THE EFFECT OF EMPLOYEE TURNOVER ON ORGANIZATION PERFORMANCE THE CASE OF OROMIA BANK

Abstract

The purpose of this study was to examine the effect of employee turnover on the organizational performance of Oromia Bank. A descriptive research design with a mixed research approach was employed. Proportionally stratified sampling techniques, simple random techniques, and the purposive sampling technique were used to select samples from the target population. Data were gathered using a semi-structured questionnaire and semi-structured interview from 244 sampled respondents and four interviewees, including directors, chief officers, and deputy chief officers. Additionally, primary data were gathered from different documents. From inferential statistics, independent sample linear regression was employed, and from descriptive statistics, frequency, percentage mean, and standard deviation were employed to analyze the data. The findings from both quantitative and qualitative sources concomitantly revealed that there is staff turnover in Oromia Bank caused by factors like the search for better employment opportunity, career development, compensation, and salary, as well as poor governance, high work pressure, and poor training and development opportunities. Additionally, it is found that existing employee turnover has affected organizational performance. From this, it is concluded that the existing staff turnover in Oromia Bank is caused by uncompetitive career development, compensation, and salary, poor governance, high work pressure, and poor training and development opportunities. Additionally, it is concluded that employee turnover has affected organizational performance, resulting in declined service delivery, low productivity, and a high cost of hiring new employees. Hence, it is recommended that Oromia Bank improve its career development opportunities, salary and benefit status, increase its workforce to reduce workload, provide continuous training for employee development, and create a conducive, clean, and stable work environment to reduce employee turnover. Finally, to enhance its productivity, service quality, and delivery time to maximize its profitability, Oromia Bank is recommended to retain its experienced employees.