ARBA MINCH UNIVERSITY

SCHOOL OF POST GRADUATE STUDIES

COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
Course title: MANAGERIAL ECONOMICS

Title: ASSESSING PROBLEMS IN ARBAMINCH TOWN

MUNICIPALITY
Name ID No.

1. Mahedre Zenebe PRBE/047/11

2. Iyasu Samuel PRBE/042/11
3. Mengistu Markos PRBE/056/11
4. Mesfin Sakato PRBE/061/11
5. Negash Fantahun PRBE/066/11
6. Samuel Bekele PRBE/070/11

Submitted to: D/r. Mebratu Alemu(Phd)

March, 2019
Contents
ABSTRACT ............................................................................................................................. iii
CHAPTER ONE ........................................................................................................................ 1
1. Introduction ..................................................................................................................... 1
1.3 Objective of the Study ..................................................................................................... 4
CHAPTER TWO ....................................................................................................................... 5
2. LITERATURE REVIEW ............................................................................................... 5
2.1 Urban Land Management ................................................................................................ 5
2.1.1 Land management in Arba Minch .............................................................................. 5
2.1.2 Aspects of land management in Arba Minch ............................................................ 5
2.1.3 Management of land information system ................................................................. 5
2.1.4 Methods of Land Acquisition by Residents .............................................................. 6
2.1.5 Informal settlement and land management ............................................................... 6
2.2 Infrastructural development ............................................................................................. 6
2.1 Type of infrastructure: ................................................................................................. 7
2.1.1 Infrastructural Development of Arba Minch Municipality....................................... 7
2.3 Employee turnover ........................................................................................................... 8
2.3.1 Voluntary turnover Vs. Involuntary turnover ........................................................... 9
2.3.2 The Relationship between Working Environment and Turnover ........................... 10
2.3.3 The Relationship between Compensation/Reward and Turnover .......................... 10
CHAPTER THREE ................................................................................................................. 12
Discussion and analysis part: ................................................................................................... 12
3.1 Urban Land management problem: ........................................................................... 12
3.2 Infrastructure Development....................................................................................... 15
3.3 Employee Turnover ................................................................................................... 18
CHAPTER FOUR .................................................................................................................... 21
4. CONCLUSION AND RECOMONDATION ...................................................................... 21
4.1Conclusion: ......................................................................................................................... 21

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ABSTRACT
The more the development of the economy, the more the significance of managerial economist.
To keep pace with this increasing economy, it becomes imperative for the organizations to
adopt new management economic principle and techniques. It is also important for the
organizations. This paper seeks to obtain an overview of managerial problem and their
solution in Arba Minch municipality. Data has been gathered by primary and secondary
sources. this trend continues, organization will lag behind in the race of National
competitiveness and comparative advantages. It is therefore, some policy recommendation has
been made to improve and fasten the managerial economics.

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 CHAPTER ONE
1. Introduction

Arba Minch Municipalities primarily regulate land use and environmental protection, public
order, control of the implementation of municipal by-laws, the provision of public services and
municipal authorities. Good governance is important to smoothly running any types of
activities to achievement a set or certain objectives. In Arba Minch town there is different
activities which is related to distribution of resources that means the expansion of
infrastructural service and administration of land and fairly distributed to the community of the
town. In general good governance is the base for countries sustainable development and
growth.

Good governance means that processes and institution to produce results that meet the need of
society while making the best use of resources at their disposal. The concept of efficiency in
the context of good governance also covers sustainable use of natural resource and the
protection of the environment. Arba Minch Municipality is important to the society of the town
by keeping environment condition, service offered to the society like urban land management,
infrastructural development, house administration, healthy management, fire-fighting, waste
management and transportation etc. AMM regulate good governance by keeping the meet
needed of the society.

Urban land management is closely linked with planning for management of land. It means that
the manager assign; which land is conformable for housing, enterprise and also investments. It
is the process of managing the use and the development of land resource. In Arba Minch town,
consist of four sub-cites like; nechesar, abaya, sekela, and secha. Among different roles and
responsibilities of the municipality or the central issue of municipal task is the management of
urban land. These is the most challenging task of land planning and managing bodies because
there are competing and conflicting interests with respect ownership and use of urban land.

From other aspect service offered by municipality is infrastructure development. Infrastructure

development involves fundamental structures that are required for the functioning of
community and society. This is usually refers to structure like rods, water supply, sewers,
electrical grid, telecommunications, renewable energy and so on. This structure tends to be
high-cost investment; however, they are vital to a country's economic development and
prosperity. The infrastructure investment can boost the economic growth. And the
reconstruction of public infrastructure is an important ingredient for recovery, sustained

1
economic growth and poverty reduction. It helps improvised affected communities by
improving their access to essential infrastructure like indoors cobblestone rug easing, access to
water supply schemes; this are also called social over head capital. .

