HUMAN RESOURCE PRACTICES AND VOLUNTARY LABOUR

TURNOVER IN THE READYMADE GARMENT

INDUSTRY IN BANGLADESH

Submitted in fulfilment of the requirement for the degree of

Doctor of Philosophy in Management (Human Resource Management)

Gazi M. Farid Hossain

B.B.S. (Mgmt., Hons.), M.B.S. (Mgmt.)

M. Econ. (UNE, Aus.), M. Com. (UNE, Aus.)

Newcastle Business School

Faculty of Business and Law

University of Newcastle

February, 2016

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STATEMENT OF ORIGINALITY

This thesis contains no material which has been accepted for the award of any other degree or diploma

in any university or other tertiary institution and, to the best of my knowledge and belief, contains no

material previously published or written by another person, except where due reference has been

made in the test. I give consent to the final version of my thesis being made available worldwide when

deposited in the University’s Digital Repository, subject to the provisions of the Copyright Act 1968.

…………………………………………… Gazi M. Farid Hossain

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DEDICATION

This thesis is dedicated to my parents, who have

continuously encouraged and motivating me to aim high. I

will never forget the sacrifices they made for me and my

siblings.

iv

ACKNOWLEDGEMENT

This dissertation would not have been completed without the direct and indirect support and valuable

assistance provided by a number of people.

First, I would like to express my deepest and sincerest gratitude to my principal supervisor,

Professor Mark Bray. His insights helped me to frame my research questions and to shape the

thesis. He never failed to share with me insights arising from his research expertise in

organisational studies, and from his experience in helping others to undertake research projects.

Without his support I could not have done whatever I have done. Professor Mark Bray will remain in

my mind forever.

I am also grateful to my co-supervisor, Dr Jennifer Waterhouse, for her constant, enthusiastic

and valuable intellectual advice, guidance, and inspiration. I would also like to express my gratitude

to my former principal supervisor, Dr Shaun Ryan.

I would like to express my appreciation to the University of Newcastle for awarding me the

scholarships to pursue the PhD study. I am especially grateful to former head of Business School,

Professor Alison Dean and Associate Professor Suzanne Ryan.

Of course, without the participation of the interviewees and other individuals this research

would have been impossible, and I am appreciative of all those individuals and managers and assistant

managers of the RMG organisations who gave me their time willingly and freely to answer my

questions thoughtfully and constructively. They generously provided internal policy documents and

other materials for my scrutiny.

Finally, any success I attain, I owe to them and the collection of those who have helped along

the way. Without you all, I am the more impoverished. To my family and especially my wife,- Koli

and my beloved daughters: Faiza and Najah, without you all I am nothing, but with you all I have

everything. You have all contributed to my knowledge and wisdom.

Newcastle, February, 2016.

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PUBLICATIONS ASSOCIATED WITH THE THESES

Hossain, G. (2014, June 19-20). Human resource practices and voluntary labour turnover in the

readymade garment (RMG) industry in Bangladesh. (ANZAM Mid-Year Research

Student Workshop, RMIT University, Melbourne, Australia).

Hossain, G. & Bray, M. (2013, November). What value are Western theories in developing

countries? (Academy of International Business-Australia and New Zealand Chapter

Annual Symposium, University of Newcastle, Australia. November).

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ABSTRACT

The huge volume of research on labour turnover displays four features that are especially relevant to

the present study: most studies use the individual employee as the unit of analysis; few focus on the

organisation as the unit of analysis; most apply quantitative methods and only a few have employed

qualitative methods; and most are conducted in Western and/or developed countries, with relatively

few in developing countries. The current research project is therefore distinctive because it: focuses

on the organisation as the unit of analysis; applies qualitative case study research methods; and it is

located in the developing country of Bangladesh.

The Ready Made Garment (RMG) industry in Bangladesh has played an impressive role in the

transformation of the national economy from one based on agriculture to one increasingly based on

export-oriented manufacturing. In the process, this industry has provided significant opportunities for

employment and contributed towards the improvement of living standards, particularly of women.

Despite the incredible growth, however, the RMG industry continues to confront serious challenges,

one of which is high labour turnover.

In order to understand better the manifestations and causes of the labour turnover problem – as

well as its potential solutions – the research project reported in this thesis studies eight companies in

the Bangladeshi RMG industry, differentiated by their size, ownership, geographical location and role

in the supply chain.

The findings provide unusually rich empirical data on the quite different patterns of labour

turnover in these eight case studies, including overall organisational rates of turnover ranging from 11

percent to 33 percent, differences in turnover rates between occupational groups and diverse

consequences of high labour turnover.

The explanation offered of the differences in turnover rates between the case organisations in

this industry focuses on the interaction between factors internal to the organisations, and therefore

under the control of management, and external factors, beyond management’s immediate control.

With respect to the former, a large number of individual human resource management and workplace

safety policies and practices are found to be associated with turnover rates, but more important is the

finding that these multiple internal factors are best considered as part of a package or system of

practices. With respect to the latter, key external explanatory factors include local labour markets and

the operation of government regulations.

By studying labour turnover in a way that differs to the dominant approach – that is, offering a

more holistic analysis of organisational turnover rates using qualitative methods in a developing

country context – this thesis is able to offer not only novel empirical data but also theoretical insights

and practical recommendations to both mangers and governments.

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CONTENTS

Statement of Originality ....................................................................................................................... ii Dedication ............................................................................................................................................. iii Acknowledgement ................................................................................................................................ iv PUBLICATIONS ASSOCIATED WITH THE THESES ................................................................. v Abstract ................................................................................................................................................. vi List of Tables ........................................................................................................................................ xi List of Figures ...................................................................................................................................... xii Abbreviations and Acronyms ........................................................................................................... xiii CHAPTER 1: INTRODUCTION .................................................................................................... 1

1.1 Introduction ................................................................................................................................. 1 1.2 Background .................................................................................................................................. 1 1.3 Purpose of the study .................................................................................................................... 2 1.4 Broad theoretical assumptions ................................................................................................... 2 1.5 Significance of the study .............................................................................................................. 5

1.5.1 Empirical novelty ............................................................................................................. 5 1.5.2 Theoretical justification .................................................................................................... 6 1.5.3 Practical importance ......................................................................................................... 6

1.6 Research methodology ................................................................................................................ 7 1.7 Thesis structure............................................................................................................................ 8 1.8 Summary of the chapter .............................................................................................................. 9

CHAPTER 2: LITERATURE REVIEW ...................................................................................... 11 2.1 Introduction ............................................................................................................................... 11 2.2 General overview of the employee turnover literature .......................................................... 11

2.2.1 Focus on individual employees in organisations ............................................................ 12 2.2.2 Lack of attention to employee turnover at organisational-level ..................................... 14 2.2.3 Mostly quantitative methodology used .......................................................................... 16 2.2.4 Domination of studies of Western context ..................................................................... 17

2.3 Explaining differences in organisational rates of employee turnover: The literature ........ 24 2.4 Explaining differences in organisational rates of employee turnover: A framework ......... 27

2.4.1 Structural features of the organisation ............................................................................ 29 2.4.2 Managerial or internal factors effecting employee turnover rates .................................. 30 2.4.3 Non-managerial or external factors effecting employee turnover rates ......................... 36

2.5 Summary of the chapter ................................................................ Error! Bookmark not defined. CHAPTER 3: RESEARCH METHODOLOGY .......................................................................... 41

3.1 Introduction ............................................................................................................................... 41 3.2 Research design.......................................................................................................................... 41

3.2.1 Strengths of the qualitative case study approach ............................................................ 43 3.2.2 Weaknesses of the qualitative case study method .......................................................... 44 3.2.3 Issue of generalisability .................................................................................................. 45 3.2.4 The number of and selection criteria for case organisations .......................................... 47

3.3 Data gathering techniques and quality in research ................................................................ 50 3.3.1 Interviews ....................................................................................................................... 51 3.3.2 Documentary data .......................................................................................................... 54

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3.3.3 Observation .................................................................................................................... 55 3.3.4 Triangulation .................................................................................................................. 56

3.4 Data analysis .............................................................................................................................. 57 3.4.1 Analysis of single case studies ....................................................................................... 57 3.4.2 Cross-case analysis ......................................................................................................... 59

3.5 Ethics and quality in research .................................................................................................. 60 3.5.1 Ethical considerations..................................................................................................... 60 3.5.2 Reflexivity ...................................................................................................................... 61

3.6 Summary of the chapter ............................................................................................................ 61 CHAPTER 4: OVERVIEW OF RMG INDUSTRY IN BANGLADESH .................................. 62

4.1 Introduction ............................................................................................................................... 62 4.2 Key concepts in the structure of the RMG industry............................................................... 62

4.2.1 The garmenting-making production process .................................................................. 65 4.2.2 Delivery to customers ..................................................................................................... 68

4.3 Evolution of RMG industry in Bangladesh before the 2010s ................................................ 70 4.4 The Bangladeshi RMG industry in the 2010s ......................................................................... 73

4.4.1 Products, markets, growth and exports........................................................................... 73 4.4.2 The workforce ................................................................................................................ 77 4.4.3 HR practices ................................................................................................................... 78 4.4.4 Industrial relations and labour regulations ..................................................................... 86

4.5 Problems in the RMG industry ................................................................................................ 88 4.5.1 Low productivity and inefficiency ................................................................................. 88 4.5.2 Insufficient infrastructure ............................................................................................... 89 4.5.3 Political instability .......................................................................................................... 89 4.5.4 High labour turnover ...................................................................................................... 90

4.6 Summary of the chapter ............................................................................................................ 91 CHAPTER 5: EIGHT CASE STUDIES ........................................................................................ 93

5.1 Introduction: .............................................................................................................................. 93 5.2 Brown & Bronze Group: Case study one ................................................................................ 93

5.2.1 Workforce and labour turnover ...................................................................................... 95 5.2.2 HR policies and practices for reducing labour turnover ................................................. 95 5.2.3 Workers’ health and safety ............................................................................................. 98 5.2.4 Staff amenities and staff facilities .................................................................................. 98 5.2.5 Conclusion ...................................................................................................................... 98

5.3 Blue Concern: Case study two .................................................................................................. 98 5.3.1 Workforce characteristics and labour turnover ............................................................ 100 5.3.2 HR Policies & practices to reducing labour turnover ................................................... 100 5.3.3 Workers’ health and safety ........................................................................................... 102 5.3.4 Staff amenities and staff facilities ................................................................................ 103 5.3.5 Conclusion .................................................................................................................... 103

5.4 Green Garments Ltd: Case study three ................................................................................. 103 5.4.1 Workforce and labour turnover .................................................................................... 105 5.4.2 HR policies & practices to reducing labour turnover ................................................... 105 5.4.3 Workers’ health and safety ........................................................................................... 107 5.4.4 Staff amenities and staff facilities ................................................................................ 108 5.4.5 Conclusions .................................................................................................................. 108

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5.5 Pink fashion company Ltd: Case study four ......................................................................... 108 5.5.1 Workforce and labour turnover .................................................................................... 110 5.5.2 HR policies & practices for reducing labour turnover ................................................. 110 5.5.3 Workers’ health and safety ........................................................................................... 112 5.5.4 Staff amenities and staff facilities ................................................................................ 113 5.5.5 Conclusions .................................................................................................................. 113

5.6 Silver Dew Apparels Ltd: Case Study five ............................................................................ 113 5.6.1 Workforce and labour turnover .................................................................................... 115 5.6.2 HR policies & practices to reduce labour turnover ...................................................... 115 5.6.3 Workers’ health and safety ........................................................................................... 117 5.6.4 Staff amenities and staff facilities ................................................................................ 118 5.6.5 Conclusions .................................................................................................................. 118

5.7 Amber Fashion Ltd: Case study six ....................................................................................... 118 5.7.1 Workforce and labour turnover .................................................................................... 119 5.7.2 HR policies & practices to reducing labour turnover ................................................... 120 5.7.3 Workers’ health and safety ........................................................................................... 122 5.7.4 Staff amenities and staff facilities ................................................................................ 122 5.7.5 Conclusions .................................................................................................................. 123

5.8 Purple group: Case study seven ............................................................................................. 123 5.8.1 Workforce and labour turnover .................................................................................... 124 5.8.2 HR policies & practices for reducing labour turnover ................................................. 125 5.8.3 Workers’ health and safety ........................................................................................... 126 5.8.4 Staff amenities and staff facilities ................................................................................ 127 5.8.5 Conclusions .................................................................................................................. 127

5.9 Red International: Case study eight ...................................................................................... 128 5.9.1 Workforce characteristics and labour turnover ............................................................ 129 5.9.2 HR policies & practices to reducing labour turnover ................................................... 130 5.9.3 Workers’ health and safety ........................................................................................... 132 5.9.4 Staff amenities and staff facilities ................................................................................ 132 5.9.5 Conclusion .................................................................................................................... 133

CHAPTER 6: PATTERN MATCHING ..................................................................................... 134

6.1 Introduction ............................................................................................................................. 134 6.2 Labour turnover rates: ........................................................................................................... 134

6.2.1 Overall turnover rates: .................................................................................................. 134 6.2.2 Turnover rates among occupational groups ................................................................. 137 6.2.3 The consequences of labour turnover ........................................................................... 139

6.3 Explaining labour turnover rates (Research Question 3) .................................................... 141 6.3.1 Organisational characteristics and labour turnover ...................................................... 142 6.3.2 HR practices and labour turnover ................................................................................. 155 6.3.3 Occupational health & safety and labour turnover ....................................................... 174 6.3.4 Links between the explanatory factors? ....................................................................... 178 6.3.5 Links between organisational characteristics and HR practices ................................... 181

6.4 Summary of the chapter ................................................................ Error! Bookmark not defined. CHAPTER 7: CONCLUSION ..................................................................................................... 185

7.1 Introduction ............................................................................................................................. 185 7.2 Empirical novelty ..................................................................................................................... 185 7.3 Theoretical contribution ......................................................................................................... 188

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7.3.1 Holism .......................................................................................................................... 190 7.3.2 Holism and internal fit .................................................................................................. 189 7.3.3 Holism and type of organisation .................................................................................. 191 7.3.4 Holism and external fit………………………………………………………………. 190

7.4 Implications for practice ......................................................................................................... 192 7.5 Limitations of the research ..................................................................................................... 197 7.6 Areas for further research ...................................................................................................... 197

REFERENCES .................................................................................................................................. 199 APPENDIX 1: Data collection references ....................................................................................... 215 APPENDIX 2: Employee turnover studies based on organisational unit of analysis ................. 217 APPENDIX 3: Information statements ........................................................................................... 218 APPENDIX 4: Consent forms .......................................................................................................... 230 APPENDIX 5: Questionnaires ......................................................................................................... 234

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LIST OF TABLES Table 3.1: Relevant situations for determining the appropriate type of research method ..................................... 42 Table 3.2: Ideal criteria to select eight RMG case organisations .......................................................................... 47 Table 3.3: The eight RMG case organisations ...................................................................................................... 50 Table 3.4: Information collected from each case RMG organisation ................................................................... 52 Table 3.5: Criterion to select interviewees ........................................................................................................... 53 Table 3.6: Types of documents collected from selected RMG factories .............................................................. 54 Table 3.7: Types of information collected from non-participant observation ...................................................... 55 Table 4.1:Export values to tradition and non-traditional markets in fiscal years 2013-14 and 2014-15 .............. 69 Table 4.2: Summary of important periods for the RMG industry before the 2010s ............................................. 72 Table 4.3: Summary of important periods for the RMG industry in the 2010s .................................................... 73 Table 4.4: Top 10 knitwear exports from Bangladesh, fiscal year 2010-2011 ..................................................... 73 Table 4.5: Top 10 woven exports from Bangladesh, fiscal year 2010-2010 ........................................................ 74 Table 4.6: Export of knitwear, including sweaters and woven garments ............................................................. 75 Table 4.7: Major apparel items ............................................................................................................................. 75 Table 4.8: RMG exports of Bangladesh - a comparative scenario ....................................................................... 76 Table 4.9: Wages and productivity in the apparel industries of selected countries .............................................. 78 Table 4.10: Labour costs in the apparel industries in Bangladesh, India and China............................................. 79 Table 4.11: Average hourly wages (including fringe benefits) in the RMG Industry .......................................... 79 Table 4.12: Weekly holidays enjoyed by RMG workers ...................................................................................... 82 Table 4.13: Comparison of productivity in the RMG sector in Bangladesh with other countries ........................ 88 Table 4.14: A comparison of RMG industry efficiency in six Asian countries .................................................... 88 Table 5.1: Company overview, production process and product markets at a glance .......................................... 94 Table 5.2: Number of total employees and annual turnover rates by category of employee ................................ 95 Table 5.3: HR policies and practices for reducing labour turnover in Brown & Bronze Group ........................... 96 Table 5.4: Comparison between Government-stipulated minimum wages and wages paid by Brown & Bronze

Group ........................................................................................................................................................... 96 Table 5.5: Company overview, production process and product markets at a glance .......................................... 99 Table 5.6: Number of employees and annual labour turnover rates by work occupation ................................... 100 Table 5.7: HR policies & practices to reduce labour turnover at Blue Concern ................................................. 101 Table 5.8: Comparison of wage payment between Government rules and Blue Concern .................................. 101 Table 5.9: Company overview, production process and product markets at a glance ........................................ 104 Table 5.10: Number of employees and annual labour turnover rates by category of employee ......................... 105 Table 5.11: HR policies & practices for reducing labour turnover ..................................................................... 106 Table 5.12: Company overview, production process and product markets at a glance ...................................... 109 Table 5.13: Numbers of employees and annual labour turnover rates by category of employee ....................... 110 Table 5.14: HR policies & practices for reducing labour turnover ..................................................................... 111 Table 5.15: Company overview, production process and product markets at a glance ...................................... 114 Table 5.16: Number of total employees and annual turnover rates by category of employee ............................ 115 Table 5.17: HR policies and practices for reducing labour turnover .................................................................. 116 Table 5.18: Comparison of wage payment between Government rules and Silver Dew Apparels .................... 116 Table 5.19: Company overview, production process and product markets at a glance ...................................... 119 Table 5.20: Number of total employees and annual turnover rates by category of employee ............................ 120 Table 5.21: HR policies and practices in Amber Fashion Ltd ............................................................................ 120 Table 5.22: Company overview, production process and product markets at a glance ...................................... 123 Table 5.23: Number of employees & annual labour turnover rates by category of employee ............................ 125 Table 5.24: Purple Group HR policies and practices .......................................................................................... 125 Table 5.25: Comparison of wage payment between Government rules and Purple Group wages ..................... 125

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Table 5.26: Company overview, production process and product markets at a glance ...................................... 128 Table 5.27: Number of employees and annual labour turnover rates by category of employee ......................... 129 Table 5.28: Poor HR policies & practices contributing to high labour turnover ................................................ 130 Table 6.1: Rates of employee turnover among eight case organisations ............................................................ 135 Table 6.2: Turnover rates by occupational category among eight case organisations ........................................ 138 Table 6.3: Rates of employee turnover among eight case organisations (2012/2013) ........................................ 142 Table 6.4: Rates of employee turnover among eight case organisations ............................................................ 144 Table 6.5: Rates of employee turnover among eight case organisations ............................................................ 145 Table 6.6: Rates of employee turnover among eight case organisations ............................................................ 147 Table 6.7: Rates of employee turnover among the eight case organisations ...................................................... 151 Table 6.8: Rates of employee turnover among eight case organisations ............................................................ 153 Table 6.9: Relationship between wages and payment period and turnover rates................................................ 155 Table 6.10: Relationship between wage payment periods and turnover rates .................................................... 157 Table 6.11: Relationship between wage increase and turnover rates .................................................................. 159 Table 6.12: Relationship between standard work hours and turnover rates ........................................................ 161 Table 6.13: Relationship between overtime work practices and turnover rates .................................................. 163 Table 6.14: Relationship between weekly off day and turnover rates ................................................................ 164 Table 6.15: Relationship between organisations providing training and turnover rates ..................................... 166 Table 6.16: Relationship between career development opportunity and turnover rates ..................................... 167 Table 6.17: Relationship between annual leave and maternity leave and turnover rates .................................... 168 Table 6.18: Relationship between sick leave and provision of medical centre, and turnover rates .................... 171 Table 6.19: Relationship between staff amenities and other financial benefits, and turnover rates ................... 173 Table 6.20: Relationship between OH&S and turnover rates ............................................................................. 175 Table 6.21: Relationship between fire safety and turnover rates ........................................................................ 177 Table 6.22: Different variables contributing to turnover rates in the eight case organisations ........................... 179 Table 6.23: Organisations characteristics contributing to turnover rates in the eight case organisations ........... 181

LIST OF FIGURES

Figure 2.1: A model of turnover showing its determinants and consequences ..................................................... 28 Figure 4.1: Backward linkage - steps from fibres/cotton to finished fabrics ........................................................ 63

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ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank

BBS Bangladesh Bureau of Statistics

BCDB Bangladesh Cotton Development Board

BEPZA Bangladesh export processing zone authority

BGMEA Bangladesh Garment Manufacturers and Exporters Association

BDT Bangladesh Taka (Monetary Unit of Bangladesh Currency)

BIDS Bangladesh Institute of Development Studies

BTMA Bangladesh Textile Mills Association

DEPZ Dhaka Export Processing Zone

EPZ Export Processing Zone

EU European Union

FSCDD Fire Service and Civil Defence Directorate

FY Fiscal Year

GDP Gross Domestic Product

HPWP High Performance Work Practices

HR Human Resource

HRM Human Resource Management

ILO International Labour Organisation

LC Letter of Credit

MFA Multi-Fibre Arrangement

OD Organisational Development

OH&S Occupational Health and Safety

RMG Ready Made Garment

SDNP Sustainable Development Networking Program

US United States

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CHAPTER 1: INTRODUCTION

1.1 Introduction The aim of this chapter is to provide a brief overview of this thesis. Section 1.2 introduces the

background of the study, which discusses the successes achieved and problems faced by the

readymade garment (RMG) industry in Bangladesh. One of the problems – namely, labour

turnover – is the focus of the thesis. The purpose of the study is presented in Section 1.3,

including the research questions. Section 1.4 reflects on the theoretical assumptions underlying

the approach taken in the thesis. Section 1.5 demonstrates the theoretical justification, research

objectives and practical importance of the study. The research methodology, which includes

case study method, data collection and analysis technique, is elaborated upon in Section 1.6.

The overall structure of the thesis is further outlined in Section 1.7.

1.2 Background The RMG industry has played an impressive role in the transformation of the Bangladeshi

economy from one based on agriculture towards one increasingly based on export-oriented

manufacturing (Morshed, 2007). As will be discussed in Chapter 4, the industry started its

journey in the late 1970s with a relatively small investment and flourished in the 1980s and

1990s. By 2012-13, there were about 5,600 export-oriented, RMG firms in Bangladesh

(BGMEA, 2014). It was the largest export-earning sector in Bangladesh, accounting for over 79

per cent of the country’s total export earnings (BGMEA, 2014). The value of apparel exports

rose to US$ 21515.73 million in 2012-2013 from a mere US$ 6 million in 1981, making the

Bangladesh RMG the 2nd largest apparel supplier, after China, to the global apparel markets

(Main, Hirst & Phillips, 2013; BGMEA, 2014).

In addition to benefits from export earnings for Bangladesh, the RMG sector has provided

significant opportunities for employment. The number of employees working in the sector grew

from 0.04 million in 1983-84 to almost 4.4 million in 2013 (BGMEA 2014). Many employees

come from socio-economic groups that had previously not been able to effectively participate in

the economy.

Despite this incredible growth, the RMG industry continues to confront serious

challenges. Widely discussed problems for employees are low wages rates, irregular payment of

wages, poor workplace safety, long working hours, forced overtime, the absence of weekly days

off (particularly in a peak season or shipment period), the lack of training for newly recruited

and existing workers, limited career development opportunities, the unavailability of annual and

2

maternity leave. In addition, employers suffer labour strikes, and nation-wide strikes by political

parties (Hossain, 2010).

In addition, a particularly difficult problem for the industry has been the high voluntary

labour turnover. As reported in several academic studies (e.g. Hossain, 2010; Shamsuzzoha &

Shumon, 2007) and in both government and non-government organisation (NGO) reports

(Moazzem & Raz, 2014), high labour turnover rates are common, causing production problems,

and high recruitment and training costs. Moazzem & Raz (2014, p. 17) contended that ‘high

labour turnover in the RMG must be detrimental to factory performance’. Excessively high

labour turnover has hindered the industry’s growth and, by extension, threatened the country’s

economic development. Although a recognised problem that needs to be fixed, neither the

various Bangladeshi governments nor managers gather the detailed empirical data on labour

turnover or apply a “scientific” method for testing ways to fix the labour turnover problems.

1.3 Purpose of the study The broad purpose of this study is to use empirical research to understand better the problem of

labour turnover in the Bangladeshi RMG industry: its manifestations, its causes and its possible

solutions. The approach adopted in this thesis is to investigate differences in the rates of labour

turnover between organisations/enterprises in the industry, describing their respective patterns

of turnover, assessing the factors that might explain the differences and using this assessment to

recommend potential remedies. The general research question is:

(1) How can differences in the rates of employee turnover between

organisations/enterprises in the same industry be explained?

This general research question leads to more specific research questions:

(2) How do different human resource policies and practices in different

organisations/enterprises affect rates of voluntary employee turnover?

(3) How can managers and governments reduce the rates of labour turnover of the

companies of the Bangladeshi RMG industry?

1.4 Broad theoretical assumptions Like any research, this thesis addresses these research questions within a broad theoretical

tradition, which can best be described as Strategic Human Resource Management (SHRM),

which is itself a part of Human Resource Management (HRM) more generally.

Boxall and Purcell (2011, p. 3) define HRM as “the management of work and the

management of people” to achieve organizational goals as well as employee satisfaction. HRM

is generally seen as emerging from Personnel Management in the 1980s, but Boxall has recently

3

argued that HRM has been marked by three broad “agendas”, which respectively focus on

“individual, organizational, societal and global” (Boxall 2014, p. 579). He goes on to suggest

that most HRM studies have worked within the second of these agendas:

[HRM] has been focused on organisational needs for human resources and the role of

management in hiring, motivating and developing people to meet these needs. This is what

people naturally associate with HRM and it has generated a major demand for tertiary

education in it. The management discipline of HRM has survived and reproduced itself in

the academic world because it fits this niche: it focuses on activities that managers have to

go out and do, and for which management students seek some preparation in relevant

theoretical frameworks and skill sets. This incorporates the micro activities of HRM –

recruitment, remuneration, training, performance management, and so on – and their

overall patterns and interactions with organisational strategy. (p. 580)

The latter part of this quote allows Boxall to characterise SHRM as being:

concerned with how models of HRM vary across societal, industry and organisational

contexts and with how HRM in any particular firm can be used to enhance its performance,

a mission that is essential to its role in business schools. (p. 580)

Earlier, Delery and Doty (1996, p. 802) had also seen the emergence of this broader

‘strategic’ perspective on HRM as an advance over the narrower traditional perspective of

previous decades because it shifted away from a ‘micro’ or individual-level analysis ‘… to a

macro or strategic perspective’. There are three key features of SHRM (as a theoretical

tradition) that inform the approach adopted in this thesis. First, as Delery and Doty (1996, p.

803) argued, SHRM is ‘guided by the holistic principle of enquiry’. This considers not just

individual HR policies and practices of managers, but also sees these individual policies and

practices as component parts of a larger entity (i.e. the organisation’s HR strategy) rather than as

separate and unconnected initiatives.

Second, this leads to the question of ‘internal fit’ (Boxall and Purcell, 2011, p. 229;

Gerhart 2012; Delery & Doty, 1996). This focuses on the extent to which various HR policies

and practices are consistent with each other and integrated with the organizational larger

business strategy. With respect to the latter, Brewster and Larsen (1992: 411–12) define

integration as ‘the degree to which the HRM issues are considered as part of the formulation of

the business strategy’. Research in the field (see Budhwar and Sparrow, 1997; Truss et al.,

1997; Budhwar, 2000a; 2000b) highlights a number of potential benefits of integration of HRM

into the corporate strategy: providing a broader range of solutions for solving complex

organisational problems; assuring the successful implementation of corporate strategy;

contributing a vital ingredient in achieving and maintaining effective organisational

performance; ensuring that all human, technical and financial resources are given equal and due

4

consideration in setting goals and assessing implementation capabilities; limiting the

subordination and neglect of HR issues to strategic considerations; providing long-term focus to

HRM; and helping a firm to achieve competitive advantage.

In prescriptive terms, SHRM therefore suggests that an effective HR strategy links

together these component parts into a coherent set of policies and practices that are consistent

with each other – and with the organisation’s business strategy – and reinforce each other in

ways that guide employee behavior towards the achievement of organisational goals. More

analytically, empirical studies of SHRM should investigate the extent to which internal fit is

achieved in practice.

Third, SHRM focuses on the relationship between an organisation’s HR strategy and the

organisation’s external environment. This is the question of ‘external fit’ (Boxall and Purcell,

2011, p. 80), which is especially important in the ‘contingency’ approach to SHRM (Sparrow,

Brewster, and Harris, 2004, p. 30). The contingency paradigm is ‘idiographic’, searching for an

overall understanding of what is contextually unique and why. It is focused on understanding

what is different between and within HRM in various contexts and what are the antecedents of

those differences (Sparrow, Brewster and Harris, 2004).

In prescriptive terms, SHRM therefore suggests that organizational performance will be

improved to the extent that HR strategy is appropriate to the product markets, labour markets,

regulatory and cultural contexts in which the organization operates. Organisations may under-

perform or fail if managers do not inevitably tailor their HRM to their specific context or do not

adapt to their environment. Analytically, this means that empirical research should investigate

differences in HR strategy across difference contexts and the extent to which organizational;

performance varies across different strategies and contexts.

The application of this broad theoretical tradition (i.e. SHRM) to the research questions

means that the thesis will:

• Examine labour turnover as an important organisational ‘outcome’ of the types of HR

policies and practices operating in different types of RMG firms in Bangladesh.

• Emphasize multiple HR practices in the different types of RMG firms in Bangladesh

and the links between those practices within those firms.

• Anticipate that the explanation for the impact of HR systems in Bangladeshi RMG

firms on labour turnover will depend on the link between the firm’s HR systems and the

context in which they operate.

5

1.5 Significance of the study

The study is important in three ways: it is empirically novel, providing data on labour turnover

that is rare; it adopts a methodology and a theoretical approach that is different to most studies

of labour turnover and is, consequently, able to provide valuable theoretical insights into

explanations of labour turnover; and it offers practical suggestions to the Bangladeshi

government and to mangers – and possibly to governments and managers in other developing

countries – about how the problem of high labour turnover might be addressed.

1.5.1 Empirical novelty

Remarkably, given its significance of the labour turnover problem to the Bangladeshi economy

and wide recognition of the problem, there is little accurate or detailed empirical data on labour

turnover in the RMG industry. As Chapters 4 and 6 discuss in more detail, research published

on the industry often devotes surprisingly little attention to turnover rates and, where it does

raise the labour turnover issue, it mostly relies on vague assertions about voluntary turnover

rates being “high” and representing “a problem” for the industry without providing any data.

For example, Mahmud and Kabeer (2003) note: ‘high rates of turnover in the workforce’ (p. 25)

in the RMG industry and Moazzem & Raz (2014) claim “at present, there is high labour

turnover within the RMG sector” (p. 4), but neither presented empirical evidence on

organisational turnover rates or industry standards, nor have the authors analysed organisational

policies and practices that might reduce turnover rates.

More broadly, as will be discussed in Chapter 2, empirical research on labour turnover

more generally displays two further characteristics. First, there are few empirical studies of

labour turnover in developing countries, despite the huge number of studies in Western

developed countries. Second, the vast bulk of empirical studies of labour turnover use

quantitative methods, reporting the results of surveys of samples of employees; the unit of

analysis is, therefore, the individual. This means that few studies present empirical data on

organisational rates of labour turnover.

This study is, therefore, important because it investigates labour turnover in a developing

economy (i.e. Bangladesh) and it provides novel and detailed empirical data on organisational

labour turnover rates and the factors that potentially explain those rates in eight companies

engaged in a key industry (i.e. the RMG industry) of that country. In this way, it makes a

contribution by, at least partially, filling a significant empirical gap in the research literature,

which is currently dominated by studies of labour turnover in developed Western countries.

6

1.5.2 Theoretical justification

The research literature on turnover is huge, as noted by Smith, Oczkowski and Smith (2011, p.

395). The (necessarily selective) review of this literature in Chapter 2, however, argues that it

displays two general features. First, the vast majority of studies examining turnover have

adopted an individual-level analysis using quantitative methodologies (Cotton & Tuttle, 1986;

Keat, 2005), with a corresponding lack of studies that focus on turnover data for organisations

and possible explanations for variations in rates between organisations. Thus, it can be argued

that the existing literature fragments analysis into separate variables and, thereby, neglects the

holism of organisations. The present study is, therefore, distinctive and important because it

uses the case study method and qualitative data, allowing it to make a theoretical contribution,

which is discussed in more detail in Chapter 7.

Second, the existing literature largely neglects the question of context. One of the very

important consequences of this theoretical neglect becomes clear when attention turns to

understanding labour turnover in developing countries. Most existing studies of labour turnover

are located in Western countries, mostly in the US and UK (Ovadje, 2010, p. 65), with little

recognition of the impact of this highly specific context on the findings. Probably the

explanations of labour turnover rates in organisations in developed countries do not explain

labour turnover rates in developing countries. Does the level of economic development or the

nature of legal systems or religion/culture affect patterns in labour turnover? Recent mainstream

studies in Western countries, for example, have highlighted family friendly policies, flexible

working hours, opportunities for career development and organisational training as explanations

of labour turnover. Are these universal phenomena – and therefore good theory – or are they

explanations that are specific the certain contexts, namely Western developed countries in the

21st century?

The analysis of labour turnover in organisations in a developing country offered in this

thesis – enhanced by the case study method – is important because it is more sensitive to

context. It locates Bangladeshi RMG companies in their market, geographic and regulatory

contexts, and explores whether they lead to different explanations of labour turnover to those in

developed Western countries. As well, by analysing labour turnover in different types of

organisations – that is, different contexts – in the same industry, it allows explanations that are

both internal and external to the organisation.

1.5.3 Practical importance

The present study aims to contribute to the management of voluntary labour turnover by both

governments and managers in Bangladesh, and in developing countries more generally. The

current body of research on the impact of human resource (HR) policies on labour turnover in

7

the RMG industry in Bangladesh is still limited, and there is a lack of understanding of which

HR policies can be used to reduce voluntary turnover rates (Hossain, 2010). The provision in

this thesis of rare empirical data on labour turnover in the RMG industry, especially turnover in

different types of companies (which vary according to size, location, ownership and position in

supply chain) and different types of employees (varying according to occupation and gender)

assists in more effectively identifying and locating the nature of the labour turnover problem.

While the limited number of cases means that generalisation is not possible, it is valuable to

demonstrate that different types of companies and different types of employees have different

problems, which may well be subject to different managerial solutions.

The more holistic analysis of the companies resulting from the case study method also

reveals how the many factors affecting labour turnover in companies are inter-related.

Companies with low turnover rates tend to display a number of factors which reinforce each

other and work together to retain employees, while companies with high turnover display a

range of mutually-reinforcing factors which work in the opposite direction. On the one hand,

this means that managers seeking to reduce labour turnover cannot “cherry pick” individual

policies and practices and expect them to be successful; on the other hand, the need to address

multiple factors within the company may place limits on what some companies can achieve,

because they are unable to break free of the web of practices that are creating the problem.

At the same time, the industry-level analysis presented here and the location of the

different types of companies within the broader RMG industry enables the formation of

recommendations for actions by government on how to reform existing regulations and apply

stricter enforcement of regulations.

Improvements in the management of labour turnover are not only important to company

management and the government but also to workers in the Bangladeshi RMG industry. Labour

turnover is often associated with poor treatment of workers, which may have long-term

detrimental consequences for the industry as dissatisfaction grows (Rashid, 2006). If better

management leads to better treatment of workers, then there may be mutual gains for all

stakeholders.

1.6 Research methodology The research methodology will be described and justified in detail in Chapter 3, but a brief

introduction is provided here to anticipate how the main research questions will be addressed

and to acknowledge some of the methodology’s limitations.

Voluntary labour turnover and HR practices are complex phenomena embedded in

organisational practice and highly influenced by context. For this reason, the case study

8

approach is used as the overall research design (Yin, 2003). Case studies contribute to

knowledge about individual, group, organisational, social, political and related phenomena. As

Yin (2003, p. 1) notes: ‘in all these situations, the distinctive need for case studies arises out of

the desire to understand complex social phenomena’. Case studies also allow the researcher to

investigate phenomena in its real-life context (Descombe, 1998; Stake, 1995; Van Wynsberghe

& Khan, 2007).

Case study research can include either single or multiple cases (Yin, 1984; cited in

Eisenhardt, 1989). The present study will involve multiple cases (eight cases) because multiple–

case studies typically offer a stronger base for theory building (Yin, 2009) and produce greater

confidence in the reliability of findings (Kitay & Callus, 1998). The present study will select

eight RMG organisations of different size (i.e. large and small in terms of number of

employees) and ownership (i.e. foreign owned and local owned), and from different

geographical locations in Bangladesh. This sample of cases maximises contrast (Creswell,

2007) and increases the likelihood of research findings reflecting different viewpoints: an ideal

in qualitative research strategy, even if the research cannot guarantee the generalizability of the

findings.

The data collection techniques are semi-structured interviews, document reviews and

observation. As Hall and Rist (1999) argue, the strength of qualitative methods lies in the

concurrent use of multiple methods because it enables methodological triangulation (Patton,

1990).

Data analysis for this study follows processes typical of qualitative studies (Creswell

2007; Miles & Huberman, 1994): (i) data management, involving reduction of bulky and

voluminous data into meaningful segments; (ii) identification of themes and categories; and (iii)

data displaying. As the study employs the multiple-case method, cross-case analysis compares

both similarities and differences in the cases, essential to the identification and analysis of

empirical patterns and theoretical conclusions.

1.7 Thesis structure This thesis consists of six chapters beyond this Introduction. Chapter two reviews the existing

literature on the voluntary labour turnover area, particularly in Western developed countries to

identify the determinants of voluntary labour turnover and summarise the major findings. The

chapter identifies four major shortcomings in the existing literature. First, the majority of studies

examining labour turnover have adopted an individual-level analysis. Second, there is an

absence of studies that focus on labour turnover data for Bangladeshi organisations and the key

factors that explain turnover rates at the organisational level. Third, the vast majority of the

9

individual-level studies examining labour turnover have been conducted in Western countries.

Fourth, most studies of labour turnover have used quantitative methodologies.

Chapter three justifies why qualitative research, particularly the case study method, is

important for the present study. The chapter consists of four principal sections. First, the

research design of multiple qualitative case studies is shown to be appropriate for the research

questions of the present study. Second, the combination of semi-structured interviews,

documentary analysis and physical observation is shown to be appropriate for the collection of

data in such a project. Third, data analysis methods, including pattern matching, are discussed.

Fourth, ethical considerations for this study are explained.

Chapter four provides an overall scenario of the RMG industry of Bangladesh, presenting

past history and growth, present successes and challenges. Chapter four also briefly summarises

the major findings of the handful of studies on the RMG industry of Bangladesh, especially on

the voluntary turnover issue.

Chapter five presents each of the eight case organisations separately and geographically

locates them, explains their products and product markets, and their numbers of employees,

production capacity, growth, export, labour turnover rates and HR practices.

Chapter six analyses the data and explores the causes of higher turnover rates in the eight

case organisations. This chapter, therefore, uses cross-case analysis to more directly address the

research questions of the thesis. In this way, it draws on the data already reported on a

company-by-company basis in Chapter five, but seeks to compare similarities and differences in

their experiences. The chapter begins with descriptive accounts of overall labour turnover rates,

followed by more disaggregated analyses of occupational turnover rates. It also explores the

consequences of labour turnover for the organisations. Then it seeks explanations of labour

turnover rates. This initially focuses on the influence of numerous individual explanatory

factors, then discusses HR and non-HR factors. The chapter discussion emphasises that despite

the importance of the individual factors, labour turnover can only be properly explained by

integrating the individual factors into a more holistic analysis.

Finally, Chapter seven provides conclusion of the results, and the theoretical and practical

implications of the study.

1.8 Summary of the chapter The purpose of this chapter has been to introduce the research topic, and provide the

background to the research, and its significance. The chapter provided a brief description of the

RMG industry and its importance to the RMG industry to Bangladesh, as well as identifying the

10

research question. Chapter one also provided an overview of the contents of chapters 2 to

chapter 7.

11

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction The purpose of this chapter is to review the literature on labour turnover. The first part of the

chapter provides a general overview of the labour turnover literature to locate the current study

within the broader research field. The second part of the chapter focuses attention on studies

that analysed different rates of turnover between different organisations. This information

enables the development of a framework to guide the empirical investigation and answer the

research questions.

2.2 General overview of the employee turnover literature The literature on labour turnover is large and has a long history. Muchinsky and Morrow (1980)

notes: “The history of research on employee turnover is both lengthy and diverse as turnover

has been the object of research for nearly 65 years . . . by researchers from a multitude of

disciplines” (p. 263). Zheng and Lamond (2010), in their research to identify the organisational

determinants of employee turnover for multinational companies in six Asian countries agreed.

They cited Barrick and Zimmerman (2005), who had analysed 1,500 studies carried out over the

previous 50 years on labour turnover. Lee, Hsu and Lien (2008) in one of the few firm-level

studies of employee turnover on the Taiwanese manufacturing industry, noted “a search in

October 2005 for articles published in peer-reviewed scholarly journals with ‘employee

turnover’ as the heading found 1,140 studies from the PsycINFO database and 4,491 articles

from the ABI/INFORM Complete (ProQuest) database” (p. 232). Holtom, Mitchell, Lee and

Eberly (2008) argued, however, that there is still much to understand: “it is not surprising that

turnover continues to be a vibrant field of research despite more than 1500 academic studies

addressing the topic” (p. 232).

Four features of this huge volume of literature are especially relevant to the present study.

First, most of the studies have been conducted using the individual employee as the unit of

analysis. Second, and related to the first, a significant shortcoming is the small number of

studies focusing on the organisation as the unit of analysis. Third, most turnover studies have

applied quantitative methods rather than qualitative methods. Fourth, most studies have been

conducted in Western and/or developed countries, with relatively few studies conducted in

developing countries. This suggests a neglect of contextual factors and their impact on turnover.

These four features of the turnover literature (which are discussed in more detail below) help to

demonstrate the distinctiveness of the current study, which is a qualitative study, using the

organisation as the unit of analysis and drawing empirical data from a developing country.

12

2.2.1 Focus on individual employees in organisations

Most studies of employee turnover have focused on individual-level analysis. Smith et al,

(2011), for instance, find that much of the labour turnover literature has focused on individual

employees’ motivations for, and attitudes and intentions towards, quitting their present work,

while Zheng and Lamond (2010) claim that the bulk of labour turnover studies tend to focus on

describing employee turnover at the individual-level. A number of other studies make the same

point, including Smith et al. (2011), Lee, Hsu and Lien (2006), Shaw, Delery, Jenkins and

Gupta (1998), Peterson (2004), Barrick and Zimmerman (2005), Holtom et al., (2008) and

Terborg and Lee (1984).

The main strength of the individual-level studies is that they have gathered quantitative

data through survey questionnaires that has been used to provide “incremental knowledge” (Lee

et al., 1999, p. 450) on multidimensional causes and consequences of turnover over time (Zheng

& Lamond, 2010). Peterson (2004) stated that over the past few decades of theory building,

there has been widespread and significant support for theoretical constructs based on the

individual characteristics of satisfaction, attitudes, commitment, behaviours and intention as key

antecedents for explaining labour turnover.

In this way, these individual-level studies point to a number of factors that potentially

explain organisation-level labour turnover, but they have not necessarily delivered a strong

foundation for the current study. There are a number of problems with the dominant approach.

These studies, for example, measure the intentions of employees to quit rather than their actual

behaviour. Guchait and Cho (2010) studied the impact of human resource management practices

on ‘intention to leave of employees’ in one service organisation in India. They refer intention to

leave as ‘subjective estimation of an individual regarding the probability of leaving an

organisation in the near future’ (p. 1234). While some studies (such as Guchait and Cho (2010),

Arnold and Feldman (1982), Steel and Ovalle (1984), and Ghiselli, La Lopa,, and Bai, (2001))

have argued that intention to quit is a single best predictor of actual turnover (Steel & Ovalle,

1984 as cited in Guchait & Cho, 2010), intentions do not necessarily translate into action.

Individual-level studies produce a wide range of findings, identifying many different

variables. Griffeth, Hom and Gaertner (2000) found “500 correlations from 42 studies in the

1990s’ (p. 463). A few scholars, such as Maertz and Campion (2004), aimed to unify the many

disparate theoretical approaches, which, according to Holtom et al. (2008), have “In the past 10

years . . . experienced considerable theoretical expansion” (p. 243). They continue that: “Efforts

such as those of Maertz and colleagues to provide a unifying theoretical framework to orient the

many individual constructs demonstrated to influence turnover are clearly valuable to the field’

13

(p. 245). Such efforts are especially valuable because, as Pettman (1975) claim, findings on

labour turnover are not well integrated. Muchinsky and Morrow (1980) state: “Despite the

wealth of studies on turnover, the amount of theory or attempts at integration and synthesis via

theory is really quite small” (p. 264).

Boxall et al. (2003) came to a similar conclusion. They claim that individual-level

analysis “has resulted in incremental and sometimes inconsistent research findings with small to

modest effect sizes and uncertain generalisation’ (p. 198). Some individual-level studies suggest

significant correlations between particular individual characteristics and intention to leave,

while other studies find no correlation between them. For example, Zeffane and Gul (1995, p.

93) state: “It has been variously found that commitment was a precursor to satisfaction

(Bateman and Strasser, 1984), that satisfaction was a precursor of commitment (Marsh and

Mannari, 1977) and that the two concepts were correlated (Porter, 1974), whilst in a more recent

study, no significant casual relationships in either direction were found” (Curry et al., 1986).

Generally, individual-level studies neglect the impact of “context”, in spite of the

intuitive recognition that different managerial (organisational) and non–managerial (non–

organisational) factors may have different affects on employee satisfaction. Satisfaction with

pay and benefits might not be an important factor in the decision to stay in a job or to leave a

job in every country because different economic situations. Satisfaction with pay and benefits

are especially important in regions where poverty levels are very high (Ovadje, 2010). Whereas

in affluent countries, such as New Zealand (New Zealand is very similar to the US (Hofstede,

1991 as cited by Guthrie, 2000) satisfaction with pay and benefits are insignificant explanatory

issues for employee turnover (Boxall et al., 2003). Because many individual-level studies do not

adequately discuss how generalisation of their findings are applicable to different contexts, it is

difficult reconcile their different findings.

The causes of individual employee’s intention to quit, actual turnover and the

organisational variables may interact in different ways depending upon employee’s perception,

personal wants, individual career plan, personal likes and dislikes, work-family conflict and so

on.

Organisational-unit of analysis measures organisational variables which are “opposed to

individual characteristics” (Zheng & Lamond, 2010, p. 423). Training, formal appraisals,

teamwork, climate of learning, size of the organisation, industry type, high–performance work

systems, and presence of union are the examples of organisational variables (Smith et al., 2011).

Several individual-level models exist in the turnover literature. These models will not

work if homology does not exist between functional relations found at the individual-level of

analysis. Homology between functional relations exists at the organisational-level of analysis

14

(Terborg & Lee, 1984). Age, for example, is often found to be negatively correlated with

individual-level labour turnover factors. Could it then be assumed that turnover rates are

negatively correlated with average age of the organisation’s workforce? In practice, it will be an

unlikely result (Roberts, Hulin, & Rousseau, 1978).

According to Muchinsky and Morrow (1980) employee turnover research suffers from

two significant deficiencies, which hinder integration of findings and advancement. First, many

studies, especially those from within the discipline of psychology, fail to capture the importance

of economic factors for predicting and understanding the turnover process. Second, the effect of

turnover on other phenomena has been ignored. In a wide number of studies, particularly

prediction studies, turnover is the conceptual endpoint of the investigation with little or no

attention to the consequences of turnover.

The findings from individual-unit of analysis are not generalisable to the organisational-

level because studies focusing on individual-unit of analysis deal with individual employees’

characteristics while organisational-unit studies focus on organisational variables, which are

different from individual characteristics (Zheng & Lamond, 2010).

The present research does not attempt to integrate or synthesise findings from the

individual-level studies. Rather, the present study is focused at an organisational-level. It will

examine organisational-level factors as determinants of turnover. Training, high performance

work practices (Huselid, 1995), high involvement work practices (Guthrie, 2001), size of

organisation (Lee et al., 2006), and unionisation are the organisational-level factors of interest.

In conclusion, turnover studies are dominated by individual-level studies. Though it is

useful for some purposes, it mainly focuses on measuring the turnover intention, which may not

be the same as actual turnover rates. Furthermore, individual-level predictors do not include

significant variables to explain real causes of voluntary turnover.

2.2.2 Lack of attention to employee turnover at organisational-level

As already noted, few studies in the labour turnover field have focused on determining the key

factors of turnover at the organisational level (Zheng & Lamond, 2010). Zheng & Lamond

(2010) claim that their research is one of the few of studies that investigates employee turnover

from the organisational and institutional perspective. Similarly, Terborg and Lee (1984) contend

that their study contributes to the almost non-existent literature on organisational-level turnover

research. Many other researchers make essentially the same point, including Lee, Hsu, and Lien

(2006), Barrick and Zimmerman (2005), Peterson (2004) and Shaw, Delery, Jenkins, and Gupta

(1998). Turnover studies at the organisational-level are important to develop a comprehensive

model of turnover that spans various levels of analysis. Moreover, such studies are needed if

15

firms are to effectively manage and forecast their human resource requirements (Terborg & Lee,

1984).

Organisational-level studies deal with different ‘dependent’ and ‘independent’ variables

to those of individual-level studies. With respect to the former, they measure organisational

turnover rates, rather than a summation of individual turnover rates. These are also actual

turnover rates rather than ‘intentions’ to leave. With respect to the latter, they focus on

organisational predictors, such as industry context, size of the organisation, ownership of the

organisation, position in supply chain, organisation-initiated training, HR system or multiple

HR practices and so on.

Taplin, Winterton, and Winterton (2003) point out that results from individual-level

studies cannot be applied to organisational-level cases: “Because of the paucity of studies of

turnover at the establishment or organisational-level, it is difficult to adduce organisational-level

characteristics from individual job satisfaction surveys” (p. 1027).

Smith et al., (2011) assert that a majority of organisational-level studies deal with a series

of common factors, such as high performance work systems, high involvement work practices,

unionisation and organisation-initiated training programs. The significance of organisational-

level research has been implicitly or explicitly emphasised in the organisational (e.g. Roberts et

al., 1978) and strategic human resource management (e.g. Huselid, 1995) literatures, but has

rarely been addressed particularly (Shaw, Delery, Jenkins and Gupta, 1998).

Terborg and Lee (1984) emphasise the necessity of conducting research that explicitly

considers organisational-level variables as predictors of organisational-level turnover rates.

They also emphasise that there are both practical and theoretical uses that justify the expansion

of turnover studies at the organisational-level. Moreover, Baysinger and Mobley, (1983) advice

that it is important to identify optimal levels of turnover rates so that better decisions regarding

human resource utilisation can be made.

One especially valuable recent study of turnover at an organisational level was Zheng &

Lamond (2010). They investigated organisational determinants of voluntary turnover in six

Asian countries; namely Indonesia, Malaysia, Philippines, Singapore, Taiwan, and Thailand.

They gathered data at an organisational (rather than the individual employee) level using a

survey questionnaire completed by one respondent (variously the CEO, financial controller or

HR manager) of 529 multinational companies (MNCs). Zheng & Lamond’s (2010) study is

useful for the current project, in at least three ways. First, their focus on the organisation as the

unit of analysis allowed them to analyse actual labour turnover rates rather than the intention of

individual employees to leave. Second, their findings emphasise ‘… the importance of using

organisational predictors in explaining employee turnover’ (p. 434). Indeed, they found that

16

organisational predictors accounted for significantly more of variance in turnover rates than did

individual predictors. This suggests there will be value in considering the unit of analysis of the

current research as organisational. Third, amongst the organisational factors they found to be

associated with organisational turnover rates were characteristics of the organisations (like size,

age of the subsidiary and source of ownership) as well as some HR practices (including training,

intra-company transfer, and supervisory style). They also went further to acknowledge links

between the various HR practices. For example, they found that single HR practices, such as

training, are not effective in retaining employees by themselves. What was most important, they

claimed, was a ‘… combination of training with other HR practices that creates a synergy where

organisations develop a higher level of organisational commitment in employees, and a lower

level of turnover rates is the result’ (p. 437). In this way, they demonstrate the value of ‘bundle

practices’ rather than single HR practices.

In conclusion, there are few studies of labour turnover focusing on the measurement and

determinants of turnover at the organisational-level, even though organisational predictors

account for a greater amount of variance in describing employee turnover. It is important to

conduct research at the organisational-level not only to fill up the research gap but also to

implement its results practically.

2.2.3 Mostly quantitative methodology used

Most studies of employee turnover have used quantitative methods of research, while there are

few studies of employee turnover applying qualitative methods (Keat, 2005; see also Cotton and

Tuttle (1986). Quantitative methods apply numerical measurement and statistical analysis

techniques, presenting their data in tables, graphs, and other number-based presentations

(Auerbach & Silverstein, 2003; Hesse-Biber, & Leary, 20060; Thomas, 2003). In particular,

quantitative methods establish correlations between variables and turnover and have been used

for both individual- and organisational-level studies.

The findings from quantitative methods, however, present only one way of viewing a

phenomena. Cotton and Tuttle (1986) argue that there is little value in simply linking variables

with turnover. They suggest that it would be worthwhile to conduct research that determines

whether variables are causally linked to turnover and how these links are moderated by other

variables. Here, Cotton and Tuttle (1986) suggest the use of qualitative method.

The strength of qualitative research lies in its ability to concentrate on actual practice,

looking at how social interactions are routinely enacted (Silverman, 2000). Generally,

qualitative research is applied in situations where the research is conducted in its natural settings

in an attempt to interpret phenomena through the meaning concerned with them (Cheng &

17

Brown, 1998). The particular benefits of qualitative case studies to provide insights into

organisational labour turnover will be addressed in Chapter 3.

2.2.4 Domination of studies of Western context

The vast bulk of the research carried out on labour turnover has been undertaken by scholars

from Western countries based on empirical data from organisations located in Western

countries. Holtom et al. (2008) were even more specific: they reviewed a significant number of

studies on turnover and concluded that: “Most of the turnover research that we have reviewed…

has been conducted in the USA, with a few studies based in Australia and the UK” (p. 257).

Other scholars who have explicitly drawn similar conclusions include Boxall et al. (2003, p.

198) and Ovadje (2010, p. 65).

The corollary is that there have been very few studies of labour turnover in developing

countries. Only seven studies in developing countries were located, including Loess, Miller and

Yoskowitz’s (2008); Ovadje (2010); Guchait and Cho (2010); Altarawneh and Al-Kilani’s

(2010); Shahzad, Hussain, Bashir, Chishti, and Nasir (2011); Aponsa (2012); and World Bank

(2012).

The Western dominance in turnover research, as Smith et al. (2011) assert, has been

accompanied by a neglect of context: “The impact of contextual factors has been subjected to

less scrutiny until recent years” (p. 396). However, they did not point out any recent studies that

have investigated the impact of contexts. In other words, the location of these studies in the

Western countries (especially the USA and UK) has not been treated as problematic and

therefore subject to investigation. There has been little attempt to identify the characteristics of

this Western context or to explore the ways in which this specific context affects findings about

the causes of labour turnover. One example of context that has been neglected is national culture. Guthrie (2000), for

example, questioned the generalisability of his findings from New Zealand, which was

considered to have an ‘individualistic’ culture, to societies with more ‘collectivist’ cultures,

which includes many developing countries. Ovadje (2010) raised similar questions in more

detail. His study is one of the very few studies of labour turnover in developing countries: he

explored the drivers of turnover intention among middle managers in Nigeria through a

structured questionnaire that gathered data from 109 managers. The survey was designed to test

hypotheses associated with the impact of six variables on employee turnover intention:

demographic variables, employment opportunities, pay and benefits, management style,

organisational commitment, turnover culture and perceived organisational support (POS) (pp.

67-69). So, the study was typical of labour turnover research in some ways (i.e. quantitative

methods and individual-unit of analysis), it was unusual in its location in a developing country.

18

Ovadje (2010) speculated that the factors driving turnover in Nigeria should be different

to those in Western countries, especially because of significant cultural differences. He argued

that ‘… the collectivist context [in Nigeria] is significantly different from a western context’ (p.

65). Unlike individualistic culture in Western countries, he claimed, ‘… there is strong in-group

identification’ in collectivist cultures like Nigeria. ‘People define themselves in terms of

membership of a community’ and ‘they are willing to sacrifice personal comfort, interests etc

for the community’s goals’ (p. 65). When employees join in an organisation, they attribute to

the organisation the characteristics of their social group. In addition, employees in such cultures

have certain expectations of their organisations. Turnover rates will be higher, Ovadje

anticipated, if these expectations are not met. Employees expect to have financial and moral

support in both good and bad times. Organisations and managers are expected to be ‘their

brother’s keeper’ (p. 76). Ovadje (2010) believed that cultural differences would be particularly

affected by some of the variables he was investigating:

Few studies have investigated the relationship between turnover and Perceived

Organisational Support (POS), Management Style and Turnover Culture. These variables

may be particularly important in a non–western context. (p. 64).

The problem is that Ovadje’s findings were not able to confirm or disprove these

speculations. His (quantitative) methodology, which was essentially the same as many studies in

Western countries, did not allow him to prove or disprove this contention and his results

suggested causes of labour turnover that were not much different to those from Western studies.

For example, he found that low turnover correlated with employee satisfaction with ‘managerial

style’, but he did not investigate whether the substance of managerial style in Nigeria was any

different to managerial style elsewhere. Similarly, he found a strong negative correlation

between employee commitment and turnover, without analysing whether the reasons behind

employee commitment in Nigeria were any different to those elsewhere. Beyond culture, a second contextual factor that can be expected to be different in

developing countries compared to Western countries is the stage of economic development.

This is likely to produce very different types of labour markets as well as state and institutional

structures (like social security, unemployment insurance and skill development) in developing

countries compared to Western countries. A good example of an (unusual) exploration of

economic development and labour turnover is Jacoby (1979), which studied the development of

internal labour markets in Japan. His argument is that as Japan rapidly industrialised during the

early decades of the 20th century, there was very strong demand for skilled labour and short

supply, which led to high levels of labour turnover. There was no state-sponsored solution to

this problem, so the large manufacturing employers initiated ‘the development of a labour force

that would be loyal, stable, and resistant to unions’ (p. 191). Therefore, ‘employers in the

19

primary sector began to develop a new pool of skilled labour’ (p. 193) through training and

other HR practices. The employers were also able to retain the employees they trained as ‘the

firm-trained skilled labour force was more … loyal and stable’ (p. 194) because of a system of

HR practices developed within the large manufacturing firms. This provides valuable insights

into the possible impact of stage of economic development on labour turnover, although the big

differences between the Japanese industries in question (big companies in capital intensive

industries) and the industries in Bangladesh (small companies in labour-intensive industries)

mean that these insights are not directly transferable to the current study.

Another explicit account of the impact of economic development was Lehmann and

Wadsworth (2000), which studied worker turnover rates in two transition economies (Russia

and Poland) and compared them with turnover rates in Britain. They gathered data through

surveys in each economy. They also found variations in rates of labour turnover were caused by

the stages of economic growth. In particular, they claimed that ‘[a]n important factor of worker

turnover in a transition economy is the ease with which small and medium-sized enterprises

(SMEs) can create new jobs’ (p. 642). Therefore, rates of turnover are higher in transition

economies because turnover rate is high in small firms. This conclusion is based on an argument

that, first, national turnover rates will be higher in transitional economies than in mature

economies because ‘higher total number of [small firms’] jobs for both [transition] countries

[Russia and Poland] compared to Britain [which is a developed economy]’ (p. 658). Second,

‘upturn in the rate of new job creation can facilitate job quitting and within-firm transfers of

workers’ (p. 640) as workers leave to take up those opportunities.

Beyond culture and stage of economic development, a third contextual factor that can be

expected to be different in developing countries compared to Western countries is the

occupational health & safety (OHS). Workplace safety and security has in Western countries

long been the subject of legal and institutional regulation, which have affected management

practice and eliminated the most serious workplace dangers for employees. Jeyaratnam (n. d; p.

3), for example, notes ‘The developed nations evolved their legal and administrative structure to

keep pace with their technological and economic advancements’. As a result, research in

Western countries has in recent years rarely considered workplace safety as an explanatory

factor worth investigating in studies of labour turnover. For example, of the thirty seven

published literature reviews on labour turnover in Western countries studied for this thesis, none

devoted any attention to workplace safety.

In contrast, the legal and institutional regulation of OHS is much weaker in most

developing countries, resulting in unsafe workplaces being much more common, especially in

rapidly growing industries. Chew (1988, p. 111), for example, claims ‘in developing countries

20

the state of occupational safety remains distressingly poor’. Whilst Western Developed

countries expend a substantial amount of money for OHS, very little is invested in OHS in

many developing countries. Chew (1988, p. 111) claims ‘While hardly any statistics exist on

safety expenditures by Third World firms, it is generally believed that they are small’.

