Mabalacat City College

Rizal St., Dolores, Mabalacat City, Pampanga

Institute of Business Education

EMPLOYEE TURNOVER: AS EVIDENCE IN BUSINESS PROCESS

OUTSOURCING (BPO) INDUSTRY IN MABALACAT CITY.

A Business Research Presented to the

Faculty of Institute of Business Education,
Mabalacat City College,
Mabalacat City, Pampanga

By:

Manapul, Ralph Michael R.

Antonio, Mary May
Alejan, Rocheiv

FIRST SEMESTER – A.Y 2019-2020

 INTRODUCTION
Over the past decade, business process outsourcing (BPO) industry have successfully contributed to

global economic growth (Bangko Sentral ng Pilipinas, 2013). Just like the high-profile economic area of

Bonifacio Global City (BGC) in Taguig City, Clark now labeled as Clark Global City (CGC) in Clark

Freeport Zone, Mabalacat City, it’s because of the Business Process Outsourcing (BPO) industry

contribution to the economic growth of Clark Freeport Zone that brings a lot of opportunity not just to the

Kapampangan but also to the people nearby provinces.

However, in today’s business, retention of valuable employee is one of the most fault-finding issues

facing employers. Retaining employees is a critical and ongoing effort. Employees leave the company

and or the country to look for good opportunities for them to have a better living and stable career. The

competitors in the industry are likely to attract and snatch the talent already nurtured in the company over

a period of time.

According to Maxwell (2010), a key problem to employees’ turnover is that the organization loses the

most experienced and skilled staff that the organization had invested heavily in training on various

organization job task functions. This therefore means that, the organization must incur huge costs in terms

of time and finance to train the newly recruited staff in order to make them effectively adapt to

organization working environment and demonstrate the required skills and experience.

Employee turnover, which is the main point of this study, is one of those human resource management

challenges that affect the productivity and efficiency of the organization. High turnover may be harmful

to a company's performance since skilled workers are leaving and the worker population contains a high

percentage of learner workers in that organization and it can be a symptom in a major issue of the

business.
Significance of the Study

The study is attempted to identify the cause of employee turnover in business process outsourcing (BPO)

Industry in Clark, Mabalacat City, Pampanga and the related problems associated with it, so that it helps

the organization to be aware of the state of turnover. Besides, the information which is gathered and

analyzed in the study helps the organizations to understand the root cause of employee turnover.

Moreover, the study can be used as a reference that can help the following;

Business Process Outsourcing (BPO) Companies – Researchers believe that this study can support

the Business Process Outsourcing (BPO) company in understanding the level of employee turnover which

can affect the progress of their resources management, core competencies and overall organization’s

effectiveness and efficiency.

BPO agent – Researchers believes that this study can be able to help workers who are working in a

business process outsourcing (BPO) company to understand the effect of employee turnover.

Researchers – This study will serve as guides for other writers who will conduct a similar study on

employee turnover as well as the study will also give them ideas and knowledge that can be used for

furthermore study regarding employee turnover.

Review of related literature

 Review of related literature on employee turnover are based from the views of various articles and

previous research done in the field of employee turnover were discussed to provide a background for the

research preparation and serve as basis for the formulation of a conceptual framework, which was tested

in the field by an analysis. It includes definition of employee turnover and causes of employee turnover

which consists of job satisfaction, organizational commitment and organizational change.

Employee Turnover

Clifford (2012), briefly states that turnover is any departure beyond organizational boundaries. This

indicate that the separation of employee from the employer by any means.

Deepa and Stella (2012), define employee turnover as, “Employee turnover is a ratio comparison of the

number of employees a company must replace in a given time period to the average number of total

employees”. According to this definition employee turnover means that the assessment of the number of

workers an organization should substitute during a given time period to the existing number of workers in

an organization.

In line with Kuria and Ondigi (2012), employee turnover is a gradual process. This indicates that an

employee starts by an assessment of the on hand job and the atmosphere in the work is being performed.

It is believed that work atmosphere plays an essential role on an employee’s decision to carry on working

in an organization or to stop. Job dissatisfaction follows in deciding to stop working in an organization.