In Arbaminch municipality urban land management has become a serious challenges face
obstacle to serve the society and promote growth. The problems land management in Arba
Minch town such as land related conflict and management, archaic land information
management, informal land acquisition, illegal squatter settlement, supply of land, budget and
employee turnover. These problems are the causes for serving the society and support the socio-
economic condition given by the municipality. Among the problem we emphasis or solve the
problem of lack supply land, because land has become a serious challenges since it is the space
over all human activities carried out and use conformable for housing ,enterprise and also
investments. Illegal squatter settlement, informal land acquisition, archaic land information,
those create lack of land supply. The other problem like budget and employee turnover is
indirectly affecting the land supply. Due to this, solving the problem of land supply is indirectly
solving the other problem exit in urban land management.

1.2 The major problems which are selected to be decided on it by using the decision
making steps:

 Problem-1, shortage of land supply is seriously affecting the organization to serve the
society.

Infrastructure is the fundamental facilities serve to the society. Despite monumental

contribution, as like urban land management, Arba Minch Municipality faces some problem
that hinders the expansion of infrastructure in the town. AMM unable to fulfill the development
accessible of land utilize and infrastructure to the society. The problem like do note expose
cobblestone carpet around all areas, there is lack of external lamp and sanitation control. The
reason why AMM has not expose infrastructure service to the city is; because, lack of available
supply like cobblestone peppermint; the acute shortage of skilled man power and employee
turnover. And Shortage of budget or fund those are the main problem to reach the objective.

From the above problem, this paper was taken to solve problem lack of supply cobblestone
peppermint as the main problem. Lack of supply cobblestone was the major problem to serve

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the public community and to promote the economic growth. So to solve this issue is the main
point of this paper.

 Problem-2, Lack or shortage of supplying cobblestone peppermint is hindering the

Organization to serve the society in appropriate manner,
 Problem-3, higher rate of employee turnover existing in the organization.

Throughout the world, every organization faces a high degree of employee turnover or in other
means, the movement of employees from one organization to another organization increases
from time to time. Therefore, employee turnover harms /costs the organization why because
when one employee leaves the organization another new employee will be hired to fill the
position of the previous employee. In addition to that, it reduces the moral of the existing
employee and it reduces the productivity of the organization. So in order to reduce employee
turnover human resource manager of any organization should develop a retaining strategy in
order to stay an employee within their organization.

Specifically we have observed/visited Arba Minch town municipality by applying unstructured

interviews and majority of the employees of the municipality told us that, every year the
municipality were facing a high degree of employee turnover. The employee leaves the
municipality because of different reasons. Among the reasons some of them are; inadequate
salary/ compensation and benefits, the working environment is not suitable for the employees,
seeking for additional opportunity and lack of promotion and the like. As we know
municipalities should play the significant role in the development of the town, but employee
turnover is the serious problem facing arbaminch town municipality to achieve its success.
Even if it is difficult to avoid employee turnover at all; know by considering the impact of
turnover on the municipality we are going to decide how to reduce employee turnover. As we
know arbaminch town municipality has so many functions in order to gain sustainable
development of the town, For instance; land development, fire-fighting, waste management,
infrastructures, transportation, water and sewer and so on are the main functions of the
municipality. While rendering this service for the community arbaminch town municipality
faces an employee turnover and in return, this reduces the services to the people by the
employees and finally leads to poor governance.

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So we will follow the decision making process to decide on how to reduce employee turnover
in arbaminch town municipality. Before we are going to the decision making process we should
set our objective why we are conducting such kind of study. Our objective is to know why the
employee of the municipality leaves their organization and knowing how to reduce the out flow
of the employees.

1.3 Objective of the Study

Assessing the problems and solving the existing problems in Arba Minch municipality in order
to enhance the good governance to the society. Specifically, the objective of this study is:

1. To recommend the municipality of Arba Minch town to minimize its problem of land
shortage and advice to practice on fair distribution of land to the community of the
town.
2. To enhance the supply of cobblestone peppermint and expand infrastructural service to
the community by creating social benefit and lasting good governance in the town.
3. How to reduce employee turnover and its related cost within the organization.

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 CHAPTER TWO

2. LITERATURE REVIEW

2.1 Urban Land Management

Urban land management is closely linked with planning for management of land. Which means
that the manager assign; which land is conformable for housing, for enterprise and also for
investments, it is the process of managing the use and the development of land resource.

2.1.1 Land management in Arba Minch

Arba Minch is a town in south nation’s nationalities and people’s regional state. It consists of
four administrative sub-cities. These are seklla, shecha, abaya and nechsar.
Among different roles and responsibilities of the municipality or the central issue of municipal
task is the management of urban land. These is the most challenging task of land planning and
managing bodies because there are competing and conflicting interests with respect ownership
and use of urban land .

