This document summarizes a marketing management project submitted by 5 students to their project advisor Aziza Munir. The project focuses on employee turnover at Dancom Communication and how it affects organizational effectiveness. It includes an acknowledgement, dedication, executive summary that outlines the problem of absenteeism and turnover and examines causes and costs. It also provides an introduction to Dancom Communication, its services, objectives, and growth. The research process is then outlined which discusses problem statement, preliminary data collection through interviews and literature review, theoretical framework, hypothesis generation, and research design.

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PROJECT ADVISOR : AZIZA MUNIR
PROJECT SUBMITTED BY
• MAAZ JAVED SHEIKH-(052)
• HASSAN ASGHAR SIPRA-(037)
• KAZI YASIR IRSHAD-(055)
• KASHIF RASHID-(048)
• JAZIB SARWAR-(046)
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY

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“Department of Management Sciences”
ACKNOWLEDGEMENT
First of all we are thankful to Almighty Allah who gave us
strength for the commencement of this project. And secondly
thanks to our respected MA’M AZIZA MUNIR. We are really
thankful to MANAGEMENT for its cooperation that really
helped us in providing the information regarding the company.
DEDICATION
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY

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We dedicate this project to our teacher, Ma’m Aziza Munir who
assigned this project to us. And to our beloved parents who always
pray for us.
EXECUTIVE SUMMARY
Productivity or effectiveness of an organization frequently suffers
as a result of high level of absenteeism and worker turnover.
There is evidence that all concerned owners, contractors and
workers are interested in resolving problem. This study examines
the source and size of problem and recommendations to reduce
it. For this purpose we have conducted interviews and literature
survey in order to investigate the organization effectiveness.
This report describes an HR management tool for decreasing
turnover at Dancom Communication. High employee turnover is like
shrink. It cuts into the bottom line, but it can be controlled. There
are many potential causes for turnover. Certainly, area economic
conditions as well as other factors such as labor market
conditions, effect general turnover rates.
In voluntary turnovers are difficult to directly manage however
are voluntary turnover that can be managed. The purpose of this
literature survey is to allocate the important variables of our
existing problem I-e “How does employee’s turnover affect the effectiveness of
organization”. With the help of these variables we a can assess the
variables related to our problem for structuring theoretical
framework. This survey includes the situation which had occurred
in past with others companies and how those companies deal
with these variable means how they solved different problems.
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After completing literature survey and defining problem there is
need to develop framework. In it we try to discuss the
interrelationship among the variables that are deemed to be
integral to the dynamics of the situation being investigated.
Different variables can affect the effectiveness of organization we
are considering all-important variables that can affect the
company. After the thorough study of literature survey we deduct
some variables, which can become a cause that can effects the
sales and keeping in mind we make schematic diagram of the
theoretical framework so that the reader can see and easily
comprehend the theorized relationship.
The research design, which involves a series of rational decision-
making choices, the various issued involved in the research
design, will be discussed here. Like Purpose of the study, Types
of investigation, Extent of researcher interference, Study setting,
Measurement and measures, Unit of analysis, Sampling, Time
horizon and Data collection method but the hypothesis statement,
which we are going to proof, it will come under hypotheses testing
study.
This study that engage in hypotheses testing usually explain the
nature of certain relationships, or establish the differences among
groups or the independence of two or more factor in a situation
Causal type of investigation is done, when it is necessary to establish a
definitive cause and effect relationship, however, if the
researcher simply wants a mere identification of the important
factors “associated with the problem” then a correlation study is
called. Correlation type of investigation will be suitable for our research,
actually our hypotheses is “ effective compensation has positive
impact on organizational effectiveness” That’s why we select this
method to identify the important factor associated with the
problem.
A correlational study is conducted in the natural environment of the
organization, with the researcher interfering minimally with the
normal flow of work. Organizational research can be done in the
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natural environment where work proceeds normally (no contrived
settings) or in artificial, contrived settings. As we have selected
correlational investigation method with minimum interference,
then automatically our study setting will be no contrived. Its mean
our research will be conduct under natural environment.
What we are going to apply in our project that is ratio scale and
interval scale because these scales give maximum accuracy in
measuring the variable. Even though the method we have
selected for investigation is correlational that provide less
accuracy as compare to causal. In this project we selected”
individuals and organizational” as a unit of analysis, and this selection is
match with the definition of unit of analysis.. Why we chose
probability sampling? Because the sample we get from probability
have the quality of representatives. We have proved that there is
positive relation between compensation and effectiveness. By
increasing the retention rate;
• Retaining hourly employees.
• Improving management retention.
• Training first than promoting.
• Attractive salary packages.
• To motivate employees.
Management through selection.
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY

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TABLE OF CONTENTS
• Problem Statement
• Broad Problem Area
• Preliminary data gathering
1. Unstructured Interviews
2. Literature Survey
• Theoretical framework
• Generation of hypothesis
• Research design
1. Purpose of Study
2. Type of study
3. Study setting
4. Unit of Analysis
5. Time Horizon
• Sampling

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• Data Analysis
• Data Interpretation
• Conclusion / Deduction
• Recommendation to Management
OBJECTIVE OF STUDY
The main objective of our project is to apply our concept and
knowledge in practical
scenario. And how the organizations are getting competitive
advantages through conducting business research.
Nowadays, as we know organization can increase their
profitability, customer satisfaction, and productivity by
conducting business research. Because through business
research we can detect the real problem and its cause.
That’s why, we can say that research generates alternative
to solve problems. By getting solution of the problems in time
we can run our business smoothly and effectively.

