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MASTER OF BUSINESS ADMINISTRATION 2nd SEMESTER (2008-2010) G.D. MEMORIAL COLLEGE OF MANAGEMENT & TECHNOLOGY
Submitted to:Prof. Ashwini Agrawal Semester)
Submitted by:Poonam Kumari M.B.A.(2nd
I express my sincere thanks to my project guide, Prof. Ashwini Agrawal Designation Director, Dept. of Management, for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support he/she/they had provided to me with all stages of this project. I would also like to thanks the supporting staff Sheetal Soni, Ritu Khokar and Divya Khatri Department, for their help and cooperation throughout our project. .
(Signature of Student) Poonam Kumari
Personnel turnover in organizations is a normal and expected phenomenon, something that all organizations experience at some level and something that is seldom problematic. Consider, however, if a manager has five employees and one of them quits during the year, he or she has to replace and retrain. Indeed, turnover turns toxic when it affects financial results. In addition to all the usual costs of replacing departed employees--recruiting fees, etc.--companies inevitably incur indirect expenses such as lost productivity, capacity and even customers. Obviously an issue for growing organizations, turnover is also a common problem for those that are downsizing as they fight the exodus of their best people. With the recognition of turnover as a financial issue increasing, companies are searching for strategies to confront the problem in ways that generate a good return on investment. Successfully managing turnover is a matter of understanding its costs, causes and cures. A poor diagnosis of an organization's true turnover costs and causes can lead to misguided cures that do little. Traditional solutions may be applied carte blanche without targeting specific causes or segments. Or even worse, turnover may become an accepted fact of life, an expensive, ongoing talent drain that saps the company of its momentum and viability. Turnover becomes a problem when a talent gap hits those roles that are critical to the organization's ability to execute its business strategy and chronic vacancies begin to erode revenue. For example, turnover in key roles for developing innovations and bringing them to market would have a great impact on the top-line results of innovation-based companies, which would forgo revenue as a result of a lack of new products. Managing the problem requires understanding how the company's turnover varies by population segment and which segments have the greatest impact on its ability to deliver its core business services and products and drive its long-term strategic success. Segmentation involves identifying the population and turnover rate.
2. Objective of Report
This research is important in the sense that it can assist HR managers to imply the efforts or strategies that can increase the motivation and trust of employees on organization management. As far as basic HR practices are concerned they have key role but also proper communication channel between employees and organization, empowerment and helping employees is vital. Managers are important role players in maintaining the better environment, which can increase trust on management so that they will give positive and maximum feedback and to realize their employees that each is playing specific & important role to the organization.
3. Individual and Situational Factors
Researchers have found that individual as well as situational factors play an important role in describing turnover intentions. Not only individuals but organizations also have their own individual and situational factor that empower or dampens their role in participating turnover intentions. From organization point of view, individual factor might be the implicit risk present in the business model or environment when entrepreneurs take initiatives to start a new business. Here, situational factors also play an important role. In today‘s competitive and tight market , to what extent an employer provide variety among its jobs that he offers and to what extent does his position differentiates him from others. Research done by agarwal posted that effect of situational risk on turnover intentions is moderated by individual preference for risk. Returns associated with a particular employment situation are likely to be evaluated in the context of the risks that the employer embodies. The DOT COM revolution has changed the way organizations think before and young entrepreneurial ventures emerged in the latter half of 1990s. Thus organizational enabled business innovation offers an opportunity for reward these rewards are not without risk. Situational Risk is positively related to turnover intentions. Two identical individuals, in terms of salary, work criteria and incentives, the one in the situation of higher risk is likely to have the higher turnover intentions. When individuals see their preferences aligned with situation, their attachment and commitment increases with the organization. Whereas facing unsatisfactory outcome from job, one might develop intentions to leave organization. Evaluation of employment opportunities doesn‘t ends here. A second dimension, that also consider is the range of technologies and experiences that are potentially available with a given employer. High quality of work, variety among work, interesting work are few norms that individuals usually foresee and that eventually moderate intentions to stay. Surveys of ―Best places of work highlight
the nature of the work as an important driver of i.e. attitudes and work behaviors. Thus they posted that Effect of variety offered by the employer (or the situation) is moderated by individual preferences for variety. Organizations that provide such incentives, face low turnover rates as compared to organizations that have some rigidity in this regard.