On the other hand, the employee may assess the value of searching for the new job. The search for an

alternative job takes place and employee evaluates all the jobs that are available for him or her. Judgment

is further made with the on hand job and the most option jobs that are searched and final decision is arrive

at by either to continue working on the existing job or separating from the existing work as the final step.

Employees who are dissatisfied with the existing job are may take the decision to separate from that

organization which is not satisfied employees.

Job satisfaction

Singhai (2016) opined job satisfaction as the evaluation of person’s job and his company as contributing

suitably to the attainment of one’s personal objectives. The job satisfaction and dissatisfaction depend on

the nature of job and also on the expectation from their job. Therefore, it is a function of the intended and

actual performance and the perceived discrepancy. The concept of job satisfaction can be defined as the

difference between the quantum of rewards received by employees and the amount, they believe they

should receive.

Organizational Commitment

Bateman and Strasser defined commitment as “multidimensional in nature, involving an employee’s

loyalty to the organization, willingness to exert effort on behalf of the organization, degree of goal and

value congruency with the organization, and desire to maintain membership”. Adekola, (2012) defined

commitments as being a positive evaluation of the organization and the organizations goals. In addition,

Organizational commitment is defined as the strength of an individual’s recognition and participation in a

particular organization, and can be categorized by a firm belief and acceptance of organizational

principles, values and goals, and a willingness to do so on behalf of the organization, and a strong desire

to maintain membership and continue to work for the organization (Mowday et al., 2013).

Organizational Change

The concept of the organizational change comes from the nature and environment of the organizations.

Change basically means series of events which supports the process of development in organizations.

(Kassim, Tahajuddin, Shahzad, Isa, & Mat, 2010). Organizational change generally means rightsizing,

new development and change in technologies, rescheduling operations and major partnerships.

(McNamara, 2011). organizational change includes Mission changes, Strategicchanges, Operational

changes (including structural change), Technological changes, Changing the attitudes and behaviors of
personnel‟s,Counter resistance from different employees of companies and align them to strategic

directions of the organization. Downsizing, mergers, innovations and restructuring of the organizations

usually decrease employee‟s performance. In additions to that, task, quantity and quality, changing

location and time constraints radically affect the work life of employees. (Tavakolia, 2010).

Statement of the Problem

Employee turnover has become a serious management problem because it brings financial and moral

impact on the organization scarce resources. Today, Business Process Outsourcing (BPO) industries are

finding difficult to retain well performing, well experienced, and soundly trained employees as a result of

turnover. Employee turnover has become a problem for Business Process Outsourcing (BPO) since well

experienced and well qualified experts leave the position they held in the offices. The study focused on

answering the following research questions.

1. How may the demographic profile be described in terms of:

1.1 age

1.2 sex

1.3 monthly income

2. How may the employee turnover variables be described in terms of:

2.1 job satisfaction

2.2 organizational change

2.3 organizational commitment

3. Is there any significant difference between the age and the rating of the employee turnover

variables?

4. Is there any significant difference between the sex and the rating of the employee turnover

variables?

5. Is there any significant difference between the monthly income and the rating of the employee

turnover variables?
 6. Is there a significant relationship between job satisfaction and organizational commitment?

7. Is there a significant relationship between organizational commitment and organizational change?

8. Is there a significant relationship between organizational change and job satisfaction?

Conceptual Framework

Figure 1 Conceptual Framework

Job Satisfaction - or employee satisfaction is a measure of workers' contentedness with their job,
whether or not they like the job or individual aspects or facets of jobs, such as nature of work or
supervision.[1] Job satisfaction can be measured in cognitive (evaluative), affective (or
emotional), and behavioral components.[2] Researchers have also noted that job satisfaction
measures vary in the extent to which they measure feelings about the job (affective job
satisfaction).[3] or cognitions about the job (cognitive job satisfaction).[4]
https://en.wikipedia.org/wiki/Job_satisfaction

Organizational Commitment - is an individual's psychological attachment to the organization.

