THE IMPACT OF EMPLOYEE RENUMARATION ON LABOUR TURNOVER

CASE STUDY: TANDEM SYSTEM LIMITED –MASINDI MUNICIPALITY

NAMIIRO PHIONA

06/U/9720/EXT

A RESEARCH REPORT SUBMITTED IN PARTIAL FULFIMENT OF THE

REQUIREMENTS FOR THE AWARD OF THE DEGREE OF BACHELOR OF

COMMERCE OF MAKERERE UNIVERSITY

July, 2011

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DECLARATION

I Namiiro Phiona declare to the best of my ability that this report is as a result of my own efforts

and has never been submitted for any academic award to this university and any other university

or institution.

SIGNATURE:………………………………….. DATE:…………………………

STUDENT: NAMIIRO PHIONA

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APPROVAL

This research was carried out under my supervision on the topic “The Impact of Employee

Remuneration on Labour Turnover” and is now hereby ready for submission to the academic

board of Makerere University, College of Business and Management Sciences.

SIGNATURE:……………………………… DATE:……………………………...

SUPERVISOR: MR. SSAJJABBI VINCENT

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DEDICATION

I dedicate this report to my beloved Mum Ms. Nagawa Cissy and my daughter Kansiime Chloe

who have laid for me an academic foundation that has led me to this level and lastly to all my

friends for their motivation and developmental ideas.

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ACKNOWLEDGEMENT

My sincere gratitude to My research supervisor, Mr. Ssajjabbi Vincent for his expert advice,

guidance, and for awakening my enthusiasm for carrying out this study.

The respondents who took part in this study especially the staff and employees from Tandem

Systems Limited, I salute them for their courage, commitment and pioneering spirit.

Everyone who assisted me through this study process, in particular Ayesiga for the statistical

processing, and organizing of this report.

My sisters Annet, Brenda, Beatrice, my brothers Richard, Rogers, Robert and my friends

Baguma Charles, Ignatious, Ronnie and Hamidu and to all the family members with whom we

have shared great love and also helped me not to give up because of their inspiration moments.

Above of all to the Almighty God, whose blessings allowed me the privilege of completing this

study in time. Without his compassion, generosity and love I can do nothing.

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TABLE OF CONTENTS

DECLARATION............................................................................................................................................ iAPPROVAL..................................................................................................................................................iiDEDICATION.............................................................................................................................................. iiiACKNOWLEDGEMENT............................................................................................................................ivABSTRACT.................................................................................................................................................. ixCHAPTER ONE..........................................................................................................................................11.0 INTRODUCTION...................................................................................................................................11.1 BACK GROUND TO THE STUDY.......................................................................................................11.2 STATEMENT OF THE PROBLEM.......................................................................................................31.3 OBJECTIVE OF THE STUDY...............................................................................................................31.4 RESEARCH QUESTIONS.....................................................................................................................31.5 SCOPE OF THE STUDY........................................................................................................................41.6 SIGNIFICANCE OF THE STUDY.........................................................................................................4CHAPTER TWO: LITERATURE REVIEW...........................................................................................52.0 INTRODUCTION...................................................................................................................................52.1 Definitions of Employee Remuneration..................................................................................................52.2 Components of Employee Remuneration................................................................................................52. 3 Factors Influencing Employee Remuneration........................................................................................62.4 Challenges Affecting Remuneration........................................................................................................82.5 Definition of Labour Turnover................................................................................................................92.6 Classification of Labour Turnover.........................................................................................................102.7 Causes of Labour Turnover...................................................................................................................112.8 Effects of Labour Turnover on a Company...........................................................................................132.9 Relationship between Employee Remuneration and Labour Turnover.................................................152.10 CONCLUSION....................................................................................................................................16CHAPTER THREE METHODOLOGY.................................................................................................173.0 Introduction............................................................................................................................................173.1 Research Design.....................................................................................................................................173.2 Sampling Design....................................................................................................................................173.4.0 Data Sources and Types......................................................................................................................183.5.0 Data Processing, Analysis and Presentation.......................................................................................18CHAPTER FOUR: PRESENTATION, INTERPRETATION AND DISCUSION OF FINDINGS. 194.0 Introduction............................................................................................................................................194.1 SECTION A: RESPONDENTS’ DATA...............................................................................................194.1.2 Respondents Level of Education........................................................................................................204.2 SECTION B: EMPLOYEE REMUNERATION...................................................................................214.2.1 What are the components in the employee remuneration structure of Tandem System Ltd?............214.5 RELATIONSHIP BETWEEN EMPLOYEE REMUNERATION AND LABOUR............................33CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS. . .365.0 INTRODUCTION.................................................................................................................................365.1.0 Summary of Findings..........................................................................................................................36

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5.1.1 Respondents’’ Personal Profile...........................................................................................................365.1.2 Components of Employee Remuneration...........................................................................................365.1.3 Level of Labour Turnover at Tandem Systems Limited.....................................................................375.1.4 Causes of Labour Turnover at Tandem Systems Limited..................................................................375.1.5 Relationship between Employee Remuneration and..........................................................................375.2 Recommendations of the Study.............................................................................................................385.3 Conclusion.............................................................................................................................................385.4 Suggested Further Research...................................................................................................................385.5 Anticipated problems to the study.........................................................................................................39APPENDIX I: INTRODUCTORY LETTER.........................................................................................41APPENDIX II: QUESTIONNAIRE........................................................................................................42APPENDIX III: INTERVIEW GUIDE...................................................................................................46APPENDIX IV: RESEARCH PROJECT SCHEDULE........................................................................47APPENDIX V: RESEARCH PROJECT BUDGET...............................................................................48

LIST OF TABLESvi

Table 1 Trend of Labour Turnover (Workers)...............................................................................................2

Table 2 Showing the Number and Type of Respondents............................................................................18

Table 3 Showing Gender of the Respondents..............................................................................................20

Table 4 Showing the Respondents Level of Education...............................................................................21

Table 5 Showing Marital Status...................................................................................................................22

Table 6 Showing Components in the Employee Remuneration Structure..................................................23

Table 7 showing the Company has a Clear Salary Scale Structure that is well known to the Employees..24

Table 8 Showing Management gives explanation in Case of Delay to Pay................................................25

Table 9 Showing Employees’ Pay at Work is Fair Compared to their in put in the Company...................25

Table 10 Showing the Company makes Regular Pay Increments...............................................................26

Table 11 Showing the Pay employees get favours them to stay..................................................................27

Table 12 Showing the Company Organizes Regular meetings that reduce employee Dissatisfaction.......27

Table 13 Showing Management of the Company Rewards Workers for the extra Load given to them.....28

Table 14 Showing Employees have a Strong Desire to Work in this Company ........................................29

Table 15 Showing Tandem System Limited experiences Labour Turnover every year..............................30

Table 16 Showing how employees rate the level of labour turnover in this company................................30

Table 17 Showing what Employees expect the rate of labour turnover to be this year...............................31

Table 18 Showing whether Employees had ever worked with another Company before...........................31

Table 19 Showing the reason why they left their companies where they were working before.................32

Table 20 Showing Causes of Labour Turnover at Tandem Systems Limited.............................................33

Table 21 Showing Reduction in Wages and Salaries leads to a higher Labour Turnover in a company....34

Table 22 Showing Provision of Incentives motivates Workers hence reducing on Labour turnover.........35

Table 23 Showing Pearson Correlation between Employee Remuneration and Labour Turnover.............36

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ABSTRACT

The study looks at the effect of Employee remuneration on Labour turnover, a case study of

Tandem Systems Limited. The findings of the study revealed that there is a strong negative

relationship between Employee remuneration and Labour turnover. Most of the respondents

strongly agreed with it.