Moreover, while countries of the developing world often adopt OHS standards from the

developed countries, there is often a lack of trained personnel to administer and enforce the

standards. In addition, the ‘standards are often inappropriate and have not taken into account

differences in … exposure levels and work schedules’ Jeyaratnam (n. d; p. 4). The lack of

government regulation and enforcement, Jevaratanm further agued, allowed managers to neglect

OH&S: ‘a lack of commitment of management to the health and safety of the workers’ as one of

the main reasons for frequent workplace accidents in developing countries’. The result of all

these factors is often poor and hazardous occupational safety. Jeyaratnam (n. d; p. 4) found

“The health status of workers in the developing countries is often lower compared to that of

workers in developed countries”.

The potential for OHS to affect labour turnover – as employees leave organisations with

poor working conditions for those that are safer – is likely to be higher in developing countries

than in developed countries. This theme is certainly demonstrated in some of the few studies of

labour turnover conducted in developing countries which have identified workplace safety as an

important explanatory factor. A prime example is Guchait and Cho (2010), which investigated

the impact of eight HRM practices on the intention of employees to leave in the service industry

in India, a developing country. Amongst the eight HR practices they investigated as possible

influences on organisational commitment and labour turnover, only one had a significant and

independent effect; namely, ‘good and safe working conditions’ (p. 1242).

Several other studies of labour turnover in developing countries have also mentioned the

importance of workplace safety, although the limited accounts of their research and the modest

quality of the publications make the reliability of their research difficult to assess. For example,

Sujeewa (2011) investigated a relationship between human resource management practices and

non-managerial employees’ intention to turnover in garment industry in Sri Lanka. This is

potentially very relevant to current project because it examines the labour turnover in the

readymade garment industry in Sri Lanka, a developing country. Amongst other things, Sujeewa

found ‘a significant negative relationship … between employee health and safety practice with

employee intention to turnover’ (p. 539). Unfortunately, however, he does not provide much

detail on this issue, only mentioning ‘the health and safety practice is important to lower the

intention to turnover’ (p. 539).

21

Another example is Shahzad et al. (2011), which investigated the public sector of

Pakistan and found that ‘feasible organisational environment’ has great influence on turnover

intention (p. 50), but again the publication provides little detail about the meaning of

‘organisational environment’ over employees’ or its impact on turnover intentions. Likewise,

Hossan et al. (2012), which researched in the RMG sector of Bangladesh, suggested ‘health

safety and security conditions in this [RMG] sector are also insufficient’ (p. 209) and implied

that they were a cause of high rates of labour turnover. However, this publication provides no

detailed discussion of the topic and little systematic evidence or analysis to demonstrate this

causal relationship.

To summarize so far, there are at least three contextual factors potentially causing labour

turnover that previous studies have shown to be more important in developing countries than in

Western Countries: national culture, stage of economic development and OHS. These factors

therefore deserve attention as a potentially important determinant of labour turnover in the

RMG industry in Bangladesh.

There are some additional exceptions to the general dominance of Western studies of

labour turnover – studies undertaken in developing countries – but these studies either lack

quality, making them unusable, or they fail to discuss or explicitly investigate the impact of

developing country context on the causes of labour turnover. An example of the former is

Weerawansa and Aponsa’s (2012) study of Sri Lanka’s ready-made garment industry, which

sought to investigate possible explanations for turnover amongst the white-collar job categories.

This appears on the surface to be research highly relevant to the current project, but the report of

the findings is so brief and poorly presented that its findings are difficult to assess.

Five more serious studies of labour turnover in developing countries were identified.

Three of them adopted the dominant methodology of quantitative analysis of survey data

administered to individual employees. Shahzad, Hussain, Bashir, Chishti, and Nasir (2011), for

example, investigated the impact of three types of variables (job satisfaction, career

development and what they called ‘organisational environment/climate’) on employees’

turnover intention in public sector of Pakistan through 100 completed questionnaires from

employees in five large public sector organisations. Altarawneh and Al-Kilani’s (2010)

collected survey data from 147 regular employees working in Jordanian hotels in order to test

the impact of three types of variables (i.e. employee demographic factors, like age;

organisational characteristics, like ownership and categories of hotels); and HRM practices.

Guchait and Cho (2010) investigated the impact of various HRM practices on intention to leave

of employees in the service industry in India through survey responses from 131 employees in a

single call centre.

22

Of these three studies, the design and findings of Guchait and Cho’s (2010) study are

most useful for the current project, in two ways. First, amongst the eight HR practices they

investigated as possible influences on organisational commitment and labour turnover, only one

had a significant and independent effect; namely, good and safe working conditions. This

confirms the potential value of exploring the impact of safety at work as a determinant of labour

turnover in the current study. Second, they specifically sought to analyse the eight HR practices

in combination, as a ‘bundle’. They did this by creating a single index to represent all eight

factors and then demonstrating a significant statistical relationship between this index and both

commitment and turnover. This finding suggests there will be value in considering HR practices

in RMG firms in Bangladesh as a bundle.

Beyond this, these three fail to directly investigate how the developing country and

industry locations of the study affect turnover, despite acknowledging the lack of existing

research on developing countries and importance of context. In this way, while they provide

some insights that can be used to direct empirical research in the current study, they offer little

more insight into the impact of context than the bulk of Western studies.

The other two studies of turnover in developing countries adopted different

methodologies, producing more valuable results in different ways. Loess, Miller and

Yoskowitz’s (2008) studied the impact of two variables (i.e. the ‘generation’ of each factory,

which broadly means the stages of production undertaken in the factory; and wages) on labour

turnover in 33 maquilas, which are factories operating in special export zones in which a range

of taxes are exempt, located in eight northern cities of Mexico. They gathered data at an

organisational (rather than individual) level using qualitative methods, including interviews of

both plant managers during on-site visits and leaders of local maquiladora associations. This

method still relied on a small number of respondents in each factory, but it allowed flexibility in

data gathering.

Loess et al. (2008), however, then used statistical analysis to test the impacts because of

the larger number (i.e. 33) of factories involved. Their findings were strongly significant for the

two variables analysed (see pp. 261-5), but more importantly the authors went on to discuss the

broader HR systems in the different types of maquila (see pp. 265-70). This revealed a deeper

understanding of the interaction between HR ‘variables’ and their impact on turnover than is

common in the literature, in developed or developing countries. They discuss, for example, how

‘third generation’ factories (whose production systems include assembly, manufacturing and

design/engineering) have a range of HR practices beyond good wages (e.g. training and career

development) that produces low turnover, while ‘first generation’ factories (which focus solely

on assembly) not only have much lower wages but also many other HR practices that lead to

23

high turnover. This more holistic analysis of each organisation and their focus on inter-related

HR practices in different types of organisation inevitably involves greater attention to the

context in which organisations operate and reflects the approach taken in the current project.

The fifth, and final, study of labour turnover in developing countries is the World Bank’s

(2012) research on the labour standards, turnover and productivity in the garment export sector

in Laos. The report gathered firm-level data through structured surveys of garment-making

factories, with multiple respondents in each factory (which included owners or managers,

workers, supervisors, and dormitory managers). The sample covered more than half of all RMG

firms, representing over 70 per cent of the garment workforce. In addition, the report gathered

data from some key industry leaders. As the data were collected from variety of sources, it

ensures the triangulation of data. The method and findings of this study are useful for the

current project, in two ways. First, the unit of analysis of the World Bank’s (2012) study was

organisational rather individual employees, making it different to the majority of turnover

research. Secondly, the report (2012) found that rates of turnover vary in different sizes of

firms: the turnover rate in large and medium firms was around 3.5 per cent every month, while

attrition from small firms was higher, at just over 6 per cent every month. The report (2012) also

found that poor wages rates and long working hours were primary reasons for voluntary

turnover. The study also revealed mandatory overtime work, poor physical work conditions,

strict factory rules and bad supervision were causes of voluntary turnover. These findings

suggest there will be value in undertaking organisational-unit of analysis and considering

bundle HR practices in the current research.

More broadly, it might be possible to criticise the World Bank (2012) study for being too

descriptive, but this would be a mistake. The empirical detail provided about HR practices in

different types of Lao garment-making firms and their links with turnover actually allows a

better understanding of the peculiarities of the Lao context and the effects of different types of

HR practices. In this way, the World Bank (2012) study – unlike most other studies of turnover

– closely analyses the specifics of the Lao situation. If there is a problem, it lies in the inability

to generalise to the “population” and to theory rather than a neglect of context.

In conclusion, the limited attention in the existing literature to empirical analysis of

turnover in developing countries, the neglect of context and the methodological weaknesses of

the few studies actually investigating turnover in developing countries suggest a major research

gap, which the present study seeks to fill. Despite the shortcomings of the few studies that do

examine labour turnover in developing countries and explore the impact of context, they do

provide some guidance about the factors that might explain turnover in the Bangladeshi RMG

industry.

24

2.3 Explaining differences in organisational rates of employee turnover: The literature

The review of the general literature on labour turnover reported above shows that despite the

longevity and huge amount of research, it is only modestly useful for the thesis. First, most of it

fails to address the research questions of this thesis, which focus narrowly on explaining

differences in organisational turnover rates in the same industry. Second, it displays theoretical

and methodological characteristics (i.e. individual unit of analysis, quantitative research

methods, neglect of context and preoccupation with Western countries) that reduce the insights

it can make on the research questions. This general literature provides hints of the types of data

to gather, and some studies (especially those about developing countries) are more directly

valuable.

This section and the next focus more narrowly on the specific research questions,

reviewing first (in section 2.3) the very small number of previous studies that address similar

research questions, and then (in section 2.4) developing a framework that will guide the

empirical research on the RMG industry in Bangladesh.

Rates of voluntary turnover vary from industry to industry, and even from organisation to

organisation. To quote Holtom et al. (2008):

Different types of organisations and industries face very different average turnover rates.

For example, since the Bureau of Labor Statistics started tracking voluntary turnover in the

USA in 2001, the rate for accommodation and food service employees has averaged around

50% per year while the rate for educational services has averaged just over 10%. Yet across

firms in the same industry, turnover rates vary widely. (p. 234)

The differences in turnover rates between industries have been observed over many years

in empirical studies (on Australia, for example, see Morehead, Steel, Alexander, Stephen, &

Duffin, 1997; more generally, see Cotton and Tuttle 1986, Holtom et al. 2008 and Zheng and

Lamond 2010). Remarkably, there does not seem to be any studies that systematically attempt

to explain these industry differences.

Most important to the present study are differences in turnover rates between

organisations within the same industry. Again, very few studies directly provide data on

differences between organisations and even fewer analyse the reasons why organisations have

different rates of employee turnover. One exception is the study conducted by Taplin et al

(2003) of variations in organisational turnover rates vary across organisations in the clothing

industry in the UK, while another by Zheng and Lamond (2010) explored differences in

turnover rates between local subsidiaries of multinational companies in Asia, albeit operating in

different industries. Both studies make valuable contributions and they will be reviewed below,

25

but they focus on issues different to the current study and they fail to generate the more holistic

analysis necessary to properly understand variations in turnover across enterprises in the same

industry.

Taplin, Winterton, and Winterton (2003) used a structured questionnaire returned from a

single respondent in each of 754 establishments from a total of 4133 in the UK clothing industry

in 1999 to gather data on turnover rates and characteristics of those establishments. The survey

was designed to test four hypotheses associated with rates of labour turnover: payment rates,

size of firms, multi-skills of workers, and regions (pp. 1027-1029). So, the study was typical of

labour turnover research in some ways (i.e. quantitative methods and its location in a Western

country), it was unusual in its focus on organisational (as opposed to individual) turnover rates

and in its efforts to analyse organisation-level explanatory variables.

Taplin et al. (2003) found pay as the factor most frequently cited as the main reason why

employees leave (32 per cent of organisations). They also found size of establishment was an

important factor determining turnover rates, although the relationship between this variable and

turnover was not simple: micro establishments (fewer than ten employees) demonstrated the

highest rates of labour turnover (36 per cent), while establishments in the size ranges of 20-49

and 500-999 employees exhibited the lowest rates (22 per cent). However, they did not find

strong evidence in establishing an inverse relationship between multi-skills of workers and

turnover rates.

Despite major differences in average labour turnover rates between regions (ranging from

42% to 16%), Taplin et al. (2003, pp. 1036-7) did not find any statistically significant

relationship between geographical location and organisational turnover rates. This seems odd,

although they attribute the negative outcome to the peculiarities of their sample and major

differences within the regions. Zheng and Lamond (2010, p. 436) found some country

differences in organisational turnover rates of multinational subsidiaries, which they attributed

to different labour market conditions in the respective countries. Overall, the role of

geographical location in affecting organisational turnover deserves investigation, especially if

the key elements of location (such as local labour markets or differences in regulatory

differences) can be explored.

These findings are valuable and suggest three explanatory factors that will be investigated

in the Bangladeshi RMG industry: wages, enterprise size and geographical location although the

current research project will not consider multi-skills of workers, as they are not closely relevant

to the RMG workers in Bangladesh. The approach to these three factors, however, will be

broader than was possible for Taplin et al. (2003). They, for example, focused on payment

systems (i.e. piece rate or flat rate), three different sizes of establishment (i.e. micro, medium

26

and large), and employment rates in regions, while the present study will investigate three

aspects under wages: wage rates, payment period and annual increment of wages, small

(organisations having less than five hundred employees) and large size (more than five hundred

employees) of organisation, and access to public transport and cheap residential accommodation

in different geographical locations. At the same time the present research will examine

significance of other HR practices as well as various organisational characteristics.

Zheng and Lamond (2010) used a structured questionnaire returned either from CEOs, or

financial controllers, or HR managers in each of 529 multinational companies in six Asian

countries; namely Indonesia, Malaysia, Philippines, Singapore, Taiwan, and Thailand. The

survey was designed to explore six assumed sources of variation in labour turnover: training,

size, age, industry, percentage of expatriate managers and headquarters’ national base. So, the

study was typical of labour turnover research in some ways (i.e. quantitative methods), it was

unusual in its focus on organisational (as opposed to individual) turnover rates and in its efforts

to analyse organisation-level explanatory variables.

Zheng & Lamond (2010) report that size matters for the retention of employees. They

claimed that smaller-sized organisations experience relatively higher rates of turnover. They

also claim that larger sized organisation experience lower rates of turnover than smaller sized

organisations. They asserted “Size also matters. Bigger firm size leads to lower employee

turnover rate (beta=0.091, p<0.05)”.

Zheng and Lamond (2010) also demonstrated an inverse relationship between age of

organisation and rates of turnover because of business experience gained by the organisation.

They stated: “there is a reverse relationship between turnover and years in local subsidiary

(beta= -0.113, p<0.01). It seems that the longer the companies have experienced in the local

subsidiary, the better they managed the retention of their staff” (p. 435).

Zheng and Lamond (2010) claim that a combination of training with other HR practices

(such as benefits, career development opportunity) could create a synergy where organisations

develop a higher level of organisational commitment in employees, and reduce turnover rates is

the result. Therefore, it is necessary to integrate training with other HR practices to ensure its

impact on minimising voluntary turnover rates. In other words, organisations adopting multiple

HR policies/practices have lower turnover rates than organisations adopting individual HR

practices.

These findings are valuable and suggest five explanatory factors that will be investigated

in the Bangladeshi RMG industry: training conducted by the enterprise, size, age of the

enterprise, industry, and headquarters’ national base (i.e. ownership of organisation). The

findings of the study also reinforce the importance of exploring the inter-connection between

multiple HR policies and practices rather focusing on individual practices.

27

2.4 Explaining differences in organisational rates of employee turnover: A framework

As the discussion of the larger turnover literature in this chapter shows, there are many different

factors that have been found to influence the decisions of individual employees to leave an

organisation and which, therefore, offer hints as to how to explain organisational turnover rates.

The much smaller literature on organisational turnover similarly raises diverse explanatory

variables: as Taplin et al. (2003) argue, ‘reasons suggest that leavers are motivated by a wide

variety of factors, and many establishments reported more than one reason why employees left

their companies’ (p. 1032). The large number of potential explanatory factors means it is

necessary to find some way of grouping them to form a more coherent theoretical framework.

The point of departure in this task is to acknowledge that some factors are internal to the

organisation and others are external.

Internal factors or variables are those which are under the control of managers and supervisors

to manage employee turnover. These factors are associated with issues such as physical work

environment, wages rates or opportunities for promotion. Holtom et al., (2008) called these

variables ‘organisational’ or ‘micro-level’ factors. Lemay, Taylor and Turner (1993) called

internal factors as “managerially controlled” factors, as these factors can be controlled through

managerial initiative; the application of human resource (HR) policies may be one of the

examples of such initiatives.

External factors or variables are those which are beyond the control of managers and

supervisors. They are often associated with the “environment” in which the organisation

operates. Examples of external factors include the economic position of the country, availability

of jobs, culture of the country, employees’ demographic factors. Holtom et al. (2008) called

these variables “non-organisational” or “macro” factors because these arise from outside the

organisation.

This distinction between internal and external factors is important to understanding

voluntary organisational turnover rates. Organisational managers need to be aware of external

factors because external factors affect rates of turnover. Managers must adjust internal factors

according to external circumstances in order to achieve their turnover objectives. In this way,

external factors place constraints on – or limitations to – the effectiveness of internal factors, but

the internal factors – essentially the decisions of managers – still ultimately determine the

turnover outcomes. Both internal and external factors are important, but it is ultimately the

interactions between internal and external factors that are likely to be the key to understanding

organisational turnover rates.

28

The key to applying these very general propositions to explaining organisational rates of

labour turnover is to recognise that every organisation is different: it comprises different

combinations of internal and external factors, which will produce different rates of turnover.

Previous research has identified certain structural features of organisations that seem to

correspond with different rates of labour turnover; for example, size of the organisation,

location in supply chain, age and geographical location of the organisation.

Figure 2.1: A model of turnover showing its determinants and consequences

Figure 2.1 represents an attempt to describe in diagrammatic form the framework that

will be used to explore explanations of organisational labour turnover in the empirical study of

this thesis. The different structural features of organisations are shown on the left-hand side of

the figure. The different types of organisations produced by these structural features are

associated with different combinations of both internal and external factors, which potentially

lead to different rates of organisational labour turnover. Some of the consequences of labour

turnover for the organisation are shown on the right-hand side.

It is very important to recognise that Figure 2.1 is not offered as a model of relationships

that will be “tested”, in the way that most quantitative studies progress. Rather, it is a simple

‘heuristic device’ to assist the reader to understand the approach adopted in this study for

gathering data on factors that potentially explaining different rates of labour turnover in

29

organisations in the Bangladeshi RMG industry. The following sections provide more detail on

the various factors by drawing on findings and discussions of previous research.

2.4.1 Structural features of the organisation

There is evidence in the literature to suggest that different types of organisations (characterised

by different structural features) are likely to have different rates of labour turnover. Structural

features that have been particularly highlighted are: size of organisation, age of organisation, the

ownership of the organisation and the location of the organisation in the supply chain.

Size of organisation: Generally there is a relationship between size of a firm and voluntary

turnover. Taplin et al. (2003), for example, found that differences in turnover rates between

organisations in the clothing industry in the UK were at least partly explained by size:

Micro establishments (fewer than ten employees) demonstrate the highest rate of labour

turnover (36 per cent), while establishment in the size ranges 20-49 and 500-999 employees

exhibit the lowest (22 per cent). (p. 1034)

Even & Macpherson (1996) argue that: “Labor turnover is lower among large employers

than smaller employers” (p. 707). A number of other studies draw similar conclisions, including

Zheng & Lamond (2010) , March and Simon (1958), Porter and Steers (1973), Cummings &

Berger (1976, Mobley et al, (1979), Price and Mueller (1986), Parasuraman (1989), and Jolma

(1990). However, Lemay, Taylor, and Turner (1993) find that larger sized firms experience

comparatively higher rates of turnover.

What is it about larger organisations that might promote lower turnover? Several studies

argued that larger organisations are more likely to use sophisticated human resource practices

(Jackson & Schuler, 1995; Terpstra & Rozell, 1993; Wilson & Peel, 1991), which may lead to

reduced turnover rates. Beyond this, Mobley (1982a) pointed to more competitive wages

systems and greater internal career development opportunities.

Age of the organisation: Researchers have found that comparatively older organisations

experience lower rates of turnover and relatively younger organisations experience higher rates

of turnover, probably because the former generally have relatively more opportunities, including

financial base, business experience and strategies. Wise (1990) proposed that older

organisations have lower turnover rates because of their opportunity to evolve strategies to

minimise turnover and to develop more stability among their staff. Similarly, Abelson (1986)

found that a reputation for more stable staffing in an older firm may attract staff who are also

more stable and less likely to leave. In addition, Bame (1993) found a statistically significant

“inverse relationship between overall nursing turnover and years of operation” (p. 79). Guthrie

(2000) contended that there is an inverse correlation between age of organisation and rates of

30

turnover. He argued that relatively older organisations have “advantages associated with

increased time for the evolution of adoption of HR practices or stabilization of employment

patterns” (p. 427). Zheng and Lamond (2010) also demonstrated an inverse relationship

between age of organisation and rates of turnover because of business experience gained by the

organisation. It seems that the longer the companies have experienced in the local subsidiary,

the better they managed the retention of their staff” (p. 435).

Ownership of organisation: A number of studies have argued that the ownership of an

organisation is associated with rates of turnover. For example, it has been found that foreign-

owned organisations experience lower rates of turnover than locally-owned organisations. There

is a correlation in some studies between ownership of organisation with labour turnover rates

(Bame, 1993; Bloom et al., 1992) and country of origin with labour turnover rates (Ma & Trigo,

2012). Cummings & ElSalmi (1968) argue that publicly-owned or nationally-owned

organisations may have lower rates of turnover because they can offer both more competitive

benefit packages and more training and education opportunities than locally owned

organisations can.

Position of organisation in supply chain: Usually, the position of an organisation in the

supply chain contributes to reducing rates of turnover. That is, the organisations acting as

contractors consistently have lower turnover rates compared to sub-contracting organisations. In

other words, an organisation with direct relationships with customers (i.e. a contractor) is more

likely to have lower labour turnover than one further down the chain (i.e. a sub-contractors or a

sub-sub-contractor). Scarbrough (2000), Mahmud and Kabeer (2003), and Hossain, Sarker and

Afroze (2012) find that organisations with a direct or good connection in the supply chain gain

organisational reputations and are able to reduce turnover rates.

2.4.2 Managerial or internal factors effecting employee turnover rates

The literature reviewed in section 2.2, as well as many other studies focusing on individual

employees’ intentions to leave an organisation, have found a wide range of factors internal to

the organisation that are likely to affect labour turnover. A number of these factors are reviewed

separately below (i.e. pay, merit and skill-based pay, performance-based pay, non-pay benefits,

training, career development opportunities, working conditions and the image of the

organisation). This is followed by a discussion of “multiple” human resource management

practices.

Pay: Many managers believe that paying their employees higher wages compared to competitor

organisations plays an important role in minimising voluntary turnover rates in their

organisations. Mukul, Rahman, and Ansari (2013), for example profess the view that “low

wages rates are the notable reasons for high job turnover” (p. 32). Research findings have not

31

consistently supported this belief. Rather, research results are mixed: while some researchers

have found relatively higher wages minimise rates of turnover in the organisations, other

researchers have found higher wages play an insignificant role. However, a majority of studies

do support the proposition that relatively higher wages have an important role in controlling

voluntary turnover rates. Workers’ wages in the RMG industry in Bangladesh are one of the

lowest in the world (Habib, 2009). Many commentators believe that such low wage rates lead to

high voluntary turnover rates (See Habib 2009; Khundker 2002; Morshed 2007; Paul-Majumdar

2001; Rahman, Hossain, & Sultana, 2001; Rahman & Shaikh, 2001; Zohir, 2001).

The significance of relatively higher wages may vary between developed and developing

countries. For example, the significance of relatively higher wages in Australian organisations

(i.e. developed country) and in Bangladeshi (i.e. developing country) organisations may not

same. Iverson and Deery (1997), for instance, found an insignificant relationship between wages

and turnover in the hospitality industry in Australia. On the contrary, Ovadje (2010) found that

wages are very significantly correlated with turnover intention (r=-.542) in the Nigerian context

(i.e. developing country), where over 60 per cent of the population is poor and the extended

family system makes demands on the few who have an income. Budhwar, Varma, Singh, &

Dhar (2006) suggest that in order to reduce the high labour turnover in Indian (i.e. developing

country) call centres, management should increase financial incentives (i.e. wages rates).

In their meta-analysis of studies including the effect of wages, Cotton and Tuttle (1986)

found 29 of 32 data sets demonstrated negative relationships between pay and turnover, and

only one study showed a positive relationship. They also showed that pay satisfaction produced

highly significant correlations with turnover rates (p<.01). Similarly, Shaw et al., (1998)

showed that pay is negatively related to voluntary turnover rates at the organisational level.

Loess, Miller and Yoskowitz (2008) reported that Mexican maquilas with higher wage levels

and more levels of wage rates have lower turnover rates. They also found that wages alone

significantly contribute 10 to 15 per cent of the variance in voluntary turnover. Taplin et al.,

(2003) found that 17 per cent of the factories in the clothing industry in the UK acknowledged

that low wage rates was the prime cause of voluntary labour turnover problems in the industry.

Moreover Taplin et al., (2003) demonstrated that whilst many organisations reported a wide

variety of factors lead to labour turnover, two of the most significant factors behind high

employee turnover (26.5% in the UK clothing industry, while the average rate of turnover in the

UK is 19%) in the UK clothing industry.

However, Allen, Bryant and Vardaman (2010) suggest not worrying about pay. They

argued that many managers consider pay very seriously when it does not actually play a

significant role in reducing turnover rates. They allege “pay level and pay satisfaction are

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typically relatively weaker predictors of individual turnover decisions; pay increases may not

always be the most efficient way to address the turnover issue” (p. 54-55). In addition,

Altarawneh and Al-Kilani (2010) found no significant relationship between pay and employee

turnover intentions. Lemay et al. (1993) assert that there is no significant relationship between

pay and job satisfaction or employee turnover: “Do not assume that increased pay will offset

driver (employee) dissatisfaction” (p. 20).

To conclude, despite a debate on the significance of wages rates over turnover rates, the

effect of wage rate varies between developed and developing countries. For example, relatively

higher wages rates may have an important role in controlling labour turnover rates in a

developing country, while wages rates may have less influence in terms of turnover decision in

a developed country.

Merit and skill-based pay: Merit and skill-based pay is designed to reward meritorious and

skilled employees’, allowing them to earn more money rather than traditional hour-based

system. Such a pay plan may reduce rates of turnover among meritorious and skilled employees.

Guthrie (2000) certainly found that ‘greater use of skill–or knowledge–based pay systems is

associated with lower rates of employee turnover’ (p. 422). Haines, Jalette and Larose (2010)

also found a marginally significant (p<.01) association between merit and skill-based pay and

voluntary turnover rates.

Performance-based pay plans: Performance-based pay plans are designed to encourage

employees to perform better in order to earn more money. As a result, such a pay plan might

reduce the rates of turnover in the organisation among better performing employees. Guthrie

(2000) revealed from his study that greater use of group performance-based pay systems

reduces rates of employee turnover. However, Haines, Jalette and Larose (2010) did not find

any significant correlation between performance-based pay plans and turnover rates.

Non-pay benefits: It is generally expected that more generous employee benefits minimise

employee turnover rates. However, research on this issue has found mixed results: while some

researchers found that better benefit plans minimise rates of turnover in the organisations, other

studies showed insignificant roles. Shaw et al., (1998), for instance, showed that non-pay

benefits is negatively related to voluntary turnover at the organisational level. Taplin et al.,

(2003) also found that many organisations consider benefits as a significant factor in employee

turnover. They demonstrated that 31 per cent of clothing factories in the UK reported that lack

of maternity leave benefits leads to high turnover rates. In addition, they showed 21 per cent of

clothing factories in the UK reported that a lack of childcare benefits influences employees to

leave the organisations. Two other studies also showed negative relationship between benefits

and turnover (Bennett et al., 1993; Fairris 2004). However, Haines, Jalette and Larose (2010)

33

found a weaker relationship (p<.01) between benefits and turnover. Two other studies showed

no significant relationship between benefits and turnover (Park, Ofori-Dankwa, & Bishop,

1994; Delery, Gupta, Shaw, Jenkins, & Ganster, 2000).

Training: Training is an effective tool to enhance employees’ skills. Organisations can offer

training programs for its employees to reduce voluntary turnover rates because training may

lead to increased organisational commitment. Shaw et al. (1998), for example, found that

training was negatively related to voluntary turnover at the organisational level. In another study

Lemay et al. (1993) argued that the implementation of training programs can reduce voluntary

turnover rates, although they suggest that some incentives may need to be tied to completion of

training programs if employee satisfaction is to be increased and turnover reduced. Taplin et al.,

(2003) also found an association between turnover rates and training. They found “turnover is

highest amongst smaller firms who are less able to offer extensive training” (p. 1044).

In contrast, however, other studies have showed that training alone may not enhance

employee commitment (Huselid, 1995; Zheng et al., 2006). Instead, a combination of training

with other HR practices (such as benefits, career development opportunity) could create a

synergy where organisations develop a higher level of organisational commitment in

employees, and reduce turnover rates is the result (Beer, Spector, Lawrence, Mills and Walton,

1984; Becker and Huselid, 1999; Zheng, Morrison, & O’Neill, 2006). Therefore, it is necessary

to integrate training with other HR practices to ensure its impact on minimising voluntary

turnover rates.

Zheng and Lamond (2010) found that organisations in Asia that provide many training

programs for their employees experience higher rates of employee turnover because the

additional training makes workers more employable by competing organisations.

It needs to note here that the present study considers “multiple HR factors”, not a single

HR factor, to reduce turnover rates. Multiple HR factors will be discussed below.

Career development opportunities: Ariff (1988) revealed that promotional opportunities in

the organisation can increase job satisfaction and decrease rates of turnover. Allen et al. (2010)

also found that career development opportunities are moderately related to turnover rates.

Shahzad, Hussain, Bashir, Chishti, and Nasir (2011) also found a mild negative (p<0.1)

relationship between internal career growth opportunities and employees’ turnover intention.

Again, however, the results for this factor are contradictory. Altarawneh and Al-Kilani

(2010) found no significant relationship between career development opportunities and

employee turnover intentions.

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Working conditions: The presence of organisational factors, such as a satisfactory physical

work environment, generally leads to lower employee turnover rates. Taplin et al., (2003), for

instance, found that 3 per cent of clothing factories in the UK reported that their employees

leave because of bad working conditions. Allen, Bryant and Vardaman (2010) also show that

work environment is a significant variable in turnover decision. They considered that the

organisations that ensure relatively better work environments experience relatively lower

turnover rates.

Guchait and Cho (2010) examined the impact of eight HRM practices on intention to

leave. Only one of the eight HRM practices – namely, working conditions – had a significant

effect on employees’ intention to leave, while the other seven HRM practices were held

constant. Guchait and Cho (2010) showed that good and safe working conditions emerged as a

important predictor of intention to leave: employees intended not to leave if a firm spent

generously in providing a safe and clean work environment. They also recommended that

Indian organisations should pay more attention to employee perceptions of the work

environment. Guchait and Cho’s findings are consistent with those of Biswas and Varma

(2007). In addition, Shahzad et al. (2011) found a significant (p<0.01) negative correlation

between safe organisational environment and employees’ turnover intention in public sector of

Pakistan.

Organisational image: Generally it is assumed that there is a negative correlation between the

image of an organisation and turnover rates. In other words, an organisation with a good

reputation and image is more likely to have lower labour turnover rates than one with a

comparatively bad organisational image. Usually organisational image includes goodwill, brand

name, status in the market, compliance, social and consumer awareness, and low accident rates.

Taplin et al., (2003) found two significant factors which lead to high turnover rates, one of them

is organisational image.

Multiple HR practices: As anticipated in the brief overview of Strategic HRM in Chapter 1,

there is a strong stream in the research literature that argues that the various internal factors

(especially HR policies and practices) should be studied as “bundles” or “packages” of practices

or “HR systems”. “Multiple HR practices” suggests that combinations of internal factors, in a

package, will have a greater impact on outcomes like labour turnover than individual or single

HR practices. The idea is that the various individual factors (or policies/practices) can be

complementary, reinforcing each other with the result that they are synergistic – the whole is

greater than the sum of the individual parts.

A number of important Western studies have found that multiple HR factors have been

important in explaining patterns of labour turnover. Arthur’s (1994) early study suggested this

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important point, but more significant was Huselid’s (1995) seminal research on high

performance work practices and their impact on organisational performance. He concluded that:

Organizational human resource policies can, if properly configured, provide a direct and

economically significant contribution to firm performance. The presumption is that more

effective systems of HRM practices, which simultaneously exploit the potential for

complementarities or synergies among such practices and help to implement a firm’s

competitive strategy, are sources of sustained competitive advantage. Unfortunately, very

little empirical evidence supports such a belief. What empirical work does exist has largely

focused on individual HRM practices to the exclusion of overall HRM systems. (p. 636)

Macduffie’s (1995) study is important in the development of HR bundles as a concept,

although he did not apply this analysis specifically to explaining organisational rates of labour

turnover. Macduffie (1995) evinced that bundles of HR practices increase organisational

performance, while single or individual HR practices do not. He stated: ‘HR practices affect

performance not individually but as interrelated elements in an internally consistent HR

‘bundles’ or systems; and that these HR bundles contribute most to … productivity and quality

when they are integrated’ (p. 197). Macduffie (1995) also claimed that “research that focuses on

the impact of individual HR practices on performance may produce misleading results, with a

single practice capturing the effect of the entire HR system” (p. 200).

Another early study, carried out by Shaw et al. (1998), found a strong relationship

between multiple HR factors and lower rates of turnover. They showed that in spite of clear and

strong correlation between single or individual HR factors and turnover rates, multiple HR

factors strengthen even further the bonding between employees and managers and thereby

reduce rates of turnover. They argued that a single or individual HR factor is an inadequate

practice for retaining existing workers. One example they cited was pay:

Pay clearly offers one such inducement [which attracts employees to remain with an

organisation], but it is not the only one. Other HRM practices, particularly benefits, also

induce employees, bonding them to their employing organization. (p. 520-21).

More recently, and more directly relevant to the current project, Zheng and Lamond

(2010) claimed that multiple HR practices could create synergies that allow organisations to

develop a higher level of organisational commitment in employees, and thereby reduce turnover

rates. Their study of local subsidiaries of multinational corporations in a number of developing

countries produced the unexpected finding that investment in training was actually associated

with higher turnover rates rather than lower rates (see pp. 434-5), which was predicted on the

basis of previous studies. Their explanation for this finding focused on “developmental shifts

taking place in Asian economies within which the companies are located – additional training

36

makes the employees more employable and so much more attractive to other employers’ (Zheng

and Lamond 2010, p. 435). The implication was that these multinational subsidiaries needed to

use additional HR practices to retain the employees who had been trained. Their theoretical

conclusion was that ‘there is a need to integrate training [one individual HR practice] with other

HR practices to confirm its effect on controlling employee turnover’ (p. 437).

The notion that research needs to focus on multiple – rather than individual – HR

practices became widely accepted after the initial studies in the 1990s; indeed, it became a

foundation of the sub-discipline of Strategic HRM (Boxall & Purcell, 2011). What has been less

common, however, are attempts to associate ‘bundles’ of HR practices with different types of

organisations or organisations with different characteristics. The focus has been on the

relationships between the HR bundles and outcomes (like turnover) rather than on the

relationships between organisational types of the HR practices themselves. This weakness may

partly be explained by the methodologies used in most studies. Quantitative studies of the

intentions of employees from one organisation to leave (i.e. turnover) treat as unproblematic the

nature of the organisation and its HR practices. The lack of organisation-level studies may also

be to blame. Even valuable studies like Zheng and Lamond (2010) draw data from only one

type of organisation – namely, the subsidiaries of multinational corporations.

A qualitative study of organisational turnover rates in different types of organisations in

the same industry (such that presented in this thesis) therefore has the potential to shed novel

light on the question of multiple HR practices and their impact on labour turnover.

Do managers and employers recognise employee turnover as a problem and take

initiatives to minimise or control it? Taplin et al., (2003) found that 26 per cent of clothing

factories in the UK consider employee turnover as a difficulty within their factories. It means 74

per cent of factories do not think employee turnover is a problem. Therefore, these 74 per cent

factories do not bother taking steps to reduce the employee turnover problem in their

organisations. This may be one of the main reasons of difference in turnover rates between

organisations in the same industry.

In summary, these studies (and the broader tradition of Strategic HRM) suggest that

explanations of labour turnover in the Bangladeshi RMG industry must pay attention to multiple

HR policies and practices, instead individual practices to reduce rates of turnover.

2.4.3 Non-managerial or external factors effecting employee turnover rates

Non-managerial or external factors such as national unemployment rates or demand for workers

in local job markets also have impacts on labour turnover. Researchers such as Armknecht and

Earley, (1972); Harrison, (1997); Monks, (1998); Shaw et at., (1998) and Taplin et al., (2003)

37

found that non-managerial factors can also effect employee turnover. Cotton and Tuttle (1986)

presented four external factors related to voluntary labour turnover behaviour. Three of them are

employment perceptions, unemployment rate, and union presence. “Employment perception”

relates to employees’ perceptions of alternative jobs and whether they have a chance of getting

another job. As this is the case, employment perception will be part of the labour market in the

following discussion. The external factors reviewed here are the state of the national or local

labour market in which the organisation operates, the location of the organisation, and the

nature and enforcement of state regulation.

Labour markets: Just as many studies of individual intention of leaving an organisation have

emphasised the availability of alternative jobs as a key explanatory variable, so the state of the

labour market in which an organisation operates is likely to affect its organisational rate of

labour turnover. One aspect of the labour market is unemployment: there is generally a negative

correlation between unemployment rates and turnover rates, although this is not always clear.

For example, March and Simon (1958) state that-

Under nearly all conditions, the most accurate single predictor of labour turnover is the

state of the economy. When jobs are plentiful, voluntary movement is high, when jobs are

scarce, voluntary turnover is small.

Similarly, Taplin et al., (2003) contends that areas with low rates of unemployment can lead to

higher rates of labour turnover amongst new entrants to clothing work in the UK, while “high

rates of turnover in regions where alternative job opportunities are more plentiful” (p. 1029).

Many other scholars, such as Steers and Mowday (1981), Michaels and Spector (1982), and

Igbaria, Greenhaus, & Parasuraman (1991) also found a relationship between unemployment

rate and turnover rates. However Cotton and Tuttle (1986) found a highly significant (p<.0005)

relationship between unemployment rates and turnover rates in one study, and a weaker

relationship (p<.01) in another study. Terborg and Lee (1984) found a negative relationship

between local unemployment rates and voluntary turnover rates in a 1978 data set. However

they did not find any significant relationship in a 1977 data set. Moreover, Haines et al. (2010)

reported a significant correlation between labour markets and lowering turnover rates, which is

consistent with internal labour market theory (Doeringer & Piore, 1970). Haines et al.’s (2010)

findings are supported by Taplin et al., (2003): “Labour market variation can have a significant

affect inasmuch as areas with low rates of unemployment and a variety of low skilled job

opportunities can lead to high labour turnover” (p. 1029). However, Bennett et al. (1993) did not

find a strong relationship between unemployment rate and turnover rates. They claimed ‘As

compared to previous research, the role of unemployment rate as a factor in predicting turnover

rate was slight’ (p. 494).

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Location of organisation: There is a strong correlation between location of the organisation

and voluntary turnover rates (Bame, 1993; Bennett et al., 1993). Mobley (1982), Abelson and

Baysinger (1984) and Abelson (1986) also showed that the location of an organisation, which

reflects the environmental context of job market accessibility and employment opportunities,

may facilitate or impede turnover rates. Hossain et al. (2012), in their research on the recent

labour unrest in the RMG industry in Bangladesh, showed there is a strong correlation between

location of the organisation and turnover rates. Shamsuzzoha & Shumon (2007, p. 67), in their

investigation on causes and effects in the different industries in Bangladesh, found that job

location is one of the top five significant factors contributing to turnover rates.

The nature and enforcement of state regulations: Generally state regulations of various types

(including minimum wage regulations and safety regulations) and their proper (or inadequate)

enforcement can contribute to organisational turnover rates: reducing rates where enforcement

of regulations is effective and increasing turnover rates where they are not. Mahmud and Kabeer

(2003), for example, studied compliance issues in the Bangladeshi RMG industry and found

‘[l]abor legislation in Bangladesh not only excludes the majority of workers in Bangladesh, but

also fails to protect those it formally includes’ (p. 25). This poor enforcement of state

regulations results in RMG organisations experiencing higher rates of turnover, with “[t]he main

exceptions to this are to be found in the country’s EPZs (export processing zone), where more

formal conditions exist”, and where turnover rates were lower. Mukul et al. (2013) also

investigated enforcement of regulations in the RMG industry in Bangladesh, finding that the

enforcement of regulations is not uniform across the country. They reported that the “majority

of the respondents” (p. 26) employed in the RMG organisations in the EPZ areas are not only

satisfied with their wages but also with all other work-related factors because of strict

enforcement of regulations. Finally, Hossain et al. (2012), and Moazzem and Raz (2014) found

that the organisations in the EPZ areas experienced relatively lower rates of turnover due to

proper enforcement of regulations compared with organisations in the non-EPZ areas.

Stages of economic development: Labour turnover rates also depend on different stages of

economic development of a country or an industry. Usually the countries or industries which

have strong economic positions or rapid development can provide relatively better employment

opportunities for its citizens. Thus, easily available job opportunities lead to increase turnover

rates. On the other hand, the countries or industries with poor economic situations or

development cannot create many employments and have relatively poor employment

opportunities. In such circumstance, where employees fear about their future due to little

availability of jobs, do not want to leave existing job voluntarily. Therefore, countries or

industries with poor economic positions or development experience lower turnover rates.

Jacoby (1979, p. 190) observed this in 19th century Japan: “As industrialization accelerated in

39

the nineties [in Japan], employers were faced with the problem that their skilled labour force

was highly mobile”. Large manufacturing employers responded with a range of HR practices

(like seniority wages, extensive internal training and job rotation, and life time employment)

which were designed to retain skilled employees.

Culture of the country: In some countries, many employees are employed with only one job

for their entire work lives. That is they start their work life with one organisation and continue

working with the same organisation till their retirement from work. This is the culture of those

countries. In contrast, in some countries, considerable number of employees quit their job

multiple times. Here, the common culture is to change the present jobs for different reasons.

Hence, culture of the concern country leads to increase or decrease turnover rate Cotton and

Tuttle (1986, p. 66), for example, found that different nationalities impact over turnover rates.

They asserted “the regression analysis indicate that … nationality [i.e. culture of country]

influence turnover [rates]”. Moreover, they emphasised the need to conduct further research on

nationality (i.e. different cultures),- ‘Research on employee turnover needs to include

…nationality’. It is also noted in section 2.2 that Holtom, Mitchell, Lee and Eberly (2008)

agreed that US-based turnover models may not be generalised in other cultures due to vast

cultural differences, while they also argued that turnover research conducted in other countries,

such as Mexico, may find new findings and turnover dynamics than that of in the USA.

Union presence: Generally the presence of unions stabilises and lengthens the employment

relationship and minimises turnover rates. Organisations with union representation generally

experience lower turnover rates because employees can more often voice their concerns

(Freeman & Medoff, 1984; Huselid, 1995; Lincoln & Kallenberg, 1996). Cotton and Tuttle

(1986) found that union presence is highly significant (p<.0005) for explaining turnover

behaviour. Haines et al. (2010) also reported that union density and the presence of a human

resource department are associated with lower turnover rates in the Canadian non-government

sector.

2.5 Summary of the chapter The history of research on labour turnover goes back nearly 100 years. Over this period, a large

number of studies have been undertaken. They provide many insights into the causes and

patterns of labour turnover, but this chapter has argued that the research also displays

weaknesses. The four main problems discussed in section 2.2 above are: the majority of

turnover studies have focused on the attitudes and behaviours of individual employees rather

than on organisational factors; correspondingly, few studies have focused on the key factors

determining turnover at the organisational level; the majority of studies have applied

quantitative methods; and most of the studies have been conducted in Western country contexts.

40

These weaknesses mean that there is promise for new findings in a qualitative study that

investigates organisational rates of labour turnover in a developing country.

The present study will examine and explain differences in turnover rates between

different types of organisations in the same industry, to what extent this difference can be

explained by HR policies and practices, and the potential for managers to minimise turnover

rates.

The review of literature provides the broad analytical framework that will be used to

answer the research questions. This framework begins with the recognition that all organisations

are different and that different types of organisations (distinguished by the structural features:

geographical location, age and position in supply chain) have been found in the literature to be

associated with different rates of labour turnover. This initial point recommends empirical

research that focuses on describing and explaining the different turnover rates in different types

of organisation.

The impact of these structural features on turnover is, however, not direct. Rather,

understanding organisational rates of labour turnover requires attention to a range of

explanatory factors, some internal to the organisation and under the control of managers, and

others external to the organisation and – at least in the short term – beyond the control of

managers. The main empirical project, then, is to explore the impact of these various

explanatory factors on labour turnover rates in the different types of organisations within the

same industry that are selected for investigation.

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CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction The principal purpose of this chapter is to discuss and defend the choice of research approach

and techniques adopted in this study. The criterion is the appropriateness of the methods to the

research questions. As anticipated in Chapter 1, the research questions for the present study are:

General research question:

(1) How can differences in the rates of labour turnover between organisations/enterprises

in the same industry be explained?

This general research question leads to more specific research questions, which are:

(2) How do different human resource policies and practices in different

organisations/enterprises affect rates of voluntary labour turnover?

(3) How can managers and governments reduce the rates of labour turnover in the

organisations of the Bangladeshi RMG industry?

These research questions will be investigated using a qualitative case study method.

Section 3.2 will demonstrate the appropriateness of this research design to the research

questions. It is, however, worth recognising here that (as was demonstrated in Chapter 2) the

existing literature on employee turnover is dominated by quantitative study, with relatively few

studies applying qualitative methods. Choosing a qualitative method for this present research

provides an opportunity to make an original contribution, especially given the substantive focus

of the research on organisations (rather than individual employees) and on locating those

organisations in a developing country context. Section 3.3 then describes the data-gathering

techniques and demonstrates their appropriateness, while section 3.4 clarifies the approach to

data analysis. Section 3.5 finalises the chapter by reflecting on the ethical issues raised by the

research.

3.2 Research design Research design, according to Yin (2003), is the “… logical sequence that connects the

empirical data to a study’s initial questions and, ultimately, to its conclusions” (p. 20).

Similarly, Creswell (2007) sees research design as the entire process of research from

conceptualising a problem to writing research questions, and on to data collection, analysis,

interpretation, and report writing, while Bryman (1989, p. 28) professes that research designs

should be viewed as the overall structure and orientation of an investigation. This structure

provides a framework within which data are collected and analysed.

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While particular designs tend to be associated with particular methods of data collection,

Bryman (1989) cautions that a distinction between the design and data collection methods is

important because one does not necessarily imply the other. Methods are instruments of data

collection. Any research design can therefore potentially use any type of data collection method

and can use either quantitative or qualitative data. In this way, the case study design adopted in

this thesis is a research strategy, not a data collection technique.

Many scholars and academics have defined what a “case study” is. Some of these

scholars are Cavaye, (1996), Mitchell (1983), Benbasat, Goldstein, & Mead (1987), Eisenhardt

(1989) and Stoecker (1991). Although each definition has merit, the present study will adopt

Yin’s (1994) widely accepted definition:

An empirical enquiry that investigates a contemporary phenomenon within its real-life

context, especially when the boundaries between phenomenon and context are not clearly

evident (and it) relies on multiple sources of evidence. (p. 13)

Yin (2009) notes that the first and most significant condition for distinguishing among the

different research approaches is to classify the type of research question(s) being asked. He also

argues that defining the research question(s) is the most significant step to be taken in a

research. If the researcher’s aim is a “what”, “how many” or “how often” type research

question(s), then a case study research approach is not appropriate. But if the researcher wants

to know “how” or “why”, he/she would lean toward either a case study or a field experiment.

As summarised in Table 3.1, the case study method is generally chosen in the following

circumstances:

a) How and why questions are being posed,

b) The researcher haw little control over the situations, and

c) The focus is on a contemporary phenomenon within a real-life context.

Table 3.1: Relevant situations for determining the appropriate type of research method Research

Design Form of research

question Requires control over behavioural events?

Focuses on contemporary events?

Experiment how, why Yes No

Survey who, what, where, how many, how much No Yes

Case study how, why No Yes Source: adapted from Yin (2009)

With respect to the first of the considerations, case studies are appropriate to the current

project because its research questions are “how” and “why” questions, which demand

explanatory answers (see also Hartley, 1994). Research question (1) focuses directly on

explanation: it asks how and why organisations in the same industry can have different rates of

labour turnover. More specifically, but in the same vein, research question (2) seeks to explore

43

the extent to which HR policies and practices explain different turnover rates in different

organisations. In relation to the second and third conditions, which are ultimately less important

than the first, the current research also meets Yin’s (2009) criteria because the researcher has no

control over events and the events under investigation are contemporary real world events, with

the data gathered focusing on events in Bangladesh around the time of data gathering in 2013.

The case study method suits such situations where the researcher is studying phenomena as they

naturally happen – there is no need for the researcher to control or change situations to

understand a particular phenomenon.

3.2.1 Strengths of the qualitative case study approach

Other strengths of the case study method make it particularly appropriate for the present project.

For example, many commentators argue that the explanations developed through case studies –

the way in which this method answers the “how” and “why” questions – focus strongly on the

link between the case and its context. Tharenou, Donohue, & Cooper, (2007) say that case

studies not only explain a situation but also assess the conditions surrounding the phenomenon,

building plausible descriptions or finding causal relationships that link the antecedents to

results. Eisenhardt and Graebner (2007) argue that case studies allow researchers to locate the

rich, real-world context in which the phenomena occur. Similarly, Yin (2009) outlines two

strengths of the case study; depth investigation and real-life context. He states:

you would use the case study method because you wanted to understand a real-life

phenomenon in depth, but such understanding encompassed important contextual

conditions – because they were highly pertinent to your phenomenon of study. (p. 18)

Given the discussion in Chapter 2 about the neglect of context in existing (quantitative)

studies of labour turnover, this feature of the case study method offers a comparative advantage.

The current research project seeks to locate turnover experiences of organisations within their

industry and national contexts.

Another strength of the case study method is its capacity to reveal the complex social

processes within organisations and the dynamics of such processes. Denscombe (1998), for

example, argues that the rich data gained from case studies makes the researcher familiar with

and confident in dealing with relationships and social processes in a way that cannot be

achieved in the survey approach. Walton (1972) also cites the advantages of the case study

research as including its ability to attend to the process of change, to give an account of actions,

events and people, and also to provide a sensitivity to the change process and its consequences.

Yin (2009) describes two further strengths of the case study method: copes with situation and

relies on multiple sources. He states:

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The case study inquiry copes with the technically distinctive situation in which there will be

many more variables of interest than data points . . . relies on multiple sources of evidence,

with data needing to converge in a triangulating fashion. (p. 18)

Again, this makes the case study method especially valuable for the present study. The

review of the existing research in Chapter 2 highlights the many and diverse factors found to

influence labour turnover, and the complex explanatory processes involved. Case study analysis

has the potential to shed light on these complexities.

Practical applications of the case study method are numerous. Case studies can be applied

to accomplish various aims: to generate new theory (e.g. Eisenhardt & Bourgeois, 1988;

Pettigrew, 1988); test existing theory (e.g. Pinfield, 1986; Anderson 1983), or to provide

description (Kidder, 1982). The aim of the present study is to generate a new theory to explain

voluntary turnover in the RMG industry in Bangladesh. The current research project seeks to

demonstrate significant internal and external factors as the causes of organisational turnover

rates.

3.2.2 Weaknesses of the qualitative case study method

Despite the strengths of case study research, critics have raised a number of potential problems

or weaknesses. It is useful to review these potential weaknesses so that researchers can apply

the steps necessary to avoid and overcome them.

Some commentators claim that case study research lacks rigour and is sloppy, not abiding

by systematic procedures, or permitting equivocal or biased views to influence results and

conclusions (Yin, 2009). The claim is, also, that this lack of rigour is less likely to be present in

other research methods such as the experimental and survey methods.

Claims about lack of rigour are not, of course, confined to the case study method.

Experimental and survey methods can be sloppy, or may allow equivocal evidence or biased

views. Yin (2009) claims that it is rarely realised that bias also can enter into the conduct of

experiments (Rosenthal, 1966; cited in Yin, 2009) and the use of other research methods, such

as designing questionnaires for surveys (Sudman & Bradburn, 1982, cited in Yin, 2009) or

conducting historical research (Gottschalk, 1968, cited in Yin, 2009). In this way, Yin (2009)

observes that the lacks of rigour, allowance of equivocal evidence or biased views are the

problems for every research method. However, case study research scholars need to be

particularly vigilant. Research evidence must not be deliberately altered, which is strictly

forbidden. In case study research, every investigator must work hard and follow systematic

procedures to report all evidence properly. In order to avoid a lack of rigour, the present study

applied systematic procedures to report all evidence and thus enhance its rigour.

45

Some people claim that access to suitable case organisations can make it difficult to

ensure that designing and scoping of a case study research project adequately and properly

answer the research questions (e.g. Yin, 2009, Darke, Shanks, & Broadbent, 1998). The

availability of suitable case study sites may be difficult as businesses and other organisations are

not always willing to participate in case study research (Darke et al., 1998). This was, however,

not a problem with the current project. The managers of the eight RMG factories that comprise

the case organisations were happy to participate, especially when they understood that the

results of the project may assist RMG employers and employees to better understand and

minimise the employee turnover problem in Bangladesh.

Some commentators believe that data collection for the case study research technique can

be time-consuming and resource intensive, requiring the accumulation of a large amount of data

that is difficult to analyse (Yin, 2009, Darke et al., 1998). On the one hand, the dangers of this

criticism are less important when the case study research is undertaken for a PhD thesis, when

time is more readily available than other types of projects. On the other hand, the present study

took action to make data gathering as efficient as possible. Early contact with the case

organisations allowed an effective plan to be developed for each fieldwork visit to factory sites.

Case organisations and interviewees were, therefore, aware before the visits of the schedule and

the data/information that was to be collected. There is no doubt that the present project gathered

large quantities of data, but this was also analysed efficiently and effectively, as will be

discussed in section 3.5 below.

Perhaps the most important criticism – and potential weakness – of the case study method

relates to the inability to generalise from a small number of cases. This deserves a separate

section.

3.2.3 Issue of generalisability

Some commentators claim that case study methods provide inadequate bases for scientific

generalisation (Yin, 2009). “How can you generalise from a single case?” is a common question

relating to the case study approach. Kennedy (1976) claims that the answer is not simple.

Certainly, the capacity for generalisability from case studies – and the role of case studies in

theory development – is a controversial topic.

There are two main conclusions that can be drawn from the controversy that inform the

current project. First, it is quite widely accepted that case studies best contribute to theory

generation – as opposed to theory testing – when empirical research on a topic is new and

theory is weak (Eisenhardt, 1989). Consistent with this, Kitay and Callus 1978) argue that an

investigator can rely on single case while it is “an exploratory study”, since it may generate

ideas for further research. For example, based on Burawoy’s (1979, cited in Kitay & Callus

46

1978) single study, a wealth of insights yielded that significantly influenced the direction of

labour process theory in the early 1980s. The present study focuses on explaining

organizational-level turnover. It was argued in Chapter 2 that very few studies amongst the vast

literature on labour turnover have focused on this organisational-level issue. Moreover, the

literature review argued that there are few studies of labour turnover in developing countries.

Consequently, it could be argued that case study research could generate new theoretical

propositions, which could then be tested in later quantitative research. In this way,

generalisability in the current project would be considered legitimate but very limited.

Another approach sees greater scope for generalisability provided the case studies are

selected appropriately. The key here is that cases are selected not because they are “typical” or

“representative” of any empirical population – as would be the basis of quantitative studies

using statistical logic – but rather they are selected according to theory (Eisenhardt & Graebner

2007, Yin 2009). Under these circumstances, the mode of generalisation is analytic

generalisation, in which a previously developed theory is used as a template with which to

compare the empirical results of the case study. This approach, therefore, means that single case

studies can provide the basis for generalisation if they are selected properly to test a particular

theory. Eisenhardt and Graebner (2007) observe that theoretical sampling of single cases is

straight-forward: they are chosen because they are unusually revelatory, extreme exemplars, or

opportunities for unusual research or, as Yin (2009) notes, they are “critical” to a theory.

This justification, according to some commentators, is even stronger with research based

on multiple cases rather than a single case. This is based on the assertion that scientific facts are

generally based on multiple set of experiments (Eisenhardt & Graebner, 2007). Multiple cases,

in this sense, resemble multiple experiments.

There is, then, a strong argument that multiple case studies, selected appropriately

according to theory, provide a sound basis for generalisation and theory development. Yin

(2009) claims that multiple-case studies typically offer a stronger base for theory building,

while Kitay and Callus (1998) observe that the use of multiple cases can produce greater

confidence in the reliability of findings. Multiple cases enable comparisons that clarify whether

an emergent finding is simply idiosyncratic to a single case or consistently replicated by several

cases (Eisenhardt, 1991). Eisenhardt and Graebner (2007) believe that multiple cases create

more robust theory because the propositions are more deeply grounded in varied empirical

evidence. They also argue that constructs and relationships are more precisely delineated

because it is easier to determine accurate definitions and appropriate levels of construct

abstraction from multiple cases. Furthermore, multiple cases enable broader exploration of

47

research questions and theoretical elaboration, meaning that theory building from multiple cases

typically yields more robust, generalisable, and testable theory rather than single-case study.

The present study will employ multiple case studies not only for the greater reliability of

their findings but also because they meet the objectives of the present research. The next section

explaining the criteria used to determine the number of cases and select the cases of

organisational labour turnover in the Bangladeshi RMG industry.

3.2.4 The number of and selection criteria for case organisations

There is no ideal number of cases (Darke, Shanks, and Broadbent, 1998). The number of cases

that are studied depends on the objectives of the study (i.e. research questions) and such

practical issues as time, resources and access (Kitay and Callus, 1998).

The review of the literature in Chapter 2, and the framework at the end of Chapter 2 that

came out of that review, suggested that different types of organisations could be expected to

have different rates of labour turnover. Given that the research questions focus on investigating

the factors (internal and external) that explain why these different types of organisations have

different rates of turnover, then the number and characteristics of the case organisations should

reflect the different organisational types. There would also be value in selecting some

organisations with different levels of labour turnover, so that comparisons can be made between

them.

The key structural features of the organisations discussed in Chapter 2 are size and

ownership. Hence, ideally, the present study would aim to select two large locally-owned RMG

factories (one with high turnover rates and with low turnover rates) and two large foreign-

owned RMG factories (one with high turnover rates, and one with low turnover rates). This

would mean a total of four large organisations. In addition, it would also be appropriate to select

four small organisations: two of these small RMG factories being locally-owned (one with high

turnover rates and one with relatively low turnover rates) and two being foreign-owned (again

one with high turnover rates and one with low turnover rates). Table 3.2 shows the ideal criteria

to be used to select eight RMG factories in Bangladesh.

Table 3.2: Ideal criteria to select eight RMG case organisations

High turnover Low turnover Large RMG factory

Locally owned X X

Foreign owned X X

Small RMG factory

Locally owned X X

Foreign owned X X

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Apart from the size and ownership, two more key structural features of the organisations

identified in the literature as potential explanatory factors are location and position in supply

chain (see Chapter 2). These criteria, as explained below, can largely be accommodated by size

and ownership (see below). In practice, the aim is to ensure that when selecting organisations

they were well spread across geographical areas and position in the supply chain.

In this way, the number of cases and the selection criteria are determined by theory and

the nature of the research questions. These selection criteria make no judgment about the

incidence of these organisational types, in general or in the Bangladeshi RMG industry. Rather,

the organisational types are created by theory, not by any empirical process. There can also be

no suggestion that any factory chosen through these criteria is ‘typical’ or ‘representative’ of its

respective category. Each factory will, however, provide insights into the factors (internal and

external) that affect labour turnover in that category.

The selection criteria were operationalised in the current project as follows. With respect

to size, the Bangladesh Garment Manufacturers and Exporter Association (BGMEA) reported a

total of 5,400 RMG factories in Bangladesh in 2011-12 (BGMEA, 2014). The bulk of these

factories are small in size, in terms of number of employees. Unfortunately, however, the

literature does not provide a consistent definition of ‘small’ and ‘large’. Mintoo (2007) defines

large business organisations in Bangladesh as those employing more than 100 workers and

requiring investment between BDT 500 and 800 million. In contrast, Mukul, Rahman & Ansari

(2013, p. 23) claimed that the RMG ‘factory sizes vary between 200 and 1,200 workers, with an

average of about 550-600 workers’. For the purposes of this project, Small-sized RMG

organisations are deemed to consist of up to four hundred ninety nine employees, and large

sized RMG organisation consists of five hundred or more employees.

The size of RMG factories usually corresponds with their position in the supply chain:

large organisations usually source their own fabric and export directly, while the small-sized

factories either sell to buying agents or work as a sub–contractor for the large factories (Rashid,

2006). It was, however, important to ensure that the selected case studies covered different

positions in the supply chain.

