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1. Introduction Chapter1.1 Introduction
The nature of the Business environment and Manager Job
has been changed a lot in the last decades. Fierce
competition in the market demand a very strong Human
rescores along with the quality product and services. One of
the major concerns for organizations is to hire efficient
employees. Today's workers have different expectations
from the companies and less hesitant to leave one job for
another if they don't feel those expectations are being met.
In fact, many employees see job skip as an opportunity for
advancement.
Surprisingly, most people do not leave their jobs only for
money. While money usually plays some role in a person's
decision to leave a company, it is not normally the deciding
factor. Insufficient management support is one of the major
reasons of employees leave.
It is expensive to lose good employees. There are some
important issues which organization should consider. Like
the costs of termination, the cost of hiring and training a
replacement, the vacancy cost until the job is filled and the
loss of productivity with a new hire. These staggering
figures should be motivation enough for owners and
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managers to begin to focus on retaining their best
employees.
1.2 Origin of the report
This report has been prepared as a requirement of the
Internship program of School of Business of Independent
University. HSBC Bank (The Hong Kong Shanghai Banking
Corporation) is the place where I have gathered experience
about the operations of the financial institution. The
organization has been extremely helpful in acquiring
knowledge regarding various aspects and daily banking
activities. This report is the outcome of three-month
internship program. The research has been conducted
under the supervision of Mr. Sheikh Shiblee Sadek and
Ansara Chowdhury from HSBC Bank and Mr. A. Qaiyum
Chowdhury from the University, has also approved the topic
that I assigned for my internship report.
1.3 Statement of the problem
Banking sector is one of the fast growing industries in
Bangladesh. Beside the local Bank, many foreign banks also
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operate here to provide the service. Because of the strong
competition the banks are continuously innovating new
ways to attract and satisfy their customers. So, they are the
first to interact with customers and have a huge impact on a
customer’s impression of the institution.
Employee turnover, now-a-day is a common problem every
where. A bank may face problems when its employee
turnover rate is increased. Turnover levels vary from
industry to industry, region to region. It has many reasons;
sometimes it is the attraction of a new job in a different
company that “pull” them out of their current organization,
hence on other occasions they are 'pushed' due to
dissatisfaction in their present jobs seek alternative
employment in other company. Sometimes it is a mixture of
both “pull” and “push” factors.
The level of employee turnover varies from hiererchy to
hierechy and organization to organization and accordingly,
the impact of such turnover also varies. Everything depends
on the type of labour markets in which it compete. Where it
is relatively easy to find and train new employees quickly
and at relatively little cost, it is possible to sustain high
quality levels of service provision despite having a high
turnover rate. Employee turnover is a great problem when it
bears costs. Like—
Employee recruitment costs
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Employee selection costs
Cost of covering during the period in which there is a
vacancy
Administration of the recruitment and selection
process
Induction training for the new employee.
Leak of business informatio/secrecy.
Therefore, in the above scenario it is found that an
internationally reputed bank likes HSBC is also not an
exception. Hence through the research I have tried to know
the reasons of employee turnover in HSBC (CGE branch).
Also I have tried to find out relevant information about
employee turnover.
1.4 Objective of the research:
The objective of the research is- “Identify the reasons of
employee turn over in HSBC”
Specific objectives
To identify the causes of employee turnover.
To suggest solution of employee turnover.
1.5 Methodology:
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1.5.1 Sampling Plan :
Population – All employees of HSBC bank in
Bangladesh.
Sample Unit--- employees of HSBC bank in CGE
(Nasirabad) Branch, Chittagong.
Sampling type: Non Probabilistic Sampling.
Sample technique: Judgmental Sampling.
Sample size: 30
For selecting employees judgmental sampling has been
used and selected 30 employees from 56 for the sample
unit. All the respondents are the employees of HSBC
bank CGE Branch, Chittagong. To ensure representation
responses have been collected from different layers of
management.
1.5.2 Methods of Data Collection
The report is composed of both primary and secondary
sources of data.
Primary Data :
Primary data may be collected by the following two tools.
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1. Questionnaire Method.
2. Direct Interview Method.
Data have been collected through questionnaire from the
employees of the Bank. Primary data have been also
collected by informal interview with the officers. Structured
questionnaires were used to collect information from the
bank employees.