4. Decision Paths
Researchers have extensively studied the decision paths that professionals take under different circumstances. However, diversification in results has made this issue controversial. What are the factors that an individual considers while planning to switch employee. Factors such as job satisfaction, organizational commitment, attitude etc were pull into concentration while analyzing decision path that affect turnover and considerable outcomes were viewed. Job satisfaction and organizational commitment each contribute independently to the prediction of intention of turnover. It clearly reflects that there are some factors that are prominent to the Industry and professionals consider something else while being in a job as well as while searching a new job. The ever glimpse and charm of that has attracted intellectuals towards itself, not only enjoys their worthy services but also facing their controversial attitudes, diversified demands and off course their mystified decisions. While discussing the same issue of Decision Path mystery Lee et al (1999) proposed a alternative view that adds new attitudinal measures such as a shock, a jarring event such as an unsolicited job offer or significant change in family circumstances, and availability of alternatives to extend the set of variables considered as potential turnover influences. In a series of studies, they have tested and refined their theory examining varied groups of respondents including nurses and accountants. They have further tested differences in characteristics of those following the various paths. Researchers have found that job satisfaction, higher salaries, managerial problems are not always the reason of leaving job. In this analysis turnover is influenced by a variety of variables like shock (an unexpected job offer, major life events etc). A shock is a jarring event such as an unexpected job offer, a drastic change in family life, or any such event has an aggressive effect on mind. Such events might have or might not have engaged scripts. Engaged scripts are pre existing plan of actions that one has brought in his mind with the passage of time like how to react, what to do if any particular event occurred. This can also develop from previous experiences, social learning, behavior of people around like colleagues, friends etc. Image violation occurs when one‘s goals, objectives are not synchronizing with the current job or what he is doing. An employee not getting intellectual, financial or
moral benefits from his employee can feel his image being violated. This is intern pressurize personnel to look for alternatives that might also be intention of job switch. There can be several decision paths when an individual decides to leave an organization. Lee and Mitchell (1994) described it as follows. Consider path 1 where individual‘s intention towards turnover starts with a shock. Employee leaves without considering his attachment to the current organization or without considering job alternatives; job satisfaction is not relevant. This is termed as script-driven decision. There was some pre engaged script created in his mind that insists him to immediately leave the job without considering alternatives. Here job satisfaction is not relevant because his attachment to the organization wasn‘t that deep and his attitude has become so much agitated with time that insists him to switch without considering anything. Path 2 also starts with a shock but employee reconsiders his attachment with the organization because image violation has occurred, and the employee leaves without searching for alternatives. This is termed as push decision. In path 3, that also starts with a shock, an employee experiences image violations that in turn prompt the evaluation of both the current job and alternatives. This is termed as a pull decision . It is not necessary that there should always be a shock that impact individuals to see alternatives but there may be some other reasons as well. Suppose we have path 4a and 4b. In such path where turnover intentions start without a shock is called gradual withdrawal. Usually this has been noticed because of lower job satisfaction among individuals. In path 4a lower job satisfaction becomes so prominent that an individual leaves organization without considering alternatives where as in employees search and evaluate different alternatives.
4.1 Decision Path Speed
While studying the nature of this study and the speed through which individual‘s leave organization depends upon three factors. One is off course shock; other two are amount of mental forethought and the availability of information. Since path 1 and 2 faces fewer mental deliberations, therefore take less time to decide as compared to path 3, where individual need to consider alternatives. However, mental forethoughts are more in path 4a and 4b as compared to other paths, decision making here take more time. Secondly, availability of information also affects decision speed. In path 3 and 4b, information about the alternatives, options and jobs predict that it will take more time than path 1, 2 and 4a.