In terms of ownership, RMG factories in Bangladesh can mainly be classified as local

and foreign owned. Locally-owned factories can be small or large in size, while most of the

foreign owned factories are large in size. There is, however, almost no existing literature what

focuses on the differences between locally-owned factories and foreign-owned factories in the

Bangladeshi RMG industry. Out of only a handful of existing articles on the voluntary labour

turnover, no article devotes attention on ownership of the organisation.

49

Most of the RMG factories are mainly located in Dhaka (the capital city), Chittagong (the

port city), Gazipur and Narayangonj, two industrial cities. In all four cities, RMG factories can

be located within the city or outside the city, in more regional areas. Dhaka and Chittagong each

has an Export Processing Zones (EPZ). In both in Dhaka and Chittagong, significant numbers of

factories are located inside the EPZ areas, but others are in the non-EPZ areas. The RMG

factories located in EPZ areas generally are larger in size in terms of number of employees.

Moreover, most of the foreign owned factories are located in EPZ areas, though a good number

of local owned factories are also located in EPZ areas. In contrast, the RMG factories located in

non-EPZ areas are mostly locally owned. However, both large and small sized factories are

located in non-EPZ areas.

Once the ideal (or theoretical) selection criteria and their operationalisation were

determined, there was the practical process of identifying, and gaining access to, actual factories

in the Bangladeshi RMG industry which fitted each category. The aim was to select eight case

organisations that met the criteria above. The procedure by which this aim was pursued was as

follows. First, a list was attained of all the RMG organisations from the BGMEA website. In

2011-12, there were 5,400 RMG organisations in Bangladesh (BGMEA, 2012). The

information about each organisation in this database included only their contact details (which

identified their location and the key contact person), size (in terms of number of employees

and/or number of machines) and ownership. Secondly, from the consolidated list, a short list

was compiled of 240 RMG organisations from four different districts (i.e. Dhaka, Gazipur,

Narayangonj and Savar including Savar EPZ), sixty organisations from each location each with

a mixture of large and small factories and factories of local and foreign ownership. Thirdly, all

of the 240 organisations were approached with an offer to participate in the research project.

Only fourteen organisations gave their consent to participate as a case organisation: five

organisations were from Dhaka, four from each of Gazipur and Savar, and one from

Narayangonj district. Fourthly, the mix of large/small and local/foreign ownership was not

achieved in Savar and Narayangonj, so another list was compiled, consisting of fifty nine

organisations located in these two locations. This time an additional seven organisations gave

their consent: four from Narayangonj and three from Savar. Therefore, a total of twenty one

organisations were willing to participate.

Finally, from this group of 21 organisations that were willing to participate, the final eight

case organisations were selected, realising a mix of the two key criteria (i.e. size and ownership)

in each of the four locations. In addition, the convenience of the organisations’ locations for the

researcher and the practicality of arranging interview schedules were also taken into account.

The eight organisations and the categories they represent are presented in Table 3.3.

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Table 3.3: The eight RMG case organisations

Large RMG factory

Locally owned Blue Concern Green Garments Ltd

Foreign owned Brown & Bronze Group Pink Fashion Co. Ltd

Small RMG factory

Locally owned Red International Purple Group

Foreign owned Amber Fashion Ltd Silver Dew Apparels

It is important to acknowledge that it was not possible, even in this last step of case

selection, to know the actual labour turnover rates in these organisations. There was, of course,

no information on labour turnover in the BGMEA database. More importantly, the organisations

were very reluctant to disclose their experiences with turnover before they became part of the

project and it would have breached ethical standards for the researcher to request information on

this issue. In the end, this did not prove a problem because the eight organisations subsequently

revealed a wider range of turnover rates (see Chapters 5 and 6), which allowed fruitful

comparison between the cases.

3.3 Data gathering techniques and quality in research Case studies are “rich”, “thick” and “meaningful” empirical descriptions of particular instances

of a phenomenon usually derived from a variety of data sources. Usually case study research

combines interviews, observation, questionnaires and document (archives) and record analysis

as data collection techniques (Eisenhardt & Graebner, 2007; Hartley, 1994; Yin, 1994). Gillham

(2000) advocates that employing a variety of data collection methods such as interviews,

document and record analysis, participant observation and even employee questionnaires. This

combination of data-gathering techniques is especially important because it allows for

triangulation, which improves the reliability of the evidence (Yin, 2009).

Research data for the present study was collected from multiple sources in each case,

using three main data-gathering techniques: interviews, collection of documents and non-

participant observation. These methods are discussed in detail below.

Data collection and analysis methods can be either qualitative (which deal with words

and meanings) or quantitative (which deal with numbers and measurement) or both. For

instance, Eisenhardt and Bourgeois (1988) combine quantitative data from questionnaire with

qualitative evidence from interviews and observations, Sutton and Callahan (1987) depend on

quantitative data, and Mintzberg and McHugh (1985) rely on qualitative data. Analysis methods

for the present study will be qualitative.

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3.3.1 Interviews

According to May (1997) “Interviews represent a cornerstone of social science research,

yielding rich insights into people’s experiences” (p.109). Eisenhardt and Graebner (2007) also

argue that interviews represent a highly efficient way to gather rich, empirical data.

One potential problem with interviews is that they often provoke a “knee–jerk” reaction

thus causing the data elicited being biased. This challenge to interview data is best mitigated by

data collection approaches which limit bias (Eisenhardt & Graebner, 2007). A key approach is

using numerous and highly knowledgeable informants who view the focal phenomena from

diverse perspectives. These informants can include organisational actors from different

hierarchical levels, functional areas, groups and geographies, as well as actors from other

relevant organisations and outside observers such as market analysts and NGOs. Another key

approach to mitigating bias is to combine retrospective and real-time cases (Leonard-Barton,

1990; cited in Eisenhardt & Graebner, 2007). Retrospective cases rely on interviews that build

up the number and depth of cases efficiently and so enable a researcher to cover more

informants and include more cases. Such interviews are particularly accurate when the focal

events are recent. In contrast, real-time cases employ longitudinal data collection of interviews,

and, often, observations, both of which help to mitigate retrospective sense-making and

impression management.

As many methodological commentators acknowledge, there are various types of

interviews. Punch (1998) identifies three principal types of interviews: structured, semi–

structured, and unstructured (see also Denscombe, 1998; Fontana & Frey, 2003). Structured and

unstructured interviews were not viewed as appropriate for this study. Semi–structured

interviews, however, were entirely appropriate. They involve a relatively informal, relaxed

discussion between interviewer and interviewee based around a predetermined topic. They mix

a structured agenda with the flexibility to ask other relevant questions; the interviewer is

generally required to ask specific questions but is also free to probe beyond them if necessary

(Punch, 1998). Indeed, most of the questions are formed during the interview. They represent an

ideal way to gather insight and in-depth information on the subject of study.

Table 3.4 shows the types of information collected from the interviewees in this research.

To collect this information, however, different questions were asked of different interviewees,

though there were also some common questions. During the interview, however, the order in

which questions were asked remained predominantly the same.

Denscombe (1998) indicates that interviewee respondents tend to be selected deliberately

because they have some special contribution to make, have some unique insight into the

phenomenon, or because of the position they hold. A common initial step, then, is to identify

52

key interviewees who have a sound knowledge of the issue being investigated (Kitay & Callus,

1998). Johnson (1990) (cited in Kitay & Callus, 1998) notes that the investigator needs to make

judgments about who should be considered as key informants.

Table 3.4: Information collected from each case RMG organisation

Context based information: Products/products markets: Raw material, Sources of raw materials (own sources/external), Related other plants/units (accessories/packing), Production cost, Prices, Competition/ Competitors (local/foreign), Lead time, Customers, Sales/supply orders (self-contact/buying house), Supply channels (ships/air), Govt. regulations (export–import, safety, minimum wages). External infrastructure: Power, Water, Gas, Transportation, Phone, Fax, Internet, Bank, Bonded warehouse, Sea port, Position/location. External economy: Inflation, Tax, Unemployment rate, Exchange rates, Export quota (LDC). External labor market: Availability of employees (including women), Wages rates. Country’s political environment: Political situations (unrest, strikes), Political pressures, Bureaucracy, Govt. supports.

Organization based information:

Ownership: Foreign/joint venture/local, Public/Private/Partnership/Sole trade, Umbrella organization/Group of companies, Multinational organization. Size: Large/Medium/Small, Annual turnover/revenue, Total number of employees, Number of expatriate officials, Financial position, Sources of capital, Work contract (full contractor/sub–contractor), Production process (technology/machinery), Types of employees (occupation, gender, skills, experience, education, ethnic). Nature of workforce: Fresher/experienced/educated/sex/marital status, Managers/Supervisors (professional, experienced).

Location: In EPZ area, Non–EPZ area.

Business strategy: Performance, Profits, Market penetration, Low priced products.

Internal control and management: Managerial Hierarchy, Corporate governance, Authority (centralized/decentralized), Trade Unions.

History: Years of operation, Organizational image.

HR Practices based information:

Management style and supervision: Democratic/autocratic/supportive, Organizational supportiveness, Employee–Management relationship, Job satisfaction: Wages/salaries rates, Performance–based pay plans, Merit and skill–based pay, Merit and skill–based pay, Wages payment (timely/delay), Financial & non–financial benefits, Work environment: Co–worker relationship, Weekly holiday & Annual leave, Maternity leave, Job type (permanent/temporary),

Safety: Fire fighter, Fire exit, Extra stair.

Career development opportunity: Training, Performance appraisal, Role clarity, Job analysis and design

The selection of the interviewees for the present study was based on key officials and

employees who know and/or deal with the data and information the investigator was looking

for. In other words, individuals from within the case organisations were invited to participate

who have knowledge of or experience with labour turnover because of the roles they performed,

or because of their long experience in the organisations. Such key employees in the case RMG

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factories were CEO/managing director, general manager, HR manager, assistant HR manager,

supervisor, and labour representative. Senior managers such as CEO/Managing director or

general manager have been treated as key informants because, as Kitay and Callus (1968) note,

they typically have a broad overview of the organization and are able to provide a great deal of

information quickly. Within the bounds of practicality, this research included as many

interviewees as possible, for triangulation purposes. Labour representatives and employees were

not considered as statistically representative of all employees but rather as informants useful for

for gathering information and data and for triangulating the data collected from other sources

such employees provide different perspectives to those of senior managers.

Participation in this research project was entirely voluntary. CEOs/General Directors

were provided with an information statement and requested to do the following:

• Return the completed organisational consent form via post mail.

• Provide organisational consent for eligible staff from within the organisation to

participate.

• Return the completed individual consent form for the CEO/Managing Directors

personal participation in interviews consent form via post mail.

• Distribute a Participant Information Statement and Consent Form to eligible staff from

within the organisation on behalf of the researchers.

• Prepare to answer the demographic questions based on the demographic questionnaire

at the beginning of the interview.

• Allow the student researcher to use a quiet room within the office to conduct the

interviews with participants.

Table 3.5 shows different types of information gathered from different key officials and

employees in the case organisations.

Table 3.5: Criterion to select interviewees

Organizational position Information gathered

CEO/Managing Director Knows organization’s overall situation, strategies and future plans General Manager Knows organization’s overall situation, strategies and future plans HR Manager Knows HRM policies/practices and their impact on turnover rates Assistant HR Manager Knows consequences of existing HRM practices Supervisor Knows reasons/causes of voluntary turnover Labor representative Knows employees’/labors’ demand

Individual interviewees who agreed to participate were not disclosed to the company

managers. These participants were asked to provide information relating to different issues,

including workforce, labour turnover, HR policies and practices, physical work environment,

54

and fire safety. The researcher took brief notes based on personal observations on basic features

of the physical and social environment of each case organisation. The location of the interview

was a specific, quiet and confined room at each case organisation.

3.3.2 Documentary data

Documents can be letters, memoranda, agendas, administrative documents, newspaper articles,

or any document that is useful to the research (Yin, 2009). This study primarily used internal

documents from the case organisations. This method is viewed as effective because, for

example, such primary sources provide accurate historical and contextual information written in

the participants’ own words. This kind of data can, therefore, be considered as authentic and as

having meaning (Bryman, 2004), although it is also important to exercise caution with such

data. As Bryman (2004) said: ‘the question of credibility raises the issue of whether the

documentary source is biased’ (p. 387). Usually, RMG factories do produce credible evidence

because they need to follow the Bangladesh Garment Manufacturers and Exporters Association

(BGMEA) regulations but, in other instances, they may tend to serve their own financial and

goodwill interests, which, in turn, suggest that caution is necessary in attempting to treat them

as depictions of reality.

The search for documents relevant to researcher’s topic can often be a frustrating and

highly protracted process (Bryman, 2004), but the process was generally effective in the current

project. Table 3.5 shows that by analysing documents and records, various sources of

information, such as product/products markets, job satisfaction, business strategy, internal

control and management, career development opportunities, political environment, and nature of

workforce related information could be collected.

Table 3.5 also shows that different data, such as products/markets and workforce-related data,

was gathered from different documents and records, such as company’s internal documents and

documents submitted to the board.

Table 3.6: Types of documents collected from selected RMG factories

Types of documents Data from the documents

Minutes of meeting Career development opportunity, such as performance appraisal, political environment, such as political unrest, political pressure,

Documents submitted to the board

Job satisfaction, such as wages rates, business strategy, internal control & management, such as managerial hierarchy, work environment such as weekly holiday,

Company’s internal documents Nature of workforce, such as experience, education,

Annual report Products/markets, such as raw materials, customers, price; size, such as revenue, no. of employees, financial position, source of capital,

Furthermore, in the interest of triangulation of evidence, the documents serve to

corroborate the evidence from other sources.

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3.3.3 Observation

Observational methods are of great value in some situations. When researchers begin research

in an area, it may be appropriate to start with an observational study before conducting anything

more complicated. Furthermore, specific behaviours that cannot be studied in experimental

situations lend themselves nicely to observational research.

Sutcliffe (1999) classifies observational research in two basic types: participant

observation and non–participant observation. Studies in which the researcher actively

participates in the situation in which the research participants are involved is called participant

observation. Participant observation ensures that the observations include patterns of action

rather than ‘odd’ incidents (Sutcliffe, 1999). Sutcliffe (1999) notes that, in participant

observation, those being observed support the process. The main limitation of participant

observation is that it takes considerable time to set up and observe a research participant

(Sutcliffe, 1999). In non–participant observation, the researcher does not participate in the

situation in which the research participants are involved. As a non–participant observer, the

investigator is much more of an outsider looking in on the subjects. In non–participant

observation, there is considerably more flexibility for movement within the research location

than if one “is working at the job” (Sutcliffe, 1999). Sutcliffe (1999) also observes that non–

participant observation allows considerably more time for full record-keeping and reporting.

However, non-participant observation tends to raise questions about the researcher-subject

relationship and the extent to which behaviour is likely to be modified by the presence of the

observer. The present research used non-participant observation only.

Table 3.7: Types of information collected from non-participant observation Observation Type of information

Neat/dirty, clean/messy, organised/disorganised Working condition Smiling face, helping each other, cohesion Co-worker relationship Establishment, infrastructure of the organisation, and number of employees Size of the organisation

Work related assistance, guidance, and support from supervisor(s) Supervision

Number of employees in one group Employee group Activities and office of trade unions Trade unions Manual/semi-automatic/automatic production Production process How many days work identified few employees in a week Weekly leave

Total number of level from top to bottom in management Managerial hierarchy

Residential, canteen, transport, health care, child care facilities Non-financial benefits

Young, mid-age, old Age Inside/outside of EPZ Location

Table 3.7 shows that non–participant observation in this research contributes to the

collection of information, such as working condition, co-worker relationships, supervision,

56

employee groups, size of the organisations, production processes, trade unions, managerial

hierarchies, non–financial benefits, age, and location.

Observational data was recorded in field notes in the current project, but it was not hugely

important. Rather, it was used, mostly, as a supplement to interviews and documents, which

were the main methods for collecting data for the present study. In this way, observation

assisted data triangulation, enhancing the reliability of collected data and information.

3.3.4 Triangulation

LeCompte and Preissle (1993) suggest that researchers can “Pinpoint the accuracy of

conclusions drawn by triangulating with several sources of data” (p. 48). Denzin (1978)

describes four types of triangulation: data triangulation, investigator triangulation, theory

triangulation, and methodological triangulation. The present research uses data triangulation to

enhance reliability and avoid lack-of-rigour claims. Researchers can gather data from different

sources and at different points in time to cross check accuracy and enhance reliability.

One of the keys to a good qualitative research, therefore, is the use of data triangulation.

Triangulation is like using multiple–legged stool (Hall & Rist, 1999). Hall & Rist (1999) argue

that use of multiple methods (such as interviews, observation, and document analysis) not only

provides a more precise and accurate fix on the research question but also enhances the root of

triangulation, as each of the three major types of data collection (interviews, observation, and

document analysis) has unique strengths and weaknesses. The unique strengths and weaknesses

of these three major types of data collection methods also suggest why triangulation is so

central.

The necessity for triangulation is that

No single method ever adequately solves the problem of rival causal factors . . . Because

each method reveals different reality, multiple methods of observations must be employed.

This is termed triangulation. The present research now offers as a final methodological rule

the principle that multiple methods (methodological triangulation) should be used in every

investigation (Patton, 1990, p. 187).

Hall and Rist (1999) claim that the strategy of triangulation, including a system of

theoretical (theory triangulation) and/or methodological (methodological triangulation), adds

checks and balances to a research and lends strength to that research. Patton (1990) also claims:

Studies that use only one method are more vulnerable to errors linked to that particular

method . . . than studies that use multiple methods (methodological triangulation) in which

different types of data provide cross–data validity checks’. (p. 188)

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3.4 Data analysis It is important to explain how data is analysed in order to answer a project’s research questions,

but this is a complicated task when the data is qualitative. Unlike the more settled forms of

analysis in quantitative research, qualitative analysis is a challenge (Creswell, 2007). Miles

(1979 cited in Punch, 1998) emphasises this point:

The most serious and central difficulty in the use of qualitative data is that methods of

analysis are not well formulated. For quantitative data, there are clear conventions the

researcher can use. But the analyst faced with a bank of qualitative data has very few

guidelines for protection against self-delusion, let alone the presentation of unreliable or

invalid conclusions to scientific or policy making audiences.

Analysis implies some kind of transformation of raw data to empirical and theoretical

conclusions (Gibbs, 2007). In this project, which adopted a multiple case study strategy, data

analysis leading to this type of transformation involves two steps. First, there is the analysis of

each of the eight case studies separately. Second, there is cross-case analysis of the eight cases.

3.4.1 Analysis of single case studies

The process by which raw qualitative data is transformed into a final case study has been

described in different ways by different scholars but the descriptions share similarities (see

Gibbs, 2007; Miles & Huberman, 1994; Stake, 1995; Yin, 2009). Part of the difficulty in

describing these processes is that they occur: before data collection; during study design and

planning; during data collection as interim and early analyses are carried out; and after data

collection as final products are approached and completed (Miles & Huberman, 1994). So, the

process of data analysis is not completed in one step; instead it is iterative, with consecutive

inductive and deductive reasoning in complicated cycles of pattern identification/verification

(Gabrielian, 1999). As well, a researcher conducting qualitative research is an integral part of

the research instrument – the researcher’s self is inevitably a vital part of the data analysis as

he/she interprets and makes sense of data they collect, and this further complicates the process.

The first step is usually seen as some sort of “data reduction” process, by which the mass

of collected data – mostly, by definition, in the form of words – is decreased in volume and

focused more tightly towards the themes and topics demanded by the research questions. Gibbs

(2007) refers to these as “office” processes, such as the sorting, retrieving, indexing and

handling of data. Miles and Huberman (1994) see data reduction as helping to sharpen evidence

in order to find clusters, themes and patterns. Techniques used here include editing, coding and

memoing.

In the present study, both research questions and theory guide data reduction. The

investigator kept only useful and relevant data relating to the research questions. Coding was

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used for this purpose. Both Glaser and Strauss (1967, cited in Drake et al, 1998), in their

inductive, grounded theory approach to qualitative data analysis, and Miles and Huberman

(1984), who adopt a more deductive approach, have provided extensive descriptions of

systematic procedures for analysis of qualitative data. The grounded theory approach involves

coding: “the assignment of themes and concepts to a selected unit such as sentences taken from

an interview transcript” (Drake, Shanks, & Broadbent, 1998, p. 284).

The process of data reduction in the current project was important because each of the

eight case studies produced a huge amount of data. On average, there were six interviews for

each case, involving around 55 hours of recorded transcript, as well as many documents and

field notes based on observation. This data had to be sifted and coded under common themes

and topics relevant to the research questions before any attempt to develop higher-level analysis

could take place.

A second step described by Miles and Huberman (1994) is “data display”. This entails

taking the reduced data and displaying it in an organised and compressed way so that

conclusions can be more easily drawn. In the current project, this involved the development of a

case template, or a preliminary framework of headings (such as company background,

workforce characteristics, HR policies/practices etc.) by which the final case might be

structured. It also meant assembling data into tables so that it was easier to appreciate and

interpret.

A third step, which partially overlaps the first two, involves what some have called

“interpretation”. Miles and Huberman (1994) refer to “conclusion drawing and verification”,

whereby the researcher begins to decide what things mean by taking note of regularities,

patterns, explanations, possible configuration, casual flows and propositions. Yin (2009)

discusses four analytic techniques which seem similar: pattern matching, explanation building,

time-series analysis and logic models. In pattern matching, some data are analysed for patterns

that are then compared to predicted patterns. In this way, an empirically based pattern is

compared with predictions anticipated by theory. Explanation building is to stipulate a

presumed set of casual links about it, or “how” or “why” something happened. The casual links

may be complex and difficult to measure in any precise manner. Yin (2009) notes that

explanation building has occurred in narrative form in most existing case studies. He also argues

that, because such narratives cannot be precise, the better case studies are the ones in which the

explanations have reflected some theoretically significant propositions. The casual links may

reflect critical insights into voluntary employee turnover theory. Yin (2009) observes three

types of time-series analyses: simple time series, complex time series, and chronologies.

Chronology seems most relevant: a chronology permits the investigator to trace events under

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investigation over time. It does so by explaining events as they unfolds (i.e., what happens first,

what happens next, and provide a description of why).

Given the “how” and “why” nature of the research questions, this third step is especially

important to the present study. It involved linking together the various internal and external

factors in each case study and exploring their apparent value as explanations for the rates of

labour turnover in the case organisations.

Finally, the case studies had to be written up and presented in a form that makes them

accessible to readers and persuasive in the logic of their argument and the evidence used to

support the argument. In other words, a narrative story is presented for each case answering the

research questions. This necessarily means treating each case as a coherent whole – developing

a “holistic” analysis – in which the internal factors and external factors identified in Chapter 2

are presented for each case organisation. The analysis of eight cases is separately presented in

Chapter 5. Cross-case analysis is presented in Chapter 6 to more directly address the research

questions of the current research project.

3.4.2 Cross-case analysis

Cross-case analysis, which is presented in Chapter 6, compares both similarities and differences

of the case organisations. Unlike the single-case design, evidence from multiple-case design is

often considered more compelling and, therefore, the multiple-case is regarded as more robust

for the generalisation of theories (see section 3.3.4 above).

The main objective of cross–case analysis is to identify patterns by comparison of

multiple cases. When multiple organizations are being studied, it is essential that there be a

common protocol to ensure that similar issues are addressed (Kitay and Callus, 1998). This does

not necessarily mean that each interview or observation should be replicated at each

organization, but the issues studied should be the same and the information must be comparable.

Then, comparison of the same phenomenon in different situations allows the development of

explanations/theory (Yin 2009).

The main objective of cross-case analysis is to search for patterns (Eisenhardt, 1989). The

logic of cross-case analysis is to avoid leaping to conclusions based on limited instances of or

data about a phenomenon (Kahneman and Tversky, 1973) According to Eisenhardt (1989, p.

540), the danger is that investigators reach premature and even false conclusions as a result of

these information-processing biases (Eisenhardt, 1989, p. 540). Eistenhardt (1989, pp. 540-541)

goes on to discuss three strategies used in the search for patterns in cross-case analysis. The one

that most closely describes the analysis presented in Chapter 6 below is ‘use of structured and

diverse lenses on the data’ to find ‘novel’ patterns through cross-case analysis of the data. This

60

strategy enhances the probability of accurate and acceptable theory, that is ‘a close fit with the

data’ (Eistenhardt, 1989, p. 541). In addition, cross-case analysis strategies improve the

likelihood that the researchers will ‘capture the novel findings which may exist in the data’

(Eisenhardt, 1989, p. 541).

Therefore, the present study will present eight individual case stories regarding the RMG

industry in Bangladesh and internal and external causes of voluntary labour turnover of these

eight case organisations. A comparative analysis of the cases will be presented in chapter six,

explaining voluntary labour turnover. The cross-case analysis will show a relationship of

turnover rates with both internal factors and external factors. While, internal factors mostly

include HR policies and practices, OH&S including fire safety, and organisational structural

factors, external factors include enforcement of regulations.

3.5 Ethics and quality in research The issue of ethics and quality is important in social science research. This is to ensure that

work produced is of highest quality. Many of the ideas about quality of research have been

developed in quantitative research; with various approaches and techniques developed to ensure

that study findings are, as far as possible, valid, reliable and generalisable (Punch, 1998). In the

context of qualitative research, however, the question of quality in research is still contested,

with competing claims to what counts as good quality research (see, e.g., Seale, 1999). One

response by those undertaking qualitative research has been to focus on possible threats to

quality that arise in the process of analysis (Gibbs, 2007, p. 91). Emphasis on quality has both

practical and ethical implications for research. Below are suggestions for good research practice

meant to minimise such threats for this study.

3.5.1 Ethical considerations

As a student of the University of Newcastle, the researcher of the present study abided by the

ethical Code of Conduct established by the University in conduct of this study. The researcher

commenced collecting data only after obtaining approval by the Human Research Ethics

Committee. Authorisation was also sought from the BGMEA to conduct research within the

RMG factories in Bangladesh. With permission granted, letters were prepared for the case

organisations outlining the research purpose and seeking the participation of organisational

members.

During the research, the researcher maintained responsibility to protect participants,

ensuring that correct research procedures were undertaken, records and results were managed

appropriately and there were no inherent risks. Each interview participant was asked to sign a

‘Participant Consent Form’ regarding their participation in the research to guarantee their

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anonymity. The participants also received a ‘Participant Information Statement’ indicating the

contact details for the University’s Human Research Ethics Committee if those interviewees had

any queries at any time concerning the research procedures. Ethical undertakings were

maintained through observed and expected societal norms of behavior and code whilst

conducting the research in respect to participants and their organisations.

3.5.2 Reflexivity

The product of research reflects the researcher’s basic beliefs and assumptions. This can create a

potential problem of the researcher imposing their own personal beliefs in the production and

analysis of data (bias) – especially in qualitative research, where the researcher is an integral

part of the investigation. According to Denscombe (1998), two measures can be employed to

guard against such an eventuality. On the one hand, knowing their self-beliefs, qualitative

researchers should be on the guard to distance themselves and suspend their judgement for the

period of their study. On the other hand, they can directly consider the way their research

agenda has been shaped by personal experiences and social backgrounds. In doing so, the reader

of the research is provided with information upon which to base a judgement about how

reasonable the writer’s claims are with regard to the detachment or involvement of self-identity,

values and beliefs.

3.6 Summary of the chapter This chapter has examined the research methodology adopted for the research issues developed

in the literature review regarding high labour turnover in the RMG industry in Bangladesh. It

evaluated the overall research approach in which the research would be conducted and

concluded that a qualitative one was appropriate for this study. The chapter then developed the

research design to guide the study. A case study approach was deemed appropriate to address

the research questions. The criteria for case selection and unit of analysis were discussed.

Purposive selection was deemed appropriate with interviews, documents and observations used

as principal data-gathering methods. How gathered data will be analysed was also discussed.

The following chapter provides an overview of the RMG industry in Bangladesh, which

provides context for this study.

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CHAPTER 4: OVERVIEW OF RMG INDUSTRY IN BANGLADESH

4.1 Introduction This chapter provides an overview of the Bangladeshi RMG industry. The industry is the

context in which the causes of labour turnover in the case organisations – analysed in Chapters

5 and 6 – are located. As argued in Chapter 2, research on employee turnover is frequently

weakened by a failure to account for context and unappreciated context can taint research

results or damage the generalisability of those results.

This chapter begins, in section 4.2, with a broad introduction to the structure of the RMG

industry and the identification of the key concepts of the industry in a developing country,

particularly in Bangladesh. This section provides the basic terminology and language that will

be used throughout this thesis. Section 4.3 then traces the evolution of the RMG industry in

Bangladesh, from its origins in the 1970s to the 2010s. Section 4.4 describes the recent position

of the industry (i.e., at the time when most of the data-gathering took place), focusing

particularly on growth, the workforce, HR practices and industrial relations and labour

regulations. Section 4.5 discusses obstacles to the further development of the industry,

especially high labour turnover, low productivity, poor infrastructure and political instability.

The final section, 4.6, summarises the chapter.

4.2 Key concepts in the structure of the RMG industry The account of the RMG industry in this chapter can only proceed after the key concepts in the

structure of the industry are identified and defined. Firms in the RMG industry are essentially

involved in the transformation of fabrics into clothing, through the stages of cutting, sewing and

packaging. Before this transformation can take place, the raw materials for garment making

(i.e., the fabric, the machinery and the labour) must be acquired. After the transformation takes

place, the garments must be sold to customers. This section discusses, in turn, these three main

stages (i.e., the procurement of raw materials, the production process and the product markets)

in general terms, before the specific operation of these three stages in Bangladesh can be

explored in subsequent sections. When discussing the RMG industry, the following meanings

are applied to significant terms and issues.

Backward linkages: the procurement of raw materials

Backward linkage means the process by which a firm engaged in the garment-making business

and procures the inputs or raw materials for production. Basically a finished garment relies on

three steps (Habib, 2009):

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1. Converting fibres/cotton to yarn,

2. Converting yarns to grey fabrics, and

3. Converting grey fabrics to dyed, printed and finished fabrics.

Figure 4.1 shows how backward linkage works (BGMEA, 2005): yarn is manufactured

from fibres in spinning mills, grey fabric is manufactured from yarn in weaving or knitting

mills, and, finally, grey fabric is converted into finished cotton in dyeing, printing and finishing

firms.

Step 1 Step 2 Step 3

Fibres/Fabrics------ Yarns------------ Grey fabrics------------ Finished Cotton

Spinning Weaving or Knitting Dyeing, Printing, Finishing

Figure 4.1: Backward linkage - steps from fibres/cotton to finished fabrics

Although there is, potentially, a wide range of activities through backward linkage, Bangladesh

only succeeds in producing RMG accessories, fulfilling 80 per cent of the demand from locally

produced accessories (Habib, 2009). Habib, (2009) notes: “Bangladesh RMG sector, therefore,

needs to develop the backward linkage sub-sectors further in order to reduce dependency on

imported raw-materials and intermediate goods” (p. 2). Many of the raw materials are imported,

extending the lead-time required by the RMG industry. Developing backward linkage refers to

controlling supply of inputs to the RMG industry, like fabric, yarn and processing facilities

(Siddiqi, 2005).

The success of the garment industry largely depends on the effective operation of backward

linkages. That is, sound backward linkage, such as the effective supply of raw materials,

components and ancillary services, creates an uninterrupted finished product flow. Composite

garments are one example of backward linkage for the rapid success of large RMG

organisations. Composite garments consist of spinning, weaving or knitting, dyeing, printing

and sewing sections. Therefore, many large RMG organisations have their own sources of raw

materials, which allow them an effective control over backward linkage.

The development of backward linkage has been receiving high priority in the post-MFA regime

for achieving self-sufficiency in the area of input production for reducing cost and lead-time.

Sources of raw materials: Khatun, Rahman, Bhattacharya, Moazzem, & Shahrin (2007) found that

while many large sized RMG firms source their own fabric to produce garments, small-sized

firms tend to work on a cutting-and-making basis for importers or buying agents. Usually, the

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large sized RMG firms have their own dyeing, printing and finishing sections. In some cases,

the large sized RMG firms even have their own weaving and knitting sections.

Cotton is the main raw material for yarn production for the fabrics used in garments made in

Bangladesh. Production of cotton in Bangladesh has been very limited, hence, spinning mills in

Bangladesh depend on imported cotton from international markets: India, Pakistan, Turkey,

China, Uzbekistan and the US being the main production sources of cotton (Habib, 2009). The

Bangladesh Cotton Development Board (BCDB) undertakes cotton promotions activities, but

the outcomes have not been satisfactory (Habib, 2009).

Spinning mills The primary textile industry in the early 1980s was not strong but, with the

growing demand for raw materials, the backward linkage industry started to flourish. According

to the Bangladesh Textile Mills Association (BTMA), there were 148 spinning units (107

privately owned units, and 41 publicly owned units) in 2000, with a total installed capacity of

3.6 million spindles. The annual production capacity of these units was 443 million kg

(BTMEA, 2001). The number of spinning mills increased to 202 (private: 176 units; public: 26

units) in 2005. In 2005, BGMEA reported that the installed capacity increased to 4,334,796

spindles with production capacity of 50 million kg of yarn per annum. To attain self-sufficiency

in yarn to fulfil domestic and export needs, at present, the number of spinning mills is about 300

(BTMA, 2014). Currently, the country has around nine million spindles installed, capable of

producing up to 1.7 billion kg of yarn per year (BGMEA, 2014).

Weaving and knitting mills Fabric is produced from weaving and knitting mills where yarn is

converted to fabrics. Fabric is the basic raw material for making garments. It accounts for 75 per

cent of production cost (Habib, 2009). Fabric demand was 830 million meters in 2000, and the

demand almost doubled in 2005. The weaving and knitting mills produce about 8.66 billion

meters of fabrics every year (BTMA, 2014). Now Bangladesh is almost self-sufficient in

producing knitted fabric, with more than 90 per cent of knitwear fabric manufactured in local

knitting mills. The country’s woven fabric manufacturing and processing capacity is also

growing rapidly and has reached 2 billion meters per annum (BGMEA, 2014).

Dyeing, printing, and finishing Currently dyeing, printing, and finishing firms are capable of

processing all of the locally produced grey fabrics. According to BTMA (2001), Bangladesh’s

knitting, knit dyeing, and finishing sub-sector had 282 firms (99 merchandised dyeing and

finishing, 183 semi-merchandised dyeing and finishing) with fabric production capacity of 680

million meters per annum. The knitting industry had a total of 155 firms (23 domestically

supported existing units and 132 export oriented units). Due to the increased demand in the

RMG industry and to achieve self-sufficiency in fabric supply, Bangladesh established 481

additional dyeing, printing and finishing units with 10 million meter fabric production capacity

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for each unit (Siddiqi, 2000). Existing knitting, knit dyeing and finishing sub-sectors are able to

fill the local demand as well as fill the demand of the export-oriented RMG industry in

Bangladesh.

Trims and accessories: Bangladesh is almost self-sufficient in the production of trims and

accessories. So, with the expansion of the RMG industry the backward linkage industries

developed and have been playing an important role in reducing lead time and offering

competitive prices on the international market.

Forward linkages: Forward linkage is as important as backward linkage. The success of the

garment industry largely depends on the effective operation of forward linkages. The RMG

organisations need a strong and fast marketing and distribution channels that can provide the

right signals about customers’ choices and preferences. The channel may also help the

companies to find and penetrate niche markets. Habib (2009) recommended the coordination of

backward and forward linkages. He reasoned ‘… to minimize cost of production and maximize

sales revenues both backward and forward linkages need to be integrated’. (p. 2).

4.2.1 The garmenting-making production process

The main focus of the current research in on RMG firms (large and small) that transform fabrics

into clothing through the stages of cutting, sewing and packaging. Most of the RMG firms in

Bangladesh are private limited companies. The locally owned companies acquire their capital

mainly from the owners’ personal sources and loans from local banks or financial institutions,

while the capital for foreign-owned companies comes mostly from their parent companies.

Small RMG firms: The literature does not provide a consistent definition for different sizes of

organisations (i.e., small and large) in Bangladesh. Rather, the literature is contradictory. The

industrial policy of Bangladesh in 1999 describes small firms or businesses as those employing

less than 50 people and having a fixed capital investment of BDT100 million (US$1.69

million). A firm with a replacement cost of BDT15 million (US$ 254,000) is defined as a small

firm, and one with a replacement cost of BDT 15-100 million (US$0.25-1.69 million) is

classified as a medium firm. However, Mukul et al. (2013) claims that the RMG ‘factory sizes

vary between 200 and 1,200 workers, with an average of about 550-600 workers’ (p. 23). The

current research project limits small RMG organisation up to 499 workers. The four small case

organisations fall within this sixty per cent margin, although on the upper end of the range: 139

(Red International), 247 (Purple Group), 349 (Amber Fashions) and 448 (Silver Dew)

employees respectively.

Usually small RMG organisations are located in the regional areas and play a sub-

contractor role in the supply chain. This certainly describes the three case organisations (I,e.,

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Red International, Purple Group and Amber Fashions), although the largest of the small case

organisations, Silver Dew Apparels, is located in a region but is mostly a contractor.

Small RMG companies generally have a relatively higher proportion of unskilled workers

than large organisations. Mukul et al (2013) found that “The proportion of unskilled workers is

high in small and medium enterprises than that of large enterprises” (p. 24). Generally,

production costs in small organisations are comparatively higher compared to large RMG

organisations, especially when the large organisations have their own source of raw materials.

As many of the small RMG organisations do not have their own sources of raw materials, they

have to buy the raw materials either from the local market or foreign markets at relatively

higher price compared to prices paid by organisations with their own sources of raw materials.

Such high production costs as well as their sub-contractor role decrease the revenues earned by

small organization. The effect of small size of organisation on turnover rates will be discussed

in detail in section 6.3.1.1.

Large RMG firms: As with small organisations, the literature does not provide a consistent

definition of what constitutes a large organisations. The current research project defines RMG

organisations as having more than five hundred employees. Usually large RMG organisations

are located in urban areas, play a full-contractor role in the supply chain and have relatively

higher numbers of skilled workers than small organisations. Of the four case organisations, all

are located in the city; three are based in EPZs; all four are contractors.

Mukul et al (2013) found that “The proportion of skilled workers is higher in large

factories (46-53%) than in small and medium factories (p. 24). The influence of large size

organisation over turnover rates will be discussed in section 6.3.1.1.

Locally-owned RMG firms: There is a dominance of locally-owned RMG organisations in the

industry. About 95 per cent firms are locally owned (BGMEA, 2014). Locally owned

organisations usually play a sub-contractor role in the supply chain. The influence of locally

owned organisation over turnover rates will be discussed section 6.3.1.2.

Foreign-owned RMG firms: Only a few RMG organisations are foreign owned: 5 per cent

(BGMEA, 2014). Generally foreign owned organisations play a full-contractor role in the

supply chain, as is the case with the four foreign-owned case organisations examined in this

thesis. The impact of foreign-owned organisations over turnover rates will be discussed in

section 6.3.1.2.

Work contract (full contractor/sub-contractor): Sometimes some of the RMG firms,

particularly large sized firms, have to employ sub-contractor firms to meet production demand

and supply the finished products to the buying agents on time. Sub-contracting increases the

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production costs for the principal firm. Khatun et al., (2007) found that while most direct

contractor firms regularly receive work orders from foreign buyers throughout the year, sub-

contractor firms suffer from irregular work orders. In 2007, there were more than 1,200 RMG

firms that worked as sub-contractors for large and medium-sized organisations (Khatun et al.,

2007). The effect of position in supply chain on turnover rates will be discussed in section

6.3.1.5.

Location: Most of the locally-owned RMG factories are located in Dhaka, Gazipur,

Narayanganj, Chittagong and Savar districts. Most foreign owned RMG factories and some of

the locally owned factories are located in the Dhaka Export Processing Zone (EPZ) area and

Chittagong EPZ area.

The enforcement of regulations varies in the EPZ areas and outside of the EPZ areas.

There is a regulatory authority, called Bangladesh EPZ authority (BEPZA), which monitors the

enforcement of regulations and ensures that rules and regulations are strictly followed by the

companies. All organisations, including the RMG organisations in the EPZ areas, are required

to comply with all regulations including OH&S rules set out by the Government or the

Bangladesh EPZ authority. Enforcement of regulations requires all the RMG factories in the

EPZ areas to devote careful attention to improving the physical work environment. As a result,

there is almost no record of major accidents in RMG organisations located in the EPZ areas.

Organisations located outside of the EPZ areas, in contrast, usually are reluctant to follow

standard OH&S procedures due to lack of enforcement of laws.

HR policies and practices including wages, daily work hours, overtime work payment

rates, weekly off day and paid maternity leave provision are comparatively better in the EPZ

area than that non-EPZ areas. For example, daily work hours is strictly eight hours in the EPZ

areas, whereas average daily work hours is more than eight hours, excluding overtime hours, in

the RMG organisations located in non-EPZ areas (Rahman, Bhattacharya & Moazzem, 2008).

In addition, wage structures determined for the workers in the EPZ areas are higher than the

wages structures determined for the workers in the non-EPZ areas. Moazzem & Raz (2014, p. 9)

contend that wages structures of the RMG workers in the EPZ areas are higher than that of the

non-EPZ areas workers. In recent time, the physical work environment has become a significant

factor for boosting workers’ satisfaction. The impact of location as well as enforcement of

regulations over turnover rates will be discussed completely in section 6.3.1.3 and 6.3.1.4

respectively in Chapter 6.

Employees and supervisors

Employees mean all types of employed persons who work in the production process of the

garment industry. The various jobs or occupations include cutters and cutting assistants,

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machine operators, button machine operators, helpers, ironers, polly workers, supervisors,

quality controllers:

• Cutters and cutting assistants cut the cloth according to size and specification.

• A machine operator is a key person in the RMG firm. She/he makes the garment, by

joining together the cut pieces with a sewing machine.

• Button machine operators are responsible for attaching or swinging particular button

where appropriate.

• Helpers make every operator's work easy and smooth. He/she assists machine operators,

button machine operators, quality controllers, and others.

• Ironers are workers who iron the garment after it is made and before it is packaged.

• Polly workers package the garments into the polly packets after ironing.

• Supervisors are the personnel who oversee the activities of other employees, but they are

also responsible for the quality and quantity of the products, specific lines of operation,

and sometimes the total floor operations. Usually he/she takes the necessary steps to

solve technical and non-technical problems.

• Quality Controllers (QC) check and ensure that finished garments conform with the

specifications provided by the buyer or the model product.

4.2.2 Delivery to customers

The RMG industry basically produces two types of garments (i.e., woven wears and knit wears)

for children, men and women in casual as well as fashion categories. Section 4.4.1 in this

chapter describes these two types of garments in more detail.

The product market of the industry is very wide, spread over six continents. The RMG

industry divides its product market in two types: traditional markets and non-traditional

markets. Major traditional markets include the US, Canada and EU countries. The value of the

RMG export to Canada, a major traditional market, has crossed the one billion US$ mark in the

2013-14 fiscal year (BGMEA, 2015). Non-traditional markets include Australia, Brazil, Chile,

China, India, Japan, Korea Republic, Mexico, Russia, South Africa, and Turkey. Bangladesh

has set a vision of reaching US$50 billion of RMG export by 2021 (BGMEA, 2015). Table 4.1

shows the export values (in Million US$) in traditional markets and non-traditional markets in

2013-14 (July-December) and 2014-15 (July-December).

Many RMG organisations, particularly the large organisations, have permanent foreign

buying organisations (either whole seller or retailer) or buying agents. Many RMG

organisations have long-term business relationship with these buying organisations. Some of the

buying organisations or agents are: Carrefour, Auchen, H & M, Tesco, JC Penny, Li & Fung,

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Wal-Mart, Primark, Fashion Fit (FF), K & L Ruppert, Phildar, BONOBO, WE, Bizzbee, Jacadi

Paris, OBAIBI, G-Star, Uniqlo, Gap, Reebok, Adidas, K-Mart, Sears, Gueldenpfennig & Ospig,

Liwe, Lidl, Jebsen & Jessen, Garcia, O’Neill, and Zara. These buying organisations are retail

chains, supermarkets or buying agents. For example, H & M is a very large Swedish company

with its main outlets in Europe. It also has outlets in the US, South America, and Asia. Jacadi

Paris, has over 270 stores and two online shops, and operates its business in more than 35

countries.

Table 4.1:Export values to tradition and non-traditional markets in fiscal years 2013-14 and 2014-15

Destinations Woven (US$ m) Knit (US$ m) Total (US$ m)

2013-14 2014-15 2013-14 2014-15 2013-14 2014-15

Major EU countries 2793.50 2945.52 4253.11 4349.71 7046.61 7295.23 % of major EU countries 46.69 49.40 71.50 71.76 59.06 60.67 USA 1959.38 1819.47 616.76 623.34 2576.14 2442.81 % of USA 32.75 30.51 10.37 10.28 21.59 20.32 Canada 274.61 243.54 224.10 182.34 498.71 425.88 % of Canada 4.59 4.08 3.77 3.01 4.18 3.54 Non-Traditional Markets 956.02 954.17 854.72 906.19 1810.74 1860.36 % of non-traditional Markets 15.98 16.00 14.37 14.95 15.18 16.47 Source: BGMEA (2015).

The RMG industry frequently searches for new markets, particularly in non-traditional

countries. In 2014, the industry made significant progress, penetrating and acquiring market

shares in Russia, South Africa, Brazil and Turkey. The percentage of exports to the non-

traditional market has increased to 14.71 per cent in the last fiscal year of 2013-14 and the

growth of exports to non-traditional markets was 21.15 percent in the fiscal year 2013-14

(BGMEA, 2015).

Bangladeshi children' wear is taking a vantage position on world markets with

international retailers and fashion brands showing interest in sourcing this clothing item.

Bangladeshi baby-wear manufacturers are providing diversified items which are competitive in

price and international quality standards. According to BGMEA (2015), the export of baby

garments rose by 25 per cent in the first five months of the 2014-15 fiscal year. Existing global

merchants and brands, such as Wal-Mart, JC Penny, Zara, Tesco, IKEA, Marks and Spencer,

H&M, G-Star Raw, Uniqlo and Li&Fung, are expanding their work orders from Bangladesh.

The industry exports baby-wear to traditional and non-traditional markets, including the US,

Germany, the UK, France, Argentina, Brazil and South Africa. In recent times, exporters have

found new international business partners in Australia, South Korea, Russia, Japan, Thailand,

Singapore, Argentina, Chile, Uruguay, Portugal and the Middle-East (BGMEA, 2015).

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Delivery channels: Usually RMG firms use sea vessels to export their products to buyers due

to costs effectiveness. However, for fast delivery or if the quantity is small (i.e., samples of

products) they use airlines. Both channels have pros and cons, sea vessels are cost effective but

take relatively longer, while air freight is faster but expensive.

4.3 Evolution of RMG industry in Bangladesh before the 2010s At the end of colonial rule in 1947, several South Asian countries, including Bangladesh,

focused on developing garment-making firms. The first garment firm in Dhaka was established

in the 1960s. By 1970 there were five garment firms (Wahar & Rahman, 1995). In 1978 there

were nine export-oriented garment firms. These nine garment firms accounted for export

earnings of US one million dollars. In the 1970s most of the garment manufacturing units were

small, and manufactured garments for both domestic and foreign markets. By 1982 there were

47 garment firms. In 1984-85 the number of firms increased to 384 (BGMEA, 2014).

The RMG industry has expanded rapidly both in terms of number of organisations and

export values since 1990s (see Table 4.8). From the late 1970s to 1990s many large

organisations were founded. There is no doubt that these old, large organisations made

significant contributions to the growth of the industry in terms of acquiring know-how and

technology, training and developing workers, establishing new markets, establishing backward

and forward linkages, and gaining reputations for the industry. It is also true that, since late

1970s to mid-1990s, there was less competition in the industry compared with the mid-1990s to

current periods. The present study has gathered data from eight case organisations, four of them

are large and were founded between 1984 and 1991. Four case organisations were founded

between 2007 and 2009 and are small. A lesson from the case studies is that, due to intense

competition across the industry, it is now difficult to expand; this is different to the situation in

the late 1970s to early 1990s which were comparatively easy periods for business growth.

There were three leading export oriented RMG organisations till the 1980s. These three

pioneer RMG firms were: Reaz Garments, Desh Garments and Trexim Ltd. Reaz Garments was

established in 1960. In 1978 it exported 10,000 men’s shirts worth US$12,000 to a Paris-based

firm. It was the first direct export of garment goods to any foreign country. Desh Garments

started to manufacture in the early 1980s (Rashid, 2006). It was the first non-equity joint

venture in a garment firm. It had technical and marketing collaboration with Daewoo

Corporation, South Korea. Desh Garments was one of the first 100 per cent export-oriented

garment manufacturing firms. In the initial stage it had 120 machine operators. Among these

120 operators, three women were trained in South Korea. In 1980, Trexim Ltd. formed the first

equity joint-venture garment industry with Youngones Corporation, another South Korean firm.

Trexim Ltd. contributed 51 per cent of the equity of the new firm. It formed as Youngones

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Bangladesh. In December, 1980 Youngones Bangladesh exported its first consignment of

padded and non-padded jackets to Sweden (BGMEA, 2001).

In 1983-84, the export of garment goods earned only US $32 million for the RMG sector,

3.89 per cent of total export earning for Bangladesh. But Bangladesh had emerged as a

significant garment goods supplier by 1985. A 1989 survey revealed 759 approved and

registered garment firms, employing 335,000 workers, exporting to the US, Canadian and

European markets (Titumir & Ahmed, 2006; BGMEA, 2014).

From 1986 to the end of 2004, Bangladesh benefited from increasing quota facilities

offered by the US and Canada. The Multi-Fibre Arrangement (MFA) created an opportunity for

Bangladesh to step into the global apparel manufacturing chain. Academics and researchers

have generally attributed the remarkable growth of RMG exports from Bangladesh to

favourable external conditions – notably the MFA bilateral quota system imposed by developed

apparel countries, and to low wages in Bangladesh (Rashid 2006).

The MFA quota system used by developed importing countries like the US restricted

export supplies of garments to these markets from established supplying countries, and thereby

paved the way for the emergence of new garment countries. The very rapid growth of imports of

apparel from Bangladesh prompted the US, Canada, and European countries to impose MFA

quotas on Bangladesh’s garments export in 1985 (Rashid, 2006). The MFA was primarily

designed to protect the textile and apparel industries of the developed importing countries, such

as the US and European Union (EU) countries (Morshed, 2007). It also aimed to spread the

export-based garment industry from MFA quotas-restrained countries to quota-unrestrained,

low-wage developing countries. In the 1970s, prime garment exporters, such as South Korea,

Hong Kong, Taiwan, and Singapore, came under increasing MFA quotas restrictions (Rashid,

2006). At the same time, these countries experienced rising labour costs. To overcome these two

disadvantages, and to retain their share of the global apparel market, these countries, and other

countries in a similar position, relocated their production, sometimes under joint-venture

arrangements, to those countries that enjoyed quota-free status. As a less developed country,

Bangladesh enjoyed such a quota-free status in the 1970s (Rashid, 2006).

In addition, in the 1980s, the RMG sector in some other countries suffered setbacks; such

as internal problems in the case of Sri-Lanka, and rapid increases in labour costs in Southeast

Asian countries. In these contexts, buyers searched for alternative sources for the manufacture

of garment wear and Bangladesh was seen as attractive. Due to its cheap labour costs and large

export quotas, Bangladesh was seen as an ideal site. The US and Canada provided large quotas

to Bangladesh. Moreover, the EU continued to recognise Bangladesh as a quota-free status

country. These facilities guaranteed Bangladesh with markets for its apparel in the US, Canada

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and EU. Low labour costs and the wide availability of cheap labour played an important role as

domestic factors that contributed to the development of the Bangladeshi RMG industry (Rashid,

2006).

Bangladesh’s government policies contributed to the rapid growth in the sector. Various

kinds of facilities and incentives such as cash export incentives, duty-free import of fabrics

under back-to-back Letter of Credit (LC) facilities, EPZ facilities, bonded warehouse facilities

and concessionary rates of interest were offered by the government. To streamline export-

import formalities, the government took pragmatic steps, such as developing a one-stop service

Due to the Bangladesh bureaucratic system and corruption, businessmen were required to deal

with five to eight sections of government to complete export-import formalities, banking

formalities or other official procedures – a time consuming and tedious process. With a one-stop

service, manufacturers, exporters and importers could obtain all the required services from one

dedicated section. In 1999, the number of RMG organisations increased to around 3,200. In

1998-99, total export earnings from the RMG industry were US$4,020 million. This figure

represented 75.67 per cent of the total export earnings of the country (BGMEA, 2014).

An important development in the RMG industry was the growth of knitted garment

exports in the early 1990s. The industry was almost completely dominated by woven garments

during the 1980s. Export of knitwear amounting to US$131.20 million was the first major

consignment of knit RMG exports from Bangladesh. After that, knitwear export from

Bangladesh grew rapidly. In the 10-year period 1993/94 to 2003/04, the annual growth rate of

knitwear exports was about 23 per cent, which was higher than the annual growth rate of 10.6

per cent achieved by woven garments export in the same period. The share of knit garment

exports in total apparel export from Bangladesh rose from 17 per cent in 1993/94 to more than

43 per cent by 2004/05, while the share of woven garments gradually declined (Rashid, 2008).

Table 4.2: Summary of important periods for the RMG industry before the 2010s Years Issue

1977-1980 Early period of growth 1982-1985 Boom days 1985 Imposition of quota system 1990s Knitwear sector developed significantly 1993-1995 Child labour issue and its solution 2005 Phase-out of Multi-fibre Arrangement- MFA (export-quota system) 2005-2009 Growth continues, labour unrest, high labour turnover

Sources: Compiled by the author from Quddus & Rashid, 2000; Mainuddin, 2000; EPB, 2006 and BGMEA, 2014.

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4.4 The Bangladeshi RMG industry in the 2010s Bangladesh is now the second largest apparel exporter in the world. In the fiscal year 2013-

2014, exporting garment goods earned US$24491.88 million, a 14 per cent increase over the

previous year. The RMG sector is now the number one export sector in Bangladesh. At present,

the number of garment firms is around 5,600 (BGMEA, 2014). About 65 per cent of factories

produce woven garments, 20 per cent are engaged in knitting, while the remaining 15 percent

are involved in sweater production (BGMEA, 2009). Sub-section 4.4.1 traces RMG products,

their markets and recent growth in terms of exports values and expansions of businesses. Sub-

section 4.4.2 discusses the workforce, particularly the source of workers and workers’

demographic characteristics. Sub-section 4.4.3 investigates HR practices by the RMG industry.

Finally section 4.4.4 discusses industrial relations and labour regulations in the industry.

Table 4.3: Summary of important periods for the RMG industry in the 2010s

2010 Growth continues; labour unrest 2012-13 Fire accident at Tazreen garment factory and Rana Plaza collapsed and

total death tolls was 2,340 workers; high labour turnover 2014 Bangladesh becomes the 2nd largest apparel exporter in the world after

China; high labour turnover Sources: Compiled by the author from Al-Mahmood, 2013; Wright, 2013; BGMEA, 2014.

4.4.1 Products, markets, growth and exports

RMGs manufactured in Bangladesh can be divided into two major categories:

1. Knitted Garments: various underwear, sweaters, socks, stockings, T-shirts and other

casual and soft garments are the main knit products (Haider, 2007) (See Table 4.4).

Table 4.4: Top 10 knitwear exports from Bangladesh, fiscal year 2010-2011

Product Description US$ m T-shirts, singlets & other vests, knitted or crocheted, of cotton. 4,430.17 Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted or crocheted, of textile materials 1,551.30

Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted or crocheted, of cotton. 730.50

Men's or boys' shirts, knitted or crocheted, of cotton. 633.43 T-shirts, singlets & other vests, knitted or crocheted, of textile material other than cotton. 266.41

Women's or girls' briefs & panties, knitted or crocheted, of cotton. 172.64 Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted or crocheted, of man-made fibres. 152.40

Women's or girls' blouses, shirts & shirt-blouses, knitted or crocheted, of cotton. 135.51 Women's or girls' trousers, bib & brace overalls, breeches & shorts, knitted or crocheted, of cotton. 132.76

Men's or boys' trousers, bib & brace overalls, breeches & shorts, knitted or crocheted, of cotton. 127.97

Source: BGMEA, 2014

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2. Woven Garments, such as shirts, T-shirts, trousers, pants, shorts, ladies’ wear,

children’s wear, suits, cotton jackets, leather jackets, embroidered wear, and Jeans

(Ahmed, 1997) (See Table 4.5).

Table 4.5: Top 10 woven exports from Bangladesh, fiscal year 2010-2010 Product Description US$ m

T-shirts, singlets & other vests, knitted or crocheted, of cotton. 4,430.17 Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted or crocheted, of textile materials 1,551.30

Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted or crocheted, of cotton. 730.50

Men's or boys' shirts, knitted or crocheted, of cotton. 633.43 T-shirts, singlets & other vests, knitted or crocheted, of textile material other than cotton. 266.41 Women's or girls' briefs & panties, knitted or crocheted, of cotton. 172.64 Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted or crocheted, of man-made fibres. 152.40

Women's or girls' blouses, shirts & shirt-blouses, knitted or crocheted, of cotton. 135.51 Women's or girls' trousers, bib & brace overalls, breeches & shorts, knitted or crocheted, of cotton. 132.76

Men's or boys' trousers, bib & brace overalls, breeches & shorts, knitted or crocheted, of cotton. 127.97

Source: BGMEA, 2014.

Around 45 per cent of RMG factories are knitwear and sweater manufacturers, and the

rest, 55 per cent, are woven garment manufacturers (See Table 4.6). The ratio of gross export

earnings from woven wear and knitwear has increased from 100:34 in fiscal year 1997 to

100:98 in fiscal year 2007, which shows a structural change in export earnings (Rahman et al.,

2008). The statistics of financial year 2008-09 showed that the export figures for woven, light

knit and sweater were US$ 5.92 billion, US$ 4.57 billion and US$ 1.86 billion respectively.

The EU is the largest destination of Bangladeshi apparels and it accounts for about 50 per

cent of the country’s total RMG exports. After a period of strong growth, total exports of RMG

(both woven and knitted) to the EU appeared to slow in 2007(ADB, 2009).

The US is the second largest export market, accounting for 45 per cent of Bangladesh’s

RMG exports. The top five knitwear items account for nearly 60 per cent of US knitwear

imports from Bangladesh, while the top five woven items account for 71 per cent of woven

apparel imports. Despite a similar high level of concentration on selected items, the picture of

the industry – in particular the woven sector – appears significantly brighter in the US (Titumir

et al., 2006).

Products and products markets: The basic apparel products produced by the RMG firms are

T-shirts, trousers, ordinary shirts, sweaters, jackets, pants, singlets, shorts, caps, women’s and

children’s wear - in casual as well as fashion categories (See Table 4.7). However, RMG firms

have the ability to produce shirts of complicated designs and jackets, sweaters and denim

(Khatun et al., 2007). Both woven and knitwear good s are exported to more than fifty countries

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in the world including the US, Canada, the UK, Germany, France, Austria, Belgium, Denmark,

Finland, Ireland, Portugal, Netherlands, Span, Italy, Romania, Bulgaria, Sweden, Poland, Czech

Republic, Brazil and Australia (BGMEA, 2014).

Table 4.6: Export of knitwear, including sweaters and woven garments Year Total apparel export in US$ m

Woven Knit Total 1992-1993 1240.48 204.54 1445.02 1993-1994 1291.65 264.14 1555.79 1994-1995 1835.09 393.26 2228.35 1995-1996 1948.81 598.32 2547.13 1996-1997 2237.95 763.30 3001.25 1997-1998 2844.43 937.51 3781.94 1998-1999 2984.96 1035.02 4019.98 1999-2000 3081.19 1268.22 4349.41 2000-2001 3364.32 1495.51 4859.83 2001-2002 3124.82 1458.93 4583.75 2002-2003 3258.27 1653.82 4912.09 2003-2004 3538.07 2148.02 5686.09 2004-2005 3598.20 2819.47 6417.67 2005-2006 4083.82 3816.98 7900.80 2006-2007 4657.63 4553.60 9211.23 2007-2008 5167.28 5532.52 10699.80 2008-2009 5918.51 6429.26 12347.77 2009-2010 6013.43 6483.29 12496.72 2010-2011 8432.40 9482.06 17914.46 2011-2012 9603.34 9486.35 19089.69 2012-2013 11039.85 10475.88 21515.73 2013-2014 12442.07 12049.81 24491.88

Source: EPB, 2014; BGMEA, 2014

Table 4.7: Major apparel items Major Apparel Items Exported From Bangladesh, in Million USD

Year Shirts Trousers Jackets T-shirt Sweaters 1995-96 807.66 112.02 171.73 366.36 70.41 1998-99 1043.11 394.85 393.44 471.88 271.70 2001-02 871.21 636.61 412.34 546.28 517.83 2004-05 1053.34 1667.72 430.28 1349.71 893.12 2007-08 915.6 2512.74 1181.52 2765.56 1474.09 2008-09 1000.16 3007.29 1299.74 3065.86 1858.62 2009-10 993.41 3035.35 1350.43 3145.52 1795.39 2010-11 1566.42 4164.16 1887.5 4696.57 2488.19

Source: BGMEA, 2014

Growth of the RMG firms and exports

RMG organisations in Bangladesh are turning the country from a traditionally jute-centred

export economy to one primarily based on RMG exports. According to Bakht, Salimullah,

Yamagata and Yunus (2006), the export of garment wear contributes nearly three-quarters of

total export earnings. As noted in section 4.4, at the end of 1982 there were only 47 garment

firms in Bangladesh. The BGMEA (2014) reports that in 2011-2012 and 2012-2013 the total

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number of garment firms in Bangladesh was 5,400 and 5,600 respectively. In the 1990s,

BGMEA membership experienced an annual average growth rate of 18 per cent and in 2011-

2012 the growth rate was 3.70 per cent.