2.1.2 Aspects of land management in Arba Minch

There are some aspects of land management in Arba Minch town. These are land management
information system, land related conflict and management, method of land acquisition by
resident, informal settlement and land management and also informal land transaction

2.1.3 Management of land information system

The management of land information system is a major and integral component of land
management and administration for urban center a in particular. Land related information is
important resources that must be manage efficiently in order to maximize potential benefit
that can be obtained from land. (UN-ECE 2005). According to Lanba (2005) land information
management strategies are concerned with the effective management of land information
resource to achieve specific objective and improve decision making in urban centers.

Land registration in the town has started two years after its establishing as a town in
1965.However; the problem is that the exact number of plots in the registration was unknown.
This clearly shows that poor registration and documentation and data management system of
the town owing to weak technical financial and human resource, Lack of coordination and
commitment of the town of the municipality. Even at present data on land in Arba Minch
municipality are disorganized and not standardized; So that it is difficult to making a decision
and also it happens a conflict between a community because of poor land administration.

5
2.1.4 Methods of Land Acquisition by Residents
Method of land acquisition is an important element to study land management aspects of the
town. The method by which land is acquired by the town of Arba Minch community is through
land allocation by municipal, informal allocation of land, inheritance and gift from relatives
and also renting. From this method of land acquisition informal land acquisition is the most
practiced activities in Arba Minch town is

2.1.5 Informal settlement and land management

Informal settlement in the form of squatters and illegal settlement has been observed in Arba
Minch town particularly in sikella, secha, and abaya sub cities. The extent of informal
settlement in the remaining one city of the town was minimal Expansions of illegal settlement
in the town one of the major emerging land use planning and measurement problem facing the
municipality. An informal settlement is taken to mean a residential area where houses are
developed/constructed without seeking approval/permission from the concerned local
authorities to build resulting into having inadequate infrastructure and services in that
settlement. They are the unplanned residential areas which are usually inhabited by the urban
poor who may or may not have direct legal claims on the land that they occupy.

2.2 Infrastructural development

Infrastructure is the basic physical system of nation. Infrastructure development involves
fundamental structures that are required for the functioning of community and society. This is
usually refers to structure like rods, water supply, sewers, electrical grid, telecommunications,
renewable energy and so on. This structure tends to be high-cost investment; however, they are
vital to a country's economic development and prosperity. The infrastructure investment can
boost the economic growth. And the reconstruction of public infrastructure is an important
ingredient for recovery, sustained economic growth and poverty reduction. It helps improvised
affected communities by improving their access to essential infrastructure like indoors
cobblestone rug easing, access to water supply schemes; this are also called social over head
capital.

Social overhead capital contributes to enhancing productivity and assists in the realization of
the potential ability of human capital, and creates situations in which that potential can fully
function. It also contributes directly and indirectly to improving the safety and quality of
people’s lives. Within the scope of infrastructure, electric power, ports, roads, and
telecommunications are often used as the services and intermediate goods that are essential for

6
the productive processes of private sector. These do not directly produce good and service but
induce production in agriculture, industry and trade by generating external economies

2.1 Type of infrastructure:

Broadly speaking infrastructure can be divided in two categories: Economics infrastructure and
social infrastructure. Economic infrastructure means those basic facilities and service which
directly benefit the process of the production and distribution of an economy. Irrigation, power,
transportation are the example of economic infrastructure on the other hand means those basic
activity and service which, in addition to achieving certain social objective, indirectly help in
the economic activity. For example education does affect economic activity like production
and distribution but indirectly helps in the economic development of the country by producing
skilled man. So education, health service, sanitation and water supply etc are the example of
social infrastructure.
Type of Infrastructure

Economic Infrastructure Social Infrastructure

 Transportation  Water supply
 Communication. etc  Sanitation. etc

Figure 1 Type of infrastructure

2.1.1 Infrastructural Development of Arba Minch Municipality

Arba Minch municipality urban land development and management in support of socio-
economic growth has long been recognized. Arba Minch municipality gives the provision of
infrastructure service to meet the demand of business, households and other users. The
municipality of serve the community by giving sanitation, greenery, access to clean water,
Indore cobblestone carpet and electricity (Exterior lighting).

The infrastructure services in urban development contribute high to poverty reduction and
improvement in living standard in several ways. First, these services have strong and direct
linked to improve healthy income. Water-related illness account for a very substantial burden
of disease in the city, exacting high cost interims of death, malnutrition, stunting and reduce
productivity. Improving water and sanitation facilities reduce this cost substantially. Electricity

7
permit improved healthy service deliver in several way; electric function of healthy permit safe
storage of vaccines and medication and modern energy source permit substantial reduction in
morbidity associated with indoor use of wood fuels for cooking. The indoor cobblestone and
transport service has been shown to permit women and children better access to health care
service.

