Labour turnover and absenteeism have long been a major cause of worry among the manufacturers. Labour turnover is the rate at which an employer gains and losses employees. It is an important and pervasive feature of the labour market. Absenteeism is a habitual pattern of absence from a duty or obligation. Johns and Nicholson (1982) persuasively argued that there are individual differences that may be related to the absence phenomenon. Morrell et al. (2004) tested voluntary turnover of nurses in the UK and found shocks play a role in many cases where people decide to leave. Campion (1991) cited in Tang suggests that the most important reason for voluntary turnover is higher wages or career opportunity. It is very important to reduce the rate of labour turnover and absenteeism for increasing industrial production. The objective of the study was to find out the factors involved in labour turn over and absenteeism and the effects in the organization. The study adopts descriptive research design. The study was conducted with special reference to PEE AAA Impex in Karur town by selecting 60 employees using simple random sampling method. In this study an attempt is made to find out the labour turn over and absenteeism among the employees and their effects on the organizational effectiveness.