While China was once considered “the place to be” for the RMG goods, the light is

starting to shine ever brighter on Bangladesh. In the course of two and half decades, the RMG

industry has been contributing more than 13.5 per cent to GDP, and brought about a revolution

in the society through employment, women empowerment and poverty alleviation, and branded

Bangladesh among the top apparel manufacturing countries in the world. It was noted in section

4.4 that the first RMG exports made in 1978 was worth US$12,000 and contributed only 3.89

per cent to total export earnings. In 2012-13 fiscal year, the industry earnt US$21,515.73

through exporting garment goods, which contributed 79.63 per cent in country’s total export

(see Table 4.8). Moreover, around 20 million people are directly and indirectly depending on

this sector for their immediate livelihoods (BGMEA, 2014).

Table 4.8: RMG exports of Bangladesh - a comparative scenario Year No. of

firms Employment

(in m) Export of

RMG (US$ m)

Total export of BD (US$

m)

RMG export as a % of total

export

% of value

addition 1983-84 134 0.04 32 811 3.89 - 1984-85 384 0.115 116 934 12.44 - 1985-86 594 0.198 131 819 16.05 - 1986-87 629 0.283 299 1077 27.74 - 1987-88 685 0.306 434 1231 35.24 - 1988-89 725 0.317 471 1292 36.47 - 1989-90 759 0.335 624 1924 32.45 - 1990-91 834 0.402 867 1718 50.47 - 1991-92 1163 0.582 1183 1994 59.31 - 1992-93 1537 0.804 1445 2383 60.64 28.74 1993-94 1839 0.827 1556 2534 61.40 26.79 1994-95 2182 1.200 2228 3473 64.17 17.7 1995-96 2353 1.29 2547 3882 65.61 28.6 1996-97 2503 1.3 3001 4418 67.93 31.81 1997-98 2726 1.5 3782 5161 73.28 31.97 1998-99 2963 1.5 4020 5313 75.67 34.82 1999-00 3200 1.6 4352 5752 75.66 35.23 2000-01 3480 1.8 4860 6467 75.15 46.53 2001-02 3618 1.8 4584 5986 76.57 42.38 2002-03 3760 2.0 4912 6548 75.01 52.51 2003-04 3957 2.0 5686 7603 74.79 55.59 2004-05 4107 2.0 6418 8655 74.15 64.67 2005-06 4220 2.2 7901 10526 75.06 65.57 2006-07 4490 2.4 9211 12178 75.64 69.59 2007-08 4743 2.8 10700 14111 75.83 70.00 2008-09 4925 3.5 12347.77 15565.19 79.33 - 2009-10 5063 3.6 12496.72 16204.65 77.12 - 2010-11 5150 3.6 17914.46 22924.38 78.15 - 2011-12 5400 4.0 19089.69 24287.66 78.60 - 2012-13 5600 4.4 21515.73 27018.26 79.63 - 2013-14 5700 4.5 24490.00 30174.96 81.16 -

Source: EPB, 2014; and BGMEA, 2014.

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4.4.2 The workforce

Sources of labour: Researchers found that most of RMG workers are from rural area.

Ali, Begum, Salehin, & Farid (2008) found that the majority of the RMG workers migrate from

rural area to different cities to get employment in the RMG organisations. Sikder, Sarker and

Sadeka (2014) also found a dominance of migrant workers. They note: “about 46 per cent of the

female workers originated from rural areas as their first working place” (p. 174.). BGMEA and

some researchers (e.g., Ahamed, 2014; Begum & Ahamed 1999; Mahmud & Kabeer, 2003;

Khatun et al., 2007) find that female workers account for 80 to 90 per cent of the total garment

employment. However, Paul-Majumder, (2007) claim that about 60 per cent of the total labour

forces employed in the garment industry are female. Over the last few years, the ratio of male

and female workers employed in the garment industry has changed significantly, mainly due to

the fact that garment manufacturing in Bangladesh is increasingly moving towards knitwear

manufacturing in which more and more male workers are employed. The male-female ratio of

workers employed in the factories manufacturing knitwear was 65:35, and 32:68 in the factories

manufacturing woven wear.

Sex: As noted, there is a gender imbalance in the RMG industry in Bangladesh. Eighty per cent

of the workers employed in the RMG industry are women (Mahmud & Kabeer, 2003; Khatun et

al., 2007). Sikder et al. (2014) found that the ratio of women employees is: “85 percent workers

are women” (p. 173). Paul-Majumder and Begum (2000) argue that the employers cause this

imbalance because of their preference for young women with their nimble fingers and low wage

rates. In general, most employees at lower levels, such as Helper or Worker are female.

However, the mid or top-levels of management are male dominating. Ahamed (2014) claims

that women are discriminated against and find it difficult to get a “higher-paid white collar and

management positions” (p. 7). He also found that women “are generally considered only for

helpers, mechanists, finishing helpers and sewing helpers”.

Age: In the RMG industry most of the workers are young, as garment work requires physical

energy (Khatun et al., 2007). Khatun et al., (2007) also found that about 51 per cent of female

workers in the RMG industry are between the ages of 20 and 25. Sikder et al. (2014) studied

female RMG workers and reported that “average age of the female worker is 23.68 years” (p.

174). Their study also revealed that “92.5 percent of the female workers are aged less than 30”.

Researchers reveal two basic reasons behind the dominance of young workers (80%), especially

young women workers (Mahmud & Kabeer, 2003; Khatun et al., 2007). First, female workers

cannot work for a long time in this industry because of occupational hazards. Second,

employers prefer not to recruit aged and experienced female workers because of the need to pay

relatively higher wage rates.

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4.4.3 HR practices

The RMG industry is plagued with an endless list of pitfalls ranging from poor wage rates to

unsafe working conditions. HR policies and practices are relatively poor and sub-standard in

many RMG organisations. Against the malpractices, there was a wave of demonstration across

the RMG industry in the last week of May, 2006, with severe damages done to at least 300

RMG factories and, consequently, a loss of around BDT four billion (Morshed, 2007).

Wages

Average wages rates in the RMG industry in Bangladesh are low (Rahman & Shaikh, 2001),

especially for females (Zohir 2001; Kabeer & Mahmud 2004). The Bangladesh government

declared the minimum wages rates for the RMG workers in October, 2010 (BGMEA, 2015; see

also section 4.4.4 below), but many workers in the industry do not receive the legal minimum.

Sarker (1997), for example, claimed that more than 70 per cent of the RMG workers are

deprived of a minimum wage. Wages paid in the Bangladeshi RMG industry are also low

compared to wages paid in other countries, which provides Bangladesh with a competitive

advantage. Ahmed and Peerlings (2007), for example, show that, in 2003, the wage per RMG

workers in Bangladesh was 157 per cent lower than the wage per RMG worker in China.

Comparing Bangladesh’s 1997 data with those for India in 1998, they also show that the wage

per RMG worker in Bangladesh was 20-30 per cent lower than the wage per RMG worker in

India (See Table 4.9).

Table 4.9: Wages and productivity in the apparel industries of selected countries Country Year Wages per employee

(US$) Value added per employees

(US$) Bangladesh 2003

(1997) 2,500 (900)

700 400

China 2003 (2001)

7,000 (5000)

1,800 (1,600)

Hong Kong SAR 1999 27,600 14,800 India 1998 2,600 700 Indonesia 1999 2,500 600 Sri Lanka 1998 2,500 700 Source: Ahmed & Peerlings, 2007

Haider (2007) found low labour costs gave Bangladesh a comparative advantage in

manufacturing garment wear compared to India and China, the two main competitors of

Bangladesh. However, he argued that such advantage cannot be sustained forever nor can it be

expected from a humanitarian perspective. Haider (2007) noted that the average labour cost was

$0.16 per hour in 1993 in the RMG industry in Bangladesh, while the corresponding figures for

India and China were $0.27 and $0.25 respectively. He also showed that the average labour

costs were $0.39, $0.38 and $0.68 for Bangladesh, India and China respectively in 2002 (See

Table 4.10). Similar findings were reported in Habib (2009).

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Habib, (2009) found that labour cost in the RMG industry in Bangladesh is one of the

lowest in the world, though he agreed the Bangladeshi RMG industry has been enjoying great

advantages in terms of lower wages in manufacturing garments . He also showed that the

average hourly wages in the RMG industry in Bangladesh is only US$0.23 (See Table 4.11).

India and China are the two major competitors of Bangladesh. The Bangladeshi RMG workers

are deprived most in terms of wages comparing to Indian and Chinese RMG workers, whose

wages are US$0.56 and US$0.40 respectively. Even the Bangladeshi RMG workers’ wages are

lower than that of the RMG workers in other South Asian countries, such as Sri Lanka and

Pakistan.

Table 4.10: Labour costs in the apparel industries in Bangladesh, India and China Year Bangladesh (in US$) India (in US$) China(in US$) 1993 $0.16 $0.27 $0.25 2002 $0.39 $0.38 $0.68

Source: Haider, 2007

Table 4.11: Average hourly wages (including fringe benefits) in the RMG Industry

Country Hourly Wage (US$) Mexico 2.40 Philippines 0.78 India 0.56 Pakistan 0.49 Vietnam 0.40 China 0.40 Sri Lanka 0.39 Bangladesh 0.23

Source: Habib (2009).

Labour organisations, like International Labour Organisation (ILO), social welfare

organisations and humanitarian organisations, like Human Rights Watch, have been raising their

voices against such poor wages, which are considered labour exploitation (Haider, 2007). Zohir

(2001) argued that work-related illnesses, like physical weaknesses and headaches, of the RMG

workers occurs because of the consumption of poor quality and low quantity of food because

employees cannot afford to consume a proper quality and quantity of food because of their low

wages. A number of commentators have also argued that the low wages leads to high levels of

labour turnover (see section 4.5.1), a contention that will be investigated in the current project,

the findings of which are reported in section 6.3.2.1. However, some managers of different

RMG organisations claimed that the wages rates are not lower, as the government has declared

the new minimum wages for the RMG workers in October, 2010 (BGMEA, 2015).

Wage payment period

There is a complaint that RMG managers intentionally delay the payment of wages to hold back

workers from voluntary turnover. For instance, Paul-Majumder (2003) reports that “About 64

80

per cent of the factories” delay to pay the wages and violate the Factory Act regarding wage

payment period. She also commented that: “Most factories kept one month payment of overtime

earnings as security money to deter the workers from leaving the factory without notice. In 60

per cent of the factories, overtime earnings were paid during the fourth week of the following

month. The remaining 40 per cent of the factories had no fixed time of paying overtime wages”

(p. 115). Mahmud & Kabeer (2003) wrote that: “delayed payments of wages” is one of the

significant problems in the RMG industry in Bangladesh (p. 22). Irregular payment of wages is

a very common practice in the RMG factories in Bangladesh (Haider, 2007). Shamsuzzoha and

Shumon (2007, p. 66-67), for example, revealed that on-time payment of wages is the second

most significant factor explaining labour turnover rates. They noted that 12 per cent of

respondents in their study consider “irregular payment” as the cause of their turnover decision.

Similarly, Hossain, Sarker, and Afroze (2012) noted: “The most common reasons of labour

unrest in the garment sector are . . . unpaid wage” (p. 209). Ahmed (2013) contended that ‘late

or irregular payment is common” (p. 47) in the RMG industry. Sikder et al. (2014) examined

the socio-economic conditions of female RMG workers in Bangladesh. Work hours was one of

the eight factors they considered based on their primary survey. The also also evinced that,

many RMG organisations pay monthly wages after the expiry of seventh day: “The RMG

workers are faced with the problems of getting salary in time” (p. 178). However, they did not

make a link between the wage payment period and turnover rates. The consequences of wage

payment period for voluntary labour turnover will also be discussed in section 6.3.2.1.

Wage increase

Despite government proclamations of annual increments of wages, many RMG organisations do

not act in accordance with the regulation. The regulation orders an increase of the basic wage

rates by 5 per cent every year. A significant number of RMG firms do not increase workers’

wages even in every three years. Shamsuzzoha and Shumon (2007, p. 67), for example, found

that lack of incremental rises of wages is one of the factors relating to voluntary labour turnover.

The effects of incremental wage rises for voluntary turnover rates will be further discussed in

section 6.3.2.2.

Work hours

Many RMG workers are forced to work 9 to 11 hours in every working day, with only a half-

hour to one-hour lunch break. Sarker (1997) found that, in the RMG industry, 71 per cent of the

labour force work for 11 hours or more each working day. Sarker (1997) claimed that such long

working hours is one of the factors for high labour turnover. Moreover, Zohir (2001) claimed

that long working hours adversely effect RMG workers’ health. She found that working hours

for the RMG workers were nearly 12 hours each day in 1990. She claimed these long working

hours remained unchanged in 1997 with only half-hour to one hour lunch break. Zohir (2001)

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further claimed that the 12 hours work in each working day with a short lunch break is

exhausting for workers. Mahmud & Kabeer (2003, p. 22) evinced that “long work hour” is a

significant problem. Paul-Majumder (2003) observed that on average, a garment worker has to

work about 12 hours a day. She claimed that long working hours is a serious problem for RMG

workers as it causes a number of socio-demographic problems for them. She claimed that 43 per

cent of the RMG workers reported that long working hours affected their health most. She also

claimed that the workers reported that, due to long working hours, they have very little

opportunity for rest and recreation. Such conditions impair workers’ health largely, and a

consequence is job turnover. Paul-Majumder (2003) found that only about 12 per cent of female

RMG workers work a normal eight-hour day, nearly 52 per cent female workers work 12 hours

per day, and 36 per cent of female workers work 16 hours each working day. In addition,

Kabeer and Mahmud (2004) found that, due to the long working hours, it is not possible for the

workers to continue to work in the RMG firms for an extended period. They found that, on

average, women workers work five years in the garment firms. Recently, Ahamed (2014)

argued that long working hours (i.e., 9 to 12 hour work days) was a important factor explaining

abour turnover. He alleges “Garment workers often change their jobs because of . . . excessive

working hours” (p. 7). Efficacy of work hour over turnover rates will also be investigated

specifically in section 6.3.2.3.

Overtime work

Many RMG workers are forced, particularly in shipment period, to do overtime work without

full compensation. Government regulations state that payment must be twice the rate of

ordinary wages for overtime work. Garment workers are inhumanly deprived from getting

overtime work allowances (Sarker, 1997). Sarker (1997) found that overtime work hours are

intentionally underestimated by the management of RMG firms to evade the workers’ real

claims. Sarker (1997) claims that the underestimation of overtime work allowances is one of the

reasons for high labour turnover. Morshed (2007) found that “Overtime is a source of

dissatisfaction for workers, but not always for the same reasons. Overtime is forced, not

optional; . . . workers are bound to work extra hours or lose their jobs” (p. 92). Chowdhury and

Ullah 2010) found a relationship between excessive and forced overtime work and workers’

dissatisfaction. They note: “About 40 per cent of the workers work more than two hours of

overtime work a day, while 15.91 per cent work more than three hours of overtime a day . . .

they cannot provide much time for their family or children. As a result, they become unhappy in

their family lives” (p. 59). Ahamed (2013, p. 87) also found that forced overtime work is a

major problem in the RMG industry. Section 6.3.2.4 will further discuss the relationship

between overtime work policy and rates of turnover.

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Weekly off day

Sometimes, especially during shipment periods, workers are forced to work seven days a week. Paul-Majumder (2003) claimed that the granting of leave is minimal in the RMG industry, as

many workers have to work even on weekly holidays. The Factory Act (1965) provides for a

weekly holidays and states that no worker is to work more than 10 days consecutively without a

holiday. Paul-Majumder (2003) found that about 38 per cent of RMG workers work all 30 days

in each month, only 7 per cent of workers enjoy a weekly holiday, and the rest, 55 per cent

,enjoy either one or two weekly holidays a month (See Table 4.12).

Table 4.12: Weekly holidays enjoyed by RMG workers Weekly off days (each month) No. of workers enjoying such (%) No Holidays 38 One or two days 55 All Holidays 7

Source: Paul-Majumder (2003)

Ahmed (2013) asserted that “There is no weekly off day” (p. 47) in the RMG industry.

Therefore, RMG workers have no opportunity to regain the strength and stamina they lose

during work. The consequences of lack of a day-off in every week will be further discussed in

section 6.3.2.5.

Training

Training is an effective tool which can enhance employees’ skills. Organisation-provided

training programs are very important, especially for newly recruited workers, to accustom them

to machine operations and production techniques. However, many RMG firms do not offer

training, even for the newly recruited workers. Shamsuzzoha and Shumon (2007), for example,

argue that the lack of training increases the rates of turnover in Bangladesh: “A lack of proper

training . . . is also a major cause for voluntary turnover”. Ahamed (2014) emphasised that

training not only for minimised turnover rates but also enhances productivity and workers’

efficiency. Section 6.3.2.6 will explore the relationship between organisations provided training

programs and voluntary turnover rates.

Career development

Generally career development opportunities in the RMG industry are limited and biased.

Shamsuzzoha and Shumon (2007, p. 67), for instance, argue that the “delay of promotion” is

one factor relating to voluntary turnover. Mukul et al (2013, p. 30) evinced that 44 per cent

workers are promoted to a higher positions based on performance, while 20 per cent of workers’

career development is biased. The consequences of career development opportunities for

voluntary labour turnover will also be discussed in section 6.3.2.6.

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Annual leave

A significant numbers of RMG workers are deprived of paid annual leave. Paul-Majumder

(2003) claims that the provision of paid leave is minimal in the RMG industry. Paul-Majumder

(2003) found that for about 67 per cent of cases, workers are not granted any leave. The impact

of paid annual leave on labour turnover rates will be discussed further in section 6.3.2.7.

Maternity Leave

The ILO Convention No. 183 provides for fourteen weeks of maternity benefit to female

workers and The Bangladesh Labour Act (2006) (Section 47 (1)) states

Any pregnant woman entitled to maternity benefit under this act may, on any day, give

notice either orally or in writing to her employer that she expects to be confined within

eight weeks next following and may therein nominate a person for purposes of receiving

payment of maternity benefit in case of her death.

However, many garment organisations do not provide maternity benefits at all to their female

workers. Morshed (2007), for example, found that “There are very few garment factories that

properly implement the [maternity benefit] law; among them some factories provide only basic

salary, some allow partial or full maternity leave but without pay. Most garment factories

dismiss pregnant women workers” (p. 107). Kaikobad and Bhuiyan (2012) and Ullah, Sunny,

and Rahman (2013) claim that not all RMG organisations act in accordance with government

regulations relating to paid maternity leave. Majumder (2009, reported in Ullah et al, 2013)

claims that: “The factory owners dismiss a woman worker if they discover that she [female

worker] is pregnant or if she applies for maternity leave” (p. 5). Sikder et al (2014, p. 178)

found that 40 per cent of female workers are allowed twelve weeks or even less as paid

maternity leave instead sixteen weeks. Section 6.3.2.7 will discuss the relationship between paid

maternity leave and rates of turnover.

Sick leave

Despite frequently suffering from occupational diseases, such as headache, malnutrition,

asthma, eye strain, fainting, chest pain and musculoskeletal pain, many RMG workers are not

allowed paid sick leave. Paul-Majumder (2003) reported that there is no provision for medical

leave in the RMG industry, although the Factory Act (1965) provides for medical leave. Impacts

of paid sick leave provisions on turnover rates will be discussed more in section 6.3.2.8.

Other financial benefits

While many RMG firms are reluctant to pay minimum wages and double wages rates for

overtime work, they do not even consider other financial benefits. Usually there are no fringe

benefits, such as superannuation and festival bonuses for RMG workers (Sarker, 1997). Sarker

(1997) found that in the limited number of RMG firms that allow two types of bonuses,

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including festival bonus, the rate of labour turnover is relatively low. Likewise, Paul-Majumder

& Begum (2006) found that the RMG workers are deprived of fringe benefits. They allege “Due

to absence of formal appointment, the workers at the export-oriented garment industry are not

entitled to any fringe benefits like . . . provident fund facilities’ (p. 48). Ahmed (2013) also

affirmed that: “There is absence of gratuity or provident fund for the garment workers” (p. 47).

Section 6.3.2.8 will discuss the link between financial benefits paid by firms and rates of labour

turnover in more detail.

Occupational health & safety

The overall physical work environment at the RMG industry is poor and unsatisfactory. To

illustrate the case, Zohir (2001) argued that the working conditions of the RMG firms are

significant factors for the poor health the workers. He noted the BIDS 1990 survey data, which

showed that nearly 5 per cent of women workers have fainted because of high temperatures at

their work places in the month of June-July every year. It means most of the RMG firms in

Bangladesh do not have adequate arrangements to control hot weather during summer. Zohir

(2001) found that work-related illness, like physical weakness and headaches, is very common

among RMG workers, however they were in good health before joining the garment industry.

He also found that the incidence of work-related illness is much lower among male workers.

Also male workers in the RMG firms located in the Dhaka EPZ (DEPZ), compared to male

RMG workers outside DEPZ areas fare better.

This result shows that organisational factors, such as working conditions, impact workers’

health and contributes to causes of labour turnover. Zohir (2001) further found that many RMG

firms lack adequate ventilation and light. He claims that the consequences of lack of proper

ventilation and light are work related illness, such as physical weakness and headache, because

no fresh air circulates. Mahmud and Kabeer (2003, p. 22) argue that “routine violation of health

and safety standards” is a major problem in the RMG industry.

Haider (2007) points out that many brand name international buyers demand compliance with

their “Code of Conduct” before placing any garment import order. He also notes that the RMG

factories in Bangladesh have been facing immense pressure from international buyers for

compliance with their codes of conduct. Haider (2007) claims that large buyers/importers are

willing to continue and expand their businesses with the Bangladeshi RMG factories if

compliance standards can be met, but the working environments in the RMG factories are still

not satisfactory. Rented factory premises, narrow staircases, low roofs, closed environments,

absence of lunch rooms, unavailability of drinking water, lacks of separate toilets or common

rooms for female workers are the main working environmental concerns in the RMG industry in

Bangladesh. He suggests that RMG factories need to improve the above-mentioned bad

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conditions in order to remain competitive in the global apparel market. Ahamed (2013)

affirmed:

Violation of health and safety regulations is frequent in the RMG sector. As a result,

workers suffer from constant fatigue, headaches, anaemia, fever, chest, stomach, eye and

ear pain, coughs and colds, diarrhoea, dysentery, urinary tract infections and reproductive

health problems (p. 47).

Reinecke and Donaghey (2015, p.724) also worry about the OHS, particularly factory

fires and building collapses in the RMG industry in Bangladesh. They mentioned ‘From the

mid-2000s onwards, and following a series of deadly factory fires and building collapses,

including the Rana Plaza factory collapse in 2013’ took place in the industry. Feldman (2013)

investigated about poor OHS in the RMG industry in Bangladesh and found ‘Building and fire

safety were often lacking, with buildings having locked exits and extensions upwards being

built on top of existing building’.

Section 6.3.3.1 also finds a co-relation between OH&S and turnover rates.

Fire Safety

Although the RMG industry is fire prone because of the use of highly flammable raw materials,

many managers are reluctant to minimise the fire threat due to investment costs. Paul-Majumder

(2003), for example, claims that RMG factories are prone to fire accidents because all the raw

materials, such as cotton, cloth and thread, used in the industry are highly inflammable. She also

claims that though fire is one of the greatest hazards for workers employed in the RMG

industry, safety equipment, such as fire extinguisher and precautions against fire, are absent in

most workplaces of this industry.

Paul-Majumder (2003) also claims that most RMG factories have poor electrical wiring and

consume more electrical power than their installed capacity. She reported that voltage

fluctuation and electrical surges through poor wiring often result in short circuits causing fatal

fires in RMG factories. She found that most fire accidents that took places in RMG factories

were either caused by improper wiring or by defective machinery. Similarly, Akhter,

Salahuddin, Iqbal, Malek & Jahan, (2010, p. 69) claim that frequent fire accidents take place in

the RMG industry. They allege that in the period to 2000, “more than a hundred fire” accidents

have occurred in the industry, which killed over 5,000 workers. For example, in one fire

accident in 2006, 91 RMG workers were killed and over 400 workers were injured.

Akhter et al., (2010) reveal that the ignorance of fire risk by owner-managers, unplanned work

environments and faulty electrical wiring are the major causes of fire accidents. They also report

that absence of a fire exit, locked exits during work hour and narrow staircases increase

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casualties due to fire accidents. According to the Fire Service and Civil Defence Directorate

(FSCDD) Ordinance, “no building or place shall be used as a warehouse or as a workshop

unless the owner or occupier thereof shall have previously obtained a license for such use from

FSCDD”. According to the FSCDD, 50 per cent of the garment factories located in Dhaka city

do not have a licence from the FSCDD, which means that 50 per cent of garment factories do

not meet FSCDD’s requirements to be used as a warehouse. Therefore, the fire risk is very high

in these garment factories. Section 6.3.3.2 will further discuss the relationship between fire

safety and rates of turnover.

4.4.4 Industrial relations and labour regulations

In the RMG industry of Bangladesh, enforcement of labour regulation is very weak.

Government rules and regulations on every aspect of industrial relation, such as minimum

wages, wage payment period, daily work hours, overtime work rates, paid maternity leave, paid

annual leave, and OH&S, are very clear and well specified. But many RMG organisations are

reluctant to observe the regulations, which will be further discussed in section 6.3.1.4.

The Bangladesh Labour Act (2006) specifies:

The minimum rates of wages declared under section 140 or published under section 145

shall be binding on all employers concerned and every worker shall be entitled to be paid

wages at a rate which shall, in no case, be less than the rate of wages so declared or

published. (Section 148).

In practice, many RMG organisations do not follow the minimum wages declared by the

government. Paul-Majumder (2003), for example, claims that a significant number of workers

are paid below the minimum wage. She argues: ‘It was observed that a large number of female

workers received wages below the minimum wage rate fixed by the Government of Bangladesh’

(p. 115). Khan et al., (2009) reported that the Bangladesh Government had failed to address the

minimum wage issue prior to the labour unrest in 2006. BGMEA (2015) reports that, the

Bangladesh government declared the minimum wages rates for the RMG workers in October,

2010. Twelve years before the unrest, in 1994, the minimum wage for the RMG workers had

been set at BDT 9301 by the Government (Khan et al, 2009). It means the government did not

adjust the minimum wage against inflation or against gradual increases of market prices for the

RMG workers over the years between 1994 and May, 2006. Following the labour unrest in the

RMG industry, the Government formed a wage board on 31 May 2006 and asked the board for

its recommendation for a new pay scale for the RMG workers within 90 days. The minimum

wage was proposed for BDT 3,000 by the board. The RMG firms’ owners accused the

government of having failed to regularly adjust minimum wages and criticised the proposed 3 The exchange rate was approximately BDT 59 to a US dollar in 1994.

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sudden, sharp hike in wages to BDT 3,000. The owners also expressed their concerns that, due

to sudden increase in wages, they would not be able to absorb the extra costs of production

(Khan et al; 2009).

In practice, some the RMG firms do not follow the minimum wage rule set by the

Government. These firms have been paying a lesser amount to newly employed, unskilled RMG

workers. However, other firms have complied with the Government’s regulation on minimum

wage. Such discrimination in wages influences unskilled and skilled workers to want to be

employed by RMG firms whose wages structures are higher.

The Bangladesh Labour Act (2006) defines Precaution in case of fire as:

In every establishment wherein more than ten workers are ordinarily employed in any place

above the ground floor, or explosive or highly inflammable materials are used or stored,

effective measures shall be taken to ensure that all the workers are familiar with the means

of escape in case of fire and have been adequately trained in the routine to be followed in

such case (Section 62).

Paul-Majumder (2003) argues that many fire deaths and injuries occur primarily because

there are no fire alarms, evacuation training programs and fire exits in the RMG factories. She

reports that RMG employers admit they have not trained workers to escape during an

emergency. She claimed this is in violation of one of the provisions of the Factory Act (1965),

which states: “In every factory there should be provided effective and clearly audible means of

giving warning in case of fire to every person employed therein”. She found that only 12 RMG

factories out of 39 have evacuation fire warning signals.

The Bangladesh Labour Act (2006) defines ventilation and temperature as:

(1) Effective and suitable provisions shall be made in every establishment for securing and

maintaining in every work-room adequate ventilation by the circulation of fresh air; (2)

such temperature as will secure to workers therein reasonable conditions of comfort and

prevent injury to health. (Section 52, p. 40).

Trade Unions: In Bangladesh, there are signs of the existence of trade unions or employee

unions. For instance, there might be an office of trade union or employee union within

organisation premises, a sign saying trade union or employee union, or posters or wall writings

within organisational premises. Many RMG organisations do not allow trade unions or

employee unions. According to Sustainable Development Networking Program (SDNP) (2003),

employers do not allow garment employees to join trade unions and employees are not allowed

to form a trade union despite the fact that workers have a right to form or join trade unions

according to the labour law and ILO conventions. Mahmud & Kabeer (2003, p. 25) believe that

the “low level of unionization” is a significant characteristics of the RMG industry. Hossain et

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al. (2012) claim that “Only 25 unions are active among 200 unions registered in the garment

sector” (p. 207). Ahamed (2013) argues that stopping workers from joining a trade union makes

them destructive and increases the likelihood of labour unrest.

4.5 Problems in the RMG industry Despite the significant growth and development in the RMG industry, it faces significant

problems for managers and governments in addition to those already discussed above (i.e., low

wages, long work hours, and irregular payment of wages). This section will briefly survey five

such problems: low productivity, insufficient infrastructure, political instability, and high labour

turnover.

4.5.1 Low productivity and inefficiency

The productivity in the RMG industry of Bangladesh is low, far behind than that of the US,

although it is close to that in Sri Lanka, which is one of the prominent South Asian competitors.

Table 4.13 shows the comparison of productivity. Hossan et al. (2012) argue that “the

productivity of Bangladeshi workers is one-fourth of that of Chinese” (p. 207).

Table 4.13: Comparison of productivity in the RMG sector in Bangladesh with other countries

Country Person minutes per basic operation United States 14.00 Hong Kong 19.75 South Korea 20.75 Sri Lanka 24.00

Bangladesh 25.00 Source: Khan et al., (2009).

In addition to low productivity, workers’ efficiency is low in the RMG industry. A

study shows that the performance of the Bangladesh RMG export is lower than Vietnam’s. The

RMG industry of Bangladesh earns US$21.5 billion with an active workforce of 4.0 million,

while the RMG industry of Vietnam earns US$17 billion with only 1.3 million workers

(BGMEA, 2015). Workers’ inefficiency is the main reason for such a poor performance by the

Bangladeshi RMG industry. Table 4.14 shows the comparison of efficiency in six Asian

countries including Bangladesh.

Table 4.14: A comparison of RMG industry efficiency in six Asian countries Country RMG workers’ efficiency (%)

Cambodia 68 Bangladesh 77 Pakistan 88 Vietnam 90 India 92 China 100

Source: BGMEA, 2015.

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4.5.2 Insufficient infrastructure

Congested highways, inefficient and congested seaports, poor train container capacity, shortages

and unreliable supplies of power are the notable problems facing the RMG industry. Highways,

particularly the one from Dhaka to Chittagong, are often congested as capacity planning falls

behind demand. Travel times have been increasing from Dhaka to Chittagong, sometimes it

takes up to twenty hours, whereas the distance is only 252 km. Rashid (2008) reported that:

Transport is a big problem in Bangladesh than in some comparator countries. Despite a

relatively high-density road network in Bangladesh, poor road conditions and the lack of

transportation seriously impair economic activity. This situation is the result of poor road

and bridge construction, lack of road and waterway maintenance, and failure to integrate

the different modes of transportation, making long-haul transport very difficult. (p. 266).

Due to a lack of a deep-sea harbour, lead time for sea freight is increased by about ten

days. Inefficient processing (e.g., manual processing), limited crane capacity, and employee

strikes contribute to reduce the productivity of the Chittagong Port. Rashid (2008) reports:

The Chittagong port handles about 85 percent of the country’s imports and exports, but it is

one of the most inefficient and costly ports in Asia. The port is plagued with labour

problems, poor management, and lack of equipment. The cargo yards are severely

congested, and operations at the container terminal are very inefficient. Ship turnaround

time is much higher compared with more efficient ports, and the port is seriously

congested. These problems have hampered export growth and investment. The average wait

for imports to clear ports and customs in Bangladesh is nearly 12 days, and the average

wait is nearly 9 days for exports. (p. 266.)

Train connection, especially between Dhaka to Chittagong, only offers 120 containers per

day, although logistics experts estimate a tenfold capacity is needed. Rahman and Anwar (2007)

claimed that poor infrastructure is a major problem for the industry. They affirm poor and

inefficient infrastructures such as inadequate energy supply, poor port facilities such as port

congestion are the common challenges facing by the RMG sector in Bangladesh. Rahman and

Anwar (2007) showed that huge financial losses are incurred by the RMG industry because of

inefficiency and congestion in the Chittagong seaport. Berg, Henric, Kempf, and Tochtermann.,

(2011, p. 10) also claim that poor infrastructure is one of five significant obstacles for the RMG

industry. They contend ‘Utilities, road network, and port facilities are seen as major limiting

factors’.

4.5.3 Political instability

Political instability is another factor that adversely affects the RMG industry. It is manifested

mainly in the form of strikes and blockades. The RMG organisations are hard-hit because goods

cannot be transported to the Chittagong Port on time and because port activities have stopped.

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Moreover, RMG organisations are not allowed to function and workers cannot go to their place

of work. Because of political instability, some foreign buyers and customers are decreasing the

numbers of work orders and some others are placing work orders in alternative countries such as

in India, Vietnam and Cambodia (The Daily Prothom Alo, (2015), January, 24).

4.5.4 High labour turnover

Despite immense potential for further growth, high labour turnover has been identified as one of

the major problems of the RMG industry by some scholars. Shamsuzzoha and Shumon (2007),

for example, argue that high labour turnover is the most significant problem for the industry.

Recently Mukulet al (2013) also found voluntary turnover as a major problem. A few other

researchers, such as Habib (2009); Hossain (2010); Kaikobad and Bhuiyan (2012); and Hossan,

et al. (2012) also claim it as a significant problem for the industry. However, none of the articles

focus on the organisational turnover rates or the industry average, or compare the turnover rates

between different work occupations. Hence, the significance of the present study is to fill this

research gap. The basic distinguishing factors between the current research project and existing

literature is: the current research project focuses on the organisational turnover rates, whilst

most of the existing literature only described turnover rate as “high”. Although some other

researcher, such as Sarker (1997); Khundker (2002); Paul-Majumder (2003); Mahmud &

Kabeer (2003); Rahman et al. (2008); Moazzem & Raz (2014); and Ahamed (2014) allege that

the industry faces “high turnover”, they do not further discuss the issues; its causes or

consequences. Nor do they indicate what they meant by “high turnover”.

High labour turnover is a problem for employers, government, and workers. High labour

turnover is a problem for employers as it severely affects business performance. Shamsuzzoha

& Shumon (2007); Hossain et al. (2012); and Mukul et al (2013, p. 32) argue that high labour

turnover is a problem because of its “disruption in production” or production losses.

High labour turnover is a problem for the government; production losses in the industry

because of voluntary turnover ultimately affect the Government. As shown in Table 4.8, the

industry contributes 81.16 per cent of the country’s exports. Therefore, labour turnover may

severely affect the country’s export earnings.

High turnover may create some problems for workers as well. High turnover rates

decrease labour productivity and increases unemployment rates. Hossain (2010), for example

shows that voluntary turnover may cause workers to be unemployed for more than twenty days,

with the significant financial impacts that causes them.

While some researchers and academics found that the RMG industry has been suffering

from voluntary turnover, only few show the causes of labour turnover. Khundker (2002) is one

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of the few who has identified some part of HR practices, such as low wages, long working

hours, arrears in payments, lack of formal contracts or lack of appointment letters, and lack of

maternity leave, as the main reasons behind the labour turnover in the readymade the RMG

industry in Bangladesh. Comparing the wages of RMG factory workers with similar positions in

the textile factory and other sectors on the basis of wage data provided by Bangladesh Bureau of

Statistics (BBS, 1999), Khundker (2002) found that the average monthly wage of skilled RMG

factory workers is 1.4 to 2 times lower than that of wages in the textile factories. Paul-

Majumder (2003) revealed that excessive work load and poor health and safety are the two

prime reasons for the high turnover rates: “a female worker cannot continue her work in the

garment industry for a long time due to disability and fatigue arising from occupational hazards

and workplace stress” (p. 129). Shamsuzzoha and Shumon (2007, p. 67) revealed that two most

important causes of turnover are: “less salary and irregular payment”. They analysed fourteen

individual factors and found that 33 per cent of respondents mentioned “less salary” and 12 per

cent respondents mentioned “irregular payment” are responsible for their turnover.

Rahman et al (2008) hold the view that the RMG workers are treated as machines, not

human being and workers are forced to produce products and maximise profits for the

employers. They claimed such treatment accelerates turnover rates. Likewise, Hossain (2010)

analysed the factors causing voluntary turnover and found wage rates, irregular payment of

wages, long working hours, lack of weekly day off and overtime work rate are the most

influential factors. Mukul et al. (2013, p. 32) professed the view that poor wages rates,

excessive work-load and harassments by line managers are the prime causes for the high

turnover rates. Ahamed (2014) notes that “Standard working conditions, better wages, minimum

working hours, incentives and respect for equality can . . . lower turnover of staff” (p. 9). The

high labour turnover within the RMG sector is because workers seek the best remuneration

package for themselves (Moazzem & Raz, 2014).

Another distinguishing factor between the current research project and existing literature

is: the current research project studies the relationship between voluntary turnover rates and

“multiple HR practices”, whilst all existing literature focuses on individual or parts of HR

practices. Chapter of will examine the causes of high labour turnover in detail.

4.6 Summary of the chapter The RMG industry makes a major contribution to the Bangladeshi nation through export

earnings, employment generation and GDP. In particular, it is very impressive that the industry

has created employment for more than 4.5 million employees, more than eighty per cent of them

are women. This chapter has shown that while the RMG industry’s growth rates have continued,

there are some significant problems in the industry. Voluntary labour turnover problem is an

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important one. Section 4.5.4 has shown that the industry has been facing high labour turnover

problem from mid-1990s (Saker, 1997) to very recent period (Ahamed, 2014). However, there

is no indication of organisational turnover rates or even industry averages in the existing

literature of Bangladeshi RMG industry.

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CHAPTER 5: EIGHT CASE STUDIES

5.1 Introduction: As discussed in Chapter 3, the aim of this chapter is to summarise the key structural and internal

characteristics of the eight case organisations; the structural factors are size, ownership,

geographical location, age of the organisation, position in supply chain; the internal factors are

HR policies and practices, and OH&S. This chapter analysis each of the eight case analyses

individually. Chapter 6 present a cross-case analysis.

5.2 Brown & Bronze Group: Case study one The Brown & Bronze Group, is a 100 per cent export-oriented RMG organisation. The Group is

an example of a large foreign owned organization with low labour turnover. The following

account will make a connection between low labour turnover and Brown & Bronze Group’s HR

policies and practices. Table 5.1 provides an overview of the company.

A manager asserts that the comparatively better HR practices and enforcement of government

regulations contribute to the organisation’s relatively (to the rest of the industry) lower rates of

labour turnover. He assesses:

The main reason of low rates of labour turnover in our organization is relatively good

human resource policies and its proper implementation. Our higher wages rates compared

with other RMG firms, on-time payment of both wages and overtime work payments,

standard work hours, paid annual leave, paid maternity leave and work place safety and

security play the main role to retain the skilled workers. Moreover, large size of the

organization, strong financial base and good organisational reputation help to retain the

workers. (Interview, Manager 1).

The data on which the case draws were gathered from: interviews with four managers and

two workers, organisational documents (especially its 2012 Annual Report and its web site):

and observations by the researcher. On some topics, data came from one source only; for

example, information on products and customers was collected from either manager interviews

or organisational documents only. On other topics, data and information were gathered from

more than one source, allowing greater reliability through triangulation. For instance, data on

the causes of labour turnover or working hours were gathered from both manager and worker

interviews, with their arguments sometimes supporting each other and sometimes contradictory.

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Table 5.1: Company overview, production process and product markets at a glance

Location: Brown & Bronze Group is located in Export Processing Zone (EPZ) at Savar in Dhaka.

Years of inception: in 1984 Size of the organization:

Large organization in terms of number of employees and numbers of machines.

Number of Employees: 9090 employees

Number of Machines The Group’s woven division has 23 sewing lines with over 6770 employees and composite division has 22 sewing line with over 2000 employees.

Ownership: Foreign-owned private ltd. company with head office in the U.K. Voluntary turnover rates 11% rates of labour turnover overall.

Work contract: It works as a full-contractor organisation in the supply chain.

Organizational image:

The Group vows to maintain the highest standards of honesty, integrity and ethics in all aspects of its business. It promises to comply with the laws of the country and community in which it operates.

Sources of capital: Brown & Bronze Group is privately owned, supplementing the owner’s capital with loans from local and foreign financial institutions.

Performance: Over time it has been growing in to a giant by providing quality services to its customers and clients.

Total revenue The annual turnover of this group is around US $ 50 million.

Market penetration:

The organisational goal is to make Brown & Bronze Group most desired by its clients and buyers. It applies different strategies to enter new countries & markets. Growth in market penetration rate is about 17% in 2012.

Production capacity: The total production capacity of this group is 18,000 pieces of woven items and 40,000 pieces of Knit items per day.

Products type Its major Knitwears include T-shirt, Polo-shirt, Tank Top, Sweat Shirt, Shorts, Jacket & Pajama and Woven products include Trousers, Shorts, Skirts & Jackets.

Products Markets It mostly sells its products to the European Union such as Germany, Spain and Netherlands and the United States.

Sources of raw materials:

As a large integrated corporation, Brown & Bronze group sources their own fabric to produce garments through its own factories where fabrics are produced, dyed and printed.

Production process: It has special sewing machinery, such as picto, fagot, zigzag which are automatic or semi-automatic and faster in terms of production, and easier to operate.

Production cost: Its mission is to manufacture and sell the most desired quality products for its valued clients and in the most cost effective manner, and costs are as same as many other similar organisations

Customers:

Lidl, Jebsen, Jessen, WE, Garcia, O’Neill, Zara, Carrefour, Auchen, Wall Mart J. C. Penny, CSI, Gymboree, SRS Miller, The Children Place (TCP), Hagg, Kiabi Laredoute, Vertbaudet, Albion Plc, Auchen

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Brown & Bronze Group, 2013).

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5.2.1 Workforce and labour turnover

Overall, voluntary labour turnover at the Brown & Bronze Group is about 11 per cent annually.

Annual employee turnover rate at the company is highest among Helpers, which is about 12 per

cent, and lowest at the manager level, which is 3 per cent (see Table 5.2).

A manager at Brown & Bronze Group believes that workers always prefer to continue

their jobs with organisations which values its human resources and follows good human

resource practices. One worker agrees, saying that the main reasons for lower rates of labour

turnover are:

… financial factors, such as wage rates and safe work place including fire safety are the

basic factors to take my own decision – stay in or leave the job. I did not find any other

RMG factory in this area which pays more than this factory. Actually the major reason of

my long working career with this organisation is the better wage rates (Interview,

Employee 2).

Table 5.2: Number of total employees and annual turnover rates by category of employee Position Currently employed (2013) Annual turnover (%)

Manager & Assistant Manager 90 3 Supervisor 200 4 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others 2100 11

Operator 3700 10 Helper (Cutting, Sewing & Finishing) 3000 12 Total 9090 (Source: Fieldwork at Brown & Bronze Group, 2013)

The manager also believes that the large size of the organisation and good reputation of

the organization are important reasons for low rate of turnover. He professes the view that

labour turnover is certainly a problem for their organisation as voluntary labour turnover

interrupts in production process and damage the organisational reputation.

5.2.2 HR policies and practices for reducing labour turnover

The Manager reports that Brown & Bronze Group adheres to the minimum wages standard,

occupational health and safety (OH&S) regulations – including fire safety, and export-import

regulations set out by the government. Besides the government’s regulations, the organisation

has its own standards. These standards do not contradict the government’s regulations. Table

5.3 provides and overview of the HR policies and practices of the organisation.

The Manager also alleges that the wages paid by Brown & Bronze Group are better

relative to many other similar RMG firms. He also asserts that the wage rate is more than the

minimum wage rates stipulated by the Government of Bangladesh (see Table 5.4). The Manager

affirms that the attractive wage rate paid by the organisation is a significant factor for explaining

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the low voluntary labour turnover rates. Workers contend that they are happy with the wage

rates given by the firm because they are better that those of other RMG firms.

Table 5.3: HR policies and practices for reducing labour turnover in Brown & Bronze Group

Comparatively higher wages rates Paid leave facility Timely payments Sick leave & Medical centre Wages increase annually Paid maternity leave Fair method of overtime payment Other financial & non-financial benefits Standard works hours Occupational health & safety Weekly off day Fire safety Training opportunity Staff Amenities and staff Facilities Career development opportunity (Source: Interview, Managers 1 & 2, 2013)

Table 5.4: Comparison between Government-stipulated minimum wages and wages paid by Brown & Bronze Group

Position Govt. minimum wage (BDT)

Wage payment by Brown & Bronze (BDT)

Operator 3,861 5,000 Junior Operator 3,553 4,500 Helper 3,000 3,800 (Source: Bangladesh Gadget, 2010 & Interview, Manager 3 & 4, 2013).

Usually employees’ wages are paid between the 2nd and 7th day of every month. If the pay

date falls on a weekend or public holiday, the wages are paid on the immediate next work day.

The Manager believes that on-time wage payment is very important for retaining skilled

employees.

In addition to the relatively better wage rates, workers’ wages increase annually. Usually

the wages increase by 10 per cent of the basic wage. Both the Manager and the worker

(interviewed) claim that annual increment of wages is a good HR practice.

The overtime work wage rate is double the normal work rate. Under normal work

pressure, workers work two hours of overtime each day. Overtime work is not mandatory for

the workers. The Manager appraises the method of overtime work payment as fair and unbiased.

He explained that to reduce disputes, everything related to the overtime work – such as total

hours worked by individual worker and rates of payment – are recorded. An internal document

of the organisation shows the overtime work rate as follows: Overtime work rate = (Basic

Wages X 2)/208 hours.

The Manager reports that the number of work hours per day is strictly eight hours, which

is in accordance with the government rules. He also reports that even in peak business season or

in shipment period work hours do not exceed the normal eight hour limit. He declares that

standard working hours (eight hours in every working day) has contributed to minimising

voluntary labour turnover in his organisation. The workers interviewed agreed that the “eight

hour work” day is an important reason for low turnover rates in this firm.

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There is a strict provision of a weekly off day in the Brown & Bronze Group. No worker

is allowed to work seven days a week under any circumstance. Generally, Sunday is the weekly

off day in the organisation. The Manager reports that weekly off day helps the workers to

balance work and family lives.

In the factory premises, there is a well-equipped training centre, particularly for newly

recruited employees. Newly recruited employees are trained here to familiarise them with the

work procedures. Generally, the training for the newly recruited employees’ lasts fifteen to

thirty days, depending on workers’ occupations and types of tasks. Existing employees are also

trained here on new machines, new product or work processes. The Manager reports that, on

average, about 100 employees are trained in this training centre every month. He believes that

the training centre not only makes the workers familiar with work processes but also increases

their satisfaction levels.

There are good opportunities for the workers to develop their careers through promotion

to the next higher position in this organisation. Work performance is the main factor

determining promotion to the next higher position. The Manager claims that good career

development opportunities play an important role in minimising labour turnover rates.

The Brown & Bronze Group provides annual leave to employees. All permanent, fulltime

employees, including the helpers, are given ten days paid leave in a year. The Manager believes

that the paid leave opportunity refreshes the workers and increases their work satisfaction.

There is also provision for sick leave. Employees can take fourteen days medical leave

with pay in a year. There is a medical centre with two fulltime doctors and two nurses. In this

medical centre, treatment is free for the employees. The manager asserts that sick leave and the

medical centre has a positive impact on labour turnover rates.

There is a provision for 120 days of paid maternity leave by the organisation. However,

to receive this benefit, the woman worker must have worked for at least the previous twelve

months with this organisation. Female workers are happy because of this provision.

Apart from the wages, all employees are given other financial and non-financial benefits.

Five types of financial benefits are: festival bonuses – given about twice a year; annual bonuses

– given to all employees; attendance bonuses; provident fund – both the employee and employer

contribute to this fund; and gratuity. Important non-financial benefits include: child-care benefit

– employees can use this benefit for their dependent child at a nominal cost; transportation

facility – employees are given free transportation from home to office and office to home; and

subsidised canteen facility.

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5.2.3 Workers’ health and safety

The Brown & Bronze Group has been trying to minimise work hazards. The managers are

careful to follow and maintain standard OH&S. As a result, the organization has not faced any

major accidents, including fire accident, since its commencement in 1984. There are good

arrangements, such as fire alarm, fire blankets, carbon dioxide cylinders, and water hose pipes

against fire accident. Fire training programs takes place regularly on the factory premises. It is

mandatory for every worker to take part in the fire training programs at least once in a year. As

required by government regulations, there is an additional staircase (fire exit) to escape in case

of fire. The Manager affirms that very low work hazards and no major accident rates attract the

workers to continue their work with this company. The employees are satisfied with the fire

fighter arrangements and with the regular fire training program.

5.2.4 Staff amenities and staff facilities

There are good staff amenities and facilities in this organisation. Amenities include sufficient

supply of wholesome drinking water, separate latrines and toilets for the male and female

workers, wastepaper baskets and buckets for the disposable of sanitary napkins, and a sufficient

number of spittoons. There are adequate washing facilities, including soap and paper towels.

The firm provides adequate numbers of lunchrooms with seating arrangements. All toilets are in

a clean and sanitary condition. The spittoons are located in different convenient places, such as

the corner of staircases and corners of workroom. Workrooms and factory premises are clean

and dirt free. There is no accumulation of dirt and refuse in any workroom or inside the factory.

The workers are permitted to use the above-mentioned facilities whenever they need to.

5.2.5 Conclusion

In this section, the Brown & Bronze Group has presented an example of a foreign owned large

organization with low labour turnover. Employees revealed their belief that the relatively better

HR policies and practices contribute to minimise voluntary labour turnover. The case study

results indicate that both HR policies and practices have a great impact on workers’ decisions to

remain with an organisation.

5.3 Blue Concern: Case study two Blue Concern is a 100 per cent export-oriented RMG organisation. Blue Concern is an example

of large locally owned organisation with low labour turnover. A Manager who was interviewed

pointed out a link between HR practices and labour turnover rates. He also believes that the size

of the organisation, reputation of the organisation, contracting position of the organisation in

supply chain, steady revenues and good location of the organisation are factors that contribute to

the low rates of labour turnover. The manager states:

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Many of our workers prefer to keep working in this organisation due to a number of

reasons. Employee friendly human resource practices, such as career development

opportunity, better wages rates, payment of wages on time, working places ensuring safety

and security are the main of such reasons. The other reasons could be large size of the

company, full-contracting status in supply chain, good image of the company, company’s

financial solvency, and transportation facilities (Interview, Manager 1).

Table 5.5: Company overview, production process and product markets at a glance Location: Blue Concern is located in Narayanganj EPZ. Years of inception: 1990 and started manufacturing and exporting in 1992 Size of the organization:

Large organization in terms of number of employees and numbers of machines.

No. of employees: 7,500 employees No. of machines In Blue Concern there are about 3,000 sewing machines. Ownership: Locally-owned organization. Voluntary turnover rates Overall labour turnover rate is 13%.

Work contract: Works as a full -contracting organization in supply chain. It also employs sub-contractors, depending on its work load and shipment dates.

Organizational image:

It has a good reputation in the industry in terms of good HR policies & practices.

Sources of capital: Blue Concern is privately owned, supplementing the owner’s capital with loans from both local and foreign financial institutions.

Performance: In 1992 Blue Concern’s exports were valued at US$ 1.03 million, but this had growth to US$70 million in 2011.

Total revenue Blue Concern earned about $ 70 million as revenue in 2011.

Market penetration:

It receives regular work orders from foreign buyers throughout the year. It contacts directly with the potential buyers and wholesalers in different countries. Growth in market penetration rate is about 11% in 2012.

Production capacity:

43.2 million pieces of apparel and 7.2 million pieces of lingerie per annum.

Products type Blue Concern’s main products are knitwear, what includes various sweaters, socks, stockings, T-shirts, underwear and other casual garments.

Products markets Blue Concern mainly supplies products to USA, Canada and Europe. Sources of raw materials:

As a large integrated corporation, Blue Concern sources their own fabric to produce garments through its own factories.

Production process:

The company uses simple sewing machines with automatic thread cutting, trimming, and sucking devices. These modern machines are faster in terms of production, and easier to operate as they are mostly automatic.

Production cost: Internal sources of raw materials, comparatively large volume of production and automatic production process make per unit product cost relatively as same as many other similar RMG organisations.

Customers: Main buyers are H & M, Fashion Fit (FF), K & L Ruppert, Phildar, BONOBO, WE, Bizzbee, Jacadi Paris, and OBAIBI.

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Blue Concern, 2012).

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The data on which the case draws were gathered from interviews with four managers and

two workers, organizational documents (especially its 2012 Annual Report and its web site) and

observations by the researcher. Table 5.5 provides an overview of the company.

5.3.1 Workforce characteristics and labour turnover

Overall voluntary labour turnover at Blue Concern is about 13 per cent annually. Annual

employee turnover rate at Blue Concern is the highest among Helpers, at about 14 per cent and

lowest among Managers, which is 3 per cent (see Table 5.6).

Voluntary turnover rate at this organisation is not high compared with many other RMG

organisations. The Manager believes that good human resource practices, large size of the

organisation, full contracting role in supply chain, financially sound and steady earnings and

good location of the organization are significant reasons for such low rates of turnover.

One of the workers interviewed stated regarding the turnover rates:

I have been working in Blue Concern since 2005. The wages rates, overtime work payment

rates, wages payment period and annual increment rates of wages are better comparing with

similar other RMG organisations. In fact, money is my main consideration to leave out or

continue with the job. Hence, I never think to change my job as I am happy with the

amount of wages, (Interview, Employee 2).

Table 5.6: Number of employees and annual labour turnover rates by work occupation

Position Currently employed Annual turnover (%) Manager & Assistant Manager 79 3 Supervisor 210 5 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others 2200 11

Operator 2881 13 Helper (Cutting, Sewing & Finishing) 2130 14 Total 7500 (Source: Fieldwork at Blue Concern, 2012).

However, the manager is still concerned about the current turnover rates, particularly

turnover rates of Helpers and newly recruited operators. The Manager alleges that labour

turnover is a problem for their organisation because it interrupts the production process.

5.3.2 HR Policies & practices to reducing labour turnover

The Manager noted that the following HR policies and practices (see Table 5.7) contribute to

reducing voluntary turnover rates.

The Manager claimed that the wages rates in their organisation are more than the

minimum wage rates stipulated by the Government of Bangladesh. The manager viewed the

wage rate is one of the prime factors for lowering voluntary labour turnover in this organisation.

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The Manager noted that payments of monthly wages of employees, especially workers,

are being paid between 2nd to 7th day of following month. A worker asserted that timely

payments of wages lead to enhance their loyalty to this organisation.

Table 5.7: HR policies & practices to reduce labour turnover at Blue Concern Comparatively higher wages rates Leave facilities Timely payments Sick leave & Medical centre Wages increase annually Maternity leave Fair method of overtime payment Other financial & non-financial benefits Standard works hours Occupational health & safety Weekly off day Fire safety Organisation provided training Staff amenities and staff facilities Career development opportunity (Source: Interview, Manager 2 & 4, 2012).

Both the Manager and the workers reported that, at Blue Concern, every worker’s wages

increased each ear; the increment in wages in this factory is in accordance with Government

regulations. Generally the increase is 10 per cent of the basic wage per annum. To be eligible

for such an increase in wages, every worker needs to be employed for at least last twelve

months with Blue Concern Ltd.

Table 5.8: Comparison of wage payment between Government rules and Blue Concern

Position Govt. minimum wage (BDT)

Wage payment by Blue Concern (BDT)

Operator 3,861 4,500 Junior Operator 3,553 4,000 Helper 3,000 3,500 (Source: Bangladesh Gadget, 2010 & Interview, Manager 3, 2012).

Blue Concern pays double rates for overtime work. Generally, employees work twelve

hours as overtime work in a week, which is not mandatory. The Manager believes that this

organisation follows fair and transparent methods for overtime work payment. Workers

interviewed agreed with the Manager regarding overtime work rates and payments.

The Manager noted that, at Blue Concern, daily work hours is in accordance with

Government rules, which is eight hours each day. He claimed that the eight hour working day

contributes to minimising the voluntary labour turnover rates. Workers agreed that the eight-

hours working day motivates them to continue working with Blue Concern.

The manager reported that all employees enjoy a day off every week (i.e. Friday).

Workers agreed with the manager and said that they work six days a week because there is a

day off. Both the Manager and workers reported that a day off encourages the Workers to

continue their job with this organisation.

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Both newly recruited employees and existing employees in Blue Concern gain training in

its own training centre. Such training for new employees is mandatory since it makes them

familiar with the organisation’s work processes. Generally, the training program lasts fifteen to

thirty days, depending on workers’ level, occupations and nature of tasks.

There is an ample opportunity for workers to develop their career up to assistant manager

or even above. According to the Manager, development in career largely depends on worker’s

performance.

There is a provision for annual leave at Blue Concern. Workers are allowed, altogether,

ten days as paid annual leave. Since very few RMG firms have provision for paid annual leave,

workers are satisfied with this practice.

There is a provision for paid sick leave at Blue Concern. Workers can receive up to

fourteen days paid sick leave in a year. There is a medical centre at Blue Concern. Both

managers and workers are happy with the paid sick leave entitlement and the medical centre.

There is also provision for 120 days paid maternity leave for women workers. One female

worker affirms that Blue Concern allows paid maternity leave indiscriminately to all eligible

female workers. The Manager reported that women workers can obtain leave before and after

the birth of a child.

Both workers and managers reported that, other than wages, all employees at Blue

Concern are given five types of financial benefits and some non-financial benefits. The five

types of financial benefits are: two festival bonuses, annual bonus, attendance bonus, provident

fund and gratuity. Non-financial benefits include child-care benefit, transportation facility,

canteen facility, staffs’ lounge and prayer place facility.

5.3.3 Workers’ health and safety

The OH&S system is very strong at Blue Concern. A HR Manager reported that the most

common accidents suffered by workers are: pricking workers’ fingers, crushing fingers, hurting

fingertips, getting scarves entangled in a machine, cutting fingers with scissors, electric shocks,

and injuries due to falling or slipping on the staircase. Both managers and workers agree that the

most common minor accident in the RMG workplaces are accidents caused by needles while

sewing cloths. To prevent such minor accidents, the HR department made it compulsory for

every operator to use a needle protector on their fingers. Workers reported that not only

prevention of major accidents but also minor accidents and ensuring the safety at work place

including fire safety encourages them to continue their job year-after-year. Workers reported

that hot and humid work environments are responsible for some of the workers’ illnesses, such

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headaches, and loss of appetite and fainting. The Manager noted that every workroom is fitted

with a number of electric fans to cool the temperature and increase comfort.

The HR manager reported that garment firms are very prone to fire accidents as all the

raw materials, such as threads or long clothes used in the industry are highly inflammable. Both

the Manager and workers reported that there is no fire accident history in this organisation for

past 21 years, because the organisation has all arrangements against fire accident, and fire

training programs takes place regularly on its premises. There are various fire fighters, such as

fire alarm, carbon dioxide (CO2), water hose pipes, fire blankets, buckets full of sand and long

ropes at every floor at convenient places (i.e. near staircases). Moreover, there are spacious

staircases and a large elevator in the factory building.

5.3.4 Staff amenities and staff facilities

There are a good number of quality amenities and facilities available for the workers. There are

sufficient supplies of wholesome drinking water, adequate numbers of lunchrooms, adequate

arrangements for washing facilities – including soap or other suitable means of cleaning, and

separate toilets for male and female workers at Blue Concern. There are also a good number of

wastepaper baskets and a sufficient number of spittoons located in different convenient places,

such as corners of staircase and corners of workroom. Workrooms and factory premises are

clean and dirt free. There are no accumulations of dirt and refuge in any workroom or inside the

factory. The workers are permitted to use the above-mentioned facilities whenever they need.

5.3.5 Conclusion

Blue Concern is an example of a locally owned large organisation with low labour turnover.

This chapter discussed how relatively good HR policies and practices contribute to minimise

voluntary labour turnover. The above indicates that both HR policies and practices do have a

great impact on workers’ decisions regarding voluntary turnover.

5.4 Green Garments Ltd: Case study three This section provides a descriptive case study of Green Garments Ltd. Table 5.9 provides an

overview of the company.