Second, access to infrastructure services is also often associated with improved educational
outcomes. Electricity is strongly associated with improvement in adult literacy as well as
primary school completion rates, as it permits reading and studying in the evening and early
morning hours. Lack of improved water facilities can work against educational outcomes,
especially for girls who do not attend school for lack of adequate sanitary facilities or because
of the demands of household chores like collecting water. Access to all-weather roads has been
shown to be a strong factor in increasing primary school attendance, particularly in rural areas.

Arba Minch Municipality utilizes economic growth of the country by developing

infrastructural service. Infrastructure services also contribute to improved productivity of
business, households and government services. The time spent obtaining water and fuel or
traveling to markets and service centers is often significant. When household connections are
available and transport and telecommunications services are accessible, household members,
particularly women and children, can engage in more productive activities. The expansion in
quantity and improvement in quality of infrastructure services also lowers costs and expands
market opportunities for businesses. This contributes to increased investment and productivity
which is essential for sustaining economic growth.

2.3 Employee turnover

First, let as define the terms like - employee, turnover and employee turnover in general.
Employee: is an individual who works part-time or full-time under a contract of employment
and has recognized rights and duty. Turnover: turnover means the out flow of employees from
the organization/it is the termination of a membership between an individual who was
employed by the company (Mobley). Employee turnover: it refers to the number or percentage
of workers who leave an organization.

Employee turnover exists in most of the organization throughout the world and it is the ratio
comparison to know that how much employee turnover affects the performance of the
organization and a company plans to replace in a given time period. It is one them which is to

8
be considered in today’s competitive business world (Bowman, C and Asch, D., 1996)), it is
considered to be an important task to manage employee turnover for any organization.
Naturally, people want diversifies in his/her everyday life; for instance; seeks for new and
challenging jobs and good working environment in job place. To provide these things to
employees in an economic way it is very difficult cumbersome (Campion MA, 1999).

Human resource is one of the most important value assets of the organization, and without
human resource there is no an existence of organization however achieving its objective
employee turnover is probably the problem falling human resource management in today’s
work environment (Raymond Anoa, 2004).

Employee turnover increase due to a number of factors, such employees turned over in large
scope when the management is failed to fill the gap of handling such in appropriate
mechanisms. Actually, the Couse of turnover was; illness, low morality, lack of job
satisfaction, lack of effective leadership, when the working environment is not sustainable,
personal problems, lack of promotion and adequate salary, workload and disciplines. Except
illness, the rest Couse is controllable by the management. All the factors can result in high
turnover and again it reduces productivity even up to shot down of a given organization
(Raymond Anoa, 2004)

2.3.1 Voluntary turnover Vs. Involuntary turnover

Voluntary turnover describes the amount of employee turnover that occurs due to the decision
of employees to resign from their positions and voluntarily leave their employers. There are
different reasons why voluntary turnover occurs. Employee might choose to vacate their job
for a variety of reasons. They may feel dissatisfied with their position or their compensation,
they may be seeking a career change, or they may have accepted another offer. One way to
limit the voluntary turnover rate is to put forth effort in the hiring process to determine an
applicant’s “job fit “or job suitability for a particular position. Employers should try to assess
the likelihood that their future employees will feel satisfied and fulfilled their positions.
(Wikipedia).

Involuntary turnover is the type of turnover that occurs when an employee terminated from a
position. Employee may be late go for a wide range of reason, including unsatisfactory job
performance or inappropriate behavior or often called counter productive work behavior
(Bozarth, C. (2006), Many of the issues that cause involuntary turnover can be minimized; by

9
administering pre-employment tests in the hiring process. For example, one of the main causes
for involuntary turnover is that new employees do not digest and apply the training they were
given in a satisfactory manner; aptitude and skills test can predict learning ability and the
likelihood that an applicant will successfully complete training (Wikipedia).

According to Mike Foster (2002), it is clear that having prober retaining strategy is the key in
order to retain employee within the organization. Working environment should motivate and
stimulate employee, manager need to incorporate motivation puling practice in to their
corporate culture. These practices include; listening to employee and respecting their opinions,
basing reward on performance, and being available to them with their career advancement.

2.3.2 The Relationship between Working Environment and Turnover

Working conditions defined as the working environment and all existing circumstances
affecting labor in the work place, including job hours, physical aspects, and legal rights and
responsibilities. According to Branson, R. (1999)), key motivational variables that may
influence employee turnover decision are competitive salary, good supervision and
interpersonal relationships, job autonomy, better working environment, training and
development and job security. Research on employees health and safety is long been the main
interest of the issue of working conditions, moreover employee motivation and performance
also become more and more important in every industry. In fact, the quality of employees
working environment will directly and positively influence the safe working conditions. Hence,
the sufficient work force for any organization can be maintaining by creating a good working
conditions.

