Impact of Employee Turnover on Aldi's Business Performance: Research

This dissertation investigates the impact of international employee turnover on the business performance of Aldi UK. The study explores the reasons behind employee turnover, the link between turnover and business performance, and strategies for lowering turnover rates. The research employs a mixed-methods approach, collecting data from primary and secondary sources, including questionnaires administered to 25 Aldi managers. The findings reveal a negative correlation between high employee turnover and overall business performance. The dissertation concludes with recommendations for Aldi to improve employee retention, such as managing workloads and providing family benefits. The study aims to provide insights for Aldi to enhance its performance by reducing employee turnover and retaining skilled personnel in a competitive market. The literature review covers key concepts and previous research on employee turnover. The research also outlines limitations and suggests areas for future study.

Dissertation
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ACKNOWLEDGEMENT
First of all, I would like to thank my mentor who provided me with an opportunity to do
this dissertation. Further, without his support and guidelines, it was not possible for me to
complete the dissertation and achieve its objectives. Along with this, I am also thankful to my
colleagues and friends who have supported me in data collection and analysis.
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ABSTRACT
The main purpose behind carrying out this research is to find out the impact of
international employee turnover on business performance of an organization. In the present era
high employee turnover has emerged as the major issue in front of businesses. Further, there are
several reasons because of which employees feel that they should no longer serve the
organization. The present study is based on Aldi which is one of the leading global chains of
supermarkets which provides different types of discounts to its customers. With the help of
present study, researcher has witnessed the areas which are affected because of international
employee turnover
In the present study, information has been collected with the help of various primary and
secondary sources. In order to collect primary data, questionnaire is used by the scholar. Further,
the data is collected from 25 managers of Aldi with the help of purposive sampling method.
After carrying out this study, it has been concluded that overall business performance or
organization is negatively affected by high rate of employee turnover. It is recommended that in
order to lower down rate of employee turnover management of workload and providing various
family benefits to employees can be used.
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TABLE OF CONTENTS
Abstract............................................................................................................................................3
CHAPTER 1: INTRODUCTION ...................................................................................................6
1.1 Background ...........................................................................................................................6
1.2 Rationale................................................................................................................................8
1.3 Research aim .........................................................................................................................8
1.4 Objectives: ............................................................................................................................8
1.5 Questions ...............................................................................................................................9
Chapter 2: Literature review..........................................................................................................10
2.1 Introduction .........................................................................................................................10
2.2 Reason behind employee turnover.......................................................................................10
2.3 Link between employee turnover and business performance..............................................14
2.4 Strategies to lower down the rate of employee turnover ....................................................16
Chapter 3 Research Methodologies ..............................................................................................21
3.1 Introduction..........................................................................................................................21
3.2 Research philosophy ...........................................................................................................21
3.3 Research approach...............................................................................................................22
3.4 Research purpose ................................................................................................................22
3.5 Research strategy ................................................................................................................23
3.6 Research methods................................................................................................................23
3.7 Data collection ....................................................................................................................23
3.8 Sample selection .................................................................................................................24
3.9 Data analysis........................................................................................................................25
3.10 Limitations ........................................................................................................................26
3.11 Ethical consideration .........................................................................................................26
Chapter 4: Results analysis and discussion ...................................................................................27
4.1 Introduction..........................................................................................................................27
4.2 Presentation of findings.......................................................................................................27
4.3 Analysis ...............................................................................................................................40
Chapter -5 CONCLUSION and recommendation ........................................................................50
5.1 Conclusion...........................................................................................................................50
5.2 Recommendation.................................................................................................................52
5.3 Limitations and future research ..........................................................................................53
REFERENCES..............................................................................................................................54
Appendix .......................................................................................................................................58
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CHAPTER 1: INTRODUCTION
1.1 Background
In the present scenario, employees are considered as one of the crucial and important
assets of businesses. Furthermore, issues such as lack of skilled and competent human resources
are faced by the entities. Now-a-days, businesses have started using different kind of tools and
techniques through which they can enhance skills and performance of workers. This includes
employee motivation, performance appraisals, reward and recognition etc. All these techniques
are very helpful in creating satisfaction among workers and encouraging them to give their best.
