Job Stress Or Perceived Alternative External Opportunities Management Essay

Turnover intention has been a critical issue for management for many years (Chen, Lin & Lien, 2010) and it is a major problem for organisations till now. Therefore, much attention has been paid over the past some years towards employees’ turnover behaviour and the major causes that lead towards the turnover intention of employees (Richer, Blanchard & Vallerandi, 2002).The broad range of turnover studies is indicative of the significance and complexity of the issue. The phenomenon attracts interest due to its psychological dimension, its organizational significance, and its economic dimension. Thus organizations of all types are giving increased attention to this problem because they know that low level of turnover enhances the performance of organization and reduces the costs associated with recruiting and training new employees (Chen et al., 2010). As a consequence, many organizations have taken it seriously and started to invest in their employees in terms of orientation, training, maintaining, developing and retaining them at any cost (Ongori, 2007), because turnover has great impact on business (West, 2007). In the past, researchers have focused on various factors which contribute towards the employee’s intention to leave the job. The present study addressing “Employee turnover: is it job stress or perceived alternative external opportunities?” attempts further investigation into turnover intentions.

LITERATURE REVIEW

Turnover Intentions

A topic closely related to voluntary job mobility is “turnover intention”. Turnover is defined as the “individual movement across the membership boundary of an organization” (Price, 2001); individual refers to an employee within an organization and the notion of movement may be understood as an accession to or a separation from the company; many authors have used other words – such as quits, attrition, exits, mobility, migration, succession – for turnover. Turnover has three fundamental characteristics: Voluntariness, Avoidability and Functionality. In this study “turnover intent” rather than “turnover” was used as the dependent variable. The importance of analyzing turnover intention draws upon a number of recent research papers that have assessed its role in forecasting and understanding actual quits. The operational definition of turnover intentions for this study is “Turnover intention is the subjective and cognitive response to the working environment by the organizational member which characterise as feelings of retreating the current job for alternative opportunity.”

Stress and Turnover Intentions

Psychological pressure of work has a considerable influence on an employee’s quit intention. Stress and work exhaustion play an important role in increasing turnover of employees (Moore, 2000) because both stress and emotional regulation influence turnover intention, and stress is also an emotion that decreases job satisfaction and increases turnover (Côté & Morgan, 2002). Work stress has become a major cause of voluntary turnover leading to loss of employees (Zhang & Lee, 2010). Many researchers have clearly found that the greater the amount of stress the higher is the turnover intention of employees (Kavanagh, 2005; Cropanzano et al., 2003; Chen et al., 2010; Applebaum et al., 2010). Stress is universally present in all organizations and it is produced by various workplace stressors (Zhang & Lee, 2010). These stressors in the work environment influence the job satisfaction of employees, which in turn leads to the intention to leave the job (Applebaum, 2010). Khurram (2011) found that employees tend to leave their organization when they feel stress at their jobs. Tan, Tan and Tiong (2006) examined the impact of work satisfaction and stress on the turnover intention. Noor & Maad (2008) researching on marketing executives of Pakistan, found a positive relationship between work life conflict, stress, and turnover. O’Neill et al. (2009) studied the relationship between work-family climate, organizational commitment, organizational leadership characteristics, and turnover intent. A significant impact of long hours, organizational time expectations, perceived negative career consequence and lack of support was tested by Bauld et al., (2009). Ahmad and Omer (2010) developed a positive association between family supportive work culture, affective commitment, and turnover intention. Role ambiguity and role conflict have been the popular research areas. Sager (1994) and other scholars note that an employee with a lot of role conflict and ambiguity faces high work stress, which leads to dissatisfaction and ultimately develops an intention to look for another job – he quits as soon as he finds a better opportunity elsewhere. Repetition at work is another factor affecting the turnover intention. Whereas the more demanding the job the more satisfaction it brings to an employee, inspires him to work harder, hence increases the productivity, much against that, simple and routine jobs result in lower participation, higher absenteeism, and stronger desire to leave the job (Larson and Laiken, 1999). In 2008, Yu found that work life balance policies are positively associated with the job tenure of the female employees, and moreover the practices of such policies have a great effect on the turnover rate of employees. Work-life balance policies help in reducing the stress and provide a good work place where there is less chance of accidents in the working and also provide a fair platform for every employee, ultimately enhancing productivity (Yasbek, 2004). Nowadays companies are more aware about the work life balance and implementation of friendly policies (Yasbek, 2004) because complex and additional working hours increase the stress and turnover intention among employees (Ling & Phillips, 2006). According to Forsyth and Polzer-Debruyne (2007), when employees feel that organization is supportive and providing them work life balance it enhances job satisfaction and reduces work pressure leading to reduction in turnover intention.