Secondary Data :
The secondary data have been collected from the
“Employees Job Enlist Record” of HSBC Bank, and from
some journals. Also some important information is collected
form Internet for the report.
1.5.3 Method for Analysis:
In order to analyze and interpret data some tools of
statistical analysis has been used .The statistical tools to be
followed are –
1. Mean.
2. Percentage.
3. Cross tabulation
1.5.4 Survey period
The survey is being conducted from March 10th to April 15th
2008.
1.6 Scope:
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The scope of the report is limited to all the personnel of
HSBC CGE Branch. The report will explore the reasons of
employee turnover in HSBC.
1.7 Limitations:
Objective of the practical orientation program is to have
practical exposure for the students. Our tenure was for only
three months which was some how not sufficient for
analyzing such a matter. Moreover, it was too difficult for
me to give time for preparing this report after working
whole day in the bank.
Some limitations and inconvenience had appeared as
barriers in accomplishing the report. These are as follows:
The study is confined only to HSBC Bank CGE
(Nasirabad) Branch.
The information that collected through questionnaire
survey and direct interview could be imprecise
because of the biasness of the employees.
As the topic is very much sensitive so, unwillingness
and fear among most of the junior staffs on disclose
any opinion towards their boss.
Some variation in views among the amateur and
experienced personnel.
Insufficient time period.
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Because of the limitation of information, some
assumptions were made. So, there may be some
mistakes in the report.
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2. Organization overview
HSBC is a truly unique financial institution that delivers
superior growth and financial performance and be the most
recognizable brand in the financial services in Bangladesh
& worldwide. Through an international network & rapidly
growing capability HSBC has achieved a strong competitive
position over other banks in Bangladesh. It creates new
opportunities for its clients by offering customize services
and maintains harmonious banker-clients relationship. It
contributes towards formation of national capital, growth of
savings and investments in trade, commerce and industrial
sectors.
At HSBC people realize how busy the customers are in
today's fast-paced world. To make the life simpler, they
have created different channels to bring banking closer to
the customer. Customers no longer have to visit our
branches to complete their daily banking transactions. Now
they can access a host of services 24-hours a day from
wherever they are.
2.1 PROFILE
The World’s local bank. Headquarter in London, is one of the largest banking
and financial services organization in the world.
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2.2 Vision Is to become the world’s leading financial services
company. “Leading” means preferred, admired dynamic and
being recognized for giving the customer a fair deal.
2.3 Mission Is to grow earnings over the long run which will place it favorably in comparison to its peer group.
Also on investing in its delivery platforms, its technology, its
people and its brand to support the future value of HSBC.
Brand HSBC, a symbol of one of the world’s leading brand for
customer, experience and corporate responsibility.
Massage “THE WORLD’S LOCAL BANK”
Parent Company “The Hong Kong and shanghai Banking Corporation
Limited is wholly owned subsidiary of HSBC Holdings Plc,
the holding company of the HSBC Group.
HSBC Group maintains one of the world’s largest
private data communication network and is reconfiguring
its businesses for the e-age. Its rapidly growing e-commerce
capability includes the use of the internet, PC banking over
a private network, interactive TV, fixed and mobile
telephones.
HSBC Group
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The HSBC group is named after its founding member,
“The Hong Kong and shanghai Banking Corporation
Limited” which was established in 1865 to finance the
growing trade between china and Europe.
HSBC Network HSBC’s international network comprises over 10000
offices in 83 countries and territories in Europe, the Asia-
pacific region, the Americas, the Middle East and Africa.
QualityEmphasis on long term, ethical client relationships.
High productivity through teamwork.
A confident and ambitious sense of excellence.
International in outlook, and character.
Creativity and customer focused marketing.
HSBC in Bangladesh HSBC incorporated in Bangladesh in December 1996.
Started its journey in Bangladesh from anchor tower in
December 1996.