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BRIEF INTRODUCTION OF
COMPANY
Our Beginning
From a small beginning in 1997, Dancom Pakistan (Pvt.) Ltd.
has now become a major player in the local communication
arena. Dancom in Pakistan is subsidiary of Dancom Malaysia,
specializes in smart technology-based product applications,
cellular deployments: IT related projects, digital TV, Broadband
wireless and turn key solutions related to telecommunication
projects.
DANCOM In Pakistan
Dancom Pakistan (Pvt.) Ltd. was established in 1995 under the
Company ‘s Ordinance 1984. Our major shareholder, Dancom
Telecommunication (M) Sdn Bhd Malaysia provides total
Telecom &IT solutions for the Malaysian marker and abroad as
well. The group specializes in smart technology-based product
applications, cellular deployments; IT related projects Digital
TV, Broadband wireless and turnkey solutions related to
telecommunication projects.
The Company, core strength lies in its state of the art telecom
systems deployment, dedicated expertise to manage and
operate the core network, and an effective after sales support
network of over 6 offices al over Pakistan with over 800
personnel. Dancom established the telecom services with a
mission to provide easy and manageable access to the
workforce of general consumers.
Since 1997,Dancom ‘s team has made consistent efforts to
establish its services all over Pakistan including the remotest
parts such as AJK, Northern Areas and the other far-flung
remote areas of the four provinces of the country.

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To meet the requirement of the corporate sector for its online
networking all over Pakistan, Dancom has successfully
deployed and tested the system, which is capable of providing
wire line and wireless connectivity. Dancom also provides
managed Internet access service for Corporate/SME/SOHO
and also offers turnkey solutions including LAN & WAN support.
Dancom continues to invest in the latest telecom systems in
order to provide services with high quality standards. Dancom
Pakistan Head office is located in Islamabad with its network of
regional and area offices in all major cities of Pakistan. The
Corporate Headquarter is based in Petaling Jaya, Malaysia.
Call Point
Our card pay-phone service in Pakistan, the card pay-phone
technology is considered the standard mean in providing public
telephone service to the common man. Dancom started its first
public card phone installation in jan.,1997 from the cultural city
of Lahore. The card phone terminal & system were imported
from a Greek telecommunication manufacturer. Today,
Dancom continues to increase its Card phone deployment so
as to bring it within the access of the common masses, the
actual users of the Card phone service. Our Card phones are
branded as call point and the illuminated signboards all over
Pakistan show the significant presence of our Card phone
Network. Dancom successfully achieved its target of installing
20,000 Card phones all over Pakistan including the rural areas
within 5years.
The card pay phones are interconnected with public switched
Telephone Network (PSTN) of Pakistan Telecommunication
Company (Pvt.) Ltd. (PTCL). Our card pay phone lines are
protected against misuse etc. through a hardware protection
device called line protection unit (LPU and are installed in
collocation manner with PSSTN Distributions Frames. The card
pay phones are managed using a remote

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management system called card phone supervision and
management system (CSMS. At each regional level, one Unix
based CSMS supports approximately 2000 card payphones
and our Regional CSMS are connected with the National
Management system.
The phenomenal success of our card pay phone service was
possible due to the selection of good technology; active
marketing, team spirit and above all profession back up
service.
Our Objectives
“Building Bridges” these two words truly describe the objectives
of Dancom, we area committed to bringing you closer to your
people, your world and your dreams. Connecting people and
nations to the world is what we do best through
telecommunication and IT. Whichever direction you choose to
go in, Dancom will accompany you with custom solutions for all
your needs.
Our Mission
To be a leading market oriented company providing quality telecommunication
solutions so as to provide value to the customers, principals, employees and
shareholders of the company.
Dancom Online Our Internet service
Dancom Online Internet service started in Dec.2001 from
Islamabad, and gradually expanded to Karachi Lahore,
Peshawar, Faisalabad, Multan, Gujranwala, and Quetta.
Dancom Internet service’s available in the form of prepaid
cards as well as postpaid packages. Dancom Online is
providing the most consistent Internet service to its users
through its easy to use prepaid Internet cards of various
denominations, eliminating the hassle of registration process

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as well as monthly billing. Through our (prepaid) scratch cards,
a user can create login name and password of his own choice
and upon expiry of cards, the same login name can be
continued by recharging the amount of account with another
scratch card.
Dancom Online service features are:
Highs peed backbone
No monthly bills
No Credit checks
No contract or obligations
Bigger Mail Box 8mb 10mb
Fast &reliable connection speed
Fastest download speed ever.
User friendly (login and password of your own choice)
Why are different from other Internet service Providers?
No disconnection due to collocation of equipment in PTCL
exchanges premises.
High capacity Cache service.
Dual bandwidth (optical fiber & satellite)
Single local call charges irrespective of the duration of the call
Highly reliable Mail Server
Roaming service in more than 150 cities of Pakistan
24/7 Help-line services at 111-505-555
Our Growth
Since we initially started out in 1997, Dancom‘s team of
hardcore professionals has spread their resources to the

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furthest corners of Pakistan. Dancom is now operation 65
offices in Pakistan, serving the needs of a growing country.

