employee turnover on hbl

ALLAMA IQBAL OPEN

UNIVERSITY

Course Human Resource ManagementCode (8502)Semester Autumn, 2014Level MBA Marketing (3½ Years)Tutor Sir Khawaja ImranName waQas ilYasRoll # BA 582702

Assignment # 02

Topic = Employee Turnover

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Submitted to: Sir Khawaja Imran Submitted by: waQas ilYas(BA582702)

ACKNOWLEDGEMENT

All gratitude and thanks to almighty “ALLAH” the

gracious, the most merciful and beneficent who gave me

courage to undertake and complete this task. I am very

much obliged to my ever caring and loving parents whose

prayers have enabled to reach this stage.

I am grateful to almighty ALLAH who made me able to

complete the work presented in this report. It is due to

HIS unending mercy that this work moved towards

success.

I am highly indebted to my course instructor for providing

me an opportunity to learn about the “which is vital

ingredient” of MBA program. I am very grateful to my

teacher (Sir Khawaja Imran) for providing me guideline

for the completion of this report.

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I feel great pride and pleasure on the accomplishment of this report.

ABSTRACT

This report is the Practical part of the most vital practice

of our MBA-Marketing program. The sole objective of my

activity is to familiarize with the practical manipulation of

business organization. This report has been written to

know how big organizations like Habib Bank Limited

manage their teams to achieve their common goals. In the first phase of the report there is the general introduction about the company and then different terms have been explained, then the mission, values, different services and different strategies of the organization have been explained. In the next part, SWOT analysis of the firm have been done by the help of which it is identified that what are the strong areas of the company and where it lacks so that it can improve, and then in the end most important my experience while visiting in the HBL.

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DEDICATION This report is dedicated to the greatest man in the world

that shows us the right path. Who is the great patron of

the mankind that is Holy Prophet Hazrat Muhammad

(PBUH).

I would also like to dedicate this small effort of extract to

my Parents and Teachers. They have always been a

shining star to look upon, to give light and to show me

the directions whenever I am lost. May Allah give them

more strength and long life to guide me forever. Ameen!

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Table of Contents

Introduction of Topic 06Practical Review of Company 13Vision Statement 15Mission Statement 15Application of Topic 16SWOT Analysis 20 Conclusion 21Recommendations 21References 22

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Introduction of Topic:

Employee TurnoverEmployee turnover is a measure of how many employees leave an organization and are replaced each year. A turnover rate of 25 percent would mean that 25 percent of employees who were working at the start of the year had left the company by the end of the year. Some employee turnover is inevitable in any organization, but a high turnover rate can cost your business money and lead to a dissatisfied and unproductive workforce.

High staff turnover costs your company money in terms of lost production and the costs to recruit new employees. Excessive turnover metrics can vary from industry to industry, but 20 percent employee attrition is considered high turnover, according to Judy Capko, writing on the Academy of American Family Physicians

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website. When you understand what causes high turnover rates, you can develop policies that will reverse the trend and maintain productive staffing levels.

Industry Variations

Turnover can vary greatly from industry to industry. For example, turnover in the fast-food industry can be as high as 50 to 75 percent, and fast-food restaurants may build high turnover into their cost calculations. The U.S. Bureau of Labor Statistics reports that average yearly turnover in all industries is close to 32 percent. Public sector organizations are also affected by turnover. For example, a study by the National Commission on Teaching and America's Future found that the national teacher turnover rate, as of 2008, was almost 17 percent. High teacher turnover causes schools to spend scarce resources on finding and training new teachers and can reduce the effectiveness of the school.

Important sub topics

Important sub topics are:

Factors Affecting Turnover

High turnover tends to occur in jobs where employees view themselves as undervalued. Low pay is one factor, but turnover also increases when employees feel they are not treated with respect and where there is a lack of teamwork, or where management is viewed as arbitrary

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and overly demanding. A lack of flexible work scheduling can also cause employees with families, especially women, to leave a job. Turnover can also increase when there is a change to the corporate structure, such as a merger or a major organizational restructuring. Jobs where there are high levels of stress or injury, such as police officer, child-care worker and construction worker, may also have higher level of turnover.

Costs of Turnover

Costs associated with employee turnover include covering the vacancy, advertising the position and training new hires. The loss of experienced employees can also lead to a "brain drain," which can make your company less competitive. In addition to these obvious costs, there are hidden costs of employee turnover. These include stress on existing staff who have to cover the position, lower productivity and reduced customer service. In offices with high employee turnover, staff morale may be low, as employees view the business as a career dead end or a depressing place to work, and this can also affect productivity.

