SECTION A

$[30$ MARKS$]$

Read the case study below and answer ALL the questions in this section.

The Effect of Leadership Behaviour on High Employee Turnover Rate in the Internal Audit Department of a Public

Listed Company

Author$($s$)$: Rozlano bin Muhamad Tobat

Introduction

Each organisation is distinct in terms of the work culture that has evolved since the company's beginnings. There are

various types of leadership styles in the organisation that shape the employee's working approaches and interactions

with each other. The leadership style plays a vital role in employees and ensures they can work in harmony and high

productivity. Numerous studies have found a link between high turnover rates and a negative relationship between upper

management and other employees. The leadership style is not always the reason for employees' resignations, but it does

carry a high weight. The impact of leadership style is more prominent and has a greater effect than previously assumed.

That is because the leader is authorized to have the power to change what needs to be changed, unlike followers that are

limited in their power and authority $($Alkhawaja$,1970).$

The information on the case study is gathered for five $(5)$ years from $2018,2019,2020,2021,$ and $2022$ from the Internal

Audit Department $($IAD$)$ of a construction company listed in the Bursa Malaysia. Data on IAD employees includes

employee resignation, appointment, and duration of working months before the employee resignation.

Case Scenario

As a department leader, the Head of Department $($HOD$)$ is given authority to shape the department's work culture and

behaviours. Communication of instructions and chain of command within the department are based on the organisation

chart to ensure every employee is aware of their roles and responsibilities in the department. Different employees have

exclusive personalities along with divergent strengths and weaknesses. Thus, it is significant to understand the distinct

personality types that employees may have and how to get the most out of them. Personality is the dynamic organisation

within the individual of those psychophysical systems that determine his characteristic behaviour and thought $($Allport$,$

$.$ However, employees hired for the IAD are from diverse backgrounds with educational backgrounds from prominent

education institutions with at least degree holders. Despite being a part of a departmental hierarchy, the reporting flow

does not always adhere to the chart as the HOD occasionally tells the other employee directly without telling the

immediate superior in the unit, i$.$e$.,$ the Senior Manager of the IAD unit. This sloppy chain of command producesresignations is for the years $2021$ and $2022,$ with a turnover rate of $86\%$ and $59\%.$ Recruitment of new employees in IAD

will take approximately $3$ to $6$ months. Once recruited, the probationary period is six $(6)$ months and evaluated before the

employee is hired as a confirmed permanent employee. Employee turnover is costly to any organisation, regardless of

size or sort of business. Product or service quality will always suffer from diminished efficiency and productivity, causing a

high turnover rate. A company with a high turnover rate will face high direct costs about expenditures incurred for

recruitment such as advertisement, selection of candidates, induction and training of new employees as well as the non$-$

monetary impact such as reduced morale of existing employees, missing good talent, retraining of specific set of skills,

etc.