Now HSBC has 9 offices and 8 branches in
1. Dhaka 2. Chittagong 3. Sylhet
The Line of Business in (HSBC) Investment Practices
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o Payment and Cash Managemento Custody And Clearingo Trade Services
Personal Financial Services
o Personal Credit Operationo Customer Serviceso Branch Operationo Personal Loans
Commercial Banking
o Leasing, Finance and Factoringo Payment and Cash Managemento Trade Services
Human Resources (Salary, Benefit, Appointment etc)
Insurance Services Network Service Center
HSBC ASSET PRODUCTS
Home Loan
Home Equity Loan
Car Loan
Personal Installment Loan
Travel loan
Student loan
Life style loan
Wedding loan
Furniture loan
Motorbike loan
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CNG conversation loan
Partial Secured Loan
Other Loan Product
Personal Secured Loan Personal Secured Credit
HSBC LIABILITY PRODUCTS
Current Account
Savings Account
Savings Plus
Power vantage
Amanah Account
Time Deposit Account
Monthly Interest Bearing Time Deposit
Account
HSBC Savings Plan
Children’s Savings Plan
Education Savings Plan
Holyday Savings Plan
Peace of Mind Savings Plan
Retirement Savings Plan
Smart Savers Plan
Family Protection Plan
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PRODUCTS FOR NON RESIDENT BANGLADESHIS
Foreign currency current account:
A non-interest bearing transactional account to be
opened with funds remitted from abroad. US Dollars,
Pound Sterling and Euro.
Foreign currency time deposit account:
An interest bearing time deposit account. Tenors ranging
from 1 to 12 months.
Private non-resident taka account:
This account can be opened with taka or funds
remitted from abroad. This is a local currency account
and can be opened as an interest paying savings account
or non-interest bearing current account.
Wage Earner Development Bond (WEDB) and US Dollar Bond (USDB):
Government bonds issued by the Bangladesh Bank,
especially for the NRBs.
Personal secured credit:
A taka credit facility secured by foreign currency time
deposit, WEDBs or USDBs.
Personal secured loan:
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A fixed loan secured by foreign currency time deposit,
WEDBs or USDBs.
3. Literature Review
Conceptual Learning:
Turnover, in a human resources context refers to the
characteristic of a given company or industry, relative to
rate at which an employer gains and loses staff. If an
employer is said to have a high turnover, it most often
means that employees of that company have a shorter
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tenure than those of other companies in that same industry.
Similarly, if the average tenure of employees in a particular
sector is lower than that in other sectors, that sector can be
said to have a relatively high turnover.
Like recruitment, turnover can be classed as 'internal' or
external. Internal turnover involves employees leaving their
current position, and taking a new position with the same
organization. Both positive and negative effects of internal
turnover exist, and thus this form of turnover may be as
important to monitor as its external counterpart. Internal
turnover might be moderated and controlled by typical HR
mechanisms, such as an internal recruitment policy or
formal succession planning. Unskilled positions often have
high turnover, and employees can generally be replaced
without the organization or business incurring any loss of
performance. The ease of replacing these employees
provides little incentive to employers to offer generous
employment contracts. However, high turnover rates of
skilled professionals can pose as a risk to the business, due
to lose of intellectual property such as skills, training, and
knowledge. Notably, given the natural specializations of
skilled professionals, these employees are likely to be re-
employed within the same industry by a competitor.
Therefore, turnover of these individuals incurs both
replacement costs to the organization, as well as resulting
in a competitive disadvantage to the business. (TAYLOR, 2002)
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High turnover often means that employees are unhappy
with the work or compensation, but it can also indicate
unsafe or unhealthy conditions, or that too few employees
give satisfactory performance (due to unrealistic
expectations or poor candidate screening). Low turnover
indicates that employees are satisfied, healthy and safe, and
their performance is satisfactory to the employer. Many
psychological and management theories exist regarding the
types of job content which is intrinsically satisfying to
employees and which, in turn, should minimize external
voluntary turnover. Dismissals should also depend
negatively on the cost of monitoring since firms with high
monitoring costs would be expected to monitor their
workers less intensely. Employees resign for many different
reasons. Sometimes it is the attraction of a new job or the
prospect of a period outside the workforce which 'pulls'
them; on other occasions they are 'pushed' due to
dissatisfaction in their present jobs to seek alternative
employment. Sometimes it is a mixture of both pulls and
push factors. For a fourth group reasons for leaving are
entirely explained by domestic circumstances outside the
control of any employer, as is the case when someone
relocates with their spouse or partner. It is important to
appreciate that the reasons people give for their
resignations are frequently untrue or only partially true.
