The Impact of Human Resource Management Practices on Employees Turnover in Banking Sector of Pakistan

The Impact of Human Resource Management Practices on Employees Turnover in Banking Sector of Pakistan
Research has shown consistently that there are different factors which predicts turnover, so this study investigates that what factors, cause employees to leave one organization and join another. Second, to find out the significant impact of each variable on turnover. It is hypothesized that human resource management practices are negatively correlated with employee turnover. In this study multiple regression analyses will be run to test a model that included the above mentioned independent variables as predictors of intent to quit in banking sector. Six banks and a total of 120 respondents from these organizations participated in the designed scale. Findings show that realistic job information, job analysis, work family balance, supervisor support, and compensation were negatively correlated with employee?s turnover.Introduction
The field of human resource management has gained attention of researchers in the recent years. This study broadly focuses on the impact of human resource (HR) practices on employees? turnover. In addition to this, the study also focuses on various HR practices in the banking industry with respect to employees working for banks.
Commercial banks play a vital role in the economic activity of a country, as the state bank of Pakistan implements monetary policy with the help of commercial banks. As government of Pakistan is facilitating the investors in every sector due to which lot of multinational banks have encouraged investing in banking sector. The new multinational banks no doubt created lot of employment opportunities for the Pakistani youth but it also raised the phenomenon of employee turnover. Turnover has become a major concern for organizations especially in banks with employee shortages and competitive pressures making retention of key employees a strategic issue. There is no doubt retaining top talent is a high priority with the war for talent in today?s workplace and the changes in the larger business world, organizations have to do more than pay well.
As the paradigm of lifetime employment becomes unrealistic, the question who stays with you? has assumed great importance in organizations today. Simultaneously, there has been an increasing tendency to ?buy in? the talents of professionals with cross functional skills in order to create a competitive advantage. One visible effect of this has been a consistent rise in the pay packages of most organizations so as to attract and retain the most desirable employees. Such a trend over the last few years has resulted in an unstable labor market, especially for industries such as marketing, advertising, finance and software where the skills are by and large transferable, from one work environment to another (McEvoy et al., 1987).
The undesired loss of competent personnel is costly to an organization in both direct and indirect terms. Therefore Turnover reduction may be a goal for some employers to reduce replacement and training costs, increase productivity, lessen supervisory workload and stress, enhance customer service, or improve product quality.
Turnover also has some positive effects on the organization like it is the source of get rid of those employees who are unproductive and only increasing the cost. Turnover also provides a chance for entry of new brain with new ideas despite those boring and conservative ideas. It also provides promotional opportunities for lower staff which increases their motivation to work for the betterment of the organization.
Poor supervision, unproductive relationships with the boss, poor planning, and generally poor management are the prime reasons cited by the workers for turnover. As in the case of absenteeism, this too can be minimized by planning, supervising, and the application of good management principles. Lower turnover offers a wide range of productivity gains. One other significant cause of turnover is the attractiveness of nearby jobs offering extended overtime.
The outcome of the research would help to identify the effective human resource practices to retain the competent staff. Moreover, the findings may help the academics to do further research on this area.

