Employees are considered as an asset of a company which makes things happen with the resources available. According to Ongori (2007) , employee turnover is the number of employee movements that occurred in and out of the organization. Melissa S Cardona (2004) , Described employ turnover as the discontinuation of organization membership by the person who gets monetary compensation from the organization. Another interesting definition for employee turnover was given by the research study conducted by, (Tham, 2008) where they described it as the rotation of workers around the market of labor, between organizations, within different jobs and careers. However, the most important factor is that employee turnover directly influences on employee productivity. Therefore, it leads to economic losses and it greatly reduces job efficiency. Employee turnover is costly and reduces organizational effectiveness and therefore managers have to spend more energy to recruit a new talent to replace the employees leaving the organization (Barak, 2001 ) Organizations spend millions to train and develop their human resources to perform in high standards and latest technology to help the company to achieve its ultimate goals. Therefore it is important to make plans to retain the employees in your organization with proper retention strategies.
If the trained employees leave the company it not only will be a cost to the company but also the knowledge and the expertise gained through experience will be taken along with them. According to Khatri (2001) , the total cost of replacing an employee is about 50% to 150% of the annual salary of that position. For managerial staff, this turnover cost can be much higher than this. Khatri (2001) Further mentioned that employee turnover cost is comprised of direct cost and indirect cost. Direct cost is the amount each time the employer has to bear when recruiting a new employee. Organizations have to bear the cost of attracting, selecting and inducting new employees. Indirect cost is the loss that occurred in the production due to the leaving organization. It can be a cost for incomplete work, disrupted work or loss of quality.
The employee turnover rate can be varied from one company to another company. Highest turnover rates can be normally seen in private sector organizations compared to public sector organizations (M Fugate, 2004). Sometimes employee turnover rates can be varied from region to region as well (Gemma Robertson-Smith, 2004) . The regions where the unemployment rates are low can see high labor turnover because employees have a lot of alternative employment opportunities (Poza, 2000) Employee turnover can play an important role in long-term achievements of the organization. When the employee turnover is low it will in return positive yields to the organization. It drives the performance for the targets of the organization (Khan, 2013) Employee turnover doesn’t bring negative effects always. Sometimes employee turnover gives benefits to the organization. This happens when the poor employees leave the organization and more skillful employees enter the organization. When the turnover rate is too low, the most important fresh blood and new ideas will be lacking and the company can slowly become an aging machine. Likewise, turnover can be positive at times where the organization is able to increase productivity through better matching of employees and jobs. It also enables to adapt to the changes in the market without going for costly layoffs. So, it is better to maintain a moderate level of turnover because it keeps the organization more dynamic one compared to others (Shamuzzoha)
Randall S. Schuler, (2005) Identified that there are two main types of employee turnover. They are voluntary turnover and involuntary turnover. He defined voluntary turnover as a separation that occurs when an employee decides for personal reasons to end the relationship with the employer. If the employee gets a better job opportunity, changing career, or unhappy with the present job because of poor working conditions, low pay or benefits, and a bad relationship with a supervisor they tend to leave the Organization. (Khatri, 2001) Conceded that voluntary turnover occurs when an employee initiates the termination of the employment of their own free will. It means when the employee leaves the organization based on his or her own decision. For example, if an employee decides to leave the current organization and join another organization to get a better salary can be considered as a voluntary type turnover. Arthur (2001) Presented a list of reasons for voluntary turnover which includes lack of training, feeling of not valued by the company, poor supervision, inadequate salaries, and lack of career advancement opportunities, poor relationships in the organization, not having flexible work schedules, no compatibility with corporate values and too much work. On the other hand, involuntary turnover refers to employee termination due to poor performance, violating working policies, absenteeism, and retirements. It can be mostly occurred due to the management’s decision. For example, a dismissal of an employee by the management for the misconduct of the employee can be considered as an involuntary type of turnover.
