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IMPACT OF LABOUR TURNOVER ON PERFORMANCE IN BANKING SECTOR IN NIGERIA

ABSTRACT

This examined the impact of labour turnover on performance in banking sector in Nigeria. Specifically, the study focused on some selected deposit money banks in three senatorial districts of Delta State, Nigeria. Questionnaire was the major instrument of data collection and was administered to employees of the selected deposit money banks across three senatorial districts in Delta State comprising of Delta North, South and Central. Performance measures of profitability, productivity, customer service and organizational achievement alongside four determinants of employee labour turnover of poor salary structure, retrenchment, excessive workload and job insecurity were utilized. The data obtained were analyzed via descriptive (simple percentage, mean and standard deviation) and inferential statistics (multiple regression) and findings indicated that employee labour turnover determinants of the study significantly affect the performance of the Nigerian banking subsector. More importantly, it was revealed that employee labour turnover determinants of retrenchment, poor salary structure and job insecurity negatively affect organizational performance of banks in Nigeria. On the basis of the findings, it was recommended among others that banks management and regulatory framework of the banking sub-sector in Nigeria should ensure that employee labour turnover determinants like poor salary structure, retrenchment and job insecurity affecting performance should be given considerable attention. As a matter of fact, there is need to urgently enact legislature aimed at curtailing the incessant retrenchment of employees of banks in such a way that they may not be easily retrenched. Also, legislature that guarantees employees of banks job security should be enacted as well as their salary structure. Besides, management should learn to consult employees to ensure they have a ‘voice’ via consultative bodies, regular appraisals, attitude survey and grievance system. This will provide dissatisfied employees with a number of mechanism to sort out problems before resigning.

CHAPTER ONE

INTRODUCTION

1.1   Background of the Study

The term Human Resource Management (HRM) and Human Resources (HR) has largely replaced the term “personnel management” as a description of the process involved in managing people in an organization with the ultimate aim of enhancing optimum level of productivity in acquaintance with the art of engaging the human resource element (labour) in an organization. According to Dwomoh and Korankye (2012), organizations seek to obtain the best and highest level of output from its labour force (employees) in order to enhance the overall performance. This view is supported by the assertion of Muhammad, Muhammad and Riaz (2013) that the higher the productivity levels of an organization’s labour force, the higher the organizational performance, ratings and propensity of continuity.

Akindele (2007) opines that among the resources of an organization which includes labour, financial, material and information, labour is the most fundamental,especially when nurtured, cared for and supported. Perhaps, this buttresses why most organizations irrespective of their size and scope, investasignificant proportion of resources to make the labour force efficient and effective for improved performance. Inspite of the fundamental role and huge investments committed tonurturingandsupporting the labour force of firms, organizations are still finding it difficult to retain employees, hence contributing to their underperformance (Justus, Murumba &  Edwin, 2012). Conceivably, this has made employee labour turnover a heated discuss in management literature (Long, Perumal & Ajagbe, 2012). Labour turnover is a ratio comparison of the number of employee a company must replace in a given time period to

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