strategy into disarray. This might have a significant impact on the organization's production and, as a result, its effectiveness. If the company provides a service, employee turnover may have an impact on the quality and/or quantity of service provided, especially if one person's output is the input of another (Blau, 2014). Hill and Twist (2015) define labor turnover as withdrawal behaviors that lead psychologists to believe that it is the result of unfavorable workplace attitudes affected by factors such as income, job security, recognition and appreciation, working hours, and physical conditions, among others. There are also psychological withdrawal behaviors such as a lack of creativity or putting in little effort on a work, which frequently show as laziness and an unwillingness to think and enhance creativity (Pinder, 2018). There is also an attempt to comprehend managerial turnover and determine why employees leave their jobs. Carbery, Garavan, Brien, and McDomel (2013) believe that, all other things being equal, management turnover is likely to be lower than operational turnover, which might be due to the fact that they are more devoted and have a stake in the company. Labour turnover also has the effect of impeding the attainment of larger corporate objectives since it necessitates a significant investment in training, induction, growth, and skills development to replace personnel who leave the company. Controlling labour turnover, on the other hand, is critical for businesses and must be handled well due to the impact it has on organizational productivity (Adewole, 2017).
In Nigeria, the issue of labour turnover cannot be neglected by many firms operating in the country. This is because ineffective labour turnover management in any Nigerian organization would have a significant negative impact on not just that organization's performance and output, but also on the economy as a whole. For example, in the late 1980s and early 1990s, Nigeria experienced a turning point in her history when Nigerian universities lost a slew of well-trained teachers in what became known as the "Brain-drain." Perhaps the situation that occurred in our universities had an impact on some businesses, such as the Nigerian Bottling Company Plc. and the 7up Bottling Company Plc., where some of these academics serve as consultants. Terrible pay rates, a lack of advancement, a lack of sufficient training of trained and competent labour force, and a poor work environment may have all contributed to such a choice to quit a company (Adewole, 2017). This is likely to have an impact on the manufacturing line in terms of profit maximization. The situation hasn't altered much since then, and many businesses are calculating their losses (Orji, 2018). According to a Mercer report on the total financial impact of employee turnover, the cost of labour turnover is sometimes misunderstood, seen as incalculable, or disregarded as a minor expense, yet the total cost of labour turnover is considerable, accounting for 36 percent of payroll. The actual cost of employing someone to cover absentee employees is a significant but frequently ignored expense. In Nigeria bottling firm and 7up Bottling Company Plc. Aba, Nigeria, this is a typical practice in enterprises that leads to a certain level of turnover and its probable impacts on productivity.
Organizational Productivity is defined as an organization's, institution's, or business's ability to achieve desired outcomes with the least amount of energy, time, money, staff, material, and so on. It is a measure of an organization's ability to meet its output targets via the use of its labour, authority strategies, machinery, equipment, and assets (Adewole, 2017). Productivity increase is crucial for organizations since delivering more goods and services to customers equates to better profitability. As productivity rises, an organization's resources may be converted into revenues, allowing it to pay stakeholders while reserving cash flows for future development and expansion. With increased productivity, an economy may create and consume more products and services for the same amount of effort. Individuals (workers and customers), company executives, and analysts all value productivity (such as policymakers and government statisticians). Labour turnover is inextricably linked to an organization's productivity and is frequently a sign of other issues confronting both the organization and its personnel. A variety of strategies have been proposed by management scholars in order to overcome high rates of labour turnover among employees and enhance employee retention. According to Ibrahim, Usman, and Bagudu (2013), employees who resigned their employment did so due to bad working circumstances that required them to execute their tasks. Poor working circumstances owing to physical factors may result in reduced productivity and general job unhappiness.
Nigerian bottling firms, such as Nigerian Bottling Company (NBC) and 7up Bottling Company Plc. (7UP), are not immune to the effects of high labor turnover. The capacity of these businesses to fulfill rising demand for their goods and services is heavily reliant on the efficiency of their skilled employees, who assure optimal production, sales, and profit margins. Labour turnover, particularly among experienced employees, is a major and continuous issue that employers of labor in these organizations are concerned about. This is due to the high expense of finding a substitute for such high quality, which is sometimes difficult to come by. Most new employees are more prone to accidents since there are more breakages and they make more mistakes than experienced workers, resulting in the expense of replacing a man exceeding the recruiting projections by a significant margin (Stessin, 2011). When a company's labor turnover is a problem, management must identify the root reasons, monitor the turnover rate, calculate the cost of turnover, and solve the issue. Given the reality of unemployment and economic hardship in Nigeria, knowing the impact of labor turnover on productivity at Nigerian Bottling Company (NBC) and 7up Bottling Company Plc. is crucial. Such knowledge will aid these businesses in developing effective labor turnover prevention plans that will allow them to function sustainably and adequately satisfy consumer needs as well as corporate objectives. As a result, the purpose of this study was to examine in depth how labor turnover management affects organizational productivity of Nigerian Bottling Company (NBC) and 7up Bottling Company Plc in Aba, Nigeria.