5. Turnover: As Culture
Culture is defined as the values commonly held among a group of people. Organizational culture is the set of values, norms, and beliefs shared by members of an organization. Being a part of same culture, co-workers get inspired from each other that also moderate intention when we talk about turnover. Turnover has come to be so accepted that an Manager recently confided that his subordinates look at my career and think I‘m a loser because I‘ve pretty much stayed in one place. Said more clearly, a high turnover culture reflects the acceptance of turnover as part of work group norms. That is an employee under this environment likely believes that turnover is necessary and perhaps even expected. While understanding turnover culture, much can be understood by literature and research done on Organizational Culture. Different groups, siblings, casts and friends exist in an organization. Some are highly attached and some are loosely coupled according to their work norms and ethical attitudes. In both the cases every individual take inspiration from others constantly. Researchers have identified two key dimensions of organizational culture construct: direction and intensity Direction refers to the kind of culture being developed in the organization. It could be the implicit thoughts among individuals or norms developed organization wide. Intensity is the strength of these norms or thoughts. Organizations can lead to a significant outcome for their future plans by controlling the ratio of these two factors. Equalizing these switches and creating a good balance is a pretty good art than science. As we have mentioned earlier, turnover culture has deep resemblance with organizational culture as gossips, customs, information flows, hierarchy and structure are few prominent features that relate both. Therefore, these artifacts ultimately moderate assumptions and beliefs that in turn effect turnover intentions. If colleagues make positive comments about their work, environment and management, then there is a higher degree of chance that favorable aspects of the job and commitment to work and organization increases. On the other hand if coworkers have some negative views about work, then there is a higher chance that these effect individual negatively i.e.; his own perceptions and views become negative. Researchers have noted that more similar colleagues or siblings that have almost same position or work assignments will come to a similar decision more quickly. Their attitude towards staying or leaving will be more or less similar. It is not necessary that turnover all happen among individuals. It can exist at industry, organizational, and workgroup levels. At industry level, it depicts that turnover, low or high, is present in a particular industry. That industry faces shortage of specified skill set people and is common across companies belonging to that industry. These companies however can create a firm strategy to cope with this problem. Turnover at organizational level at organizational level refers to the beliefs and custom developed within an organization with a passage of time. Coworkers share their views and perceptions that in turn reflect in their actions. That
is why turnover most of the times differ from organization to organization. Companies make similar strategies to retain employees and perform different operations accordingly. Turnover at workgroup level refers to a department or unit within an organization that more or less contain similar beliefs. Since the nature of work and functional operations are similar with a workgroup, therefore their demands and problems are similar. We argue that turnover culture can also exist at occupational level. Occupation for example refers to a particular industry that can be shared among many individuals working in different organizations. Such kind of occupational group where communication ways are easily available and accessible creates a strong network where information flows rapidly and accurately. Therefore any labor market containing an occupational group can contribute to high turnover. Occupational group could be the best fit. For example there is a strong demand of professionals in the market their shortage as well can inspire them to work for more pennies and therefore job switch will become a trend. As we move further we need to insight an important question. Are all IT professionals similar according to demand and turnover ratio? The marketability of particular job skills highly contributes to turnover culture within an occupational group. In one way or other, management practices also contribute to turnover. Since organizations face shortage of skilled employees, they offer handsome packages and incentives in order to attract professionals towards them. Paying top dollars to require personnel provide message to others that there are higher wages available in the market and that they are working for small pennies. Such actions create hype in the market that fuels higher turnover. Professionals judge themselves by looking for head hunter calls. If professionals at all level are not getting head hunter calls than they conclude that there is some problem with their skills and abilities. There are several strategies followed by organizations to cope with this situation. Most of the time, mid career professionals are at a highest demand or we can say mid career professionals hold a larger part of job percentage. Organization usually move aside mid career workers and bring fresh graduates to work. Fresh graduates tend to work on lower salaries as compared to experienced workers. Their intention to learn and enthusiasm can lead organization to a significant outcome and success. Fresh graduates are usually single and can even work happily under sufficient work load. They had no issues in late sittings as their primary focus is to learn. Family responsibilities are near to none. Such an Human Resource strategy was acknowledged recently by hiring a manager in Silicon Valley firm: ―You work the young ones for five years and then replace them exhaustion report significantly stronger intentions to leave their jobs. Exhausted professionals have described work environments in which ―management places unrealistic and arbitrary goals on us, then refuses to hire anyone to help. If work overload and exhaustion are common within the workgroup, professionals are likely to have observed others experiencing the
problem and successfully resolving it by leaving their jobs. Work overload and exhaustion can therefore contribute to a high turnover culture in workgroups. As we have discussed that culture plays an important role and that people attract people in a sense that they get inspired from each other easily. Over glorification of this act or as termed by Moore, Romance of turnover can become a usual thing at occupational level. Departing employees are treated as heroes, because they have found a way out of the organization. Most of the time only positive aspects of the new job are discussed among co workers and those aspects negative of the current employer. Actual consequences and fair judgment is very keep in to consideration thus assuming that turnover is the only solution to their problems. Implications of the above mentioned problems are always depicted as a serious issue and none could a single positive aspect out of it. Over 30 years ago, political and social economist Albert O. Hirschman, in his classic treatise on exit and voice, noted that when exit is an easy alternative, the use of voice to right problems in an organization tends to atrophy. By executing such a path, organization loses valuable comments and suggestion, departing employee has in his mind. How often we have seen or heard that exit interviews are conducted while an employee leaves. This is because why one should use voice and might become part of any controversy, instead exit safely.
