International Conference on Management, Economics and Social Sciences (ICMESS'2011) Bangkok Dec., 2011
Relationship between Human Resource Management
Practices,
Non – Managerial Employee Intention to Turnover
in Garment Industry in
Sri Lanka
WWAN Sujeewa
sector per annum with the highest rate of 60 per cent being
recorded for factories in the western province.
Researchers (Kelegama and Epparachchi, 2001; Irving and
Meger, 1994; Sheridan, 1992; Campion, 1991; Heneman,
Schwab, Fossum and Dyer, 1999;) find that the employee
absenteeism and turnover affect the development of
organization productivity. In a broader sense, it relates to the
development of a country. A country’s ultimate goal is to get
the higher standard of living of the people in that country
(Opatha, 1996). These two indicators are heavily depending
on productivity. The HRM practice and absenteeism and
turnover are one of the major determinants of organization
productivity. It is very important to maintain a better HRM
practice for the better productivity and reduce employee
turnover in any organization (Patterson et al, 1996). Therefore,
organizations need to design effective HRM practices that
encourage the retention of high performing employees,
particularly among skilled employees. This is because there is
a global shortage of skilled employees and firms will need to
have competitive practices to retain them. Past research have
linked various HRM practices to employee turnover and
productivity, for example, realistic job previews, selection
procedures, socialization programs, promotion opportunities
and compensation practices were found to affect employee
turnover and productivity.
Thus, the theoretical literature clearly suggests that the
behavior of employees within firms has important implications
for organizational performance and that HRM practices can
affect individual employee performance through their
influence over employees’ skill and motivation and through
organizational structures that allow employees to improve how
their jobs are performed. If this is so, a firm’s HRM practices
should be related to employee performance. Therefore, in
anticipation, review of the empirical literature concentrates on
prior work examining the HRM practices on non-managerial
employee productivity and their turnover in relation to the
garment manufacturing industry in Sri Lanka. Hence the
problem statement addressed in the present study is:
Abstract- The objective of this research paper was to investigate
whether human resource management (HRM) practices are related to
the non - managerial employee intention to turnover. Study setting,
unit of analysis and time horizon was hypotheses testing, non-causal,
non contrived and individual respectively. The structured questioner
was administrated to cover stratified randomly selected sample of
1000 non – managerial employees, however, data was possible to be
collected from 826 non – managerial employees. The data analysis
included the univariate, bivariate and multivariate analysis. In order
to test the first five hypotheses the Pearson Product – moment
Correlation technique was applied. To test the sixth hypothesis,
multiple regression and F – test were applied. The results of the study
showed negative relationship between HRM Practices with employee
intention to turnover. Multivariate analysis revealed that combined
influence of HRM practices on intention to turnover on non –
managerial employees was significant. Findings of the study are that
a garment industry should retain the competent employees because
employees gain the competitive advantages in any organization.
Key words- Compensation, Career Development, Discipline
Management, Grievance Handling, Health and safety management,
Human Resource Management Practice, Intention to Turnover
I. INTRODUCTION
ROMOTION of exports and liberalization of exports
continued to be the key instruments in the open economic
policy in Sri Lanka. Textiles and garments continue to
maintain its position as the Sri Lanka’s largest single item of
exports since 1986. There is no doubt that the "person" as the
principal resource of labour incentive garment industry plays a
crucial role in any productivity improvement effect. Further,
this argument is supported by the facts that labour comprises
about 20 per cent of the cost price of a garment (Gerry, 1997).
Therefore, the way people are directed, motivated or utilized
will be decided upon whether the organization will be
prosperous and survive or ultimately fail. Hence, people are
the key element for competitive advantage (Luthan, 1995).
Absenteeism and turnover resulting from poor productivity
could be seen almost in each of past years. Kelagama and
Epaarachchi (2001) found that 55 per cent of average labour
turnover rate has recorded from Sri Lankan garment industry
P
WWAN Sujeewa is senior lecturer in Faculty of Management studies,
Rajarata University of Sri Lanka
Phone: +94 716838733; fax: +94 252266227; email:nasu@rjt.ac.lk
535
International Conference on Management, Economics and Social Sciences (ICMESS'2011) Bangkok Dec., 2011
job satisfaction which can lead to industrial problems,
increased absenteeism and increased staff turnover; loss of
reputation to the employee; loss of reputation as an employer
and service provider; lost working time of everyone involved
in dealing with a complaint; and the potential for legal action
and damages. Based on above argument, it is hypothesized
that;
Hypothesis 2: The degree to which the nonmanagerial employees accept the current grievance handling
practice will be negatively related to their intention to
turnover.