It can be also stated that the organizations which invest large amount of human and financial
resources in development of their workers are able to gain advantage over other market players
as well (Ton and Huckman, 2008). The overall performance of businesses relies on how they
treat their human resources and value the same. It can be also stated that the competition among
companies in almost every sector is getting more and more intense along with the passage of
time. In order to maintain its customer base and market share, organization needs to retain its
qualified, effective and competent human resources for long run. Human resources are the one
which helps businesses in achieving high degree of customer satisfaction. This further assists
them to have better opportunities for growth and development in the future.
Now-a-days, employee turnover is an issue faced by most of the firms. It becomes very
difficult for firms to achieve higher profits and sales in situations where employee turnover rate
is high. In simpler terms, employee turnover rate helps the firms in deciding the potential of their
respective workforce. It is the situations when employees start voluntary leaving their job.
Further, such situations clearly highlight the fact that businesses have failed in selecting right
employees and providing a motivated working environment to employees. The reason behind
leaving organization differs from employee to employees (Zimmerman and Darnold, 2009).
However, it can be explained that some common reason includes inadequate pay, working
timings, zero motivation and inappropriate working environment. Other than this, it can be also
stated that there are various kinds of consequences which are faced by organization when
talented personnel quite their job. Due to increasing competition, the demand of highly skilled
and effective individuals is very high.
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Businesses need to ensure the fact that their employees stay with themselves for long
period. This will support them in carrying out their operations in more effective manner. In the
current scenario, organizations are required to become aware of consequences related to high rate
of employee turnover. Along with this, they must have knowledge about different tools and their
usage in retaining workers. There are several reasons which clearly highlights the fact that why
high rate of employee turnover is not good for companies.
One of the major among those is that hiring of people is very complicated and difficult
process. The process selection begins with short listing of individual from a very large pool of
candidates. In addition to this, interviews at different levels are conducted to hire the best and
most talented. Therefore, it can be argued that the entire process of selection is costly as-well-as
time consuming. It is a great loss of organization; if selected candidates leave organization after
investing such amount of time and resources. There are total four types of employee turnover
where companies are required to become aware about all of them. Voluntary, involuntary,
functional and dysfunctional are the common forms of employee turnover. Dysfunctional
turnover is the one in which individuals leave organization by themselves (Allen, 2008). On the
other side of this, in functional turnover type business forces people to resign from their
designation. The workers, who are really performing low, leave organization and this is termed
as functional turnover whereas in situations where high performing workers leave their job, it is
defined as dysfunctional turnover. All the above stated types have their own reasons as-well-as
consequences. Companies are required to ensure that high performing employee’s stays for long
term and measures should be taken to improve performance of people which are not giving their
best. In case of high or increasing rate of employee turnover, firms are required to adopt
necessary actions so that reasons behind their dissatisfaction can be discovered.
In order to analyze the effect of turnover on the performance of company, Aldi has been
selected as an organization. It has helped in getting aware of the fact that whether the
organization has positive or negative impact on its overall performance. It can be also stated that
with the help of this study, Aldi will become aware about the main reasons behind high rate of
employee turnover. Other than this, this study will also support the organisation in developing
effective strategies through which it can retain its employees. It can also be argued that when
employees’ leave organization, firm’s entire sales and profitability gets affected to a great extent.
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1.2 Rationale
In the current era, many businesses in the retail supermarket sector are facing problems of
rising turnover of their workers. Furthermore, the problem is that organizations are not able to
determine whether their overall performance is getting affected by this or not. This research is
conducted to analyze the overall impact of employee turnover on the performance of Aldi. It
means that the organization will become aware of the fact that whether employee’s turnover is
one of the major factors which has lower down its overall performance or not. In order to grow
and survive in long run, Aldi is required to retain all its staff members. The organization is facing
high degree of competition from other market players such as Aldi and Wal-Mart store.
Therefore, it has become very important for the brand to perform outstanding in marketplace.