A Manager makes a connection between Green Garments Ltd.’s HR policies and practices and

low labour turnover. He explains the reasons for lower turnover rates in this organisation:

Skilled and experienced workers are our real asset. We never want to lose the skilled

workers. They perform faster and make very little mistakes, what directly contributes to

minimise production costs and maximise the revenues for the organisation. We really like

to retain skilled and efficient workers. Hence, we have been applying comparatively better

HR policies including better wages, eight hours based working time, weekly off day, annual

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leave, annual bonus, promote skilled and qualified workers to next higher position and so

on (Interview, Manager 4).

Table 5.9: Company overview, production process and product markets at a glance Location: Green Garments Ltd is located in Dhaka metropolitan area. Years of inception: 1984. Size of the organization: Large organisation in terms of number of employees and machines.

Number of Employees: 1,388 employees.

Number of Machines In Green Garments Ltd there are 760 sewing machines. Ownership: Locally-owned private limited organisation. Voluntary turnover rates Labour turnover rate is 15% overall.

Work contract: Works as a full-contracting organisation in supply chain.

Organizational image: A good reputation in the industry in terms of HR policies & practices.

Sources of capital: Green Garments Ltd is privately owned, supplementing the owner’s capital with loans from both local financial institutions.

Performance: Green Garments Ltd.’s performance, in terms of export revenue, is steady.

Total revenue Green Garments Ltd earned US $ 10.00 million as revenue in 2011.

Market penetration: It applies strong strategy to search new market. To penetrate in new markets, this organization applies ‘search and contact’ policy. Growth in market penetration rate is about 9% in 2012.

Production capacity: It produces about 55,000-60,000 dozens of garments goods in every month.

Products type

Green Garments Ltd.’s main products are jeans, jogging shorts, pants sports jackets, denim shirts, night wears, polo shirts, t-shirts shirts, trouser, Bermuda shorts, ladies dresses.

Products Markets Green Garments Ltd supplies its products to Germany, Holland, France, Spain, Canada, Austria and Australia.

Sources of raw materials:

As a large organisation, Green Garments Ltd collects its required fabric from local and foreign markets.

Production process: The company mostly uses automatic sewing machines. These automatic machines are faster in terms of production and easier to operate.

Production cost: Production cost in this firm is about 1.5 per cent higher than the similar other companies, particularly with those who have their own source of raw materials.

Customers: Gueldenpfennig & Ospig and Liwe are the main buying companies/agents of this organization.

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Green Garments Ltd, 2012-13).

The data on which the case draws were collected from interviews with four managers and

two workers, organizational documents (especially company profile and orientation instruction)

and observations by the researcher. On some topics, data came from one source only. For

example, information on products or customers was collected from either manager interviews or

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organisational documents only. On other topics, data and information were gathered from more

than one source, allowing greater reliability through triangulation. For instance, data on the

causes of labour turnover were gathered from both manager and worker interviews, with their

arguments sometimes supporting each other and sometimes contradictory.

5.4.1 Workforce and labour turnover

Overall, voluntary labour turnover at Green Garments Ltd is 15 per cent annually. It is highest

among Helpers, at about 16 per cent and lowest at the Manager level, which is only 4 per cent

(see Table 5.10). One of the workers states:

I will not leave the organisation unless I will be deprived in terms of wages, promotion and

other financial benefits such as overtime work payments. Generally we, the workers,

consider the wages rates, opportunities to be promoted, total working hours, weekly off day

and safety issues. The working condition including the safety issue is comparatively better.

However, there are little dissatisfaction among the workers regarding the wages rates,

opportunities to be promoted and the calculation of leave period and overtime work

payments. In my opinion, these are the main causes of the voluntary turnover in this

organisation (Interview, Employee 1).

Table 5.10: Number of employees and annual labour turnover rates by category of employee Position Currently employed Turnover rates (%)

Manager & Assistant Manager 15 4 Supervisor 25 6 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others 108 13 Machine Operator 793 15 Helper (Cutting, Sewing & Finishing) 447 16 Total 1388 - (Source: Interview, Manager 1 & 2, 2012-13

A Manager contends that despite comparatively better HR policies and practices, Helpers

leave the organisation to get the next higher position in other firms. The Manager is concerned

about the current turnover rates. He affirms that labour turnover is certainly a problem for his

organisation as it interrupts the production process and lowers revenues.

5.4.2 HR policies & practices to reducing labour turnover

The rate of wages provided by this organization is comparatively better than that provided in the

industry as a whole. The Manager reported that rate of wages is the most significant factor

causing voluntary turnover in the RMG industry. He also reported that the rate of voluntary

turnover is comparatively low in this organisation because of the good wages rates compared

with other similar RMG organisations. The Manager claimed that Green Garments Ltd fully

complies with government regulations regarding wage rates. The employees are happy with the

amount of wages paid, which influences them to stay with the organisation.

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Usually the monthly wage is paid within seven working days in the following month. On-

time payment of wages is a contributing factor for low voluntary turnover rates, increasing

workers’ satisfaction. The Manager claimed that priority is given to pay the wages to workers.

He also claimed that the Officers and Managers are paid after workers.

Green Garments Ltd increases workers’ wages every year by 5 per cent, which is

consistent with the government regulation. The government regulation states: ‘rate of yearly

increment will be five per cent on basic wage’ (Bangladesh Gazette 2013, p. 10304).

The overtime work policy (i.e., workers are not forced to do overtime work), overtime

pay rates (i.e., double of the usual wage rates) and overtime payment date (i.e., within seven

working days in the following month) are all factors contributing to worker satisfaction and

largely influences the retention of skilled workers in the organisation. Overtime work is not

mandatory but solely depends on the willingness of the worker to do the overtime.

Green Garments Ltd abides by government regulations in term of working hours. Normal

working hours is eight hours, excluding one hour for lunch and prayer time. The Manager

reported that the eight-hours based working day makes the workers happy.

Table 5.11: HR policies & practices for reducing labour turnover

Comparatively higher wages rates Leave facilities Timely payments Sick leave & medical centre Wages increase annually Maternity leave Fair method of overtime work payment Other financial & non-financial benefits Standard works hours Occupational health & safety Weekly day off Fire safety Training facility Staff amenities and staff facilities Career development opportunities (Source: Interview, Manager 3 & 4, 2012-13).

The organisation provides one day off (i.e. Friday) in every week for employees. Even in

the peak business season, workers enjoy one off day in every week. The Manager claimed that

the off day per week refresh workers and helps them to regain the energy.

The organisation provides a training opportunity for newly recruited employees.

Moreover, existing employees are given training to enhance their skills and productivity. A

Manager believes that workers’ satisfaction and productivity are high because of the quality

training programs. He reports that, usually, training for newly recruited employees lasts fifteen

to twenty days, depending on workers’ occupations and types of tasks. He also reported that the

training duration for existing employees is shorter: mostly three to five days.

There are good career development opportunities; especially workers have an opportunity

to develop their careers up to supervisor levels. Importantly, career development is unbiased and

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based on workers’ performance. Employees reported that career development opportunities

motivate them to stay with this organisation.

Green Garments Ltd provides paid leave for its workers. A maximum of ten days leave is

allowed in a year for the ordinary leave. All employees are entitled to have this paid leave. A

Manager recognised that the leave provision is a significant factor enhancing the organisations

image.

There is also provision for paid sick leave. Both a manager and an employee reported that

fourteen days are granted as paid sick leave in a year. There is a medical center with a full-time

doctor and nurses for the employees. Employees are satisfied with the paid sick leave and

medical center.

There is a provision for 120 days paid maternity leave (60 days before the birth and 60

days after the birth of a child) for the female workers who have been continuously working at

least 12 months in this organisation. However, paid maternity leave is not granted to casual

female employees. A Manager acknowledged that the presence of paid maternity leave

contributes to reducing turnover rates.

All employees in Green Garments Ltd. are given five types of financial benefits and some

non-financial benefits. The five types of financial benefits are: two festival bonuses, an annual

bonus, an attendance bonus, provident fund and gratuity. The non-financial benefits include

transportation, canteen and child care facilities.

5.4.3 Workers’ health and safety

The overall work environment in Green Garments Ltd is at a satisfactory level. The temperature

inside the factory building, presence of electric fans and air conditioners, free space between

sewing machine operators, conditions of the sewing machines and cutter machines, tolerance

level of sound inside the factory building, cleanliness inside the factory building and physical

structure of the factory building are good and comfortable.

The manager heavily emphasizes on safety issues. During the orientation of newly

recruited employees as well as in their training programs, OH&S is taught. Employees are

shown how to operate and use different types of machines, use chemicals and electric iron.

Some of the safety processes applied by this organisation are as follows:

• Steel gloves and mask must be worn during the operation of the cutter machines.

• Mask and eye protecting glass must be used when using chemicals, and use of

chemicals must be carried out in a special room.

• Safety guards, needle guards and masks must be worn during the operation of sewing

machines.

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• Proper utilisation steps must be followed when using an iron. The electric iron must be

kept on a rubber mat in vertical position when in use.

Major fire accidents have never occurred in this organisation. Various organisational

steps against fire accidents, such as: fire training; how to use modern electric equipment to

prevent short-circuits; and how to handle highly flammable raw materials and finished goods

with extra care have brought about this success. The factory building is well organized in terms

of availability of adequate fire extinguishers, fire alarms, fire training and fire exit. It is

mandatory for all employees to take part in fire training, which is held every six month. In this

fire training employees become familiar with the operation of the fire extinguishers. Both

managers and employees express their satisfaction with this issue.

5.4.4 Staff amenities and staff facilities

Staff amenities and staff facilities are at satisfactory levels in this organisation. There is a

lunchroom and washing facilities on every floor in the factory building. There are adequate

numbers of separate toilets for the male and female employees. There is a prayer room inside

the factory building. In this factory, there is a day-care/child-care center. The availability of the

child-care center is one of the causes of low voluntary turnover rates among the women workers

with infants.

5.4.5 Conclusions

In this section Green Garments Ltd has presented an example of locally owned large

organisation with low labour turnover. This section discussed how relatively better HR policies

and practices contribute to minimising voluntary labour turnover. Both HR policies and

practices appear to have a great impact on workers in decision making regarding voluntary

turnover.

5.5 Pink fashion company Ltd: Case study four This chapter provides information on the Pink Fashion Company Ltd, a 100 per cent

export-oriented RMG organisation. The Pink Fashion Company Ltd is an example of a foreign-

owned large organisation with relatively low labour turnover rates. Table 5.12 provides an

overview of the company.

A manager articulates the reasons for voluntary turnover:

… voluntary turnover, especially in the RMG industry in this country, mainly relates with

two factors; HR policies & practices and occupational health & safety. HR policies &

practices include wages rates, overtime work payments rates, work hours, weekly day off

and bonuses. Occupational health & safety include physical work environment such as

level of safety, level of temperature and level of noise created by the sewing machines.

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Occupational health & safety also include fire training, fire exit and fire extinguishers

(Interview, Manager 2).

The data on which the case draws were gathered from interviews with four managers and two

workers, organizational documents (especially its Registrar book and its web site) and

observation by the researcher himself.

Table 5.12: Company overview, production process and product markets at a glance Location: Pink Fashion Company Ltd is located in the Dhaka (EPZ), Savar. Years of inception: 1991 Size of the organization: Large organization in terms of number of employees and machines.

Number of Employees: 1,627 employees

Number of Machines In Pink Fashion Company there are 840 machines Ownership: Foreign-owned organization with head office in Hong Kong. Voluntary turnover rate: 16% rates of turnover overall.

Work contract: Works as a full contracting organization. Organizational image: Pink Fashion Company has a good reputation in the industry.

Sources of capital: Pink Fashion Company is privately owned, supplementing the owner’s capital with loans from both local and foreign financial institutions.

Performance: Since its inception in 1991, numbers of production, total sales and annual revenues have been increasing every year except the year 2008 & 2009 due to global financial crisis.

Total revenue Pink Fashion Company earned about $12 million as revenue in 2012.

Market penetration: To penetrate in the new markets it contacts directly with the potential buyers and participate in trade fairs in different countries. Growth in market penetration rate is 11% in 2012.

Production capacity: 8 million pieces of garment wears per annum.

Products type Shirts, pants, shorts, pajama suits, and night wear suits for both men & women, and children’s garment wears.

Products Markets Pink Fashion mainly supplies its products to the USA, UK, France, Germany, Australia and Canada.

Sources of raw materials:

The Company uses both internal and external sources of raw materials. The organization has its own dyeing unit, where dyed yarns are produced.

Production process: The company is well equipped with the latest hi-tech machines.

Production cost: Organization’s own dyeing unit, internal sources of raw materials and latest hi-tech machines enable Pink Fashion company to produce with a very competitive price, similar costs with other companies.

Customers: Main buyers are Walmart, Gap, Reebok, Adidas, K-Mart, & Sears

Supply channels: Usually the finished products are sent to the buying agents and customers by the sea vessel.

(Source: Fieldwork at Pink Fashion Company, 2013)

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5.5.1 Workforce and labour turnover

Overall, voluntary labour turnover at Pink Fashion company is 16 per cent annually. Annual

employee turnover rates is highest among helpers, at about 17 per cent, and lower at the

Manager and Assistant Manager level, about 5 per cent (see Table 5.13).

One of the workers comments:

I think that many workers want to stay at the factory, very few want to leave this factory as

here we have been receiving wages and other financial benefits according to our

expectations. Moreover, we have been treated in a fair way. However, the turnover rate is

relatively high among newly recruited helpers or operators who are looking for promotion.

Due to some organisational problems, such as lack of proper training and instruction, some

newly recruited helpers leave their jobs. (Interview, Employee1).

Table 5.13: Numbers of employees and annual labour turnover rates by category of employee

Position Currently employed Turnover rates (%) Manager & Assistant Manager 31 5 Supervisor 68 6 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others

331 15

Machine operator 750 16 Helper (Cutting, Sewing & Finishing 409 17 Total 1589 - (Source: Interview, Managers 2 & 3, 2013)

A manager stresses the comparatively better HR policies and practices used to attract

skilled workers. He considers that better HR policies and practices can retain skilled workers.

The manager considers labour turnover as a serious problem for the organisation because

voluntary labour turnover creates skills shortage, interrupts production processes and increases

production costs.

5.5.2 HR policies & practices for reducing labour turnover

Overall, the voluntary labour turnover rate is low in this organisation. The managers profess the

view that good HR policies and their proper application contributes largely to keeping the

turnover rate low. They mentioned that following HR policies and practices (summarised in

Table 5.14) contributed to reducing voluntary turnover.

The rate of wages provided by the Pink Fashion Company is better compared with many

other RMG organisations. The managers allege that the Pink Fashion Company follows

government regulation regarding the minimum wage. They also assert that, in all cases, the

company pays more than the minimum wage declared by the government.

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Regular payment of monthly wages attracts employees. Both managers and employees

affirm that the monthly wages are regularly paid in this company. They also assert that,

normally, wages are paid within the first seven working days of the following month. Regular

and faster payment of monthly wages motivates employees and, ultimately, reduces the

voluntary turnover. A manager alleges that, usually, workers are paid their monthly wages

between the 2nd and 7th day of the month.

Workers’ wages increase every year in the Pink Fashion Company. Generally they

increase by ten per cent of the basic wage. However, increases of wages only apply for workers

who have been employed by the company over the last twelve months or more.

Workers are not forced to do overtime work. Work in the overtime period is a worker’s

choices. Generally, the overtime work payment rate is double of the normal work rate and paid

on the same day as monthly wages paid, which is usually on the 5th day of the month. The

managers believe that the overtime work policy is very clear and fair.

Standard working hours play an important role in minimising turnover rates. Normal

working hours at the Pink Fashion Company is an eight-hour day, starting at 8 am and finishing

at 6pm. There is a one-hour break for lunch and prayer time, which are not included in the

normal working hours. The managers believe that the eight-hour day is a significant contributor

for retention of workers.

Table 5.14: HR policies & practices for reducing labour turnover Higher wages rates Leave facility Regular wage payments Paid sick leave & Medical centre Wages increase annually Paid maternity leave Fair method of overtime work payment Other financial & non-financial benefits 8 hours based works hours Occupational health & safety Weekly day off Fire safety Training opportunity Staff amenities and staff facilities Career development opportunity (Source: Interview, Manager 1 & 4, 2013)

It is quite onerous for employees to work seven days a week, adversely impacting on their

performance. Considering this factor, Pink Fashion Company operates only six days a week. All

employees and workers enjoy Sunday as their weekly off day. Employees are satisfied with this

arrangement. A manager considers weekly off day as a significant HR practice to help workers,

saying that working seven days a week under any circumstance deteriorates workers’

performances.

There is a well-equipped training center at the Pink Fashion Factory. Newly recruited

workers, such as Helpers who have little or no skills and experience, are trained in this training

center. Moreover, existing employees are also sent to this center to enhance their skills and

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productivity. The managers affirm that due to adequate training resources as well as facilities to

train both new and existing employees, the workers are pleased and turnover rate is low. The

training program for newly recruited workers lasts from ten to fifteen days, while the training

duration for existing employees is two to three days.

There are great opportunities to advance workers’ careers in this company. A worker can

advance his/her career from Helper to Assistant Manager or even to Manager level. The

employees feel contented because of the career advancement opportunities. In many cases, the

company recruits from internal candidates who fulfill skills and experience requirements –

mostly based on workers’ performance and academic qualification.

Pink Fashion offers paid annual leave for its workers. The workers can enjoy ten days

paid annual leave every year.

There is a policy and practice for providing paid sick leave. The workers are entitled to

receive fourteen days paid medical leave every year. A manager contends that employees are

permitted to get more than fourteen days as paid medical leave if they have accidents or become

sick during work time. There is a medical center with a registered doctor and nurses for the

workers. A worker says that the paid medical leave as well as medical center are important

factors for explaining employees’ satisfaction.

There is a practice of paid maternity leave. Currently ninety days of paid maternity leave

is granted to the female workers. In addition to this ninety days paid leave, female workers can

get another eight weeks unpaid maternity leave. The managers believe that paid maternity leave

is a contributing factor for reducing the turnover rates among female workers.

The Pink Fashion Company offers financial and non-financial benefits to all its workers

other than wages. Financial benefits include four benefits namely: two festival bonuses, annual

bonus, attendance bonus and provident fund. Non-financial benefits include transportation

facility, child-care centre facility, canteen facility and lunchroom facility.

5.5.3 Workers’ health and safety

Occupational Health & Safety, and fire safety are at satisfactory levels in the Pink fashion

Company. There are adequate numbers of electric fans available to reduce the temperature.

There are enough free spaces for moving around in the production area. Sewing machines are

placed in a row; the quality of machines, especially sewing machines, is of good standard. There

is an induction session for newly recruited workers to introduce them to OH&S issues. They are

also trained on how to use the machines and chemicals safely and properly in the organisation.

Some of the safety processes which are mandatory are:

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• It is mandatory for the operator to wear safety guard, needle guard and dust mask

during operation of a sewing machine.

• It is mandatory for the operator to wear steel hand gloves and mask during the operation

of the cutter machine.

• It is mandatory for the user to wear mask and eye protection glasses when using

chemicals.

• The ironer must follow proper utilisation steps and must keep the iron on a rubber mat

in vertical position.

The Pink Fashion Company has never experienced major fire accidents. Different steps

and precautions against fire accident have made this success possible. Regular fire training and

fire induction, available arrangements for fire-fighting, use of safe electrical equipment to

prevent short-circuits, and keeping highly flammable raw materials and finished goods in

specially-made store rooms are among the organisation precautions. There are adequate fire

extinguishers, fire alarms, fire training and fire exits to prevent fire accidents in this factory.

5.5.4 Staff amenities and staff facilities

Pink Fashion Company provides a good number of amenities and facilities to its employees.

There is a medical center, ambulance, free first aid, and prayer room. The Pink Fashion

Company provides a free transportation facility for the employees. There is a lunchroom for the

employees with washing and heating facilities on every floor in the factory building. There are

adequate numbers of male and female toilets kept in clean and hygienic manner. The employees

can send their children who are less than five years of age to the child care center run by the

company for a nominal cost. Both managers and employees are happy about the existing

amenities and facilities.

5.5.5 Conclusions

The Pink Fashion Company is an example of a foreign owned large organisation with low

labour turnover. This chapter showed how relatively good HR policies and practices contribute

to minimising voluntary labour turnover. It seems that both HR policies and practices have a

great impact on workers decisions regarding voluntary turnover.

5.6 Silver Dew Apparels Ltd: Case Study five This chapter provides a descriptive case study of Silver Dew Apparels Ltd, a 100 per cent

export-oriented RMG organisation. Silver Dew Apparels Ltd is an example of a foreign-owned

small organization with an eighteen per cent rate of labour turnover, which is relatively low

compared to the industry average. See Table 5.15 for an overview of the company. A Manager

comments on the prime causes of voluntary turnover in the RMG industry:

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Good HR policies and practices play a prime role in reducing voluntary labour turnover.

Silver Dew Apparels follows comparatively good HR policies to retain skilled workers. HR

policies followed by the organisation include standard wages, standard work hours, timely

payment of monthly wages, weekly off day, double rates of overtime work payments, paid

annual and sick leave, safe work place, and fire safety. (Interview, Manager 2).

Table 5.15: Company overview, production process and product markets at a glance Location: Silver Dew Apparels Ltd is located in outside of Narayanganj city. Years of inception: 2007 Size of the organization:

Small organization in terms of number of employees and numbers of machines.

Number of Employees: 448 employees

Number of Machines In Silver Dew Apparels Ltd there are 184 machines. Ownership: Foreign-owned organization with head office in Taiwan. Voluntary turnover rate: 18% rates of labour turnover overall.

Work contract: Works as a full contracting organization. Organizational image: Silver Dew Apparels Ltd has a good reputation in the industry.

Sources of capital: Silver Dew Apparels Ltd is privately owned, supplementing the owner’s capital with loans from both local and foreign financial institutions.

Performance: Since its inception in 2007, numbers of production, total sales and annual revenues have been increasing every year.

Total revenue Silver Dew Apparels Ltd earned about $2.7 million as revenue in 2012.

Market penetration: To penetrate in the new markets it contacts directly with the potential buying agents and wholesalers in different countries. Growth in market penetration rate is 10% in 2012.

Production capacity: Approximately 2 million pieces of garment wears per annum.

Products type Silver Dew Apparels’s main products are Denim pant, Twill/Canvas pant, Canvas cargo pant, short, Skirt, Micro fiber pant, Swim short, Oven shirt, T-shirt, Polo shirt, Hoodies and Sweaters.

Products Markets Silver Dew Apparels Ltd mainly supplies its products to Canada, England, France, Germany and Denmark.

Sources of raw materials:

The Company uses external sources of raw materials. However, it has a plan to establish a yarn dyeing unit, where fabrics will be dyed, and printed.

Production process: The company is equipped with the faster and easier machines to operate. Most of the machines are automatic or semi-automatic.

Production cost: External sources of raw materials and comparatively small volume of production make cost about 2.5 per cent higher than other companies

Customers: Main buyers are New Look, Erima, TMS and Katag.

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Silver Dew Apparels, 2013)

The data on which the case draws were gathered from interviews with four managers and

two workers and observation by the researcher himself.

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5.6.1 Workforce and labour turnover

Overall voluntary labour turnover at Silver Dew Apparels is about 18 percent annually. The

turnover rate is highest among helpers, which is about 18 per cent, and lowest among managers,

which is 6 per cent (see Table 5.16).

Table 5.16: Number of total employees and annual turnover rates by category of employee Position Currently employed Annual turnover (%)

Manager & Assistant Manager 14 6 Supervisor 30 8 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others

170 18

Operator 145 17 Helper (Cutting, Sewing & Finishing) 89 18 Total 448 - (Source: Fieldwork at Silver Dew Apparels, 2013)

The voluntary turnover rate at Silver Dew Apparels is low compared to many other RMG

organisations located in this district or in other districts. A manager notes that the comparatively

better human resource practices of the company helps to retain the employees. One worker

expresses his satisfaction with the normal work hour:

In this factory our normal work shift starts at 9 o’clock in the morning and finishes at 6

o’clock in the evening. We have one hour break for lunch between 1 and 2 o’clock. I like

normal work hour as it is only 8 hours based, whereas some of my friends have to work 9

to 10 hours as normal work hours in other RMG factories’ (Interview, Employee 2).

Labour turnover is a problem for this organisation as it interrupts the production process.

A Manager asserts that they need to deliver the finished goods on time. Labour turnover makes

it difficult to ship finished goods on time. In addition to the interruptions in production, labour

turnover destroys organisational goodwill.

5.6.2 HR policies & practices to reduce labour turnover

Good HR policies and practices play a prime role in reducing voluntary turnover. The Manager

contends that Silver Dew Apparels follows comparatively good HR policies to retain skilled

workers. HR policies followed by the organisation include standard wages, standard work

hours, timely payment of monthly wages, a weekly off day, fair calculation of overtime work

payments, a safe work place, fire safety protocols, and so on.

Table 5.17 listed the HR policies and practices followed by the company.

Silver Dew Apparels pays standard rates of wages to its workers because rate of pay is

the most significant explanation for voluntary turnover. Workers emphasised that wages rates

determine whether they stay or leave. A manager noted that the wage rates are a little bit higher

than the minimum wage rate stipulated by the Government of Bangladesh (see Table 5.18).

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Table 5.17: HR policies and practices for reducing labour turnover

Standard wages rates Leave facility Timely payments of monthly wages Medical centre & medical leave Wages increase annually Maternity leave Fair method of overtime payment Other Financial & non-financial benefits Standard works hours Workers’ health & safety Weekly off day Fire training & fire safety Training opportunity Staff amenities and staff facilities Career development opportunities

(Source: Interview, Manager 1 & 4, 2013)

Table 5.18: Comparison of wage payment between Government rules and Silver Dew Apparels Position Govt. Minimum wage (BDT) Wage payments (BDT) Operator 3,861 4,000 Junior Operator 3,553 3,700 Helper 3,000 3,100

(Source: Bangladesh Gadget, 2010 & Interview, Manager 2 & 3, 2013)

There is a practice to pay the monthly wages between the 7th and 10th day of every month.

A manager alleges that regularity of payment of wages is very important to stop voluntary

turnover. Workers are pleased because of such a consistent payment system.

There is a practice of incrementally increasing wages every year. The rate of the

increment is 5 per cent of the base wage. The managers consider the increment of wages is a

strong component for making the workers happy.

There is a policy to pay double of normal work rate for overtime work. There is no

pressure to work overtime hours. An employee can work twelve to eighteen hours as overtime

work each week. The usual practice is to pay the overtime work on the same day as monthly

wages payment day. The employees appreciate the organisational policy regarding overtime

work.

Normal work hours in this organisation are eight hours in every working day. A Manager

notes that there are no exceptions to the eight-hour based normal work hour, even in goods

delivery period or shipment period. He professes the view that an eight hour day contributes to

reduced turnover rates because the government sets out eight hours as the normal work hours

for the RMG industry.

Silver Dew Apparels operates six days a week. Generally it operates from Saturday to

Thursday and Friday is the weekly off day. Both workers and managers advocate the necessity

of a weekly off day. The workers hold the view that there must be one day off in a week so that

the workers can have a rest. The managers believe that a weekly off day helps both workers and

the company in terms of performance and revenues.

There is a practice in this company to provide training. The employees are sent to an

outside training centre when necessary. Duration of training program for newly recruited

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employees vary between five to ten days, while it is only one to two days for existing

employees. The employees agree with the necessity of a training program as it enhances their

skills.

In spite of the small size of the firm, there are good opportunities for workers to develop

their careers. There is a practice in the company to give priority to recruiting from internal

sources. Three factors are mainly considered for promotion internally: work skills, performance

and educational background. The manager affirms that everyone likes to advance in their

careers. The workers prefer to stay in this organisation because of career development

opportunities.

Silver Dew Apparels has introduced a policy regarding a paid annual leave facility for its

employees. All permanent employees are allowed ten days as annual leave. A manager claims

that paid annual leave increase workers’ satisfaction. The workers are pleased that the company

has introduced paid annual leave.

There is a practice to allow fourteen days paid sick leave in a year. In addition to the

fourteen days, there is a policy to allow more days in special cases. There is a medical centre

with one fulltime doctor and a nurse.

There is a practice to allow ninety days paid maternity leave to the female workers. The

female workers are satisfied with this policy and its proper practice. However, some of them

want the leave to increase to 120 days.

All employees in Silver Dew Apparels receive some financial and non-financial benefits

other than wages. The company offers three financial benefits namely: two festival bonuses,

attendance bonus and provident fund. Employees receive transport facility, canteen facility,

lunchroom facility and staff lounge facility as non-financial benefits. A Manager notes the

significance of financial and non-financial benefits to retain skilled workers.

5.6.3 Workers’ health and safety

Managers at Silver Dew apparels have been trying to make the workplace less risky because

RMG factories are generally prone to accidents. There is a policy in this company to follow

every standard relating to OH&S. The Workers must wear safety protectors such as finger

protector, safety shoes, and steel hand gloves. The supervisors make sure that every worker

follows and maintains safety standards. The workers are pleased with the safety standards.

Silver Dew apparels have its own standard to protect the workers from fire accident.

Proper fire safety standards, regulations relating to fire safety and adequate fire fighters have

protected this organisation from major fire accident. Both workers and managers are pleased

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with the steps and arrangements against fire accidents. The managers emphasise that that

complying with the policies and standards saves the company from fire incidents.

5.6.4 Staff amenities and staff facilities

Both the workers and managers are satisfied regarding the availability of staff amenities and

facilities. There is a clean and hygienic washing facility with soap and towel. There is one

lunchroom with the sitting and food heating arrangements on every floor of the factory building.

There are separate change rooms for male and female workers on every floor. There is a canteen

facility on the factory premises. There are adequate numbers of waste cloth baskets and waste

bins at convenient places in the production area. There is one spittoon on every landing of the

staircase and adequate numbers of spittoons in different places of the production area. Every

year the company organises an annual picnic and annual sports day for the workers.

5.6.5 Conclusions

In this section Silver Dew Apparels presents an example of a foreign owned small organisation

with low labour turnover. This section outlines how relatively better HR policies and practices

contribute to minimising voluntary labour turnover. It seems that both HR policies and practices

do have a great impact on workers’ decisions regarding voluntary turnover.

5.7 Amber Fashion Ltd: Case study six This chapter provides a descriptive case study of Amber Fashion Ltd, an export-oriented RMG

organisation. Amber Fashion Ltd is an example of a foreign-owned small organisation with high

rates of turnover. A manager notes that financial benefits and workplace safety as the basis for

turnover rates. He contends:

We have been experiencing higher turnover rates. Personally I believe that attractive

financial benefits and safe workplace may help to retain the skilled workers. While some of

our HR policies and practices are attractive, some others are comparatively poor. Moreover,

we don’t offer some financial benefits, such as paid maternity leave and our workplace is

not very safe. Such lacks and poor standards of the financial benefits are liable for higher

turnover rates in this organisation. We can’t improve this HR policies and practices

overnight. We have been working hard to improve it, since we want to control the labour

turnover rates. (Interview, Manager 2).

The data on which the case draws were gathered from interviews with three managers and

two workers and observation by the researcher. On some topics, data came from one source

only. On other topics, data and information were gathered from more than one source.

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Table 5.19 provides an overview of the company.

Table 5.19: Company overview, production process and product markets at a glance Location: Amber Fashion Ltd is located in regional area in Gazipur district. Years of inception: 2009 Size of the organization: Small organization in terms of number of employees and machines.

Number of Employees: 349 employees

Number of Machines In Amber Fashion Ltd there are about 100 machines.

Ownership: Foreign-owned organization with head office in India. Voluntary turnover rate: Labour turnover rate is 26% overall.

Work contract: Works mainly as a sub-contracting organization in supply chain. Organizational image:

Amber Fashion Ltd does not have a very good reputation in the industry in terms of some specific HR policies and practices.

Sources of capital: Amber Fashion Ltd is privately owned, supplementing the owner’s capital with loans from both local and foreign financial institutions.

Performance: There is no evidence of steady performance in terms of sales and annual revenues since its inception in 2009.

Total revenue Amber Fashion Ltd earned about $ 1.90 million as revenue in 2012.

Market penetration:

To receive the work orders and penetrate in the new markets it depends on the local buying houses. In addition, it contacts directly with the potential buyers and wholesalers in different countries. Growth in market penetration rate is 7.5% in 2012.

Production capacity: Approximately 2.3 million pieces of garment wears per annum.

Products type Amber Fashion Ltd.’s main products are Denim pant, Twill/Canvas pant, Canvas cargo pant, short, Skirt, Micro fiber pant, Swim short, Oven shirt, T-shirt, Polo shirt, Hoodies and Sweaters.

Products Markets Amber Fashion Ltd mainly supplies its products to Turkey, France, U.K, Germany and Japan.

Sources of raw materials: The Company uses external sources of raw materials.

Production process: Currently the company runs with bit old machines which are slower in production. However, it has a plan to install modern automatic and semi-automatic machines.

Production cost: External sources of raw materials, comparatively small volume of production and manual production process make per unit product cost about 2.0 per cent higher than the similar other companies

Customers: Main buyers are TEAM MAGAZACILIK, Carel S.A, Kik, Next, EMA Textiles, and Kaito.

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Amber Fashion Ltd, 2013)

5.7.1 Workforce and labour turnover

Overall voluntary labour turnover at Amber Fashion Ltd. is about 26 per cent annually. The

turnover rate is highest among operators, which is about 28 per cent and lowest among

managers, which is 8 per cent (see Table 5.20).

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The voluntary turnover rate at Amber Fashion Ltd. is even higher than many other RMG

organisations located in this district. The manager claims that comparatively better financial

benefits can reduce the employee turnover. Workers are dissatisfied with being forced to work

overtime, especially in shipment periods. Many workers have to do overtime work even though

they do not want to do it. One of the workers said:

In this factory we are paid only one-and-half times the basic wages for overtime work

payments, while the government rule is twice the base wages. Overtime work payment rate

is twice the base wage in many other RMG factories around. We are also deprived in

calculating the total hours worked. Frequently our supervisor or manager reduces the hours

showing fake reasons. Some of my co-workers left this factory due to such a low overtime

work rates. (Interview, Employee 2).

Table 5.20: Number of total employees and annual turnover rates by category of employee Position Currently employed Annual turnover (%)

Manager & Assistant Manager 9 8 Supervisor 24 12 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others

103 25

Operator 127 28 Helper (Cutting, Sewing & Finishing) 86 23 Total 349 -

(Source: Fieldwork at Amber Fashion Ltd, 2013)

The manager alleges that buying agencies want to receive the finished goods on time.

Labour turnover makes it difficult to deliver the finished goods on time.

5.7.2 HR policies & practices to reducing labour turnover

Some of the HR policies followed by Amber Fashion Ltd are employee friendly and some

others are non-friendly, which are summarised in Table 5.21.

Table 5.21: HR policies and practices in Amber Fashion Ltd Standard wages rates Paid leave facility On-time payment of wages Partial sick leave & No medical centre Irregular increase of monthly Lacks of paid maternity leave Unfair overtime work payments Poor financial & non-financial benefits Standard works hours Poor occupational health & safety Weekly off day Fire threat Limited training opportunity Poor staff amenities & facilities (Source: Interview, Manager 1, 2013)

Wage paid by the Amber Fashion Ltd. is in accordance with the minimum wages paid by

the government. A manager notes that the wage rate is an important weapon to satisfy the

workers.

The organizational policy at Amber Fashion Ltd is to pay wages on the 7th day of each

month. The workers are satisfied because of the regularity of wages payment. A manager

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contends that irregularity of payment makes the workers frustrated and contributes to higher

turnover rates.

Amber Fashion Ltd does not increase every worker’s wage every year. Wage increase

decisions are irregular. Only satisfactorily performing workers, in terms of production rates,

have their wages increased. However, the workers contend that some workers’ wages are

increased based on favouritism.

The per hour overtime work rate is one-and-half times regular wage rates instead of twice

the rate and there are disputes regarding the calculation of total hours of overtime work.

Moreover, employees are dissatisfied with being forced to work overtime, especially in

shipment periods. Many workers have to do overtime work even though they do not want to. A

manager agrees that the overtime work per hour rate is comparatively lower than paid in other

companies.

Amber Fashion Ltd. follows standard work hours, which is eight base hours. The

Manager reports that standard work hour have been contributing to building the image of the

company.

Saturday is the weekly off day in this company. That is, workers work six days in a week.

A manager professes the view that the weekly off day enhances workers’ productivity as well as

making them happier. Workers believe that the lack of a weekly off day has significant adverse

impacts, such as increases in turnover rates, decrease workers performances and the workers

satisfaction.

Amber Fashion Ltd neither has its own training center nor sends its workers to outside

training centers. It only provides on-the-job training to its newly recruited workers to make

them familiar with the work procedures and work environment. Existing employees argue that,

because type of products and production techniques have been changing, training programs for

existing employees might contribute to increasing their skills.

Workers at Amber Fashion Ltd have only limited career development opportunities. That

is, the workers can be promoted up to supervisor position. Moreover, the selection and

recruitment process is biased. Workers believe that the limited career development opportunities

and unfair selection processes are two significant determinants of higher turnover rates.

While the lack of an annual paid leave facility makes the workers dissatisfied and

increases the turnover rates, Amber Fashion Ltd has no provision for paid leave for workers.

The workers hold the view that the absence of a paid leave facility is a significant reason for the

high turnover rate.

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There is no paid sick leave. The company only offers paid medical leave if a worker falls

and injures himself/herself during work periods and requires admission to hospital to recover.

There is no medical centre or registered nurse in the factory. The workers are dissatisfied

because there is not paid sick leave provision and no medical centre.

While lack of paid maternity leave is liable to increase turnover rates, there is no paid

maternity leave in this company. The female workers are disappointed because many other

RMG organisations offer paid maternity leave. A manager notes that paid maternity leave is

necessary for retaining female workers.

All employees in Amber Fashion Ltd receive few financial and non-financial benefits

other than wages: two festival bonuses and provident fund. Employees receive free

transportation to and from the factory, a canteen facility, a lunchroom facility and prayer room

facility as non-financial benefits.

5.7.3 Workers’ health and safety

Cutting of hands or fingers during operating the sewing machines and falling over on the floor

or staircase are the most common types of accident. Due to the vulnerability to accidents, the

company must take initiatives relating to the safety procedures to make the workplace safe.

However, the safety policies and procedures taken by the company are inadequate. As a result,

the minor accident rate is comparatively high in this company. The workers are dissatisfied with

the safety policies and standards.

Nowadays fire accidents are an explanatory factor for voluntary turnover, because the

garment industry is prone to fire accidents due to flammable raw materials and finished goods.

Amber Fashion Ltd has experienced two major fire accidents: one in 2009 and one in 2012. At

first, the company had pitiful resources against fire accidents. However, the company still has

not organised adequate fire fighters. In addition, there is no regular fire training for the

employees. As a result, many workers are frightened and some of them do not want to continue

their jobs in a risky workplace. A manager contends that both the organisational system and the

workers are liable for the frequent fire accident.

5.7.4 Staff amenities and staff facilities

There is a relationship between staff amenities and voluntary turnover, though it is not

very strong. There is a lunchroom on every floor of the factory building with dining tables and

chair, where about forty employees can dine together. There is a canteen facility on the factory

premises. There are two sources of drinking water for the workers on every floor of the factory

building. There are separate latrines and urinals with normal conditions on every floor of the

factory building. However, some of the latrines and urinals are in poor condition in terms of

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cleanliness and hygiene. Moreover, there is no bin for disposable sanitary napkins in the female

toilets. An adequate numbers of waste bins are kept at convenient places in the production area.

There is a spittoon on every landing of the staircase. Every year the company organises an

annual picnic for the workers. The workers are permitted to use the above-mentioned facilities

whenever they need. However, there is no change room, where the workers can change their

clothes from the work uniforms or apron and no appropriate safeguards before and after work.

5.7.5 Conclusions

In this section Amber Fashion Ltd has been presented as an example of locally owned

small organisation with high labour turnover. This section shows how relatively poorer HR

policies and practices contribute to maximising voluntary labour turnover.

5.8 Purple group: Case study seven This section provides a descriptive case study of Purple Group, an export-oriented RMG

organisation. Purple Group is an example of locally owned small organisation with high labour

turnover. A manager appraises the reasons of higher labour turnover rates at Purple Group. He

alleges

Due to few organisational drawbacks the voluntary turnover rate is higher in this

organisation. However, in my opinion, most of the helpers and operators leave the factory

because of wages. They leave their jobs to increase wages. Even the workers jump from

here to other RMG factories to increase a little amount of money. For example, only for

additional BDT 100 per month they leave their jobs (Interview, Manager 1).

Table 5.22 provides an overview of the company.

Table 5.22: Company overview, production process and product markets at a glance Location: Purple Group is located in regional area in Gazipur district. Years of inception: in 2008 Size of the organization:

Small organization in terms of number of employees and numbers of machines.

Number of Employees:

247 employees

Number of Machines In Purple Group there are 106 sewing machines. Ownership: Locally-owned private limited organization. Voluntary turnover rates

Labour turnover rate is 31% overall.

Work contract: It works mainly as a sub-contractor in supply chain.

Organizational image:

Due to poor HR policies and practices and because of one devastating fire accident in 2011, this organization does not have a good business image.

Sources of capital: Purple Group is privately owned, supplementing the owner’s capital with loans from local financial institutions.

Performance: Company’s revenues have been declining successively in the last

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three years. Total revenue The firm earned US $ 2.10 million as revenue in 2011.

Market penetration:

Due to lacks of permanent buying organizations there is no regular work order. In this circumstance it knocks door to door to collect work order, which is very time consuming and competitive. Growth in market penetration rate is 4% in 2012.

Production capacity: It produces about 7000-8000 dozens of RMG goods in every month.

Products type Purple Group’s main products are shirts, ladies blouses, ladies tops, skirts and sleepwear.

Products Markets The firm currently supplies its products mainly to the U.S.A, U.K and Spain.

Sources of raw materials:

As a small organisation, Purple Group collects its required fabric from outsourcing; local and foreign markets.

Production process: The company has both automatic and manual sewing machines. While about 40 percent machines are automatic, rest 60 percent are manual.

Production cost: Because of sixty percent manual sewing machines and outsourcing of the raw materials, production cost in this firm is about 2.5 per cent higher than the similar other companies.

Customers: There are no permanent buying companies/agents of this organization, as a result there is no regular work order.

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Purple Group, 2013).

5.8.1 Workforce and labour turnover

The overall rate of turnover in this organization is high, about 31 per cent. The turnover rates

are the highest among Helpers, at 34 per cent, and the lowest among the managers, at 10 per

cent (See Table 5.23). One of the employees reports a significant reason of higher turnover rates

as:

Workers of this factory demonstrated a couple of times demanding the payment of monthly

wages and overtime work on time. Every time management gave assurance to pay on time.

Still we are paid the wages and overtime work payments about fifteen days later than the

expiry of last day of wage period. Like many other of my colleagues, my family depends on

my income. It’s really very inconvenient to get the wages about fifteen days or even more

days later. I am looking for a job in another garment factory where I will be paid on time.

(Interview, Employee 2).

The manager recognises that due to some organisational problems, the voluntary turnover

rate is higher in this organisation than in others. He noted that the inappropriate HR policies and

practices (such as arrears in wages) and high turnover rates are the crucial problems in this

organisation.

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Table 5.23: Number of employees & annual labour turnover rates by category of employee Position Currently employed Turnover rates (%)

Manager & Assistant Manager 6 10 Supervisor 21 15 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others

43 30

Machine Operator 107 30 Helper (Cutting, Sewing & Finishing)

70 34

Total 247 - (Source: Interview, Manager 1 & 3, 2013)

5.8.2 HR policies & practices for reducing labour turnover

The rate of wages is low in this organisation, and is a significant reason for high

turnover rates. Wages rates are even lower than that of the minimum wage rates declared by the

government of Bangladesh.

Table 5.24: Purple Group HR policies and practices Low wage rates Five days paid annual leave Irregular payment of wages Absence of paid sick leave Lack of annual increment of wages Medical centre for employees Partial payment of overtime work Thirty days maternity leave Nine hour based work hour Limited financial & non-financial benefits Weekly off day except shipment period Poor occupational health & safety No training opportunity Fire hazard Limited career development opportunity Absence of staff amenity (Source: Interview, Manager 2 & 4, 2013)

Table 5.25: Comparison of wage payment between Government rules and Purple Group wages Position Govt. minimum wage

(BDT) Wage payment by Purple Group

(BDT) Operator 3,861 3,800 Helper 3,000 2,800

(Source: Bangladesh Gadget, 2010 & Interview, Manager 1, 2013).

Workers are not paid their monthly wages on time. Generally they receive their wages

ten to fifteen days after the due payment date. A manager claims that the delay in payment of

wages is an important explanatory factor for the voluntary turnover rate.

Purple Group does not apply the wage increment regulation declared by the Government.

It only increases selected workers’ wage every year based on their performance. However, the

increment rate varies from worker to worker.

Workers are only paid one-and-quarter instead of twice the rate for overtime. Moreover,

workers are forced to do overtime during peak seasons and shipment periods.

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Normal work hour in this organization is nine hours excluding overtime hour, while the

usual work day is eight hours according to Government regulations. The workers are

dissatisfied for this nine-hour based work day.

There is no specific off day in a week as the weekly off day rotates every week.

Moreover, sometimes, particularly in shipment periods, workers have to work seven days a

week. A manager claims that working seven days a week is a reason for higher turnover rates in

this organisation.

No formal training is given to the workers in this organisation; either for newly recruited

or existing workers. Purple Group only provides on-the-job training for its new recruits workers.

Due to the small size and small number of sections, the opportunity to develop a career in

this organisation is limited. Moreover, management relies mostly on external recruitment rather

than internal recruitment. Employees also complain that the recruitment and selection process is

unfair and biased.

There is a provision and practice of five days paid annual leave in this organisation, while

the government regulation is for ten days every year. Despite this practice, the workers are

satisfied with this provision since they are deprived of other benefits.

There is no provision for paid sick leave in this organisation. Absence of paid sick leave

is a significant factor causing high voluntary turnover rates. However, there is a medical center

with one fulltime nurse for the workers on factory premises. A manager contends that because

of financial incapability there is no capacity for the provision of paid sick leave.

Despite having seventy per cent female workers, there is a practice of only thirty days

paid maternity leave in the Purple Group. The absence of more maternity leave causes high

voluntary turnover rates among female workers.

All workers in Purple Group receive specific financial and non-financial benefits other

than wages: financial benefits are: two festival bonuses, attendance bonus and provident fund.

There is no provision or practice of gratuity, or annual bonus in this factory. Workers only

receive a canteen facility as a non-financial benefit. There is no provision of transportation or

child care facility for the workers.

5.8.3 Workers’ health and safety

The physical work environment of this organisation is poor in terms of standards and

compliance with Government OH&S regulations. The main occupational health hazards in this

organization are coughs, fevers, asthma and eye strain. Many of the workers, particularly

machine operators, sewing helpers and ironmen suffer from coughs and fevers more frequently

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now than before joining this organisation. Moreover, in summer, the temperature inside the

factory building is too hot because of an inadequate number of electric fans and poor ventilation

system.

Many workers in this firm suffer from asthma (a chronic obstructive pulmonary disease)

because of excessive dust. Due to poor OH&S system, such dust is produced during the

preparation and handling of garment products. One of the employees complaints that there is a

significant relationship between eye strain and length of work. Excluding the overtime hours,

the workers have to work nine hours on every working day. He argues that, because the workers

have to work for a long period of time, it adversely effects on their eyes. He also complains that

because of poor OH&S, the voluntary turnover rate is higher here.

One devastating fire accident occurred in this organisation in 2011. The fire accident not

only severely burned eight employees but also damaged raw materials such as cloths and

threads, machinery and factory buildings. Workers are very upset because management still

takes no precautions against fire accidents. They claim that voluntary turnover in this

organisation is high because of very poor arrangement of fire-fighting as well as irregular and

inadequate fire training.

A manager agrees that there are risks relating to fire accidents not only in this

organisation but also in every garment factory because the materials used in the garment factory

are highly flammable. He also agrees that lack of fire safety is a considerable factor causing

voluntary labour turnover, especially after the fire accident at Tazreen garment factory.

However, he argues that there are arrangements for firefighting. He also claims that fire training

has been conducted at regular intervals. However, the researcher did not find good arrangements

for firefighting, such as an adequate number of carbon dioxide cylinders, fire blankets and water

hosepipes during his physical visit to the factory building.

5.8.4 Staff amenities and staff facilities

There is a lack of staff amenities and staff facilities, which upsets the workers. Some workers

believe that the absence of amenities and facilities causes worker dissatisfaction and increase

the turnover rates.

5.8.5. Conclusion

In this section Purple Group has been presented as an example of locally owned small

organisation with high labour turnover. This chapter discussed how relatively poor HR policies

and practices contribute to high voluntary labour turnover rates.

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5.9 Red International: Case study eight This section provides a descriptive case study of Red International, an export-oriented RMG

organisation.

The data on which the case draws were gathered from interviews with three managers and two

workers and observations by the researcher. On some topics, data came from one source only.

For example, information on products or customers was collected from manager interviews

only. On other topics, data and information were gathered from more than one source. Table

5.26 provides an overview of the company.

Table 5.26: Company overview, production process and product markets at a glance Location: Red International is located in regional Dhaka. Years of inception: in 2009 Size of the organisation:

Small organization in terms of number of employees and numbers of machines.

Number of Employees: 139 employees

Number of Machines In Red International there are 57 sewing machines. Ownership: Locally-owned organization. Voluntary turnover rates Labour turnover rate is 33% overall.

Work contract: Works mostly as a sub-contracting organization in supply chain.

Organizational image: It does not have a good reputation in the industry in terms of good HR policies & practices.

Sources of capital: Red International is privately owned, supplementing the owner’s capital with loans from both local financial institutions.

Performance: Red International’s performance, in terms of export revenue, is not steady. Total revenue Red International earned just below $1.0 million as revenue in 2011.

Market penetration: Red International does not have any effective strategy to search new market. It suffers from lacks of work orders throughout the year from foreign buyers. Growth in market penetration rate is 2.5% in 2012.

Production capacity: It produces about 1,40,000 pieces of RMG products per annum.

Products type Red International’s main products are woven garments, what includes various shirts, pants, T-shirts, children wear and other casual garments.

Products Markets Despite sub-contracting role, Red International sometimes supplies its products to Japan, U.K, France and Spain.

Sources of raw materials:

As a small organisation, Red International collects its required fabric from local and foreign markets.

Production process: The company mostly uses manual sewing machines. These manual machines are slower in terms of production and makes trouble to operate.

Production cost: Low number of total production, external sources of raw materials and manual production process make about its production costs 3 per cent higher than the similar other companies.

Customers: Mostly it works on a cutting-and-making basis for other large RMG organisations. Sometimes it supplies directly to the buyers, but it does not have any particular regular buyer.

Supply channels: Usually the finished products are sent to the buying agents and wholesalers by the sea vessel.

(Source: Fieldwork at Red International, 2012).

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Red International is an example of a locally owned small organisation with high labour turnover

rates. A manager explains the causes of the higher labour turnover rates as being caused by

irregular work orders and poor OH&S:

Workers do not want to continue to work here because of some particular reasons. The

first reason is this organization suffers from irregular work orders, particularly in off-

seasons. As a result there is no continuous work guarantee for the workers. When there is

no work order, we ask the workers not to come to work. Obviously we cannot pay them

in that time. Second reason is poor wages rates, long work hours and no annual leave or

maternity leave. Third reason is our workplace safety system is not very substandard.

Therefore, the voluntary turnover rate is higher in this organization, especially among

skilled and experienced workers. However, at this stage we are not much worried about

the turnover rates. (Interview, Manager 1).

5.9.1 Workforce characteristics and labour turnover

Overall voluntary labour turnover Red International is about 33 percent per year. The annual

employee turnover rate at Red International is the highest among operators and cutting master

and others, at about 33 per cent, and lowest among managers, which is 11 per cent (see Table

5.27). One worker contends,

I am not satisfied with my wages, work hours [work duration], weekly day off, training

facility, career development opportunity, provident fund provision, or even way of

supervision. I am not satisfied at all in this organization. Certainly I will leave this factory if

I will have a job in other factory. (Interview, Employee 2).

Table 5.27: Number of employees and annual labour turnover rates by category of employee Position Currently employed Annual turnover (%)

Manager & Assistant Manager 4 11 Supervisor 9 16 Cutting Master, Quality Controller, Ironer, Folder, Poly-men & Others 39 33 Operator 54 33 Helper (Cutting, Sewing & Finishing) 33 32 Total 139

(Source: Fieldwork at Red International, 2012).

The managers are not concern with the high voluntary turnover rate in this organisation.

They acknowledge that poor HR policies and practices are the major causes of the above

mentioned high turnover rates. They also know that low wages compared with similar other

RMG firms, lack of overtime payments, long working hours, no particular day off in a week,

limited career development opportunities and unsafe working condition are the main HR

policies among others that contribute to high labour turnover. They also realise that labour

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turnover is a problem for their organisation as it interrupts the production process and the

organisation loses skilled and experience workers.

5.9.2 HR policies & practices to reducing labour turnover

HR Policies and practices at the Red International are poor compared to similar RMG firms.

Poor wages, lacks of overtime work payments, irregular wages payments, long working hours,

no provision for training for newly recruited or existing employees, lack of day off in a week

and lack of leave facilities are some examples of poor HR practices (see Table 5.28). Such poor

HR practices are mainly responsible for higher voluntary turnover rates in this organisation.

Red International pays relatively poor wages compared to similar RMG organisations.

The wages rates are even lower than the minimum wage rate stipulated by the Government.

Despite acknowledging high turnover rates as a consequence of poor wages, managers are

reluctant to pay comparatively good wages as they believe the low wage is their only

comparative advantage in the industry. A manager believes that paying low wages can

maximise the revenue for the organisation. Workers, on the other hand, are dissatisfied with the

wages paid by the firm.

Table 5.28: Poor HR policies & practices contributing to high labour turnover Lower wages rates No annual leave facility Delays in wages payments Lack of sick leave & medical centre Lack of annual increment of wages Lack of maternity leave Lacks of overtime work payments No financial & non-financial benefits Long work hour Hazardous work environment Lacks of weekly off-day Risk of fire accident Five days long training opportunity No staff amenity No career development opportunity

(Source: Fieldwork at Red International, 2012).

Red International takes longer to pay wages, usually twenty to thirty days from the last

day of the wage period. Workers are extremely dissatisfied as Government regulations stipulate

that wages must be paid within seven days of the due date. Both the workers and managers

believe that the long time to pay monthly wages is one of the reasons for higher turnover rates

in this organisation (Interview, Manager 2 and Employee 1).

While increments of monthly wages contribute to maximise workers’ satisfaction,

absence of increment of wages accelerates voluntary turnover rates. There is no practice of

annual increments of workers’ wage in the Red International, even for workers who have

performed well over the past twelve months. Workers complain that lack of yearly increment on

base wages is a violation of Government regulations.

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There is no provision for overtime work at Red International. Workers have to work one

to two hours more than the usual normal work hours (i.e. eight hours a day) in very work day,

however they do not receive any overtime work payments for the extra hours. Workers are not

even paid for overtime on their weekly off day. Workers are dissatisfied due to the absence of

overtime work payments.

While Government rules are strict about an eight hour work day, at Red International the

work day is nine to ten hours. Workers think such long working hours are one of the main

factors for voluntary labour turnover in this organisation. Workers are dissatisfied as they have

to work nine to ten hours on every working day, but are paid for only eight hours (Interview,

Employee 1). Workers complained against the extended work hours.

Usually workers in Red International work six days and get one off day in a week.

However, the off day is not fixed and rotated every week. Moreover, workers have to work

seven days and have no weekly off day during sub-contracting periods because of high work

pressure. A manager argued that workers need to work seven days a week only in a peak season.

Workers feel exhausted and overwhelmed due to working seven days a week. They do not get a

rest day to recover energy and strength. Moreover, working seven days in a week makes their

family life difficult. Workers claimed that lacks of weekly day off is one of the important

factors for high voluntary labour turnover in this organisation.

There is no training center or training equipment at Red International. As a result, fresh

and newly recruited workers are sent for five days training programs to an outside training

center. Workers are pleased because of the training program. Workers report that the training

program is very important, especially for fresh and newly recruited workers, to make them

accustomed with machine operations, production techniques and other activities.

Workers report that there are very limited opportunities to develop workers’ careers at

Red International. Workers are upset because even the limited career development opportunity

is biased. Managers agree that career development opportunity is limited because of small size

of the organiation in terms of number of employees and number of production units. A manager

advocates for external recruitment as in most cases, internal sources do not meet selection

criteria.

There is no paid annual leave provision in this organisation. Workers are dissatisfied

because of the absence of paid annual leave provision. A manager argues that financial

insolvency makes them unable to practice this regulation.

Red International provides fourteen days paid sick leave per annum to sick or injured

workers. Employees are satisfied because of the paid sick leave. However, there is no medical

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center or a registered doctor or even a nurse on the factory premises. Workers claim that a

medical center with a doctor and a nurse is really important due to unsafe and hazardous

physical work environment.

There is no maternity leave provision for the women employees in this organisation.

Women employees are not even allowed to get maternity leave without financial benefits (i.e.

wages).

All workers in Red International receive a few specific financial and non-financial

benefits other than wages: two festival bonuses and provident fund. There is no provision or

practice of gratuity, annual bonus or attendance bonus in this factory. Employees are frustrated

and angry about this poor financial benefits. Employees also only receive canteen facility,

lunchroom facility and prayer room facility as non-financial benefits. There is no transportation

facility or childcare facility for the employees.

5.9.3 Workers’ health and safety

The work environment at Red International is not only very risky and unsafe for the employees,

but also hot, very noisy and overcrowded. The space provided for the each machine operator is

not enough. Machines are placed too close to each other due to limited space; when the

machines run together they are noisy, exceeding the tolerance level. There is an inadequate

ventilation system, narrow paths to bring the raw materials in and take the finished goods out.

Moreover, the workplace is dirty and smelly. There is no provision for pure drinking water for

the employees. In addition, there is no separate toilet for male and female employees. The

toilets are very unhygienic, and in an almost unusable condition.

There are no safety and security precautions against any type of accidents, including fire

accidents. There are no fire extinguishers, fire blankets, water hose pipe or fire exits. There is

not even any fire induction or fire training for the workers. Workers do not know what to do or

how to escape in a fire accident. There is no major fire accidents record in this organisation in

its three-and-half years’ operation. However, a couple of minor fire accidents occurred due to

short-circuits in 2011 and 2012. Managers have not yet taken step to improve short-circuit

problems. Workers are disappointed because of consecutive fire accidents in 2011 and 2012.

Workers also reported that fire accidents do not only damage property and lives but also damage

organisational reputations and increase voluntary labour turnover.

5.9.4 Staff amenities and staff facilities

There are no amenities in Red International. Most of the workers are dissatisfied because of lack

of staff amenities in this factory.

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5.9.5 Conclusion

In this section, Red International has been presented as an example of locally owned small

organisation with high labour turnover. This section showed how relatively poor HR policies

and practices contribute to increasing voluntary labour turnover.

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CHAPTER 6: PATTERN MATCHING

6.1 Introduction This chapter uses cross-case analysis to more directly address the research questions of the

thesis. In this way, it draws on the data already reported on a company-by-company basis in

Chapter 5, but seeks to compare the similarities and differences in their experiences. The

chapter begins, in section 6.2, with descriptive accounts of overall labour turnover rates,

followed by a more disaggregated analysis of occupational turnover rates. It also explores the

consequences of labour turnover for the organisations. Section 6.3 then seeks explanations of

labour turnover rates. This initially focuses on the influence of numerous individual explanatory

factors, with sub-section 6.3.1 analysing non-HR factors and sub-section 6.3.2 discussing HR

factors. However, despite the importance of these individual factors, section 6.4 develops the

argument that labour turnover can only be properly explained by integrating these individual

factors into a more holistic analysis. The final section (6.5) briefly summarises the findings and

draws conclusions.

6.2 Labour turnover rates: The purpose of this section is to introduce the overall labour turnover rates of the eight case

organisations, turnover rates among occupational groups and provide the consequences of

labour turnover. Overall, the labour turnover rates of the eight case organisations vary

considerably, ranging from “lower” labour turnover rates to “higher” turnover rates. Turnover

rates different occupational groups also varied significantly within all organisations, but are

quite consistent across all the organisations.

6.2.1 Overall turnover rates:

The overall labour turnover rates (including managers and excluding managers) in the eight case

organisations are summarised in Table 6.1. “Turnover rate including managers” includes all five

occupational groups (Helper, Operator, Cutting Master & others, Supervisor and Manager, and

Assistant Manager); ‘turnover rate excluding managers’ includes just three occupational groups

(i.e. Helper, Operator, and Cutting Master & others). The present study deals mostly with the

latter – that is, turnover excluding managers – because the focus is on the management of

“labour” and because most other organisational studies of labour turnover exclude managers

from their measures.

The method for calculating the overall turnover rate requires some explanation. When

gathering data in the eight case organisations managers (who were the only respondents with the

appropriate information) were asked to estimate the percentage turnover for each of the five

occupational categories. The overall turnover rate was produced by calculating a weighted

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average method – rather than a simple average method. For example, the overall turnover rate

including and excluding managers in Brown and Bronze Group (see Tables 6.1 and 6.2) was

calculated as follows:

Turnover rate including managers = (3000 X .129090

+ 3700 X .109090

+ 2100 X .119090

+ 200 X .049090

+ 90 X .039090

)

= 10.72

= 11 (round figure).