Perceived Alternative Employment Opportunities (PAEO) & Turnover Intentions

Another possible predictor of turnover intentions is perception of alternative job opportunities among the employees. PAEO refers to an individual’s perception of the availability of alternative jobs in the organization’s environment (Price & Mueller, 1986), and it is the function of labour market conditions. Employees perceive more alternative job opportunities when the job market is tight and less alternative job opportunities when there is unemployment. It should be noted, however, that PAEO is not the same thing as actual labour market conditions. If organizations fail to provide substantial growth opportunities, the employees actively start searching for an alternative job and their search is based upon the perceived opportunities in external market (Negrin & Tzafrir, 2004). Findings of Ing-San Hwang & Jyh-Huei Kuo (2006) revealed a significant positive correlation between perceived alternative job opportunities and turnover intention in the public sector organizations. The same has been proved by Lambert, Hogan & Barton (2001) in a study that focused on impact of job satisfaction on turnover intent. It was revealed that job satisfaction had the largest impact on turnover intentions and perceived availability of alternate jobs had positive correlation with turnover intentions of the employees. Thatcher, Stepnia & Boyle (2003) have conducted a research on turnover of information technology workers and found a strong positive correlation between perceived alternative job opportunities and turnover intention. Past research suggests that both PAEO and labour market conditions are positively associated with turnover (Hulin et al., 1985). Although labour shortage is considered one of the most important factors contributing to employee turnover, none of the studies have yet examined the effect of PAEO and job stress on turnover intention.

NEED FOR THE PRESENT STUDY

There are only a few research studies that have examined the relations between turnover intentions, perceived alternative external opportunities, and job stress. The extant literature is based on data collected in western countries, and limited to the manufacturing sector. However, whereas job stress has been found to be a direct predictor of turnover, better external opportunities together with job stress has not been analyzed. This study aims to fill this gap by focusing on the issue of turnover intentions, job stress & PAEO as its antecedents, and the extent to which these antecedents contribute to the intention to leave an organization. There are no known studies linking these subjects in the service sector of Jammu &Kashmir.

The results of this research will allow a better understanding of the influence of job stress and PAEO on the employee turnover intentions. The results will also enhance our understanding of the determinants of these two important antecedents of employee turnover intentions. It is hoped that a better understanding of these issues and their relationship will aid further research, pinpoint better strategies for retaining of future bank employees, particularly in J&K, and probably in other societies as well.

Objectives of the Study

To assess relationship among job stress (work life balance, job overload, job characteristics, and work relationship), PAEO, and employee turnover intentions;

To investigate the employee turnover intentions with two predictive variables, that is, PAEO and job stress.

Hypothesis

H1: PAEO result in employee turnover intentions.

H2: Excessive job stress results in employee turnover intentions.

Methodology

Pearson correlation coefficients (r) were conducted to determine whether a relationship exists between the dependent variable employee turnover intentions and the independent variables, that is, job stress and PAEO. In addition, a multiple regression analysis was conducted to evaluate the predictive values of job stress and PAEO on employee turnover. All analyses were conducted at the 0.001 significance level.

A questionnaire method using standardized measurement tools was used for data collection. Employee turnover intentions were measured by Cummann et al. (1979) instrument (α = 0.805). The perceived alternative employment opportunities (PAEO) scale contained six items and was adapted from Mowdey et al. (1984), Billings and Wemmerus (1983), Arnold and Feldman (1982), and Michaels and Spector (1982). The scale showed good reliability (¡= 0.713) and finally job stress items were adopted from the “An Organizational Stress Screening Tool” commonly known as ASSEST by Cartwright and Cooper (2002) model questionnaire (α = 0.929). Responses were measured on a 5-point scale ranging from Strongly Disagree to Strongly Agree from the respondents of the largest private sector bank operating in Jammu & Kashmir. Sample size was restricted to 100 employees selected on the basis of stratified sampling procedure.

Research Findings

The correlation analysis shows a significant relationship between dependent and independent variables. The employee turnover intention positively and significantly correlates with PAEO (.669**) and job stress (.499**). The results demonstrate that the employees’ turnover intention increases when they perceive external alternative opportunities and experience undue job stress at their work place. Therefore, H1 “perceived alternative external opportunities result in employee turnover intentions” and H2 “excessive job stress results in employee turnover intentions” are accepted. Further, multiple regression was conducted to investigate the influence of perceived alternative external opportunities and job stress on turnover intention. The presence of high correlations, 0.90 and above, between the independent variables may influence the regression results and interpretations. Since the correlation between independent variables is 0.38, not indicating the existence of high multicolinearity, it allows a straightforward interpretation of regression results and regression coefficients. Results of multiple regression analysis shown in Table 1 reveal that employee turnover intention in the bank is heavily influenced by PAEO explaining a variance (R2) of 45%. The effect of job stress on turnover intentions, though significant, explains a variance of 24% only.

Table 1

Shows Correlation Coefficients

1

2

3

4

5

6

7

8

Turnover

Intentions

1

PAEO

.669**

1

Work life

Balance

.423**

.255**

1

Work

Relationship

.361**

.265**

.510**

1

Overload

.461**

.373**

.453**

.750**

1

Job

Characteristics

.458**

.394**

.573**

.593**

.688**

1

Job control

.394**

.335**

.627**

.597**

.664**

.834**

1

Overall

Stress

.499**

.385**

.763**

.813**

.849**

.867**

.896**

1

**Correlation is significant at the 0.01 level (2-tailed).

Results from the regression equation for the standardized variables were as follows: Predictive turnover intentions score = – 0.314 + 0.888 (perceived alternative external opportunities) + 0.382 (job stress) shown in Table 2. Again the high positive coefficient of beta (= 0.888) (p < 0.000) indicates that the perceived alternative external opportunities highly influence employee turnover intentions than job stress which has beta coefficient of .382 (< 0.000) only.