Also the study undertook to examine the components in the remuneration structure and it was

found out that Tandem Systems Limited employee remuneration structure largely comprises of

wages, salary and incentives. Furthermore, the study found out that the company has a clear

salary structure, management gives explanation in case of delayed payments, and that

management conducts regular meetings that could reduce employee dissatisfaction. The

following were found to be causes of labour turnover at Tandem System Limited; Work stress

perception about their career, job dissatisfaction, competition for labour, prospect of getting a

higher pay, and sickness.

Data was collected using self-administered questionnaires and interview guides. The study used

stratified and purposive sampling techniques to draw representative samples and 60 respondents

were involved in the study.

The study also recommends the following; Regular meetings should be conducted to ensure good

communication, Companies are advised to set up a common rate for wages and salary, and also

make regular pay increments in relation to price changes in the market.

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CHAPTER ONE

1.0 INTRODUCTIONThis chapter looks at; the back ground to the study, statement of the problem, purpose of the

study, objective of the study, research questions, scope of the study which includes the

conceptual scope, geographical scope and time scope and finally the significance of the study.

1.1 BACK GROUND TO THE STUDY

According to Kamukama 2006, Employee Remuneration is a reward given to labour, and a

compensation an employee receives in return for his or her contribution to the organization.

Remuneration occupies an important place in the life of an employee. The employee’s standard

of living, status in the society, motivation, loyalty, and productivity depend upon the

remuneration he or she receives. For the employer too, employee remuneration is significant

because of its contribution to the cost of production.

Milkovich & Newman 2005 said that the concept of remuneration refers to “all forms of

financial returns and tangible services and benefits employees receive as part of an employment

relationship.” For Human Resource Management too, employee remuneration is a major

function. In other words remuneration is both the monetary benefits that one receives as part of

an employment agreement, together with the tangible products employees can be offered.

Bwire, 2005, defines Labour Turnover in a human resources context as the rate at which an

employer gains and loses employees and that simple ways to describe it are "how long

employees tend to stay" or "the rate of traffic through the revolving door." Turnover is measured

for individual companies and for their industry as a whole.

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Mcgehee & Thayer 1961 found out that if an employer is said to have a high turnover relative to

its competitors, it means that employees of that company have a shorter average tenure than

those of other companies in the same industry. They further said high turnover can be harmful to

a company's productivity especially if skilled workers are often leaving and the worker

population contains a high percentage of novice workers.

Tandem System Limited was incorporated under the Companies Act in 2003 as a limited liability

company. The company’s operations are civil works, construction of buildings, shallow wells,

drawing of architecture plans, among others. It has different departments like human resource,

finance and accounting, and stores and materials department. The company is 100 percent

private and its head quarters are located along Commercial street road in Masindi Municipal

Council covering all its branches in Masindi District.

Employee remuneration is an important factor in a company like Tandem System Ltd a

construction Company which relies heavily on temporary (casual) workers who account for 90

percent of the total work force of 120 employees. According to the report by process analysts in

the company, it revealed that there is a trend of workers leaving the company. The remuneration

structure is composed of mostly wages and salary and some incentives based on productivity of

the workers and overtime work. Salaries and wages are determined by the company’s top

management officials during the board of governors meeting. The table below shows the trend of

wages and salary of the company and its employee turnover;

Table 1 Trend of Labour Turnover (Workers)

Period (year) 2006 2007 2008 2009 2010

Remuneration Salary (Shs) 200 000 198 000 250 000 250 000 250 000

Wages (Shs) 2500 2000 2250 2750 3500

Number of workers 125 102 115 90 992

Source: Personnel records

Table 1 shows that a decrease in wages and salary leads to a decrease in the number of workers

while an increase in wages and salary leads to an increase in the number of workers. So the

influence posed by employee remuneration on labour turnover has a direct effect on labour

turnover, therefore improvements in the remuneration system will enable the company retain its

workers.

1.2 STATEMENT OF THE PROBLEM

The obligation of management towards human resources in any organization would be its

motivation through employee remuneration so as to achieve organizational goals; employee

remuneration brings about job satisfaction, which reduces possible protests and complaints,

hence increasing the organization’s retention capacity of its employees (Maicibi 2003).

However, according to Company personnel records of 2009, the company has been recording a

high labour turnover on average of around 16 percent for the last five years. Therefore it is

projected that for years to come the level of efficiency and performance in the company is likely

to be affected if the company does not attend to its remuneration structure. The study is

prompted to assess the impact of employee remuneration on labour turnover in Tandem System

Limited.

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1.3 OBJECTIVE OF THE STUDY

The study aimed at establishing the relationship between Employee Remuneration and Labour

Turnover in Tandem System Ltd.

1.4 RESEARCH QUESTIONS

i. What are the components in the employee remuneration struture of Tandem System

Limited?

ii. What is the level of labour turnover at Tandem System Limited?

iii. What are the causes of labour turnover at Tandem System Limited?

iv. Is there any relationship between Employee Remuneration and Labour Turnover?

1.5 SCOPE OF THE STUDY

The study focused on employee remuneration and labour turnover in Tandem System Ltd. The

study covered a period of five years from 2006 to 2010 since during this time the company

experienced the highest labour turnover.

1.6 SIGNIFICANCE OF THE STUDYi. The findings of the study will specifically help management of Tandem System Ltd to

revisit her remuneration system so as to improve it.

ii. The study will also help policy makers to formulate ways on how to improve the

employee remuneration system in the economy.

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CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTIONThis chapter discusses the opinions, findings from different authors, publications, magazines,

websites, and all possible sources as a basis foundation for this research study. It is divided into

definition of the key variables and other parts are according to the research questions as seen

below;

2.1 Definitions of Employee Remuneration

Maclean & Stacey 2009 noted that Employee remuneration has different meaning for different

people. For an employee, it means standard of living and class; for the employer it appends to the

cost; and to the human resource manager, the management of remuneration is a significant

activity.

Milkovich and Newman 2005, also regards the concept of employee remuneration to refer to “all

forms of financial returns and tangible services and benefits employees receive as part of an

employment relationship,” in other words remuneration is both the monetary benefits that one

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receives as part of an employment agreement, together with the tangible products employees can

be offered.

Basing on the above definitions, the researcher asserts that employee remuneration is the

compensation an employee receives in return for his or her contribution to the organization,

therefore it occupies an important place in the life of an employee.

2.2 Components of Employee Remuneration

Mahendra 2008, remuneration is an element of both monetary and non-monetary rewards;

financially, in terms of cash and benefits received; non-monetary in terms of status, recognition,

and esteem. Job evaluation is a method to decide the input of a position to an organization. It

needs to be seen by the employee and organization, as just and impartial. He came up with the

following components of remuneration;

Wages and Salary: Wages refer the hourly rates of pay, salary refers to the monthly rate of pay,

wages and salaries are subject to annual increments. They differ between one employer to

another. They also depend upon the nature of job, seniority and merits.