Mitchell (2017) Defined that involuntary turnover occurs when management decides to terminate its relationship with an employee due to economic necessity or a poor fit. This type of turnover cannot be controlled by both the company and the employee. It is further stressed by the authors that involuntary turnover results in very serious and painful decisions that can have a profound impact on the entire organization, especially the employee who loses his or her job. Grobler (2002) Described employee turnover types differently compared to what other scholars mentioned so far. They divided into two types as functional turnover and dysfunctional turnover. Functional turnover is the resignation of insufficient employees who have been an obstacle for the organization to move on. Dysfunctional turnover can be defined as the exit of very sufficient and effective employees from the organization (Johnson, 2000). Out of these two turnover types, dysfunctional turnover is the most concerned turnover type for the management because it negatively affects the organization's overall performance. Functional turnover is a good thing for the organization since it brings new employees with new ideas and skills to improve the performance of the organization. On the other hand, dysfunctional turnover creates an unstable workforce, increases the cost of human resources and brings ineffectiveness to the organization.
It is suggested that various factors are the causes of employee turnover. Some factors are biographic and some are demographic. According to Eric GLambert, (2001) demographic factors such as educational level, age and tenure can affect employee turnover. They further mentioned that biographic factors such as financial rewards, working environment, recognition, and promotion can make effects on employee turnover as well. Employee turnover can be occurred due to institutional factors such as pay, supervision, physical working conditions; personal characteristics of employees such as age, sex, intelligence, interests and service length; reaction of employees to the job such as job satisfaction, job expectations, and job involvement (Abeysekara, 2007) Employee turnover can be caused due to several other factors as well. In order to minimize employee turnover employees must be given the necessary tools to perform their duties. This includes the proper equipment, machinery, and computer technology as well as adequate lighting, workspace and ergonomically-correct seating. Poor working conditions can lead to job dissatisfaction which can end up by employees leaving the organization.
According to Salazar, (2000) employee turnover can be considered with three key factors. They are pulled, pushed and outside factors. He mentioned that employees are pulled to resign from the current job since there other attractive alternative options or pushed due to job dissatisfaction with the current organization or resign due to outside factors that are not related to work or organization. As mentioned pull factors are the number of reasons to leave the current employer and join a new employer. In this category, employees are satisfied with a job which gives them a better payment, career advancement opportunities and the ability to improve living standards. Push factors occur due to dissatisfaction with the employer (TH Lee, 2008) This dissatisfaction can be occurred due to poor development opportunities, poor supervision, and low involvement of employees, boredom and personality conflicts. Significantly the poor relationship with the manager has been one of the major reasons to dissatisfy most of the employees (FJ Milliken, 2003) . Outside factors are not directly related to work or organization. In most of the cases, employees leave the organization because of spouse or family is relocated. Long-term ambition to travel, families and illness are other outside factors that cause employee turnover. This type of turnover is hard to reduce and unavoidable. But it can be reduced to a certain extent with the provision of breaks in career, flexible working schedules, and childcare facilities.
Human nature is very complex and required to be managed well by understanding their personal and as well as work environment issues (Abeysekara, 2007) . Most of the studies reflect that work-life balance has been becoming one major factor that employees consider to decide whether to stay in the organization or leave the organization. Work-life balance increases employee’s chance of retaining with the current organization (Arthur, 2001) Suggested that work-life balance is linked positively with the retention of employees. In other words, when the work-life balance is high the employee turnover is reduced. Arthur, (2001) Further mentioned that work-life balance is a significant factor of job satisfaction and therefore it leads to employees to decide the stay with the organization. However, it emphasized that job satisfaction can be increased and therefore employee turnover can be reduced by implementing suitable work-life balance policies by reducing conflict between work and family. If not when employees feel that they don’t have proper work-life balance, employees tend to leave the organization. Therefore, it is important to make sure as an organization to provide work-life balance for employees.