2.3.3 The Relationship between Compensation/Reward and Turnover

When high performers are inadequately rewarded, they quit, It is their opinion that, the jobs
which able to provide adequate financial incentives are more likely to make employees stay
with the organization (Mbah, 2012). There for, desire to leave and ease of leaving the
organization is affected by the reward. Besides that, kind and level of reward, an organization
offers influences who are attracted to work the organization and who will continue to retain in
work. The organizations, which gives the most reward to attract and retain most people
(Milkovich, 2006). This means that high reward levels will lead to; high satisfaction, individual
who are satisfied with their job expected to continue to be satisfied and stay with the same
organization, which will lead to lower turnover.

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A survey of labor turnover, published in December1997, by the institute of Personnel and
Development indicated that the cost of replacing staff has increased significantly in the UK in
the last twelve months. Taking a detailed look at the available data on the labor in the UK the
independent employment researchers, industrial relations services argued in 1997 that the
economic recovery in the UK is leading to increasing numbers of resignations and skill
shortages, which in turn are leading to substantial resourcing problems for employers. At the
same time labour turnover is being adopted by many organizations in the UK as a “bench mark”
indicator of performance and business efficiency (Branson, R. (1999)

Griffin, (2000) argues that remuneration strategy influences key outcomes like job satisfaction,
attraction, retention, performance, skill acquisition, co-operation, motivation and turnover
intent of employees. Retention and motivation of personnel has become a major concern for
HR especially in the Indian Retail industry. Compensation & Benefits have been described to
be one of the factors responsible for the high attrition rate. A study of remuneration strategy
and turnover intent shows that there is a negative relationship between the two factors. Emma,
(2007) notice that base pay is an employee's initial rate of compensation, excluding extra lump
sum compensation or increases in the rate of pay. An employee's base pay can be expressed as
a base hourly rate of pay or as an annual salary. Extra forms of compensation that are excluded
from base pay typically include shift differential pay, on-call pay, pay for special assignment
or incentive-based pay and bonuses and these types of compensation lead to low staff turnover.

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CHAPTER THREE

Discussion and analysis part:

Using different decision making steeps we can solve different problems. This chapter discusses
the detail of the problems existing in arbaminch town municipality as they are organized in a
sequential order, so first we have decided on how to solve the problem of urban land
management, second problems related to infrastructural development, and lastly how to reduce
employee turnover within the organization

3.1 Urban Land management problem:

As we have stated above; arbaminch town municipality faced the problem related to land and
its management. So by following the decision making steps we have decided on the problems
of land.

Step 1: Establishing the Objective

The main objective is to recommend the municipality of Arba Minch town to minimize its
problem of land shortage and advice to practice on fair distribution of land to the community
of the town.

Step 2: Defining the Problem

The second step in decision making process is identifying or defining the problem. As we
conducted interview on the employee of Arba Minch town municipality there is a major
problem in the town which is shortage of land supply for housing, establishing enterprises and
investment. As we know house is one of the essential human basic needs that means that it is
difficult to life without having a house so lack of land to build house is a serious problem in
the town.
Small scale enterprises have a vital contribution for decreasing unemployment to the town as
well as the country at large. In fact, in most countries, the number of new job created by small
business is significantly higher than created by large business. This shows that enterprises are
the back bone of one’s country development. But in Arba Minch town there is shortage of land
to establish those enterprises. At the same time this land problem affects investment activities
that can provide contribution for the growth and development of the city.

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As the manager of the municipality said one of the main cause of the shortage of land is illegal
settlements that means some peoples in the town settled illegally in the way that they own the
land temporarily that means only for some periods until they become capable to acquire the
land illegally or until some ones come and ask the land to build. But after that they control and
exercise illegal ownership rights to the land. So this becomes the cause for the shortage of land
in the town.
The other reason for the shortage of land is illegal acquisition and expansion of land by the
residents this implies some peoples acquire land illegally by buying the land without the
consent of the municipality. Some peoples also expand their boarder by violating the consent
that the government legally gives or someone sale to them legally.
The third reason for this shortage of land is the rapid growth of population. In the town the
number of peoples growing rapidly the main reason is migration of peoples from the rural areas
to the town. This migration leads to the shortage of land.

Step 3: Developing alternative solution

After defining or identifying the problem as decision maker we try to develop possible
alternative solution for the shortage of land supply in Arba Minch town. To providing fair
distribution or allocation of land and to minimize the shortage of land resource of the
communities of the town, so we develop the following alternatives.

 Establishing social housing strategy

 Release lands from illegal land holders
 Building saving housing to the communities

Step 4: Evaluating Alternatives

Once we developed a set of alternatives, then we evaluate them to see how effective each would
be. Each alternative must be judged in light of the goals and resources of the organization and
how well the alternative will help solve the problem. In addition, each alternative must be
judged in terms of its consequences.

