Effect of Organizational Policies on Attrition Rates

The Information Technology ( IT ) sector in India holds the differentiation of progressing the state into the new-age economic system. The growing impulse attained by the overall economic system since the late ninetiess to a great extent can be owed to the IT sector, good supported by a liberalized policy government with decrease in telecommunication cost and import responsibilities on hardware and package. Perceptible is the transmutation since liberalisation – India today is the universe leader in information engineering and concern outsourcing. Correspondingly, the industry ‘s part to India ‘s GDP has grown significantly from 1.2 % in 1999-2000 to around 4.8 % in FY06, and has been estimated to traverse 5 % in FY07. The sector has been turning at an one-year rate of 28 % per annum since FY01.

Indian IT companies have globally established their high quality in footings of cost advantage, handiness of skilled work force and the quality of services. They have been heightening their planetary service bringing capabilities through a combination of organic and inorganic growing enterprises. Global giants like Microsoft, SAP, Oracle, and Lenovo have already established their confined centres in India. These companies recognize the advantage India offers and the fact that it is among the fastest turning IT markets in the Asia-Pacific part.

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The size of the Indian IT industry, harmonizing to NASSCOM, has been estimated to be around US $ 47.8 bn. The Indian IT industry can be loosely divided into two markets: domestic market and exports market. The exports market constitutes the largest section accounting for 75 % of the entire gross generated by the Indian package industry.

Beginning: D & A ; B Research

Some of the Top IT Companies are Accenture, TCS, Infosys, Mahindra Satyam, Wipro, HCL Technologies, IBM and Cognizant.

What are Organizational Policies?

Organizational Policies can be defined as:

“ A class or method of action selected, normally by an organisation, establishment, university, society, etc. , from among options to steer and find present and future determinations and places on affairs of public involvement or societal concern. It does non include internal policy associating toA organisation and disposal within the corporate organic structure, for which organisation and disposal is available. ”

Organizational policies are used to accomplish uniformity, economic sciences, public dealingss, benefits and other aims that many be unrelated to enrolling. There are assorted types of policies like Compensation policies, Employment position policies etc.

What is Attrition?

The growing of abrasion rate has been a major concern for the last twosome of decennaries. Abrasion is the separation of employees from an organisation, due to surrender, retirement etc. It may be defined as the loss of work force due to ineluctable fortunes.

Beginning: hypertext transfer protocol: //retention.naukrihub.com/attrition-rates-in-different-sectors.html

With the planetary fiscal meltdown it appears employees prefer to lodge to their current occupations every bit much as possible. In November 2008 BPO abrasion fell to 30 % . The abrasion rate in few taking companies is,

Infosys BPO 28 %

Wipro BPO 18 %

TCS BPO 21-22 %

Tesco HSC has seen a 6 % bead in abrasion

In 2007 the abrasion rate was about 50-55 % .

Rationale for taking this survey

The grounds why the abrasion is really large concern in different industries was studied by B. Lynn Ware, Ph.D. , and Bruce Fern which gave these factors as to why this is of import:

The Costss of Attrition Can Be Astonishing, But Often Unseen

The Reasons Employees Stay are Not the Same as Why They Leave

The Manager ‘s Role in Attrition is Paramount but Underplayed

Prevention is the Best Medicine

Retention Has an Often Unrecognized Impact on the Customer

Ill-conceived Thinking: “ Abrasion is Inevitable ”

World Class Retention Reflects A Multi-Factored Solution

Beginning: hypertext transfer protocol: //www.itsinc.net/retention-research.htm

Different research along with above suggests that cost of abrasion can be really high if non managed decently. Therefore happening out the causes of abrasion along with ways to retain employees may ensue is great sum of cost economy for an organisation.

Some of the common jobs as identified by Dr. Deepali Monga and Dr. Ruchi Srivastava are:

Different Rule For Different Employees

Discrimination On The Basis Of GenderA

Ineffective Role Of Leader

Poor Work Relationship

Higher EducationA

Poor CareerA Planning And DevelopmentA

Organizational/Work Stress

Work Overload

Lack Of Interest

Lack Of Opportunity To Use And Display Talent

Incompatibility With Job Requirement

Family Reasons

We can see that some of these factors are related to the Organizational Polices that a peculiar organisation has. We in this survey would seek to set up a relationship between Organization Polices and the rate of abrasion.