Turnover rate excluding managers = (3000 X .128800

+ 3700 X .108800

+ 2100 X .118800

)

= 10.91

= 11 (round figure).

Table 6.1: Rates of employee turnover among eight case organisations

Name of the case organisation Turnover Rate (%) (including Managers)

Turnover Rate (%) (excluding Managers)

Brown & Bronze Group 11 11 Blue Concern 12 13 Green Garments Ltd 15 15 Pink Fashion Company Ltd 15 16 Silver Dew Apparels Ltd 17 18 Amber Fashion Ltd 24 26 Purple Group 29 31 Red International 31 33 (Source: Fieldwork, 2012-13).

Managers from six of the eight case RMG organisations explicitly stated that the current

rates of turnover reported in Table 6.1 (which were accurate at the time of the interviews in

2012/13) were lower than they had been in earlier years. Interviewees at the other two

organisations did not address this issue. A manager from Silver Dew, for example, said he could

“remember the high turnover rates in this company only three years ago” (Interview, Manager

2, Silver Dew Apparels Ltd). Similarly, managers at Blue Concern said that the present 13 per

cent turnover compared with 19 per cent in earlier years (Interviews, Managers 1 & 3, Blue

Concern). These managers attributed these declines in labour turnover within their organisations

to a range of factors that will be discussed in later sections of this chapter.

Comparisons between overall labour turnover rates in the eight case organisations and

those in the rest of the Bangladeshi RGM industry is difficult. It is widely agreed that voluntary

turnover rate in the industry is high, but there is almost no data on typical or average turnover

rates. As Chapter 4 discussed, considerable research has been published on the RMG industry in

Bangladesh but only a handful of articles focus on voluntary labour turnover. Even these few

articles often did not devote much attention to labour turnover rates and, when they did, they

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made only vague statements about the voluntary labour turnover rate being “high” and

representing “a problem” for the industry without providing any data. For example, in a very

recent article, Moazzem and Raz (2014) noted: “at present, there is a high labour turnover

within the RMG sector” (p. 4). Ahamed (2014), in another recent article alleging that RMG

workers often change their jobs – in other words, the turnover rate is high in the RMG industry.

Both Moazzem and Raz (2014) and Ahamed (2014) went on to blame HR practices, but they

did not analyse the industry labour turnover rate or even report the turnover rates of individual

organisations. In another recent article, Hossain et al. (2012) asserted that the RMG industry

experiences high rates of labour turnover as well as other poor labour practices and causes of

labour unrest. But, again, the authors did not cite the industry turnover rate or industry

standards. Mukul et al. (2013) also recently claimed that “RMG factories in Bangladesh face

high rate of . . . turnover” (p. 32), particularly in the non-EPZ area, without providing any

measures of turnover. Mahmud and Kabeer (2003) also found “high rates of turnover in the

workforce” (p. 25).

One exception is the paper by Shamsuzzoha and Shumon (2007). Although their paper

does not mention the industry average rate of turnover or industry standards, it reports the

turnover rate of one particular RMG organisation (namely, Crescent Garments Ltd, a private

sector organisation) as part of a comparison with other organisations that operate in the

government sector. They found that Crescent Garments Ltd experienced a 30 per cent turnover

rate, while the government sector organisations experience a 10 per cent or less turnover rate;

one organisation, Oxygen Company Ltd (a non-RMG organisation), had a 5 per cent labour

turnover rate.

Data from the case organisations provide little more guidance about industry standards.

Some managers compared their own turnover rates with the industry as a whole, but they did

not provide specific industry rates. For example, a manager at Amber Fashion Ltd stated:

Considering the turnover rate in many other competitive organisations, our rate is not high.

Especially, the turnover rates in many RMG organisations in this district are very high.

(Interview, Manager 4, Amber Fashion Ltd).

A couple of managers, however, put numbers to the industry rate, mentioning rates over

30 per cent. For example, a manager at Green Garments Ltd said:

Obviously high rate of turnover is a major problem in many RMG organisations. In fact,

this is an industry-wide problem . . . I am not very sure about the rate in the industry, but

could be 30 per cent to 38 per cent. (Interview, Manager 1, Green Garments Ltd).

Similarly, a manager at Blue Concern stated:

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For the steady growth of the industry, we need to control the high rate of voluntary

turnover. Compared with many other industries, our rate is really high . . . I am informed

that the overall rate is about 36 per cent. (Interview, Manager 2, Blue Concern).

Two main conclusions can be drawn about the overall labour turnover rates in the case

organisations. First, the overall turnover rates of the eight case organisations vary considerably,

ranging from those (such as Brown & Bronze and Blue Concern) best referred to as

experiencing “lower” turnover to others (such as Purple Group and Red International)

experiencing much “higher” turnover. Second, while there is little doubt that those in the

“lower” category are low compared to many in the industry, those in the “higher” category may

not be as high as the worst in the industry.

6.2.2 Turnover rates among occupational groups

More disaggregated data was also gathered from the eight case organisations on the turnover

rates of different occupational groups within the RMG industry using five categories: Helpers;

Operators; Cutting Masters & others; Supervisors; and Managers & Assistant Managers. These

categories generally represent a hierarchy of skill and rewards, with the lowest skilled and

lowest paid being the Helpers and the highest skilled and highest paid being the Managers (see

Chapter 4).

The disaggregated results on turnover rates, which are summarised in Table 6.2, suggest

four main findings. First, the turnover rates for different occupational groups varied

significantly within all organisations, ranging from the highest being 34 per cent for helpers at

Purple Group to the lowest being 3 per cent for Managers & Assistant Managers at Brown &

Bronze, and Blue Concern.

Second, the occupational variations were quite consistent across all of the organisations:

the turnover rates in three categories (i.e. Helpers, Operators and Cutting Masters) are higher

than supervisors, which are higher than Managers & Assistant Managers. In other words, the

turnover rates generally decline as they move through the columns in Table 6.2 towards the

right.

The managers in all eight case organisations acknowledged the different turnover rates

for the different occupational groups. They also observed that the turnover rates are the highest

among the Helpers and operators group and lowest among the Managers & Assistant Managers

group. The Manager in the Purple Group, for example, said:

The voluntary turnover rate is not unique for all the occupations. It varies occupation to

occupation . . . in this organisation, the rate is the highest among Helpers and operators and

it is lowest among Managers & Assistant Managers’ (Interview, Manager 2, Purple Group).

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The manager in the Green Garments Ltd made similar comments:

Despite almost the same opportunities and benefits for all occupations in this company,

turnover rate varies occupation to occupation . . . The turnover rate is the lowest among

Managers & Assistant Managers and highest among Helpers. (Interview, Manager 1, Green

Garments Ltd).

Table 6.2: Turnover rates by occupational category among eight case organisations

Rank Organisation Turnover Rate (%)

Helper Operator CM and Others Supervisor Manager &

A.M

No. Rate (%) No. Rate

(%) No. Rate (%) No. Rate

(%) No. Rate (%)

1 Brown & Bronze 11 3000 12 3700 10 2100 11 200 4 90 3

2 Blue Concern 13 2130 14 2881 13 2200 11 210 5 79 3

3 Green Garments 15 447 16 793 15 108 13 25 6 15 4

4 Pink Fashion 16 409 17 750 16 331 15 68 6 31 5 5 Silver Dew 18 89 18 145 17 170 18 30 8 14 6

6 Amber Fashion 26 86 23 127 28 103 25 24 12 9 8

7 Purple Group 31 70 34 107 30 43 30 21 15 6 10 8 Red Intl. 33 33 32 54 33 39 33 9 16 4 11

(Source: Fieldwork, 2012-13).

Third, despite the broad consistency in occupational differences in turnover rates, there

are some exceptions, especially between the first three categories. For example, in two cases

(i.e. Amber Fashion and Red International), turnover rates of Cutting Masters & others category

is slightly higher than those of the Helper category. Operator rates are higher than Helpers in the

same two organisations (namely, Amber Fashion and Red International). These differences,

however, are not great (i.e. mostly 1% or 2%), while the total number of employees in Red

International and Amber Fashion are only 139 and 349 respectively. This means that the

percentages could easily be affected by small numbers of employees leaving.

Fourth, looking down the rows of Table 6.2, the eight case organisations consistently

occupy the same rank in the order of turnover rates for all occupational groups. Brown &

Bronze Group has the lowest turnover rate in all five work categories. Similarly, Blue Concern,

Green Garments Ltd, Pink Fashion Company Ltd and Silver Dew Apparels Ltd occupy 2nd, 3rd,

4th and 5th ranking for all categories. Red International occupies the 8th ranking, experiencing the

highest turnover rate in all occupational categories, except for Helper, followed by Purple

Group (7th) and Amber Fashion Ltd (6th). Hence, the pattern appears to be that an organisation

that controls turnover rate in one particular category, will control it in all other work categories.

This suggests that there are strong organisation-specific explanations for the variations in

turnover rates.

The two exceptions to the above generalisation (both involving Red International) require

further discussion. While the overall rank of Red International is 8th, it occupies the 7th rank for

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the helper category. Indeed, the turnover rate of Helpers at Red International is 2 per cent less

than that of the Purple Group, the organisation above it in all other categories. A clue to

understanding this anomaly is that Red International devotes particular attention to retaining

Helpers because they are paid comparatively low wages:

As a sub-contracting organisation we don’t have enough work orders, especially in the off-

peck period . . . to be honest, considering financial impacts, we don’t want to employ all the

workers except the Helpers during off-peak period . . . always we prefer to keep the Helpers

as their wages are relatively low. (Interview, Manager 2, Red International).

6.2.3 The consequences of labour turnover

Data was also gathered on the consequences of high labour turnover. All the case organisations,

with the possible exception of Red International, considered turnover as a problem. The

negative consequences of this problem, as observed by the managers of the case organisations,

relate mostly to production delays and adverse effects on the production process (such as

increased production costs), particularly with respect to the turnover of skilled occupational

groups. There were, however, not only the delays in production and increased costs flowing

from these production problems that concerned the managers but their impact on the timing of

shipments of finished goods, the reputation of the company and recruitment and training costs.

Among the adverse consequences, delay in production is the most severe one as it not only

damages the reputation of the organisation but also dissatisfies the buying agent. More

importantly, a consignment can be returned or a work order can be withdrawn by the buying

agent because of delays in production.

The findings of the present study relating to consequences of turnover on the production

process are consistent with findings in the literature. The handful of research articles on

voluntary labour turnover in the RMG industry in Bangladesh also found multiple negative

consequences of high labour turnover. Shamsuzzoha and Shumon (2007) claimed that even low

rates of turnover create significant problem in terms of production loss. All relevant studies

reported that delays in production, production loss, recruitment and training costs and extra

work load on the existing workers are the major adverse impact.

Mukul et al (2013) noted: “Turnover . . . results in disruption in production” (p. 32).

Hossain et al. (2012, p. 214) also found “disruption in production” is a major consequences of

high labour turnover. Shamsuzzoha & Shumon (2007) found similar negative effects of labour

turnover: “hamper the overall productivity of an organisation” (p. 66).

A manager at Green Garments Ltd provides a good example of the significance of the

skilled workers. He made comments about the consequences of turnover on production delays:

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Skilled and experienced employees are our real asset. Voluntary turnover means loss of this

valuable asset. Skilled and experienced workers not only perform faster, but they also make

very few mistakes, which directly contributes to uninterrupted, fast and quality production

process. Voluntary turnover, on the other hand makes the targets very difficult, especially

production in due time. (Interview, Manager 4, Green Garments Ltd).

Similarly, a manager at Amber Fashion Ltd argued that buying agencies want to receive

the finished goods on time. Labour turnover, especially amongst skilled workers, makes it

difficult to deliver the finished goods on time:

High labour turnover is a serious problem for every RMG organisation . . . skilled human

resources are the significant factor of production. Every organisation wants to retain them.

Losses of skilled workers have many negative consequences, the basic one is delays in

production. (Interview, Manager 1, Amber Fashion Ltd).

Shamsuzzoha & Shumon (2007) found production loss as another significant negative

effect: “turnover may cause considerable amount of production lost” (p. 66). Again the findings

of the present study concerning the consequences of turnover on the production process are

consistent with findings reported in the literature. A manager at Silver Dew Apparels Ltd

considered the high rate of labour turnover as a problem for his organisation as it incurs

additional expenses due to a sudden vacancy and replacement by a relatively low-skilled

worker:

Apart from some other adverse impacts of voluntary turnover, it increases production costs

. . . due to sudden leaving, some of the workers – such as Machine Operators or Helpers –

may become idle, as they work as a team. Moreover, replaced worker(s) may not be as

skilled as the workers who just left, which increase the production costs. (Interview,

Manager 1, Silver Dew Apparels Ltd).

Shamsuzzoha & Shumon (2007) found that the need to provide training adversely

impacts an organisation because of the time and cost. They allege: “Newly appointed employee

. . . needed time consuming training for settle down with the new job place” (p. 66). The

findings of the present study concerning adverse effects of turnover on recruitment and training

cost are similar to findings reported in the literature. A manager at Blue Concern claimed that

recruitment and training cost is one of the major consequences of voluntary turnover for their

organisation. He claimed:

Obviously voluntary turnover adversely impacts on our plan, strategies and organisational

goals. More importantly, voluntary turnover increases costs of the organisation . . .

selection and training cost for the newly recruited employees is a considerable one. Our

selection and training, particularly training is extensive and expensive. (Interview, Manager

1, Blue Concern)

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In addition to the above, the existing literature highlights the “extra work load on the

existing workers” as a consequence of high labour turnover. Hossain et al. (2012) argue “

existing workers face extra work-load due to the shortage of labour” (p. 214). They also argue

such increased work pressures reduce job satisfaction. Ultimately, poor job satisfaction may

force other workers to leave the organisation also. The present study, however, did not find

“extra work load on the existing workers” from the case organisations as a consequences of

turnover.

The present study found that high labour turnover could destroy organisational image.

Existing research articles, however, do not find this as a negative consequence of turnover. A

manager at Brown & Bronze Group believed that labour turnover is a problem for their

organisation because it damages the organisation’s reputation:

One of the main consequences of labour turnover is that it destroys organisational goodwill.

We have to supply the consignments to our buyers on time . . . voluntary labour turnover

makes machines idle, destroys the production chain and ultimately causes delays in the

shipment of finished goods. Such delays not only damage our reputation but also reduce

future work orders due to a bad organisational image. (Interview, Manager 2, Brown &

Bronze Group).

Hence, the present study found that the consequences of high labour turnover are delays

in production, production loss, recruitment and training costs. It is hard to evaluate the relative

importance of each consequence because they are inter-related. For instance, production loss,

damage of organisational image and even recruitment and training costs occur due to delays in

production. Existing research articles also found these as the consequences of turnover. The

present study found that turnover negatively impacts on organisational image, though the

literature does not find any such consequences. In contrast, the literature demonstrated that high

labour turnover increases the workload of the existing workers, but the present study did not

find such consequences.

6.3 Explaining labour turnover rates (Research Question 3) This section consists of four sub-sections. Sub-section 6.3.1 examines the association of

organisational characteristics, such as size, ownership, location, enforcement of regulation,

position in supply chain and age, with labour turnover. Sub-section 6.3.2 appraises a link of HR

practices, such as wages rates and work hours, with turnover rates. Sub-section 6.3.3 provides a

correlation between OH&S and labour turnover. Finally, sub-section 6.3.4 discusses the inter-

relationship between the factors effecting turnover rates.

As discussed in the earlier sections of this chapter, the rate of turnover varies significantly

between the eight case organisations. Size, location and age of the organisation, enforcement of

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regulations and position of the organisation in the supply chain impacts on the turnover rate.

However, ownership of organisation does not effect turnover rates. Bundle or integrated HR

practices also play a vital role in fostering workers’ satisfaction and reducing the turnover rates.

In contrast, single HR practices have very little or no appeal in enhancing workers’ satisfaction

and reducing the rate. The reality is that there is a strong relationship between bundle or

integrated HR practices and demographic factors (i.e. size, location, age, position in supply

chain) of the organisation. Apart from the demographic factors of the organisation and bundle

HR practices, OH&S plays a significant role in the turnover rate.

6.3.1 Organisational characteristics and labour turnover

Tables 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8 summarise the relationship of turnover rates with size,

ownership, location and age of the organisation, enforcement of regulations and position of the

organisation in the supply chain. It demonstrates the significant effects of size, location,

enforcement of regulations, age and position of the organisation in the supply chain over

voluntary turnover rate. Greater size, prime location (such as in a city), mature age, proper

enforcement of regulations and strong position in the supply chain bring an opportunity for the

organisations to offer a range of HR and work environment practices which would likely

improve workers’ satisfaction and reduce voluntary turnover.

6.3.1.1 Size of the organisation

Table 6.3 shows that size of the organisation, in terms of numbers of employee, corresponds

closely with the turnover rates. That is, in general, large organisations experience lower rates of

turnover and small organisations experience higher rates of turnover. Table 6.3 shows that all

four large organisations experience lower rate of turnover, ranging from 11 per cent per annum

(Brown & Bronze Group) to 16 per cent per annum (Pink Fashion Company Ltd). In contrast,

three of the four small RMG organisations experience relatively higher rates of turnover,

ranging from 33 per annum (Red International) to 26 per cent per annum (Amber Fashion Ltd).

Table 6.3: Rates of employee turnover among eight case organisations (2012/2013)

Rank Name of organisation Number of employees Size Turnover rate (%)

(excludes Managers) 1 Brown & Bronze 9090 Large 11 2 Blue Concern 7500 Large 13 3 Green Garments Ltd 1388 Large 15 4 Pink Fashion Co. 1672 Large 16 5 Silver Dew Apparels 448 Small 18 6 Amber Fashion Ltd 349 Small 26 7 Purple Group 247 Small 31 8 Red International 139 Small 33

(Source: Fieldwork, 2012-13) Some managers from the case organisations acknowledge the influence of size on the

turnover rate. A manager from Red International, for example, said: “Turnover rate is associated

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. . . also with size of the organisation . . . large organisations are in better position compared

with small sized organisations to retain their skilled workers.” (Interview, Manager 3, Red

International).

In addition, managers at Green Garments Ltd said that there size influences the turnover

rate of an organisation. He said: “Mostly workers like to work with the greater size

organisations, as big organisations generally offer better financial benefits and work

environment” (Interviews, Manager 2, Green Garments Ltd). These managers added that large

organisations allow managers to offer a range of HR practices which reduces the turnover rate.

Hence, the pattern is that large organisations experience lower rates of turnover and small

organisations experience higher rates of turnover.

While there are many studies from Western countries which link size of organisation with

labour turnover (Bame, 1993; Benson, Dickinson & Neidt, 1987; Ingham, 1970; Guthrie, 2000;

Taplin et al., 2003; Lee et al., 2006; Mobley 1982; Even & Macpherson, 1996; Zheng &

Lamond, 2010), the comparison on influence of size on turnover rates among the eight case

organisations and those in the rest of the Bangladeshi RGM industry is difficult as there is little

information on labour turnover rates. As already noted a number of times in this thesis, few

articles focus on the health of RMG workers or growth of the industry, almost no article devote

attention on turnover rates, particularly the impact of size on turnover rates. Paul-Majumder

(2003), for instance, researched size of RMG firms and the link with occupational hazards, but

not with turnover rates. She noted that “the large factories provide comparatively more facilities

to workers in terms of higher wages, less working hours, more leave facilities, better physical

working conditions in terms of light, ventilation, cleanliness” (p. 133).

6.3.1.2 Ownership of the organisation

Table 6.4 shows that ownership (i.e. foreign or locally owned) of the organisation has little

direct affect on the turnover rate. Generally, foreign owned organisations experience low rates

of turnover. Locally owned organisations, on the other hand, usually experience high rates of

turnover. However, the present research does not find such evidence. Table 6.4 shows that three

of four foreign organisations experience lower rates of turnover, ranging from 11 per cent per

annum (Brown & Bronze Group) to 18 per cent per annum (Silver Dew Apparels Ltd). The

remaining foreign organisation (Amber Fashion Ltd) experiences comparatively higher rates of

turnover, at 26 per cent. In contrast, two of the four local case organisations experience

comparatively lower rate of turnover, at13 per cent per annum (Blue Concern) and 15 per cent

per annum (Green Garments Ltd). The remaining two local organisations experience relatively

higher rate of turnover, at 33 per cent per annum (Red International) and 31 per cent per annum

(Purple Group) reported in Table 6.4. It is hard to arrive at a concrete conclusion by analysing

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the data presented in Table 6.4 because both foreign and locally owned organisations experience

lower and higher turnover rates; cannot be concluded that only foreign owned organisations

have reduced turnover rates and locally owned organisations experience higher turnover rate or

vice versa. Hence, the data shows that there is minimal direct impact of ownership (i.e. foreign

or locally owned) of the organisation on the labour turnover rate.

Table 6.4: Rates of employee turnover among eight case organisations Name of organisation Ownership Turnover rates

Brown & Bronze Group Foreign 11 Blue Concern Local 13 Green Garments Ltd Local 15 Pink Fashion Company Ltd Foreign 16 Silver Dew Apparels Ltd Foreign 18 Amber Fashion Ltd Foreign 26 Purple Group Local 31 Red International Local 33

(Source: Fieldwork, 2012-13).

Some managers from the case organisations claim that there ownership does not influence

the turnover rate. A manager from Blue Concern, for example, said:

I don’t think foreign ownership influences in reducing voluntary turnover rate at all . . .

factors of voluntary turnover rate are different than the ownerships of the organisations.

While about 98 per cent of the workers are from financially poor and needy family, I don’t

think ownership is a matter to them . . . we are a locally owned organisation and our rate of

voluntary turnover is relatively lower . . . the workers do not bother who are the owners –

foreign or local . . . in fact, most of our workers stay in this factory for some other reason.

(Interview, Manager 1, Blue Concern).

These managers added that there is trivial link between ownership and workers’

satisfaction. Hence, the pattern of ownership of the organisations plays a limited role in

explaining an increase or decrease in the labour turnover rates of an organisation.

While some studies from Western countries link ownership of organisation with labour

turnover (such as Bame, 1993; Bloom et al., 1992; Cummings & ElSalmi, 1968) or country of

origin with labour turnover (such as Ma & Trigo, 2012), the comparison in terms of effects of

ownership between the eight case organisations and those in the rest of the Bangladeshi RGM

industry is difficult. Only a handful of existing articles concerned with voluntary labour

turnover devote attention to labour turnover rates, particularly to the influence of ownership on

turnover rates.

6.3.1.3 Location of the organisation

Table 6.5 shows that geographical locations of the organisations correspond closely to labour

turnover rates. In general, RMG organisations located in cities experience lower rates of

turnover than organisations located in regional areas or outside cities with poor facilities

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experience higher rate of turnover. Kaikobad and Bhuiyan (2012, p. 2), for instance, allege that

providing transportation is a significant factor impacting voluntary turnover among female

workers, who are 85 per cent of the workforce (Sikder et al., 2014). Table 6.5 shows that the

four organisations with the lowest turnover rates were all located in or very close to cities. In

contrast, the three RMG organisations with the highest turnover rates were located in regional

areas (such as Gazipur and Narayangonj) or outside of cities (such as Red International is

located in outside of Dhaka city). Despite its regional location, Silver Dew Apparels Ltd is an

exception, experiencing relatively lower turnover rate, at 18 per cent. The location of Silver

Dew Apparels Ltd, despite its classification as “regional” is less isolated than the other three

organisations.

Table 6.5: Rates of employee turnover among eight case organisations

Rank Case organisation Location City/region Turnover rates (%)

1 Brown & Bronze Savar EPZ City 11 1 Blue Concern Narayangonj EPZ City 13 1 Green Garments Dhaka City 15 1 Pink Fashion Co. Savar EPZ City 16 5 Silver Dew Apparel Narayangonj Region 18 5 Amber Fashion Gazipur Region 26 5 Purple Group Gazipur Region 31 5 Red International Dhaka Region 33

(Source: Fieldwork, 2012-13).

Geographical location of the organisation affects turnover. Data from interviewees

suggest that it relates to access to public transport and other factors like residential

accommodation. For example, some workers from the case organisations acknowledge the

influence of geographical location on the turnover rate. A worker from Purple Group, for

example, expressed:

My house is far away from this factory. Public transport is not easily available. Every day it

takes about three hours to come in and go back from my work. Considerable numbers of

employees in this factory have this problem . . .position [geographical location] of the

factory is important for me. I will not continue my job with this factory … I am looking for

a job in a good location, particularly not very far from my house . . . I guess far distance

from city is one reason for the higher turnover rate in this factory. (Interview, Employee 1,

Purple Group).

In addition, a Manager at Green Garments Ltd contended that a suitable factory location

favours organisations to attract workers and reduce the turnover rate. He said:

We are located at Uttara in Dhaka district. Uttara is a suitable location in terms of cheap

and available accommodation, affordable school-college facilities for dependent children,

availability of public transports and easy transportation facility with other cities. Such a

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prime location directly helps us to retain the skilled workers (Interviews, Manager 4, Green

Garments Ltd).

The Manager added that good locations save employees time, energy and money, which,

in turn, reduces the turnover rate. Hence, the emerging pattern from the data is that

organisations located in cities with public facilities experience lower rates of turnover, and

organisations located in regional areas or outside of cities with poor public facilities experience

higher rates of turnover.

While there are many studies from Western countries which link location of organisation

with labour turnover (such as Bame, 1993; Bennett et al., 1993), only a handful of research

articles devote attention to the relationship between geographical location of the organisation

and turnover rate in the RGM industry in Bangladesh. Shamsuzzoha and Shumon (2007, p. 67),

for example, showed that there is a strong correlation between location of the organisation and

turnover rates. They argued that “job location” is one of the top five most significant factors

contributing to turnover rates. However, they did not clearly describe how city and regional

locations of organisations effects turnover rates. Hossain et al. (2012) and Moazzem and Raz

(2014) also found that RGM organisations located in EPZ areas (i.e. in cities or close to a city)

experience relatively lower rates of turnover than that organisations in no EPZ areas. However,

non- EPZ areas do not always mean regional areas. These findings help to explain why

voluntary turnover rates are different in city areas compared with regional areas.

Hossain et al. (2012) is one of a couple of articles that indirectly demonstrates the

relationship between geographical location and turnover rate. They found “a strong relationship

exists between the location of the factory and workers absenteeism” (p. 212). It can be

interpreted that the absenteeism then leads to turnover. Therefore, it appears that location of the

factory has a strong influence on voluntary turnover.

Conversely, Paul-Majumder (2003) found that the RMG firms located in city areas have

relatively bad working conditions compared to firms located in regional areas. She asserts: “The

factories situated in the city proper have bad working conditions, since most factories in this

location were not purposes-built” (p. 138). She also notes: “physical working conditions, terms

and conditions of employment in the factories situated outside the city center were found to be

better than those in the factories situated within the city proper”. However, she did not make a

link between location and turnover rates.

6.3.1.4 Enforcement of regulations

RMG organisations are obliged to abide by rules and regulations, such as minimum wages rate,

normal working hour, weekly off days and occupational health and safety. In practice, many

RMG organisations abide by rules and regulations but many others do not because the

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enforcements of regulations are not strict and fair. Generally, the organisations that follow the

rules and regulations experience lower rate of turnover than those that do not. Table 6.6 shows

that, rigorous enforcement of regulations corresponds closely with the turnover rates because

workers are less likely to leave the organisation where regulations are obeyed.

There are a significant number of government regulations concerned with the RMG

industry in Bangladesh. Those on which data were gathered are: government regulations on

minimum wages rates, annual wages increment rates, normal work hours, paid annual leave,

medical allowances, medical leave and maternity leave. The present study has analysed

government regulations related to data gathered from each case organisations and assessed

whether the case organisations enforce regulations or not. In Brown & Bronze Group, for

example, the normal work day is eight hours, which is consistent with the government

regulation related on normal work hours. In contrast, Red International practices nine to ten

hour days, which is a clear violation of government regulations.

Table 6.6 shows that the five case organisations that enforce standard rules and

regulations experience lower rates of turnover, ranging from 11 per cent per annum (Brown &

Bronze Group) to 18 per cent per annum (Silver Dew Apparels Ltd). All three case RMG

organisations that do not to enforce standard regulations, experience higher rates of turnover,

ranging from 33 per cent per annum (Red International) to 25 per cent per annum (Amber

Fashion Ltd).

Table 6.6: Rates of employee turnover among eight case organisations

Rank Name of organisation Enforcement of regulations

Turnover rates (%) (excludes Managers)

1 Brown & Bronze Group Yes 11 1 Blue Concern Yes 13 1 Green Garments Ltd Yes 15 1 Pink Fashion Company Ltd Yes 16 1 Silver Dew Apparels Ltd Yes 18 6 Amber Fashion Ltd No 26 6 Purple Group No 31 6 Red International No 33

(Source: Fieldwork, 2012-13).

Some managers from the case organisations acknowledge the influence of the

enforcement of regulations on voluntary turnover rate. A manager from Blue Concern, for

example appraised enforcement of regulations:

It is very important to follow the government regulations, such as wages rates, wages

payment periods, work hours, overtime work hours and payments, work safety and so on.

We are very concerned about the enforcement of regulations . . . we enforce the regulations

as it assists us to retain the skilled and experienced workers . . . the workers prefer to work

with the organisations where the regulations are enforced properly. Certainly they [the

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workers] will not continue [their jobs] where the wages rate is lower than the government

minimum rates or work hours is more than eight hours. . . . many factories [RMG

organisations] lose their skilled workers due to the lack of enforcement [of

regulations](Interview, Manager 1, Blue Concern).

In addition, a manager from Red International assessed the enforcement of regulations as:

Standard rules and regulations play an important role in reducing the voluntary turnover

rates. But rules and regulations are not enforced by every factory, as the enforcement

mechanisms are not strict and strong . . . voluntary turnover rate is high in this factory.

Absence of the application of the regulations is the key for this high rate . . . while

enforcement of regulations has made a safe and secured physical work conditions for

workers, ignorance of enforcement, in many cases, has made it risky and hazardous . . . I

believe that enforcement of regulations, particularly occupational health and safety

regulations attract workers to continue their work for a long period of time.(Interview,

Manager 3, Red International).

These managers added that organisations that enforce work-related standards set by the

government, such as minimum wages rates, regular and due time payment of wages, weekly off

days, standard overtime work payments, eight hours based work hour and OH&S related

regulations increase workers’ satisfaction and reduce turnover rate. They also added that

enforcement of regulations brings a good business reputation for the organisation. Hence, the

pattern is organisations that enforce regulations experience low rates of turnover and

organisations that do not experience high rates of labour turnover.

While there are significant numbers of studies from Western countries which link the

enforcement of regulations with labour turnover, only a couple of articles focus on the

relationship between the enforcement of regulations and voluntary labour turnover in

developing countries. Mahmud and Kabeer (2003) is one of the couple of studies on compliance

issues in the RMG industry. They assert that because of better regulations and practices the

RMG organisations in the EPZ areas experience lower rates of turnover. They affirm: “The

main exceptions to this are to be found in the country’s EPZs, where more formal conditions

exist, but these account for a very small proportion of total garment employment” (p. 25).

Mukul, et al. (2013) investigated the enforcement of regulations in the EPZ areas in Bangladesh.

Enforcement of regulations is not uniform across the country. Particularly it varies significantly

between the EPZ areas and non-EPZ areas. Due to the variation of enforcement of regulations,

turnover rate also variy between the organisations situated in EPZ areas and non-EPZ areas. The

RMG factories in the EPZ areas are required to strictly abide by the regulations because of the

very strong enforcement authority, namely the BEPZA. Such enforcement of regulations

increases workers’ satisfactions and reduces turnover rates. Mukul et al (2013, p. 26) argue that

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the “majority of the respondents” employed in the RMG organisations in the EPZ areas are

highly satisfied with the rate of wages. The workers employed in the EPZ areas are not only

satisfied with the wages but also with all other work-related factors because of the strict

enforcement of regulations.

Enforcement of regulations, on the other hand, is weak in the non-EPZ areas. Mondol

(2002) revealed that less than 3 per cent of the workforces in non-EPZ area are protected by the

existing legislative framework. Similarly, Mahmud & Kabeer, (2003) argue that enforcement of

regulations is very poor. They allege: “Labor legislation in Bangladesh not only excludes the

majority of workers in Bangladesh, but also fails to protect those it formally includes” (p. 28).

Many RMG factories in the non-EPZ areas are even able to pay lower than the minimum wages

determined by the Bangladesh Government because of the lack of enforcement of regulations.

Scholars and researchers finnd that the lack of enforcement of regulations is one of the main

reasons for voluntary labour turnover in the RMG industry (Khatun et al., 2007; Mahmud &

Kabeer, 2003)). Rahman and Hossain (2010), for example, recommend: “regular practice of

compliance codes of conduct can bring . . . less worker turnover rate” (p. 79). Similarly,

Ahamed (2013,) alleges: “Absence of an appropriate mechanism to ensure the enforceability of

the available laws for protecting workers’ rights and maintaining workplace safety continues to

be a concern in the RMG sector” (p. 3) Ullah et al (2013, p. 4) also contend that because of

very poor enforcement of regulations turnover rates are high. They assert that the RMG

factories in Bangladesh “do not follow compliance obligation” which creates a range of

“problems, such as workers left their work place”.

Standard work hours, which is generally eight hour based, contributes significantly to

increase workers’ satisfaction and retaining skilled workers. Because of weak enforcement of

regulations, many RMG organisations exercise extended working hours excluding overtime

work. Some organisations even have ten or more hours as normal work hour. Hossain et al.

(2012), for example, claim that normal work hour of the RMG industry is extended. On the

other hand, due to enforcement of regulations, which is enforced by the BEPZA, organisations

in the EPZ areas are required to strictly follow eight hour based normal work hour. Mukul, et al.

(2013, p. 27) found that enforcement of regulations made normal work hours tolerable for the

RMG workers in the EPZ area. They also found that most RMG organisations in the EPZ area

follow standard work hour (i.e. 8 hours) as normal work hours.

Heterogeneous gender policy, which can be ensured by enforcement of regulations, plays

a vital role to increase workers’ satisfaction, especially female workers’ satisfaction. Ninety per

cent of the RMG workers are female in the RMG industry (Ahamed, 2014; Begum & Ahamed,

1999; Khatun et al., 2007; Mahmud & Kabeer, 2003). Due to poor enforcement of regulations,

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many RMG factories follow discriminatory wage practices or overtime payment practices

between male and female workers. Hossain et al (2012), for example, found discriminations

because of weak enforcement of regulations: “In fact, women face discriminations at work in

terms of wage differentials and gender differences: (p. 209). Such gender discrimination is one

of the important factors for high turnover rates, especially in those organisations where there is

no enforcement of regulations. Enforcement of regulations, on the other hand, contributes to

ensuring equal employment opportunity and minimising turnover rates. Table 6.6 demonstrates

that enforcement of regulations and equal opportunity for male and female workers plays an

important role in lowering turnover rate in the EPZ area. Mukul et al. (2013, p. 26) found that

“there is no [gender] discrimination on RMG [organisations] in EPZ area”.

Mukul et al (2013) found the workers are “satisfied regarding working environment”

because when managers abide by physical work related regulations. But physical work

environments in many RMG factories are unsafe and hazardous due to the lack of enforcement

of regulations. Such lacks of enforcement of regulations cause deadly accidents every year in

the RMG industry. “The Spectrum factory collapse in 2005” (Reinecke and Donaghey, 2015, p.

729), and fire accidents in 2005 and in 2006, for example, not only caused death of 130 and 88

RMG workers on the job respectively but also severely burnt and made permanently lame many

others (Morshed, 2007, p. 106). Two other recent occupational safety related mishaps due to

lack of enforcement of regulations show why workers in the RMG industry are concerned about

the enforcement of regulations: the industrial fire accident at Tazreen garment factory in 2012

that killed 111 workers (Main, Hirst & Phillips, 2013; Al-Mahmood, 2013, Reinecke and

Donaghey, 2015, p. 729), and Rana Plaza garment factory collapsed in 2013 which killed 1,229

workers and injured a further 2,500 workers (Main et al., 2013; Wright, 2013, Gabriel,

Korczynski and Rieder, 2015, p. 631). However, the rate of accidents is low in the organisations

that enforce OH&S-related regulations. Enforcement of regulations not only deals with the

improvement of the physical work environment but also wages rates, heterogeneous gender

policy and work hours. As a result, the organisations that enforce regulations, including the

OH&S-related regulations increase workers’ satisfaction and retain skilled and experienced

workers.

6.3.1.5 Position of the organisation in the supply chain

Table 6.7 shows that the position of the organisation in the supply chain, in terms of its role as a

direct contractor or a sub-contractor, corresponds closely with turnover rates. Those

organisations acting as contractors consistently have lower labour turnover rates compared to

sub-contractors. Especially important here is the role of the buying agent. Generally, the buying

agents inspects the physical work conditions and safety standards, and monitors other practices

of RMG organisations from which they directly buy readymade garments products. These RMG

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organisations are required to meet buying agents requirements regardomg HR practices (such as

work hour) and physical work standards. Hossain et al. (2012), for example note: “The RMG

firms in Bangladesh have been facing immense pressure from international buyers for

compliance with their codes of conduct” (p. 208). Moreover, Mahmud & Kabeer (2003) allege

“Non-compliance with basic labor standards in this sector carries real penalties in the form of

lost orders from their international buyers” (p. 22). Better HR practices and physical work

environment, determined by either buying agents or the government, contribute to lowering the

rate of turnover. Table 6.7 shows that all five contracting organisations experience lower rates

of turnover, ranging from 11 per cent per annum (Brown & Bronze Group) to 18 per cent per

annum (Silver Dew Apparels Ltd).

Significant numbers of RMG organisations work as sub-contractors, especially in peak

season. As sub-contracting organisations are not contracted to the buying agents, they are not

inspected or monitored by the buying agents. In addition, inspection and monitoring mechanism

of the government is not only insufficient but also corrupt. As a result, there is almost no

pressure on these sub-contracting organisations to comply with regulations either from the

buyers or the government. Hence, HR practices and OH&S of sub-contracting organisations

depend on the whims of the managers. Such poor HR practices and physical work environments

lead to higher rates of turnover. Table 6.7 demonstrates that the three sub-contracting

organisations experience higher rates of turnover, ranging from 33 per cent per annum (Red

International) to 26 per cent per annum (Amber Fashion Ltd) as buying agents do not police

them.

Table 6.7: Rates of employee turnover among the eight case organisations Rank Name of organisation Position Turnover rates (%)

1 Brown & Bronze Contractor 11 1 Blue Concern Contractor 13 1 Green Garments Ltd Contractor 15 1 Pink Fashion Co. Ltd Contractor 16 1 Silver Dew Apparels Contractor 18 6 Amber Fashion Ltd Sub-contractor 26 6 Purple Group Sub-contractor 31 6 Red International Sub-contractor 33

(Source: Fieldwork, 2012-13).

Some managers from the case organisations acknowledge the influence of position of the

organisation in supply chain on the turnover rate. For instance a manager from Blue Concern

contended:

Buying companies from overseas or their local representatives inspect our workplace safety

and security system. They are very concerned about the physical work conditions,

especially after the Tazreen Garment tragedy . . . in many cases, it’s a pre-requisite for

working as a supplier for the foreign buyers to comply with safety related regulations . . .

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the buying company is also concerned about particular HR practices. They monitor

supervisor-workers relationship, provision of weekly off day or even wages rates . . . the

inspection and monitoring from the buying company force upon us to secure workplace

safety and exercise employee favoured policies. (Interview, Manager 2, Blue Concern).

In addition, managers at Red International professed that position of the organisation in

the supply chain has an influence on turnover rate:

Red International operates as a sub-contracting organisation. Due to sub-contracting

position we don’t have any contact with the buying companies . . . as we are the sub-

contractor of the local RMG organisations, who supply directly to the buying companies,

there is no pressure on us from the buying companies to improve workers’ health and safety

issue . . . to be honest, lack of pressure to make the safety system standard is partially

responsible for our current unsafe physical work environment. (Interviews, Manager 1, Red

International).

These managers added that pressure from the buying companies encourage the managers

to standardise physical work environments and offer employees favourable HR practices, which

reduces labour turnover rate. Hence, the pattern is full-contracting organisations which supply

readymade products directly to the buying companies experience lower rates of turnover and

sub-contracting organisations experience higher rates of turnover.

While there are many studies from Western countries which link position of the

organisation in supply chain with labour turnover (e.g. Scarbrough, 2000), it is difficult to

compare the influence of position of the organisation in supply chain over turnover rates

between the eight case organisations and those in the rest of the Bangladeshi RGM industry.

The few articles focusing on the voluntary labour turnover in Bangladesh RGM industry do not

devote attention to turnover rates, particularly the impact of position of the organisation in the

supply chain on turnover rates.

6.3.1.6 Age of the organisation

Table 6.8 shows that age of the organisation, in terms of inception of business, corresponds

closely with the turnover rate. That is, in general, relatively older organisations experience

lower rates of turnover and relatively younger organisations experience higher rates of turnover.

As older organisations commenced their businesses about a quarter of a century before, they

have had considerable time to expand their businesses and establish strong financial bases.

Moreover, older organisations faced relatively less competition at the time when they were

growing compared with younger organisations, which have been facing enormous business

competition because there are too many RMG organisations at home and abroad. Table 6.8

shows that all four old organisations experience lower rates of turnover, ranging from 11 per

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cent per annum (Brown & Bronze Group) to 16 per cent per annum (Pink Fashion Company

Ltd).

Table 6.8 also shows that three of the four young RMG organisations experience

relatively higher rates of turnover, ranging from 33 per cent per annum (Red International) to 26

per cent per annum (Amber Fashion Ltd). Despite being a relatively young organisation, Silver

Dew Apparels Ltd is an exception, experiencing relatively lower turnover rate because of its

comparatively good HR practices, which will be discussed in the later part of this Chapter.

Table 6.8: Rates of employee turnover among eight case organisations Rank Name of organisation Inception Age Turnover rates (%)

1 Brown & Bronze Group 1984 Old 11 1 Blue Concern 1990 Old 13 1 Green Garments Ltd 1984 Old 15 1 Pink Fashion Company Ltd 1991 Old 16 5 Silver Dew Apparels Ltd 2007 Young 18 5 Amber Fashion Ltd 2009 Young 26 5 Purple Group 2008 Young 31 5 Red International 2009 Young 33

(Source: Fieldwork, 2012-13).

Some managers from the case organisations acknowledge the influence of age of the

organisation on the turnover rates. A manager from Green Garments Ltd, for example, affirmed:

Green Garments Ltd has been operating in the RMG industry since the mid-eighties. For

the last three decades we not only have acquired a significant share in the foreign markets

but also expanded the business . . . as one of the managers, I found that the workers prefer

to work in the old and established organisations . . . the workers feel that it’s less likely to

be redundant in the old organisations . . . as a manager, I think old organisations compared

with many newly established organisations experience low rate of turnover as in many

cases, they [old organisations] follow relatively good HR practices, have permanent and

full-time work opportunities for the workers and are financially independent. (Interview,

Manager 2, Green Garments Ltd).

In addition, a manager at Amber Fashion Ltd said that there is an influence of age of the

organisation over turnover rate. He asserted: “In fact, voluntary turnover rate does not only

depend on wages rates or some specific [HR] practices . . . the rate also depends on some other

factors . . . age of the organisation is one of them.” (Interviews, Manager 4, Amber Fashion

Ltd). This manager added that relatively older organisations, as generally t financially

established, allow managers to offer employees favourable HR practices, which reduce labour

turnover rates.

There are a considerable number of studies from developed countries which demonstrate

a relationship between age of organisation and labour turnover rates (such as Guthrie, 2000;

Harzing, 2001; Reiche, 2007: Zheng & Lamond, 2010). Because very few studies have been

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carried out on the effect of age on labour turnover rates, it is difficult to be definitive about the

correlation between age of organisation and turnover rates among the eight case organisations

and those in the rest of the Bangladeshi RGM industry. Generally, relatively younger

organisations have a comparatively weaker financial position than older organisations. In

addition, younger organisations have comparatively less market share and less product diversity.

However, sometimes it is difficult to separate the age of the organisation from other

organisational factors. As a result, the comparison on influence of age of organisation on

turnover rates between the eight case organisations and those in the rest of the Bangladeshi

RGM industry is difficult. There is almost no data on impact of age of the organisations over

turnover rates.

6.3.1.7 Summary – organisational characteristics

It is clear that some characteristics of the eight case organisations correspond closely with rates

of labour turnover. The present research finds that, size of organisations, in terms of numbers of

employees or production capacities, corresponds closely with the turnover rates. It reveals that

all four large organisations experience lower rates of turnover and three of the four small RMG

organisations experience relatively higher rates of turnover. There is a correlation between

geographical location of the organisation and turnover rates. The present research finds that, of

the eight case organisations, four organisations with the lowest turnover rates were located in or

very close to cities and three RMG organisations with the highest turnover rates were located in

regional areas or outside of cities. Workers are less likely to leave organisation where

regulations are obeyed.

The present study also finds a link between enforcement of regulations and lower rates of

turnover. It finds that the five case organisations which enforce standard rules and regulations

experience lower rates of turnover, while the other three organisations, which are reluctant to

enforce standard regulations, experience higher rates of turnover.

The position of the organisation in the supply chain, in terms of its role as a direct contractor or

a sub-contractor, corresponds closely with turnover rates. The findings of the present study is

that five contracting organisations experience lower rates of turnover, while three sub-

contracting organisations experience higher rates of turnover. Generally relatively older

organisations, in terms of inception of business, experience lower rate of turnover and relatively

younger organisations experience higher rate of turnover. The present study finds that all four

older organisations experience lower rates of labour turnover, while three of the four younger

organisations experience relatively higher rates of turnover.

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6.3.2 HR practices and labour turnover

6.3.2.1 Wages and wages payment period

Case organisations were asked about the wages they paid and wages payment period: what were

their rates for Helper and Operator work categories, and on what day did they paid the monthly

wages. The Bangladesh Labour Act (2006) defines wages as:

all remuneration, expressed in terms of money or capable of being so expressed, which

would, if the terms of employment, expressed or implied, were fulfilled, be payable to a

worker in respect of his employment or of work done in such employment, and includes

any other additional remuneration of the nature aforesaid which would be so payable.

(Section xlv).

The Bangladesh Labour Act (2006), also states: “The minimum rates of wages declared

under section 140 or published under section 145 shall be binding on all employers concerned

and every worker shall be entitled to be paid wages at a rate which shall, in no case, be less than

the rate of wages so declared or published” (Section 148).

Table 6.9: Relationship between wages and payment period and turnover rates

Rank Case organisation Wages paid (BDT) Turnover rates (%) (excludes Managers) Helper Operator

1 Brown & Bronze 3,800 5,000 11 2 Blue Concern 3,500 4,500 13 3 Green Garments Ltd 3,350 4,200 15 4 Pink Fashion Co. 3,200 4,250 16 5 Silver Dew Apparels 3,100 4,000 18 6 Amber Fashion Ltd 3,000 3,861 26 7 Purple Group 2,800 3,800 31 8 Red International 2,500 3,500 33

Source: Fieldwork, 2012-13. (Note: Government Minimum Wage for the Helper is BDT 3,000 & for the Operator is BDT 3,861).

Table 6.9 shows the rank according to wage rates among eight case organisations. The

case organisation offering comparatively higher wage rates rank highly. Though Pink Fashion

Company offers BDT50 more to the Operator work category than Green Garments Ltd, Green

Garments Ltd pays BDT150 more to the Helper work category than that of Pink Fashion

Company. Green Garments Ltd ranks third and Pink Fashion Company ranks fourth. Table 6.9

also shows that, except for Amber Fashion Ltd, all RMG organisations who offer better wages

to their employees have lower labour turnover rates. Despite following government minimum

wage rates, turnover rates are higher in the Amber Fashion Ltd because of other factors. Some

of these factors have already been discussed in earlier sections and the rest will be discussed in

later sections of this chapter. Table 6.9 also shows that the organisations offering comparatively

poorer wages experience higher turnover rates.

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Workers of all eight case organisations reported that comparatively good wages rates

greatly influence them to stay with an organisation. Two typical examples are as follows. One

employee from Pink Fashion Company remarks:

I do value wages rates. It is the most important factor to me. I have compared my current

wages rates paid by this factory with some other RMG factories, particularly with the RMG

factories located outside of the EPZ area. I have found that my current wage is higher

compared with the RMG factories located outside of the EPZ area. Therefore, I am happy

and will stay in this factory. My colleagues are also happy because of the standard wages

rates. (Interview, Employee 2, Pink Fashion Company)

Similarly, workers from Silver Dew Apparels Ltd emphasise that comparatively better

wages rates explain their satisfaction. One worker, for example, from Silver Dew Apparels Ltd

appraises the significance of wages as: “I have been receiving better wages than my friends who

work in some other RMG factories. Better rates of wages inspire me to stay in this factory”

(Interview, Employee 1, Silver Dew Apparels Ltd).

Six managers of eight case organisations also reported the significance of wage rates on

turnover rates. These managers also note that wage rates lower than the government minimum

rate is one of the important causes for accelerating turnover rates. Typical of managers’

comments was from Pink Fashion Company, who explained:

Our wage payment policy is fair and uniform for every employee. We don’t deprive our

employees paying standard wages. Usually we pay the wages according to the position such

as Helper or Quality Controller of the employee. However, wages of the same group of

workers’ may vary due to variance in their individual skills, experience and performance.

In every case our wage rates are more than that of the minimum wage rates declared by the

Bangladesh Government. As a manager I am aware of that wage is the most attractive

factor to retain the skilled workers. Moreover, I believe that standard wage rates have been

hugely contributing to minimise the rate of labour turnover in this organisation. (Interview,

Manager 2).

The findings of the present research regarding “wage and voluntary turnover” are very

consistent with the literature. The handful of existing articles on voluntary labour turnover

reveals that wages is considered one of the most important determinants of labour turnover.

Shamsuzzoha and Shumon (2007), for example, collected data from both managers and workers

through structured interviews and found fourteen causes of voluntary turnover. They found

“Salary is the highest among the causes of turnover which is 33 per cent” (p. 66-67). They

allege: “low pay is [a] great cause of dissatisfaction and can drive some employees to quit”.

Hossain et al. (2012, p. 212) investigated whether recent the unrest in the RMG sector is the

outcome of poor labour practices. Based on three focus group discussions in one RMG

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organisation and one textile mill in Bangladesh they found four ‘notable reasons for high job

turnover . . . The most common reasons of labour unrest in the garment sector are [low] wage

rate” (p. 209).

Similarly, Kaikobad and Bhuiyan (2012) researched job switching of RMG workers.

Based on the data gathered from sixty workers and nine managers from three RMG

organisations in three different locations in Bangladesh, they found eight factors contribute to

turnover rates and: “Garment workers change their jobs for higher salary”. They also found that,

because of good wage rates, 71 per cent or more of male workers voluntarily change their jobs.

They reported that “Male workers shift their jobs basically for higher wages”. Mukul et al.

(2013) investigated labour law practices in the EPZ area. Based on the survey in two RMG

organisations they also found that 47 per cent of workers consider wage as the most significant

factor explaining job satisfaction and voluntary turnover.

Hence, the pattern is that comparatively better wages retain skilled and experienced

workers.

As well as wages rates, on-time payment of wages also plays a significant role in

explaining voluntary labour turnover. While the Bangladesh Labour Act (2006) state: “The

wages of every worker shall be paid before the expiry of the seventh day after the last day of the

wage period” , (Section 123 (1)), about 64 per cent of RMG organisations pay wages after

expiry of the seventh day (Paul-Majumder, 2003, p. 115). Overdue payment of wages

disappoints workers and accelerates voluntary turnover rates.

Table 6.10: Relationship between wage payment periods and turnover rates

Rank Name of organisation Payment periods

Turnover rates (%) (excludes Managers)

1 Brown & Bronze Group 2-7th Day 11 1 Blue Concern 2-7th Day 13 4 Green Garments Ltd 7th Day 15 3 Pink Fashion Comp Ltd 2-7th Day 16 6 Silver Dew Apparels Ltd 7-10th Day 18 5 Amber Fashion Ltd 7th Day 26 7 Purple Group 10-15th Day 31 8 Red International 20-30th Day 33

(Source: Fieldwork, 2012-13).

Table 6.10 shows rank one to eight according to wage payment periods for the eight case

organisations. The case organisations pay monthly wages approximately at the beginning of the

month. Both Brown & Bronze Group and Blue Concern ranked are ranked first because their

payment periods lie between the second to seventh day of each month. Table 6.10 also shows

that, except Amber Fashion Ltd, all RMG organisations that pay wages between 2nd to 7th day of

each month have lower turnover rates. Table 6.10 also shows that, except for Silver Dew

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Apparels Ltd, the organisations that take longer to pay wages experience higher turnover rates.

Despite taking a bit longer to pay wages, turnover rates are comparatively lower in the Silver

Dew Apparels Ltd because of other factors. Some of these factors have already been discussed

in earlier sections and the rest will be discussed in later sections of this chapter.

Seven managers from the eight case organisations discussed the impact of payment

period on turnover rates. For example, the Manager from Blue Concern state:,

It is important for the workers to get their wages on time, as in many cases the worker is the

only earning member of his/her family. We realise it and pay the wages on time. Such

timely payment does not only make our workers happy but also retains them with us for a

long time. (Interview, Manager 4, Blue Concern).

A manager from Pink Fashion Company Ltd asserts that regular and on time wages

payments not only makes the workers content but also contribute positively to minimising

labour turnover rates. He notes:

For two specific reasons we pay wages on time: to build trust with the company and to

retain the workers. We know if we can fulfill their [the employees] logical needs, there will

be no reason to leave us. Skilled and better performing employees compare wages rates,

monthly wages payment period, and other financial benefits given by Pink Fashion with

other RMG companies. We are sure that very few companies only offer better financial

benefits than that of us. Our general rule is to pay the monthly wages between 2nd to 7th day

of each month. This on time wages payments policy has been contributing a lot to reduce

the turnover rates. (Interview, Manager 3, Pink Fashion Company Ltd).

The findings of the present study are consistent with those of the existing literature. That

is, regular and on-time payment of wages contributes to minimising turnover rates, whereas

payment of wages after the seventh day from the last day wage period – which is also against

Government regulations – increases the voluntary turnover rate. Shamsuzzoha and Shumon

(2007, p. 66-67), for example, revealed that on-time payment of wages is the second most

significant factor explaining labout turnover. They found that 12 per cent of respondents

consider “irregular payment” as the cause of their turnover decision. Similarly, Hossain et al.

(2012) stated that: “The most common reasons of labour unrest in the garment sector are . . .

unpaid wage” (p. 209). Ahamed (2013) also found that irregular wage payments is a prime

problem: “Late of irregular wage payments are common in the sector” (p. 87). Sikder et al.

(2014) examined the socio-economic conditions of female RMG workers in Bangladesh. Work

hour was one of the eight factors they identified from a preliminary survey. They reported: “The

RMG workers are faced with the problems of getting salary in time” (p. 174). However, they

did not make a link between wage payment period and turnover rates.

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Findings from this study and those reported in the literature, provide evidence of a regular

pattern that the on-time payment of wages helps in the retention of skilled and experienced

workers.

6.3.2.2 Wage increases

Another aspect of wages raised in interviews is failure to incrementally raise wages.

Interviewees from case organisations were asked whether they increase all workers’ wages

annually and about the percentage of the incremental raise. Government-required incremental

wage increases are not same for RMG organisations located in EPZ areas and those located in

non-EPZ areas. The Bangladesh Gazette (2013) states that increments of wages are 5 per cent,

but BEPZA (2013) declares “The rate of yearly increment will be ten per cent on basic wage”

(p. 3).

Table 6.11: Relationship between wage increase and turnover rates

Rank Case organisation Wages increase Turnover rates %) (Exc. Managers) % of wage Period

1 Brown & Bronze 10 Every year 11 1 Blue Concern 10 Every year 13 4 Green Garments Ltd 5 Every year 15 1 Pink Fashion Co. 10 Every year 16 4 Silver Dew Apparels 5 Every year 18 6 Amber Fashion Ltd Varies Irregular 26 6 Purple Group Varies Irregular 31 8 Red International 0 N.A. 33

(Source: Fieldwork, 2012-13)

Table 6.11 shows rank the case organisations according to annual wage increments. The

case organisation that increases wages by ten per cent every year is first. All Brown & Bronze

Group, Blue Concern and Pink Fashion Company rank highly because their annual wage

increment rates are ten per cent. Table 6.11 also shows that, all RMG organisations that increase

wages according to government regulations (5% for the non- EPZ areas and 10% for the EPZ

areas) each year have relatively low labour turnover rates. Table 6.11 also shows that the

organisations that do not increase all workers’ wages every year experience relatively higher

turnover rates.

Five managers of the eight case organisations explained the consequences of a failure to

incrementally raise wages on turnover rates. These managers also warned about the

consequences of irregular wage increments on turnover rates. Typical of such comments was

from Silver Dew Apparels Ltd who considered the payment of incremental wage increases as a

strong reason for making the workers happy:

Annual increment of wages is a good practice as inflation rate is high in this country. The

increment of wages enables the workers to adjust with increased house rents and other

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household expenses. This practice makes our workers pleased and retains them as only

some RMG companies offer increment of wages. (Interview, Manager 1, Silver Dew

Apparels Ltd.).

Seven workers of eight case organisations noted that the payment of incrementally higher

wages each year was a major consideration influencing their turnover decision. One worker

from Amber Fashion Ltd, for example, stated:

While the government rule is to increase all workers’ monthly wages at least 5 per cent

every year, here in this company some of the workers’ wages increase each year, remaining

workers receive wages at the same rate in second year, sometimes even in the third year.

Our manager informed us that wages will be increased every year based on the annual

performance. We understand that the wages could increase at a varying rate for different

workers, as some workers are good performers and some are not. However, in practice only

some of the workers’ wages increase each year; the rest workers’ wages do not increase at

all, even with a lower rate. (Interview, Employee 1, Amber Fashion Ltd).

The findings of the present study are consistent with those in the existing literature.

Shamsuzzoha and Shumon (2007, p. 67), for instance, found that incremental wage increases is

a factor related to voluntary turnover. They found that a failure to or provision of low

incremental wage increases is one of the causes of labour turnover. Hence, the pattern is that

indiscriminate wage increments for all workers’ wages every year helps to retain skilled and

experienced workers.

6.3.2.3 Work hours

Interviewees from the case organisations were asked about the work hours; specifically,

interviewees were asked what their normal working hours each work day is. The Bangladesh

Labour Act (2006) states: “No adult worker shall ordinarily be required or allowed to work in an

establishment for more than eight hours in any day” (Section 100)..

Table 6.12 rank the case organisations from one to eight according to the work hours they

impose on their workers. Those that have an eight-hour based normal working day rank on top.

All case organisations, except Purple Group and Red International, hold that their normal work

hours are eight hours. Table 6.12 shows that there is a correlation between standard work hours

(i.e. eight hours) and lower turnover rates in all case organisation except for Amber Fashion

Ltd. That is. The eight hour based normal work day contributes to reducing labour turnover

rates, while nine or more work hour is liable to increase the rates.

Workers in all eight case organisations reported the consequences of a failure to

implement standard work hours (i.e. eight hours) on their voluntary turnover decision. Two

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representatives of these workers were from Green Garments and Red International. One

employee from Green Garments Ltd stated:

“While workers have to work 9-10 hours or even more in many other RMG organisations,

here in this organization the total work hour is 8 hours, what is very important to me,

particularly it makes me satisfied with the job and influences me to stay with this

organization” (Interview, Employee 1, Green Garments Ltd).

Table 6.12: Relationship between standard work hours and turnover rates Rank Name of case organisation Work Hours Turnover rates (%)

1 Brown & Bronze Group 8 11 1 Blue Concern 8 13 1 Green Garments Ltd 8 15 1 Pink Fashion Company Ltd 8 16 1 Silver Dew Apparels Ltd 8 18 1 Amber Fashion Ltd 8 26 7 Purple Group 9 31 8 Red International 9-10 33

(Source: Fieldwork, 2012-13)

Table 6.12 shows that in the organisations in which workers have a 10 to 12 hour normal

working day, excluding overtime work payments, there is high turnover rate. One of the

workers from Red International asserts: “We the workers don’t want to stay in this factory for

the some specific reasons, long work hour is one of them” (Interview, Employee 1, Red

International).

Seven managers of eight case organisations also commented on the substantial impact of

implementing an eight-hour based normal work day on labour turnover rates. These managers

contend that extending normal work hours is a significant factor for accelerating turnover rates.

Typical of these managers’ comments is one made by the Manager from Green Garments Ltd:

“Our work hour starts at 8 o’clock in the morning and finishes at 5 o’clock at afternoon. There

is a lunch and prayer break from 1am to 2pm. No worker can work more than 60 hours per

week including overtime work hour” (Interview, Manager 1, Green Garments Ltd).