The use of exit interviews is widespread yet they are
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notoriously unreliable, particularly when conducted by
someone who may later be asked to write a reference for
the departing employee. They are reluctant to voice
criticism of their managers, colleagues or the organization
generally, preferring to give some less contentious reason
for their departure. (Robbins, 2005)
The major methods of costing employee turnover are
described above. Obtaining accurate information on reasons
for leaving is harder. Where exit interviews are used it is
best to conduct them a short time after the employees hand
in their notice. The interviewer should not be a manager
who has had responsibility for the individual and who will
not be involved in future reference writing. Confidentiality
should be assured and the purpose of the interview
explained. Alternative approaches involve the use of
confidential attitude surveys which include questions about
intention to leave and questionnaires sent to former
employees on a confidential basis around six months after
their departure. (TAYLOR, 2002)
Empirical learning:
Turnover is a fact of life. Bankers may think they have it
awful, but virtually every industry faces turnover
challenges. The national fast food chains run an at
unbelievable 85% – 120% annual turnover. While the
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turnover rate is consider “high” today, it should be accepted
that some normalized rate in the 10% – 15% range would be
expected for even a high performer. The good news about
turnover is that the economy is doing well and employees
have options. Great companies do achieve lower turnover.
While turnover is a fact of life, some companies have simply
put this issue to bed. Low turnover alone does not drive
better performance – While great companies typically have
low turnover, it’s important to note that low turnover does
not necessarily make you a great company. It is found that
there is no mathematical correlation between a bank’s
turnover rate and its ROA or efficiency ratio. Performance
has too many variables for turnover alone to be a primary
driver.
Turnover is not an HR issue, it’s a business design issue – If
bankers expect the HR department to solve the turnover
issue, they will be sorely disappointed. Instead, bankers
should get to the real strategic issues about why someone
would work at their bank instead of anywhere else. Humans
naturally want to work for winning teams, a bank with a
clear strategy that been drilled down into the culture has a
lot better shot at reducing turnover. The costs of turnover
are real and painful. Bankers intuitively accept that
turnover is costly, but few banks ever make real attempts to
measure this cost. Experts say that it costs 20% of an
employee's annual salary to replace the lowest production
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worker and five times the annual salary to replace
executives. One of the universal truths in business is that no
one likes to work for a wicked person. While the Human
Resources department cannot be expected to solve the
employee turnover issue, it certainly can be the coordinator
and catalyst for going after the problem. However to face
this problem the first thing HR can do is to make the
turnover issue visible and the costs real. Making visual
report will keep management focused quarter to quarter on
the issue. Another practice the HR can do is to conduct exit
interviews with employees to learn and to know the reason
behind their leave. (TAYLOR, 2002)
There is no set level of employee turnover above which
effects on the employing organization becomes damaging.
Everything depends on the type of labor markets in which
the company competes. It is possible to sustain high quality
of service provision despite having a high turnover rate. By
contrast, where skills are relatively scarce, where
recruitment is costly or where it takes several weeks to fill a
vacancy, turnover is likely to be problematic from a
management point of view. This is especially true of
situations in which organizations are losing staff to direct
competitors or where customers have developed
relationships with individual employees as is the case in
many professional services organizations. Again, it has been
noticed that some employee turnover positively benefits
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organizations. This happens when a poor performer is
replaced by a more effective employee, and can happen
when a senior retirement allows the promotion or
acquisition of a young, energetic employee
Turnover is one of those issues that floats around every year
at the bank but never seems to get a groundswell of action
to address it. It’s because most bankers have wrongfully
assumed there’s some mystic practice that HR can follow to
address the issue. Going forward, bank managers should
jump in feet first and get involved in the business issue of
keeping employees, and HR can start this process by
making the facts about turnover more visible with senior
management. (RANKIN, 2006)
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4. Findings and Analysis:
Analyzing the data collected through the questionnaire
survey with the bank personnel some findings has been
explored.
Employees intention about switching the existing job-
Frequency Percentage
Yes 3 10%
Not sure 18 60%
No 9 30%
N=30 100%
From the chart it is evident that, while one third of the
employees showed strong commitment towards the
organization. A significant proportion of the employee
exhibited no organizational commitment. In addition 60%
of the employees were uncertain about staying in the
existing job, which revealed their lack of loyalty towards
their existing job. This group of employees might be
actively responsible for the further turnover. Therefore the
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low level of loyalty of the employees is the core cause for
employee turnover in HSBC (CGE Branch).
