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Managing employee turnover and retention
Managing employee turnover and retention
Managing employee turnover and retention
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Career Development at Electronic Applications 1. Executive Summary Electronic Applications was found in 1972, its headquarters are on San Francisco and it is a major producer of silicon chips. The company’s sales, profit and stock price have grown fast on the past years while the human resources policies have remained unchanged. The main problem the company is facing nowadays is the high turnover ratio closed to an average of 30% on the past three years. The fact that the company is based in an area where many of its closest competitors have offices facilitates employee’s movements from one job to another. This high turnover is mainly affecting positions among the electrical engineers in the R&D department. The key factors behind this high turnover are more related to the fact that there is no career development programmes inside the company than to salary issues, as a wage survey has revealed, Electronic Applications pays 5-8% above the market. Recently the company has hired Harold Sweeney: On the medium term he would need to upgrade the company’s human resources policies, at the moment are mainly reactive. On the short term he would need to tackle the high turnover ratio, specially taking into account that one of the company’s section chiefs, Helen Morgan is reviewing the possibility of moving to another company. 2. Problem Statement Electronic Applications has not got a Human Resources policy in place that goes accordingly to its position in the market and its actual growth. On the past years the Human Resources policies have only been reactive. On the medium term, the key questions, the Human Resources department needs to answer, are following ones, in order to align its strategy with the company’s one: - What are Electronic Applications’ major strategic issues over the next three years? - What are the most critical needs and challenges will face over the next three years? - What critical skills, knowledge and experience will be needed to meet these challenges? - What staffing levels will be required? On the short term a more practical approach needs to be taken in order to reduce the high turnover ratio. Being the lack of career development programmes the main reason for employees to leave the company more in detail issues were identified: - In the appraisal there is no section dealing with future potential or future goals - No rewards for supervisors who develop their subordinates - Mo human resources planning to identify future jobs - No centralised job information or job position system - No career path or career ladders - Attitudinal barriers against women in management positions 3. Alternatives with pros and cons of each alternative
After analyzing the reading, a few things seems to be causing this issue. First, Gobias Industries recently underwent a change which made each division a separate entity. The change caused job mobility to plummet. Communication between each division halted. The pool of job opportunities and work location transfers decreased for the employees of each location. Without communication between the divisions, employees found it difficult to hear of job opportunities at other location. The employees became limited to only the opportunities offered at their location. Secondly, the job opportunities at each division also decreased with the introduction of new technology. The technology began taking over the majority of work for many entry-level jobs. The work left for employees to do became low complexity and low effort therefore, were compensated less. The wages for these entry-level jobs became stagnant. These jobs then became boring, less attractive, and scarce. With the decrease in jobs, a decrease in the opportunity for promotion also exist. Thirdly, the new technology also caused job evaluations to become outdated and incorrect. If recruiters are misrepresenting the jobs during recruitment, then employees will be highly unlikely to stay with that job for long especially if the job does not pay well and has little room for promotion. In order to fix the issue of high turnover, Sudden Valley Works needs to redo their job analysis and revamp their recruiting. These solutions will help with job turnover as well as reaching their goals of retention and employment of more women and minority groups. Recruiting should include a broader market and leadership personality assessments. Previous recruiting techniques were targeted at engineers with the highest GPAs however, with the new technology, a high-level of educated employees are not longer needed. A high
The Human Resources department is dedicated to hire and build an excellent team with a great teamwork and leadership. As one of the most important strategies of the business is the innovation of their products, it is needed people who can add value to the company through its diversity, innovation and entrepreneurial spirit, in a competitive and fun environment.
Based on what I learned in Chapter 10, interventions that I would make to reduce management turnover would be to include various and multiple strategies for promoting employee job satisfaction and commitment. What this means is that organizations today are concentrating on retaining good employees, so motivational techniques play a big part in an organization’s success. Turnover is time consuming and costly. I have never understood the purpose of the “revolving door” at some of the law firms that I have been employed other than a dysfunctional management. As Barry Schwartz stated, “society needs to be mentored by wise teachers.” (Ted2009).
Employee turnover costs are very costly to a company. Turnover not only affects the bottom line but also affects the company’s morale. We are analyzing the problems within our company that are causing our employees to become unsatisfied with their job. Then we are going to find solutions. And then do the cost estimates of the turnover costs and the turnover savings after our solutions are implemented.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)
Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.
Voluntary and involuntary turnover have an effect on organizations. Rapid changes in job descriptions, organizational structures, and inter-organizational competitiveness increase the importance of studying turnover and its relationship with organizational change. According to Leana and Van Buren (1999), "the loss of key network members can severely damage an organization 's social fabric and perhaps eradicate its social capital altogether." When businesses lose a high number of employees, problems can occur, costing the company time and money. Some of the costs incurred are associated with training, drug testing, physicals, and orientations to hire replacements that may take several months to learn the job and to achieve competency. There is a saying, “Good help is hard to find---and harder to keep”. This saying refers to good organizations trying to reduce turnover when the competition for retaining good employees is intense.