The findings of the present research regarding “work hour and voluntary turnover” are

consistent with findings in the literature. The handful of existing articles on voluntary labour

turnover reveals that work hour is an most important determinant of labour turnover. Ahamed

(2014), using secondary data, investigated the job dissatisfaction and satisfaction of RMG

workers because of HR practice. He found that long working hours (i.e. nine to twelve hours

based work days) is an important factor for explaining labour turnover. He states: “Garment

workers often change their jobs because of . . . excessive working hours” (p. 7). Chowdhury

and Ullah (2010) empirically studied socio-economic conditions of female RMG workers in

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Chittagong Metropolitan area in Bangladesh. Based on the sample of 151 respondents from 29

RMG organisations, they found: “The most tedious condition of work in the garment factories is

the long working hours” (p. 56). Nahar, Ali and Begum (2010) researched occupational health

hazards in the RMG sector in Bangladesh. Based on a sample of ninety respondents the

identified that many of the health problem suffered by RMG workers were a consequences of

long working hours: “Most of the health problems that the garment workers suffered from arose

from the occupational hazards including long working hours” (p. 2). Though Chowdhury and

Ullah (2010) and Nahar et al. (2010) did not investigate a link between long working hours and

voluntary turnover, it might be inferred that workers are not satisfied to work more than eight

hours a day, particularly when such extended work hour creates health problems. In many cases,

workers’ dissatisfaction influences turnover decision.

Sikder, Sarker and Sadeka (2014) found that many garment factories impose long work

hour: “average working hour in a day is 11.21 hours . . . . almost 69 per cent of workers have to

work 11-12 hours in a day” (p. 178). However, Sikder et al. (2014) did not find a relationship

between long work hours and turnover rates. Nevertheless the pattern appears to be that

requiring a standard work day, which is eight hours, helps to retain skilled and experienced

workers.

6.3.2.4 Overtime work

Managers of case organisations were asked about their overtime work practices: whether they

allow employees to choose to work overtime and what overtime wage rates are. The Bangladesh

Labour Act (2006) stipulates: “Where a worker works in an establishment on any day or week

for more than the hours fixed under this Act, he [she] shall, in respect of overtime work, be

entitled to allowance at the rate of twice his ordinary rate of basic wage” (Section 108 (1)).

Table 6.13 ranks the eight case organisations according to their overtime work practices.

Case organisation offering twice rates of payment and workers’ voluntary engagement in

overtime work rank at the top. Only Amber Fashion Ltd, Purple Group and Red International

rank do not pay double rate for overtime work and do not allow workers to volunteer to work

overtime. Table 6.13 also shows that, case RMG organisations that pay double the normal wage

rate for overtime work and practice a free and fair overtime work policy have relatively low

turnover rates compared with other case organisations.

Workers in all eight case organisations reported the significant effect of double time and

voluntary option to undertake overtime work on turnover rates. Typical comments were:

“Unlike many other RMG factories, we are not forced for the overtime work. We, the workers,

have the freedom to make the decision whether will work or not. Moreover, overtime work hour

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rate is double the normal work rate . . . I like this policy and have been continuing with this

organization for many years.” (Interview, Employee 2, Blue Concern).

The present study finds that forced overtime work or no payment for overtime work is

largely responsible for the high rate of turnover in the RMG organisations. A worker from Red

International said: “While we work ten hours in a day, we should be paid for additional two

hours work as overtime work payments, but we are not paid.” (Interview, Employee 2, Red

International).

Table 6.13: Relationship between overtime work practices and turnover rates Rank Name of case organisation Rate Nature Turnover rates (%)

1 Brown & Bronze Group Double Voluntary 11 1 Blue Concern Double Voluntary 13 1 Green Garments Ltd Double Voluntary 15 1 Pink Fashion Company Ltd Double Voluntary 16 1 Silver Dew Apparels Ltd Double Voluntary 18 6 Amber Fashion Ltd 1.5 times Forced 26 7 Purple Group 1.25 times Forced 31 8 Red International N.A N.A 33

(Source: Fieldwork, 2012-13)

The findings of the present research regarding the link between overtime work and

voluntary turnover are consistent with findings in the literature. Paul-Majumder (2003) revealed

that overtime work is almost compulsory for RMG workers. She stated “Mandatory overtime

work is frequently required in the garment industry” (p. 117). She also found that 88 per cent of

workers have to do overtime work. However, she did not research the relationship between

overtime work and voluntary turnover.

Morshed (2007) researched the implementation of labour rights in the RMG industry in

Bangladesh. He found that “Overtime is a source of dissatisfaction for workers, but not always

for the same reasons. Overtime is forced, not optional; . . . workers are bound to work extra

hours or lose their jobs” (p. 92).

Chowdhury and Ullah (2010) found a relationship between excessive and forced overtime

work and workers’ dissatisfaction: “About 40 per cent of the workers work more than two hours

of overtime work a day, while 15.91 per cent work more than three hours of overtime a day . . .

they cannot provide much time for their family or children. As a result, they become unhappy in

their family life” (p. 59). Though Chowdhury and Ullah (2010) did not demonstrate a

relationship between excessive and forced overtime work and voluntary turnover, it might be

inferred, from their work, that workers’ dissatisfaction is the root of their decision to voluntarily

decide to leave their job.

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Ahamed (2013) also have found that forced overtime work is a major problem in the

RMG industry. He asserted: “Compulsory overtime [work] is [a] common problem in this

sector” (p. 87).

Findings reported in the literature and those uncovered in this study appear to show a

pattern that double wage rates for overtime and a voluntary overtime work policy helps to retain

skilled and experienced workers.

6.3.2.5 Weekly off-day

Interviewees in the case organisations were asked about weekly off days: whether there is a

practice of days off per week and when that day occurs. The Bangladesh Labour Act (2006),

requires one day off in each week for every adult worker employed in a factory (Section 103).

All eight case organisations allow their workers one day off a week. Some of the organisations

have a specific day (such as Saturday) for all workers. Other organisation vary their off day; for

example, Friday is weekly off day for a group of workers and Sunday for another group, and the

off day will be different for these groups of workers in the following week. Here, the problem is

that workers do not know two or three weeks ahead of time which day will be their off day. As a

result, they cannot make plans for their off days.

Table 6.14: Relationship between weekly off day and turnover rates Rank Name of case organisation Off day Turnover rates (%)

1 Brown & Bronze Group Sunday 11 1 Blue Concern Friday 13 1 Green Garments Ltd Friday 15 1 Pink Fashion Company Ltd Sunday 16 1 Silver Dew Apparels Ltd Friday 18 1 Amber Fashion Ltd Saturday 26 7 Purple Group Varies 31 7 Red International Varies 33

(Source: Fieldwork, 2012-13)

Table 6.14 ranks the eight case organisations according to their weekly off day

provisions, with those practicing a regular day off every week ranked highest top. Only Purple

Group and Red International did not practice a regular weekly off day. The present study finds a

correlation between the practice of a specific weekly off day and low rate of turnover. Workers

of all eight case organisations believed that apart from influencing efficiency and performance,

a regular weekly off day assists them to balance work and family lives. They believe that

working on all seven days of a week destroys workers’ family lives.

One female worker from Brown & Bronze Group said: “I left my previous garment

factory as we were forced to work seven days in a week, especially in peak season. Many of my

co-workers like this factory.” [Brown & Bronze group]. Another worker added: “. . . because of

the weekly off day” (Interview, Employee 2, Brown & Bronze Group).

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Table 6.14 also indicates there is a link between a lack of a regular specific off day in a

week or lack of weekly off day and increased turnover rates. Workers employed by Red

International and Purple Group, lack of specific weekly off day but whose off days are

determined by their work load and may even work the seven days of the week in peak seasons.

When the organisation has little work (off peak) workers are given two or three days off but are

not paid for these days. One worker from Purple Group claims that working seven days a week

is a reason for labour dissatisfaction: “We are forced to work seven days in a week in shipment

period and peak season. I will leave this factory as soon as I will get a job in other RMG factory

where there is a weekly off day throughout the year.” (Interview, Employee 2, Purple Group).

The findings of the present research regarding weekly off day and voluntary turnover are

consistent with the findings of other studies. Morshed (2007), for example, commented onthe

RMG workers who are forced to work on weekly off days: “Though, officially, Friday [or any

other day] is supposed to be day off, in practice most of the garment workers have to work on

Friday. If anyone is absent of Friday then the worker would be verbally abused and/or six to

eight hours wage would be deducted as punishment” (p. 91).

Hossain (2010) used secondary data to research labour turnover in the RMG industry in

Bangladesh. He also found that the lack of weekly day off is one of the significant factors

contributing voluntary turnover rates: “In many cases RMG workers are required to work seven

days a week with few opportunities for leisure and holidays. This working regime causes high

stress among workers, inducing them to find opportunities for employment in other firms” (p.

88).

Hence the pattern appears to bet that the practice of providing a weekly off day helps

organisations to retain skilled and experienced workers.

6.3.2.6 Training and career development

Interviewees were asked about the provision of training and career development opportunities in

their organisations: who participated in such training and the usual duration of the training. The

researcher also physically observed the availability of training centres on the organisations’

premises. The Bangladesh Gazette (2013, p. 10308) indicates that the maximum training

(probationary) period should be three months.

Table 6.15 rank the eight case organisations according to their training protocols. The

case organisation that provide training for both newly recruited and existing workers rank

highly. Both Brown & Bronze Group and Blue Concern provide fifteen to thirty days training

for both newly recruited and existing workers. The present study finds that those organisations

that provide training programs for both newly recruited and existing workers experience low

labour turnover rate..

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Table 6.15: Relationship between organisations providing training and turnover rates Rank Name of case organisation Training period Trainees Turnover rates (%)

1 Brown & Bronze Group 15-30 Days New & Existing 11 1 Blue Concern 15-30 Days New & Existing 13 3 Green Garments Ltd 15-20 Days New & Existing 15 4 Pink Fashion Company Ltd 10-15 Days New & Existing 16 5 Silver Dew Apparels Ltd 5-10 Days New & Existing 18 7 Amber Fashion Ltd On-the-job training Newly only 26 8 Purple Group On-the-job training Newly only 31 6 Red International 5 Days Newly only 33

(Source: Fieldwork, 2012-13)

Four managers from the eight case organisations believed that organisation-provided

training is a prime means for retaining workers. These managers also believed that training

enhances workers skills and productivity, and enhances workers familiarity with production

techniques or operating techniques when new products or new machines are introduced. A

typical comment was: “As a production manager I emphasise training as through training the

employees learn how to operate machines. The raining program also provides other essential

skills to the employees” (Interview, Manager 4, Brown & Bronze Group).

Table 6.15 also shows that organisations with no or limited training opportunity for their

workers experience higher turnover rates. The significance of training for minimising employee

turnover rates has caused Blue Concern to make it mandatory for all newly recruited workers to

undergo training. The Blue Concern Report notes: “Blue Concern places all of its newcomer

workforce members on compulsory basic and job specific training programs at its well-

equipped training center. On average, more than 120 people are recruited and trained here every

month.” (Source: B C Report, 2012, p.39).

The findings of the present study are consistent with those reported in the literature,

which shows a strong relationship between training and labour turnover. Shamsuzzoha and

Shumon (2007,) for instance, find that lack of training is one of the important causes for higher

turnover rates: “The absence of a training program may cause workers to fall behind in their

level of performance and feel that their abilities are lacking” (p. 66). Ahamed (2014)

emphasised that training not only minimising turnover rates but also enhances productivity and

workers’ efficiency.

The results from this study and those reported in the literature show a pattern that

organisation-initiated training opportunities for existing and newly employed workers helps the

organisation to retain employees.

The present study finds a correlation between fair career development opportunity and

labour turnover in case organisations Table 6.16 rank the eight case organisations according to

performance- and skills-based career development opportunities. All case organisations except

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Amber Fashion Ltd, Purple Group and Red International have a rank of 1 because of workers’

performance and skills based career development opportunity. Table 6.16 also shows that the

RMG organisations with comparatively good career development opportunity, based on the

workers’ performance, experience low turnover rates compared with other case organisations.

Table 6.16 also shows that the organisations with limited career development opportunities, or

those with biased decision-making regarding career development, experience high turnover

rates.

Table 6.16: Relationship between career development opportunity and turnover rates Rank Name of organisation Career opportunity Considering factors Rates (%)

1 Brown & Bronze Group Ample opportunity Performance based 11 1 Blue Concern Ample opportunity Performance based 13 1 Green Garments Ltd Ample opportunity Performance based 15 1 Pink Fashion Co. Ample opportunity Performance & A.Q 16 1 Silver Dew Apparels Ample opportunity Skill, performance &

A.Q 18

6 Amber Fashion Ltd Limited Biased 26 6 Purple Group Limited Biased 31 6 Red International Limited Biased 33

(Source: Fieldwork, 2012-13), Note: A.Q means Academic Qualification

Six managers from the eight case organisations noted the importance of career

development opportunity in lowering turnover rates. A manager from Pink Fashion Company

Ltd believed that there is a strong link between career development opportunities and voluntary

turnover:

We have unique and fair opportunities for the workers to advance their career to the next

upper position. We consider few important factors to recruit from the internal source:

number of years as experience, performance reports in last couple of years and educational

qualifications. Educational qualification is especially given importance for the supervisor

and assistant manager positions. To recruit in any position first we try to do it from our

internal source fulfilling the required skills, experience and educational qualification.

Because of the internal recruitment policy the turnover rate is really low in this company.

(Interview, Manager 1, Pink Fashion Company Ltd).

Likewise a manager from Green Garments Ltd claimed:

There is an ample opportunity for the workers to develop their career in this organization. It

is not difficult to get promotion up to supervisor or floor in-charge or even managerial

position. As example I can mention many supervisors’ names and some floor in-charges’

names who commenced their career as a Helper in this factory. Usually we prefer internal

candidates over external candidates in case of similar skills and experience. Because of

such preference and better career development opportunities we could able to retain our

skilled and experienced employees and could minimise the voluntary turnover rates

(Interview, Manager 3, Green Garments Ltd).

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The findings of the present research regarding“career development opportunity and

voluntary turnover are consistent with those found by studies reported in the literature. The

handful of existing articles on voluntary labour turnover find that career development

opportunities is one of the important factors influencing labour turnover. Shamsuzzoha and

Shumon (2007, p. 67), for instance, showed “delay of promotion” is one factor relating to

voluntary turnover. Mukul et al. (2013, p. 30) found that 44 per cent workers are promoted to

next higher positions based on performance, while 20 per cent of workers’ career development

is biased. Hence, the pattern is career development opportunity for the workers help to minimise

turnover rates, whereas no or limited career development opportunities causes higher labour

turnover rates.

6.3.2.7 Annual leave and maternity leave

Case organisations were asked about their annual leave and maternity leave practices: whether

they have paid annual leave, number of days, paid maternity leave and number of days as paid

maternity leave policies. The Bangladesh Labour Act (2006) requires: “Every adult worker, who

has completed one year of continuous service in an establishment, shall be allowed during the

subsequent period of twelve months leave with wages for a number of days calculated at the

rate of one day– (a) in the case of a . . . industrial establishment or factory . . ., for every

eighteen days of work” (Section 117 (1)).

Table 6.17 ranks the eight case organisationns according to their annual leave and

maternity leave provisions among eight case organisations. The case organisation practices ten

days paid annual leave and 120 days paid maternity leave ranks top. All three case

organisations; Brown & Bronze Group, Blue Concern and Green Garments Ltd ranked first

because of their ten days paid annual leave and 120 days paid maternity leave practices. Table

6.17 also shows that all the case organisations that provide ten days paid annual leave to their

workers experience lower turnover rates.

Table 6.17: Relationship between annual leave and maternity leave and turnover rates Rank Name of organisation Annual leave Maternity leave Turnover rates (%)

1 Brown & Bronze Group 10 days 120 days paid 11 1 Blue Concern 10 days 120 days paid 13 1 Green Garments Ltd 10 days 120 days paid 15 4 Pink Fashion Company Ltd 10 days 90 days paid 16 4 Silver Dew Apparels Ltd 10 days 90 days paid 18 7 Amber Fashion Ltd No provision No provision 26 6 Purple Group 5 days 30 days paid 31 7 Red International No Provision No Provision 33

(Source: Fieldwork, 2012-13)

Five workers from eight case organisations commented that the paid annual leave

provision was as one of prime factors for their decision to stay with an organisation. One worker

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satee “Paid annual leave facility is one of the most attractive factors. With some other factors,

this facility encourages me to stay in this factory” (Interview, Employee 2, Brown & Bronze

Group). Lack of paid annual leave in Amber Fashion Ltd. causes workers to be dissatisfied. One

worker complained: “There is no practice of paid annual leave in this factory, which is

contradictory with government regulations relating to annual leave. The government regulation

is one day paid leave for every fifteen days of work . . . significant per cent of RMG factories

allow forty-one days altogether” (Interview, Employee 1, Amber Fashion Ltd).

The findings of the present research regarding paid annual leave and voluntary turnover

are consistent with those reported in the literature. Chowdhury and Ullah (2010) stated: “Our

study reveals that about 8 per cent of the workers do not enjoy any casual leave with pay and

more than 50 per cent of the workers get less than 10 days of casual leave per year” (p. 59).

Though Chowdhury & Ullah (2010) did not examine a correlation between absence of paid

annual leave and voluntary turnover, their study shows that workers are not satisfied if they do

not have the full ten days of paid annual leave, particularly when there is a government

regulation stipulation that ten days paid annual leave is mandatory. In many cases, workers’

dissatisfaction becomes a decision to leave the organisation. Hence, the pattern found in this

study, and from the literature, is that provision of and practice of providing paid annual leave

minimises turnover rates, whereas no provision of paid annual leave increases labour turnover

rates.

There is a relationship between sixteen weeks or 120 days paid maternity leave for female

workers and voluntary turnover in the case organisations, except for the Pink Fashion Company

Ltd and Silver Dew Apparels Ltd,, as shown by Table 6.17. In spite of thirty days less paid

maternity leave, turnover rates are lower in the Pink Fashion Company Ltd and Silver Dew

Apparels Ltd because of other factors, such as position in supply chain and HR policies and

practices. All of the characteristics and some of the policies and practices have already been

discussed in earlier sections of this chapter. Other HR-related policies and practices will be

discussed in later sections of this chapter.

The Bangladesh Labour Act (2006) requires: “Every woman employed in an

establishment shall be entitled to and her employer shall be liable for, the payment of maternity

benefit in respect of the period of eight weeks preceding the expected day of her delivery and

eight weeks immediately following the day of her delivery”. ( Section 46 (1)).

Female workers of all eight case organisations commented on the significance of paid

maternity leave on their voluntary turnover decision. One worker from Brown & Bronze Group

said “Paid maternity leave is rarely implemented in the garment factories. Most of the factories

try to escape from the implementation of this provision. All female workers are satisfied here

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because of the proper implementation of the provision. Due to the provision, labour turnover is

low in this factory, particularly among the female workers” (Interview, Employee 2, Brown &

Bronze Group).

Table 6.17 also shows that the organisations with no paid maternity leave opportunity

experience higher turnover rate. For instance, female workers are disappointed because no paid

paid maternity leave is offered in the Amber Fashion Ltd. One female worker remarks:

It’s not fair at all that some RMG factories don’t allow paid maternity leave, while there is

a government regulation to allow 16 weeks paid maternity leave. I believe that lack of paid

maternity leave is one of the causes of high turnover rate among female workers in this

factory. Personally I am dissatisfied due to lack of paid maternity leave . . . I will leave this

factory if I will be offered a job with paid maternity leave from other [RMG] factory.

(Interview, Employee 2, Amber Fashion Ltd).

The findings of the present study are consistent with findings from other studies reported

in the literature, which shows a strong relationship between paid maternity leave and labour

turnover. That is organisations that grant paid maternity leave experience relatively lower

turnover rates. Chowdhury and Ullah (2010) affirmed: “Maternity leave is a basic and

humanitarian right of the female garment workers but all the garment factories are not giving

maternity leave to their workers with pay” (p. 66). They found that 40.12 per cent of female

workers get twelve weeks or even less maternity leave and 6.62 per cent of female workers get

nothing, while the government regulation is sixteen week or 120 days. Sikder et al. (2014, p.

178) allege that not all garment organisations grant paid maternity leave to their female workers.

They found that 40 per cent of female workers are granted less than four months paid maternity

leave, whereas the government regulation requires four months or sixteen weeks paid leave.

Though Sikder et al. (2014) did not investigate the relationship between paid maternity leave

and turnover rates, it might be inferred that the practice of less than four months paid maternity

leave is linked to higher turnover rates.

Hence, the pattern identified in this study is that the provision and practice of paid

maternity leave minimises turnover rate, whereas no provision of paid maternity leave increases

the rate.

6.3.2.8 Sick leave and medical centre

Interviewees in the case organisations were asked whether the organisation has a sick leave

policy. In addition, the researcher physically observed the availability of a medical centre in

organisation premises. The Bangladesh Labour Act (2006) declares: “Every worker . . . shall be

entitled to sick leave with full wages for fourteen days in a calendar year” (Section 116 (1).

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Table 6.18 rank the eight case organisations according to the availability of sick leave

and medical centres. Those case organisations that practices fourteen days paid sick leave and

have medical centres have a rank of “1”. All case organisations except Amber Fashion Ltd,

Purple Group and Red International have this rank because of their fourteen days paid sick leave

practices and medical centre facility for the workers. Table 6.18 also shows that, except for Red

International, all the RMG organisations that have a paid sick leave policy experience low

turnover rate. Though Red International has a policy of fourteen days paid sick leave, turnover

rates are higher because of other organisational characteristics, such as size of the organisation

and other HR-related practices. Table 6.18 also shows that the organisations with no paid sick

leave opportunity experiences higher turnover rates.

Table 6.18: Relationship between sick leave and provision of medical centre, and turnover rates Rank Case organisation Sick leave Centre Turnover rates (%)

1 Brown & Bronze 14 days Paid Yes 11 1 Blue Concern 14 days Paid Yes 13 1 Green Garments Ltd 14 days Paid Yes 15 1 Pink Fashion Co. 14 days Paid Yes 16 1 Silver Dew Apparels 14 days Paid Yes 18 7 Amber Fashion Ltd No fixed days No 26 8 Purple Group No paid leave Yes 31 6 Red International 14 days Paid No 33

(Source: Fieldwork, 2012-13).

Six workers of eight case organisations discussed the effects of sick leave on voluntary

turnover decisions. Lack of sick leave provision, for example, in Red International causes

workers’ dissatisfaction. One employee of Red International claimed:

A significant percent of employees in the RMG industry have to involve physical work for

long hours. Moreover, in some factories, including this one, there are many occupational

health and safety risks. So it is very usual for the employees to become sick or injury . . . it

is terribly important to provide paid sick leave in every RMG organization . . . Red

International provides fourteen days paid sick leave to the sick or injured workers. We are

very happy because of the paid sick leave practice, although in many other cases this

organization does not provide genuine financial benefits and does not care about the

government regulations. (Interview, Employee 2, Red International).

The findings of the present research regarding paid sick leave opportunity and voluntary

turnover are consistent with findings from the literature. The handful of existing articles on

voluntary labour turnover show that paid sick leave opportunities are a significant factor

influencing turnover rates. Shamsuzzoha and Shumon (2007, p. 67), for example, noted that

“insufficient medical [sick] allowance” is one of the factors relating to labour turnover. Hence,

the pattern identified is that provision and practice of paid sick leave reduces labour turnover

rates, whereas no provision of paid sick leave increases the rate.

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There is a relationship between the provision of a medical centre and voluntary turnover.

Table 6.18 shows that, except for the Purple Group, all the RMG organisations provide a

medical centre for their workers and they experience lower turnover rates. Though Purple

Group has a medical center with one full-time nurse, turnover rates are higher because of other

organisational characteristics, such as size of organisation and other HR-related practices.

Organisational characteristics and other HR policies and practices already discussed in earlier

sections of this chapter.

Regarding medical facilities, the internal document of Blue Concern states: “Blue

Concern offers on-campus medical facilities round the clock. Certified medics and nurses attend

Blue Concern’s people for their necessary medical attentions during working hours. Its medical

center is quite capable of attending many emergencies also” (Source: B C Report, 2012, p.33).

A worker in Amber Fashion Ltd commented:

It is frustrating that there is no medical centre or even a nurse. There are about 350

employees in this factory. Sometimes the workers fall in accidents [mostly minor] and

require immediate medical treatment. Lack of medical centre makes the suffering severe to

the injured worker(s). It is also frustrating that there is no paid medical leave, whereas

annually ten to fifteen days as paid medical leave is a common practice in the RMG

industry, as the industry is accident prone. (Interview, Employee 1, Amber Fashion Ltd).

Hence, the pattern is that the provision of medical centre is correlated with turnover rates.

6.3.2.9 Staff amenities and other benefits

The researcher physically observed available staff amenities and ranked them – strong, good

and none based on his observation. Moreover, case organisations were asked about other

benefits for the workers: how many types of financial benefits, except wages, are given to the

workers. The Bangladesh Labour Act (2006) stipulates about staff amenities:

In every establishment wherein more than fifty workers are ordinarily employed, adequate

and suitable shelters or rest rooms, and a suitable lunch room, with provision for drinking

water, where workers can eat meals brought by them, shall be provided and maintained for

the use of the workers. (Section 93 (1)).

Table 6.19 ranks the eight case organisations according to their provision of staffs’

amenities and other financial benefits. The case organisations with comparatively better staff

amenities and five types of financial benefits for workers were given higher rankings. Both

Brown & Bronze Group and Blue Concern were given a rank of “1” because of their

comparatively better staff amenities and five types of financial benefits. Table 6.19 also shows

that, except for Amber Fashion Ltd, all the RMG organisations that provide staff amenities for

their workers experience lower turnover rates.

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Table 6.19: Relationship between staff amenities and other financial benefits, and turnover rates Rank Case organisation Amenity Financial benefits Turnover rates

1 Brown & Bronze Strong 5 types 11 1 Blue Concern Strong 5 types 13 3 Green Garments Ltd Good 5 types 15 4 Pink Fashion Co. Good 4 types 16 5 Silver Dew Apparels Good 3 types 18 6 Amber Fashion Ltd Good 2 types 26 7 Purple Group None 3 types 31 8 Red International None 2 types 33

(Source: Fieldwork, 2012-13)

Three Managers assessed the contributions of staff amenities on workers’ voluntary

turnover decisions. A Manager from Green Garments Ltd. reported that staff amenities and staff

facilities contribute to making workers happy: “Staff amenities and staff facilities are important

tools to increase satisfaction levels of workers. We have different amenities and facilities for our

workers. Lunch room, kitchen facility, prayer room, transport facility, annual sports and annual

picnic are some of them” (Interview, Manager 3, Green Garments Ltd.).

A worker from Purple Group expressed his anger: “While Bangladesh Labour Law

(2013) describes that all latrines and washrooms shall be maintained in a clean and sanitary

condition at all times, our toilets are unhygienic condition. Even the numbers of toilets are

inadequate.” (Interview, Employee 1, Purple Group).

The pattern is that provision of staff amenities influences the turnover rate.

The case organisations were asked about their provisions and practices regarding various

financial benefits other than wage such as provident fund or festival bonuses: whether they offer

different types of financial benefits. The Bangladesh Labour Act (2006) requires: “No worker,

who is a member of any provident Fund, shall be deprived due to retrenchment, dismissal,

removal, discharge or termination of service of the benefit of the provident Fund including the

employer’s contribution thereto, if he is entitled to it under the rules of that Fund” (Section 29 ,

p. 33). Section 234(1) also states: “Every Company to which this chapter applies shall: (a)

establish a workers’ Participation Fund and a workers’ Welfare Fund in accordance with this

chapter within one month of the date of which the chapter becomes applicable to it.

Table 6.19 shows that, except for Purple Group, all the RMG organisations provide up to

three different types of financial benefits for their workers and experience lower turnover rates.

Three managers discussed the importance of financial benefits on turnover rates. For

example, a Manager from Pink Fashion Company stated: “Particularly we provide four types of

financial benefits. They are fringe benefits, gratuity, two festival bonus and profit sharing.

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These financial benefits have outstanding effects to improve workers’ satisfaction” (Interview,

Manager 2, Pink Fashion Company).

Table 6.19 also shows that the organisations providing fewer than three types of financial

benefits experience higher turnover rates. Red International, for instance, does not have any

provision for fringe benefits, such as superannuation and festival bonuses to its RMG workers.

Workers are upset at not having fringe benefit provisions, especially the festival bonus. One

worker expressed her frustration: “Many other RMG factories pay two festival bonuses every

year. We never have been paid it. We expect to get festival bonus, even though less than other

RMG factories. Not only me but most of the workers are upset for such a bad practice”

(Interview, Employee 2, Red International).

The findings of the present study are consistent with findings of other studies..

Shamsuzzoha and Shumon (2007, p. 67) examined the causes and effects of employee turnover

in Bangladesh. Based on interviews with both managers and workers, they found that only two

financial benefits, namely bonus and gratuity and provident fund jointly retain 25 per cent of

workers.

The pattern identified in this study is that provision of different types of financial benefits

for workers reduces turnover rates.

6.3.3 Occupational health & safety and labour turnover

6.3.3.1 Occupational health and safety

The researcher physically observed OH&S standards and ranked them – strong, good, poor and

very poor. The Bangladesh Labour Act (2006) requires:

In every establishment - (a) all floors, stairs, passages and gangways shall be of sound

construction and properly maintained and where it is necessary to ensure safety steps,

stairs, passages and gangways shall be provided with substantial handrails; (c) all floors,

ways and stairways shall be clean, wide and clear of all obstructions. (Section 72)

Section 61 (1) also requires:

If it appears to the Inspector that any building or part of a building or any part of the ways,

machinery or plant in an establishment is in such a conditions that it is dangerous to human

life or safety, he may serve on the employer of the establishment an order in writing

specifying the measures which, in his opinion, should be adopted, and requiring them to be

carried out before a specified date.

Table 6.20 shows the rank from one to eight of the case organisations with regard to their

OH&S standards. The case organisations with comparatively better OH&S are given higher

rankings. Brown & Bronze Group, Blue Concern and Green Garments Ltd have a rank of “1”

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because of their comparatively better OH&S practices. Table 6.20 also shows that, the RMG

organisations that provide good OH&S for their workers experience lower turnover rates.

Table 6.20: Relationship between OH&S and turnover rates Rank Case organisation OH&S Turnover rates %

1 Brown & Bronze Strong 11 1 Blue Concern Strong 13 1 Green Garments Ltd Strong 15 4 Pink Fashion Co. Good 16 4 Silver Dew Apparels Good 18 6 Amber Fashion Ltd Poor 26 7 Purple Group Very poor 31 7 Red International Very poor 33

(Source: Fieldwork, 2012-13)

A manager from Green Garments Ltd, who is typical of the six other managers from the

six organisations with higher rankings stated:

The rate of accidents in our factory is very low. Our main target is to reduce the avoidable

accident rate to zero per cent. Always we encourage and monitor our employees to follow

the proper safety steps and take the safeguards. However, sometimes some employees do

not do that, particularly in absence of the supervisor, as they ignore the safety issue. We are

thinking to impose financial penalty in case of such ignorance. (Interview, Manager 2,

Green Garments Ltd).

Likewise a worker in Purple Group, who is typical of six other workers in the eight case

organisations, complained of poor OH&S standards: “Many workers have been suffering from

eye strain. They have had no eye trouble before joining in this factory. Lacks of adequate light

and excessive dust are the reasons of this eye problem . . . many times we placed complaints

about the bad physical work conditions to the managers before. But nothing has improved yet.”

(Interview, Employee 2, Purple Group).

The findings of the present study are consistent with findings reported in the literature.

Shamsuzzoha and Shumon (2007, p. 67), for example, noted that OH&S is one of the

contributory factors to turnover rates. They found that “noisy work environment” is one of the

top six factors influencing voluntary turnover. Chowdhury and Ullah (2010) also noted:

“Female workers cannot work in the garment fully for long time because of occupational

hazards” (p. 56). Likewise, Kaikobad and Bhuiyan (2012, p. 1) reported that “Garment workers

change their jobs for . . . bad [physical] environment”.

Ahmed (2013) analysed secondary data to study whether monitoring and surveillance

would be useful to establishing social compliance in the RMG industry of Bangladesh. He

evaluated that OH&S is substandard and reported: “The working environment in Bangladesh

RMG sector is below standards. Most factories do not have adequate ventilation and exhaust

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fans that leave the garments workers exposed to toxic substances and dust. Raw materials

contain dust and fibre particles that hang in the air” (p. 88). Sikder et al. (2014) found that due

to poor OH&S standards, RMG Workers, particularly female workers who are 85 per cent of the

total work force, voluntarily leave their jobs. They asserted “Female workers cannot work in the

garment … for long time because of occupational hazards’ (p. 174-176). They also found that

workers “health [condition] deteriorated after they joined in garment” work. Sikder et al;

(2014,) also found: “56 per cent of the workers had fairly good health before joining in the

garment factory. But it came down to 16 per cent after joining in the industry” (p. 176). Nahar,

Ali and Begum (2010, p. 1), similarly found that “[the] nature of work in readymade garment

created various types of [occupational] health hazard” (p. 1) They found that “95.56 per cent

workers were affected by headaches” and “78.89 per cent respondents suffered from

musculoskeletal pain problems”. They also found that 72.22 per cent of workers suffered from

eye strain and 74 per cent of respondents believed that the physical work conditions in the

factory were unhygienic.

Hence, the pattern is good OH&S practices help to reduce turnover rates, whereas poor

OH&S motivate workers to leave organisations.

6.3.3.2 Fire safety

Case organisations were asked about their fire incidents history and fire safety procedures:

whether any fire accident have taken place, what fire training for employees there are and

whether there were fire fighters available. The Bangladesh Labour Act (2006) orders regarding

fire safety is:

In factories wherein fifty or more workers and employees are employed shall arrange at

least once in a year a mock fire-fighting and the employer shall maintain a book of records

in this regards’. Section 62 (1) also announces ‘Every establishment shall be provided with

at least one alternative connection stairway with each floor and such means of escape in

case of fire and firefighting apparatus, as may be prescribed by rules. (Section 62 (8))

Table 6.21 ranks the eight case organisations according to their fire safety standards. The

case organisation with comparatively better fire safety and no major or minor fire accident ranks

higher. Only Amber Fashion Ltd, Purple Group and Red International ranked have had major or

minor fire accident since business inception. Table 6.21 shows that those RMG organisations

that provide fire safety, adequate fire fighters and regular fire training for their workers

experience lower turnover rates. Table 6.21 also shows that the organisations with fire threats,

lack of fire training and inadequate fire fighters experience higher turnover rate.

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Table 6.21: Relationship between fire safety and turnover rates Rank Case organisation Fire accidents Turnover rates (%)

1 Brown & Bronze None 11 1 Blue Concern None 13 1 Green Garments Ltd None 15 1 Pink Fashion Co. None 16 1 Silver Dew Apparels None 18 8 Amber Fashion Ltd Two (major) 26 7 Purple Group One (major) 31 6 Red International Two (minor) 33

(Source: Fieldwork, 2012-13)

Seven managers of eight case organisations commented on the substantial impact of fire

safety on turnover rates. Typical of these managers is one from Pink Fashion Company Ltd. He

argued that low risk of fire accidents leads to low the voluntary labour turnover at this

organisation. In this fire training employees become familiar to operate the fire extinguishers

and know how to use fire exit safely. He stated:

Fire accident is a major safety threat in the RMG industry because of highly flammable

raw materials and finished goods. Moreover, recent major fire accidents in different

factories made us very cautious. We have been following precautions against fire accidents.

Moreover, here in this company it is mandatory for every worker to take part in fire training

program as we don’t want to destroy organizational image in one day what we have built in

last one decade. (Interview, Manager 4, Pink Fashion Company Ltd.).

One worker in Purple Group, who is typical of seven other workers commenting on the

issue, claimed that voluntary turnover in Purple Group is high because of very poor arrangement

of fire fighters as well as irregular and inadequate fire training. He complained:

It seems that management is very reluctant to improve the firefighting system, despite

major fire accident in 2011. In the factory building there are not enough fire extinguishers

and there is no fire exit or extra staircase. Moreover, the workers do not know what to do in

case of fire. Such a risky work environment makes the workers unhappy and influences

them to leave the organisation, particularly after devastating fire accident at Tazreen

garment factory in 2012. (Interview, Employee 2, Purple Group).

The findings of the present study are consistent with those found in the literature.

Morshed (2007) for instance, found that fire hazard is one of the serious issues in the RMG

industry for more than one decade. He reported: “130 workers in the garment industry died on

the job in 2005 and 480 were wounded” (p. 106) He also noted that 88 RMG workers died on

the job in 2006.

Hence, the pattern is that fire safety, regular fire training and adequate fire fighters help to

reduce turnover rates, whereas fire threats, lack of fire training and inadequate fire fighters

increase the rate.

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6.3.4 Links between the explanatory factors?

Sections 6.3.2 and 6.3.3 analysed sixteen separate explanatory factors (HR practices, and OH&S

practices) on which data was gathered in the case organisation, and examined their relationships

with turnover rates. Even casual observation suggests that the case organisations tended to

occupy similar positions in the rankings in the tables reporting the data. In other words, the

organisations with relatively low labour turnover rates tended consistently to display “better”

HR and safety practices, while those with higher labour turnover rates consistently displayed

relatively “poor” HR and safety practices. This suggests that the various factors that have so far

been analysed separately are, in fact, linked. A finding about the “inter-relatedness” of the

explanatory factors would not be surprising because Chapter 2 has already shown that it is a

strong theme in the HR literature, especially in research on “bundles” of HR factors in High

Performance Workplaces. This section considers these issues, firstly with an empirical

assessment of the combined data reported earlier, and then by returning to the previous

literature.

Table 6.22 combines the HR and safety practices into a single table; the sixteen separate

practices are reported in thirteen columns, with six factors combined into three columns because

they focus on similar issues; that is, three of thirteen columns: annual leave and maternity leave,

sick leave and medical centre, and amenity and other benefits, are combined into two HR

practices and the other ten columns show single HR practices information.

Table 6.22 uses indices to compare the sixteen explanatory factors across the eight case

organisations. In other words, each cell contains a number between “1” and “8”, which is

designed to rank that factor. Rank “1” means comparatively better HR practices and rank “8”

means lack of practices or very poor practices. “Total points” for each case organisation are

calculated by adding up all points for the HR practices and OH&S practices shown in the

thirteen columns. “Average points” are calculated by dividing total points by thirteen.

The case organisations that have comparatively better HR practices on a particular

variable ranks “1”. Brown & Bronze Group, for instance ranks “1” in the case of “wage rates”

practices because of its standard wages rates. However, more than one organisation can be

occupy the same rank because of their similar standards. Except for Purple Group and Red

International, for example, all six case organisations ranked “1” in the case of “work hour”

because normal work hours in these six organisations are based on an eight-hour work day. The

case organisations that have comparatively poor HR practices on a particular variable are ranked

lower. Red International is ranked “8” in the case of “wage rates” and “wage increase” practices

because wage rates are lower than the minimum wage rates declared by the government and

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there is no annual increment of wages for all workers as should be the case if implementing

government regulation.

Table 6.22: Different variables contributing to turnover rates in the eight case organisations

variable\organs

Wage rates

wage period

wage increase

work hour

overtime work

weekly off-day training career

develop A.L & M.L

sick leave & medical centre

amenity & other benefits

OH&S fire safety

total points

Average point

Turnover rates

Brown 1 1 1 1 1 1 1 1 1 1 1 1 1 13 1.00 11% Blue 2 1 1 1 1 1 1 1 1 1 1 1 1 14 1.08 13% Green 3 4 4 1 1 1 3 1 1 1 3 1 1 25 1.92 15% Pink 4 3 1 1 1 1 4 1 4 1 4 4 1 30 2.31 16% Silver 5 6 4 1 1 1 5 1 4 1 5 4 1 39 3.00 18% Amber 6 5 6 1 6 1 7 6 7 7 6 6 8 72 5.54 26% Purple 7 7 6 7 7 7 8 6 6 8 7 7 7 90 6.92 31% Red 8 8 8 8 8 7 6 6 7 6 8 7 6 93 7.15 33%

(Source: Field Work, 2012-13), Note: A.L & M.L mean Annual Leave & Maternity Leave.

Note: Calculation of Average points of Blue Concern = 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑃𝑃𝑇𝑇𝑃𝑃𝑃𝑃𝑇𝑇𝑃𝑃13

= 1413

=1.0769 =1.08 (Approximately).

Table 6.22 shows the direct relationship between HR practices and turnover rates. Table

6.22 also shows that lower average points mean lower turnover rates and vice versa. For

example, Brown & Bronze Group’s average points is comparatively lower, which indicates

comparatively better HR practices and also shows lower rates of turnover. However, Red

International’s average point is higher, which indicates relatively poorer HR practices and the

organisations show a higher rates of turnover.

There is no method in this study to find the relative importance of HR factors on turnover

rates. But the present study emphasises the importance of “multiple HR factors” rather than a

single factor because the more HR factors a firm adopts, the better the outcomes

The multiple HR factors concept in the present study differs from the “bundle” or

“system HR practices” or “high-involvement work practices” examined by Arthur (1994),

Huselid (1995), MacDuffie (1995), Guthrie (2001) and other researchers because of different

interests, contexts and types of organisation. Both Arthur (1994) and Huselid (1995) were more

interested in firm productivity or financial performance and labour turnover was less of a focus

in their studies. The context of present study is a developing country, Bangladesh, whereas

above mentioned studies were carried out in developed countries. In addition, the focus of the

present study is on the RMG industry, where the nature of production systems is labour

intensive, less sophisticated and less capital intensive than the US steel minimills (investigated

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by Arthur, 1994) or US firms with more than a hundred employees (examined by Huselid,

1995) or New Zealand business organisations employing at least 100 employees (explored by

Guthrie, 2001). It is also worthwhile to mention that Arthur (1994), Huselid (1995), and Guthrie

(2001) examined “bundle” or ‘system HR practices’ in a large organisation, but all the case

organisations for the present study are not large in size. The majority of the workers employed

in the RMG industry of Bangladesh are semi-skilled or even unskilled.

The significance of examining multiple HR factors is three-fold, that is how they:

contribute to minimising turnover rates (Arthur 1994; Huselid, 1995; Shaw et al., 1998);

increase organisational performance (Arthur, 1994; Huselid, 1995; MacDuffie, 1995; Koch &

McGrath, 1996; Guthrie, 2001); and enhance employees’ level of skill, motivation, information,

and empowerment (Lawler, 1992; Kochan & Osterman, 1994; Pfeffer, 1998).

Huselid (1995) showed that high performance work practices contribute a lot to lower the

rates of turnover. He alleges:

Prior work in both the academic and popular press has argued that the use of High

Performance Work Practices will be reflected in better firm performance. This study

provides broad evidence in support of these assertions. Across a wide range of industries

and firm sizes, I found considerable support for the hypothesis that investments in such

practices are associated with lower employee turnover. (p. 667).

In addition, Shaw et al. (1998) found strong relationships between multiple HR factors

and lower rates of turnover. They show that in spite of clear and strong correlation between one

single or individual HR factor and turnover rates, multiple HR factors should be offered to

strengthen bonds between employees and managers and reduce rates of turnover. They argued

that single or individual HR factors are an inadequate practice for retaining existing workers.

Shaw et al., (1998) contend: “Pay clearly offers one such inducement [which attracts employees

to remain with an organisation], but it is not the only one. Other HRM practices, particularly

benefits, also induce employees, bonding them to their employing organization” (pp. 520-21).

Macduffie (1995) believes that HR bundle practices increase organisational performance.

He also argued that single or individual HR practices do not raise the performance: “HR

practices affect performance not individually but as interrelated elements in an internally

consistent HR “bundle” or systems; and that these HR bundles contribute most to …

productivity and quality when they are integrated” (p. 197). Moreover, Guthrie (2001) found

that high-involvement work practices make an organisation competitive by improving

performance. He noted: “This analysis supports arguments . . . that firm competitiveness can be

enhanced by utilizing high-involvement work practices” (p. 187). Macduffie (1995) also claims:

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“Research that focuses on the impact of individual HR practices on performance may produce

misleading results, with a single practice capturing the effect of the entire HR system” (p. 200).

6.3.5 Links between organisational characteristics and HR practices

Section 6.3.1 analysed organisational characteristics on which data was gathered in the case

organisation and examined their associations with turnover rates. Even casual observation

suggests that the case organisations tended to occupy similar positions in the rankings in the

various tables reporting the data. In other words, the organisations with relatively low labour

turnover rates characterised with greater size in terms of numbers of employees or production

capacity, enforcement of regulations, contractor role in supply chain, relatively older

organisations in terms of inception of business and geographical location in cities with public

facilities, while those with higher labour turnover rates characterised by smaller size in terms of

numbers of employees or production capacity, poor or non-enforcement of regulations, sub-

contractor role in supply chain, relatively younger organisations in terms of inception of

business and geographical location in regions with less public facilities.

While section 6.3.1 analysed six organisational characteristics, Table 6.23 brings together

five characteristics, as one characteristic, namely ownership of the organisation plays limited

roles to increase or decrease turnover rate of the organisations.

Table 6.23: Organisations characteristics contributing to turnover rates in the eight case organisations

Variables/ Organisations

Size Location Age Position in supply chain

Enforcement Total points

Average points

Turnover rates (%)

Brown & Bronze 1 1 1 1 1 5 1.00 11 Blue Concern 2 1 1 1 1 6 1.20 13 Green Garments Ltd

3 1 1 1 1 7 1.40 15

Pink Fashion Co. 4 1 1 1 1 8 1.60 16 Silver Dew Apparels

5 5 5 1 1 17 3.40 18

Amber Fashion Ltd 6 5 5 6 6 28 5.60 26 Purple Group 7 5 5 6 6 29 5.80 31 Red International 8 5 5 6 6 30 6.00 33 (Source: Fieldwork, 2012-13)

Table 6.23 uses indices to compare the five characteristics across the eight case

organisations. In other words, each cell contains a number between one and eight, which is

designed to rank that characteristic. Rank “1” means very strong influence to retain existing

workers and reduce turnover rates and rank “8” means very poor association to minimise

turnover rates. Total points for each case organisation are calculated by adding up all points for

the five organisational characteristics shown in five columns. Average points are calculated by

dividing total points by five.

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There seems to be a strong link between organisational characteristics and the pattern of

HR practices. That is, organisations that are highly ranked according to their HR practices are

greater in size, operate business for a long time (i.e. relatively older organisations), and play a

role as a direct supplier to organisations in the supply chain. However, one of the organisational

characteristics, ownership of business, is less consistent. It seems that type of ownership of

organisations (i.e. foreign owned or locally owned) has little direct effect on labour turnover

rates.

The present study finds an inter-relationship between size of organisation in terms of

amount of production or numbers of employees with HR practices and OH&S practices in the

case organisations. It finds that greater size of organisation tends to offer more integrated HR

practices due to comparatively stronger financial capabilities. The present study demonstrates

that all four large case organisations offer multiple HR practices and standard OH&S practice,

while three of the four small case organisations have relatively poorer HR practices and OH&S

practices. Actually it is not a great surprise that larger organisations offer relatively better

wages, career development opportunities and safety practices, and, therefore, end up with better

HR practices and lower rates of turnover.

Many Western studies have found a relationship between size of firm and labour turnover

rates which are consistent with the findings of the present study. Guthrie (2000, p. 427), for

example, asserted: “Firm size is . . . associated with turnover”. Greater organisations are more

likely to implement sophisticated HR policies (Jackson & Schuler, 1995; Terpstra & Rozell,

1993; Wilson & Peel, 1991) and may experience lower rates of turnover because of these HR

policies and practices and greater internal career development opportunities (Wilson & Peel,

1991; Hom & Griffeth, 1995). Moreover, Zheng and Lamond (2010) claim that larger sized

organisation experience lower rates of turnover than smaller sized organisations. They asserted

“Size also matters. Bigger firm size leads to lower employee turnover rate (beta=0.091, p<0.05).

The results support Mobley’s (1982) argument for the higher capacity of larger firms to control

their employee turnover through more competitive compensation and other HRM instruments”

(p. 435). However, Bloom et al. (1992) found that organisations with a large number of

employees experience higher rates of turnover which is inconsistent with the findings of the

present study. They stated: “Hospitals with larger staffs experience greater turnover,

organisations size was a powerful predictor in the model (beta=0.23; p= 0.0001)” (p. 1420).

The present study finds a relationship between age of organisation in terms of inception

of business with HR practices and OH&S practices in the eight case organisations. It finds that

relatively older organisations are more likely to offer multiple HR practices because of their

experience and advantages gained since inception of business. The present study shows that all

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four relatively older organisations offer multiple HR practices and standard OH&S practice,

while all three of the four relatively younger case organisations have relatively poorer HR

practices and OH&S practices.

A considerable number of studies carried out in Western societies found a strong link

between age of organisation and labour turnover rates which are supported by the findings of

present study. Guthrie (2000), for instance, contended that there is an inverse relationship

between age of organisation and rates of turnover. He argued that relatively older organisations,

in terms of inception of business, have “advantages associated with increased time for the

evolution of adoption of HR practices or stabilization of employment patterns” (p. 427). Zheng

& Lamond (2010) also found an inverse relationship between age of organisation and rates of

turnover because of business experience gained by organisation. They stated: “there is a reverse

relationship between turnover and years in local subsidiary (beta= -0.113, p<0.01). It seems that

the longer the companies have experienced in the local subsidiary, the better they managed the

retention of their staff” (p. 435).

The present study also finds an inter-relationship between geographical location of

organisation with HR practices and OH&S practices in the eight case organisations. It finds that

the case organisations located in the city or close to city areas experience lower rates of turnover

because the employees of these organisations have comparatively better access to public

transport and other factors, like residential accommodation, than the organisations located in

regional areas. The present study finds that all four organisations located in the city or close to

city areas experience lower rates of turnover, while three of the four organisations located in

regional areas experience higher rates of turnover. This finding is unique as all existing studies,

particularly those in developed societies, found the reverse results.

A significant number of researchers have found that demand for labour, either in city

areas or regional areas, is largely associated with organisational turnover rates. They show that

local demand for labour is positively related to organisational turnover rates (see Parsons, 1977;

Mobley, 1982; Bluedorn, 1982). Almost all existing researches, except Bloom et al. (1992),

show that employee turnover rates are lower in rural or regional areas because unemployment

rate in rural area are higher and alternative job availability is lower than the city areas. Bloom et

al., (1992) showed that organisations placed in a geographical location with a higher supply of

employees experience relatively higher turnover rates. They note: “Hospitals in areas with

greater competition have lower turnover. Also hospitals in the areas in which there are a greater

supply of nurses (to beds per country population) have higher turnover” (p. 1420).

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6.4 Summary of the chapter In some ways, the findings of the present study are unsurprising. As discussed in section 2.2 the

literature on labour turnover is large. None of the findings contradicts conclusions from the

existing literature except for location of the organisation. The question is: what is the

contribution of the present study? First, while many of the findings are not new, the quality of

the empirical data is unusually good. The present study, especially, studies data at the

organisational level rather than at the individual level, which is the usual level of investigation.

Secondly, the HR practices in the organisations that correspond with lower rates of turnover are

a slightly different set of practices from the “bundle” or “system HR practices” or “high-

involvement work practices” discussed in other studies, because the context of the present study

is a developing country instead a developed country. Thirdly, the level of sophistication, that is,

the quality of HR practices involved in the present study is, although basic, better than the rest

of case organisations. Finally, is the finding that good practices reinforce one-another. Because

the inter-relationships are not “high-performance work systems” or “high-involvement work

practices”, the present study refers to them as “multiple HR practices”.

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CHAPTER 7: CONCLUSION

7.1 Introduction This final chapter summarises the findings, discusses the key contributions and draws the

implications of this thesis regarding the voluntary labour turnover and human resource policies

and practices in the eight RMG organisations in Bangladesh. In doing so, this chapter will avoid

too many detailed answers to the research questions that simply repeat data presented in earlier

chapters. The first two research questions focus on identifying and explaining differences in

labour turnover rates across organisations in the same industry, focusing especially on the role

of human resource management policies and practices. The answers to these questions will be

summarised in terms of the novel empirical findings and then the theoretical contributions of the

project. The third research question, about how management might address problems of labour

turnover, will be addressed by focusing on the practical consequences of the research.

The chapter therefore consists of five parts. Section 7.2 reviews the novel empirical

findings of the study. Section 7.3 addresses the implications of the findings for theory. Section

7.4 discusses implications for practice. Section 7.5 identifies limitations of the research and

Section 7.6 identifies areas for further research.

7.2 Empirical novelty Chapter 2 argued that the large number of previous studies of labour turnover displayed several

preoccupations that make the research undertaken for this thesis relatively unusual: they have

been mostly quantitative in method, thereby focusing mostly on understanding individual

employees’ intentions to quit, and they draw their empirical data overwhelmingly from

developed Western countries. Moreover, few studies focus on describing and explaining

differences in organisational turnover rates across companies in the same industry; a notable

exception being Taplin et al.’s (2003) study of turnover in the UK clothing industry. At the most

general level, these features of the broader literature make the current project rare because it

uses qualitative methods to investigate organisational rates of turnover in a developing country.

There is no suggestion here that the empirical findings of this project on one industry in one

developed country are generalizable to all industries in all countries, but they can still be used to

reflect on theory (see section 7.3 below).

More specifically, Chapters 1, 4 and 6 argued that there is a lack of empirical research on

voluntary labour turnover in the Bangladeshi RMG industry, particularly on organisational

turnover rates, a minor exception being Shamsuzzoha & Shumon (2007). Instead, the bulk of

the existing literature on the RMG industry in Bangladesh focuses on: the overall successes and

challenges of the industry (such as Khundker, 2002; Rashid, 2006, Rashid 2008); occupational

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health hazards (such as Paul-Majumder, 2001 & 2003; Nahar, Ali & Begum, 2010); workers’

rights (such as Mahmud, 2005; Ullah, Sunny & Rahman, 2013); and female workers’ health and

rights (such as Paul-Majumder & Begum, 1997; Paul-Majumder, 2002; Sikdar et al, 2014).

While there is recognition in this previous research that labour turnover is a problem for the

industry, there is little data on actual turnover rates or differences in organisational turnover

rates across organisations.

Given their novelty, it is worth summarising some of the key empirical findings of this

thesis. First, as shown in section 6.2.1, the overall organisational turnover rates varied

significantly across the eight case organisations, ranging from the lowest at 11 per cent (Brown

& Bronze Group) to the highest at 33 per cent (Red International). The turnover rates of the

Blue Concern, Green Garments Ltd, Pink Fashion Company, Silver Dew Apparels, Amber

Fashion and Purple Group were 13 per cent, 15 per cent, 16 per cent, 18 per cent, 26 per cent

and 31 per cent respectively.

Second, as revealed in section 6.2.2, the turnover rates for different occupational groups

(i.e. helpers, operators, cutting masters & others, supervisors and assistant managers &

managers) varied significantly within all eight case organisations, ranging from the highest at

34% for helpers at Purple Group to the lowest at 3% of managers & assistant managers at

Brown & Bronze and Blue Concern. Moreover, these occupational variations were quite

consistent across all of the organisations: with only minor exceptions (noted in section 6.2.2),

the turnover rates in three categories (i.e. helpers, operators and cutting masters) are higher than

supervisors, which are higher than managers & assistant managers. The eight case organisations

also consistently occupied the same rank in the order of turnover rates for both overall

organisational rates and all occupational groups, again with only minor exceptions noted in

section 6.2.2. Brown & Bronze Group has the lowest turnover rates in all five work categories.

Similarly, Blue Concern, Green Garments Ltd, Pink Fashion Company Ltd and Silver Dew

Apparels Ltd occupy 2nd, 3rd, 4th and 5th ranking for all categories. Red International occupies

the 8th ranking, experiencing the highest turnover rate in all occupational categories, except for

helper, followed by Purple Group (7th) and Amber Fashion Ltd (6th). Hence, the pattern appears

to be that an organisation that controls turnover rates in one particular category will control in

all other work categories. This suggests that there are strong organisation-specific explanations

for the variations in turnover rates.

Third, novel data on the consequences of high labour turnover was provided (see section

6.2.3). High voluntary turnover was regarded as a significant problem for all case organisations,

except one, because it had multiple adverse consequences. The important adverse impacts are

delays in production, increase production costs, production loss, recruitment and training costs

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and damage organisational reputation. These are broadly consistent with the existing general

literature on the consequences of high labour turnover and the more specific literature on the

Bangladeshi RMG industry (on the latter, see Shamsuzzoha & Shumon 2007, Hossain, Sarker &

Afroze 2012, and Mukul, Rahman & Ansari 2013). One difference, however, concerned the

negative impact of high turnover on organisational reputation, which was not discussed in the

previous literature.

Consistent with the main research questions, there were also important empirical

findings on how different rates of organisational turnover in the Bangladeshi RMG industry can

be explained. The fourth key finding is in many ways unsurprising given the criteria used to

select the case organisations: turnover rates (both overall and by occupation) varied according to

type of organisation, differentiated by key structural characteristics. As section 6.3.1.1 showed,

for example, the ranking of the eight organisations corresponded almost exactly with their size:

the larger the size of the organisation (in terms of number of employees), the lower the turnover

rate (overall or occupational).

Size is, however, by no means the sole determinant of labour turnover. The case of

Silver Dew Apparel illustrates the complications. In terms of number of employees and

production capacity, Silver Dew is small and it experienced turnover rates higher than the larger

case organisations. However, its turnover rates were quite low (i.e. 18%) compared with those

of other three small case organisations (i.e. 26% - 33%). It seems that despite its small size,

Silver Dew was different: it is foreign owned, its position in the supply chain is that of a full

contracting organisation and it has a good reputation in the industry. Above all, however, Table

6.22 showed that it adopted a number of HR policies and practices associated with lower rates

of turnover: these were not so much higher wages, but certainly more favourable working hours,

career development, leave provisions and safety practices.

This suggests an important role of agency. While the managers of the other small case

organisations (such as Red International) did not seem to care about high turnover rates, they

applied relatively poor and sub-standard HR practices (such as Purple Group) or they focused

mainly on maximising profits, Silver Dew’s managers were keen to improve HR practices,

physical work conditions, and OHS. As described in section 5.6, this reflected a learning

process by Silver Dew managers. During the early years of operation (5-6 years previously),

they had experienced relatively higher turnover rates (i.e. approximately 29%) and managers

consciously decided from around 2009 onwards to invest resources rather than maximising

profits, offer better HR practices and safer physical work conditions since 2009. One of the

results, according to managers, was the relatively lower rates of labour turnover.

Sections 6.3.1.3 and 6.3.3.4 showed that variations in turnover rates corresponded closely

with the location of the organisation: those located in city areas consistently had lower turnover

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than those in regional areas, while (with one minor exception) those in export processing zones

had lower turnover rates than those outside those zones. As section 6.3.5 showed, the position of

the organisation in the supply chain (i.e. whether it was predominantly a contractor or a

subcontractor) also corresponded with the organisational turnover rate. Finally, the age of the

organisation also seemed to correspond with turnover rates (see section 6.3.1.6). The only

organisational characteristic that did not clearly correspond with turnover rates was ownership.

As section 6.3.1.2 showed, some locally-owned organisations displayed lower turnover rates

than some foreign-owned organisations.

How can these empirical findings be interpreted? It must first be acknowledged, as it was

in the respective sections of Chapter 6, that the findings are mostly consistent with the existing

literature (both general and on the Bangladeshi RMG industry). It must also be repeated that

these are not statistically significant relationships and they cannot be considered to have proved

any hypotheses. However, the consistency of the findings is compelling, especially when it is

remembered that it was not possible to know the turnover rates of the eight case organisations

before they were selected for study (see Chapter 3).

Two additional observations about organisational characteristics have potential

theoretical implications, and will be discussed in the next section of this chapter. On the one

hand, it is clear that the various organisational characteristics overlap considerably: the larger

organisations amongst the cases selected tend to be located in cities and in the EPZs and tend to

be older and contractors, while smaller organisations tend to be located in regional areas and

outside the EPZs, and to be subcontractors and younger. This means it is difficult to assess the

separate effects of the various organisational characteristics. On the other hand, it is

questionable how much the effects of these organisational characteristics on turnover are

separable from the effects of the organisations’ HR and safety policies and practices: larger,

older, city/EPZ-located contracting organisations tend to offer HR and safety practices that are

likely to reduce turnover, while smaller, newer, region/non-EPZ-located organisations adopt HR

and safety practices that are more often associated with higher turnover rates.

The fifth empirical finding focuses more on HR and safety policies and practices. Section

6.3.2 initially demonstrated the associations between organisational turnover rates and various

individual policies and practices. These included various factors related to wage levels and

wage systems, work hours, leave, training and career development, staff amenities, occupational

health and safety and especially fire safety. Consistently across all these individual factors, the

ranking of the case organisations in terms of turnover rates remained the same, indicating that

HR policies and practices that benefitted employees led to lower labour turnover rates. In this

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way, explanatory factors internal to the organisation – and largely under the control of managers

– were shown to be important in explaining turnover rates.

Many of these findings on individual HR policies and practices are unremarkable and

differ little from the existing literature. However, while the relative importance of the different

HR policies/practices was impossible to assess with the adopted research methodology, the

qualitative data indicated that some HR practices that were important in this rapidly growing

industry in a developing country were different to those in recent years in developed countries

and in the labour turnover literature. For example, a number of interviewees argued that small

differences in wage payments motivated many employees to leave (see sections 5.8.1 and

6.3.2.1 above), in contrast to findings in some Western countries that wages (especially small

differences in pay) had insignificant impact of labour turnover (e.g. Iverson & Deery 1997,

Allen et al., 2010).

