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.
TABLE OF CONTENTS
Title
Page i
Declaration
ii
Certification
iii
Dedication
iv
Acknowledgements
v
Table
of Contents vi
List
of Tables vii
List
of Figures viii
Abstract
ix
CHAPTER 1: INTRODUCTION
1.1 Background to the Study 1
1.2
Statement of the Problem 4
1.3
Objectives of the Study 6
1.4
Research Questions 7
1.5
Research Hypotheses 7
1.6
Significance of the Study 8
1.7
Scope of the Study 9
1.8 Limitation of the Study 9
1.9
Operational Definition of Terms 10
CHAPTER 2: REVIEW OF RELATED LITERATURE
2.1
Conceptual Review 12
2.1.1 Labour turnover 12
2.1.2
Categories of employee turnover 18
2.1.3
Factors affecting voluntary labour
turnover 19
2.1.4
Turnover: causes and influencing
factors 21
2.1.5
Relationships among turnover and
productivity 23
2.1.6 Management
practices and labour turnover 24
2.1.7 Employees
attitudes and turnover 27
2.1.8 Strategies
to employee turnover 28
2.1.9
Measurement of labour turnover 31
2.1.10
Effects of labour turnover 32
2.1.11
Voluntary turnover in an
organization 33
2.1.12
Characteristic of labour turnover 35
2.1.13
Turnover on key employee groups 50
2.1.14
Measures used in controlling labour
turnover 52
2.1.15 Labour turnover and organisational
performance 53
2.2 Empirical Review 54
2.3
Theoretical Review 64
2.3.1 The Theory of Organisational
Equilibrium (TOE) 64
2.3.2 The Social exchange theory 65
2.3.3 The
Job Embeddedness theory 67
2.3.4 Herzberg Two-Factor Motivation-Hygiene
Theory 69
2.3.5 The Resource-Based View 70
2.3.6 The Equity Theory 71
2.3.7 The Human Capital Theory 73
2.3.8 The
Expectancy-Confirmation Theory. 73
2.4
Application of Expectancy -
Confirmation Theory to the Study 75
2.5
Summary 76
2.6
Gap in Literature 77
CHAPTER 3: RESEARCH METHODOLOGY
3.1
Research Design 80
3.2
Population
of the Study 81
3.3
Source of Data 83
3.4 Sample
and Sampling Procedure 84
3.5
Validity of the Research Instrument 87
3.6 Reliability of the Instrument 88
3.7 Methods of Data Analysis 90
CHAPTER 4: DATA PRESENTATION AND ANALYSES
4.1 Data Presentation 98
4.2 Analysis
of Hypotheses 118
4.3
Discussion of Findings 129
CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1
Summary 146
5.2 Conclusion 147
5.3
Recommendations 148
5.4
Contributions to Knowledge 150
References 153
Appendices 173
LIST
OF TABLES
3.1: Total Number of Workers in the
Organisations. 82
3.2: Total number of workers sampled from the
worker’s population in the organisations 87
3.3: Reliability Analysis of the Responses of
the Respondents 89
4.1: Questionnaire
Administration 98
4.2: Demographics
Characteristics of Respondents 99
4.3: Result
of the Ordinary Least Squares (OLS) Simple Regression of the Effect of
Retention of Workers on Quantity
of Sales in Nigerian Bottling Company Plc Aba 106
4.4: Result
of the Ordinary Least Squares (OLS) Simple Regression of the Effect of
Retention of Workers on Quantity
of Sales in Nigerian Bottling Company Plc Aba 107
4.5: Result
of the Ordinary Least Squares (OLS) Simple Regression of the Effect of
Training of Workers on Profit
in Nigerian Bottling Company Plc Aba
109
4.6: Result
of the Ordinary Least Squares (OLS) Simple Regression of the Effect of
Training of Workers on Profit in 7-Up
Bottling Company Plc Aba 110
4.7: Result
of the Ordinary Least Squares (OLS) Simple Regression of the Effect of
Promotions on output
in Nigerian Bottling Company Plc Aba 111
4.8: Result
of the Ordinary Least Squares (OLS) Simple Regression of the Effect of
Promotions on output
in 7-Up Bottling Company Plc Aba 112
4.9: Mean responses of respondents on the
effect of skills of workers on customers’
satisfaction in Nigerian Bottling Company Plc and 7up Bottling Company
Plc, Aba 114
4.10: Mean
responses of customers on their satisfaction with the services offers by
workers in Nigerian Bottling
Company Plc and 7up Bottling Company Plc, Aba 117
4.11: Correlation
result of the significant relationship between the retention of workers
and quantity of sales in Nigerian Bottling Company Plc and 7up Bottling
Company
Plc Aba, Nigeria 119
4.12: Correlation
result of the significant relationship between training of workers and
profit in Nigerian Bottling Company Plc and 7up Bottling Company Plc Aba,
Nigeria 122
4.13: Correlation
result of the significant relationship between promotions and output in
Nigerian Bottling Company Plc and 7up Bottling Company Plc Aba, Nigeria 124
4.14: Result
of the Ordinary Least Squares (OLS) simple regression of the effect of skills
of
workers on customers’ satisfaction in Nigerian Bottling Company Plc Aba 127
4.15 Result
of the Ordinary Least Squares (OLS) simple regression of the effect of skills
of
workers on customers’ satisfaction in Nigerian Bottling Company Plc Aba 128
LIST OF FIGURES
1: Robbins
et al., 2015, Theory of Organisational Equilibrium 65
2:
Cropanzano and Mitchel 2017, Social Exchange Theory 67
3:
Mitchell et al.,
2001, Job Embededness Theory 68
4:
Herzberg 2006, Two Factor Theory 70
5:
Barney 2006, Resource Based Theory 71
6:
Adams 2012, Equity Theory 72
7: Vroom
2006, Expectancy Theory 74
8: Bar
Chart showing the Sex Distribution of Respondents 103
9: Bar
Chart showing the Age Distribution of Respondents 104
10: Bar
Chart showing the Years of Working Experience Distribution of Respondents 105
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.
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