6. Turnover and Internal Market Strategies
Much of the research has been conducted to study the individual level evaluation of turnover. Till now research focus was on individual perceptions, what an individual thinks about his career, his future plans, his problems and his turnover intentions. However, lesser work is done to analyze this issue from a labor market perspective. Doing so we can better analyze the problem as a whole, and internal labor market strategies could be evolved that will surely help analyzing turnover problem as a whole and designing a firm strategy. A labor market perspective conceptualized a problem as a whole and induce attention towards major and most occurring problems rather than prominent but few occurrences of a problem. This can help organizations to develop strategies market wide and let them fuse at a single consensus, thus building a more flexible and robust strategy. By having a clearer picture of the overall market, they can easily control the most disputing factors and can easily float their ideas and plans that would eventually become requirement of the market.
7. Behavioral and Organizational Factors
Today organizations are facing critical situation as far as turnover is concerned and keeping workers satisfied, is one of the most challenging tasks for them. Even slowing down the pace of high turnover is getting difficult. Not only retention is a problem, the availability of highly skilled employees is very short and organizations need to face this challenging situation with increase in intensity day by day. At the same time workers enjoys a high demand market where they can put high demands in front of organizations and also ask them to create a good working environment for them. The managerial problem is to know what are the critical organizational and job features that affect the desire to stay in or leave a company. One of the most critical issues facing managers of high tech companies is keeping their technical employees satisfied and trying to prevent a rapid staff turnover. The shortage of good quality technical people in high tech companies creates a high demand for their skills. This makes it easy for them to change employers and more important for companies to provide working conditions which are attractive enough to keep their technical staff. While relating individual behavior with organizational factors two main areas are covered; the first is the reasons why technical employees would leave their present company; the second looks at factors influencing the length of time they expect to stay in their present company. workers might compromise at anything except salary because they tend to believe that the expertise and knowledge they hold, is hard to difficult and execute. Therefore, demanding a higher salary comes first beside everything else. Since the charm and life line of profession is keeping yourself updated technology wise, professionals demand more experience and more interesting work after high salaries. They always try to gain more and more experience in order to gain more expertise and require more challenging and interesting work profession is all about creativity and imagination. Professionals, who take it as a career, always look forward for more creative and interesting stuff. This generates an implicit demand to having good quality and challenging work. As we can see the factors mentioned above tends to move from more personal to environmental or less personal demands. Professionals always look forward for more and more improvement to their life style and environment that surrounds. Better location lies in the middle of all and the first point of the second group. The final eight factors were given such relatively low rankings they could be considered to be merely idiosyncratic. The priority given to salary is unusually high for individuals with a technical or professional orientation; it is more common where individuals take a more detached approach to their job (e.g., process workers). The next 5 highest-ranked factors indicate the importance of interesting and challenging work. The predicament with organizations is that their employees expect an interesting and quality work job and also demand higher salaries explicitly. Maintaining such an environment and fulfilling employee‘s demand is a big challenge for
employers."More flexible working arrangements," and "more control over own work," for example, tends to be less important but do not appear as reasons for leaving job rather it has a small implication on leaving intentions.
7.1 Small and Large Companies
According to this study, a issue has been discussed is that it is getting more difficult day by day to satisfy and retain independent type of people as structure, rules and regulations as the company grows in size. Researchers are trying to answer the question whether every small and large size of companies have different employees and does size of the company matters on identifying the nature of employees. As a study done to compare small size companies with medium and large companies several conclusions were drawn. 1. A major difference found between small companies and middle or large companies is that employees in smaller companies have a higher intention to leave because they rather want to start their own company or tends to join a more successful company. 2. In smaller companies, technical staff tends to focus on start new business, as compared to looking for a larger company. Both factors are there but differ in intensity. 3. Employees in medium and large companies differ from those in smaller companies in way that they focus more on promotion as compared to employees in smaller organizations. This is because of two reasons. Employees in larger companies tend to ladder faster and rate in promotion is higher. Secondly, employees in smaller companies assume that there career growth and advancement is dependent upon the growth of company, but in larger companies it happens alternatively. Employee there doesn‘t advance themselves accordingly as companies grows but still enjoys different incentives as company advances .
