Master of Business Administration

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PEOPLE AND ORGANISATIONS
Assignment 1– WRIT 1
Sachini Dinusha Liyanage
Cardiff Met. Student ID: 20207325
Master of Business Administration Cardiff Met. ID: 20207325

Executive Summary

Current human resources management processes are focused on retaining the skilled and qualified
task force within the organization to maintain continuous business processes. This report analyses
a situation in an organization based in Sri Lanka where high turnover rates have caused an impact
on the organizational output.
Data gathered from internal sources of the organization have been analysed, in an attempt to
understand the reasons motivating employees to exit the organization.
Further discussions have been carried out to understand the employee attitudes towards work and
the organization by applying several motivational theories. This report majorly focused on the
factors which have a negative influence on employee job satisfaction. A human psychological
approach has been taken in understanding the human resources management practices to be
implemented in the organization to mitigate the risk of losing a skilled task force.
The main objective of the report is to identify the challenges related to high employee turnover
and to understand the reasons which encourage employees to leave.
Several suggestions have been introduced to improve management practices and for the
implementation or alteration of current organizational standards to create a more welcoming work
atmosphere for the employees.

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Table of Contents
Executive Summary ........................................................................................................................ 1

1.Introduction .................................................................................................................................. 4

2.Challenges and issues of the organization ................................................................................... 6

3. Theoretical approach in analysing the situation.......................................................................... 9

3.1. Maslow’s Hierarchy of needs .............................................................................................9
3.2. Herzberg’s motivation-hygiene theory .............................................................................10
3.3. Theory of planned behaviour (TPB) .................................................................................11
3.4. Self-determination theory .................................................................................................11

4.Practical solutions and approaches to overcome the challenges ................................................ 12

5.Conclusion ................................................................................................................................. 13

References ..................................................................................................................................... 14

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List of Figures
Figure 1 - Employees on payroll in each sector (Hayleys PLC 2020/21, p. 17). .......................... 5

Figure 2 - Number of employees on payroll over the three years of 2018, 2019 and 2020
(Hayleys PLC 2019/20, p. 66). ..................................................................................... 6

Figure 3 - Number of employees on payroll over the three years of 2019, 2020 and 2021
(Hayleys PLC 2020/21, p. 19). ..................................................................................... 6

Figure 4 - Hierarchy of needs pyramid (Anon, n.d.) ..................................................................... 9

Figure 5 - Herzberg’s motivation-hygiene theory ....................................................................... 10

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1.Introduction
Hayleys PLC is a business conglomerate established in Sri Lanka which was founded in 1878.
Hayleys’s business portfolio consists of twelve diversified industrial sectors. The key industrial
sectors include manufacturing, agriculture and services (Hayleys PLC 2020/21). Their business
portfolio spreads among the industrial sectors of Eco Solutions, Agriculture, Hand Protection,
Consumer & Retail, Purification, Leisure, Textiles, Industry Inputs, Power & Energy,
Construction Materials, Transportation & Logistics, Plantations and other.
The financial position of the organization as per the annual report published for the year 2020/21
is as below.

Earning highlights
Revenue : Rs. mn 241.276
Profit after tax : Rs. mn 14.046
Financial position highlights
Total assets : Rs. mn 279.383
Total debt : rs. mn 114.462
The total Hayleys PLC employees numbered 30,765 as of 31st March 2021 (Hayleys PLC 2020/21,
p. 19). Hayleys value their task force and constantly trying to enhance the work standards to attain
high productivity and performance levels from employees while maintaining a high retaining level.

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Figure 1 - Employees on payroll in each sector (Hayleys PLC 2020/21, p. 17).

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2.Challenges and issues of the organization

According to the Annual reports of 2018/19, 2019/20 and 2020/21, it is visible that the
organization faces an increasing trend in employee turnover rates.

Figure 2 - Number of employees on payroll over the three years of 2018, 2019 and 2020
(Hayleys PLC 2019/20, p. 66).

Figure 3 - Number of employees on payroll over the three years of 2019, 2020 and 2021
(Hayleys PLC 2020/21, p. 19).

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Increased employee turnover rates result in both tangible and intangible costs for the business
(Davidson, Timo and Wang, 2010). Human resources management acts as a front line victim of
the issue. HR managers are struggling with the challenge of retaining skilled and qualified talents
within the organization. The continuous replacement of skilled labour results in the waste of
organizational assets spent on recruiting, training, induction and growth and development of the
lost employees. (Davidson, Timo and Wang, 2010)

As per the internal information from the Hayleys PLC HR department, their biggest concern is to
maintain the continuity of the workflow interrupted by the loss of skilled labour. The time
consumption of the recruitment of new employees and training them for the desired outcome is
increasing due to the scarcity of skilled labour. The time lag between loss of skilled labour and
acquiring new, affects the smooth continuation of business processes.