Research Objective

To happen if there is any relation between the Organizations Policies on the abrasion rate in an organisation in IT Industry.

Research Questions:

Does organisation polices a factor of abrasion?

Make alterations in organisation affect the abrasion rate?

How much importance is given to the organisation policies as a factor of abrasion?

We have formulated below two hypotheses to seek and accomplish our aim:

H0: There is no co relation between organisation constabularies and alterations in them with regard to the abrasion rates

H1: There is a co relation between organisation constabularies and alterations in them with regard to the abrasion rates

Scope

We are associating the Attrition Rates in an organisation with assorted factors which are listed below. These factors are a combination of factors related to Job Satisfaction and Organizational Commitment. Therefore, we are presuming there is a co relation between Job satisfaction and Organizational Commitment and Attrition rate, i.e. deficiency of Job satisfaction and Organizational Commitment leads to higher Attrition rate. There may be assorted other factors that we can impute to attrition but for the intent of this survey we are taking merely these factors.

To mensurate the consequence of Organizational Policies we will be developing a Questionnaire as a portion of this research. This is created by executing an exploratory research with a focal point group to find assorted of import variables which are so clubbed into assorted factors utilizing the SPSS tool.

To mensurate the Job Satisfaction and Commitment we are utilizing a Standard Questionnaire which divides it into assorted factors such as:

Peers and Supervisors

Pay Scale

Work/ Job

Career and Future Prospects

Organizational Committedness

Purpose to Discontinue

The Organizational Policies is considered as Independent variables whose consequence is calculated on The Job Satisfaction factors.

Methodology

Data aggregation is done utilizing the study technique. There 2 questionnaires:

Questionnaire A: This is a combination of standardised questionnaires which is used to mensurate the Job Satisfaction and Organizational Commitment. It is a combination of Job Diagnostic Survey by Hackman/Oldham and Organization Commitment Questionnaire by LW Porter. It contains a sum of 30 Questions

Questionnaire Bacillus:

To explicate the Questionnaire for Organizational Polices we conducted a focal point group exploratory research. We asked the undermentioned inquiry to find the different variables on which the Organizational Polices can be step:

What do you anticipate from the organisation ‘s policies?

The following tabular array summarizes the consequence from the exploratory research:

Variable

Count

Variable

Count

Recognition for work

28

Fiscal Stability

22

Relationship with supervisor

19

Appropriate compensation

25

Team atmosphere

15

Medical benefits

14

Employee benefit enterprises

3

Tax Benefits

8

Proper feedback system

19

Opportunity for growing

31

Opportunity to acquire pick of work

22

Work Life Balance

25

Transportation chances

10

Fair assessment system

18

Assortment of work

20

Promotion Opportunities

16

These variables as found above were used as a footing of mensurating Organizational Policies.

The features of the sample population were:

Presently working in any if the IT Companies

Entire Number of respondents: 103

Ages between 22-39 old ages

Experience in IT Industry between 0-8 old ages.

Consequences of Data Collection

Job Satisfaction and Organizational Commitment

As this is a standardised questionnaire we do non necessitate to make a factor analysis. However to look into whether the information is valid and dependable we did the followers trials.

KMO and Bartlett ‘s Trial

Kaiser-Meyer-Olkin Measure of Sampling Adequacy

0.910

As the above value is more than 0.50 we can state that we have equal sample size.

For dependability, we did a dependability trial on each of the factors

Factor ‘s Name

Alpha

Organizational Committedness

0.8767

Peers and Supervisors

0.5966

Pay Scale

0.7539

Work/ Job

0.8320

Career and Future Prospects

0.8720

Purpose to Discontinue

0.9198

As all values are either close to or more than 0.6 we can state that the information is dependable.

Organizational Policies

A Survey was conducted to acquire the values from different people presently working in IT Industry. These stairss were followed farther:

The dependability trial of the informations gave this consequence:

Cornbach ‘s Alpha

0.9124

The above value ensures that the informations being used is dependable.