Incentives: also called ‘payment by result’ paid in addition to wages and salaries. They depend

upon productivity, sale profit and they include individual incentives scheme, and group

incentives scheme.

Fringe benefits: These include such employee benefits as provident fund, gratuity, medical care,

hospitalization, accident relief, health insurance, canteen uniform.

Perquisites: These are allowed to executives and include company car, club membership, paid

holidays, furnished house among others.

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2. 3 Factors Influencing Employee Remuneration

A number of factors influence the remuneration payable to employees. They can be categorized

as Internal Factors and External Factors.

Chavan 2010 notes that among the internal factors which have an impact on the pay structure to

be; Company’s strategy, Job evaluation, Performance appraisal and the worker himself or herself

as explained below.

Maclean& Stacey 2009 argues that the overall business strategy which a company pursues

should determine the remuneration to its employees. For instance where the strategy of the

enterprise is to achieve rapid growth, remuneration should be higher than the competitors pay.

Whereas where the strategy is to maintain and protect current earnings, because of the declining

fortune of the company, remuneration level needs to be average or even below average.

Job Evaluation and Performance Appraisal. Job evaluation helps establish satisfactory wage

differentials among jobs. Performance appraisal helps award pay increase to employees who

show improved performance.

Maclean& Stacey 2009 also added that in the Labour Market, demand for and supply of labour

influence wage and salary fixation. A low wage may be fixed when the supply of labour exceeds

the demand for it. A higher wage will have to be paid when demand exceeds supply, as in the

case of skilled labour.

Stewart 1994 argued that a rise in the cost of living is sought to be compensated by payment of

dearness allowance, basic pay to remain undisturbed. Many companies include an escalatory

clause in their wage agreement in terms of which dearness allowance increases or decreases

depending upon the movement of consumer price index (CPI).

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Productivity can arise due to increased effort of the worker, or as a results of the factors beyond

the control of the management, and the like advance in technology and more efficient methods of

production. Productivity has only a role in wage fixation (Stahl 1995). The argument that

productivity would increase if it is linked to remuneration is hardly acceptable.

Labour Unions. The presence or absence of labour organizations often determines the quantum

of wages paid to employees. Employers of non-unionized factories enjoy the freedom to fix

wages and salaries (Staw 1981).

The Economy. The last external factor that has its impact on wage and salary fixation is the state

of the economy. In most cases, the standard of living will rise in an expanding economy. Since

the cost of living is commonly used as a pay standard, the economy’s health exerts a major

impact upon pay decisions. Labour unions, the government, and the society are all less likely to

press for pay increases in a depressed economy.

2.4 Challenges Affecting Remuneration

Chavan 2010 believes that people who administer wage and salary face challenges which often

necessitate adjustments to remuneration plan. The more important of the challenges are skills-

based pay, salary reviews, pay secrecy, comparable worth, and international pay as shown

below;

Skill-based pay: In the traditional job-based pay, employees’ are paid on the bases of jobs the do.

In the skill-based system, workers are paid on the basis of number of jobs they are capable of

doing, or on the depth of their knowledge.

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Pay Reviews: Pay once determined, should not remain constant. It must be reviewed and

changed often, but how often becomes a relevant question. Pay reviews may be made on

predetermined dales, anniversary dates or there could be flexible reviews.

Mullins 1999, further said that in the fixed-date reviews, wages and salaries of all employees are

reviewed and raised on a specified date each year- In the anniversary-date reviews, salaries may

be reviewed at twelve-month intervals from the date of the employee's anniversary date of hire

(Mullins 1999). Using variable timing ensures flexibility. In addition, high-performing

employees, who are low on their salary ranges, can be rewarded more frequently.

Pay Secrecy: Equity in remuneration is a significant factor in employee performance. Perceived

inequity in wages and salaries will de-motivate and demoralize employees which will lower

employee performance. One way of avoiding this problem is for managements to maintain pay

secrecy. This is particularly true in family-controlled and non-unionized organizations, where

objective and defensible pay structures do not exist.

Comparable Worth: One of the popular principles in employee remuneration is equal pay for

equal work. Beyond the concept of equal wages for equal work, is the idea of comparable worth

which implies that if both a nurse and an electrician receive the same number of points under a

point-ranking method of job evaluation, they have to be paid the same.

2.5 Definition of Labour Turnover

According to Armstrong 1990, labour is defined as the supply of human resources both physical

and mental which is available to engage in production of goods and services. He further said

labour is a vital element in an organization and payment for labour is a wage.

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Ahuja, 1986 defined labour turnover as the relationship between the number of persons joining

the organization and leaving due to the resignations or retrenchments to the average number on

the payroll.

Labour turnover is the cessation of membership in an organization by an individual who received

monetary compensation from the organization (Mobley, 1982).

Labour turnover is the rate of displacement of personnel employed in an organization

(Kamukama, 2006). He further said that a higher turnover is a sign of instability of labour, and

labour turnover is expressed as the ratio of the number of persons leaving the company in a

period to the average number on the payroll.

Shelley 2008, defined Labour turnover as employees who voluntarily leave their jobs and must

then be replaced. He added that turnover is shown as an annual percentage, so if 25 people leave

a company with 100 people, that is 25 percent turnover a year, and he also said employees often

leave companies for higher pay elsewhere, but many other factors contribute as well, and the

negative effects of employee turnover should motivate managers to increase retention.

Basing on the above definitions, the researcher asserts that labour turnover is the movement of

workforce into and out of the organization.

2.6 Classification of Labour Turnover

According to Bwire 2008, there are two categories of labour turnover depending on the

circumstances that is to say; voluntary labour turnover and involuntary labour turnover. These

include;

Voluntary labour turnover refers to the employees leaving the organization due to retirement

quits, resignations and death. With retirement, most organization have age limit beyond which an

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employee’s services are rendered unbeneficial to the company and he/ she is let to go after

calculating a compensation benefit for the services rendered earlier, whereas quit is when the

employees foregoes his services to the company. Resignation is a term initiated by the employee

him or herself (Davour, 1995).

Involuntary labour turnover on the other hand is where the employees are forced to leave the

company against their wish (Davour, 1995). For example, dismissal; these are terminations

initiated by the company, it must be done with great care and must be supported with a just and

sufficient cause. Dismissals are generally done as a last resort after all attempts at salvaging the

employee have failed. In addition, he attributes the cause of dismissals as unsatisfactory

performance, misconduct, absenteeism and tardiness.

Cuming (1993) adds that retrenchment refers to the involuntary labour turnover brought as a

result of the company trying to restructure its organization by abandoning other operations or to

improve its efficiency and effectiveness by removing labour force which is not attractive.

2.7 Causes of Labour Turnover

A number of factors are responsible for the high labour turnover in different organization and

these include the following:

Clint (2004), notes that the prospects of getting higher pay elsewhere leads to turnover. He

further said that this is one of the most obvious contributors to turnover. This practice can be

regularly observed at all levels of the economic ladder, from executives and generously paid

professionals in high-stress positions to entry-level workers in relatively low demanding jobs.