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THE RESEARCH PROCESS
In this section we will discuss each and every step of research
process that is:
• Problem Statement
• Broad Problem Area
• Preliminary data gathering
• Theoretical frame work
• Generation of hypothesis
• Research design
• Data analysis
• Data interpretation
• Conclusion / Deduction
Recommendation to Management

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PROBLEM STATEMENT
“How does employee’s turnover affect tHe
effectiveness of organization”?
BROAD PROBLEM AREA
Employee’s turnover is a serious problem in organization and
warrants attention. Poor supervision, unproductive
relationships with boss, poor planning, non-attractive
packages, non-motivation and generally poor management are
the prime reasons for turnover. Lower turnover offers a broad
range of productivity gains. As the turn over lies in all the
organizations but we have selected one organization (Dancom
Company). In order to implement our concept and knowledge
regarding employee’s turnover. What are the causes of
employee turnover? How it causes the ineffectiveness of
organizations, How to reduce it?
In broad problem area our focus is on these three things:
• Background information of the organization
• Company polices
• Perception behavior responses of organization members

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In background information in the organization we have origin
and history of the company when it came into being business
is in ownership and control. size in term s of employees,
assets purpose and ideology. Background detail of the
company we obtained from published records website of the
company.
Employee’s turnover is broad area, which includes skilled and
unskilled workers but we are focusing on skilled workers.
Unskilled workers turnovers are immaterial with assumption of
100% of labor availability in Pakistan. Pakistan being
developing country unemployment is more than other
countries. So unskilled workforce is available any time. So it
does not make any contribution to organizational effectiveness.
Skilled workers can effect more the effectiveness of
organization.
This study is aimed at the achieving productivity gains in
organization through an improved understanding of causes
and effects of turnover, specifically, the study sought to:
• Verify the problem.
• Analyze the major contributing factors.
• Quantify the costs.
• Offer recommendation for corrective action.
SPECIFIC PROBLEM AREA
To specify the problem, Dancom PVT [Ltd] is facing more
employee’s turn over in their franchisees in major cities of
Pakistan. Ratio of employee’s turn over in Islamabad is twice
more then in Faisalabad. In Lahore ratio is 1.5% and in Karachi
ratio is 3.2%. Main problem is that company has no control on
it. Ratio is increasing at 0.2% after 6 months.

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GENERATION OF HYPOTHESIS
Statement of Hypothesis
First of all, there is a need to make clear understanding with
the term of Hypotheses. Its means that “A formal testable statement”
or “any assumption, claim and statement about population’s characteristics are
called Hypothesis”.
A hypothesis can be defined as a logically conjectured relationship between two or
more variables expressed in the form of a testable statement:
Here we have developed hypothesis statement on the basis of
our theoretical framework. And then we will try to proof these
statements.
(1)Whether there is positive relationship between compensation and
organizational effectiveness.
(2)Whether there is negative relationship between compensation and
employees turn over.

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(3) Does job security of employee affect the effectiveness of
organization?
(4) Does poor planning of employees affect the effectiveness of
organization?
Note
In statement of hypothesis we develop the relationship among
different variables but we found Compensation as most important and
discussible so we select it to prove it and all remaining project
will be based on this hypothesis statement.

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Preliminary Data Collection:
How study was made:
A group member of our group was retained to devise a questionnaire, based on team’s
understanding of the practical problems to identify the reason for turnover from workers
perspective. The questionnaire was designed specifically to measure worker or
employees attitude about their job and to investigate underlying causes for turnover.
Preliminary data was collected from different resources to anticipate potential problem.
During survey different employees were asked about voluntary termination.
In order to get information about on project we have used two methods as follows:
1. Interviews
• Unstructured interviews
• Questionnaires
2. Literature survey
To conduct interview we have addressed following people:
1. Mr.Jafar Raza
HR Manager
Dancom PVT [Ltd.]
F/8-Islamabad
2. Mr. Waris Niazi
Assistant Manager
Islamabad Stock Exchange
3. Mr.Khushal Khataq
Head of Department [Economics](R)
H-8 F.G. College For Men Islamabad.

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Questionnaires For the Topic
Q: 1 what is your expectations from organization?
(a) Good feed back
(b) Good compensation
(c) Overtime
(d) Benefits
Q: 2 what makes you to work at organization?
(a) Good package
(b) Bonus
(c) Flexible working hours
Q; 3 what do you think about turnover is caused by
(a) Less wages
(b) Boss relation
(c) Inflexible hours
Q: 4 In which case you will not leave the organization?
Q: 5 In what conditions you would like to work?
(a) High pay offering
(b) Working conditions
(c) High growth organization
Q:6 Employees commitment depends upon;
a) Overtime bases
b) Good compensation
c) Good relation with boss
d) Increasing their moral

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Q: 7 How does employees’ turnover can be reduced?
(a) Revising salary
(b) Increasing basics
(c) Increasing incentives
(d)Providing facilities
Q;8 How does job growth of employees within the organization affects?
(a) Positively
(b) Negatively
(c) Challenging
Q; 9 Do you get the additional benefits like allowances, bonus?
. (a) Strongly agree
(b) Agree
(c) Neither Agree nor Disagree
(d) Disagree
(e) Strongly disagree
Q: 10 Does turnover cause organization high cost and inefficiency in working?
(a) Strongly agree
(b) Agree
(c) Neither Agree nor Disagree
(d) Disagree
(e) Strongly disagree
Q: 11 High level of growth leads efficient working of organization and cause low
turnover.?
(a) Strongly agree
(b) Agree
(c)Neither Agree nor Disagree
(d) Disagree
(e) Strongly disagree
Q: 12 Better Compensation to an employee is a factor that can cause employee
turnover.
(a) Strongly agree
(b) Agree
(c) Neither Agree nor Disagree
(d) Disagree
(e) Strongly disagree

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Q: 13 Better wages makes employee motivation high.
(a) Strongly agree
(b) Agree
(c) Neither Agree nor Disagree
(d) Disagree
(e) Strongly disagree
Q: 14 Job growth in an organization is very much important for an employee?
(a) Strongly agree
α (b)Agree
β (c)Neither Agree Nor Disagree
(d) Disagree
(e) Strongly disagree
Q: 15 Do you think Behavior of the employer is a factor that motivates employees to
be within the organization?
(a) Strongly agree
χ (b)Agree
δ (c)Neither Agree Nor Disagree
(d) Disagree
(e) Strongly disagree
Q:16 Which type of boss you would like in your organization?
(a) Autocratic
(b) Motivational
(c) Democratic
Q: 17 Would you like to get promotion?
(a) Yes
(b) No
Q: 18 What you think that, job security can increase the efficiency and effectiveness
of person?
(a) Strongly agree
ε (b)Agree
φ (c)Neither Agree Nor Disagree
(d) Disagree
(e) Strongly disagree
Q: 19 Would you like to perform job in this organization forever?

