International Journal of Research in Engineering, Science and Management 174

Volume-2, Issue-8, August-2019

A Study on Employee Attrition:

Abstract: Employees are the most valuable assets of an organization. He further states that this value is intangible and
organization. It is they who add value to the organization in terms cannot easily be replicated, therefore, the managers should
of quantity and quality as well. Therefore, it is indispensable to control attrition, Mobley (1977) suggests a measure to predict
maintain a permanent and promising workforce; which over the
attrition, he says that tenure of an employee is one of the best
years has become a tough task for employers and thereby
increased attrition in the organizations. This research paper is an measures that can be used to predict turnover. Firth et al (2007)
attempt to find out the causes of attrition from different try to find out the causes of attrition, he says that there is a range
dimensions. It undertakes the effect of the same on employer and of factors that lead to job-related stress, lack of commitment
employee both. Following this, some strange reasons for attrition towards the organization and job dissatisfaction which cause
have been discussed in this regard. The positive side of attrition employees to quit. Griffeth et al. (2000) conclude that pay and
has also been discussed upon. Role of leadership styles in
controlling attrition has been undertaken in the paper. Further,
pay-related variables have a significant effect on employee
the remedial measures have been discussed herein. turnover. Hom & Griffeth (1995) state that several
investigations in the past have revealed that organizational
Keywords: Attrition, employee, employer, leadership, commitment and job satisfaction are crucial factors that
management, productivity, retention, organization. influence turnover intention. Wanous (1992) focuses on new
employee attrition and says that new employees often leave the
1. Introduction organization because their expectations are not met which
In recent years, the employer and employee both have lost results in a violation of their psychological contract resulting in
belief in each other. The former feels that employee can leave a turnover. Abassi et al (2000) conclude that there are other
the organization anytime and the latter apprehends that he or factors like inefficient and poor recruitment practices, style of
she can be expelled anytime by the former one. Whosoever is management, lack of recognition, workplace conditions, and a
responsible, irrespective of this; loss of workforce is inevitable. lack of competitive compensation system that cause employees
This loss of workforce for any reason is called attrition. to quit the organization. Louis (1980) states that attrition takes
Irrespective of the kind of industry or the structure of the place because new employees compare their actual experience
organization, attrition is a common problem in every with their past work experiences. Past work experience plays a
organization which not only hampers production but also significant role in taking the decision to quit in case the new
results in heavy long-run costs and loss of goodwill to the worker‟s expectations are not met. Ongori (2007) focuses on
organization. Therefore, there arises a need to delve into this stress as a cause of attrition; he says that the good workers in an
multi-dimensional problem and come out with feasible organization may tend to leave when they start experiencing
solutions. signs of occupational stress. This turnover affects the
organization adversely in increasing the recruitment and
2. Literature survey selection costs of the organization.
Denver and McMahon (1992) define labour turnover as “the
movement of people into and out of employment within an 3. Kinds of attrition
organization” while Mobley (1982) defines turnover as A. Voluntary attrition
“voluntary cessation of membership in an organization by an Voluntary attrition takes place when the employee leaves the
individual who receives monetary compensation for organization by their own will. Pull factors like higher
participating in that organization”. Forbes (1971) states that emoluments elsewhere, better opportunities for growth and
labour turnover means separation from an organization and promotion etc. are responsible for this kind of attrition.
included promotion, transfer or any other internal movement
within the institution. Meaghan et al. (2002) draw attention to B. Involuntary attrition
controlling attrition; he states that the value of employees to an Involuntary attrition takes place when the employees leave
organization is a very crucial element in the success of the the organizations due to some negative forces or push factors
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Volume-2, Issue-8, August-2019
www.ijresm.com | ISSN (Online): 2581-5792