However, (Stewart, 1994) found out that there is evidence that money is often not the root cause

of turnover, even when it is a factor in an employee's decision to quit. In one survey, for

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example, more than half of the respondents didn't even list pay in the top three reasons they

believed people quit their jobs, instead that high turnover persists in certain jobs and companies

because they have an atmosphere in which employees look for reasons to leave, and others

money is a convenient and sometimes compelling justification.

Goldthorpe (1969) said when there is competition in the labour market the demand for labour

from different sources of employment is also high, which leads to instability in labour especially

when it comes to casual labour force.

Management practices, Armstrong 1996, found that turnover tends to be higher in environments

where employees feel they are taken advantage of, where they feel undervalued or ignored, and

where they feel helpless or not important. Clearly, if managers are impersonal, arbitrary, and

demanding, there is greater risk of alienation and turnover. Management policies can also affect

the environment in basic ways such as whether employee benefits and incentives appear

generous or stingy, or whether the company is responsive to employees' needs and wants.

Management's handling of major corporate events such as mergers or layoffs is also an important

influence on the work environment afterwards.

Lansor & Terence 1987 said that there is a challenge of Job dissatisfaction. They further said

when the relationship between job satisfaction and turnover is negative implying that the greater

the satisfaction, the lower the turnover and hence better performance.

Mullins 1999 argues that some labour turnover is demographically specific, particularly for

women who are balancing significant work and family duties at the same time. Such women (or

men) may choose to leave a company instead of sacrificing their other interests and

responsibilities in order to make the job work out. Some women select to quit their jobs at

childbirth, rather than simply taking a maternity leave. 12

Pencavel 1972 further found out that woman’s perceptions of their career paths might also be

tinted by their awareness of the glass ceiling, which may lower their level of commitment to any

particular firm, since they believe they're not in contention for top-level jobs. These factors

translate into higher turnover rates for women in many companies.

Retirement of experienced employees can cause high rates of turnover and extreme loss in

productivity, particularly in industries where there is little competition. For example, in the

National Aeronautics and Space Administration Report 1970, members expressed concern about

its future launch capability as thousands of “space race" engineers simply age out of the

workforce.

Armstrong 1996 said work stress experienced at particular types of jobs can also create turnover.

Childcare workers watching over constantly crying children, waiters dealing with demanding

dinnertime customers, police officers in high-crime areas, and truck drivers facing long hours

and heavy traffic are all in job categories experiencing high levels of turnover.

Even seasonal changes such as the beginning of a school year can cause high turnover when part-

time, school-age employees return to their classrooms. In this case, however, turnover is less

likely to be unexpected by management.

Mullins 1999 asserts that labour turnover arises because of various factors including

dissatisfaction with job, low rate of wages and salary, unsatisfactory working conditions, and non

availability of adequate basic amenities. So there is need for management to attend to all the

above if they are to reduce on the costs of production and interruption in the smooth flow of

work since labour is directly used in the production of goods and services.

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2.8 Effects of Labour Turnover on a Company

Mullins 1999 said high turnover can be a serious obstacle to productivity, quality, and

profitability at firms of all sizes. For the smallest of companies, a high turnover rate can mean

that simply having enough staff to fulfill daily functions is a challenge, even beyond the issue of

how well the work is done when staff is available. He further argued that turnover is no less a

problem for major companies, which often spend millions of dollars a year on turnover-related

costs. For service-oriented professions, such as consulting or account management, high

employee turnover can also lead to customer dissatisfaction and turnover, as clients feel little

attachment to a revolving contact.

Shelley 2008 said customers are also likely to experience dips in the quality of service each time

their representative changes.

Stahl 1995 believed that the cost of turnover varies with the difficulty of the job to be performed.

For example, in a food-processing company, showing someone how to put jars of jam into a

cardboard box may take five minutes, so the cost of training someone to handle this job would

not be high. If, however, the tyrannical manager of the food processing line at the company kept

driving away food cookers and quality-control workers, the cost of constantly training employees

in this critical area could be high.

In general, reducing employee turnover saves money. Money saved from not having to find and

train replacement workers can be used elsewhere, including the bottom line of the company's

profit statement. For example, the U.S. Department of Labour estimates that it costs about 33

percent of a new recruit's salary to replace an employee. In other words, it could cost $11,000 in

direct training expenses and lost productivity to replace an experienced employee making

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$33,000. Private industry estimates for highly skilled jobs peg turnover losses at a much higher

level, up to 150 percent of the position's annual salary.

Hiring Process .A study published in "Entrepreneur" magazine in 2001 looked at the effects of

hotel employee turnover and discovered the high price of recruiting, interviewing and hiring new

workers, in addition to lost productivity.

Clint (2004) asserts that high turnover can sometimes be useful, though. Employers who are poor

interviewers may not discover that new employees are actually poor employees until after the

workers have been on the payroll for several weeks. Rather than go for the trouble and

documentation of firing these underperforming employees, some companies rely on turnover to

weed out the bad employees. When the learning curve is small and the consequences of always

having inexperienced workers are minimal, high turnover may not be seen as a significant

problem (Staw, 1980).

2.9 Relationship between Employee Remuneration and Labour Turnover

Parker & Burton (1970) developed a theory relating wage to labour turnover which they labeled

incentive to quit. According to them as quoted in their book entitled Management attitudes and

performance it was shown that;

“…… inter-industry wage differentials are examples of those variables which measure the

incentives of workers to quit because of comparisons they make of attributes of their own firms

and other firms”.

One of the early theorists F.W. Taylor and M. Armstrong in their publication personnel

management assumed that;“…….. Man is a rational animal concerned with maximizing his

economic gains……….”

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Goldthorpe (1969) conducted a study from three manufacturing firms in Luton England and his

book “changing supervisory behavior revealed that;

“……. Work that offers relatively intrinsic rewards may not in fact form the basis of a powerful

tie between the worker and his employment because of inter-veiling dissatisfaction, grievances

and work which by its nature entails severe depression for those who perform it may non-the-less

offer intrinsic rewards which are to attract workers fairly and firmly to the employer who offers

his work”.

Professor Herzeburg’s theory on motivation was illustrated in his book entitled “work and the

nature of man” he divided the factors into two categories that is to say motivators (strategies) and

hygienic factors (dissatisfies) under motivators he pointed out that they include; company policy,

supervisory style, and salaries and wages.

Professor Abraham Maslow as quoted in their book; “Theory of motivation, fundamental of

human behavior “proposed a hierarchy of human needs in his theory of motivation. He contends

that human needs in his theory seeks to satisfy the more basic needs first before satisfying needs

at a higher level up the hierarchy. The other levels of the hierarchy are physiological needs,

safety/ security needs, love needs, esteem needs and finally self-actualization and all most of

these can be achieved when the company has a good remuneration.

In the book of William H. Davis, “Behavior in organizations”. A multi-dimensional view said

that;“…..there is no single factor in the whole field of labour relations that does more to break

down morale, create individual dissatisfaction, encourage absenteeism, increase labour

turnover, hamper production that the obviously unjust inequalities in remunerations given or

wage rate paid to different individuals in the same labour group within the same workplace.”

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2.10 CONCLUSION

In conclusion, Employee remuneration has a direct effect on labour turnover in a company.