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(a) Yes (b)No
Q; 20 Does proper compensation and bonuses effect the organization
Effectiveness?
(a)Yes (b) No
Q;21 Does working environment effect the organization effectiveness?
(a) Yes (b) No
Q: 22 Does motivation play important role in turnover?
(a) Yes (b)No
(c) Neither yes nor no
Q: 23 To what extent organization effectiveness increases when turn over rate is
low?
(a) 25%
(b) 50 %
(d) 75 %
Q:24 What is your opinion about the leaving organization, when organization?
(a) Does not pay you fairly
(b) Discriminate you
Q: 25 Better environment provided to an organization will cause employee work
more efficiently.
(a) Yes
(b) No
(c) Do not know

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Literature Review
Reason of literature survey
The purpose of this literature survey is to allocate the important variables of our existing
problem I-e “ How does employee’s turnover affect the effectiveness of
organization”. With the help of these variables we a can assess the variables related to
our problem for structuring theoretical framework. This survey includes the situation
which had occurred in past with others companies and how those companies deal with
these variable means how they solved different problems.
manager. Asking employees why they are leaving is generally not a good way to find the
real reason behind their departure. Instead of evaluating employee satisfaction according
to exit interviews, pay attention to the turnover rate. High turnover is the key indicator of
employee dissatisfaction. It takes a lot of effort and risk for an employee to change jobs.
Resigning is the loudest statement they can make to tell you that your management skills
are lacking.
Commit to making every employee feel worthwhile, respected, and revered. You must
not be too busy working in your business to recognize the importance of each and every
one of your employees. One of the Jim Moran Institute's entrepreneurial clients was also
his company's primary salesperson. Because of the huge amount of time he spent selling,
he never had enough time to make his fifteen employees really feel needed and,
consequently, the company experienced high turnover.
Employees can quickly feel less than respected by either abusive bosses or bosses who
are just too busy to give the requisite care. One of the things you can do to help is to
occasionally, tell employees how much you appreciate them. Even better is to tell your
whole company how certain employees have really made a difference. Another thing that
really helps is to make sure you go around and ask employees how they are doing. It all
just boils down to making each and every employee feel worthwhile.
Employee turnover is a good benchmark to evaluate the effectiveness of your
management style. If you are seeing high turnover, your management style may need to
be significantly overhauled.
References#4
Binning, J.F., & Barrett, G.V. (1989). Validity of personnel decisions: A conceptual
analysis of the inferential and evidential bases. Journal of Applied Psychology, 74,
478-494.
An Innovative Approach for Cost-effective Turnover Reduction By John F. Binning,
Ph.D., and Anthony J. Adorno, M.S.Human Resource Group- Bloomington, IL
Turnover costs for many organizations are unacceptably high. When the direct and
indirect costs associated with employee separation, replacement, and training are

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accurately compiled, it is not uncommon for even medium-sized companies to lose
several million dollars a year resulting from employee turnover.
This article describes an HR management tool for decreasing turnover which is based on
professional research linking various job characteristics to job candidates’ sourc
We are now presenting the reference of different sources.
Reference # 1:
Employee Turn Over BY: Dr. Blake Frank
Professor at University Of Dallas.
According to new ideas for retaining store-level employees, a study conducted by Dr.
Blake Frank an industrial psychologist and professor at the University of Dallas, for the
Coca-Cola Retailing Research Council. For those in higher paying jobs, the cost of turn
over is also higher.
Symptoms that organization has to face in response of turnover are:
Direct Costs: Advertising, training, interview time, employment testing, new employees
processing, and backgrounds checks.
Opportunity Costs: Change-making errors, mistakes in paperwork, product damage,
shrink and improper use of equipment.
High as these drains on the bottom line are, they do not include the adverse impact on the
quality of service and customer satisfaction, and a store’s consequent loss of sales as
shoppers “vote with their feet” and take their dollars to another store. The Coca-Cola
study asked participants for a rough estimate of the number of customers lost due to
turnover-related factors.
Reference # 2
Michelle K. Duffy, Daniel C. Ganster, and Jason D. Shaw
Positive Affectivity and Negative Outcomes: the role of tenure and job satisfaction,
Journal of Applied Psychology, 1998 Vol. 83 no 6 pp. 950 - 959
Employee Turnover and Sabotage
A matter of Disposition, Job Satisfaction and Tenure
Understanding an employee's disposition may help predict turnover and purposefully
poor performance. Together disposition and Job tenure along with job dissatisfaction
plays a role in how employees react to stress.
What is positive affectivity
Positive employees are more likely to take a wait and see attitude early in their
employment. But watch out!
Could stress be the reason for turnover and employee poor performance?
Why might it be better, in the long run, to have employees who are low in positive

