Employee turnover is the ratio of the number of organizational members who have left during the period being considered divided by the average number of people in that organization during the period. It has its own effect on the productivity of the companies. This study was conducted in Bahir Dar Textile Share Company. Because when we compared to the international recommended employee turnover rate in the industries (5%), (Brimley, 2016) BDTSC experience high employee turnover rate (18.65%, 2016 report of BDTSC). This research focuses on the identification of main causes of employee turnover and shows how it affect the productivity of the company. Both secondary and primary data were collected through documentation assessments, questionnaires and discussions. A high response rate of 99.35% was obtained using the random sampling method of data collection. Questionnaires were structured in a 5 point Likert scale format. The Excel software was used for regression analysis on the effects of turnover on the productivity of the company, and Z – score calculation in order to determine the satisfaction level of the respondents. Microsoft Office Visio for drawing fishbone diagram are used. The study results revealed that turnover rate and productivity had a negative relationship. When we see the value of R2 (coefficient of determination) for each production sections, it is, greater than 50%. This result indicated that from all causes for production loss in the company, the contribution of employee turnover was greater than 50%. Because of this turnover rate, the company lost in average 1,053,866.301kg yarn/year, 3,710,951.304 meter gray fabric/year, 7,521,970 square meter finished fabric/year in weaving, spinning, finishing and garment sections respectively. The relationship between turnover rate and sales was negative. The contribution of turnover rate for the decrement of the company sales is 53%. The main causes of employee turnover stated by current employees, ex-employees and management team were lower employee salary scale and unpleasant working environment. Simplified models and frameworks were developed to reduce employee turnover. By applying the proposed models BDTSC could reduce turnover rate by 12.37% (66.33% of 18.65%). Because of this, BDTSC will save 698,998.72 kg yarn/year, 461,365.56 meter gray fabric/year, 4,989,102.89 square meter finished fabric/year and 299,801.04 pcs/year in weaving, spinning, finishing and garment sections respectively. Finally, important concluding and recommendations were forwarded.