Therefore the effect of employee remuneration on labour turnover in all sectors is likely to affect

their performance in terms of efficiency and effectiveness, hence increasing the cost of

production.

CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter explains the description of research design, study population, sampling design

which included the sampling method, sampling procedure and sample size, sources of data

collection, data collection methods, data processing, analysis, and presentation, and the

limitations encountered by the researcher.

3.1 Research Design

The study used descriptive and analytical research designs which involved qualitative and

quantitative research so as to describe observations and examine the findings to come up with

conclusions and recommendations for implementation.

17

3.2 Sampling Design

Convenience and Purposive random sampling methods were used to select the respondents from

different section (store section, casual labourers, and foremen and personnel managers).

The study used 60 employees from different departments at Tandem Systems Limited in Masindi

Municipality. The respondents included; Personnel managers, Store keepers, Foremen, Potters

(casual labourers) considering time factor constraints and others factors as seen in the table

below.

Table 2 Showing the Number and Type of Respondents

Category of respondents Number of respondents Percentage (%)

Personnel managers 2 3.5

Store keepers 5 8.3

Foremen 7 11.6

Potters (casual labourers) 46 76.6

Total 60 100

Source: Primary data.

3.4.0 Data Sources and Types.

The study uses both Primary and Secondary Data. Primary data were collected by use of

questionnaires and interview guides in the field while secondary data were collected from

18

available published records such as textbooks, journals, magazines, manuals, internet and

Makerere University library.

3.5.0 Data Processing, Analysis and Presentation

The data collected were processed and analyzed using SPSS for frequencies and percentages and

the relationship between the variables were established and tested using Pearson. Micro soft

word and excel were used in drawing charts, tables and graphs so as to clearly present the

findings.

CHAPTER FOUR

DATA PRESENTATION, INTERPRETATION AND DISCUSION OF FINDINGS4.0 Introduction

This chapter includes the results (findings) from the study and analysis of those finding and their

discussions in relation to the objective of the study and the research questions. The findings are

presented in tables and graphs as shown below.

4.1 SECTION A: RESPONDENTS’ DATA

Gender of the Respondents

Table 3 Showing Gender of the Respondents

Response Frequency Percent (%)

Male 44 73.3

19

Female 16 26.7

Total 60 100.0

Source: Primary Data

From Table 3 above, 73.3 percent of the respondents were male and 26.7 percent were female,

therefore the company employees more men than women. Since it is a construction company, it

needs more able bodied men to carry building materials and this work involves a lot of standing

which most women cannot manage.

4.1.2 Respondents Level of Education

Table 4 Showing the Respondents Level of Education

Response Frequency Percent (%)

Certificate 11 18.4

Diploma 9 15.0

Degree 6 10.0

Masters 3 5.0

Non of the above 31 51.6

Total 60 100.0

Source: Primary Data

From table 4 above, the highest percentage of respondents that is 51.6 percent had not attained

any level of education because there was no need for skills to be acquired from school but only

needed energy which most of them possessed and these were the casual labourers. These were

20

followed by 18.4 percent with certificates, 15 percent with diploma, 10 percent with degree and

lastly 5 percent with masters. This implies that most of the employees are uneducated and

therefore since it’s a construction company it needs more casual labourers to be involved in the

work of carrying sand, bricks, cement, mixing of concrete which most of the educated in Uganda

don’t want to do.

4.1.3 Marital Status

Table 5 Showing Marital Status

Response Frequency Percent (%)

Single 38 63.3

Married 22 36.7

Total 60 100.0

Source: Primary Data

Table 5 above shows that the highest percentage that is 63.3 percent of the respondents were still

single. This is attributed to the low savings which are not enough to sustain a family. 36.7

percent were married. This is implies that there is still a likelihood of labour turnover since most

singles rarely stick to their jobs.

21

4.2 SECTION B: EMPLOYEE REMUNERATION

4.2.1 Findings on research question one. What are the components in the employee

remuneration structure of Tandem System Ltd?

Respondents were asked to state the components used in the remuneration structure of

employees, how it is determined, who determines it and also some questions were asked on

employee empowerment so as to draw a clear conclusion on the findings as seen below.

4.2.2 Components in the Employee Remuneration Structure at Tandem System Ltd.

Here respondents were asked to state the components in the remuneration structure of tandem

systems limited and their responses were as follows;

Table 6 Showing Components in the Employee Remuneration Structure

Component Wages Salary Incentives Fringe

benefits

perquisites

Freq. % Freq. % Freq. % Freq. % Freq. %

Strongly agree 60 100 60 100 60 100 3 5.0 3 5.0

22

Not Sure - - - - - - - - 7 11.7

Strongly Disagree - - - - - 57 95.0 50 83.3

Total 60 100 60 100 60 100 60 100 60 100

Source: Primary Data

Table 6 shows that 100 percent of the employees revealed that wages, salary and incentives are

components in the employee remuneration structure of Tandem Systems Limited. 10 percent

strongly agreed that the company gives fringe benefits and perquisites to it employees, in an

interview with management, they said that fringe benefits and perquisites are only given to the

top management and not to the casual labourers. 95 percent and 83.3 percent of the respondents

strongly disagreed with fringe benefits and perquisites since only top management was entitled

to them. This therefore implies that the company’s remuneration structure largely comprises of

wages, salary and incentives. This is also in agreement with the findings of Mahendra 2008, who

found out that Remuneration is composed of wages, salary and incentives among others.

From an interview with management of Tandem System Limited it was noted that the

remuneration is determined by top managers and other stake holders in the board of governors

meeting at the beginning of every financial year and its determination is based up on productivity

and overtime and the salaries are paid on a monthly basis.

Table 7 showing the Company has a Clear Salary Scale Structure that is well known to the Employees.

Response Frequency Percent

Strongly agree 23 38.3

Agree 26 43.3

Not sure 5 8.3

23

Disagree 3 5.0

Strongly disagree 3 5.0

Total 60 100.0

Source: Primary Data

The highest percentages of respondents that is 43.3percent and38.3percent agreed and strongly

agreed respectively that the company has a clear salary structure. These were followed by

8.3percent of the respondents were not sure whether the company has a clear salary scale

structure, while 5.0 percent disagreed and 5.0 percent strongly disagreed respectively with the

issue that the company has a clear salary structure. Therefore basing on the above responses,

the highest number of employees is aware of the existence of the salary structure in the company.

Table 8 Showing Management gives explanation in Case of Delay to Pay.

Response Frequency Percent

Strongly agree 28 46.7

Agree 31 51.7

Not sure 1 1.6

Total 60 100.0

Source: Primary Data

Table 8 shows that the highest percentage of respondents that is 51.7 percent and 46.7 percent

agreed and strongly agreed respectively that management gives explanation in case of delay to

pay. Only 1.6 percent of the respondents were not sure whether management gives explanation in

24

case of delay to pay. Therefore this shows that there is good communication between

management and employees in the company hence reducing on the likelihood of strikes at work

and hence reducing on labour turnover.

Table 9 Showing Employees’ Pay at Work is Fair Compared to their in put in the Company.