like faulty promotion policy, biased performance appraisal etc. E. External causes
C. Compulsory attrition These are the causes which are beyond the control of an
organization as they belong to the external environment. These
It takes place due to the rules and regulations of the
causes may be related to,
government and that of the organization as well. It includes
 better pay
attrition taking place due to attaining the age of retirement,
completion of tenure etc.  chances of promotion
 better perks and
D. Natural attrition  more fringe benefits in other organizations
It takes place due to the causes and factors that are beyond
F. Individual/Personal causes
the control of the individual and organization as well. These
factors may include end of life, insanity etc.  end of life
 marriage
4. Causes of attrition  pregnancy
 shift of family
A. Internal causes
 mental imbalance
These causes are pertaining to the internal environment of an
 over – sensitivity
organization. Therefore, they are controllable.
 wish to go abroad
1) Salary
 attrition of the group members
 Insufficient salary
 Self-employment
 Delay in payment
 Education
 No / delayed increment
 Wage compression
5. Some peculiar reasons
2) Promotion
 Biased promotion A. Attrition and Employee Stock Option Plan (ESOP)
 No / delayed promotion A peculiar paradox has been observed in case of ESOP as a
3) Transfer motivational tool and the attrition rate. Generally it is perceived
 Forceful transfer that ESOP, on one hand, generates funds for the organization
 Transfer to a placed employee is not willing to go and on the other hand, it may curb attrition rate as it increases
4) Workplace Infrastructure & amenities participation of employees in management, increase in their
 lack of hygiene financial resources and satiation of their esteem needs as well
 lack of basic facilities like water, canteen, etc. which will ultimately lead to their long- term commitment with
5) Task the organization.
 Monotony of task However, while considering an altogether different
 Task – labour mismatch perspective, ESOP may increase the rate of attrition as the
 Team issues earning from ESOP may be sufficient for the livelihood of the
 Lesser job autonomy employee or it may sometimes exceed his income leading to his
disinterest to continue the job.
B. Instability in leadership
B. Attrition and perception about growth opportunities
Leading to confusion related to directions and commands
which generate frustration among the workforce. 1) Employer’s perception and presumptions
Employers may have a perception that employees are already
C. Lack of Flexibility well aware of their growth and career opportunities in the
 Lack of flexibility in timing, choice of task etc. organization or they may perceive that the old staff will convey
 Introduction of new technology and employee’s the things to the new one. But actually the new workers may
incompetency/ unwillingness to learn and understand. not be aware of these things, further, they can be misguided and
misled by their colleagues.
D. Lack of job security
 Fear of being expelled/ retrenched/terminated C. Employee’s perception
 Faulty performance appraisal Employees may have a perception that
 Underestimation of performance  Employers may get annoyed if they are asked about
 Power distance & politics the career opportunities in the organization
 The communication gap between management and  Employers may take it negatively which may be
workforce detrimental to job security, increment and promotion
etc.
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Volume-2, Issue-8, August-2019
www.ijresm.com | ISSN (Online): 2581-5792

 If there are growth opportunities, employers will product line and product mix or they may become helpful in
themselves convey the same and their silence means starting new joint – ventures and working in collaboration.
there is no scope of growth in the organization. 4. The lesser negative impact of groupism: Sometimes the
existing groups may be rigid or the group members may be
6. Effects of attrition reluctant towards others, in such case attrition of a group
member may be positive for the organization.
A. Effect on employer/ Organization
5. Reduction in surplus staff: It will lead to a reduction in the
 Loss of productivity cost of maintaining the surplus employees ultimately
 Loss of quality leading to the total cost.
B. Increase in cost 6. Chances of bringing in creativity & innovation: New
workers may introduce a new style of working, they can
Attrition results in an increase in costs. These costs may be
have their own methods and they may think differently, all
related to the cost of the exit interview.
this will promote creativity and innovation in the
1) Cost of staffing
organization.
Cost of travelling allowance, refreshment, experts,
7. Creation of a healthy and competitive environment in the
placement companies.
organization: The new workforce may be more competitive,
2) Cost of Training
old employees may learn from them. They may get inspired
Cost of trainers, cost of training equipment and materials,
and compete with them.
cost of refreshment, cost of technology.
8. Measures to Control Attrition / Retention Strategies
3) Cost of administrative proceedings
Cost of issuing I – cards, access cards. Corporate Social Responsibility (CSR) towards employees:
4) Cost of signing bonus It comprises a wide range of intrinsic and extrinsic rewards
It is given to the works for joining the organization; it is also and motivation. It is concerned with a humanitarian aspect
a significant part of the cost. towards the employees of the organization. It is the first and
 Loss of consumers and decrease in brand loyalty foremost responsibility of an organization to take care of its
employees‟ physical and mental wellbeing. CSR towards
 Loss of goodwill
employees encompasses all monetary and non- monetary
 Loss of secrecy in case the key employees leave the
aspects. A monetary aspect includes reasonable
organization
remuneration, bonus, increment, HRA, post-retirement
 Loss of key – personnel
pension, etc. while the non- monetary aspect may include
 Lack of competitiveness the congenial environment, fair performance appraisal,
recreational activities, learning and development. Both these
7. Effect on employee aspects are equally important while considering control on
 Stress from a new job attrition.
 Monetary loss 9. Herzberg’s Two Factor Theory, CSR towards Employees &
 Effect on career Attrition: Hertzberg Two-factor theory describes two factors
 Effect on family life (Herzberg, Fredrick 1968).
 Loss of skill- if the gap between quitting from one A. Motivators
organization to other is long
These factors are related to the intrinsic aspect of the job
 Emotional loss, if the bonding with the staff of the
itself, such as recognition, achievement, personal growth etc.
previous organization was good
However, it is also possible that the employee gets a better B. Hygiene factors
environment and remuneration in the new organization and the These factors are related to the extrinsic aspect of the job
things can get positive for him. such as salary, fringe benefits, work conditions, status, job
Can Attrition Have Positive Effect On the Organization? security etc.
Attrition is not always negative; it may have some positive Hygiene factors are essentials, they do not show a direct
results also. Some of the positive results may include the contribution to productivity but their absence certainly leads to
following, a decrease in production.
1. Advantages of new knowledge: New employees bring new Motivators have a positive correlation with productivity;
knowledge; their knowledge and skill may open new their presence results in an increase in productivity and their
avenues for the organization. absence leads to a fall in the same. Thus both these factors
2. Advantage of new technology: It will decrease the cost, thus should be paid attention to boost the morale of the workers
the price of the final goods or service will be cheaper; further leading to lesser attrition as morale and attrition have an inverse
leading to an increase in demand and profits. relationship i.e. Higher the morale, lesser will be the attrition
3. Introduction of new ideas: New ideas may help in increasing and vice-versa.
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Volume-2, Issue-8, August-2019
www.ijresm.com | ISSN (Online): 2581-5792