Efforts have been taken to maintain a continuous workflow with a minimum skilled labour force
to deliver the expected outcome. The increased individual workload on the active labour force
creates a stressful, over-competitive work environment motivating employees to leave. On the
other hand, the organization has been compelled to maintain a quality output under the increased
cost of overtime pay.

The leisure (hospitality), agriculture and plantation sectors of the Hayleys PLC has a specialized
interest in recruiting employees from the local areas of the business. This practice is to minimize
the financial and social inconveniences created by the full-time employment away from the areas
of residence the employees. This practice induces limitations in acquiring the best talents due to
the scarcity of skilled labour in respective areas of business. Therefore it has become a challenge
to recruit new employees. A higher female representation can be seen in the leisure sector.
Recruitment of new female employees from the same area as the business has become a concerning
issue due to the lack of skilled labour. Also, most of the female employees tend to refuse to work
far away from their residential areas due to personal obligations.

High turnover rates in administrative divisions of business sectors such as transportation and
logistics, industrial inputs, power and energy have been recognized to cause a considerable impact
on the continuation of essential business processes with defined deadlines. The organization is
having difficulties acquiring young skilled employees capable of handling new technologies with
the defined salary scales. The time consumption for training and preparation of new employees for
the final tasks, requiring higher levels of concentration and efficiency, has been recognized to be
more crucial than other sectors. This issue results in the increased workload of the available
employees leading to inefficiency and inaccurate outputs which causes a direct impact on the profit
of the organization.

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Data acquired during exit interviews reveal that the following reasons as the key factors that
motivated the employees to leave the organisation.

 Unsatisfactory wage scales

 Unfavourable working culture/environment
 Overloaded responsibilities and work stress
 Lack of appreciation and recognition towards employees
 Weak employee-supervisor relationship
 Lack of opportunities for career enhancement and growth
 Undefined job description or clash between expected career role and the reality
 Lack of proper training prior to the introduction of complex tasks
 Long term health risks due to unfavourable factory conditions.

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3. Theoretical approach in analysing the situation

Below theories were applied in an attempt of understanding and analysing the existing issues.

3.1. Maslow’s Hierarchy of needs

This theory was identified as relevant since it is suitable to analyse the organizational orientation
and employee motivations.

According to Maslow's theory of human motivation, five needs are driving human behaviour ( see
figure 4). These five needs are arranged hierarchically so that basic needs lie at the bottom of a
progressive ladder and become more complex towards the top. (Berl, Williamson, & Powell, 1984).

The theory states that one will reach the next level in the hierarchy only if the need below is
satisfied. The need that lies down the hierarchy in each scenario is more powerful until it is satisfied
(Lester, 2013).

Figure 4 - Hierarchy of needs pyramid (Anon, n.d.)

The lowest order of the hierarchy ( physiological and safety) can be explained in relation to
organizational culture. This explains employee expectations on financial security and a safe
working environment. The third hierarchy ( Love and belongingness) reflects on human resources
management. Employees constantly crave recognition and appreciation for their hard work.
Clearly defining one's duties and awarding them for their efficiency accuracy is crucial in a healthy
work culture. The next level (self-esteem) explains why employees are motivated by the
availability of a clear career enhancement process where they will be entrusted with more
responsibilities. Proper recognition with promotions motivates employees to give their maximum
output.

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When all the mentioned needs are fulfilled, employees are encouraged to attain their best self.
Their creativity in executing a challenging job role will lead them to higher achievements in their
career. It is clear that proper coordination between the organizational culture and HR management
will results in attaining self-esteem and self-actualisation of employees (Upadhyaya, 2014).
Maslow’s theory supports the idea that employee job satisfaction is inversely proportionate to the
turnover rate.

3.2. Herzberg’s motivation-hygiene theory

Herzberg identified two factors (hygiene factors and motivators) that influence employee
behaviour and attitudes. This theory revolves around the idea that job satisfaction is fulfilled, only
if there are motivations present in the work environment (Triandis and Herzberg, 1967).

As per the gathered data, it was clear that employees got dissatisfied with the poor hygiene factors
such as low financial benefits, financial insecurity, lack of appreciation and recognition and poor
employer-employee relationship. All these factors resulted in creating an unfavourable work
condition which led to job dissatisfaction.

On the other hand, employees who were satisfied with the organizational culture and work
environment decided to exit the organization due to the lack of motivators, in search for more
challenging job roles and career growth. Employees got attracted by other career opportunities
with better exposure and a defined career enhancement path.