8. Relationship between Nature of Work Selection and Organizational Commitment
The study explores the nature of work context within the asserts that nature of work as contextually specified contributes to professional‘s commitment to the
organization. Nature of work in the expressed as core job characteristics, the level of group cohesion, and the level of role stress. Managers and organizations can use this information to guide project assignment job decisions and improve job and work design to increase organizational commitment and ultimately to increase retention. This research has shown that job performance is related to the professional‘s commitment to the organization with higher levels of commitment related to better retention of professionals. Management literature has indicated that nature of work is an antecedent to employee work-related attitudes. The connection between nature of work and organizational commitment is particularly promising as corrective action may be within the capabilities of the manager or organization. In situations where the nature of work negatively influences organizational commitment, management may have the ability to enact job redesign remedies (e.g. job enrichment, job rotation). Through better job assignment or work design, employees may have higher commitment, leading to a higher job performance. Such remedies may be particularly viable in an context where project work is prevalent. Study done by Tim Klaus introduces a model of the relationship between the nature of work and organizational commitment in the context. The proposed model recognizes past job characteristics literature and the nuances of the context by explicating nature of work to include role stress, group cohesion and job characteristics.
8.1 Core Job Characteristics
One job enrichment model that has garnered much interest and support is the Job Characteristics Model. This model postulates there are five core dimensions that affect the psychological state of employees, leading to certain personal and work outcomes. The Job Characteristics Model has been studied using organizations of all sizes and cultures. However, few if any studies have used this model to study the relationship between workers and organizational commitment. This context is inviting since historically the industry is one plagued with high turnover. The Job Characteristics Model operationalises the motivating potential of a job as a summative measure based upon the weighting of various core job characteristics. Although this model originally was developed to explain three psychological states, it has widely been used to determine work outcomes.
8.2 Group Cohesion
Group cohesion addresses how well the participant has bonded with a work group or others in the department. Given the proliferation of projects requiring teamwork
in IS, the workers perception of group cohesion was selected as a likely variable that may influence the commitment of workers to the organization. It is implicit in the work group cohesion literature to note that employees that have close friends at work rated higher on work group cohesion and were more inclined to stay at the company than leave. This study also noted that employees with close friends at work will more likely stay with the organization. Granovetter further explains this concept, nothing that within companies there are social networks. One conclusion was that employees that have strong ties with other employees are less likely to leave the organization.
8.3 Role Stress
Role stress is selected as a Nature of Work factor as employees generally move from one project to another, engaging in many types of activities, project assignments, and requirements. Therefore, role ambiguity and role conflict are more likely to occur for these workers, affecting commitment to the organization. Some research views role stress from a transactional perspective. This perspective asserts that role stress is an individualized process that increases or decreases due to stimuli and then affects responses (e.g. commitment). Role stress is a complex construct when viewed from the individual transaction level rather than a more objective environmental approach. Research indicates the dimensions of this complex construct include role ambiguity and role conflict. This study acknowledges both role stress dimensions.
8.4 Organizational Commitment
Organizational commitment is a common construct used in management, marketing, psychology, and other disciplines as an antecedent of job involvement, job satisfaction, turnover, and absenteeism. Like role stress, commitment is a multi dimensional construct. Prevalent dimensions of this construct explored in research include continuance commitment, normative commitment, and general feelings of organizational loyalty and pride. The continuance commitment perspective views commitment from the position of loss; employees remain with an organization because they will lose existing benefits if they leave. Normative commitment refers to the commitment to an organization based upon a feeling of obligation. This study will look at both continuance and normative commitment to the organization as well as the loyalty and pride participants have towards their employers.