I. Establishing Social Housing Strategy

Social housing is a house by which peoples make combination or association with the aim of
get affordable house focused on disadvantaged group such as low income earning, civil servant
and so on. As we know social housing strategy is the strategy that helps low income individuals

13
and civil servants cooperating themselves and saves some amount of money and by using this
amount of money the municipality build houses and distribute them to the members.

In this Strategy the members of the social housing is more beneficiary because they only devote
money they save their time and effort the municipality or the association build the houses and
finally distribute the house to those members of the strategy of social housing.

When we see the type and costs of those social houses they are depend on the contribution of
members. The more the individual paid he/she gains better house. The following table shows
the contribution of the members and the type of house the gained in return of their contribution.

No Type of House Estimated Contribution Area

1 G+1 with two bed rooms 381,739. 90 90 square meter
2 G+1 with one bedroom 243,590.09 90 square meter
3 G+0 with two bedrooms 129,312.14 90 square meter
4 G+0 with one bedroom 109,549.09 90 square meter
Source: from Arba Minch Municipality

So by this data the municipality can minimize the land shortage problem by social housing
strategy. Because without social housing strategy the land that is required to given to the one
person is around 200 square meter and when we see this social housing strategy the maximum
area of land given to the individual is 90 square meter. So by this reason the municipality can
handle is land shortage problem at same time the individual also become more benefited.

II. Release Illegal Land from Holders

As we stated earlier there are individuals whose hold land illegally either by boarder expansion
or temporary settlements which are not recognized legally. Therefore the organization can take
this land and can give to the community. In this case the municipality may face challenges
when releasing the land means that some peoples may built better houses which are costly then
this leads to strong grievance from the peoples.

The main advantage of this strategy is that the municipality can minimize its land shortage
problems easily by release from those illegal owners and redistribute it to the society and it
enhances good governance.

14
But even if it has an advantage there is also shortcomings which we try to stated above which
is grievance or complaint raise from those holders because they are devoting their money, effort
as well as time to build those houses.

III. Build Saving/government House to the Community

Saving houses are houses that built for elder and disable groups that built by the government
and rented for those minor communities with maximum of 10 birr. When we see this is frankly
speaking it is gift for those communities. This strategy is applicable in our country Ethiopia to
encourage disables, low income and old aged individuals because they haven’t ability to build
their house. So the municipality can built those saving houses and rent them to the community
with minimum cost. The role of government houses is that within few resource/land, huge
number of residents comported and government uses land resource in proper way. This strategy
is not as much appropriate because it requires huge cost and in return there is not tangible
benefit to the municipality.

IV. Select the Best Alternative Course of Action

After the evaluation or analyzing step is over the next step is select the best alternative. In
trying to select an alternative or combination of alternatives, managers find a solution that
appears to offer the fewest serious disadvantages and the most advantages. The purpose of
selecting an alternative is to solve the problem so as to achieve a predetermined objective.
Managers should take care not to solve one problem and create another with their choice. A
decision is not an end by itself but only a means to an end.
So as a decision making, we try to select that we say best alternative because decision making
is choosing best alternative from listed options. In this case we select social housing strategy
to better minimize the problem of land shortage because when we see this alternative it is better
than others that it uses the municipality to proper and efficient allocation of land and the
members of the housing strategy are also highly beneficiary since the invest only their money
they can devote their time and effort to other jobs. Generally speaking we conclude that social
housing strategy is better than other alternatives.

3.2 Infrastructure Development

Let us follow the same steps of making decision:-

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  Setting objective

The main aim of the Arba Minch Municipality is to expand and bring infrastructural service to
the community by creating social benefit and to crate lasting good governance in the city. The
municipality is to promote socio-economic development and poverty reduction in Arba Minch
through improved to the town zone infrastructural networks and service.

 Define the problem

After setting the objectivity, the decision maker should know and understand the problem or
situation which is connected to decision making. Despite the role, Arba Minch Municipality
was insufficiently and inadequately addressed infrastructure to the community. What is the
problem? Why unable to fulfill the objective of municipality? To define the existing problem
the reason is, lack of supply raw material is the main task. As we interview from the staff, lack
of supply cobblestone peppermint is factor to adders the Indore cobblestone carpet for the
society in the town. For this reason the municipality faces shortage of supply in quality,
quantity and timely cobblestone peppermint to serve the Indore road carpet. Unless the problem
of the cobblestone supply solved, does not bring infrastructural service to the community by
creating social benefit and to crate lasting good governance in the city.

 Develop Alternative

As far from define the existing problem, the decision maker is discovering the solution to the
shortage or lack of supply cobblestone peppermint. To solve existing infrastructural supply
problem, they have two alternatives. The first one is search or diagnose supplier (create
enterprise) within the town to supply the cobblestone peppermint in timely and quantity. On
the other hand to solve the supply problem, import or supply from outside the town is one of
them. These two alternatives can solve the problem of the cobblestone peppermint supply and
to address adequately infrastructure to the community.