26. “ MARKETING MANAGEMENT PROJECT”
affectivity?
What can be done
Researchers have found that there is a dimension in personality having to do with a
person's outlook on life. Persons high in this dimension are enthusiastic, active, and
happy. These people are generally more satisfied and see life positively. Persons low in
this dimension are the ones with the dark clouds over their heads. Researchers have
named this dimension positive affectivity (PA).
A study of fire fighter and police employees revealed that PA, a person's positive
disposition or lack thereof, in combination with tenure on the job has a bearing on how
employees react to perceived job dissatisfaction. Employees that are low in tenure, high
in PA and who are dissatisfied with their jobs are less likely to seek another job than
those who are low in PA and who also have short tenure and are also dissatisfied.
The high PA and low tenure employee also experiences less stress and less physical
symptoms of stress than does the low PA low tenured employee.
The positive person seems to be able to take the long view. When they first work for an
organization they feel less stress when experiencing dissatisfaction than negative people
do and are able to reframe from taking action to find a different job. They also do not
engage in counter productive behavior at this stage of their tenure with the organization.
But when positive people, who are dissatisfied with their job, stay with an organization
and become long term employees this changes. They are more stressed by job
dissatisfaction, reporting more physical symptoms related to stress, and more likely to
look for a different job and to engage in counter productive work behavior.
The opposite seems to be true of the more negative person, low in PA. When they are
first with an organization and become dissatisfied they seem to experience more stress
and physical symptoms of stress than the more positive employee experiences. They look
for another job or engage in counter productive work behavior. If they decide to stay with
the organization and become long term employees, they become less likely to leave the
organization and less likely to purposely perform poorly.
This is probably because stress reaction and physical symptoms related to job
dissatisfaction are lower for the long-term low PA employee. The person who views life
more on the negative side seems to be able accept that work is dissatisfying and is able to
plod along without either seeking a different job or performing poorly to get back at the
organization. Since they do not expect to find a greener pasture on the other side of the
hill, a negative outlook on life, they do not seek to leave the organization.
What can be done?
Controlling for job dissatisfaction and stress is an organizations only option. Take a good
look at employees who are dissatisfied with their work and see if adjustments in hours,

27. “ MARKETING MANAGEMENT PROJECT”
duties or work practices can elevate the situation. Not taking action will mean you will
loose valuable employees. Remember that the remaining dissatisfied employee may
begin to overreact and actually work against you. If you have high turnover among sales
persons and other such jobs even among your long term employees you had better take a
hard look at how employees feel about their supervision, work rules, work environment
and the organization as a whole. It may even be better to help employees make
adjustments in their career path leading to work outside the organization. Thereby
avoiding having employees who feel there is no way out and who may have chosen
sabotage as an outlet for their job dissatisfaction stress.
Reference #3
Employee Turnover
February 7, 2003
By Jerry Osteryoung
"The difference between a boss and a leader: a boss says, 'Go!' - a leader says, 'Let's go!'"
-E. M. Kelly, Growing Disciples, 1995
Recently, an entrepreneur whom I am assisting stated that he had 600 W-2's this year and
he has a full time staff of less than 50. When I questioned him about this rapid employee
turnover, he said it was the nature of the business. At this point I wanted to throttle him
by the neck and yell at him, "Employee turnover is bad, bad, bad!" Rather than risk
rupturing my vocal cords yelling, I sat down and listened to him talk about this problem.
What was most disconcerting about the conversation was that he thought the problem
was systemic with today's labor pool and took very little responsibility for employee
turnover in his own management style. Compensation is also caused the employees
Turnover and reduce the effectiveness.
Most employee turnover is related to poor management practices. Yes, employees are
working for wages, but, more importantly, they are working to have their non-financial
needs met. It's important to understand that employees are seeking to extract something
far more than a paycheck from their work. Most employees need to feel respected,
worthwhile and appreciated in their work. Time after time employees leave when they
feel under-appreciated (sometimes for less money), just to have these more important
needs met. The reverse is true as well - when employees are offered a significantly higher
salary from another company, they don't leave if they are appreciated at their current
workplace.
Most entrepreneurs do not perceive themselves as bad managers. However, a high
employee turnover is a telling detail that an entrepreneur may, in fact, be a horrible es of
personal discomfort and dissatisfaction. While this assessment process is relatively new
to the professional HR literature, it has been shown to dramatically reduce annual
turnover rates. In one organization where this type of process was used, annual turnover
was reduced by 54% (from 168% to approximately 78%). In another organization, the
process lowered annual turnover from 120% to 48% (60% reduction).

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MANAGING TURNOVER THROUGH SELECTION
There are many potential causes for turnover. Certainly, area economic conditions, as
well as other factors such as labor market conditions, affect general turnover rates. These
more general causes for involuntary turnover are difficult to directly manage. However,
there are certain causes for voluntary turnover that are associated with any specific job in
a given organization (e.g., non-competitive compensation, high stress, unpleasant
physical or interpersonal working conditions, monotony, and poor direct supervision) that
can be managed.
Although considerable research has been published in professional journals that
underscores the relationship among workers’ preferences, job performance, absenteeism,
and voluntary turnover, there has not been much advancement in the field of personnel
selection based on these findings.
One management option for addressing the issue of employee turnover is to change the
job to eliminate negative characteristics, but this often is not feasible or desirable. An
alternative method for reducing turnover is to screen out potential levers during the hiring
process. Organizations can use the information regarding negative job characteristics as
part of their pre-employment screening process in order to identify job candidates who
are likely to have particularly adverse reactions to these characteristics.
The assessment of employees’ sources of job-related discomfort and frustration has
proven to be a powerful predictor of turnover (Bernardin, 1987). Survey results
consistently indicate that workers' negative emotional reactions to job situations do
predict voluntary turnover. Employees in any job have conscious and unconscious
emotional reactions to work. If these reactions are generally positive, an employee is less
likely to quit.
On the other hand, if these reactions are generally negative, an employee is more likely to
quit. One very promising approach for managing turnover is to identify job candidates
who are more likely to have negative reactions to a given job. These candidates can be
screened out early in the hiring process, thus saving further hiring costs, and decreasing
subsequent turnover. Unfortunately, the most frequently used instruments for identifying
such negative job characteristics (e.g., Job Diagnostic Survey, Job Characteristics
Inventory) have little utility for making employment decisions because the scoring
process is relatively transparent to job applicants.
INTRODUCTION TO THE JOB CONGRUENCE SYSTEM (JCS)
General psychological inventories and realistic job previews have been used to reduce
turnover, but with varying degrees of success. Traditional personality and interest

