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Low Retention: High Turnover

Low Retention Rates


A Study of High Employee Turnover in a Company
Megan Wright
Keller Graduate School of Management

GM 591: Leadership and Organizational Behavior


Dr. Arnold Witchel
March 25, 2012

GM 591: Leadership and Organizational Behavior


Project Proposal

Overview of Organization
The organization that will be the topic of discussion in my final project
proposal is LP APAC.
Established in 1946, LP is one of the largest independent accounting and
business consulting firms in the region, with over 160 personnel employed.
As a full-service accounting and business consulting firm, LP continually
expands its core services to meet its clients changing needs. Their services
include accounting, audit and assurance, human resources consulting, estate
and financial planning, outsourced controllership, strategic planning, risk
advisory consulting, tax planning/compliance and profitability enhancement.
LP is recognized as a regional firm with national capabilities and also, it has
been voted Best Places to Work by its employees.
In December 2010, the company purchased a Houston based accounting firm
and the merger came complete with more than thirty staff members.
Although mergers have their pros they also have their cons such as
dissatisfaction among current staff as positions will be limited and
management has to make decisions as to which staff will hold what positions
after the transaction is complete.

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I joined LP in February 2011 and I was hired to be a Human Resources liaison
and Payroll Clerk in the Human Resources division of the company. When I
came on board we had roughly 220 employees, employee morale was really
high, and it seemed that all employees were happy and the company was on
its way. Since February 2011 we have had high employee turnover and have
lost 41 employees and of those 14 left for better opportunities in the
accounting industry.
Since the merger took place employee morale seems to have taken a major
turn and the once happy employees arent displaying the positive attitude
anymore.
LP has many qualified hardworking professionals but these days its hard to
retain these employees. Employees with many years service and who have
been loyal to the company for years are making a decision to leave.
Employee exit interviews state every reason from trust to better job
opportunities. Personally, I feel LP is a wonderful company to work for and
they do reward their employees when it comes to performance reviews but
Im afraid its going to take more.
Preliminary Problem Statement
LP currently has a major problem of low retention and high turnover. The
employees are not feeling as if they are an asset to the company; instead
they are having trust issues. With the help of the HR department and
directors we can turn this negative into a positive. First I think we can
promote internally and then think about filling lower level positions externally

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if needed. Ultimately I think job satisfaction is an issue and employee
turnover is a problem. Getting to the essence of the matter will increase
productivity, morale, absenteeism and also improve retention. If this
problem is not addressed Im afraid we are going to continue to lose
employees and the workload will only be greater as new business continues
to come through the doors.
I would like the topic of my research to be how to improve retention rates
that will have an impact on higher productivity and lower turnover. The TCO
I will address is given knowledge of group dynamics and decision
making, apply this knowledge to a case analysis to diagnose an
organizational problem and recommend solutions.

Possible Solutions
I would like to see my company attempt these possible approaches:

Pay competitive wages-If the company doesnt pay their employees


at the same level as their competitors; employees will research and
find out and job satisfaction will wear away.

Create good working relationships between employees and


managers-Bad bosses are the number one reason some employees
resign. Good communication and providing encouragement for a job
well done. Good bosses acknowledge the work of others and
genuinely care about their employees

Providing career development-Better career development and


greater challenges

If todays managers take ten minutes to talk with employees, tell them they
are doing good jobs, and explore their career interests; organizations will be
closer to securing future performance rather than pursuing new employees
(Gordon, Lowe 2002).
Analysis of OB concepts
Quality of Work Life is the approving or disapproving of the job
environment of an employee. Its purpose is to develop jobs and working
conditions that are excellent for both the employees and the organization.
One of the ways of accomplishing QWL is through job design. Some of the
options available for improving job design are:

Leave the job as is but employ only people who like the rigid environment or
routine work. Some people do enjoy the security and task support of these
kinds of jobs.
Leave the job as is, but pay the employees more.
Mechanize and automate the routine jobs.
And the area that OD lovesredesigns the job.

When redesigning jobs there are two spectrums to followjob enlargement


and job enrichment. Job enlargement adds a more variety of tasks and
duties to the job so that it is not as monotonous. This takes in the breadth of
the job. That is, the number of different tasks that an employee performs.
This can also be accomplished by job rotation.

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Job enrichment, on the other hand, adds additional motivators. It adds
depth to the jobmore control, responsibility, and discretion to how the job
is performed. This gives higher order needs to the employee, as opposed to
job enlargement which simply gives more variety.
My ultimate plan is to create a plan of action to include my possible solutions
and then allow my HR Manager and Director of Operations to review it and
allow three employees to review 1-administrative staff, 1-staff member (tax
or audit) and 1-senior member (tax or audit). Once my research is complete
I would like to report my findings and get their reactions to the reasons why
they should stay and work at LP.