EFFECTS OF EMPLOYEE SEPARATION STRATEGIES ON ORGANIZATIONAL PERFORMANCE OF FLOUR MILLING FIRMS IN UASIN GISHU COUNTY, KENYA

Abstract

Over the past couple of decades, employee separation has become an integral part of the organizational life. Global competitive pressures coupled with ever changing demand conditions have caused firms to critically examine their cost structures associated with human resources. This study sought to determine the: relationship between employee separation strategies, and the potential effect on organisational performance in Flour Milling firms in Uasin Gishu County. The specific objectives of this study were to analyse the influence of downsizing on organizational performance, to examine the effects of employee resignation on organizational performance and to examine the effects of employee dismissal on organizational performance. Institutional Theory of downsizing and theory of the Natural and the duration of employment were adopted. This study was based on descriptive research design because it provided in-depth information from the employees. The target population for the study were 436 employees of Flour Milling Companies. Respondents were stratified and thereafter simple random sampling technique used to select 148 respondents for the study. Questionnaires were used for data collection from the selected sample. The data was analysed by use of descriptive statistics and inferential statistical techniques with aid of Statistical Product and Service Solutions (SPSS) version 20. Multiple regressions and correlation analysis were used to test the hypotheses. Results indicated that employee downsizing and organizational performance resulted to (β1= -0.368, p< 0.05), which implies that for each unit increase in downsizing strategy there is up to 0.368 unit decrease in organizational performance. Employee resignation (β2=-0.192, p<0.05) indicated that for each unit increase in employee resignation, there is up to 0.192 unit decrease in organizational performance and employee dismissal (β3=-0.254, p<0.05) also indicated that for each unit increase in employee dismissal, there is up to 0.254 unit decrease in organizational performance suggesting negative significant effect on organisational performance. Moreover R squared 0.378 indicating units of separation strategies causes decrease in organizational performance if employed in the flour Milling organizations The study recommends that in order for the organizations to counter the negative effects, there is need to ensure that employees of the Flour Milling organizations have good working conditions, need for management appreciation and there should be positive relationship between management and employees. Suggestions from the study were that there is need for the study to be replicated with a larger, more representative sample and in different business sectors within the North Rift region in order to find out whether the observed findings hold for the organizations as well. The results are expected to enhance an understanding on the potential effect of employee separation on organisational performance.