As the theory states, fulfilled hygiene factors would not necessarily create job satisfaction where
employees seek motivations to further their skills.

Figure 5 - Herzberg’s motivation-hygiene theory

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3.3. Theory of planned behaviour (TPB)

This theory states that three predictors are responsible for one's intention to engage in a specific
behaviour (Ajzen, 2002). TPB can be used to analyse an employee's intention to engage in a job
role.

Attitude :

Employee's evaluation on the outcome of his career will assess the financial benefits, personal and
career growth, experience and career enhancement opportunities. Employees will get demotivated
to engage in a job role with no such favourable outcome.

The subjective norm :

Employment without reasonable financial benefits will create issues in one's personal life. One can
get influenced by peers or people of interest to look for better opportunities. Unmatched job roles
with skills will also encourage employees to reach out to other career opportunities backed by the
motivation given by peers to look for what they deserve.

Perceived behavioural control:

An employee's assessment of the difficulty in a given task will be determined by the work
environment and culture. An organization's commitment to employee job satisfaction has a direct
impact on this. Poor work facilities, unhealthy relationships with supervisors, presence of work
stressors and poor HR practices failing in analysing employee's attitudes towards work will
encourage employees to quit.

3.4. Self-determination theory

This theory suggests that people thrive for growth and self-fulfilment. Employees who are satisfied
with their career by having challenging tasks, windows for growth and career enhancement get
motivated to remain in the organization. Intrinsic motivations such as assigned responsibilities,
leadership opportunities, recognition of achievements will drive them to give their best output.
(Carver, 2010) .

Having a sense of control and hold in one's job role will enhance the self-confidence of the
employee. Adequate training and guidance will motivate the employees to engage in the given
tasks with more confidence. Appreciation and recognition for their commitment will give
employees a sense of belongingness in the organization. Employees get encouraged to leave a
working environment that lacks the above experiences (Moynihan and Pandey, 2007).

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4.Practical solutions and approaches to overcome the challenges

Mitigation of high turnover should be a long term and continuous effort by the organization. HR
management has a significant role in this process. Gathering information from employees on their
annual appraisals will help to improve or change the company policies, procedures that cause
unfavourable work conditions.

Acknowledgement and implementation of current industry-accepted wage scales will prevent

employees from getting attracted to new career opportunities with competitors. The organization
should assist the employees in mitigating the stress caused by poor economy by providing facilities
such as financial benefits ( bonus), allowances ( travel, accommodation, fuel), welfare solutions to
maintain the equilibrium between career and personal life.

The work environment needs to be improved by providing necessary facilities such as air
conditioning, adequate workspace, proper infrastructure, equipment and professional tools ( IT
facilities, software) to carry out the tasks successfully. Extra precautions to be taken to ensure
employee safety in factory and workshop environments. Employees with job roles who are
susceptible to long term health risks should be given proper precautionary measures and
compensated accordingly for the additional risk.

Identification of work stressors influencing employee attitudes also helps in the retention of skills.
Division of labour and assigning help when required will help in avoiding excessive workload on
individuals. Employees should be given recreational opportunities ( get-together events, annual
trips, sports events) to interact with colleagues and to decompress. Professional training
programmes to improve one's output, appreciation and recognition for the hard work will further
motivate employees to excel at their assigned tasks. These measures will help in improving
employee performance and attitude towards work.

Awarding the exceptional achievements ( incentive plans and promotions) and providing them
with a career enhancement path would motivate employees to give their best output. The managers
and supervisors should be trained to handle situations of sensitivity where understanding of
employee psychology is critical. The HR department should involve in evaluating unpleasant
experiences caused by bad supervisory/management decisions. Management should be accurate in
making recruitment decisions to avoid disappointment due to unmatched skills with the assigned
tasks. Repetitive work routes should be avoided by entrusting employees with varied
responsibilities.

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5.Conclusion

Elevated turnover rate is an indication of the instability of organizational human resource

management procedures. Factors such as improper company policies on recruitment, stressful
work culture/ environment, unhealthy managerial practices, prioritized quantitative and
materialistic analysis when evaluating employee job satisfaction and lack of motivations lead to
increased turnover rates.

Employee turnover has a major impact on the organizational output. Investment in recruitment,
induction, training and maintenance of employees will not return if the workforce is altering at a
higher rate. A streamlined human resources managerial procedure should be in place to identify
the factors associated with employee dissatisfaction. A well-defined communication process
should be established to understand the causes of employee disappointments. Satisfying employees’
basic requirements, motivating them to give their best output and making them feel as an important
part of the organization will help in retaining the skilled task force within the organization.

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