9. Is Turnover Always Disruptive
So far we have discussed that turnover has always been found disruptive for organizations. Employers tend to introduce new ideas, strategies, offers and facilities to employees in order to keep them attracted. However, there are people who consider turnover as a strategic facilitator and suggests that turnover is helpful and functional. The paper discusses different perspective and argues that turnover is a possible strategic facilitator for organizational development. “All those who pass through this door bring joy to this office, some by coming in and some by going out” A model which is called Strategic Turnover Management Process (STMP) using theory of planned behavior, theory of Psychological contracts and conclusion drawn from prior research on turnover. STMP has three stages consisting of: i. Continually assessing the staying or leaving intentions of the employees ii. Deciding whether to retain him, and iii. Re-recruiting in case the decision is to retain. Human resource literature has always stressed to design a HR system persistently that fit with the goals, strategies and future road maps of the organizations and also offers a good person organization fit. Therefore there should exist a balanced system that understands organization needs and at the same time also provide a balanced equity of the employees of that organization. For example, if an organization has some vacant positions available than internal candidates should be placed in those places. This would help organizations gain benefit from employees with cross-competency skills and knowledge. Employees being there for a longer period of time can also be risky for organizations. Many important knowledge and news that should be known to management timely, are acknowledged when an employee leaves out. There might be in justice happening to sub ordinates by their senior, but since he has been there for a long time no one is about to know. This might create bad feelings among sub ordinates and instead of being capable enough to do their job, they leave the organization. Turnover in the company can also open paths for career development, which is necessary when people seek to fulfill their career goals or accommodate career anchors. It may also open the way for previous employees to come back with experience from other companies as part of their career paths. If a company faces low turnover, this might be good for an external views about that organizations in terms of HR policies, but might be
disruptive for continuous growth and stability. Organizations need bright and creative ideas every time. In fact this happens that organizations needs some employees to leave organizations for strategic reasons. They might fire, transfer or laid off employees but it‘s better suggested that a firm strategy should be developed .
STMP Step 1: Assessing employees’ staying intentions
“The theoretical premise for assessing an employee’s intention to stay or leave is the theory of planned behavior or TPB . According to TPB, human behavior is guided by three kinds of considerations: Beliefs about the likely outcomes of the behavior, beliefs about the normative expectations of others, and beliefs about the presence of factors that may facilitate or impede the behavior. A combination of these leads to the formation of a behavioral intention, which is assumed to be the immediate antecedent of behavior. TPB has previously been used in career choice investigations and employment status choice intentions investigations and has found strong support. TPB has also been used to predict women's intentions to pursue a career versus intentions to become a homemaker and the career intentions of army officers. Adapting to the context of turnover, the behavior in question is either staying or leaving. One can argue whether they are the two ends of the same bipolar construct, or whether staying and leaving constructs are distinct and may be present in the same individual. To empirically derive the intentions, we sought the advice of Ajzen response was “Ask about both staying and leaving intentions and when deriving the higher order construct, recode and combine those into one construct”. This implied a bipolar construct.” STMP Step 2: The Intervention decision While dealing with turnover organizations feels themselves very confused sometimes. The decision whether turnover is obstructing organization goals and its overall strength or it‘s a good time to entertain turnover at its notion is a crucial decision to take. STMP offers a simple solution of recognizing each individual separately. The identification of company needs and comparison with individual skills and strength can easily notify whether the individual is replaceable or not. Acceptable turnover would be a case where organization can easily replace the employee and acquiring a new person with same capabilities or skills. However this might not always be the case. The competencies of the departing employee may have been outdated i.e.; no more required by the company. As an effect of this market decline, the company may have changed their corporate business strategies, focusing on other areas of competencies and service offerings. Even though the
employee‘s role may not need to be filled, a replace-ability analysis should be conducted in order to uncover aspects of the employee, the corporate business strategies or the market place not initially anticipated. The replace-ability of an employee then depends on the fit or match between three dimensions: company dimension, employee dimension and market dimension. The company dimensions are the requirements which the company should fulfill to run its business successfully. Particulars like domain expertise, technology adaption, infrastructure setup etc could be the prime focus. Company culture, trends, values and norms are few particulars that plays an important role in structuring and maintaining required environment. Demands could be also its business strategies, such as areas of growth and service/knowledge focus of the consulting company as well as the culture of the company, and the ethics and standard the company wants to be identified with. Such values and norms may be honesty, courage, freedom, team spirit, and confidence among others. The employee dimension refers to the abilities, skills, knowledge and to what extent the person organization fit tends to make him more worthy. His competencies and requirement of his skills within the job market is a complex comparison. Competencies tend to be described as substantive content because they could be one‘s own competency or the one required by the market. The market dimension refers to the availability of skills and competencies in the market. Organizations effort and willingness always affect the efficacy of market dimension. Usually business requirements of organizations create market demands that in turn attract individuals to decide their career accordingly. Since, the shortage of skill and competencies are always a challenge for organizations, the use of fringe benefits, trainings, incentives and other offers by companies accelerate market demands. The market dimension may also affect the company dimension, since company goals and strategy change with the market dynamics. The availability of projects will affect the company dimension, the business strategies and needs for competency within the company. Evaluating the replace-ability implies analysis of compatibility and fit between these dimensions.