Factor Analysis:

Factor Analysis was done to group the different variable to factors. For the factor analysis the below values were chosen:

Eigen value: 1

Factor Load: 0.6

Rotation: Varimax

The consequence of the factor analysis is summarized below:

KMO and Bartlett ‘s Trial

Kaiser-Meyer-Olkin Measure of Sampling Adequacy

0.847

As the above value is more than 0.50 we can state that we have equal sample size. By the factor analysis we find below 3 factors. These 3 factors are chosen as they are separately able to explicate more than 5 % discrepancy and cumulatively more than 60 % discrepancy. Besides the single dependability of each factor is more than 0.6.

Factor ‘s Name

Variables Included

% of discrepancies explained

Alpha

Compensation

Fiscal Stability, Appropriate Compensation, Medical Benefits, Tax Benefits, Transfer Opportunities

43.9

0.8651

Working Atmosphere

Relationship with Supervisor, Team Atmosphere

9.9

0.7786

Feedback & A ; Appraisal

Proper Feedback System, Fair Appraisal System, Employee Benefit Enterprises

8.088

0.743

Correlation

To happen if the Job Satisfaction and Commitment factors are important to the Organizational Policies, we find the bivariatre correlativity between them.

Organizational Committedness

Peers and Supervisors

Pay Scale

Work/ Job

Career and Future Prospects

Purpose to Discontinue

Organizational Policies

0.741

0.692

0.661

0.709

0.739

-0.690

The above values denote that there is good correlativity between the Organizational Polices and different factors of Organizational Commitment and Job Satisfaction.

Arrested development Analysis

The below shows the consequence of the arrested development analysis performed on each of the factors of Job Satisfaction and Commitment, which are dependent variables, and with factors of Organizational Policies, which are independent variables.

ANOVA tabular array: From this tabular array, the Significance degree is of importance and signifies the strength of relationship between independent variables and dependent variable. For relationship to be important, significance degree should be less than.05.

Adjusted R-square: This signifies the proportion of discrepancy in the dependant variable that can be explained by the fluctuation in independent variables, adjusted for add-on of immaterial forecasters.

Coefficients Table: From this tabular array, the beta values tell us about the relationship between the dependant variable and each forecaster. From the significance values, we get to cognize the important Independent factors explicating a peculiar Dependent factor.

Dependent Variable

Independent Variable

Adjusted R2

Anova Sig.

Beta Coefficient ‘s Sig.

Organizational Committedness

Compensation

0.421

0.000

0.000

Working Atmosphere

0.004

Feedback & A ; Appraisal

0.063

Therefore from the Anova tabular array we can deduce that Organizational Commitment has important relationship with Organizational Polices factors. Therefore Organizational Commitment can significantly foretell these factors.

As Adjusted R square has a value near 0.5, it says that Organizational Policies are able to significantly foretell the discrepancies in Organizational Commitment.

For the Beta Coefficient ‘s tabular array we can state that all the three Independent Factors are important in explicating Organizational Commitment.

Dependent Variable

Independent Variable

Adjusted R2

Anova Sig.

Beta Coefficient ‘s Sig.

Peers and Supervisors

Compensation

0.405

0.000

0.162

Working Atmosphere

0.000

Feedback & A ; Appraisal

0.036

Therefore from the Anova tabular array we can deduce that Peers and Supervisors have important relationship with Organizational Polices factors. Therefore Organizational Commitment can significantly foretell these factors.

As Adjusted R square has a value near 0.5, it says that Organizational Policies are able to significantly foretell the discrepancies in Peers and Supervisors.

For the Beta Coefficient ‘s tabular array we can state that merely Working Atmosphere and Feedback and Appraisal Independent Factors are important in explicating Peers and Supervisors.

Dependent Variable

Independent Variable

Adjusted R2

Anova Sig.

Beta Coefficient ‘s Sig.

Pay Scale

Compensation

0.411

0.000

0.000

Working Atmosphere

0.221

Feedback & A ; Appraisal

0.169

Therefore from the Anova tabular array we can deduce that Pay Scale have important relationship with Organizational Polices factors. Therefore Organizational Commitment can significantly foretell these factors.

As Adjusted R square has a value near 0.5, it says that Organizational Policies are able to significantly foretell the discrepancies in Pay Scale.

For the Beta Coefficient ‘s tabular array we can state that lone Compensation is important in explicating Pay Scale.

Dependent Variable

Independent Variable

Adjusted R2

Anova Sig.

Beta Coefficient ‘s Sig.