Similarly, another important factor affecting turnover rates in the case organisations was

said by interviewees to be movement resulting from employees avoiding organisations where

major safety incidents (especially fires) were considered to be possible (see sections 6.3.3.1 and

6.3.3.2). This is intuitively understandable in Bangladesh, where such safety issues have been

common, as emphasised by the devastating building collapse of Rana Plaza which took place in

2013 after gathering the data for the current research project. However, safety issues on this

scale are very rare in developed countries and they have not found their way into the literature

explaining labour turnover. In this way, research in a developing country has revealed

explanatory factors that are different to those in developed countries. The theoretical implication

of this observation, which will be discussed further below, is that context is important

7.3 Theoretical contribution This thesis adopted theoretical and methodological approaches that differ to the mainstream of

labour turnover research. The key theoretical contribution, then, is to demonstrate the value of a

more ‘holistic’ approach to turnover research, grounded in the tradition of Strategic HRM. Such

an approach demonstrates three distinctive elements: it focuses on ‘multiple’ HR policies and

practices which combine into organisational HR ‘systems’ rather than emphasising ‘individual’

and separate HR policies and practices; it locates HR systems in the larger characteristics of

organisations, recognising that different types of organisations are likely to implement different

patterns of HR policies and practices, with different implications for labour turnover; and it

locates HR systems in their external contexts, which include the industry and the nation within

which the organisation operates. Before expanding on these points, however, it is important to

provide some background on the concept of holism.

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7.3.1 Holism

The concept of holism is not new in the social sciences. As Verschuren (2001, p. 390) pointed

out, holism is an especially important concept in the writing of qualitative methodologists in

general, and ethnomethodologists in particular, as well as in the methodological literature on the

case study design. Verschuren (2001, p. 393) contrasts holism with ‘reductionism’. The former

involves “…is the tendency to look at an object as a whole”, while the latter is defined as:

“… a doctrine that maintains that all objects and events are made up of indivisible basic

elements, and that we can gain insight into these objects and events by analysing the

elementary parts.” (Verschuren 2001, p. 391)

In this way, the dominant approach to research on labour turnover (discussed at length in

Chapter 2) tends to be reductionist. This fragments explanations of labour turnover into

individual variables and isolates them from the larger organisation in which workers are

employed and the external environment. In contrast, as described briefly in Chapter 1, Strategic

HRM is more holistic (for example Becker et al. 1997; Delery and Doty, 1996; Delery 1998;

Boxall, Purcell and Wright, 2010; Boxall and Purcell, 2011), producing explanations of labour

turnover rates that focuses emphasise internal fit, which refers to the notion that ‘the effects of

individual HR practices depend on the nature of other HR practices in the HR system’ (Gerhart,

2012, p. 324); and external fit, which refers to the notion that ‘the effects of individual HR

practices depend on the contextual factors’ (ibid.).

7.3.2 Holism and internal fit

The empirical findings of this thesis confirm the theoretical importance of ‘inter-connectedness’

or ‘inter-relationships’ between the various internal/managerial factors such as HR and safety

practices. As discussed in section 6.3.4, all the case organisations consistently occupied the

same ranking in tables on a wide range of HR policies and practices. In other words,

organisations with lower turnover did not just adopt one or a small number of HR practices

associated with low turnover. Rather, they tended to operate ‘better’ HR practices on almost all

fronts. This not only makes it difficult to separate the effect of each individual HR practice on

turnover, but it suggests ‘internal fit’; in other words, that individual HR practices tend to fit

together and reinforce each other, producing an effect that is greater than the sum of the

individual practices.

This finding about ‘multiple’ HR policies/practices is consistent with some, but by no

means all, of the previous literature, largely because of the focus in the bulk of the literature on

individual turnover rates and the dominant quantitative methodology. The research that has

focused on ‘multiple HR practices’ has come out of Strategic HRM and the study of High

Performance Work Systems, which has mostly emerged since the 1990s (see Chapters 1 and 2,

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and section 6.3.4). This research, which began in the 1990s with seminal works like Arthur

(1994), Huselid (1995), Shaw et al. (1998) and MacDuffie (1995), emphasises the importance of

‘bundles’ or ‘systems HR practices’ in explaining a range of organisational outcomes, of which

labour turnover is just a minor example.

7.3.3 Holism and type of organisation

The current research project clearly finds that there are a strong links between, on the one hand,

structural features of organisation structures and the business strategies they tend to impose and,

on the other hand, the internal policies of organisation. This combination ultimately impact on

organisational rates of turnover. Large and relatively old case organisations that played full

contractor roles and were located in city areas adopted a wide range of HR policies/practices

associated with comparatively lower rates of labour turnover. This continues the theme about

the theoretical importance of holism because organisations of this type are more likely to

command the financial stability and resources, as well as the management expertise, to offer

better wages, more attractive working conditions and other HR practices that attract and retain

employees. At the same time, it also recognises the theoretical importance of context, because

various external factors (like their role in the supply chain, the local labour markets in which

they are located and the more effective enforcement of regulation) reinforce and promote HR

practices associated with lower labour turnover. In this way, a combination of internal and

external factors produces a more complete explanation.

The same theoretical conclusion comes from the smaller, younger sub-contracting

organisations that lack the financial stability and resources, let alone the management expertise,

to adopt the many HR practices associated with low turnover. The external circumstances they

confront reinforce – the context in which they operate – reinforce this situation. The result is

that they are far more likely to experience higher rates of turnover.

7.3.4 Holism and external fit

The present study makes a valuable theoretical contribution through the holistic analysis of

organisational labour turnover in the context of a developing country. As a long tradition of

research has demonstrated (e.g. Paauwe and Boselie 2007, Gospel & Pendleton 2003),

differences in institutional and other settings (especially across countries) affect the nature of

HR practices and unappreciated context can taint research results or damage the generalizability

of research results. The existing labour turnover literature, however, largely neglects the

question of context: most existing studies of labour turnover are located in western countries,

mostly in the USA and UKs (Ovadje 2010, p.65), with little recognition of the impact of this

highly specific context on the findings. Relatedly, there are few studies of labour turnover

located in developing countries. This raises questions about whether the explanations of labour

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turnover rates in organisations in developed countries are the same as those in developing

countries. Does the level of economic development or the nature of legal systems or

religion/culture affect patterns in labour turnover?

On the one hand, the findings of this study show that much of the existing theory is

relevant to developing countries, or at least to the experiences of the eight RMG organisations

studied here. Many of the explanatory factors found in previous studies have proven to be

useful in understanding differences in turnover rates between organisations in the Bangladeshi

RMG industry, while there are elements of the existing literature that anticipate the more

holistic combination of factors that is deemed necessary to properly explain what happened in

this industry.

On the other hand, the current study reveals the weaknesses of existing theory because it

does not – and perhaps cannot – predict the specific combination of factors that produced the

different rates of labour turnover in the eight case organisations. The many contradictions in the

findings of the existing theory mean it can only produce a list of potential explanatory factor.

The specific combination of these factors required to explain different rates of turnover in

different organisations in the Bangladeshi RMG industry can only come through the type of in-

depth research reported in this thesis.

7.4 Implications for practice From a practical point of view, a number of suggestions for both managers and the Bangladeshi

government come from the findings of this study. To begin with, there are a number of

relatively simple recommendations that can be made to managers who are concerned about high

labour turnover and wish to reduce it. The finding that a wide range of individual HR practices

contributed to lower organisational rates of labour turnover suggests that managers seeking to

reduce labour turnover should adopt them. Wages provide a good example: the research

reported here shows that higher wages paid by the RMG organisations contribute to lower its

turnover rates. Hence, the RMG organisations should consider at least paying minimum wage

rates, while higher wage rates are likely to further improve labour turnover. Similarly, the

irregularity of wage payments or wage arrears effects workers’ financial situations. Labour

turnover rates might be reduced if RMG organisations pay monthly wages on time.

Work hours are another example. The present study found that some organisations

forced RMG workers to work 9 to 10 hours in every working day, including only a half-hour to

one-hour lunch break, and this was associated with high labour turnover. Therefore, the RMG

organisations should follow standard work hours, which consist of eight hours. Also related to

work hours, this project found that some RMG organisations, especially during the shipment

periods, require workers to work seven days per week, which creates worker dissatisfaction and

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increases rates of turnover. It also found that there is no particular weekly off day for the

workers in many RMG organizations, which had a similar consequence. Hence, the RMG

organisations should not force workers to work seven days in a week. Similar recommendations

could be made to managers in a number of other areas of HR policy/practice, including training

and career advancement, maternity leave, increment of wages, regular payment of wages, eight

hour based working hours, provision of day off every week and paid medical leave and annual

leave.

Finally, a particularly poignant finding of this research concerns safety at work. Not

only is this an issue that threatens the health, and in some cases the lives, of workers, but labour

turnover is higher amongst companies that have a history of safety incidents or a perception

amongst its workers of poor safety. So, companies in the RMG industry need to sure that safety

and security is their first priority – ensure that working conditions are safe, hazard free and

healthy. These steps will not only protect the health of workers but also improve RMG working

conditions and decrease voluntary turnover rates.

Beyond these individual HR policies/practices, a key finding of this study is that

organisations adopting multiple HR policies/practices have lower turnover rates. The findings of

this study demonstrate that ‘multiple HR practices’ rather single offer may increase workers’

satisfaction and decrease rates of labour turnover. Therefore, organisations should prioritise

‘multiple HR practices’ which come as a package, rather single selecting individual HR

practices.

These recommendations to managers about individual and multiple HR

policies/practices, however, are relatively simplistic and fairly obvious. They may also be a

little unrealistic for at least some types of RMG companies. Adopting these ‘better’ HR

policies/practices (such increased wages, better leave entitlements or training) is likely to

increase labour costs, so they not only require good finances and other resources to fund them,

but they also have the potential to reduce the competitiveness of the firm in a price-sensitive

market. They also require managers with HR expertise to recognise the need and introduce the

policies/practices. The findings of the current research on organisational size suggest that these

HR policies/practices – and their positive impact on labour turnover – are most often associated

with large organisations that tend also to be long established in the industry, contractors rather

than subcontractors in the supply chain and located in city regions, especially in the EPZs. So,

the above recommendations are most realistic for large organisations, although the managers of

these large organisations need to understand better the negative costs of high labour turnover

and assess the positive impact of the lower turnover produced by ‘improved’ HR practices.

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What of the younger, smaller organisations that are subcontractors and located outside

the cities and the EPZs, which seems to be where the worst labour turnover problems occur? It

is clear that small RMG companies cannot suddenly age, grow in size, become contractors or re-

locate to EPZs in the cities. So, what should the managers of these small organisations do? It is

difficult to provide practical recommendations to the managers of small organisations,

especially as the holistic analysis of the current research project emphasises the inter-

connectedness of internal and external factors. Despite of this dilemma, the current research

projects offers two types of practical recommendations: short-term and long-term policies and

practices.

Short-term changes in the policies and practices of small RMG factories require greater

awareness by managers that HR practices, like those studied in this project, affect labour

turnover and that high labour turnover has significant costs. These managers might also be more

inclined, for example, to comply with minimum standards contained in government regulations

if they recognise that these are not just legal requirements, but that meeting these standards

might lead to a drop in labour turnover rates and associated reductions in some costs and/or

greater reliability in meeting delivery deadlines. These ‘awareness’ issues might be assisted by

the government education programs that are recommended below. In addition, it could also be

recommended to the managers of small RGM companies that they revise their current practices,

particularly the HR policies and practices. In other words, in the short-term the small

organisations should reshuffle some of their individual HR practices or, even better, develop

consistent systems of HR practices as much as they can.

In long-term, the goal of most small organisations will be to expand their businesses

and improve the status from sub-contractor to full contractor. Moreover, with these changes in

the organisations’ structural features, these growing organisations might be able to enhance their

existing HR policies and practices, especially in terms of the ‘multiple’ or combinations of HR

practices demonstrated in this thesis to be most effective in reducing labour turnover.

Turning to government, recommendations relate to the areas of enforcement, education

and financial assistance. With respect to the first, many of the HR practices found to be

associated with high organisational rates of turnover are subject to government regulation.

Minimum wages, for example, are regulated by the Bangladeshi government (see section

6.3.2.1). There are several practical problems with these minimum wage regulations. First, the

minimum rates specified for the Bangladeshi RMG industry are very low compared with other

South Asian countries and even compared with other industries in the country. This encourages

workers to leave the RMG industry of Bangladesh in search of higher wages. Secondly,

minimum wage rates in the Bangladeshi RMG industry are not regularly up-dated or up-graded,

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while salaries/wages rates of other industries and countries are up-graded every five to seven

years and the inflation rates are very high in the country. Khan et al. (2009) report that the

Bangladesh government did not revise the minimum-wage rates in the industry for more than

twenty years until 2010, which was a prime causes of workers’ dissatisfaction and unrest.

Thirdly, it is important for governments to enforce minimum wage rates evenly and

indiscriminately. It is found that more than 70 percent of the RMG workers are deprived of

minimum wages declared by the government (Sarker, 1997). Hence, the government needs not

only to increase the wages rates and up-grade them consistent with other industries in the

country but also enforce the minimum wages regulations strictly across the industry. The

current research project finds that variations in rates of turnover associated with the enforcement

of regulations. The government needs to make sure that all regulations are enforced in every

RMG organisation, irrespective of size, location or ownership of organisation.

Beyond wages, government regulation, and the failure of government to enforce these

regulations, also applies to several other HR practices that this research has shown to be

relevant to labour turnover. For example, the Bangladeshi government regulates standard work

hours at eight hours per day, but work hours in some of the RMG organisations are nine to ten

hours. Such long working hours lead to higher turnover rates. The Bangladesh Labour Act

(2006, Section 100, p. 54) states that: ‘No adult worker shall ordinarily be required or allowed

to work in an establishment for more than eight hours in any day’. Workplace safety in the

Bangladeshi RMG industry is also supposed to be regulated by the government. The

Bangladesh Labour Act (2006, Section 61 (1)), which is discussed in section 6.3.3.1 of chapter

6, says: If it appears to the Inspector that any building or part of a building or any part of the ways,

machinery or plant in an establishment is in such a conditions that it is dangerous to human life

or safety, he may serve on the employer of the establishment an order in writing specifying the

measures which, in his opinion, should be adopted, and requiring them to be carried out before a

specified date.

Finally, according to The Bangladesh Labour Act (2006, Section 46 (1), p. 37), which is

discussed in section 6.3.2.7 of chapter 6, women workers should receive paid maternity leave,

as the law states: … every woman employed in an establishment shall be entitled to and her employer shall be

liable for, the payment of maternity benefit in respect of the period of eight weeks preceding the

expected day of her delivery and eight weeks immediately following the day of her delivery.

In each of these areas, the current research has shown that employers failing to meet

minimum standards are associated with high labour turnover, which in turn partly results from a

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failure of the government to enforce its own standards. Very irregular labour inspection, implicit

institutional bias (Mahmud & Kabeer 2003) bribes, insufficient numbers of labour inspectors

(Mahmud & Kabeer, 2003) and rare instances of punishment for violating the regulations are

signs of a failure of the government to enforce the regulations. As mentioned in section 6.3.1.4,

Mahmud & Kabeer, (2003, p. 28) find ‘Labour legislation in Bangladesh … fails to protect

those it formally includes’. In addition, Sikder et al. (2014) find that average work hours are

more than ten hours in the RMG industry, which is a clear violation of regulation as Labour Act

(2006), which limits standard work hours to eight hours. The current research project finds that

the case organisations that follow government regulations experience lower rates of turnover

and vice versa. Therefore, the government must ensure that all regulations related with work

hours, weekly off days, wage increments, overtime work rates, paid maternity leave, paid

annual leave, sick leave and occupational health & safety are fairly enforced in every RMG

organisation, no matter how big or small, foreign or locally owned, old or new, in city or region.

As well as recommendations about more effective enforcement, there is a good case that

the Bangladeshi government also needs to mount a campaign to educate RMG managers about

the costs of high labour turnover and the potential economic benefits of HR practices that

reduce labour turnover. This type of education campaign might be particularly important for the

managers of small RMG companies who tend more often to violate the regulations and

experience higher rates of turnover than large companies. The current research has shown in

section 6.2.3 that labour turnover is a practical problem for the organisations as it severely

interrupts in production and reduces revenues, as well as creating other problems (see section

6.2.3; see also Shamsuzzoha and Shumon 2007, and Mukul et al. 2013). The goals of

government campaign are to help RMG managers to understand the financial and non-financial

impacts of high turnover. Hence, the government needs to mount a campaign to educate RMG

managers about the direct and indirect costs of high labour turnover.

The current research project also recommends the government assist the small RMG

organisations both financially in terms of credit and logistically to expand their business.

However, it is not recommended that it just give money to small RMG companies. Consistent

with earlier two recommendations, financial and logistic support should be given only to those

managers of small RMG organisations who are interested enough to practice government

regulations and attend regularly the education programs. It means the government assistance

will impact in two ways: enhance the financial ability of small RMG companies who want to

reduce turnover rates in long term through expanding its business, and also minimise turnover

rates by applying government regulations and improving knowledge about the bad effects of

high turnover. Therefore, the government should come forward to award and recognise those

small RMG firms in terms of financial and logistic support based on these two conditions.

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7.5 Limitations of the research All research has limitations, irrespective of its strengths. In spite of the contributions it makes,

this study suffers a number of limitations including the industries selected, the number and

composition of the cases and their location, as well as limitations connected with the data-

collection process and techniques used.

One limitation already discussed in section 3.2.3 is the generalizability of the case

study findings. The eight case organisations cannot be seen as typical or representative in any

quantitative way of all companies or even different types of companies in the Bangladeshi RMG

industry and there has been no attempt to generalise from the cases to this ‘population’. Rather,

the cases were selected according to theoretical criteria and they have been used to reflect on

and develop theory.

A semi-structured interview process was used in this research with managers and

workers for voluntary turnover issue. The interviews were of the same time duration in every

case. While almost same questions were asked in all cases, reflections and responses of the

individuals involved had the potential to limit the generality of the findings and theory

developed from this research.

The research was conducted by a single researcher using rigorous methods of

qualitative research design, data collection and management to ensure the quality and credibility

of the research, together with its dependability and conformability. Even so, there is still the

potential for bias as a result.

7.6 Areas for further research The empirical findings and their theoretical implications raise a number of possibilities for

future research. Indeed, an important role for case studies in theoretical development is to

generate ideas and research questions that can be investigated further through other research

methods. Following from this research, the imperative in this future research – both qualitative

and quantitative – is to explore more deeply explanations for differences between organisational

rates of labour turnover that better incorporate holism and context. The current research project

suggests at least three areas for the future research: 1) the present study has considers actual

turnover rates, not intention to turnover, of the RMG workers. Though intention to turnover is

not actual turnover, as workers’ intention may change at later, more research that investigates

the links between HR practices and how ‘bundles’ or ‘systems’ of HR affect actual turnover and

intention to turnover; 2) greater research is needed that explores the links between structural

characteristics of organisations, HR practices and rates of labour turnover; 3) more research that

links among internal factors, such as ‘bundles’ or ‘systems’ of HR practices, organisational

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structural factors and external factors with turnover rates; 4) the current study supports

questions about the validity of western management theories in developing countries. More

research applying turnover theories to both western countries in developed and developing

countries is needed; 5) the context of the present study is only one developing country (i.e.

Bangladesh). Greater attention is needed to labour turnover in other developing countries such

as Bangladesh, India, Nepal, Pakistan and Sri Lanka, which would allow greater generalisation;

6) more research is needed that compares high labour turnover rates between RMG and other

similar industries, such as the textile industry, applying mixed methods to address not only the

question of why but also how HR policies and practices influence over the voluntary turnover

rates. Such comparisons would provide the general causes of high labour turnover as well as

specific causes of high labour turnover in each individual industry, especially in the RMG

industry; 7) More research on labour turnover is needed that acknowledges contextual impacts.

In particular, one related area of research that was mentioned in Chapter 2 as a major gap is

explanations of systematic differences in turnover rates between industries.

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Shahzad, K., Hussain, S., Bashir, S., Chishti, A. F., & Nasir, Z. M. (2011). Organizational Environment, Job Satisfaction and Career Growth Opportunities: A Link to Employee Turnover Intentions in Public Sector of Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 2(9), 45-56.

Shamsuzzoha, A., & Shumon, M. R. H. (2007). Employee Turnover-a Study of its Causes and Effects to Different Industries in Bangladesh. Manufacturing Engineering, 6(3), 64-68.

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Shaw, J. D., Delery, J. E., Jenkins, G. D., & Gupta, N. (1998). An Organizational-Level Analysis of Voluntary and Involuntary Turnover. Academy of Management Journal, 41(5), 511-525.

Siddiqi, H. G. A. (2000). Developing Backward Linkage to Face the Challenges of 2005, The Daily Star, November 11, Vol. 3, No. 8, Dhaka, Bangladesh.

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Silverman, D. (2000). Doing Qualitative Research: A Practical Handbook. London: Sage Publications.

Smith, A., Oczkowski, E., & Smith, C. S. (2011). To have and to hold: modelling the drivers of employee turnover and skill retention in Australian organisations. The International Journal of Human Resource Management, 22(2), 395-416.

Sparrow, P., Brewster, C., & Harris, H. (2004). Globalizing Human Resource Management. London: Routledge.

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Steel, R. P., & Griffeth, R. W. (1989). The Elusive Relationship Between Perceived Employment Opportunity and Turnover Behavior: A Methodological or Conceptual Artifact? Journal of Applied Psychology, 74(6), 846-854.

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Sujeewa, W. (2011). Relationship between Human Resource Management Practices, Non-Managerial Employee Intention to Turnover in Garment Industry in Sri Lanka. Paper presented at the International Conference on Management, Economics and Social Sciences (ICMESS), Bangkok

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Taplin, I. M., Winterton, J., & Winterton, R. (2003). Understanding Labour Turnover in a Labour Intensive Industry: Evidence from the British Clothing Industry. Journal of Management Studies, 40(4), 1021-1046.

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Weerawansa, S., & Aponsu, I. (2012). Labour Turnover in the White-Collar Job Categories of the Sri Lanks's Ready-Made Garment (RMG) Industry: Emerging Trends and Casual Factors in the post- MFA Period. Paper presented at the Sri Lanka Economic Research Conference, Colombo, Sri Lanka.

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Zeffane, R. M., & Gul, F. A. (1995). Determinants of Employee Turnover Intentions: An Exploration of a Contingency (P-O) Model. International Journal of Employment Studies, 3(2), 91-118.

Zheng, C., & Lamond, D. (2010). Organisational determinants of employee turnover for multinational companies in Asia. Asia Pac J Manag, 27, 423-443.

Zheng, C., Morrison, M., & O'Neill, G. (2006). An empirical study of high performance work practice of Chinese SMEs. International Journal of Human Resource Management, 17(10), 1772-1803.

Zohir, S. C. (2001). Social Impact of the Growth of garment Industry in Bangladesh. The Bangladesh Development Studies, 27(4), 41-80.

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APPENDICES

APPENDIX 1: DATA COLLECTION REFERENCES

CASE ONE: Brown & Bronze Group – Interviews:

Manager 1 on 20.01.2013 Manager 2 on 16.01.2013 Manager 3 on 15.01.2013 Manager 4 on 17.01.2013 Employee 1 on 14.01.2013 Employee 2 on 14.01.2013

CASE TWO: B.C. Report. (2012) (pp. 1-43). Narayangonj: Blue Concern Group. Blue Concern – Interviews:

Manager 1 on 20.12.2012 Manager 2 on 17.12.2012 Manager 3 on 13.12.2012 Manager 4 on 19.12.2012 Employee 1 on 10.12.2012 Employee 2 on 10.12.2012

CASE THREE: Company Profile (2012) (pp. 1-8). Dhaka: Green Garments Ltd. Green Garments Ltd – Interviews:

Manager 1 on 06.01.2013 Manager 2 on 06.01.2013 Manager 3 on 03.01.2013 Manager 4 on 02.01.2013 Employee 1 on 23.12.2012 Employee 2 on 23.12.2012

CASE FOUR: Pink Fashion Company Ltd – Interviews:

Manager 1 on 29.01.2013 Manager 2 on 24.01.2013 Manager 3 on 23.01.2013 Manager 4 on 23.01.2013 Employee 1 on 21.01.2013 Employee 2 on 21.01.201

CASE FIVE: Silver Dew Apparels Ltd – Interviews:

Manager 1 on 07.02.2013 Manager 2 on 05.02.2013 Manager 3 on 05.02.2013 Manager 4 on 04.02.2013 Employee 1 on 03.02.2013 Employee 2 on 03.02.2013

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CASE SIX: Amber Fashion Ltd – Interviews:

Manager 1 on 14.02.2013 Manager 2 on 12.02.2013 Manager 3 on 11.02.2013 Manager 4 on 11.02.2013 Employee 1 on 10.02.2013 Employee 2 on 10.02.2013

CASE SEVEN: Purple Group – Interviews:

Manager 1 on 08.01.2013 Manager 2 on 08.01.2013 Manager 3 on 10.01.2013 Employee 1 on 07.01.2013 Employee 2 on 07.01.2013

CASE EIGHT: Red International – Interviews:

Manager 1 on 04.12.2012 Manager 2 on 06.12.2012 Manager 3 on 06.12.2012 Employee 1 on 02.12.2012 Employee 2 on 02.12.2012

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APPENDIX 2: EMPLOYEE TURNOVER STUDIES BASED ON ORGANISATIONAL UNIT OF ANALYSIS

Arthur, J. B. (1994). Effects of Human Resource Systems on Manufacturing Performance

and Turnover Academy of Management Journal, 37(3), 670-687. Guthrie, J. P. (2000). Alternative Pay Practices and Employee Turnover: An organizational

economics perspective. Group & Organization Management, 25(4), 419-439. Guthrie, J. P. (2001). High-involvement work practices, turnover, and productivity:

Evidence from New Zealand, Academy of Management Journal, 44(1), 180-190. Haines, V. Y., Jalette, P., & Larose, K. (2010). The influence of human resource

management practices on employee voluntary turnover rates in the Canadian non–government sector. Industrial and Labor Relations Review, 63(2), 228-246.

Huselid, M. A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance, Academy of Management Journal, 38(3), 635-672.

Lee, C.-H., Hsu, M.-L., & Lien, N.-H. (2006). The impacts of benefit of plans on employee turnover: a firm-level analysis approach on Taiwanese manufacturing industry. Int. J. of Human Resource Management, 17(11), 1951-1975.

Lemay, S. A., Taylor, G. S., & Turner, G. B. (1993). Driver Turnover and Management Policy: A survey of Truckload Irregular Route Motor Carriers. Transportation Journal.

Shaw, J. D., Delery, J. E., G. Douglas Jenkins, J., & Gupta, N. (1998). An organization-level analysis of voluntary and involuntary turnover, Academy of Management Journal, 41(5), 511-525.

Smith, A., Oczkowski, E., & Smith, C. S. (2011). To have and to hold: modelling the drivers of employee turnover and skill retention in Australian organisations. The International Journal of Human Resource Management, 22(2), 395-416.

Taplin, I. M., Winterton, J., & Winterton, R. (2003). Understanding Labour Turnover in a Labour Intensive Industry: Evidence from the British Clothing Industry. Journal of Management Studies, 40(4), 1021-1046.

Terborg, J. R., & Lee, T. W. (1984). A Predictive Study of Organizational Turnover Rates. Academy of Management Journal, 27(4), 793-810.

Titumir, R.A. Mahmud and Ahmed, M.I, 2006, ‘Demystifying Effectiveness of Market Access for LCDs: A Case Study of Bangladesh Apparel Exports to the USA’ Unnayan Onneshan, June, Dhaka, Bangladesh

Wahra, G.N. and Rhaman, F., 1995, ‘A right to live: Girl workers in the Bangladeshi garment industry’, Gender and Development, June, Vol. 3, No. 2.

Wheeler, Anthony R; Harris, Kenneth J; and Harvey, Paul, 2010, Moderating and Mediating the HRM Effectiveness-Intent to Turnover Relationship: The Roles of Supervisors and Job Embeddedness, Journal of Managerial Issues, Vol. XXII, No. 2, 182-196.

Zheng, C., & Lamond, D. (2010). Organisational determinants of employee turnover for multinational companies in Asia. Asia Pacific Journal of Management, 27, 423-443.

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APPENDIX 3: INFORMATION STATEMENTS

FACULTY OF BUSINESS AND LAW

Project Supervisor Prof Mark Bray Newcastle Business School Faculty of Business and Law University of Newcastle + 61 2 4921 5073 Mark.Bray@newcastle.edu.au

Information Statement for the Research Project:

Human Resource Practices & Voluntary Labour Turnover in the Readymade Garment (RMG) Industry in Bangladesh.

You are invited to participate in the research project identified above which is being conducted by Mr Gazi M Farid Hossain, who is a PhD student from the Newcastle Business School at the University of Newcastle. This project is part of Mr Gazi M Farid Hossain’s doctoral studies at the University of Newcastle and is being supervised by Prof Mark Bray and Dr Jennifer Waterhouse from the Newcastle Business School, University of Newcastle, Australia.

Why is the research being done? The purpose of the research is to explore the contribution of human resource policies and practices in voluntary labour turnover in the readymade garment (RMG) industry in Bangladesh.

Who can participate in the research? Within each case organization, the interviewees will occupy positions like CEO/managing director, general manager, HR manager, assistant HR manager and supervisors, and labor representatives.

In addition, interviewees external to the case organizations will include government officials, leaders and/or staff of business and employer associations, industry and national labour leaders, NGO officials, ILO officials.

What choice do you have? Participation in this research project is entirely your choice. If you do decide to participate, you may discontinue completing the survey without giving a reason. Your decision to participate or not to participate in this project will not affect you in any way and no one will know whether or not you have participated in this study. Additionally, not participating in this study will not affect your relationship with the University of Newcastle. Your consent to participate in this project will be considered as implied, once you provide the information relating to the questionnaire. Please note that, because the questionnaire is to be answered anonymously, you will not be able to withdraw from this research project after you have provided the information to the researchers.

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What will you be asked to do?

First you will need to complete the hard copy of the demographic related questions and return it to the researcher. After returning the completed demographic related questions, you will be asked to provide the information relating to the questionnaire. Please note that because the questionnaire is anonymous, you will not be able to withdraw from the study after you have completed the survey.

How much time will it take?

If you wish to take part in this study, it will take approximately 30 minutes to provide the information relating to the questionnaire.

What are the risks and benefits of participating? There are no risks or direct benefits to you associated with participation in this study. Your participation in this research will help us explore the contribution of human resource policies and practices in voluntary labour turnover in the readymade garment (RMG) industry in Bangladesh. High rate of voluntary employee turnover is the very important practical problem for both the RMG managers and the government of Bangladesh. High rate of employee turnover is a major problem for managers as it results in disruption in production. The RMG industry is the largest export-earning sector in Bangladesh, accounting for over 78% of the country’s total export earnings, obviously high employee turnover problem in the RMG industry is a concern of the government.

How will your privacy be protected? All of the information obtained from the interviewees for this research project are anonymous. It will not be possible to identify you or your organisation from your provided information. Interviewees or their organisations will not be identified in any report or publication. Only the researchers will have access to the collected data. Raw data will be stored in a password protected file in the researchers’ computers for a minimum of five (05) years of awarding the degree as per the university’s data storage policies.

How will the information collected be used? The information obtained from this questionnaire will primarily be used to produce the PhD thesis of Gazi M Farid Hossain. The findings, however, may be reported in edited publications, conference presentations or media release, and utilised in the development of human resource policies and practices, particularly in Bangladesh. A brief summary of the results of this project will be available from the project supervisor from July 28, 2013. Please feel free to contact the project supervisor by email if you would like to have an electronic copy of the summary.

What do you need to do to participate? Please read this Information Statement and be sure you understand its contents before you consent to participate. If you would like to participate, please complete and return the anonymous demographic related questionnaire. Please contact the project supervisor if there is anything you do not understand about this study or if you have any questions about this study.

Further information If you would like further information about this study, then please contact the project supervisor, prof Mark Bray by email or phone (Mark.Bray@newcastle.edu.au, + 61 2 4921 5073).

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Thank you for considering this invitation. We encourage you to retain this copy of information sheet for your record.

Yours sincerely,

Gazi M Farid Hossain Dr Jennifer Waterhouse Prof Mark Bray

Complaints about this research

This project has been approved by the University of Newcastle’s Human Research Ethics Committee, Protocol Reference No. H-2012-0349.

Should you have concerns about your rights as a participant in this research, or you have any complaints about the manner in which the research is conducted, it may be given to the researcher, or, if an independent person is preferred, you can contact the following people:

i) The Human Research Ethics Officer, Research Office, The Chancellery, The University of Newcastle, University Drive, Callaghan NSW 2308, Australia, telephone +61249216333, email Human-Ethics@newcastle.edu.au; and

ii) Prof Tanbir Ahmed Chowdhury, Professor, Dept. of Business Administration, East West University, Dhaka, Bangladesh. E-mail:tanbir@ewubd.edu

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Project Supervisor Prof Mark Bray Newcastle Business School Faculty of Business and Law University of Newcastle + 61 2 4921 5073 Mark.Bray@newcastle.edu.au

Research Project Information Statement for the CEO/Managers: Human Resource Practices & Voluntary Labour Turnover in the Readymade Garment (RMG) Industry in Bangladesh. You are invited to participate in the research project identified above which is being conducted by Mr Gazi Hossain. This project is part of Mr Hossain’s doctoral studies at the University of Newcastle and is being supervised by Prof Mark Bray and Dr Jennifer Waterhouse from the Newcastle Business School, University of Newcastle, Australia. What is the research about? The aim of the research is to explore the reasons for high labour turnover in the readymade garment (RMG) industry in Bangladesh and especially the contribution of human resource policies and practices to moderating labour turnover. Who can participate in the research? Your organisation is one of eight chosen to receive the invitation to participate based on following criteria: ■ It is a RMG organisation located in one of the four districts of Dhaka, Gazipur, Narayangong, and Savar. ■ It is either a locally-owned or a foreign-owned RMG organisation. ■ It is either a small or a large sized (in terms of number of employees) RMG organisation. ■ It is a RMG organisation experiencing either high or low rates of labour turnover. Individuals from within your organisation are invited to participate if they have knowledge of or experience with labour turnover because of the roles they perform, or because of their long experience in the organisation. We would like to invite, key employees from your organization such as the CEO/managing director, general manager, HR manager, assistant HR manager, floor manager, and supervisor), and at least one member of general staff. What choice do you have? Participation in this research project is entirely your choice. If you do decide to participate, you may withdraw at any time without giving a reason. Your decision to participate or not to participate in this project will not affect you in any way and no one will know whether or not you have participated in this study. Additionally, not participating in this study will not affect your relationship with the University of Newcastle.

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What will you be asked to do? As the CEO/General Director, you will be asked to do the following: ■ Return the completed organisational consent form via post mail. ■ Provide organisational consent for eligible staff from within your organisation to participate. ■ Return the completed individual consent form for the CEO/Managing directors via post mail. ■ Distribute a Participant Information Statement and Consent Form to eligible staff from within your organisation on behalf of the researchers. ■ Prepare to answer the demographic questions based on the demographic questionnaire at the beginning of the interview. ■ Allow the student researcher to use a quiet room within your office to conduct the interviews with participants. ■ Participate in an interview. You will be asked to sit for an interview to provide the information relating different issues including labour turnover, HR policies and practices, workforce, job satisfaction, working environment, and career development. The researcher may also take some brief notes on basic features of the physical and social environment of your organisation. The location of the interview should be in a specific, quiet and confined room at your organisation. You can request to review or edit the transcript of your interview by e-mailing or posting a letter to the researchers. As well as the interview, the researcher will request access to any relevant documents which might provide information about labour turnover and/or HR practices in your organisation. These documents might include minutes of meetings, HR reports submitted to the board or annual reports. How much time will it take? If you wish to take part in this study, the interview will take approximately 1/2-1 hour. What are the risks and benefits of participating? Given that the researchers undertake not to reveal to anyone the identity of your organisation or interviewees, we believe there are no risks to you associated with participation in this study. Your participation in this research will help us explore the contribution of human resource policies and practices in voluntary labour turnover in the readymade garment (RMG) industry in Bangladesh.

This is important because high rate of voluntary employee turnover is the major practical problem for many RMG managers and the government of Bangladesh. The RMG industry is the largest export-earning sector in Bangladesh, accounting for over 78% of the country’s total export earnings. High rate of employee turnover is a major problem for managers as it results in disruption in production.

In this context, we expect the findings of our investigation into labour turnover will be beneficial in three ways:

• For the organisation, in that it may assist you in the future in better managing labour turnover. • For the industry, in that it will provide benchmarks and guidance for individual organisations. • For the country, in that it will assist in making this important industry more efficient.

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How will your privacy be protected? All of the information obtained from the interviewees for this research project will remain confidential. Interviewees and their organisations will not be identified in any report or publication. Furthermore, the participants will not be made identifiable in how they are described (e.g. any unique characteristics which may potentially identify an individual or organisation will not be detailed in the reporting of the results). The collected raw data (e.g. digital recording of interview, documents, field notes) will be securely stored in researcher’s secured personal filing cabinet at his parents’ house in Bangladesh. Only the researcher will have access to the soft data in in Australia, which will be stored in a password protected file in the researchers’ computers for a minimum of five (05) years of awarding the degree as per the university’s data storage policies. How will the information collected be used? The information obtained in this study will primarily be used to produce the PhD thesis of Mr Gazi Hossain. The findings, however, may be reported in edited publications, conference presentations and academic journal articles. A brief summary of the results of this project will be available from the project supervisor at the end of the project. Please feel free to contact the project supervisor by email if you would like to have an electronic copy of the summary. What do you need to do to participate? Please read this Information Statement and be sure you understand its contents before you consent to participate. If you would like to participate, please complete the consent form and return it by post to the researcher. Please contact the project supervisor if there is anything you do not understand about this study or if you have any questions about this study. Further information If you would like further information about this study, then please contact the project supervisor, Prof Mark Bray by email (Mark.Bray@newcastle.edu.au ) or phone (+ 61 2 4921 5073). Thank you for considering this invitation. We encourage you to retain this copy of information sheet for your record. Yours sincerely, Gazi M Farid Hossain Dr Jennifer Waterhouse Prof Mark Bray Complaints about this research This project has been approved by the University of Newcastle’s Human Research Ethics Committee, Protocol Reference No. H-2012-0349. Should you have concerns about your rights as a participant in this research, or you have any complaints about the manner in which the research is conducted, it may be given to the researcher, or, if an independent person is preferred, you can contact the following people: i) The Human Research Ethics Officer, Research Office, The Chancellery, The University of Newcastle, University Drive, Callaghan NSW 2308, Australia, telephone +61249216333, email Human-Ethics@newcastle.edu.au; and ii) Prof Tanbir Ahmed Chowdhury, Professor, Dept. of Business Administration, East West University, Dhaka, Bangladesh. E-mail:tanbir@ewubd.edu

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Project Supervisor Prof Mark Bray Newcastle Business School Faculty of Business and Law University of Newcastle + 61 2 4921 5073 Mark.Bray@newcastle.edu.au

Research Project Information Statement for the General Staff:

Human Resource Practices & Voluntary Labour Turnover in the Readymade Garment (RMG) Industry in Bangladesh.

You are invited to participate in the research project identified above which is being conducted by Mr Gazi Hossain. This project is part of Mr Hossain’s doctoral studies at the University of Newcastle and is being supervised by Prof Mark Bray and Dr Jennifer Waterhouse from the Newcastle Business School, University of Newcastle, Australia.

What is the research about? The aim of the research is to explore the reasons for high labour turnover in the readymade garment (RMG) industry in Bangladesh and especially the contribution of human resource policies and practices to moderating labour turnover.

Who can participate in the research? You are eligible to participate in this research if you are: ■ A general staff member from an RMG organization who has knowledge of, or experience with labour turnover because of your long experience in the organisation. ■ A manager (such as CEO/managing director, general manager, HR manager, assistant HR manager, floor manager, and supervisor) with a knowledge of, or experience with labour turnover as a result of the role you perform or your long experience in the organisation.

What choice do you have?

Participation in this research project is entirely your choice. You are not obligated to take part in the research. If you are not interested to participate it will not damage the relationship between you and the head of the organisation as the researcher will not report to the head of the organisation who did and did not participate in the interview. Moreover, the researcher will request the head of the organisation not to force the general staff to participate in the interview.

If you do decide to participate, you may withdraw at any time without giving a reason. Your decision to participate or not to participate in this project will not affect you in any way and no one will know whether or not you have participated in this study. Additionally, not participating in this study will not affect your relationship with the University of Newcastle.

What will you be asked to do?

After returning the attached consent form, you will be asked to sit for an interview to provide information relating to different issues including labour turnover, HR policies and practices, workforce, job satisfaction, working environment, and career development. You can request to review or edit the

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transcript of your interview via e-mailing or post mailing the researchers. The location of the interview will be in a specific, quiet and confined room at your organisation. How much time will it take?

If you wish to take part in this study, the interview will take approximately 1/2-1 hour.

What are the risks and benefits of participating? Given that the researchers undertake not to reveal to anyone the identity of your organisation or interviewees, we believe there are no risks to you associated with participation in this study.

Your participation in this research will help us explore the contribution of human resource policies and practices in voluntary labour turnover in the readymade garment (RMG) industry in Bangladesh.

This is important because high rate of voluntary employee turnover is the major practical problem for many RMG managers and the government of Bangladesh. The RMG industry is the largest export-earning sector in Bangladesh, accounting for over 78% of the country’s total export earnings. High rate of employee turnover is a major problem for managers as it results in disruption in production.

In this context, we expect the findings of our investigation into labour turnover will be beneficial in three ways:

• For the organisation, in that it may assist you in the future in better managing labour turnover.

• For the industry, in that it will provide benchmarks and guidance for individual organisations.

• For the country, in that it will assist in making this important industry more efficient. How will your privacy be protected? All of the information obtained from the interviewees for this research project will remain confidential. Interviewees or their organisations will not be identified in any report or publication. Furthermore, the participants will not be made identifiable in how they are described (e.g. any unique characteristics which may potentially identify an individual or organisation will not be detailed in the reporting of the results). The collected raw data (e.g. digital recording of interview, documents, field notes) will be securely stored in researcher’s personal filing cabinet at his parents’ house in Bangladesh. Only the researcher will have access to the soft data in in Australia, which will be stored in a password protected file in the researchers’ computers for a minimum of five (05) years of awarding the degree as per the university’s data storage policies.

How will the information collected be used?

The information obtained in this study will primarily be used to produce the PhD thesis of Mr Gazi Hossain. The findings, however, may be reported in edited publications and conference presentations and academic journal articles.. A brief summary of the results of this project will be available from the project supervisor at the end of the project, which the thesis is submitted. Please feel free to contact the project supervisor by email if you would like to have an electronic copy of the summary.

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What do you need to do to participate?

Please read this Information Statement and be sure you understand its contents before you consent to participate. If you would like to participate, please complete the consent form and return it to the researcher. Please contact the project supervisor if there is anything you do not understand about this study or if you have any questions about this study.

Further information

If you would like further information about this study, then please contact the project supervisor, Prof Mark Bray by email (Mark.Bray@newcastle.edu.au ) or phone (+ 61 2 4921 5073).

Thank you for considering this invitation. We encourage you to retain this copy of information sheet for your record.

Yours sincerely,

Gazi M Farid Hossain Dr Jennifer Waterhouse Prof Mark Bray

Complaints about this research

This project has been approved by the University of Newcastle’s Human Research Ethics Committee, Protocol Reference No. H-2012-0349.

Should you have concerns about your rights as a participant in this research, or you have any complaints about the manner in which the research is conducted, it may be given to the researcher, or, if an independent person is preferred, you can contact the following people: i) The Human Research Ethics Officer, Research Office, The Chancellery, The University of Newcastle, University Drive, Callaghan NSW 2308, Australia, telephone +61249216333, email Human-Ethics@newcastle.edu.au; and ii) Prof Tanbir Ahmed Chowdhury, Professor, Dept. of Business Administration, East West University, Dhaka, Bangladesh. E-mail:tanbir@ewubd.edu

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Project Supervisor Prof Mark Bray Newcastle Business School Faculty of Business and Law University of Newcastle + 61 2 4921 5073 Mark.Bray@newcastle.edu.au

Research Project Information Statement for the Representatives from External Organisations:

Human Resource Practices & Voluntary Labour Turnover in the Readymade Garment (RMG)

Industry in Bangladesh.

You are invited to participate in the research project identified above which is being conducted by Mr Gazi Hossain. This project is part of Mr Hossain’s doctoral studies at the University of Newcastle and is being supervised by Prof Mark Bray and Dr Jennifer Waterhouse from the Newcastle Business School, University of Newcastle, Australia.

What is the research about?

The aim of the research is to explore the reasons for high labour turnover in the readymade garment (RMG) industry in Bangladesh and especially the contribution of human resource policies and practices to moderating labour turnover.

Who can participate in the research?

You are invited to participate in this research if you hold any of the following positions: government officials, leaders and/or staff of business and employer associations, industry and national labour leaders, NGO officials, and ILO officials. What choice do you have?

Participation in this research project is entirely your choice. If you do decide to participate, you may withdraw at any time without giving a reason. Your decision to participate or not to participate in this project will not affect you in any way and no one will know whether or not you have participated in this study. Additionally, not participating in this study will not affect your relationship with the University of Newcastle.

What will you be asked to do?

You will be asked to sit for an interview to provide information relating to different issues including

labour turnover, HR policies and practices, workforce, job satisfaction, working environment, and career

development. You may request to review or edit the transcript of your interview via e-mailing or post

mailing the researchers. The location of the interview will be in a specific, quiet and confined room at

your organisation.

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Apart from the interview, the researcher will gather relevant data through document analysis (if any). In this case, you will be requested to provide the researcher with access to documents (such as organisation’s internal documents, research reports or annual report) that are relevant to the project.

How much time will it take?

If you wish to take part in this study, the interview will take approximately 1/2-1 hour.

What are the risks and benefits of participating?

Given that the researchers undertake not to reveal to anyone the identity of your organisation or interviewees, we believe there are no risks to you associated with participation in this study.

Your participation in this research will help us explore the contribution of human resource policies and practices in voluntary labour turnover in the readymade garment (RMG) industry in Bangladesh.

This is important because high rate of voluntary employee turnover is the major practical problem for many RMG managers and the government of Bangladesh. The RMG industry is the largest export-earning sector in Bangladesh, accounting for over 78% of the country’s total export earnings. High rate of employee turnover is a major problem for managers as it results in disruption in production.

In this context, we expect the findings of our investigation into labour turnover will be beneficial in three ways:

• For the organisation, in that it may assist you in the future in better managing labour turnover. • For the industry, in that it will provide benchmarks and guidance for individual organisations. • For the country, in that it will assist in making this important industry more efficient.

How will your privacy be protected?

All of the information obtained from the interviewees for this research project will remain confidential. Interviewees and their organisations will not be identified in any report or publication. Furthermore, the participants will not be made identifiable in how they are described (e.g. any unique characteristics which may potentially identify an individual or organisation will not be detailed in the reporting of the results). The collected raw data (e.g. digital recording of interview, documents, field notes) will be securely stored in researcher’s personal filing cabinet at his parents’ house in Bangladesh. Only the researcher will have access to the soft data in in Australia, which will be stored in a password protected file in the researchers’ computers for a minimum of five (05) years of awarding the degree as per the university’s data storage policies. How will the information collected be used?

The information obtained in this study will primarily be used to produce the PhD thesis of Mr Gazi Hossain. The findings, however, may be reported in edited publications and conference presentations and academic journal articles.. A brief summary of the results of this project will be available from the project supervisor at the end of the project. Please feel free to contact the project supervisor by email if you would like to have an electronic copy of the summary.

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What do you need to do to participate?

Please read this Information Statement and be sure you understand its contents before you consent to participate. If you would like to participate, please complete the consent form and return it to the researcher. Please contact the project supervisor if there is anything you do not understand about this study or if you have any questions about this study.

Further information

If you would like further information about this study, then please contact the project supervisor, Prof Mark Bray by email (Mark.Bray@newcastle.edu.au ) or phone (+ 61 2 4921 5073).

Thank you for considering this invitation. We encourage you to retain this copy of information sheet for your record.

Yours sincerely,

Gazi M Farid Hossain Dr Jennifer Waterhouse Prof Mark Bray

Complaints about this research

This project has been approved by the University of Newcastle’s Human Research Ethics Committee, Protocol Reference No. H-2012-0349.

Should you have concerns about your rights as a participant in this research, or you have any complaints about the manner in which the research is conducted, it may be given to the researcher, or, if an independent person is preferred, you can contact the following people:

i) The Human Research Ethics Officer, Research Office, The Chancellery, The University of Newcastle, University Drive, Callaghan NSW 2308, Australia, telephone +61249216333, email Human-Ethics@newcastle.edu.au; and

ii) Prof Tanbir Ahmed Chowdhury, Professor, Dept. of Business Administration, East West University, Dhaka, Bangladesh. E-mail:tanbir@ewubd.edu

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APPENDIX 4: CONSENT FORMS Consent Form

CEO/Managing Director/Manager of RMG Organisation

Project Supervisor: Professor Mark Bray

Newcastle Business School The University of Newcastle

SRS 137, Social Science Building, University Drive, Callaghan, NSW 2208, Australia. Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911

Interviewee Consent Form for the Research Project:

Project Title: Human Resource Practices & Voluntary Labour Turnover in the Readymade Garment (RMG) Industry in Bangladesh.

Name of Researchers: 1. Prof Mark Bray, Professor, Newcastle Business School, The University of Newcastle,

E-mail: Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911.

2. Dr. Jennifer Waterhouse, Senior Lecturer, SRS 149, Social Science Building, The University of Newcastle, University Drive, Callaghan, NSW 2308, E-mail: Jennifer.Waterhouse@newcastle.edu.au Ph: 02 4921 5025, Fax: 02 4921 6911.

3. Gazi Hossain, PhD Candidate, SRS 206, Social Science Building, The University of Newcastle, University Drive, Callaghan, NSW 2308,E-mail: Gazi.Hossain@uon.edu.au Ph: 02 4921 8718, Fax: 02 4921 6911

Document Version 3; Dated: 23/10/12

I agree to participate in the above research project and give my consent freely. I understand that the project will be conducted as described in the Information Statement, a copy of which I have retained. I understand I can withdraw from the project at any time and do not have to give any reason for withdrawing. I consent to participating in an interview and having it recorded. I understand that I could request to review or edit the transcript of my interview via e-mailing or post mailing the researchers. I understand that my name will remain confidential to the researchers. No information about my name will be presented in a way that reveals the identity of mine. I have had the opportunity to have questions answered to my satisfaction. Print Name and Contact Details: _____________________________________________________ Signature: __________________________________ Date: _________________________

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Consent Form CEO/Managing Director/Manager of RMG Organisation

Project Supervisor: Professor Mark Bray

Newcastle Business School The University of Newcastle

SRS 137, Social Science Building, University Drive, Callaghan, NSW 2208, Australia. Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911

Interviewee Consent Form for the Research Project:

Project Title: Human Resource Practices & Voluntary Labour Turnover in the Readymade Garment (RMG) Industry in Bangladesh.

Name of Researchers: 1. Prof Mark Bray, Professor, Newcastle Business School, The University of Newcastle,

E-mail: Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911.

2. Dr. Jennifer Waterhouse, Senior Lecturer, SRS 149, Social Science Building, The University of Newcastle, University Drive, Callaghan, NSW 2308, E-mail: Jennifer.Waterhouse@newcastle.edu.au Ph: 02 4921 5025, Fax: 02 4921 6911.

3. Gazi Hossain, PhD Candidate, SRS 206, Social Science Building, The University of

Newcastle, University Drive, Callaghan, NSW 2308,E-mail: Gazi.Hossain@uon.edu.au Ph: 02 4921 8718, Fax: 02 4921 6911

Document Version 3; Dated: 23/10/12

I agree to participate in the above research project and give my consent freely. I understand that the project will be conducted as described in the Information Statement, a copy of which I have retained. I understand I can withdraw from the project at any time and do not have to give any reason for withdrawing. I consent to participating in an interview and having it recorded. I understand that I could request to review or edit the transcript of my interview via e-mailing or post mailing the researchers. I understand that my name will remain confidential to the researchers. No information about my name will be presented in a way that reveals the identity of mine. I have had the opportunity to have questions answered to my satisfaction. Print Name and Contact Details: _____________________________________________________ Signature: _________________________________ Date: _________________________

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Consent Form CEO/Managing Director/Manager of RMG Organisation

Project Supervisor: Professor Mark Bray

Newcastle Business School The University of Newcastle

SRS 137, Social Science Building, University Drive, Callaghan, NSW 2208, Australia. Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911

Interviewee Consent Form for the Research Project: Project Title: Human Resource Practices & Voluntary Labour Turnover in the

Readymade Garment (RMG) Industry in Bangladesh. Name of Researchers:

1. Prof Mark Bray, Professor, Newcastle Business School, The University of Newcastle, E-mail: Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911.

2. Dr. Jennifer Waterhouse, Senior Lecturer, SRS 149, Social Science Building, The University of Newcastle, University Drive, Callaghan, NSW 2308, E-mail: Jennifer.Waterhouse@newcastle.edu.au Ph: 02 4921 5025, Fax: 02 4921 6911.

3. Gazi Hossain, PhD Candidate, SRS 206, Social Science Building, The University of Newcastle, University Drive, Callaghan, NSW 2308,E-mail: Gazi.Hossain@uon.edu.au Ph: 02 4921 8718, Fax: 02 4921 6911

Document Version 3; Dated: 23/10/12

I agree to participate in the above research project and give my consent freely. I understand that the project will be conducted as described in the Information Statement, a copy of which I have retained. I understand I can withdraw from the project at any time and do not have to give any reason for withdrawing. I consent to participating in an interview and having it recorded. I understand that I could request to review or edit the transcript of my interview via e-mailing or post mailing the researchers. I understand that my name will remain confidential to the researchers. No information about my name will be presented in a way that reveals the identity of mine. I have had the opportunity to have questions answered to my satisfaction. Print Name and Contact Details: ___________________________________________________ Signature: _________________________________ Date: _________________________

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Consent Form CEO/Managing Director/Manager of RMG Organisation

Project Supervisor:

Professor Mark Bray Newcastle Business School The University of Newcastle

SRS 137, Social Science Building, University Drive, Callaghan, NSW 2208, Australia. Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911

Organisational Consent Form for the Research Project:

Project Title: HUMAN RESOURCE PRACTICES AND VOLUNTARY LABOUR TURNOVER IN THE READYMADE GARMENT (RMG) INDUSTRY IN

BANGLADESH. Name of Researchers:

1. Prof Mark Bray, Professor, Newcastle Business School, The University of Newcastle, E-mail: Mark.Bray@newcastle.edu.au Ph: 02 4921 5073, Fax: 02 4921 6911.

2. Dr. Jennifer Waterhouse, Senior Lecturer, SRS 149, Social Science Building, The University of Newcastle, University Drive, Callaghan, NSW 2308, E-mail: Jennifer.Waterhouse@newcastle.edu.au Ph: 02 4921 5025, Fax: 02 4921 6911.

3. Gazi Hossain, PhD Candidate, SRS 206, Social Science Building, The University of

Newcastle, University Drive, Callaghan, NSW 2308,E-mail: Gazi.Hossain@uon.edu.au Ph: 02 4921 8718, Fax: 02 4921 6911

Document Version 3; Dated: 23/10/12

I agree to participate my organisation in the above research project and give my consent freely. I understand that the project will be conducted as described in the Information Statement, a copy of which I have retained. I understand my organisation can withdraw from the project at any time and do not have to give any reason for withdrawing. I consent to my organisation participating in the project. I understand that the name of my organisation will remain confidential to the researchers. No information about my organisation will be presented in a way that reveals the identity of the organisation. I understand that my organisation could request to review or edit the transcript of my organisation’s interview via e-mailing or post mailing the researchers. I have had the opportunity to have questions answered to my organisation’s satisfaction. Print Name and Contact Details: Signature:__________________________________ Date: _________________________

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APPENDIX 5: QUESTIONNAIRES

Project Title: HR Practices & Voluntary Labour Turnover in the RMG Industry in Bangladesh.

Title of Document: Data to be gathered from the CEOs/ Managing directors/Managers: The information gathered from each interviewee will vary according to their positions and experience. Within each case organization, we hope to interview several people who hold different positions, like CEO/managing director, general manager, HR manager and assistant HR manager. Therefore, different information will be gathered from each interviewee based on his/her position/role in the organisation. In addition, interviewees external to the case organizations will include government officials, leaders and/or staff of business and employer associations, industry and national labour leaders, NGO officials, and ILO officials.

In addition to the interviews, some information will be gathered from each interviewee and each organization through written “Demographic Information” forms.

The nature of qualitative research means that all the data that will be gathered cannot be comprehensively listed at the beginning. Therefore, the following is a list of the broad topics/types of information that will be gathered from each organisation.

Project Title: HR Practices & Voluntary Labour Turnover in the RMG Industry in Bangladesh

Demographic information of the CEOs/ Managing directors/Managers

Name of interviewee: __________________________________________

(Note: This will be confidential to the Researcher).

What is your current position/role in your company __________

What is the status of your employment? (Circle one)

Full-time Part-time

How long have you been employed with your current employer? _____years and _____months.

How long have you been in your current position? _______years and ________ months.

How many subordinates do you have (that is, how many people report to you?) _____

What is the highest level of education you have completed? (Circle one)

Up to and including Grade 10 (or equivalent) 1

Grade 12 (or equivalent) 2

Diploma/Certificate (or equivalent) 3

Undergraduate degree 4

Post Graduate degree 5

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Questions for the CEOs/ Managing directors/Managers:

The company overall:

Ownership: Ownership or prime sources of your invested capital. Business strategy: Strategy/strategies to penetrate in new/existing market(s).

Business performance: Overall performance of your organisation in last five years.

Workforce

Voluntary labour turnover: Organisation’s labour turnover rates. Problems of high labour turnover rates. Main causes of high turnover rates. Steps to minimise high turnover rates. HR policies and practices are in places that contribute to reducing labour turnover.

HR policies and practices:

Safety policies: Accidents rates at work. Safety inductions to the employees. The usual safety processes followed by the organisation. Pay Policies: Company’s wages compare to wages in similar RMG organisations. Performance-based pay and/or merit and skilled-based pay plans. Financial and non-financial benefits (except pay).

Training and Career development: The usual trainings offer red for new workers / existing workers. Career path for workers who perform well.

Miscellaneous:

Management style and supervision: The role of employees in decision making. Internal control related questions: Compared Production costs with competitive RMG organisations.

Project Title: HR Practices & Voluntary Labour Turnover in the RMG Industry in Bangladesh.

Title of Document: Data to be gathered from the General Staffs: The information gathered from each interviewee will vary according to their positions and experience. Within each case organization, we hope to interview general staff.

In addition to the interviews, some information will be gathered from each interviewee and each organization through written “Demographic Information” forms.

The nature of qualitative research means that all the data that will be gathered cannot be comprehensively listed at the beginning. Therefore, the following is a list of the broad topics/types of information that will be gathered from each organisation.

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Project Title: HR Practices & Voluntary Labour Turnover in the RMG Industry in Bangladesh

Demographic information of the General Staffs.

Name of interviewee:___________________________________________ (Note: This will be confidential to the Researcher).

What is your current position/role in your company __________

What is the status of your employment? (Circle one)

Full-time Part-time

How long have you been employed with your current employer? _____years and _____months.

How long have you been in your current position? _______years and ________ months.

How many subordinates do you have (that is, how many people report to you?) _____

What is the highest level of education you have completed? (Circle one)

Up to and including Grade 10 (or equivalent) 1

Grade 12 (or equivalent) 2

Diploma/Certificate (or equivalent) 3

Undergraduate degree 4

Post Graduate degree 5

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Questions for the general staff: Voluntary labour turnover:

Organisation’s labour turnover rates. Problems of high labour turnover rates. Main causes of high turnover rates. Steps to minimise high turnover rates. HR policies and practices are in places that contribute to reducing labour turnover.

Management style and supervision:

The role of employees in decision making.

Business performance:

Overall performance of your organisation in last five years.

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Project Title: HR Practices & Voluntary Labour Turnover in the RMG Industry in Bangladesh.

Title of Document: Data to be gathered from the Representatives from External Organisations:

Interviewees external to the case organizations will include government officials, leaders and/or staff of business and employer associations, industry and national labour leaders, NGO officials, and ILO officials.

In addition to the interviews, some information will be gathered from each interviewee and each organization through written “Demographic Information” forms.

The nature of qualitative research means that all the data that will be gathered cannot be comprehensively listed at the beginning. Therefore, the following is a list of the broad topics/types of information that will be gathered from each organisation.

Project Title: HR Practices & Voluntary Labour Turnover in the RMG Industry in Bangladesh

Demographic information of the Representatives from External Organisations.

Name of interviewee:__________________________________________

(Note: This will be confidential to the Researcher).

What is your current position/role in your company __________

What is the status of your employment? (Circle one)

Full-time Part-time

How long have you been employed with your current employer? _____years and _____months.

How long have you been in your current position? _______years and ________ months.

How many subordinates do you have (that is, how many people report to you?) _____

What is the highest level of education you have completed? (Circle one)

Up to and including Grade 10 (or equivalent) 1

Grade 12 (or equivalent) 2

Diploma/Certificate (or equivalent) 3

Undergraduate degree 4

Post Graduate degree 5

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Questions for the representatives from external organisations:

Internal and External factors of high turnover rates. Steps to minimise high turnover rates taken by the government. Government’s regulation relating to safety and security at work in the RMG industry. Government’s regulation relating to minimum wages in the RMG industry. Discrepancy between the RMG industry and other industries in Bangladesh. Labour union at the RMG industry.