STMP Step 3: Intervention by Re-recruitment
The theoretical premise of this step is psychological contract which is defined as Individual beliefs, shaped by the organization, regarding terms of an exchange agreement between individuals and their organizations. The effects of changing psychological contracts in employment have been subject to several studies. Psychological contract refers to the moral and mental agreement between the employee and the employer. In organizational settings, contracts can be social [shared by the larger society, e.g., in this context employees in the industry] and organizational. Ideally, a psychological contract should consist of the detailed
expectations of employee and employer. But typical contracts are not complete due to bounded rationality, and the ever changing environment of an organization making all conditions impossible to specify up front. This results in gaps in the contract, which is filled in by both employee and employer, and is done in somewhat unpredictable ways. Therefore, contracts become self-organizing and change over time. 11. Conclusion As per our discussion, survey and analysis there is no doubt putting this paper in one statement that is Turnover is inevitable. Organizations will continue to face such situation, at least for some time and has to find some workout under the same situation. However, since we can‘t stop water flowing down the steam, we can control its frequency and direction. Organizations need to build an environment where they can maximize retention of employees by continuous improvement and firm strategies. Employer should have something on plate to attract employees at every point in time. Understanding their financial needs, their worth in the market, their lust to learn and keep themselves updated, competitor‘s high offers, controlling their mind sets and even justifying and satisfying their unreasonable comments are simultaneous challenges that need to be faced continuously. By providing effective training slowly and step wise could be a better option to keep them attracted. However, there should always be a good backup plan if any employee leaves. This could be achieved by keeping all the team members up to date so that there is always a backup or alternative available when somebody leaves.
Preventing Employee Turnover
➢ The ability to keep quality employees is critical to being a successful manager, particularly in today's competitive hiring environment. One of the keys to retention is making sure your staff remains challenged while recognizing signals that someone may be dissatisfied with his or her job.
➢ If you can detect the early warning flags, you will have a good chance of preventing your most valued employees from considering job opportunities elsewhere. That said, here are some signs every manager should look for.
A pattern of dissatisfaction many signs that employees are unhappy are easy to detect but can go unnoticed by busy managers.
When evaluating whether someone may be at risk for leaving a job, look for situations such as: * Someone known for offering new ideas for ways to improve processes and increase productivity stops providing suggestions. * An individual who brightened up the office almost daily with his or her positive approach to work no longer displays the same enthusiasm. * A staff member begins making negative comments to coworkers about the firm or his or her job responsibilities. Unusual behavior some employees may be adept at disguising their dissatisfaction but cannot hide the fact that they are less engaged in their work. The reason is that mentally they have already begun to sever their connection to the company and, therefore, no longer have the desire to give 100% to their jobs. To help you determine whether a slip in performance is due to a temporary slump or a growing lack of interest in the position, try to recall the employee's behavior in the preceding weeks. While your analysis will not definitively reveal an individual's intent, it could provide more insight into the situation. For example, assume an employee is usually an active contributor to group projects but has been electing to spend more time working alone. In this instance, he may be taking a relatively low-key approach to distance himself from the job and the rest of the group. Consider how long the person has been spending at lunch in recent weeks. If it's longer than normal, it could mean she is going on interviews in the early afternoon.
It may also signal boredom or unhappiness, two precursors to the start of a job search. Also pay attention if an employee is using certain resources at work that could help facilitate a hunt for a new position. Do you notice the individual using the printer or copier more often than usual? What about the Internet? It could mean he or she is making copies of resumes and sending them via fax to prospective employers or looking online at other job possibilities.