1.2 STATEMENT OF THE PROBLEM
Despite the fact that there appear to be no permanent solutions, attempts have been made to reduce the problem of labour turnover. Many individuals have left their jobs due to factors such as professional progress, more promising positions, and external incentives such as higher pay scales, promotion in other companies, and pleasant working circumstances. High labour turnover can have a negative influence on a company's production. However, because of the restricted resources available for staff recruiting, the negative impacts on firms might be extremely severe. Employees who are happy in their jobs are less likely to leave. High employee turnover is typically a sign of a longer-term issue, such as a lack of improved pay structures, training or career opportunities, or promotion, to name a few. Workers who are dissatisfied with their occupations are inclined to depart (Mobly, 2017). Mobly (2017) goes on to say that being dissatisfied with a job isn't the only reason why individuals switch jobs; it may also be because the talents and competencies they possess are in high demand. They may be enticed to leave for greater salary, perks, or career advancement opportunities. Because enterprises have little influence over what happens in other firms, they may take efforts to boost employee morale in the workplace, making people who work for them happy and productive. For companies like Nigerian Bottling Company Plc. and 7up Bottling Company Plc., employee turnover is a major issue. The high rate of labor turnover in bottling businesses, which has risen to about 15% in Nigerian Bottling Company Plc. in 2019 (NBC, 2019) and 22% in 7up Bottling Company Plc. in 2019 (NBC, 2019), is one of the issues that inspired this study (7up, 2019). It is important to remember that a high labour turnover rate reduces an organization's revenue and profitability through lowering productivity.
Another issue is that labour turnover increases hiring costs and training expenses, which is especially problematic in organizations that need to replace individuals with specialized skills and a high educational level to fill complicated job responsibilities. Recruiting new employees to replace those who have left the company might be a positive start in the right direction. However, their ability to match the unique abilities necessary for complicated activities previously performed by top executives, as well as highly paid vocations, is subject to cost impacts, making their replacement extremely challenging for the organization. This is likely to have a noticeable impact on the productivity of the company. This is not to suggest that every employee who leaves a company is dissatisfied with their work. Some people will retire, leave town, or abandon their jobs due to family obligations, a desire to change careers, or even the urge to start their own business (Kiunsi,2014).
In terms of labour turnover management, there is a knowledge vacuum and a point of departure for prior studies on labour turnover and organizational productivity. There is a knowledge gap in understanding the effect of worker retention (pay and allowance) on sales quantity, the effect of worker training on profit, the effect of promotion on output and effect of workers skills on customers satisfaction in Nigerian Bottling Company Plc. and 7up Bottling Company Plc. Aba. Against this backdrop, this research work investigates labour turnover management and organisational productivity of Nigerian Bottling Company Plc. and 7up Bottling Company Plc in Aba, Nigeria.
1.3 OBJECTIVES OF THE STUDY
The major aim of this study is to analyze the effects of labour turnover on productivity in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba, Abia state, Nigeria. Specifically, the study sought to examine the following objectives:
(1) determine the effect of workers retention (pay and allowance) on sales quantity in Nigerian Bottling Company Plc. and 7up Bottling Company Plc. Aba;
(2) determine the effect of workers training on profit in Nigerian Bottling Company Plc., and 7up Bottling Company Plc. Aba;
(3) investigate the effect of promotion on output in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba;
(4) determine the effect of workers skills on customers’ satisfaction in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba.
1.4 RESEARCH QUESTIONS
Based on the specific objectives, the following research questions were raised.
1) What effect has workers’ retention (pay and allowance) on sales quantity in Nigerian Bottling Company Plc. and 7up Bottling Company Plc. Aba?
2) What effect has workers training on profit in Nigerian Bottling Company Plc., and 7up Bottling Company Plc. Aba?
3) What effect has promotion of workers on output in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba?
4) What effect has workers skills on customers satisfaction in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba?
1.5 RESEARCH HYPOTHESES
From the above research questions, the following null hypotheses were formulated to guide the study.
H01: There is no significant effect of workers’ retention (pay and allowance) on sales quantity in Nigerian Bottling Company Plc. and 7up Bottling Company Plc. Aba.
H02: There is no significant effect of workers training on profit in Nigerian Bottling Company Plc., and 7up Bottling Company Plc. Aba.
H03: Promotion of workers does not significantly correlate with output in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba, Nigeria.
