The impact of labor turnover on organizational performance: a case study of three branches of centenary rural development bank

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Kampala International University, College of Economics and Management
The issue of labour turnover presents one of the greatest challenges to organizational performance. The problem appears to be relatively high in three branches of CERUDEB Kampala City where the study concentrated, namely: The Main Branch on Entebbe Road, its Annex on Entebbe Road and Namirembe branch, Despite the existence of formal recruitment procedures and management efforts to avail labour related incentives to staff, labour turn over has remained relatively high over the two years, posing a question to the management and threatening the effective performance of the Bank. The study investigates the causes of labour turnover, establishes a relationship between labour turnover and management style. It also assesses the impact of labour turnover on the performance of the organization particularly the three branches of CERUDEB Kampala City. Data for the study was collected through questionnaire, interviews, observation and documentary analysis (reports). Presentations were made possible by using tables, graphs and narratives. Labour turnover has both a negative and positive impact. The positive being that when non performing workers leave the organization, they are replaced by performing ones who energize the bank through new ideas. The negative one is that, it becomes difficult to replace them, disrupts production, puts stress on the remaining workers, which eventually results into labour turnover. The findings reveal that the major causes of labour turnover at the three branches of CERUDEB Kampala city were: personal motives, inadequate pay, management style and the level of experience and qualification. The study also reveals a direct and positive relation ship between labour turn over and performance of the Bank especially at the top management levels. Labour turnover is highest among people who have worked for two-three years and mainly among top mangers. Recommendations made include improvement in the causes of labour turnover. The main implications of this study are for the organization’s policy makers and Implementers CERUDEB (Kampala city)
A dissertation submitted to the school of postgraduate studies in partial fulfillment of the requirement for the award of master of business administration (HRM) of Kampala International University
Labor turnover, Organizational performance, Centenary Rural Development Bank