Response Frequency Percent (%)

Strongly agree 17 28.3

Agree 24 40.0

Not sure 9 15.0

Disagree 6 10.0

Strongly disagree 4 6.7

Total 60 100.0

Source: Primary Data

Table 9 shows that 40 percent and 28.3 percent of the respondents agreed and strongly agreed

respectively that they get a fair pay therefore they are contented. 15 percent are not sure whether

their pay is fair or not since their aim is to work and earn a living. 10 percent and 6.7 percent of

the respondents disagreed and strongly disagreed respectively that their pay is not fair compared

to their input into the company, this signifies that they are not contented and therefore may leave

the company to go and look for greener pastures.

Table 10 Showing the Company makes Regular Pay Increments in relation to Price Changes in the market.

Response Frequency Percent (%)

Strongly agree 1 1.7

Agree 3 5.0

Disagree 29 48.3

Strongly disagree 27 45.025

Total 60 100.0

Source: Primary Data

Table 10 shows that the highest percentage of the respondents that is 48.3 percent and 45 percent

disagreed and strongly disagreed respectively with the view that the company makes regular pay

increments in relation to price changes in the market. Only 5.0 percent and 1.7 percent agreed

and strongly agreed respectively that the company makes regular pay increments in relation to

price changes in the market and these were the top officials in the company. Therefore this

shows that the pay for the casual labourers is fixed until the end of the contract.

Table 11 Showing whether the Pay employees get compared to that of other workers in the Neighboring Companies favours them to stay.

Response Frequency Percent (%)

Strongly agree 16 26.7

Agree 21 35.0

Not sure 9 15.0

Disagree 9 15.0

Strongly disagree 5 8.3

Total 60 100.0

Source: Primary Data

Table 11 indicates that 35 percent and 26.7 percent of the respondents agreed and strongly

agreed respectively that their pay favours them to stay compared to that of other companies.

15percent were not sure because they had no information about the pay in other companies.

26

15percent and 8.3 percent disagreed and strongly disagreed respectively and an interview with

them, they said that given a chance they can move to other companies but they are limited

because those companies are not recruiting.

Table 12 Showing the Company Organizes Regular meetings that could reduce employee Dissatisfaction at work.

Response Frequency Percent (%)

Strongly agree 29 48.3

Agree 31 51.7

Total 60 100.0

Source: Primary Data

Table 12 shows that 51.7 percent and 48.3 percent of the respondents agreed and strongly agreed

respectively that the company organizes regular meetings that could reduce employee

dissatisfaction at work. This also implies that there is good communication between employees

and management which also helps to reduce on employee dissatisfaction at work.

Table 13 Showing Management of the Company Rewards Workers for the extra Load given to them.

Response Frequency Percent (%)

Strongly agree 18 30.0

Agree 37 61.7

Not sure 5 8.3

Total 60 100.0

Source: Primary Data

The table 13 above indicates that highest percentage (61.7 percent) of the respondents agreed

that management of the company rewards workers for the extra work load. These were followed

by 30 percent who strongly agreed and only 8.3 percent who were not sure whether management

27

rewards workers for the extra work load given. This implies that workers are motivated even to

work beyond the expected work load since they expect more rewards for their contribution.

Table 14 Showing Employees have a Strong Desire to Work in this Company because it encourages workers training and development.

Response Frequency Percent (%)

Strongly agree 21 35.0

Agree 29 48.3

Disagree 9 15.0

Strongly disagree 1 1.7

Total 60 100.0

Source: Primary Data

From the above table, the highest percent of respondents that is 48.3 percent and 35 percent of

the respondents agreed and strongly agreed respectively that they have a strong desire to work in

this company because it encourages workers training and development. While 15 percent and 1.7

percent of the respondents disagreed and strongly disagreed respectively. This indicated that they

do not have a strong desire to work for the company and therefore are likely to leave. This

28

therefore implies that some few employees may leave the company which might also contribute

to the labour turnover in this year.

4.3 SECTION C: LABOUR TURNOVER

Table 15 Showing Tandem System Limited experiences Labour Turnover every year

Response Frequency Percent (%)

Strongly agree 19 31.7

Agree 41 58.3

Total 60 100.0

Source: Primary Data

From table above, the highest percentage of the respondents that is 58.3 percent and 31.7 percent

agreed and strongly agreed respectively that Tandem System Limited experiences Labour

Turnover every year. This was also evidenced in the Company Personnel Records of 2009 where

it’s said that the company has been experiencing labour turnover.

Table 16 Showing how employees rate the level of labour turnover in this company

Response Frequency Percent (%)

29

High 41 68.3

Low 19 31.7

Total 60 100.0

Source: Primary Data

Table 16 indicates that 68.3 percent of the respondents rate the level of labour turnover to be

high and 31.7 percent of the respondents rate it to be low. In an interview with the workers they

said that in the past years that is from 2006 to 2009, workers have been leaving because they

could complain about the pay, others wanted to get experience with new companies that had

come into the market. This implied that during this time the company was incurring cost of

recruitment.

Table 17 Showing what Employees expect the rate of labour turnover to be this year.

Response Frequency Percent (%)

High 17 28.4

Low 32 53.3

Very low 11 18.3

Total 60 100.0

Source: Primary Data

Table 17 shows that the highest percentage of respondents (53.3 percent) expect the rate of

labour turnover to be low, followed by 28.4 percent who expect it to be high and only 18.3

percent of the respondents expect the rate of labour turnover to be very low. This implies that

this year the company may not spend a lot on recruitment and training programmes.

Table 18 Showing whether Employees had ever worked with another Company before.

Response Frequency Percent (%)

30

Yes 14 23.3

No 46 76.7

Total 60 100.0

Source: Primary Data

Table 18 indicates that 76.7 percent of the respondents had never worked with any other

company and only 23.3 percent of the respondents had previously worked with other companies

before they joined Tandem System Limited. This implies that most of the employees have gained

their training and experience from this company and only a few (23.3percent) have imported

skills from other companies which also helps to improve on productivity.

Table 19 Showing the reason why they left their companies where they were working

before.

On this question response was obtained from 14 respondents since they were the only ones who

had come from other companies.

Response Frequency Percent (%)

Poor salary 4 28.5

Accommodation 3 21.4

Poor Relationship With

management

1 7.1

Other specify 6 46.7

Total 14 100.0

Source: Primary Data

From the table 19 above, 28.5 percent, 21.4 percent 7.1 percent had left other companies because

of poor salary, accommodation, and poor relationship with management respectively. 46.7

31

percent of the respondents had left their former companies because of the following;

dissatisfaction with work, distance between work station and their homes, desire for change,

delay in payment and not receiving any excuse from their managers about the delay.

4.4 CAUSES OF LABOUR TURNOVER AT TANDEM SYSTEMS LIMITED

Here respondents were asked to state some factors that are causing labour turnover at Tandem

Systems Limited and their response was as follows;

Table 20 Showing Causes of Labour Turnover at Tandem Systems Limited

Cause Frequency Percent (%)

Work stress 9 15.0

Perception about career 7 11.7

Job dissatisfaction 11 18.3

Competition in for labour 3 5.0

Prospect of getting higher pay 29 48.3

Sickness 1 1.7

Total 60 100.0

Source: Primary Data

32

Table 20 show that 29 out of 60 respondents (48.3 percent) argued that prospect of getting the

higher pays in other companies has been a factor causing labour turnover in the company. 11 out

of 60 respondents (18.3 percent) also said that job dissatisfaction is another factor causing labour

turnover, this factor was highlighted by degree holders mostly.