Applying Emotional Intelligence: Emotional intelligence relations. All these factors will be helpful to control attrition.
refers to the ability and capacity to know and control own Flexibility: Flexibility is necessary for a greater degree of co-
emotions and that of others in such a manner that the energies ordination, ease and smoothness in the organizational working.
and potentials may be channelized in a positive direction and It is the demand of time as in the present context it has become
utilized to enhance productivity. To develop emotional very difficult to manage talent. Undue strictness and rigidity are
intelligence one has to develop empathy and farsightedness. no more considered the obvious right of the employer.
Following are some ways to apply emotional intelligence to Flexibility can be related to the following factors
control attrition  Time
 Being proactive  Choice of task
 Lessening communication gap between management  Transfer
and workers  Targets
 Devising and communicating career and growth  Leaves
opportunities  Methods
 Using intrinsic motivation  Place of work in the organization
 Understanding group dynamics  Number of breaks
 Conducting motivational sessions for the employees Conducting a stress interview- Exit interviews become
 Praising the employee publically but criticizing instrumental in assessing the level of satisfaction or
privately dissatisfaction of the employee. It should be well planned and
 Developing a rapport with the workers questions should be well-f framed. It should focus on the issues
Change in leadership style: Leadership can play a significant like,
role in controlling attrition. With the change in organizational  work environment
dynamics, the style of leadership should also change. One of the  Organizational culture
much-lauded styles is transformational leadership. Bass &  Peer group
Avolio (1993) state that transformational leadership comprises  Senior- subordinate relationship
of the four dimensions: idealized influence, inspirational  Performance appraisal
motivation, intellectual stimulation, and individual  Individual growth
consideration. Such leadership helps the employees in finding In this regard, the following factors should be taken care of
out their hidden talent and latent skills. They come to know
 Questions should be open-ended
about their strengths and the scope to enhance them. This acts
 Utmost confidentiality should be maintained
as an undercurrent in unleashing their energies with full faith in
 The process should not be lengthy
their capabilities resulting in a passion for work, greater
Other measures
connectivity with the organization and its goals and control on
the tendency of the workers to leave the organization.  Workers‟ participation in management
Holistic leadership inculcates a natural sensitivity and  Profit-sharing
empathy towards employees which will significantly increase  Gainsharing
the belongingness of employees towards the organization. Such  Fair performance appraisal
leadership will infuse an environment of care and sympathy in  Realistic goals
organizational relations and ease in working. This will further  Defining career path and demystifying career growth-
lead to a decrease in attrition. proper succession planning
Goleman (2001) states about six leadership styles; they are  Effective communication system
commanding, visionary, affiliative, democratic, pacesetting and
coaching leadership style. Out of these six, affiliative 8. Conclusion
leadership, according to Goleman, creates harmony in relations  Attrition is inevitable; it will always prevail; it can
and builds emotional bonds while democratic leadership only be minimized.
promotes employees participation in decision making. Both  Intrinsic factors are equally and sometimes more
these styles boost the relatedness, belongingness and cohesion important than extrinsic factors while controlling
in relations which is helpful in decreasing attrition. attrition.
Leaders should recognize, promote and praise hard work;  Effective leadership; to a great extent, may be helpful
employees should be given due credit and compliments. to control attrition.
Leaders should be open to discussions and have a welcoming
 Attrition does not always have a negative impact on
attitude towards the suggestions of the workers. First, they
the organization.
should understand and accept the value of employees and then
make the employees feel that they are valuable to the
organization; this will bring more openness, harmony, trust in
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Volume-2, Issue-8, August-2019
www.ijresm.com | ISSN (Online): 2581-5792

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and research implications for the next millennium", J. Manage. 26 (3):
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