Employee turnover in the USA averages between 25%--30% per year. This means that the average worker in the USA will work for over eight different employers during a thirty year career. Middle management turnover is even higher. A recent survey of 500 middle managers conducted by Accenture found that about 40 percent are currently looking for a new job. Another 10 percent of respondents plan to look when the economy improves. That's half of the middle managers surveyed. Why are so many people looking to change jobs? Here are the top reasons sited by Accenture: better pay or benefits, better conditions or prospects, lack of advancement opportunities at their current employer, better training or career development opportunities, or they just dislike their current jobs or their bosses. Other reasons for changing jobs are adverse changes in their current employers' business; the job is a bad fit for the employees capabilities; or the employee associates their job with some personal adversity and leaves the company to "start fresh." Employers turn over almost as much as employees do. I have been working for about 30 years and have worked for seven different employers: two great ones, two bad ones, and three companies that I founded and ran myself. Of those seven companies, only two still exist as stand-alone firms, and those two I created. Both of the great firms I worked for and one of the bad choice firms were acquired by other firms, and one of the firms I founded merged with a bigger firm. Mergers and acquisitions, and corporate re-organizations and relocations contribute to employee turnover, but it is not voluntary turnover; it is called a lay-off. Another reason that
is not specifically cited in these surveys is the impact of productivity enhancement programs on an employee's perception of his/her job security. There are lots of masons why people change jobs, but, other than offering the best and most comprehensive benefit plans, highest pay, on-going career development programs, free lunch, enlightened and inspired leadership, and unlimited career opportunities, while, at the same time, being flexible, accommodating and a valued mentor, is there anything an employer can do to eliminate employee turnover? Before tackling this question, let me break down the turnover issue into two parts: the turnover of "fast-track" employees and turnover of people who work in order to live, the "normal-track" employees. Fast-track performers are very competitive and career oriented. They will stay with an employer for only as long as they are challenged by the work, learn and acquire skills that will help them achieve career progression goals, and progress at a faster rate than their peer-group. When any one of these motivators starts to lag behind expectations, these fast-track employees will move to a new opportunity. The majority of middle managers are fast-track type people. This may be the main reason that middle manager turnover rates are higher than the average rates. Normal-track performers, generally, are more interested in work/life balance. They want good compensation, a flexible workplace and good benefits, and interesting work. If those items are available at another company, and the commute is shorter, or they offer a company gym or a nicer facility, or a friend works there, it is almost certain they will change job.
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Employee Turnover Cost Calculator
Here's an interesting tool to check out. It's an interactive Employee Turnover Cost Calculator. You can use this interactive Employee Turnover Cost Calculator to estimate your costs due to undesirable employee turnover. By entering just six values you will be able to estimate: • Total Separation Costs
• Total Replacement Costs • Total Training Costs • Total Turnover Cost per Year There is also a larger version of this calculator. It does the same calculations but also shows the background costs and documentation, plus you can enter values for up to five additional kinds of replacement cost. I went through several scenarios and found it quite useful. However, I've also noticed that these numbers may actually be too conservative. For example, it's been estimated that the cost of employee turnover is three times their salary. For example, factor in what it costs your company every time a salesperson misses out on a selling opportunity. And we can’t forget the additional costs such as: customer complaints, the lead itself, lost prospects, management’s time, your time, (what else could you have accomplished if you weren’t working on this?), employee morale, your competitive edge, recruiting, training, materials, administrative costs, benefits and of course, the cost of replacing this salesperson! The final cost to your company can total hundreds of thousands of dollars in lost revenue as well as your fixed costs, depending upon how long you keep an underperformer such as an underperforming salesperson aboard who you’re better off without. Not sure how accurately this reflects these very costly but hidden expenses. What do you see that works? Is this a valuable tool for you, as a manager or business owner? Let me know if you see any other variables that need to be considered as well.
Antecedents to temporary employee's turnover intention.
In an exploratory study using temporary workers, a model based on social exchange and social identity theories was developed and tested. Results revealed that, for both the temporary employee attitudes toward the client
organization and the temporary employee attitudes toward the temporary agency, there was a positive association between job satisfaction and organization commitment and negative associations between job satisfaction and turnover intention and organizational commitment and turnover intention. Concerning the "crossover effects", results showed that job satisfaction with the client organization had a weak positive association with organizational commitment for the temporary agency and organizational commitment for the temporary agency had a weak negative association with turnover intention for the client organization. Managerial implications of these results are discussed. ********** can quickly respond to changing environments, management has increasingly sought to maintain a flexible labor force by often utilizing a temporary workforce to achieve this flexibility. During the 1990's, the number of temporary workers employed by organizations in the United States increased by 11% (Estavo & Latch, 1999). After experiencing several years of lower demand during the recent recessionary period of the early 2000's, organizations in the United States are now beginning to increase their use of temporary workers again (Berchem, 2005). Not only is the use of temporary workers in the traditional areas of temporary employment (e.g. construction, personnel supply services, etc.) beginning to rebound, there is also a trend that indicates that there is an increase in the new economy industries employing highly skilled knowledge workers as temporary workers (Neumark & Reed, 2002). While issues related to how to manage temporary workers have often been discussed in the practical (management) literature, few empirical investigations have studied how temporary workers' attitudes influence other work related attitudes and their actual work behavior. When studies investigating temporary workers have been performed, for the most part, the studies have focused on the difference in employees' attitudes between
full-time permanent workers and contingent workers within an organization (de Gilder, 2003, Thorsteinson, 2003).
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