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inventories are not as successful for identifying candidates who are likely to turnover due
to the ease with which they can be faked during the application process.
Researchers have indicated that deliberate distortion of responses is one of the most
serious problems in the use of instruments designed to measure personality and interest
characteristics. Similarly, realistic job previews are not effective with some job seekers
who are highly motivated to gain employment, because they ignore the negative job
characteristics during the application process, but over time the negative job content
becomes instrumental in the decision to quit.
There is an alternative pre-screening method for reducing employee turnover which has
demonstrated both effectiveness and consistency. The system described here is called the
Job Congruence System (JCS). In HR literature, this general approach has been referred
to as job compatibility or job congruence assessment. The JCS focuses on motivational
characteristics of employees as opposed to traditional assessment of knowledge, skills,
and abilities. The three basic steps of the JCS are,
Identifying specific negative job characteristics which are used to
(2) Create a custom assessment instrument in order to
(3) Screen out individual job candidates who are most likely to have negative reactions to
specific job characteristics.

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Theoretical Framework:
After completing literature survey and defining problem there is need to develop
framework. In it we try to discuss the interrelationship among the variables that are
deemed to be integral to the dynamics of the situation being investigated.
IMPORTANT VARIABLELS:
Different variables can affect the effectiveness of organization we are considering all
important variables that can effect company.
SCHEMATIC DIAGRAM
After the thorough study of literature survey we deduct some variables which can
become a cause that can effect the sales and keeping in mind we make schematic diagram
of the theoretical framework so that the reader can see and easily comprehend the
theorized relationship.
A theoretical framework is a conceptual model of how one theorizes or makes logical
sense of relationship among the several factors that have been identified as important to
problem. We will identify and label following variables.
• Dependent variable.
• Independent variable.
• Moderating variable.
Five basic features for theoretical framework:
• Considering variables on relevant to study.
• Relationship between variables.
• Nature of direction of relationship.
• Clear explanation.
• Schematic diagram.

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• Theoretical Frame work
(I.V) (D.V)
Employees Turnover
Perceived
Inequalities
Job satisfaction
Company
Effectiveness
Allowances &
Benefits
Working Hours
&Job Security
Symptoms
High cost
(Age Differences) Time
M.V wastage
Resources
wastage

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RESEARCH DESIGN:
The research design, which involves a series of rational decision-making choices, the
various issued involved in the research design, will be discussed here. Like
• Purpose of the study
• Types of investigation
• Extent of researcher interference
• Study setting
• Measurement and measures
• Unit of analysis
• Sampling
• Time horizon
• Data collection method
PURPOSE OF THE STUDY
In business research we have three type of study purpose:
Exploratory study
Descriptive study
Hypotheses testing
But the hypothesis statement, which we are going to proof, it will come under
hypotheses testing study. This study that engage in hypotheses testing usually explain
the nature of certain relationships, or establish the differences among groups or the
independence of two or more factor in a situation.
TYPES OF INVESTIGATION
There are two main type of investigation we have in business research that is:
Causal
Correlation
A researcher should determine whether a causal or a correctional study is needed to find
and test hypotheses on hand. Causal type of investigation is done, when it is necessary
to establish a definitive cause and effect relationship, however, if the researcher simply
wants a mere identification of the important factors “associated with the problem” then a
correlation study is called. Correlational type of investigation will be suitable for our
research, actually our hypotheses is “ effective compensation has positive impact on
organizational effectiveness”That’s why we select this method to identify the important
factor associated with the problem.
EXTENT OF RESEARCHER INTERFERENCE
Interference can be happen in two possible ways in business research
Minimal: studying events as they normally occur
Manipulation: control and simulation

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As you know, in the type of investigation stage we have selected the correlational
investigation. A correlational study is conducted in the natural environment of the
organization, with the researcher interfering minimally with the normal flow of work.
STUDY SETTING
Organizational research can be done in the natural environment where work proceeds
normally (noncontrived settings) or in artificial, contrived settings. As we have selected
correlational investigation method with minimum interference, then automatically our
study setting will be noncontrived. Its mean our research will be conduct under natural
environment.
MEASUREMENT AND MEASURES
In business research, there is a need to measure variable, which is present in theoretical
framework to test hypotheses. We have four scaling options to measure variable to test
hypotheses.
• Nominal scale
• Ordinal scale
• Interval scale
• Ratio scale
Each scale method has its advantage and disadvantages. What we are going to apply in
our project that is ratio scale and interval scale because these scales give maximum
accuracy in measuring the variable. Even though the method we have selected for
investigation is correlational that provide less accuracy as compare to causal.
UNIT OF ANALYSIS
Unit of analysis means “ the level of aggregation of the data collected during data
analysis”. In business research the unit of analysis can be
• Individuals
• Dyads
• Groups
• Organizations
• Divisions
In this project we selected”individuals and organizational” as a unit of analysis, and
this selection is match with the definition of unit of analysis.