15 percent of the respondents argued that work stress is one of the factors that make some

employees to leave. They say that work is so tiresome since it involves a lot of standing and

walking at the site, this was an argument from the women.

Also 11.7 percent of the respondents highlighted on perception about their future carrier, this was

also highlighted by women mostly. They said the work of construction is for men and that’s why

when they get alternative sources of income, it becomes easy for them to leave.

5 percent of the respondents believe that competition for labourers between firms causes labour

turnover. This was revealed by top managers who said when new companies in the same industry

were created in Masindi, they faced a challenge retaining some workers hence some employees

were left in the process.

4.5 RELATIONSHIP BETWEEN EMPLOYEE REMUNERATION AND LABOUR

TURNOVER

Table 21 Showing Reduction in Wages and Salaries leads to a higher Labour Turnover in a

company.

Response Frequency Percent (%)

Strongly agree 24 40.0

Agree 36 60.0

Total 60 100.0

Source: Primary Data

33

Table 4.19 indicates that 60 percent agreed that reduction in wages and salaries leads to a higher

labour turnover in a company and these were followed by 40 percent who strongly agreed. This

implies that the company should keep a clear and stable pay of wages and salary so as to prevent

labour turnover.

Table 22 Showing Provision of Incentives to Workers motivates them and hence reduces

On Labour turnover.

Response Frequency Percent (%)

Strongly agree 15 25.0

Agree 35 58.3

Not sure 5 8.3

Disagree 3 5.0

Strongly disagree 2 3.3

Total 60 100.0

Source: Primary Data

Table 22 above shows that 58 percent and 25 percent of the respondents agreed and strongly

agreed respectively that provision of incentives to workers motivates them and hence reduces on

labour turnover, and 8.3 percent were not sure. While 5.0 percent and 3.3 percent disagreed and

strongly disagreed with the fact that provision of incentives to workers motivates them and hence

reduces on labour turnover. Basing on the highest percentage of respondents who strongly

34

agreed, it implies that Tandem System Limited gives incentives in addition to wages and salary

to its workers. This leads to improved productivity of labour and also labour retention.

Table 23 Showing Pearson Correlation between Employee Remuneration and Labour

Turnover.

Correlations

Employee

Remuneration

Labour

Turnover

Employee Remuneration Pearson Correlation

Sig. (2-tailed)

N

1.000

.

60

- .702**

000

60

Labour Turnover Pearson Correlation

Sig. (2-tailed)

N

- .702**

000

60

1.000

.

60

** Correlation is significant at the 0.05 level (2-tailed).

Using the rating level of;

0 to -+0.3= Weak Relationship

-+0.4 to -+0.6= Moderate/ Average Relationship

-+0.7 to -+0.9= Strong Relationship

35

Table 23 indicates that there is a strong negative relationship between Employee Remuneration

and Labour Turnover at regression (r) = -0.702 and at level of significance 0.05, this implies that

the higher the remuneration (wages, salary and incentives) the lower the labour turnover hence a

high employee retention in the company and the lower the wages, salaries and incentives, the

higher the labour turnover hence low labour retention. This is also in agreement with the findings

of Taylor 1947 who said that man is a rational animal concerned with maximizing his economic

gains and therefore will always move to look for higher pay.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 INTRODUCTION.

This chapter summarizes the findings reported in chapter four according to questions of the

study, draws conclusions, suggests recommendations and also proposes some areas for further

study.

5.1.0 Summary of Findings

5.1.1 Respondents’’ Personal Profile

The study comprises of 60 respondents of whom 73.3 percent were male and 26.7 percent were

female. Their level of education included 51.6 percent had not attained any level of education

and these were the casual labourers, followed by 18.4 percent with certificates, 15 percent with

diplomas, 10 percent with degrees and lastly 5 percent with masters. Of these respondents, 63.3

percent of the respondents were still single while 36.7 percent were married.

36

5.1.2 Components of Employee Remuneration

It was found out that Tandem Systems Limited employee remuneration structure largely

comprises of wages, salary and incentives this was revealed by 100 percent of the respondents

(Table 6).

Furthermore, the study found out that the company has a clear salary structure, and this was

revealed by the highest percentages of respondents that is 43.3percent and 38.3percent who

agreed and strongly agreed respectively that the company has a clear salary structure. The study

also found out that management gives explanation in case of delayed payments (Table 8).

On employee empowerment the study found out that management conducts regular meetings that

could reduce employee dissatisfaction at work, rewards workers for the extra work load given.

However it was found out that management does not make regular pay increments in relation to

price changes in the market as revealed by 48.3 percent and 45 percent of the respondents.

5.1.3 Level of Labour Turnover at Tandem Systems Limited

It was found out that level of labour turnover is low since the highest response from 68.3 percent

respondents said that it was low and only 31.7 percent said that it was high (Table, 16). Also the

employees expect the rate of labour turnover to be low and very low as revealed by 53.3 percent

and 18.3 percent respectively.

The study also found out that 76.7 percent had attained training and experience from Tandem

Systems Limited and that they were still royal to this company and only 23.3 percent of the

workers had previously worked with other companies.

37

5.1.4 Causes of Labour Turnover at Tandem Systems Limited

The respondents revealed the following causes of labour turnover at Tandem System Limited;

Work stress (15 percent), perception about their career (11.7 percent), job dissatisfaction (18.7

percent), competition for labour (5 percent), prospect of getting a higher pay (48.3 percent) and

sickness (1.7 percent), (Table 20). It was found out that prospect of getting higher pay and job

dissatisfaction are prominent causes of labour turnover in the company.

5.1.5 Relationship between Employee Remuneration and Labour Turnover.

It was found out that there is a strong negative relationship between Employee Remuneration and

Labour Turnover at regression (r) = -0.702, therefore a reduction of wages and salary leads to a

high labour turnover and this was also evidenced by the response from 60 percent and 40 percent

of the respondents who agreed and strongly agreed respectively (Table 20). Further more the

study found out that provision of incentives to workers motivates them and hence reduces on

labour turnover.

5.2 Recommendations of the Study.

Regular meetings should be conducted to ensure good communication between employees and

management hence addressing the problem of job dissatisfaction.

Companies are advised to set up a common rate for wages and salary that will prevail in the

industry, this will also help to reduce movement of employees from one company to another

looking for higher pays and this will also reduce on competition for labour.

Also companies are advised to make regular pay increments in relation to price changes in the

market.

38

5.3 Conclusion.

From the study findings, there is a strong negative relationship between Employee Remuneration

and Labour Turnover at regression (r) = -0.702 and at level of significance 0.05, this implies that

the higher the remuneration (wages, salary and incentives) the lower the labour turnover hence a

higher employee retention capacity in the company. In addition to remuneration there are other

factors that cause labour turnover and these included Work stress, perception about career, job

dissatisfaction, competition for labour, prospect of getting a higher pay and sickness.

5.4 Suggested Further Research

Further research should be carried out to find out the extent to which other factors affect the

level of labour turnover other remuneration.

5.5 Anticipated problems to the study

While carrying out the study the researcher faced the following problems;

Financial problems in terms of photocopying, secretarial services, transport costs were

faced. However the researcher solicited funds from brothers, family friends and also

savings from work.