Table2

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

R2

1

(Constant)

.314

.415

.757

.451

PAEO

.888

.121

.560

7.321

.000

.448

Stress

.382

.103

.284

3.707

.000

.241

a. Dependent Variable: Turnover intentions

Table 3

MODEL SUMMERY FOR MULTIPLE REGRESSION ANALYSIS

ANOVA

Model

Sum of Squares

Df

Mean Square

F

Sig.

1

Regression

47.202

2

23.601

51.765

.000

Residual

44.225

97

.456

Total

91.427

99

a. Predictors: (Constant), Stress, PAEO

b. Dependent Variable: Turnover intentions

The model analysis included the two independent variables of perceived alternative external opportunities and job stress. The linear combination of the two independent variables was significantly related to the dependent variable (employee turnover intentions), R squared = 0.71, adjusted R squared = .50, (Table 40), F = 51.76 (p= 0.000) (Table 3). An estimated 51% of variance of the predictive variables index can be accounted for by the linear combination of independent variables, that is, PAEO and job stress and the dependent variable – turnover intentions.

Table 4

Model summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.719

.516

.506

.675

a. Predictors: (Constant), STRESS, PAEO.

b. Dependent Variable: Turnover intention

Table 5

Descriptive Statistics

Mean

Std. Deviation

N

Turnover intention

4.04

.96

100

PAEO

Measures of Job stress

3.46

.60

100

Work life balance

3.39

.91

100

Work relationship

2.26

.73

100

Overload

2.53

.95

100

Job characteristics

3.00

.53

100

Job Control

Over Job Stress

2.98

2.83

1.05

.71

100

100

Discussion and Conclusion

We began with the question, “Employee turnover: PAEO or Job Stress?” Now it is possible for us to answer this question. Our analyses suggest that employee turnover problem in J & K Bank is more due to perceived alternative external opportunities than job stress. However, the importance of job stress in the employee turnover intentions can’t be ignored. Perceived alternative external job opportunities were found to explain the much greater variance in the turnover model than were the factors under the control of management. While the uncontrollable factor, that is, perceived alternative employment opportunities, added 45% of the unique variance, controllable factors (work life balance, work relationship, overload, job control, job characteristics) together contributed a unique variance of 24% in the turnover model for the total sample. Our findings reveal that the organization needs to provide substantial opportunities for growth and development of their employee at the workplace. Further, there is need to invest in training and create knowledge management panels enabling the employees to share their skills with each other and reinforce their abilities more efficiently. Under this circumstance, leaving his current job has more opportunity cost for the employee and he would likely prefer to stay. The bank further should enrich the jobs of employees so as to make the perception of employees’ better regarding the quality of working conditions, which in turn will affect the employee cognition to alternative jobs available in the labour market. The result further indicates that human resource managers in J&K Bank need to overcome their fatalistic thinking and feelings of helplessness in the face of employee turnover. It can be said that the employees work in a very stressful environment which, if not balanced with proper work life policies and other benefits, will create the desire to quit the job. There is a lot the managers can do to overcome this major human resource problem. They need to think of strategies to combat employee turnover. The employees should be given flexible working hours, should be engaged in the decision making of work life policies, because employees’ engagement, as much as commitment and support from the management, helps to motivate the employees which in turn enhances their intent to remain with the organization (Ongori, 2007). Should organizations encourage the implementation of these friendly policies and programmes, they will be successful in reducing turnover, attracting new employees, and improving the employees’ attitude and behaviour (Beauregard et al., 2009). The message is clear: Senior managers and human resource departments must cautiously balance work stress and intention to leave – to decrease the latter. Among the measures of job stress, work life balance was found to be one of the major problem areas for the employee of the bank. Therefore, it can be recommended that managers should focus on employee work life balance in order to reduce their job stress, which in turn is expected to reduce the turnover intention. Job characteristics (mean = 3), job overload (mean = 2.53), and job control (mean = 2.98) showing the correlations of 0.39, 0.37, and 0.33 with perceived alternative external opportunities, what is crystal clear is that the human resource management of the bank should redesign the policies relating to work overload, work life balance, and job control which were found to be the major stressors causing turnover.

Practical Implications

This study, observing two positive determinants through statistical tests, strongly indicates that PAEO, work life balance, job control, work relationship, job characteristics, and job overload are important factors which may be the causes of employee turnover intentions. And so the directors of human resource department should take significant measure for better management policies.

Limitations and Future Indications

This study is cross-sectional and co-relational in nature. The generalisability of this study is very broad, should be conducted in longitudinal form, and more statistical tests should be applied for more concrete analysis. Employee turnover intentions were tested by considering only two antecedents – better external opportunities and job stress. There can be some other variables too, – such as commitment, job satisfaction, self efficacy, leadership, quality of work life; and these can be taken into account in future research. Sample size also is a major limitation of this study.