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SAMPLING
We have two main type of sampling
• Probability sampling
• Non-probability sampling
PROBABILITY SAMPLING
When the elements in the population have a known chance of being chosen as subject in
the sample is call probability sampling
.
NON-PROBABILITY SAMPLING
In non-probability sampling designs, the elements in the population have no probabilities
attached to their being chosen as sample subjects is called non-probabilities.
In short we can say that we are following the probability sampling. Why we chose
probability sampling? Because the sample we get from probability have the quality of
representatives. After choosing the probability sampling, normally we have four purpose
of study that is
:
Genernalizability
Assessing differential parameters in subgroups of population
Collecting information in a localized area.
Gathering more information form a subset of the sample
TIME HORIZON
As far as concern to time horizon of study, we have two-time horizons in organizational
research that is:
• Cross sectional studies/one shot
• Longitudinal studies.
In this project we use one-shot method of time horizon in order to answer a research
problem.

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DATA COLLECTION METHOD
Data can be collected in a variety of ways in different settings, and form different
sources. Data collection methods include:
• Interviews (face-to-face interview, telephone interviews, computer-assisted
interviews and electronic media)
• Questionnaires
• Observation
• Motivational techniques
During the data collection phase we collected data by using two method that is
questionnaire and interviews (face-to-face interviews). To get the relevant information
according to our problem statement, we designed our questionnaire keeping in mind all
the techniques of questionnaire design. And we used different scale in questionnaire like
dichotomous scale and likert scale etc.
We arranged one structure interview with
Mr.Jafar Raza
HR Manager
Dancom PVT [Ltd.]
F/8-Islamabad
For this we purpose we design another questionnaire for manager. He provides very
useful information, which really assisted a lot to complete, this project.
Structured Interview.
3. What are employees expectations from organization?
4. What is the ratio of employee turnover between skilled and unskilled workers?
5. What are effects of turnover that organization has to face?
6. Do you think discrimination between contracted and percent employees lead to
less or more motivation?
7. What are the factors that make employee loyal?
8. Does overtime unavailability in organization causes turn over?
9. How does flexible hours motivate the employees to stay at the organization?
10. To what extent poor planning the cause the turnover in organization?
11. Does over burden and insecurity regarding the job make hurdle for organization
success?
12. To what extent potential cause for turnover, area economics condition labor
market condition effect general turnover rates?
13. To what extent age difference cause employee turnover?
14. How does employee retention play role in organization?

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15. How selection method provides unbiased labor force for organization in order to
increase the effectiveness?
16. Do you give any common suggestions and comments on employee’s turnover?
17. Employees retention in your organization what are your strategy in case of
Involuntary turnover
Voluntary turnover

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In data analysis, we have three objectives:
1. Getting a feel of the data
2. Testing the goodness of data
3. Testing the hypotheses developed for the research
FEEL OF THE DATA:
To approve the hypothesis statement, we applied correlation tools to analysis the data.
Correlation matrix gives an indication of how closely related or unrelated are the
variables under investigation. If they have a high correlation say for example over 0.5
then we will declare as closely related variables
.
TESTING GOODNESS OF DATA:
Testing goodness of the data depend on two thing that is:
1. Reliability
2. Validity
Reliability:
The reliability of a measure is established by testing for both consistency and stability.
For this we have different method like;
1. Cronbach’s alpha
2. Split-half reliability coefficient
3. Parallel form reliability
4. Test –retest reliability
The first two are used to check the consistency and last two to check the stability. During
the data analysis phase, we find that our data result is fulfilling the requirement of
reliability, because Cronbach’s alpha supports the results. Cronbach’s alpha is a
reliability coefficient that indicates how well the items in a set are positively correlated to
one another. The closer Cronbach’s alpha is to 1 the higher the internal consistency
reliability. So our data analysis result is close to 1 the exact answer of data by applying
correlation is 0.85 that shows that data have reliability.
HYPOTHESIS TESTING:
After checking the feel of data and goodness of the data, know we are able to apply
statistical tool to test the hypothesis. In this project, we applied correlation tool to check
the relationship between compensation and organizational effectiveness. The result and
finding will be given in the data interpretation phase

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.
X Y X2 Y2 XY
(%) (000)
Rs
10 8.52 100 72.5904 85.2
8 6.92 64 47.8864 55.36
13 10.05 169 101.0025 130.65
9 8.53 81 72.7609 76.77
11 8.33 121 69.3889 91.63
14 9.96 196 99.2016 139.44
6 7.24 36 52.4176 43.44
4 4.26 16 18.1476 17.04
12 10.86 144 117.9396 130.32
7 4.86 49 23.6196 34.02
5 5.72 25 32.7184 28.6
11 10.16 121 103.2256 111.76
ΣX=113 ΣY=95. ΣX2=121 ΣY2=810. ΣXY=974.
41 5 8991 11
STATISTICAL TOOL IS BEING APPLIED HERE TO TEST
HYPOTHESIS STATEMENT:
r = n ∑XY – (∑X)(∑ Y)
{n∑X2 – (∑x)2}{nΣY2 _(ΣY)2}
= 12 * 974.11 –113*95.41
12*1215 – (113)2 * 12(810.8991) – (95.41)2

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r= 11689.32-10781.33
42.55*25.05
r= 907.99
1065.875
r = 0.85
HYPOTHESIS TESTING OF POPULATION CO-RELATION
Step 1:
Null hypothesis and alternative
Ho: There is no relationship between compensation and organization
H1: There is positive relationship between compensation and organization
(P > 0 and one tail test will be applied)
H0: P=0
H1: P > 0
Step 2:
Level of Significance 5%
Step 3:
Test statistics
As n < 30
t= r
1 – r2
n-2
0.85
= 1 – (0.85) 2
12 – 2
tcal = 5.10
tcal=5.10