The basis behind many of these studies was to find ways to improve how workers feel about
their jobs so that these workers would become more committed to their organizations.
Organizational commitment predicts work variables such as turnover, organizational citizenship
behavior, and job performance. Some of the factors such as role stress, empowerment, job
insecurity and employability, and distribution of leadership have been shown to be connected to
a worker's sense of organizational commitment.
https://en.wikipedia.org/wiki/Organizational_commitment
Organizational Change - is both the process in which an organization changes its structure,
strategies, operational methods, technologies, or organizational culture to affect change within
the organization and the effects of these changes on the organization. Organizational change can
be continuous or occur for distinct periods of time.
https://study.com/academy/lesson/what-is-organizational-change-theory-example-quiz.html

Hypothesis
Hyphothesis 6: Job satisfaction is positively related to organizational commitment
According to Azman ISMAIL job satisfaction is positively associate with organizational
commitment in the studied organization. Azman identified that the level of intrinsic satisfaction,
extrinsic satisfaction and organizational commitment are high. This situation posits that the
capability of administrator to provide sufficient intrinsic and extrinsic satisfaction may enhance
employee commitment to support organization goals and strategies.
Hypothesis 7: Organizational commitment positive impact to organizational change
Other researchers believe that motivating employee is very important for an organization
because motivated employee improve the organizational performance; always look for new way
of doing things, concentrate more on quality which is beneficial to the organization, are more
productive, are goal-directed and act as a purposive manner. Motivating employee is a factor for
commitment which can take the organizational change.
Hypothesis 8: Organizational change is positively related to job satisfaction.
Some studies shows that when organizational change are properly managed it has a good
outcome in job satisfaction, workers perceive the proposed of change and accept the change.
Workers benefit from properly managed change in variety of ways, for example, new technology
can also increase job satisfaction by reducing the workload.

METHODS

Research Design
To solve the turnover rates in the industry, to get the solution, identify and find what can increase in
employee turnover it can be job satisfaction, organizational commitment and organizational change.
The qualities of research design to discover what contributes to employee turnover through applying the
quantitative and qualitative design. Correlational study will be use to recognize the demographic feature
of the selected respondents and to fit out the degree of significance of the relationship of the variant
variables.

Participant
The participants of the study will be current and former employee of( BPO) company within the city,
under the age of 18 and above. The participants will be selected using the random sampling technique

Source of data
The primary source of data is survey questionnaire to identify and determine the demographic factor of
the respondents, to reveal the employee turnover variables such as job satisfaction, organizational
commitment, and organizational change.

Instrument
To reveal the necessary data information needed in the study, a survey questionnaire will utilize and
assess that consist in two parts. The first part deal with the demographic factors of the respondents such as
age, sex, and monthly income. The second part is specify the employee turnover variables through Likert
scale to measure the level of relationship of the variables.

Procedures
The proponent, through request letter and upon their approval. To conduct a survey with the instrument,
our survey will come to the different (BPO) company, it will be current and former employee, our
respondents are operational agents. The survey questionnaire will stretch to the respondents for them to
answer the questionnaire instrument. Then, the proponent will wait until the completion of the survey.

Data gathering
The researchers will be writing a formal letter to HR department to have the authority and or access. Once
it is approved, they will personally conduct an orientation regarding the purpose of the questionnaire and
as well the as the study, after orientation, will start floating questionnaire to its respondents, after
collecting all questionnaire, through applying the statistical tool, will be able to tabulate and tally the
survey information and would be the basis to understanding the root cause of the employee turnover in
business process outsourcing (BPO).

Data analysis
The Data gathered will classify and evaluate through the application of different statistical tool to
manifest the demographic factors and employment turnover variables. This tools will use to analyze in
determine the respondents profile.
Pearson correlation coefficient – is a statistics test to identify the relationship between two continuous
variables, to measure the strength association between variables of interest.

T-TEST – this is a hypothesis testing tools that will be used to measure the level of the significance of
profile with two construct the demographic profile and the rating of the employment turnover variables

Frequency distribution percentage – this tool use to conclude the level of significance identify the
demographic characteristics of the respondents in term of age, sex, monthly income, educational
attainment, years of employment.