 Analyze Alternative

Once developed alternative to the supply problem, the next step is evaluate the alternative
course of action. Every alternative entails pro and cons. to choose the best alternative the
decision makers evaluate the two alternative based on cost-benefit relationship and certain
criteria or condition. Cost-benefit (cost of the unit) is used to evaluate the alternative bases on
cost of unit criteria. The principle of these criteria is to choose the best alternative from other
alternative by making low-cost optimization.

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 Cost Unit Cobblestone Peppermint

Unit Supply within the town supply outside the town

Price ETB1.3 cent ETB1.3 cent

fright in - 0.3 cent

wage to worker 0.2 cent 0.2 cent

Total ETB1.5 cent ETB1.8 cent

Source: From Arba Minch Municipality

The above data show that supply cobblestone peppermint within the town is best alternative
regard to low-cost optimization. The supply within the town cost of one unit is 1.5br compare
to supply outside the town i.e. 1.8br.

From other side we want to compare the two alternative based on different criteria to select the
best one between the supply from within or outside the town. The criteria like creating job
opportunity for enterprise; available in timely, quality and quantity,

Evaluation

Criteria Supply within the town Supply outside the town

Job opportunity to the Advisable Inconvenient

communities

Available on time Advisable kill time

Available in quality and quantity Convenient Convenient

From the evaluation criteria, supply within the town is better to create job opportunity to
enterprise, available in time, and convent required quantity and quality as compared to supply
outside the town or import the peppermint.

 Select the best alternative

The decision maker decides which is best alternative based on analyzed evaluated data from
previous step. From above comparing alternative, Arba Minch municipality decides to solve
the problem of insufficiently and inadequately addressed infrastructure to the community due

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to supply of raw material, particularly cobblestone peppermint. Bases from the data, decision
maker decide that the supply cobblestone peppermint within town enterprise.

3.3 Employee Turnover

We will follow the decision making process to decide on how to reduce employee turnover in
arbaminch town municipality. Before we are going to the decision making process we should
set our objective why we are conducting such kind of study. Our objective is to know why the
employee of the municipality leaves their organization and knowing how to reduce the out flow
of the employees.

Identifying the problem: while providing the service for the community, arbaminch town
municipality faces a serious problem what we called it employee turnover. As we have
mentioned employee turnover is the problem that hinders the organization to achieve its
objective. The problems are identified, and the next step is defining the problem. As we have
interviewed some of the employees of the municipality, their interview indicates that there were
some problems within the organization. Those are;

 Absence of promotion for employees: As we know employee promotion means the

advancement of an employee from one job position to another that has a higher salary
range, a higher-level job title, and often, more and higher-level job responsibility in an
organization. While the absence of promotion for employees in arbaminch town
municipality leads to higher employee turnover and in return it have a great impact on
good governance; for instance, services cannot rendered to the community in
appropriate manner and this leads to lack of good governance in advance.
 Working environment is not suitable: when working environment is not suitable for
employees, they may quite the organization and the degree of employee turnover within
the organization increases. Working conditions can be affected by factors including
health and safety, security and working hours. Poor working condition can damage
health and safety at risk. So the working environment of arbaminch town municipality
is not such much suitable for the employees and the municipality faces a high degree
of employee turnover. There for in order to maintain good governance; the working
environment could be suitable and employee turnover should be reduced to achieve the
goal.
 Inadequate salary/compensation and bonus: higher the salary/compensation and bonus
the lower is employee turnover. Organizations that pay high salary/compensation and

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 benefits for their employees have low level of employee turnover. Therefore, in order
to reduce employee turnover for arbaminch town municipality is better to pay balanced
compensation to enhance good governance.

Developing the alternative:

After the problems are identified, then the next step is developing the alternatives. Therefore,
we have developed the three alternatives: - Giving promotion for employees who are high
performers: when employees are given promotion or when high performers have got
promotion they may happy and interested in their job to continue with in the municipality.
Making the working environment conductive for workers; organizations having suitable
working environment retains their employees for a long period of time. Since creating
conductive working environment plays a significant role in reducing employee turnover and to
enhance good governance arbaminch municipality will create such kind of environment in
order minimize the risk of employee turnover. Increasing salary and bonus for the
employees: when employees paid high salary and bonus the level of turnover will reduce.
Analyzing the alternatives

After developing the alternatives, the next step is analyzing the alternatives. Let us see the
above alternatives in terms of their advantages and disadvantages.
1. Giving promotion for employees who are high performers