This can be done by hiring and retaining skilled, effective and talented pool of employees within
the organization. Another reason behind carrying out this study is to determine some effective
strategies which can be used to lower down the rate of employee turnover within businesses.
With the help of this study, the researcher will gain knowledge about the fact that whether high
rate of turnover affects Aldi in negative terms or not.
1.3 Research aim
“Analyzing the impact of international employee turnover on business performance of
company”- A study on Aldi UK.
1.4 Objectives
 To identify the reasons behind employee's turnover.
 To assess the link between employee turnover and performance of businesses.
 To determine strategies that can support in lowering down the rate of employee turnover
within Aldi.
 To recommend the ways through which Aldi can enhance their performance by lowering
down employee turnover rate.
1.5 Questions
 What are the main reasons behind employee's turnover?
 Determine the relationship between employee turnover and business performance?
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 What are the strategies which can support in lowering down the rate of employee
turnover?
 Determine the ways through which businesses can enhance their performance?
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
Literature review is the most important chapter among all the sections. It significantly
highlights the opinions and views of different scholars related to the subject. The researcher has
been able to gain different prospects about the present study after using various sources of
information regarding the impact of high turnover of workers on the performance of business
organization. The section of literature review has also helped the scholar in getting aware of the
main the reason behind employee turnover in businesses. In addition to this, the researcher has
taken various books, journals and online sources so that more in-depth information can be
gained.
2.2 Reason behind employee turnover
Employee turnover can be regarded as the number of workers who leave organization. It
can be stated that businesses are required to hire new employees in order to the fill the vacant
position. As per the view of Allen, (2008) in the modern era, employee turnover has emerged as
one of the most serious issue in front of companies. Further, it directly affects the culture and
structure of organizations (Allen, 2008). Now the days have been gone when employees used to
serve businesses for several years. As per the modern trend, workers do not prefer to work for a
particular company for a period of more than five years. It can be stated that nowadays people in
employees seeks for better opportunities in terms of growth and development in organization.
When they are not able to find adequate opportunities, they decide to quite their job and work for
other organization. On the other side of this, they have also started demanding for better working
conditions, culture and environment. They also want that their views and opinions should be
taken into consideration by businesses. This results in increasing satisfaction among them and
also encourages them to give their best. According to Ton and Huckman (2008), employees
serving period is higher than in older employees as compared to the young ones. This means that
that old workers are the more loyal in serving long terms as compared to other people in
organization (Ton and Huckman 2008). The process of hiring people in a business enterprise is
complex one.
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Businesses are required to deal invest huge amount of human resources, finance and
efforts in order to hire effective and talented personnel from the pool of candidate. In addition to
this, they also invest resources in providing the training and development programs in order to
provide selected candidates with the knowledge about culture and work of organization.
Zimmerman and Darnold, (2009) has explained that it is a great loss and threat to businesses
when trained employees leaves. The increasing competition among firms has provided with both
negative and positive aspects (Zimmerman and Darnold, 2009). In positive terms it has provided
employees with better growth opportunities whereas in negative terms it has created obstacles in
the smooth flow of business operations.
According to Applebaum and et.al., (2010) poor management can be termed as one of the
most common factors behind employee turnover. Sometimes management in businesses is so
bad that it creates dissatisfaction among workers and also encourages them to seek for other jobs
(Applebaum and et.al., 2010). For the purpose of lower down the rate of employee turnover and
sustain in marketplace, it is required by the firms to manage things effectually. On the other
hand, it can be explained that rude behaviour of manager or senior management forces
productive and skilled workers to quite their respective jobs. In the present scenario, things have
changed to a great extent and nowadays it is the businesses which strive for skilled and dynamic
workforce.
Rude behaviour of management results in affecting the self respect and ego of people in
organization. Along with this, scolding employees in front of other also results in making
him/her feel ashamed. Nadiri and Tanova, (2010) has asserted that rudeness and back biting has
become very common in organizations and has resulted in enhancing the rate of employee
turnover. These all things create a very negative environment in businesses and also lead to
dissatisfaction among workers (Nadiri and Tanova, 2010). Other than this, it can be expressed
that people work hard because they want to achieve something or get something in return. This
means that companies are required to provide different types of incentives and rewards in order
to get the best out from their workers. The increasing competition has resulted in increasing
workload on staff members. Further continuous work without getting something in return leads
to lower down the morale of employees (Valentine and et.al., 2011). It also impacts their
motivation level, performance and overall, productivity to a great extent. At present, employees
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also feel that the organization for which they are working should focus on their training and
development programs.