Literature Review
The literature on human resource management indicates that labor turnover has both positive and negative impacts on the productivity. Exploring the impact of labor turnover on labor productivity (Siebert, Zubanov, Chevalier, & Viitanen, 2006). .They used a panel dataset of 347 shops of UK clothing retailers over 1995-1999. They found that workers, who are less suitable for the job, leave earlier; according to their study the labor turnover has positive impact to improve performance by clearing the weak, unwilling and mismatch workforce with the job. There are a number of factors have impact on labor turnover. Compensation is an important factor for the turnover.
The effect of pay incentives on labor turnover and productivity is studied by (Chevalier, Siebert, & Viitanen, 2003). Personnel data were used from a panel of 400 shops of UK retail chain. They explain that firms use generally flat hourly wage system with no reward for tenure or individual productivity. Gupta (2003) explained the relationship of a number of variables such as company image, pay satisfaction, nature of work, and nature of peer group, comparison to peer group, inside career opportunities, expectations-reality match and turnover perceptions with intentions to stay. The findings of their study have implications for redesigning work settings to attract, motivate and retain the best employees. The relationships of some demographic variables like sex, marital status, length of service and designation were also analyzed. (Niederman & Sumner, 2001) has studied the issue of IT professionals? turnover and focused on IT workers? demographics, such as age, gender and job satisfaction, salary, job tasks, and opportunity factors for both prior and current employment. He developed ranking of different factors comprising job satisfaction and he found that satisfaction with financial compensation was high and with fringe benefits was low.
Firms that offer more benefits have lower employee turnover (Harris, 2003) Furthermore, the effect appears somewhat stronger in firms which employ mainly part-time workers compared to those which employ predominantly full-time workers. Another writer suggests that employee turnover is also a serious problem in construction and warrants attention (Absenteeism and turnover, 1989). Poor supervision, unproductive relationships with the boss, poor planning, and management are the prime reasons cited by the workers for turnover. As in the case of absenteeism, this can be minimized by planning, supervising, and the application of good management principles. Lower turnover offers a wide range of productivity gains. One other significant cause of turnover is the attractiveness of nearby jobs offering extended overtime.
The negative job attitudes for example low levels of job satisfaction, is one of the cause of labor turnover (Harman et al. 2007), in their research work, they proposed a psychological explanation of turnover that is based on individuals? utility functions. According to them when outcomes such as pay or promotion opportunities are very low relative to the employee?s expectations, an employee becomes dissatisfied and motivated to leave. Igbaria & Guimaraes (1999) investigated how far turnover and their determinants differ for telecommuters and non-telecommuters. The Telecommuters appeared to face less role conflict and ambiguity and were likely to be happier with their supervisors and more committed to their organizations, hence designate fewer turnovers as compared to the non-telecommuters. They also demonstrated lower satisfaction with peers and promotion.
According to a study, 14.1 per cent fulltime school teachers in Spanish schools were found to have left their jobs in 2002 due to a number of factors (Smithers & Robinson, 2003). They identified five main factors influencing teachers? decisions to leave: workload, new challenge, the school situation, salary and personal circumstances. Among these factors workload was by far the most important, and salary the least. Those who were leaving their jobs were disproportionately either young with a few years? service or older and approaching retirement. Young persons were more likely to cite ?salary? and ?personal circumstances including travel, whereas older leavers mentioned ?workload?. Young persons, particularly those traveling or teaching abroad, were more likely to expect to return to full-time teaching.
Tanniru & Taylor (1981) examined the causes and incidents of turnover reported by a cross-sectional sample of data processing professionals at various stages of their careers. The findings suggest that supportive organization, high salary, fringe benefits, low size of data processing (DP) unit, promotional opportunities, less sophistication of DP equipment has the negative relation with the job turnover.
Roe, Zinovieva, Dienes, and Ten Horn (2000) reported in their study that there is a positive relationship of organizational commitment and job involvement with performance. Both involvement and commitments predict turnover and tendency to leave is being strongest for people low on both involvement and commitment. On the basis of this analysis they have added direct links from opportunity for growth, pay and career opportunities to satisfaction. Satisfaction is also related to both involvement and commitment and it also acts as a predictor of turnover either directly or in conjunction with commitment. Willem, Devos, & Buelens (2007) studied the extent to which private and public sector employees differ in the importance they attach to different types of inducements being part of their employment deal. They consider five dimensions of the psychological contract: career development opportunities, job content, financial rewards, social atmosphere and respect for private life. Data from a survey of Belgian employees show that, as compared to private sector employees, public sector employees are motivated by other inducements. In particular, they affix less importance to career development opportunities and financial rewards promises in their psychological contracts, and perceive these promises as less fulfilled. Janssen, Jonge, & Bakker (1999) investigated the specific determinants of turnover intentions and hypothesized that intentions to leave is primarily determined by conditions of employment. They distinguished three main dimensions of conditions of employment, e.g. salary, job security and career opportunities. the results of their study reveals that turnover intentions are clearly and mainly determined by the unmet career expectations such as higher salary and more responsibility and to a lesser extent by quality of job content. Chiu (1999) investigated how the effect of positive affectivity on work motivation was mediated by three attitudinal variables: perception of pay equity, pay satisfaction and job satisfaction. The results revealed that positive affectivity had a positive effect on wok motivation. Amongst three attitudinal variables pay satisfaction and job satisfaction were found to arbitrate the effect of positive affectivity on work motivation. Cotton (2007) has conducted a study in which possible correlates of turnover were selected from reviews of turnover and studies involving the turnover process. For simplicity, Pettmans (1973) categorization of correlates is employed. In this system correlates are classified as (a) external factors, (b) structural or work-related factors, and ? personal characteristics of the employees. Work-related Correlates includes Job performance, Role clarity, Task repetitiveness, Satisfaction with pay, Satisfaction with work itself, Satisfaction with supervision, Satisfaction with co-worker, promotional opportunities, Organizational commitment, Job autonomy, Job involvement, Job stress etc. Results reveal that many of the work-related variables are highly reliable correlates of turnover. Overall job satisfaction with work itself, pay, supervision, and organizational commitment are highly negatively related to turnover. Job performance, satisfaction with co-workers, satisfaction with promotion, and role clarity also has shown reliable findings, although at a slightly lower level. Performance, role clarity, and the measures of satisfaction are found to be negatively related to turnover. The meta- analysis for task repetitiveness demonstrated only weak confidence that this variable is positively correlated with turnover. The meta-analyses verify many of the conclusions made in earlier qualitative reviews.
Although few local Russian companies use pay for performance for their employees (May, Bormann Young, & Ledgerwood, 1998), Fey, Engström, and Björkman (1999) reported that around 80 percent of the Western firms in their study used some kind of performance-based compensation system, most typically with bonuses being associated to the performance of the firm. Their experiences with bonus systems were optimistic, and other scholars have reached the same conclusion (Juplev, Konkov, & Kisner, 1998; Puffer, 1997; Puffer and Shekshina, 1994). Merchant Jr studied the role and significance of Career Development Programs in developing and retaining employees. Career development deals with the primary nature of the relationship of individuals to their work and employees to their organizations. The critical components are counseling and training. This will allow employees to accomplish their career needs, and organizations will benefit by retaining a greater number of their proficient and qualified employees. (Fey, et al., 1999) studied the relationship between human resource management (hrm) and the performance of 101 foreign-owned subsidiaries in Russia. The results revealed that investments in hrm practices can significantly help a firm perform better. Moreover, different hrm practices for managerial and non-managerial employees are found to be appreciably related with firm performance. Employee development, including employment security, is likely to increase employee?s levels of organizational commitment which in return lowers the level of turnover.

