ANALYSIS OF THE CAUSES, CONSEQUENCES AND MANAGEMENT OF EMPLOYEES’ TURNOVER IN THE COMMERCIAL BANK OF ETHIOPIA

Abstract

The ability of an organization in the process of management depends largely on its efficiency and effectiveness of utilizing its human resources. Human resource is the most fundamental and decisive asset. On the other hand, whatever ample material and financial resources it may have, the institution is lifeless unless it converted to some sort of outputs with the effort of people. This is due to the fact that human resources mobilize and organize other resources to realize organizational goals and objective. To create consistently high levels of retention, first it is necessary to understand why people are leaving or being terminated. This is especially true if the organization experienced high level of employee turnover, a situation that could cripple a company in coming years. The primary purpose of this research is to show the turnover, its consequence and management in the Commercial Bank of Ethiopia, which is one of the largest commercial bank in the banking industry of the country. The problem statement that initiated the researcher to conduct the study is the increase in turnover of skilled manpower through time (from 2005 to 2012). The major objective of the study is to find out the problems related with this turnover and to propose retention mechanisms. To attain the above mentioned objectives interviews will be conducted and questionnaire also be distributed to a total of 160 respondents in the selected process of Head Office organs, District Offices and Branches around Addis Ababa. One of the major importance of the study is that Management, especially those in the Human Resources Management Process and other concerned organs of the Bank will get the opportunity to revise or change the current system of the Human Resource Management of the bank; particularly on retention mechanisms of the employee. The study revealed that the employees are found to be satisfied in certain facets such as their current job, relationship with their coworker, with their working environment. Conversely, employees are dissatisfied with major determinant facets such as banks competitive pay system; the current salary and benefit; training opportunities.. Therefore, it has been recommended that training, job, promotion should be provided based on merit as per the procedure; CBE has to revise the current pay scheme by considering the external market. Finally, the bank has to work on retention mechanism which is highly depends on the extent to which the adequacy of extrinsic and intrinsic factors of motivation; since staff turnover is associated with job intrinsic and extrinsic dissatisfaction. so that employees can feel accomplished and proud of their work environment and feel happy to serve customers freely and do not even think to leave the bank.