The researcher also faced problems of unresponsive respondents in conducting the

research. This was dealt with by giving them ample time to fill the questionnaires during

their free time.

Time frame in which the researcher was required to produce a final report was not

enough. This was dealt with by using the project schedule accurately.

39

REFERENCES

Armstrong, M. (1996). A hand Book of Personnel Management Practice. Kogan Page Ltd London

Bwire, P. (2005). The Impact of Low Wage Payment on Labour Turnover. Makerere University Library.

Chavan, S. (2010). Challenges Affecting Remuneration. Available from http://www.managementparadise.com/forums/human-resources-management/201092-challenges-affecting-remuneration.html [accessed on 22nd feb 2011]

Clint, J. (2004). Effects of Employee Turnover. Flat world knowledge. Available from http://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Employee-Turnover.html#ixzz1Ezy6e6RS.

Eseme, D.G (2010). "Organizational retention strategies and employee performance of Zenith Bank in Nigeria", African Journal of Economic and Management Studies, Vol. 1 pp.61–74.

Kamukama, N.A. (2006). Cost and Management Acounting.

40

Maclean, B. & Stacey, C. (2009). Employee Turnover Causes and the Role of Compensation. Available from http://blogs.payscale.com/compensation/2009/02/employee-turnover-causes.html

Mahendra, S. (2010). Human resource management: Factors influencing remuneration. Presntation transcript: Available from http://www.slidenet/sachin.mk/factors-influencing-employee-remuneration.

Maicibi, N.A. (2003). Pertinent Issues in Employees Management. Kampala: M.P.K Graphics (U) Ltd.

Maslow, A. (1970). Motivation and Personality. 2nd Ed. New York: Harper & Row.

Mullins, L.J. (1999). Management and Organizational Behavior. 5thEd. Financial Times. London: Prentice Hall.

Pencavel J. H. (1972). Wages, Specific Training, and Labor Turnover in U.S. Manufacturing Industries. International Economic Review Vol. 13, No. 1 (Feb., 1972), pp. 53-64.

Stahl, M.J. (1995). Management. Total quality in a Global environment. Blackwell Publishers, Cambridge.

Staw, R. & Mowday, R. (1981). Employee Turnover and Post Decision Accommodation Process. Blackwell Publishers, Cambridge.

Stewart, A.M. (1994). Empowering People. London. The institute of management and Pitman Publishing.

Taylor, F.W. (1947). Scientific Management. New York: Harper & Row Publishers

APPENDIX I: INTRODUCTORY LETTER

41

APPENDIX II: QUESTIONNAIRE

Dear respondents,

42

I am Namiiro Phiona a bachelor of commerce student of Makerere University carrying out a

study on the impact of employee remuneration on labour turnover.

I humbly request you to spare some few minutes of your time and answer these questions below.

The study is strictly for academic purposes and will be treated with utmost confidentiality.

Your cooperation is highly appreciated.

Section A

Please tick in the boxes provided

Personal data

1. Gender or the respondents

a) Male

b) Female

2. Respondents level of education

a) Certificate

b) Diploma

c) Degree

d) Masters

e) Non of the above

3. Marital status

a) Single

b) married

Section BEmployee RemunerationComponent of Employee Remuneration

Tandem System Limited employee remuneration structure has the following components.

43

Component Strongly Agree Agree Not Sure Disagree Strongly Disagree

i. Wages

ii. Salary

iii. Incentives

iv. Fringe benefits

v. Perquisite

Employee Empowerment

The following is the meaning of each abbreviation in the table;

Strongly Agree (1) Agree (2) Not Sure (3) Disagree (4) Strongly Disagree (5)

Question 1 2 3 4 5

5 The company has a clear salary scale structure that is well

known to the employees

6 The management gives explanation in case of delay to pay

7 My pay at work is fair compared to my in put in the

company

8 The company makes regular pay increments in relation to

price changes in the market.

9 The pay I get compared to that of other workers in the

neighboring companies favours me to stay.

1

0

The company organizes regular meetings that could reduce

workers dissatisfaction

1

1

The management of the company rewards workers for the

extra load given to them

1

2

I have a strong desire to work in this company because it

encourages workers training and development

Section B

Labour Turn Over

44

Question 1 2 3 4 5

13 Tandem System Ltd experiences labour turnover every

year

For the Table below these abbreviations will be used in 14 - 15;

Very High (1) High (2) Low (3) Very Low (4)

Question 1 2 3 4

14 How do you rate the level of labour turnover in this company?

15 What do you expect the rate of labour turnover to be this year?

16. Have you ever worked with another company before?

a) Yes

b) No

17. If yes, why did you leave that company?

a) Poor salary

b) Accommodation

c) Poor relationship with management

d) Others specify……………………………………………………………………………

18. What do you think is the major cause of labour turnover in this company?

………………………………………………………………………………………………

19. In your opinion what should be done to reduce labour turnover in this company?

………………………………………………………………………………………………

………………………………………………………………………………………………

Relationship between Employee Remuneration and Labour Turnover

45

Question 1 2 3 4 5

20 A reduction in wages and salaries leads to a higher

labour turnover in a company.

21 Provision of incentives to workers motivates them and

hence reduces on labour turnover.

THANK YOU VERY MUCH FOR YOUR COOPERATION

APPENDIX III: INTERVIEW GUIDE

46

Dear respondents,

I am Namiiro Phiona a bachelor of commerce student of makerere university carrying out a study

on the impact of employee remuneration on labour turnover.

I humbly request you to spare some few minutes of your time and answer these questions below.

The study is strictly for academic purposes and will be treated with utmost confidentiality.

Your cooperation is highly appreciated.

1. For how long have you worked in this company?

2. The company has a clear salary scale structure that is well known to the employees.

3. The management gives explanation in case of delay to pay.

4. My pay at work is fair compared to my in put in the company.

5. Does management get some complaints about employee remuneration?

6. What kind of complaints does it receive?

7. Does the company make regular pay increments in relation to price changes in the

market?

8. The pay I get compared to that of other workers in other companies favours me to stay.

9. The company organizes regular meetings that could reduce workers dissatisfaction.

10. The management of the company rewards workers for the extra load given to them.

11. Tandem System Ltd experiences labour turnover every year.

12. How do you rate the level of labour turnover in this company?

13. What do you expect the rate of labour turnover to be this year?

14. What do you think is the major cause of labour turnover in this company?

15. In your opinion what should be done to reduce labour turnover in this company?

THANK YOU VERY MUCH FOR YOUR COOPERATION

47

APPENDIX IV: RESEARCH PROJECT SCHEDULE

ActivityWEEKS

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1 Topic selection

2 Proposal writing

3

Distribution of

questionnaires and

interview guides (data

collection)

4 Editing and coding

5 Data entry

6

Data presentation and

interpretation of findings

7

Presentation of 1st draft

dissertation

8

Correction of the draft

dissertation

9

Submission of final

report

48

APPENDIX V: RESEARCH PROJECT BUDGET

ITEMS COST (Shs)

Lunch 25.000

Printing 43.000

Transport 60.000

Binding 24.000

Stationery 12.000

Telephone calls (air time) 5.000

Total 169.000

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