Theoretical Framework
The objective of the study is to explore the major reasons that lead to the employee turnover in banking sector. An analysis and review of the relevant literature on the subject shows that employee?s turnover is influenced by a number of factors and the following six are more significant:
1. Realistic Job Information
2. Job Analysis
3. Career Development
4. Work Family Balance
5. Supervisor Support
6. Compensation

Independent Variables Dependant Variable
H1: Human resource management practices are negatively correlated with employee?s turnover
A present research was carried out on banking sector of Pakistan to find out what are the main factors that govern the problem of turnover. For this reason different private and public sector banks were selected.
Data Collection Instrument
Quantitative method of data collection was used.
Quantitative method
The main instrument used in this method is questionnaires. In preparing questionnaires Lickert Scale was used. The questionnaire consists of 65 questions. To test realistic job information, four questions were asked in the questionnaire. Six questions were asked to test job analysis, three questions to test work family balance, eight questions to test career development, nineteen questions to test compensation six questions to test supervisor support, thirteen questions to test employee loyalty and six questions to test turnover. Questions about the personal details cover age, experience, gender and education. Researcher believes that the above mentioned factors may affect the outcome of the research. Questioner is based on the research of Abeysekera (2007). These questionnaires were personally handed over to the respective persons.
The samples size was 120 respondents from different public and private banks.
Sampling Procedure
Sampling procedure was simple random sampling. In simple random sampling, every element in the population has a known and equal chance of being selected as a subject.

The Impact of Human Resource Management Practices on Employees Turnover in Banking Sector of Pakistan 9 of 10 on the basis of 4015 Review.