Our basic argument is that, overall; employees with a record of past promotions are less likely
to quit the organization. This argument emphasizes the importance of rewards, particularly
promotion, in creating an employment environment that induces workers to remain employed
in the organization. Promotions confer benefits such as status, skill development, and job
satisfaction, which may be contingent on the individual’s staying in the same organization.
Therefore, other things being equal, such as education and position in the hierarchy, the more
the individuals perceive opportunities for further promotions in the current organization, the
less desirable and likely their voluntary quitting becomes. Individuals, who have already been
promoted, may be particularly more likely to be promoted again in the future.
Past promotions can reinforce the expectation of the individual that the firm will repeat its
behavior in the future. Assuming that a promotion ceiling has not been reached and that their
qualifications and performance are satisfactory, employees may expect the firm to provide

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them with future promotions. This is particularly true when employees believe that their future
promotions are also of value to the firm.
Advantages Disadvantages

 It creates motivation and  it may be biased/ low performers

initiatives  may be promoted wrongly
 High achievement  it may cause unethical
 Increase the emotion of competition
belongingness

 Increase individual performance

among employees
2. Creating conductive working environment

Working conditions defined as the working environment and all existing circumstances
affecting labor in the work place, including job hours, physical aspects, and legal rights and
responsibilities. For example, organizations having rigid rules and regulations may lose their
hard working employees, so that working environment has a direct influence on employee
performance. On the other hand, it means that bad working environment/condition can enhance
the number of employees that leaves their organization. In fact, the quality of employees
working environment were directly and positively influence the safe working conditions.
Hence, the sufficient work force for any organization can be maintaining by creating a good
working conditions
 Advantages :- It enhances efficiency and effectiveness by the aid of
technology
• Increase the emotion of belongingness
• Giving attention to the need of individuals
• Keeping the safety of the employees
• It increases employees job satisfaction

3. Increasing salary/compensation and bonus for the employees who are high
performers

Organizations, which bays better salary or compensation and benefits to their employees can
have a capability to retain their employees rather than that of baying less salary/compensation
and benefits. Griffin, (2000) in his study argues that remuneration strategy influences key
outcomes like job satisfaction, attraction, retention, performance, skill acquisition, co-
operation, motivation and turnover intent of employees. Retention and motivation of personnel

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has become a major concern for HR especially in the Indian Retail industry. Compensation &
Benefits have been stated to be one of the factors responsible for the high attrition rate. A study
of remuneration strategy and turnover intent shows that there is a negative relationship between
the two factors.
Advantages • Any organization may

• It increases job have no a mandate to

satisfaction and increase salary but

motivation benefits

• It increases employee • Even if possible, it may

cause
initiative inflations/economic
• High achievement imbalances.
Disadvantages

Selecting the best from the alternatives:

The alternatives are already analyzed then the next step is selecting the best among the
alternatives. So depending up on the above alternative analysis, alternative two was chosen
why because before fulfilling the rest alternatives, the priority should be given to the creation
of conductive working environment and then the other alternatives will be satisfied gradually
in order to reduce employee turnover in arbaminch town municipality and to enhance good
governance.
Note: all the above-mentioned alternatives can reduce employee turnover in arbaminch
municipality, but we can select the second alternative, why because priority should be given to
the working environment to be suitable for employees. Even if the other alternatives are
fulfilled employees may steal leave the organization, but when they make their working
environment conductive, it helps employees to stay in their organization and the rest
alternatives will be fulfilled gradually.

CHAPTER FOUR

4. CONCLUSION AND RECOMONDATION

4.1Conclusion:

In the analysis section detail investigations were presented and discussed. In this section we
have to conclude that which alternative are best and effective among the different set of

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alternatives to solve the problems of arbaminch town municipality in order to render quality
services for the society and to enhance good governance in their organization.

As it is stated in chapter three the municipality faced three major problems like shortage of
land supply, infrastructural problems and high employee turnover rate. In order to decide on
the problems facing the organization the following points were forwarded as the solution for
the problems.

 In order to solve the shortage of land for housing purpose; social housing strategy is
taken as a solution regarding the problem.
 According to our decision infrastructural problems will be solved by forming enterprises
who supply cobblestone peppermint in order to solve the shortage of supply.
 Creating good or conductive working environment for employees was taken in order to
reduce employee turnover and enhance good governance.

3.4 Recommendations:
As we know every municipalities in every city plays a significant role toward the
development of the town/city by providing quality service for the society. While rendering
those services for the community arbaminch town municipality faced a lot of problems. So
we have forwarded the following recommendations for the municipality in order to minimize
the degree of the problems.

1st – it is better for arbaminch town municipality to develop retaining strategy in order to
retain their employees within their organization to reduce employee turnover. For
instance creating conductive working environment for the employees is the better
strategy why because the rest problems come after when employee leaves their
organizations.
2nd – it is advisable for the municipality to build social housing/ condominium houses as
much as possible to solve the shortage of land supply.
3rd – we recommended that it is better for the municipality to form enterprises who are
engaged by supplying row materials of road infrastructure

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