Relationship between nature of job and the related
satisfaction level—
Satisfaction level
nature of job
Stressful
Challenging
Interesting
Boring
Highly Satisfied
33.33%
33.33% 33.33% ------
Satisfied 67% 33% ------ ------
Neither Satisfied nor Dissatisfied
----- ------ ------ 100%
Dissatisfied 67% ------ ------ 33%
Highly Dissatisfied
85% ------ ------ 15%
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The chart above, exhibits employees relative satisfaction
level with the nature of their existing job. Surprisingly,
irrespective to the level of satisfaction majority of the
employees perceive their job as stressful. This high job
stress is one of the major causes for employee turnover. In
addition there is a prevalence of a group to whom the job is
just boring. This group may propel the level of turnover in
long run.
Hectic work schedule----
Type Of Work Frequency Percentage
Target Oriented 9 30%
Routine work 6 20%
Both 15 50%
From the table it is found that, maximum employee’s job is a
combination of both target oriented and routine work.
Besides performing the routine work, attaining the target
put enormous pressure on them, so soon this tight schedule
become burden some, which is likely to be responsible for
employee turnover.
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Involuntary turnover---
Year No Of Employees
Average turnover
2006 5 6
2007 7
From the analysis it is found that over the year involuntary
turnover is increasing due to inability to attaining the
target. Average turnover is 6, which is very high relative to
the level of workforce.
5. Recommendation
Organizations must have a planned approach in order to
provide successful solutions to employees' concerns. It
needs to become part of company culture, if the
organization demonstrates to employees that they are
willing to make an investment in them ensuring positive
results to follow.
If an employee resigns, then good amount of time is lost in
hiring a new employee and then training him/her and this
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goes to the loss of the company directly which many a times
goes unnoticed. Even after this new hiring cannot
guarantee the same efficiency from the new employee.
Management requires time to judge his capabilities and
work nature. The loss is even graver if the efficient
employees of the organization switch to their major
competitors.
For all these and many other reasons organization need to
retain employees. For retaining employees, Management
need to understand the requirements of the employees and
at the same time should make them clear about the
expectations of the company from them. The company
management should make their employees accountable for
their respective jobs and make them feel that they are very
important for the smooth processing of that process
HSBC can take the following steps to reduce their turnover
rate and make a long time commitment with the employees.
Career Development Program
Every individual is worried about his/her career. HSBC can
provide them conditional assistance for certain courses
which are also beneficial from business point of view. For
getting admitted to such program, Management can
propose them to sign a bond with the company, like they
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cannot leave the company for 2 years or something after the
successful completion of the course.
Performance based Bonus
To get more work out of the employee, HSBC can make a
provision of Bonus. By this employee will be able to relate
himself with the company’s profit and hence will work hard.
This bonus should be productivity based.
Making the employees easily accessible to managers
HSBC should make the employee easily accessible to the
management. Top Management expectations should clearly
communicate to the employees, so they can perform their
job better.
Employee empowerment
HSBC Management can increase sense of belongingness of
each employee so that they can also feel themselves as
important as their officers in higher hierarchy. If employees
can develop this sense of belongingness then, they will
reconsider leaving the company.
Loyalty Bonus
HSBC can introduce a Loyalty Bonus Program in which
Management can reward employees after a successful
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completion of a specified period of time. This can be in the
form of Money or Position.
Involve in the decision making
Involve in the decision making can bring a significant
employee satisfaction. Employees can feel they are a part of
the whole process. Also this involvement can create a sense
of responsibility to be more attentive in the planning
process.
Gifts at some Occasions
Management can give some gifts at the time of one or two
festivals to the employees making them feel good and
understand that the management is concerned about them.
Surveys
HSBC should conduct regular surveys for feedbacks from
employee about their satisfaction as well as other issues
and suggestions. This will make them feel of their
importance and the caring nature of the company. Some of
the suggestions might be of real good use for the company.
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For a company, the workforce is like an intellectual
property, both in terms of skills and money. A trained and
content workforce can lead a company to new
heights while an opposite one can hamper it badly. So
Management needs to take the necessary steps to minimize
the employee turnover and create a bond with the
employees.