Discipline management practice refers to non –
managerial employees perceived degree to which current
administration of worker discipline has attributes that are fair
and constructive for managing work and behaviour of
workers. The objective of discipline practice is to protect the
established standards, policies, procedures and rules and
regulations from the employees in order to achieve the
objectives of organization. Therefore, discipline practice is the
group of activities related to set-up a disciplinary system, its
execution and maintenance that help the achievement of the
organizational objectives. Morris (1998) found that there is a
negative relationship between fair discipline management
practices with employee turnover. Torrington (1998) also
found that turnover is negatively associated with fair
discipline management practice. Based on the above
evidences, it is hypothesized that:
Hypothesis 3: The degree to which the current
discipline management practice is perceived fair and well
constructed by the non-managerial employees will be
negatively related to their intention to turnover.
Career development practice refers to non –
managerial employee’s perceived degree of systematic career
development practice that focuses on developing and
enriching the employees in the organization. According to
Minor (1988), career development is a general term used to
describe a number of activities aimed at enhancing both
individual and
organizational performance.
Career
development may be viewed as an individual responsibility, or
as an organizational practice, depending upon the focus of the
process. From the organization’s viewpoint, career
development can reduce cost due to employee turnover.
According to Armstrong (1999), dissatisfaction with career
prospects is a major cause of turnover. To a certain extent, this
has to be accepted. More and more people recognize that to
develop their careers they need to more on, and there is little
their employers can do about it, especially in today’s flatter
organizations where performance prospects are more limited.
According to a recent survey by the society of HRM,
dissatisfaction with potential career development was cited by
85 percent of respondents as the largest threat to employee
retention (Hein, 1998). Hence, it is hypothesized that;
Hypothesis 4: The quality of career development
practice perceived by the non-managerial employees will be
negatively related to their intention to turnover.
Health and safety practice refers to perceived quality
mental and physical health and safety environment provided
Do employee compensation, employee grievance
handling, employee discipline management; employee career
development and employee health and safety practices
contribute to non-managerial employee intention to turnover
significantly in garment industry in Sri Lanka?
II. RESEARCH FRAMEWORK
Intention to turnover refers to perceived as existing
employees voluntary leave on their organizations. In order for
firms to be competitive, they must retain their competent and
motivated employees. HRM is one important area that affects
employees’ intentions to leave, their levels of job satisfaction
and organizational commitment in the organizations practices
(Lee & Heard, 2000). Pitt and Ramaseshan (1995), Kelegama
and Epparachchi (2001), Irving and Meger (1994), Cotton and
Tuttle (1986), Sheridan (1992), Campion (1991), Heneman,
Schwab, Fossum and Dyer (1999), etc stressed that there is a
negative relationship between the fair and well constructed
HRM practices and employee intention to turnover.
Compensation practice refers to all the extrinsic rewards
employee receive in exchange for their salary, any incentives
or bonuses and any benefits. Trevor, Gerhart and Boudreau
(1997) found that salary growth had a pronounced effect on
turnover. Particularly, salary growth effects on turnover were
greatest for high performers, that is, high salary growth
significantly reduced turnover for high performing employees.
Similarly, Williams and Livingstone (1994) found that a
negative performance-turnover relationship was stronger in
organizations using performance contingent reward systems.
Individuals who were compensated more for their high levels
of performance were less likely to quit. Park, Ofori-dankwa
and Bishop (1994) also found that turnover is negatively
associated with levels of pay, particularly when pay was
determined by individual incentive programs. However,
employee turnover was positively associated with the presence
of group incentive programs. Hence, an individual’s level of
effort, the lower the levels of employee turnover determined
the higher the levels of pay etc. Based on the above evidences,
it is hypothesized that:
Hypothesis 1: The degree to which the non-managerial
employees perceive the current compensation practice, as right
will be negatively related to their intention to turnover.
Grievance handling practice refers to perceived
degree of current grievance handling practice being accepted
as fair and justice. Both employers and employees are
influenced by the filing, processing and outcome of grievances
(Heneman et al 1999). Gandz and Whitehead (1981) said that
high grievance levels are associated with a conflictual labour
relation climate. They bound that high grievance rates were
associated with conflictual rather than cooperative labour
relations. Ichiowski (1986) found that higher grievances were
associated with lower plant productivity. Employee workrelated concerns and grievances, which are not promptly and
effectively resolved, could lead to: lost productivity; lower
quality work, products and customer services; distraction from
corporate goals; loss of confidence and communication
between employees, managers and supervisors; low morale
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International Conference on Management, Economics and Social Sciences (ICMESS'2011) Bangkok Dec., 2011
by the organization. According to Opatha (2003), health is a
situation with non-existence of physical and psychological
problems, which hinder the human general and special tasks
and activities, and under employee safety the precautions
administered to avoid any potential hazard in working
environment. The protection of employee/s from the potential
hazards in the working environment is called employee safety.