R educing Employee Turnover

If your business has a high rate of employee turnover, consult staff to find out what they makes them unhappy. Train management to deal appropriately with staff grievances and discipline. Consider incentive programs, such as productivity bonuses or offering employee stock

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options. Providing more flexible work hours and conditions may also prevent staff, particularly those with young children, from leaving.

Advancement

Employees need to feel challenged and have career goals to work toward in order to feel motivated. When your small business is unable to provide career advancement to your staff, you may start to experience high levels of turnover.

Advancement can come in the form of expanded responsibility that an employee can use to improve her resume. For example, creating teams to handle special company projects is an opportunity to allow some employees to be team leaders, while others get the chance to work on something that is different than their usual job duties.

Communication

To retain employees, company management needs to reach out and communicate with the staff. Field input and suggestions from staff members and implement the ideas that work best for the company. Allow employees to affect the work environment and give employees a chance to have a hand in determining the company's success. Alienating employees with closed-door management policies and ignoring employee input will lead to high turnover.

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Competency

When employees are consistently assigned work duties that they do not feel competent enough to complete, it can lead to employee attrition, according to Capko. Managers need to regularly evaluate employee skill levels and assign work that is in line with the employee's qualification. If management would like to add to an employee's job duties, the employee needs the necessary training before job duties can be assigned. Consistently putting employees in a position to fail by not paying attention to skill sets results in a frustrated staff.

Compensation

Analyse your current pay structure to make sure it is competitive in your industry. If you are experiencing high turnover, and exit interview results indicate that compensation is a problem, you may find that your pay structure is not making your company a competitive employer.

Create a base pay structure that entices employees to stay, and use performance bonus programs to motivate employees to be more productive. Performance bonuses also help employees to feel that their hard work was noticed by the company and they can help improve morale.

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Comparison

Although different types of turnover exist, the general definition is that turnover occurs when the employment relationship ends. Turnover and attrition -- terms that are sometimes used interchangeably or together when describing the departure of an employee -- are different. Attrition generally refers to the end of the employment relationship due to retirement, job elimination or employee death, and is distinguishable from turnover because when attrition occurs, the position is not filled with a new employee.

Involuntary Turnover

Employee termination for poor job performance, absenteeism or violation of workplace policies is called involuntary turnover -- also referred to as termination, firing or discharge. It's involuntary because it wasn't the employee's decision to leave the company. Layoffs could also be considered involuntary terminations, though layoff procedures usually are handled differently from termination. Some layoffs have certain federal and state provisions that aren't afforded to employees who are fired because of performance or policy violations.

Voluntary Turnover

When an employee leaves the company of her own volition, it's called voluntary termination. Employees give a number of reasons for leaving their jobs. They may be accepting employment with another company, relocating

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to a new area or dealing with a personal matter that makes it impossible to work. When an employee voluntarily terminates the employment relationship, she generally gives the employer verbal or written notice of intent to resign from her job.

Desirable and Undesirable Turnover

Turnover often has a negative connotation, yet turnover isn't always a negative event. For example, desirable turnover occurs an employee whose performance falls below the company's expectations is replaced by someone whose performance meets or exceeds expectations. It's desirable because poor job performance, absenteeism and tardiness are costly -- replacing a poor performer with an employee who does his job can improve the company's profitability. Desirable turnover also occurs when replacing employees infuses new talent and skills, which can give an organization a competitive advantage. Conversely, undesirable turnover means the company is losing employees whose performance, skills and qualifications are valuable resources.

Turnover Calculations

Basic turnover calculations are relatively simple. If your company employs 100 employees and 15 employees are fired or quit, your turnover is 15 percent. Most organizations use more detailed calculations to determine what underlies turnover. Assume five employees leave in

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January, one employee leaves in May and four employees leave in November. Your annual turnover rate is 10 percent, and your average monthly turnover is 8.3 percent. Employee turnover calculations may also factor in different types of turnover, such as involuntary and voluntary, or even more specific reasons why employees leave, such as poor performance, absenteeism or employees accepting new jobs elsewhere. Turnover calculations are helpful to determine hiring costs, training requirements or estimating staff time devoted to recruitment activities.

Case Study

Habib Bank Limited Pakistan

Introduction:

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HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL has grown its branch network and become the largest private sector bank with over 1,600 branches and 1,700 ATMs globally and a customer base exceeding eight million relationships.

The Government of Pakistan privatized HBL in 2004 through which AKFED acquired 51% of the Bank's shareholding and management control. HBL is majority owned (51%) by the Aga Khan Fund for Economic Development, 42.5% of the shareholding is retained by the Government of Pakistan (GOP), whilst 7.5% is owned by the general public i.e. over 170,000 shareholders following the public listing that took place in July 2007.

With a global presence in 29 countries, HBL is also the largest domestic multinational. The Bank is expanding its presence in principal international markets including the UK, UAE, South and Central Asia, Africa and the Far East.

