Relationship of Organizational Climate on Turnover Intension of Employees in a Medium Scale Apparel Sector Organization with Reference to Sumithra Group of Companies

Abstract

ABSTRACT Apparel sector generates an income of USD 538bilIion as the 2014 Central Bank of Sri Lanka report. Apparel sector is the highest income generator of the country; Textile Industry provides 33% of employment in the manufacturing sector as per the Board of Investment of Sri Lanka. However today the apparel sector faces a major challenge due to high labor turnover. Human capital is a very important factor in the apparel sector. Having one operators less in the production line could bring the entire line in to a production halt. Managers of the apparel sector industries are trying their best to increase the recruitment and labor retention. Thereofore it was important to investigate the reasons why people leave. The researcher's intention was to find out why people intend to leave rather than why people have left the organization. Aim of the study was to examine how the Organization Climate effect on the labor turnover intention of the employees of medium scale apparel sector organizations in Sri Lanka with reference to Sumithra Group of companies. Five organizational climate dimensions were chosen for this study, namely, structure, responsibility, rewards, conflicts and standards. In this respect, significant findings have been collected through a structured questionnaire using 477 respondents covering all managerial and non-managerial employees of the Sumithra Group of Companies. Study resuhs revealed that 40% of the labor turnover intention is explained by the organization climate of Sumithra Group of Companies. The organizational climate had a significant negative correlation with employees' intention to leave of the organization. Out of the five organizational climate dimensions four dimensions (Structure, Reward, conflicts, standards) had significant negative correlations with turnover intention of employees. Meanwhile only Responsibility did not show a significant correlation with turnover intention of employees. According to the study results it is concluded that a good organizational climate could reduce the labor