The activities related to establish maintenances and growth for
the hygiene and safety of the employees is included in health
and safety administration. Poor psychological and
physiological conditions result from organizational stress and
a low quality of working life. These encompass
dissatisfaction, withdrawal, projection, forgetfulness, inner
confusion about roles and duties etc (Schuler and Jackson,
1996). Therefore, working condition in an organization is
perceived as an associated factor of turnover and productivity.
Based on the above evidences, it is hypothesized that;
variables. Hence, this study was analytical in nature or
purpose. The unit of analysis of this research is individual non
-executive employees in garment industry. The survey method
equipped with a hand delivered questioner enabled the
researcher to tap each unit of analysis in the sample.
Population of the study consisted all the non – managerial
employees in ten large-scale garment factories in the Western
Province of Sri Lanka and the survey was carried out among
the sample of 1000 non – managerial employees of those
garment factories.
IV. MEASURES
The independent and dependent variables in the research
model were measured through questionnaire with five point
Likert scales of strong disagree to strong agree. Weightages or
values of 1 to 5 were given to these responses taking the
direction of the question items (whether they were negative or
positive as far as systematic use of each function was
concerned) into account. The questionnaire were completed by
the respondents themselves approximately as they have
experienced. The variables of the study constitute interval
scales.
To measure the HRM practices 45 question items were
developed in relation to elements identified based on the
relevant literature.
Hypothesis 5: Higher the perceived quality of
employee health and safety practice by the non-managerial
employees lower their intention to turnover will be.
As there are five HRM practices considered for the
study, five hypotheses were formulated to test the relationship
between each of variables and the intention to turnover on non
– managerial employees in garment industry. Following
hypothesis tested the aggregate effect of the five HRM
practices on the intention to turnover.
Hypothesis 6: The degree to which current HRM
practices are perceived as fair and well constructed by the non
– managerial employees will be negatively related their
intention to turnover.
Relevant schematic diagram is shown in fig 1.
Systematic use of employee compensation, grievance
handling, discipline management, career development, and
health and safety management practices are labeled as the
independent variables and employee intention to turnover is
labeled as dependent variable. These independent variables are
assumed to have an influence on the dependent variable.
Independent Variable
V. VALIDITY AND RELIABILITY
Validity is the extent to which the research findings
accurately represent what is really happening in the situation.
“An effect or test is valid it demonstrates or measures what the
researcher thinks or claims it does” (Hussey et al, 1997).
Content validity of a measuring instrument is the extent to
which it provides adequate coverage of the topic under study
(cooper et al, 1995). In this research study the questionnaire
provided an adequate coverage by embodying an adequate
number of items (or questions) that represents variables of
interest, ensuring the content validity of the instrument. The
questionnaire adequately covers the topics that have been
defined as the relevant dimensions. Hypotheses were
formulated based on these variables and indicators or elements
were developed by operationlising the variables. Therefore,
the content validity of the questionnaire was protected by
embodying sufficient number of question items related to all
the variables of interest in this study.
The questionnaire of this study had to be tested to see
whether it produces similar results in repeated administrations.
To ensure the reliability of the questionnaire, using test-re-test
method tested it. In this method researcher used same
questionnaire in same group on two separate occasions.
Responses for the two occasions are correlated and the
correlation coefficient of the two sets of data is computed. The
correlation is known as the reliability coefficient.. As shown in
the TABLE I the coefficients of the test – retest of the
instruments indicate that each instrument has a high external
reliability.
Dependent Variable
Health and Safety Management Practice
Grievance Handling Practice
Discipline Management Practice
Intention to
Turnover
Career Development Practice
Compensation Practice
Fig 1: Schematic Diagram of the Theoretical Framework
III. STUDY DESIGN
This study establishes the relationship between independent
and dependent variables; therefore, this study was a
correlation rather than cause effect relationships among the
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International Conference on Management, Economics and Social Sciences (ICMESS'2011) Bangkok Dec., 2011
handling, discipline management, career development, and
health and safety management practices (independent
variables) were negatively correlated with employee intention
to turnover of non-managerial employees in the garment
industry in Sri Lanka. The last hypothesis, which postulates
was multiple correlation between the employee on intention to
turnover and the set of independent variables was tested with
the multiple regression analysis under multivariate analysis.
The relevant results of the multiple regressions are shown in
TABLE IV.
TABLE I
Reliability Analysis
Variables
Independent Variables
Compensation Practice
Grievance Handling Practice
Employee Discipline Practice
Career Development Practice
Health and safety Practice
Dependent Variable
Employee Intention to turnover
Alpha Value
0.9260
0.9047
0.8776
0.8548
0.9226
TABLE IV
Results of Multiple Regression Analysis
0.9211
Chronbach alphas were computed to test the inter item
consistency reliability of independent and dependent variables
and it deemed that a minimum value of 0.7000 would be
considered acceptable (Nunnally, 1978). The results of
Chronbach's alpha test are given in the table 02, which suggest
that the internal reliability of each instrument is satisfactory.