Another important factor influencing employee turnover is job satisfaction. Employee satisfaction is always an influential factor for employee turnover (Khan, 2013) , the ability to achieve organizational objectives depends on the job satisfaction level of workers. When the employees meet their job expectations their job satisfaction is increased (Lai Wan, 2007) Job dissatisfaction is occurred when these expectations are not met. When the employees are dissatisfied, it will lead to avoiding works physically, mentally and emotionally. According to Rahman, (2008) job satisfaction has a negative effect on employee turnover. It simply suggests that when job satisfaction is low, employee turnover becomes high. It is inversely proportional. Decrease in one’s strength; increase the strength of the other.
Another important factor that influences employee turnover is working conditions. Murthy, (2003) Mentioned that employees seek an environment where they can be proud of what they are doing in the organization and recognition given to them as they are valuable employees for the organization. Employees’ recognition to be considered as a very important component of the organization. Therefore it is important to provide this working environment for employees in order to improve as an organization as well as to reduce employee turnover. If the employees are given the most suitable and favorable working conditions, employees will remain in the organization. Managers can give new challenges, more responsibility, appraisals for the good work done by the employees and rotation of jobs for employees as satisfactory working conditions for employees.
A major issue in many organizations for employee turnover is the salary and benefits that are provided for the employees. It can be identified as the monetary benefit factor (Murthy, 2003) . It is one of the major factors of employee turnover (Khan, 2013) If the employee feels that the salary and the benefits he/she receives for the services given to the organization is insufficient, he/she tends to look for more favorable opportunities which would help the employees to have a better quality of life. Therefore it is necessary to design pay and benefits packages that would be par with the industrial rates to retain employees in your organization (Arthur, 2001) . Grobler, (2002) Mentioned that the pay level of the organization directly influences employee’s voluntary turnover. Since this is the knowledge era, employees are always keen to quit the current job and seek employment opportunities with higher salaries. Therefore, organizations are aware that low wage rates and other monetary benefits will create high employee turnover in the organization.
According to Lai Wan, (2007) pay structure should be a reasonable one. It should be equal and competitive compared other industry player offerings. The company policies regarding pay should be clear for every employee. Employees definitely care about their earnings because it is their primary source of income and which makes the financially sustainable and secured. It shows their status within the organization and society at large. Therefore, all these reasons make monetary benefits significant for retaining employees in the organization.
Conclusion
After studying all the literature above, it can be seen that there are key four factors that have been identified to have making effects on employee turnover. Therefore the researcher has decided to conduct the research based on these four factors.
· Job Satisfaction
· Working Conditions
· Work-Life Balance
· Monitory Benefits
If these four factors are not met properly, the employees will leave the organization including machine operator employees. Therefore, this study is focused on analyzing these four factors and how these factors affecting employee turnover of machine operators.
List of References
Bibliography
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Arthur, D. (2001). The Employee Recruitment and Retention Handbook.
Barak, M. E. (2001 ). Antecedents to retention and turnover among child welfare, social work, and other human service employees: What can we learn from past research? ( Social Service Review, 625. ed.). A Review and Meta-Analysis:.
Eric GLambert, N. H. (2001). The impact of job satisfaction on turnover intent: a test of a structural measurement model using a national sample of workers. The Social Science Journal, 38(2), 233-250.
FJ Milliken, E. M. (2003). An exploratory study of employee silence. Journal of Management, 40.
Gemma Robertson-Smith, C. M. (2004). Employee Engagement A review of current thinking. UK: Institute for Employment Studies.
Grobler, P. W. (2002). Human Resource Management in South Africa. Thomas Learning.
Johnson, J. T. (2000). Factors discriminating functional and dysfunctional salesforce turnover. Journal of Business & Industrial Marketing, 15(Issue: 6).
Khan, S. A. (2013). The factors affecting employee turnover in an organization (The case of overseas Pakistanis foundation. African Journal of Business Management. ed.).
Khatri, N. &. (2001). Explaining employee turnover in an Asian context. Human Resource Management Journal,, 54-74.
Lai Wan, H. (2007). Human Capital Development Policies: Enhancing Employee Satisfaction. Journal of European Industrial Training,, 644-656.
M Fugate, A. K. (2004 ). Employability A psycho-social construct. Journal of Vocational Behavior.
