High employee turnover rate in Malaysia’s retail industry has become a major issue that needs to be addressed. This study determines the levels of job satisfaction, organizational commitment, and turnover intention of employees in a retail company in Malaysia. The relationships between job satisfaction and organizational commitment on turnover intention are also investigated. A questionnaire was developed using Job Descriptive Index, Organizational Commitment Questionnaire, and Lee and Mowday’s turnover intention items and data were collected from 62 respondents. The findings suggested that the respondents were moderately satisfied with job satisfaction facets such as promotion, work itself, co-workers, and supervisors but were unsatisfied with salary. They also had moderate commitment level with considerably high intention to leave the organization. All satisfaction facets (except for co-workers) and organizational commitment were significantly and negatively related to turnover intention. Based on the findings, retention strategies of retail employees were proposed.
HIGH employee turnover rate has increasingly been an issue of interest to both practitioners and academicians, not just in developed countries but also in the developing countries. Concerns over the issue have valid ground if one observes the reported statistics on turnover rates. In the United States for example, employee turnover has been seen as a national workplace crisis. The overall number of voluntary turnover (measure of workers’ willingness or ability to change jobs) was 2.1 million in April 2012, up from 1.8 million at the end of the recession in June 2009 . In 2004, annual employee turnover rate in Malaysia was reported as approximately 16% . A more recent statistics based on the Hewitt Total Compensation Management Survey, the average employee turnover rate in Malaysia was 18% in 2007 .
From the perspective of human resource management, high turnover rate is a serious issue due to several reasons. First, high turnover rate has financial consequences. When employees leave, recruiting, selecting, and training of new employees are necessary. Replacing a full-time, private-sector worker may likely to cost 25% of his or her total annual compensation . Second, employee turnover may disrupt company’s productivity and thus performance, especially when it involves critical positions in organizations. High turnover also fosters a sense of discontinuity in the workplace hence unsettling managers and employees. Companies that are not able to reduce their employee turnover figure will likely lose their competitiveness in the long run . Due to these detrimental consequences, it is therefore crucial for organizations to better understand the factors contributing to employee turnover in organizations.
This study examined the level of job satisfaction, organizational commitment, and turnover intention among employees in the retail setting. Also investigated were the effects of job satisfaction and organizational commitment on turnover intention. The intention was to investigate whether job satisfaction and organizational commitment are significant variables in influencing intention to quit among employees in the retail setting.
Overall, the findings provided empirical support that satisfaction with salary, promotion, superior, and the work itself has a significant influence on turnover intention. Interestingly though, satisfaction with the co-workers was found not to be associated with turnover intention. In addition, along with many other studies, organizational commitment has been found to be associated with turnover intention. The findings thus have contributed to addressing retail employees’ retention challenges by identifying factors influencing their turnover intention.
Several recommendations related to human resource practices have been proposed. This study is subject to limitation in terms of sample size and unit of analysis (only one company), thus the findings may not be generalized to other retail employees. Studies of similar nature using bigger number of respondents in various retail companies may provide further insight into how to manage and perhaps reduce this growing concern of voluntary turnover in the retail context.