Key areas of operations encompass product offerings and services in Retail and Consumer Banking. HBL has the largest Corporate Banking portfolio in the country with an active Investment Banking arm. SME and Agriculture lending programs and banking services are offered in urban and rural centers.

HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate

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http://www.akdn.org/akfed

the bank’s 25th Anniversary.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers. International operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

On December 29, 2003 Pakistan's Privatization Commission announced that the Government of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). On February 26, 2004, management control was handed over to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan Nominees.

Vision StatementEnabling people to advance with confidence and success.

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Mission Statement

To make our investor(s) prosper, our staff excel and toCreate value for our stakeholders.

Review of Theoretical and Practical Situation

Involuntary Turnover is Necessary to Maintain the Image of HBL Brand.

HBL Always Busy into Analyzing and Preparing the HR Policy.

HBL Always look into Tradeoff between Company and Employee benefits.

The Main purpose of HBL is to provide best Perks and Benefits to the Employee on Reasonable cost, as the Employee work for the Betterment of HBL with Creative and Fresh mind.

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I Take a Survey at Habib Bank Limited Bilal Park Br. 1512 Lahore. I Met the Branch Manager Mr. Sarfaraz Nawaz Malik. He Fully Cooperate With me to complete my Report. I Take Interview the Manager and Employees on the Topic of “Employee Turnover” Following Are the Few Important Question Listed Here:

Survey of HBL Branch Bilal park Lahoresome important Question are mention

43%57%

Gender

MaleFemale

29%

29%14%

14%14%

Age

18-2425-3435-4445-55Over 55

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14%

14%

57%

14%

Satisfied with Job

Extremely DisagreeDisagreeAgreeExtremely Agree

29%

57%

14%

Feel Freedom While Working

Disagree

Agree

Extremely Agree

43%

43%

14%

Factors most In-fluence your De-

cision to leave the Job

Low SalaryBad Work ConditionOthers

14%

14%

57%

14%

Satisfied with Salary Package

Extremely DisagreeNeutralAgreeExtremely Agree

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86%

14%

Boss Encourages your Work

AlwaysSometimes Yes 14%

14%

71%

HR Department Provide Career

Counseling on your Job Progression

Extremely DisagreeDisagreeAgree

57%29%

14%

Comparison to Reward or Facili-

ties, my work Load is….

EqualMoreExtremely Less

86%

14%

Overall, I am Happy with Organizational Culture and Work

Environment

AgreeExtremely Disagree

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At the end of Assignment the Questionnaire is attached.

Data collection methods

The Primary & Secondary data of this Assignment come from the:

Interviews of Personnel of HBL Different Websites Newspapers

SWOT Analysis:

STRENGTHS:

Professional and well trained staff. Wider space for healthy work. Stronger ambition. Higher Cooperative Workforce.

WEAKNESSES:

Difficult to maintain same environment in each branch.

Low job satisfaction. Loss of Cost When Hire New Employee.

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OPPORTUNITIES:

HBL HR Department Makes Back Up Systems when Employee Leaves an Organization.

Manager Makes Good Relation with Employee to Work Better.

Level up the Salary Slabs.

THREATS:

Offer Competitive Wages & Benefits. Leak the Information & Polices When Employee

Leaves.

Conclusion:HBL is clearly the first choice of every one who believe in qualitative approach of banking an environment of highly responsible people. Bank is enjoying a healthy market share and taste of good status in terms of its operative features and customer support. HBL is clearly the best bank operating in Pakistan. Personal loan is a distinguished feature of HBL experiencing a good reputation and reasonable mark up with respect to prevailing market mark up with assurance of satisfaction and support. HBL has more customers as compare to other banks, if they give proper attention to every customer then in few years it will be the leading bank of the country.

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Recommendations: The management should try to decrease job

insecurity among the employees. Training program should be started for internees and

newly appointed employees. There should be transport facility for the employees. The number of employees should be increased in

order to decrease the workload. The bank charges high service charges as compared

to the other banks, so these should be lowered down.

Surveys must be conducted regarding customer satisfaction level and all employees of this dept. should look forward to getting feedback whenever possible.

Adding of value added features that offer competitive advantage is also a means of avoiding customer dissatisfaction.

Quick response to customer queries is necessary to maintain a healthy relationship with the customer.

Proper training of customer handling should be given to employees. Training workshops and coaching clinics should be considered as an option that would provide adequate results.

Referenceswww.hblasset.comwww.hbl.com

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http://www.hbl.com/

http://www.hblasset.com/

WikipediaRelevant text book of AIOU Personal observationsDiscussion by HBL Branch ManagerTeacher discussion

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employee turnover on hbl

Education