Work/ Job

Compensation

0.400

0.000

0.002

Working Atmosphere

0.000

Feedback & A ; Appraisal

0.345

Therefore from the Anova tabular array we can deduce that Work/Job have important relationship with Organizational Polices factors. Therefore Organizational Commitment can significantly foretell these factors.

As Adjusted R square has a value near 0.5, it says that Organizational Policies are able to significantly foretell the discrepancies in Work/Job.

For the Beta Coefficient ‘s tabular array we can state that lone Compensation and Working Atmosphere are important in explicating Work/Job.

Dependent Variable

Independent Variable

Adjusted R2

Anova Sig.

Beta Coefficient ‘s Sig.

Career and Future Prospects

Compensation

0.394

0.000

0.005

Working Atmosphere

0.000

Feedback & A ; Appraisal

0.026

Therefore from the Anova tabular array we can deduce that Career and Future Prospects have important relationship with Organizational Polices factors. Therefore Organizational Commitment can significantly foretell these factors.

As Adjusted R square has a value near 0.5, it says that Organizational Policies are able to significantly foretell the discrepancies in Career and Future Prospects.

For the Beta Coefficient ‘s tabular array we can state that all independent factors are important in explicating Career and Future Prospects.

Dependent Variable

Independent Variable

Adjusted R2

Anova Sig.

Beta Coefficient ‘s Sig.

Purpose to Discontinue

Compensation

0.356

0.000

0.001

Working Atmosphere

0.013

Feedback & A ; Appraisal

0.033

Therefore from the Anova tabular array we can deduce that Intent to Quit have important relationship with Organizational Polices factors. Therefore Organizational Commitment can significantly foretell these factors.

As Adjusted R square has a value near 0.5, it says that Organizational Policies are able to significantly foretell the discrepancies in Intent to Quit.

For the Beta Coefficient ‘s tabular array we can state that all independent factors are important in explicating Intent to Quit.

Decision

From the above consequences we can reject the void hypothesis that there is no correlativity between Organizational Polices and Job Satisfaction and Organizational Commitment which leads to abrasion.

Explanations, Deductions and Suggestions

From the primary research above we can state that there is a relationship between the different policies that the companies adopts and what is the degree of employee ‘s Satisfaction in the company.

We can see that employees consider the Compensation, which includes fiscal benefits, wage bundle and stableness as one of the most of import factors. The other of import factors include the on the job environment, feedback and assessment system, Future chances and work life balance.

Therefore by understanding the grounds behind the abrasion, an organisation can use assorted techniques by which they can guarantee that it is kept to their desired degree which leads to a enormous cost economy for the organisation in:

Training Costss

Enrolling Costss

Sign On Bonuss

Administrative & A ; Temporary Costss

Employee costs

Beginning: hypertext transfer protocol: //www.johncelloconsulting.com/attcalc.html

Different surveies have besides provided assorted keeping techniques which may assist in keeping of employees.

Peoples First Solutions

Beginning: hypertext transfer protocol: //www.peoplefirstsolutions.com/resources/reports/pfs_cost_of_attrition.pdf

Employee Surveys Can Help Reverse Attrition

Effective employee studies yield nonsubjective, quantitative informations and penetrations that empower companies to pull off by fact, as opposed to by intestine feeling, which is n’t ever rectify. Good studies normally prove to be valuable investings, particularly in visible radiation of the immense costs associated with abrasion.

Fostering a Culture of Management Concern- Companies

Supplying Relevant Training, And Early on On

Walking the Talk – Having a strong strategic vision and pass oning it to employees is non plenty to vouch high keeping. Behavior must be consistent with scheme.

Honoring Directors Besides On Peoples Skills

Strengthening the Management Team

Survey by B. Lynn Ware, Ph.D. , and Bruce Fern

Beginning: hypertext transfer protocol: //humanresources.about.com/lr/employee_retention

This survey founds these Retention Schemes:

The quality of the supervising

The ability of the employee to talk his or her head freely within the organisation

Endowment and accomplishment use

Measurement and answerability

Suggestions for future research

This research can farther be explained by presenting more factors in add-on to Job Satisfaction and Organizational Commitment which may take to more accurate consequences. Besides a larger assortment of sample could be covered for better apprehension of assorted factors.