The reason why employees prefer training is that it increases their knowledge and skills.
Effective training programs also results in making employees productive and provide them with
better opportunities in terms of growth and development. Employees no longer stay in businesses
which do not take care of training needs to employees (Amstad and et.al., 2011). It is required
from the employees that they should always remain updated with the use of modern technology
and market trends. It can be also stated that training programs are not only beneficial for
employees but they also provide several kinds of advantages to employer. Organizations with
trained workforce are able to deliver more satisfactory products and services to customers.
According to the views of Harter and et.al., (2010), boredom can be termed as the biggest
reason behind employee turnover. In the present era, people in the organization are no longer
seeks for doing any kind of monotonous work. Every day they want to do some challenging
work which can results in their personal and professional development (Harter and et.al., 2010).
They also look forward to for a job which can polish their skills set and can lead to enhancement
of their skills. When people finds that their job is very challenging and they are doing same kind
of work again and again, they start looking forwards to opportunities outside the business
enterprise. It is required by managers to take time for their workers and discuss with them about
their professional growth which they are seeking for (Hom, and et.al., 2012). It can be stated that
organizations which has given preference to succession planning are able to retain their skilled
and productive workforce without any difficulty. Businesses should also avoid situations where
employees start perceiving that they are doing a monotonous or dead end job.
Firms need to consider the fact that each person is well informed about its roles and
responsibilities within company. Multinational organizations are not able to create environment
in which every worker is well aware of the task and responsibilities which they need to
accomplish.
According to Hancock and et.al., (2013), international employee turnover can be very
big threat to companies which are operating in the global business environment (Hancock and
et.al., 2013). Inadequate salaries and incentives are the common reason why employees leave
organizations. Money has become the most important thing in the life of human being. Further,
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with the help of money that is able to satisfy needs of themselves and their families. It becomes
very essential for employees to quite their job when they receive very low salary and are not able
to meet the demand and basic needs. Thus, it can be stated that to retain staff members, firms
need to provide salary and incentives to employees as per industry standards. Each and every
workers strives for improving its standard of living and therefore, businesses should provide fair
pay to workers (Avey and et.al., 2011). Other than this, when employees do not get recognition
from their top management, then also they are encouraged to quite their job. In the present
scenario, every staff member wants that their efforts should be recognised by organization and
they should be rewarded for the same. In case when any one of the employees has given
outstanding contribution in the success of business enterprise and his/her efforts are not being
recognised then a sense of dissatisfaction is created among them. Further they no longer remain
in the mood to give efforts in the future (Davidson, Timo and Wang, 2010). This also results in
lowering down the motivation level and morale of employee. In situations where employers do
not recognize efforts of their workers, it becomes a common perception of staff member that
there is no sense in working with organization anymore.
However Hinkin and Tracey, (2010) has argued that changes has emerged as another
reason behind increasing rate of international employee turnover. In the present scenario, it has
become very important for companies to make changes or modifications at regular intervals in
order to sustain in market (Hinkin and Tracey, 2010). Increasing competition, frequent changes
in external business environment are some situations which forces companies to carry out
modifications in existing practices, culture and structure. It can be stated that most of the time
people are not able to cope up with changes in organizations. This directly creates sense of
dissatisfaction among worker and encourages them to leave the business enterprise.
Workload can be termed as another reason which increases the rate of employee turnover.
Further, such rates get very high when one employee does the work and activities of more than
one person continuously for long time. In such situations people in organizations are also
required to work overtime in order to complete the task assigned to time (Zhang, Fried and
Griffeth, 2012). Some businesses also not pay any kind of money against employee overtime. It
can be stated that such kind of practices creates negative environment in companies and also
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