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Step 4:
Critical Region
t (0.05, 10)
V = n – 2 (degree of freedom) , t (tab)=1.821
ttab = 1.821 (from table)
Step 5:
Conclusion:
tcal ≥ ttab
5.10 ≥ 1.821
Whenever t - calculated value is greater than t - table value we always reject Ho.
H1is accepted so its means that there is positive relation between compensation and
organization effectiveness

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Interpretation of the Results
As r=. 85
r2=0.722*100
= 72%
72% is due to independent variable and 28%
is due to others factors
Other Analysis
N=89,n=12
Analysis of Respondent
# of People COPENS Job JOB DEMOGRA Total
ATION growth Satisfactio PHS
n
1 1 1 2
2 1 1 2
3 1 1 2
4 1 1 2
5 1 1 2
6 1 1 2
7 1 1 2
8 1 1 2
9 1 1
10 1 1
11 1 1 1 1 4
12 1 1 1 3
Total 10 5 6 4 25

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20%
24%
40%
16%
%of 40% 20% 24% 16% 100%
Response
Departments # Of Employees
Admin 22
Account 27
Technical 14
Sals/Mkt 13
IT 2
CSD 4

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Billing 2
Procurement 4
Retail sale -
Liason 1
Total 89

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DATA INTERPRETATION:
We have taken the data from the Dancom Communication from the different department
in order to prove that there is relationship between perceived inequalities and
organization effetiveness.we have seen that there is strong positive correlation that
indicate the validity and correctness of instrument and it is obviously clear that there is
strong relationship between these variables .As our purpose was to check the correlation
between these variables as company increases its salary packages as it gets feedback
from the employees side and ultimately organization go to the success. During our survey
it is found that majority of the people leave the organization due to less wages. Co-
relation result of this sample data is 0.85 it shows a very high relation and between two
variables and the results of population is also matching with sample data. So we can say
that better compensation has great impact on the organization.

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CONCLUSION / DEDUCTION:
We reach the conclusion that if Dancom wants to increase their effectiveness then they
should give consideration and attention towards effective compensation and also build
strong relationship between employees and employers. As well as other factors concern
we can also consider them equally but they are not so much important as for as
compensation is important. We see that 72% affect the organization and 28% affect the
other variables it mean to say that there other factors as well that make contribution
towards the effectiveness of organization.
Actually they are following centralized style of management and all decisions are made
at top level, there is no participation of middle and line managers in decision making The
Top management should follow the integrative linkage technique for decision making not
in their rooms.
How can You Reduce Turnover?
You begin to reduce turnover not by looking at turnover rates, but by looking at the
retention rate. Turnover rates tell you how many employees have left during the course of
a year.
:
1. Keeping them informed about the company’s long-range plans so that they can
motivate employees to move in that direction.
2. Thorough and continued training in all aspects of their job.
3. The opportunity for advancement.
4. Retaining Hourly Employees.
5. Improving Management Retention.
6. Create and communicate specific plans to accomplish the mission.
7. Establish a procedure to monitor progress toward the mission. Creating a
scorecard that tracks key performance indicators relating to customers,
employees, suppliers and financial performance can do this.
8. Maintain fare and evenly administered practices.
9. Establish specific procedure for lay of and termination.

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10. Establish merit based performance review procedure with forms that are job
related trains people how to conduct reviews monitor the review process.
11. Trains first then promote policy.
12. Comprehensive compensation to the employees
13. They should increase their morale through increasing benefits
14. Establishing training program to ensure at least minimum training before the
new job is begun. It advises that list of expectations be prepared for both newly
promoted employees
15. Participation in decision making as well as on important tasks should be
welcomed

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BIBLIOGRAPHY
Questionnaire
References of literature survey
Reference # 1:
Employee Turn Over BY: Dr. Blake Frank
Professor at University Of Dallas.
Reference # 2
Michelle K. Duffy, Daniel C. Ganster, and Jason D. Shaw
Positive Affectivity and Negative Outcomes: the role of tenure and job satisfaction,
Journal of Applied Psychology, 1998 Vol. 83 no 6 pp. 950 - 959
Reference #3
Employee Turnover
February 7, 2003
By Jerry Osteryoung
"The difference between a boss and a leader: a boss says, 'Go!' - a leader says,
'Let's go!'" -E. M. Kelly, Growing Disciples, 1995
Reference#4
Binning, J.F., & Barrett, G.V. (1989). Validity of personnel decisions: A conceptual
analysis of the inferential and evidential bases. Journal of Applied Psychology, 74,
478-494.
An Innovative Approach for Cost-effective Turnover Reduction By John F. Binning,
Ph.D., and Anthony J. Adorno, M.S.Human Resource Group- Bloomington, IL
Reference #5
Human resource management
By Noe. Gerhard international edition
Publisher McGraw Hill (4th edition)
“Employee turnover”
www.google.com
www.altavista.com

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X Y x2 Y2 XY
Compensation Turn over
(%) (%)
8 62 64 3844 496
11 60 121 3600 660
14 50 196 2500 700
17 45 289 2025 765
20 42 400 1764 840
12 56 144 3136 672
15 52 225 2704 780
21 42 441 1764 882
24 35 576 1225 840
13 48 169 2304 624
23 28 529 784 644
25 24 625 576 600
ΣX=203 ΣY=544 Σ X =3779 ΣY =26226
2 2
ΣXY=8503

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X Y X2 Y2 XY
Compensation Turn over
(% ) (%)
10 64 100 4096 640
12 56 144 3136 672
14 52 196 2704 728
16 50 256 2500 800
18 44 324 1936 792
20 39 400 1521 780
22 36 484 1296 792
24 34 576 1156 816
26 31 676 961 806
28 27 784 729 756
Σ X =188 Σ Y=333 ΣX =
2
Σ Y2 Σ XY=

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