I have managed a McDonald 's for over 11 years. There are plenty of potential problems that I deal with daily. One of the biggest issues I have to deal with is turnover. With any job turnover is bound to happen. Especially in a fast paced job with high customer demands. There two sides to this argument involve the pros and cons of turnover. Not all turnover is considered bad, however it can become very expensive if turnover rate is extremely high. I plan to approach this problem in my project my looking into ways of retaining employees and finding ways to reduce turnover. My main objective is how turnover specifically relates to employee engagement and management leadership skills.
In laymen level employee turnover can be understood as employees leaving their organization voluntarily. But technically employee turnover is defined as a ratio between employees appointed in a company and left out from that company in a particular period of time. The employee turnover has both positive and negative influences on organizational performance (e.g., Dalton & Todor, 1979; Dess & Shaw, 2001; Mobley, 1982; Staw, 1980). Maintaining the satisfaction level of employees is the main root for the success of the organization for a long period of time (Berry, 1997). Losing the skilled employees will lead to the reduction in quality, producti...
The company is operating without a dedicated Human Recourses (HR) department which although is not against the law may be detrimental to the way the company operates. An HR department deals with the issues of managing people within a business or organization and is responsible for suitable recruitment, employee welfare, safety & training in the workplace as well are being aware of current workplace legislation. (UCL,
Software publishers make up to $93,380 and computer system designers make up to $79,030 on average as recorded in the month of May 2016. Entry-level engineers make up to $60,000 while senior engineers make up to $111,688. Even people who just started their position make a lot of money and the longer an engineer is in the career and the more experience they gain will get they a bigger paycheck; this shows the value of this career ("Computer Programmers Career, Salary, and Education Information," sec. 11). I feel that this career choice will support my future lifestyle as long as I can find the best place to work where it doesn’t cost so much to
Staff turnover is the ratio of the number of workers that had to be replaced in a given time period to the average number of workers. It is defined as the percentage of staff members who have left the organization within the 12 months before the time of the baseline staff size measurement, divided by the staff size (Oman & Pflegger, 1996, page 311). The company has hitherto lost some of its quality graduates and younger graduates to the financial sector due to the following:
While calculating turnover costs various costs such as cost of recruitment of the replacement, and also including the cost of lost opportunity, the cost of employee turnover has is somewhere around 150% of employees’ remuneration. This cost include both direct and indirect costs. Direct costs consists of cost of the leaving, cost of replacement and cost of transition, and indirect costs include loss in producti...
673), retention management must be based on three types of turnover, voluntary, discharged, and downsizing. Not all businesses are freighted by turnovers, for some it is the way of life and cost is built into the budget. However, for others any type of high turnover can be detrimental for company profit, employee wage and benefits offered. First, let’s take a look at voluntary and involuntary turnover that affects retention. Voluntary turnovers are caused by many different reasons. Turnover may result from topics such as job dissatisfaction, job mismatching, knowing that job opportunities are plentiful. Two reasons that I will discuss more are micromanagement and employee loyalty. Like stated before in the introduction, when employees are dissatisfied, possibly due to being placed in an area that doesn’t fit with their skill set, one is more likely to seek new employment. Another part of turnover is discharging and downsizing. Discharge is just that, members being discharged due to discipline and job performance. While downsizing turnover is a result of business being overstaffed (Heneman III, Judge, Kammeyer-Mueller, 2015, pg. 675). There are also other reasons for voluntarily employee turnover, such as generation differences when it relates to employment. The current generations are more likely to see a job as one piece in their life puzzle rather than as the first, indispensable anchor piece without
Employee turnover in organization is one of the main issues that extensively affect the overall performance of a workplace (Tariq, Ramzan and Riaz, 2013). Various studies show that employee turnover negatively affect the overall efficiency at the organization (Tariq, Ramzan and Riaz, 2013). Xiancheng, (2013) mentioned the employee turnover is a method of personal issues who decided to stop associate with the company for better advantage. There are two types of turnover which are voluntary and involuntary turnover. Voluntary turnover can be defined as the termination of the official and the psychological contract between the employee and employer (Krausz, 2002; Macdonald, 1999; Mclean Parks et al, 1999; Rousseau, 1995) while involuntary turnover inescapably lead to direct negative results such as current job is insecurity, work difficulty, and status fluctuation (Gowan and Gatewood, 1997). However, other researchers such as Haven-Tang and Jones, (2012) concluded poor management, lack of salary, bad working environment and paucity of job opportunities could be the highest causes of turnover among organization. This statement was support by Kusluvan et al., (2010) where is they had stated that poor management, low payment of salary, work environment and lack of employees’ job opportunities on the organization will make employee want to quit from their job. Turnover intention situation will appear when labour had feeling that they want to quit from current job, so voluntary and involuntary turnover will become final stage for them as their decision (AlBattat and Mat Som, 2013) but it is different for researchers such as Mosadeghrad, Ferlie and Rosbenberg (2013) when they conclude that employee turno...