Besides presently this survey merely uses a nonsubjective questionnaire. A Subjective Questionnaire may take to more other factors that may non hold been considered here.

Restriction of the Study

Some of the restrictions of the surveies are:

This survey merely considers Job Satisfaction and Organizational Commitment as factors which may ensue in abrasion. But there are several other factors which may take to attrition such as:

Organizational Culture

Family Issues

Higher Education

The sample size could be increased farther for more accurate consequences

Most of the respondents are in 1-3 old ages of experience. This survey may give different consequences if more experienced are considered.

As the recent downswing has shown, merely dissatisfaction from work does non take to abrasion. The occupation market should besides hold chances for a individual to go forth his/her occupation.

Appendix 1

Questionnaire Angstrom

Name: _______________________________________ Age: _______ Gender: __________

Name of the company: _______________________________________

Entire figure of old ages in this organisation: _________

Present/Last place: _______ Duration of the place: ________

Previous places held with the company: _________

Kindly use the following evaluation graduated table and respond to the statements given:

5 4 3 2 1

Strongly Agree Agree Not certain Disagree Strongly Disagree

I am willing to set in a great trade of attempt beyond that usually expected in order to assist this organisation be successful.

My thoughts and ideas are valued by the company and my foremans.

I feel my accomplishment and the work I do fit with each other.

I talk up this organisation to my friends as a great organisation to work for.

I feel really small trueness to this organisation.

I feel that people get in front chiefly on the virtues of their work.

I enjoy the work I do.

I would accept about any type of occupation assignment in order to maintain working for this organisation.

I find that my values and the organisation ‘s values are really similar.

I am satisfied with my apprehension of how my ends are linked to company ends.

I feel more committed to a calling with the company this twelvemonth than I did a twelvemonth ago.

Company listens to the jobs that I face.

I am satisfied with the compensation that I get.

My equals are ever helpful.

I could merely every bit good be working for a different organisation every bit long as the type of work was similar.

This organisation truly inspires the really best in me in the manner of occupation public presentation.

I am non satisfied with the work agenda.

I am non acquiring adequately paid for what I contribute to this organisation.

I am highly glad that I chose this organisation to work for, over others I was sing at the clip I joined.

I am optimistic about my hereafter success with the company.

Frequently, I find it hard to hold with this organisation ‘s policies on of import affairs associating to its employees.

I truly care about the destiny of this organisation.

I get good quality and ambitious work.

For me this is the best of all possible organisations for which to work.

Deciding to work for this organisation was a definite error on my portion.

The quality of supervising in non good in the organisation.

I feel that working for the company will take to the sort of future I want.

I often think of discontinuing my occupation.

I am be aftering to seek for a new occupation during the following 12 months.

If I have my ain manner, I will be working for this organisation one twelvemonth from now.

Questionnaire B

Rate your Organization on the below factors associating to Organizational Policies. Rate on a graduated table of 1-5 with 1 being Completely Unsatisfactory and 5 being Wholly Satisfactory

Recognition for work

Relationship with supervisor

Team atmosphere

Employee benefit enterprises

Opportunity to acquire pick of work

Transportation chances

Assortment of work

Work Life Balance

Proper feedback system

Fiscal Stability

Appropriate compensation

Medical benefits

Tax Benefits

Opportunity for growing

Promotion Opportunities

Fair assessment system

Appendix 2

This tabular array denotes which variables ( Questions ) are mensurating which factor for Questionnaire A

Factors

Variables

Reverse Coded

Organizational Committedness

1,4,5,8,9,15,16,19,21,22,24,25

5,15, 21, 25

Peers/Supervisory

2,6, 12, 14, 26

26

Wage

13, 18

18

Work

3, 7, 17, 23

17

Career/ Future Prospects

10, 11, 20, 27

Purpose to discontinue

28,29,30

30

Appendix 3:

The below shows the factor analysis for the Organizational Policies variables.

The below shows the end product from SPSS for the arrested development Analysis.

3.1: Organizational Commitment & A ; Organizational Policies

3.2: Peers and Supervisors & A ; Organizational Policies

3.3 Pay Scale & A ; Organizational Policies

3.4 Work/Job & A ; Organizational Policies

3.5 Career and Future Prospects & A ; Organizational Policies

3.6 Purpose to Quit & A ; Organizational Policies

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