5. Conclusion
In the present scenario, world is turning into a global
village. In this situation, the biggest challenge for a
company is to retain its workforce intact especially the
efficient employees. Employee retention is more than a buzz
word, it is a very real and powerful part of doing business in
today's marketplace. It is becoming more and more difficult
to find and retain top talent. The company must recognize
and embraces the need of its employees. Satisfied
employees can lead to provide better service to the
customers and earn greater reputation and profitability for
the company.
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Appendix—
Questionnaire:
I am a student of Independent University
Bangladesh and currently enrolled for my Internship
program in HSBC Bank. I am conducting this survey
to prepare my Internship Report on “Identify the
reasons of employee turnover in HSBC”. The
purpose of the survey is to know the reasons of
employee turnover in HSBC (CGE Branch).
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Your participation in this survey is really
appreciated and will help me to conduct the survey
successfully. It is assured that the information you
will provide will be strictly kept confidential and
used for educational purpose only.
Thank you for your time and cooperation.
Sincerely
Sultana Pervin Keya
Please choose your best option among the
choices-
1. Gender of the respondent?
a. Male b. Female
2.Mention your job designation?
…………………………..
3.Which level of management best describes your position in the hierarchy?
a.Top
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b.Midc. First line (low).
4.How long have you been working for HSBC?
a.1-2 yearsb.2-3 yearsc. 3-4 yearsd.4-5yearse.5years above
5.Did you work for any other companies before joining at HSBC? (If Yes then answer the next question)
a. Yes b. No
How long did you worked for that company?
a. less than 1 yearsb.1-2 yearsc. 2-3 yearsd.3-4 yearse.more than 4 years
6.What was/were the dissatisfying factor/s with the company you used to work?
a. Incompatible salaryb.Job positionc. Limited opportunity for personal growthd.Other (specify) ______________.
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7.Would you switch this job if you get any better offer in any companies?
a. Yes b. Not sure c. No
8. What sort of job you are currently doing in HSBC?
a.Target orientedb.Routine workc. Both
9. How do you perceive the job you are in?
a.Stressfulb.Challengingc. Interestingd.Boring
10. Are you satisfied with the nature of the job?
5 4 3 2 1 | | | | |
Highly Satisfied Neither satisfied Dissatisfied Highlysatisfied nor dissatisfied dissatisfied
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11. How do you rate satisfaction level with your existing salary?
5 4 3 2 1 | | | | |
Highly Satisfied Neither satisfied Dissatisfied Highlysatisfied nor dissatisfied dissatisfied
12. How secure do you think your job?
5 4 3 2 1 | | | | |
Highly Secured Neither secured Unsecured Highlysecured nor unsecured unsecured
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Employees intention about switching the existing job-
Frequency Percentage
Yes 3 10%
Not sure 18 60%
No 9 30%
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0%
10%
20%
30%
40%
50%
60%
Yes Not sure No
Emplyees intention
Percentage
Relationship between nature of job and the related satisfaction
level—
Satisfaction level
nature of job
Stressful
Challenging
Interesting
Boring
Highly Satisfied
33.33% 33.33% 33.33% ------
Satisfied 67% 33% ------ ------
Neither Satisfied nor Dissatisfied
----- ------ ------ 100%
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Dissatisfied 67% ------ ------ 33%
Highly Dissatisfied
85% ------ ------ 15%
Nature of job and satisfaction level
Highly Satisfied
Satisfied
Neither Satisfied norDissatisfied
Dissatisfied
Highly Dissatisfied
Hectic work schedule----
Type Of Work Frequency Percentage
Target Oriented 9 30%
Routine work 6 20%
Both 15 50%
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Hectic work schedule
30%
20%
50%
Target Oriented
Routine work
Both
Involuntary turnover---
Year No Of Employees
Average turnover
2006 5 6
2007 7
38
Involuntary turnover
01
23
45
67
8
2006 2007
No Of Employees
Reference:
www.hsbc.com
www.gmi.org/research/websites.htm
www.cipd.co.uk/surveys
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TAYLOR, S. (2006) ‘Are you keeping your
employees happy?’ The HR Director. . London:
Chartered Institute of Personnel Development.
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