H04: Workers skills have no significant effect on customers’ satisfaction in Nigerian Bottling Company Plc., and 7up Bottling Company Plc., Aba, Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study is divided into empirical and theoretical significance.
Empirical significance: This research will serve as a resource for all organizational management, particularly the management and employees of Nigerian Bottling Company Plc. and 7Up Bottling Company Plc. in Aba, Nigeria, in understanding labour turnover management and organizational productivity. The research will assist both commercial and public organizations, including the government, in limiting their human resource capabilities by implementing methods to minimize labour turnover through worker retention, training, rapid promotion, and skill development. It would give important information to Nigerian businesses' management and staff on employee retention and limiting the negative influence of labour turnover on organizational productivity.
Theoretical significance: This study has contributed to the current body of information on labour turnover and organizational productivity. This study will be useful to scholars and postgraduate students in the Departments of Industrial Relations and Personnel Management, Business Administration, and Entrepreneurship because it will serve as a reference material for future researchers on the effects of labour turnover on organizational productivity. It may also pique the interest of other academies in conducting more study on the reasons and constraints of labour turnover in a company. The study will also help the Nigerian public and people in other disciplines understand the impact of labour turnover on the productivity of Nigerian Bottling Company Plc. and 7Up Bottling Company Plc., Aba.
1.7 SCOPE OF THE STUDY
The scope of the study is divided into unit scope, content scope, and geographical scope.
Unit scope: This study is on individual level of analysis of selected bottling companies in Aba.
Content scope: This study covers only labour turnover management on organizational productivity between 2010 and 2019.
Geographical scope: This study covered the Nigerian Bottling Company Plc. and 7Up Bottling Company Plc., Aba, Nigeria.
1.8 LIMITATION OF THE STUDY
The most significant restriction of the study is having access to the office since the setting was extremely limited for security reasons, and entry into the business was mostly by invitation. As a result, obtaining an invitation to share the questionnaire and conduct interviews was extremely difficult, and there were limits on the number of times the researcher was authorized to enter the offices where the necessary information was obtained. As a result, the researcher had to devote many months to data gathering during the research process. Furthermore, there was a constraint on the number of years of information the researcher could be given by the organisations, since the selected bottling businesses only granted the researcher access to ten (10) years of data on different labour turnover management indicators and organisational productivity.
Another difficulty encountered in performing this study was the inability to express the dependent variable "productivity" as well as the independent variable "labour turnover" with appropriate indicators for each specific aim. For this study, it took the intervention of the supervisory committee to resort to quantity of sales, profit, output, and customer satisfaction as appropriate indicators of organisational productivity, as well as worker retention (pay, allowances), worker training, promotion, and worker skills as appropriate indicators of labour turnover management.
Generally, eliciting the required information from the various issues of the annual reports of Nigerian Bottling Company Plc. and 7Up Bottling Company Plc., Aba were the major constraint encountered in completing the study. The researcher was put through rigorous methods of transforming existing information to fit the necessary variables for the investigation.
1.9 OPERATIONAL DEFINITION OF TERMS
Labour turnover: - This is the overall change in the number of people employed in a business entity during a particular period. It takes into consideration the number of exiting personnel, new joinees and the total number of workers as listed in the payroll at the end of a given period.
Productivity: - is a phenomenon, which is concerned with the utilization of resources to produce a given output, the resources could be labour materials and capital.
Incentives: - Something, which encourages you to work harder, start new activities.
Remuneration: - An amount of money paid to someone for work done.
Promotion: - is the Vertical movement of employees in the organization to a position of higher authority.
Profit: - This is the financial benefit realized when revenue generated from a given business activity or numerous business activities exceeds the expenses, cost and taxes involved in sustaining the business activity in question. It calculated as the naira difference between total revenue and total expenses
Output: - This is the number of units of goods produced in a specific time period. The period could be monthly or yearly.
Retention: Retention refers to employees’ abilities to not only absorb and retain training or specialized skills, but to apply the learned skills to their job.
Worker/Employee retention: Refers to the ability of an organization to retain its employees
Sales quantity: This is the number of units of goods sold in a specific time period. The period could be daily, weekly, monthly, quarterly, biannually or yearly.
Consumer satisfaction: Consumer satisfaction is a term that measures how products or services supplied by a company meet or surpass a customers’ expectation. Customer satisfaction is important because it provides marketers and business owners with the metric that they can use to manage and improve their businesses as well as shows how productively relevant the organisation is to its business environment.
CHAPTER 2
REVIEW OF RELATED LITERATURE
2.1 CONCEPTUAL REVIEW
2.1.1 Labour turnover
Labor turnover, also known as staffing turnover, is defined as the ratio of employees who leave a firm due to attrition, dism
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