Alpha Value
0.9135
0.8621
0.7242
0.7242
0.9014
0.9104
VI. RESULTS
The bivariate analysis, Pearson’s Correlation between HRM
practices and intention to turnover of non – managerial
employees in the garment industry are shown in the following
table.
TABLE III
The Pearson’s Correlation between Independent Variables and Dependent
Variable
Compensation
Grievance Handling
Discipline Management
Career Development
Health and Safety
Intention to
Turnover
-0.145
-0.103
-0.052
-0.126
-0.130
0.481
0.333
Adj.
R2
0.327
Std: Error of
the Estimate
0.145
F
Value
5.002
Sig: F
0.000
VII. DISCUSSION
According to the results of Pearson’s Correlation analysis, it
was found that HRM practices were negatively and
significantly correlated with employee intention to turnover of
non – managerial employees in garment industry. Hence, there
are statistical evidences to support to accept the hypotheses
formulated for the study. This empirical finding confirms the
argument of Gerhart and Boudrean (1997) that the
compensation growth affects on intention to turnover.
Similarly finding is consistent with findings of Williams and
Livingstone (1999), Ofori – dankwa and Livingstone (1994).
The research finding confirms that the degree to which the
non-managerial employees perceive the current compensation
practice, as right will be negatively related to their intention to
turnover.
It was found that there was a negative relationship between
grievance employee turnovers. This finding confirms the
findings of Heneman et al (1999), Gandz and Whitehead
(1981) that the high grievance level was associated with a
conflictual labour relation climate and turnover. Hence, it was
confirmed that poor grievance handling practice leads to
higher the employee intention turnover.
There was negative relationship also found between
employee discipline management practices with employee
intention to turnover. This finding confirmed the findings of
Steel, Jennings, Mento and Hendria (1992) that the wellconstructed grievance handling will lead to lower the
employee intention to turnover.
Employee career development practice was found to be
negatively related to the employee intention to turnover in
garment industry. This empirical finding confirms the
The results of chronbach's alpha test are given in the table
03, which suggest that the internal reliability of each
instrument is satisfactory. All the alphas indicated strong
support for internal consistency reliability.
HRM Practice
R2
The result shows that the Multiple Regression Coefficient
(R) of the five HRM practices and intention to turnover was
0.481 and R square was 0.333. R square is significant at 0.05
as F value is 5.002 with an observed significant value of
0.000. It indicates that about 33 percent of the variance in the
intention to turnover has not been significantly explanted by
the five independent variables together. But, there is statically
evidence to accept the null hypothesis and alternative
hypothesis was rejected.
TABLE II
Chronbach's Alpha Coefficients
Variables
Independent Variables
Compensation Practice
Grievance Handling Practice
Employee Discipline Practice
Career Development Practice
Health and safety Practice
Dependent Variable
Employee Intention to leave
R
Significant
(1- tailed)
0.01
0.01
0.01
0.01
0.01
The results of the Pearson’s Product Moment Correlation
that was used to test the null hypotheses for the five
hypotheses are shown in TABLE III. As a 99 percent
confident level is desired, the level of significance (∝) is 0.01.
One tailed test was used. According to the Pearson’s
Correlation Coefficients of employee compensation, grievance
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International Conference on Management, Economics and Social Sciences (ICMESS'2011) Bangkok Dec., 2011
[10]
argument of Hein (1998) that the dissatisfaction with potential
career development was the largest threat to employee
retention. Also this is matched with the findings of Gerhardt
and Wright (1994), which the employee career developments
practice have been found to affect employee intention to
turnover.
A significant negative relationship was found between
employee health and safety practice with employee intention
to turnover. This study found empirical evidence to support
the hypothesis. This finding is matched with the finding of
Schuler and Jackson (1996) that the health and safety practice
is important to lower the intention to turnover.
From the multivariate analysis, it was found that
compensation, grievance handling, discipline management,
career development, and health and safety management
practices significantly and jointly explain the variance of
intention to turnover on non – managerial employee in the
garment industry in Sri Lanka. It indicates that these five
independent variables give a moderate impact of the employee
intention to turnover. The implication of the finding is that it is
important for an organization to consider these HRM practices
in order to lower the intention to turnover in garment industry
in Sri Lanka.
The researcher believes in that the important independent
variables that may account for the unexplained variations in
the perceived intention to turnover may be level of
technology, product style, training of work force, motivation
level of work force, production scale, labour relations,
awareness of optimal productivity level, relationship with the
boss, poor supervision, poor planning, inadequate tools and
equipment, demographic factors, organizational commitment,
industrial union coverage other HRM practices and so on.
Further research studies are suggested to carry out to find out
the effects of these factors on employee productivity and
intention to turnover of non – managerial employees in
garment industry in Sri Lanka.
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