Melissa S Cardona, C. E. (2004). Managing human resources in small organizations: What do we know. Human Resource Management Review.
Mitchell, T. R. (2017). Why People Stay: Using Job Embeddedness to Predict Voluntary Turnover. Academy of Management Journal.
Muchinsky, P. M. (1990). Psychology Applied to Work: An Introduction to Industrial and Employees (Journal of Vocational Behavior ed.).
Murthy, D. B. (2003). Managing Human Resource: A Practical guide and mobilizing manpower. Ram Printogrphy.
Ongori, H. (2007). A review of the literature on employee turnover. Academic Journals,.
Poza, A. ( 2000). a cross-national analysis of the levels and determinants of job satisfaction. The journal of socio-economics.
Rahman, A. (2008). Measuring turnover intention: A study of IT professionals in Pakistan. International Review of Business Research Papers,, 45-55.
Randall S. Schuler, S. E. (2005). How to Measure Human Resources Management. management review.
Salazar, J. &. (2000). The relationship between empowerment and overall job satisfaction. The Journal of Applied Hospitality Management,, 112-129.
Shamuzzoha, A. H. (n.d.). Employee Turnover. A Study of its causes and effects on different industries in Bangladesh.
TH Lee, B. G. (2008). Understanding voluntary turnover, Path-specific job satisfaction effects and the importance of unsolicited job offers. Academy of Management, 51.
Tham, G. Z. (2008). Turnover in information systems development projects. Pacific Asia Conference on Information Systems.
Faruk (2011) also mentioned that there is an unconstructive relationship/ impact between employee turnover and job satisfaction. The fundamental cause of employee turnover happens to be unhappiness experienced by the employee in the business environment (Zeeshan et al., 2016).
ReplyDeleteAgreed, Herzberg’s (1959, 1974) motivation-hygiene theory implied that if factors related to job satisfaction go up, turnover intention should go down. According to this model, if the factors of job dissatisfaction go up, turnover intention should go up as well (Lumadi,2014)
DeleteThough there are many causes for employee
ReplyDeleteturnover in an organization, all of those do not have negative impact on the wellbeing of an organization. Organizations should differentiate between voluntary and
involuntary turnover and take actions on the one under their control (Loquercio et
al., 2006).
In general, all resignations not formally initiated by
Deleteemployers are voluntary resignations (Loquercio et al., 2006). Voluntary turnovers are further distinguished into functional and dysfunctional turnovers.Functional turnovers are the resignation of substandard performers and dysfunctional turnovers refer to the exit of effective performers.
The turnover of key employees can have a disproportionate impact on the business. The people that organizations wish to retain are often the ones most likely to leave( Amstrong,2014). Therefore, action is required to retain talented people, however, there are limits to what organization can do.
ReplyDeleteAccording to Nasurdin et al. (2008), how an organization manages its human resources establishes the tone and conditions of the employee-employer relationship. When such relationship is seen as that of a social exchange (Blau, 1964) where the norm of reciprocity is central, employees would be more inclined to engage in positive work attitudes and behaviors.
DeleteDear Vianlo,One of the major losses of revenues which organizations face though they do not agree with is the costs on employee turnover (Kelly,2001)
ReplyDeleteTrue, Employee turnover has been defined by Price (1977) as the movement of members across the boundary of an organisation. As Mobley (1982) defined that turnover is the voluntary cessation of membership in an organisation by an individual who receives monetary compensation for participating in that organisation.
DeleteHi Vianlo, according to Azharudeen and Andrew (2018), the apparel industry in Sri Lanka has the highest turnover among the other major industries. How do you, being in the apparel industry, observe this? Is it because of the high physical and emotional exhaustion as Azharudeen and Andrew (2018) say or the opportunities (such as monitory advancements) they get by job hopping?
ReplyDeleteSalvagioni DAJ, Melanda FN, Mesas AE, González AD, Gabani FL, Andrade SMd (2017) Physical, psychological and occupational consequences of job burnout: A systematic review of prospective studies shows that cardiovascular diseases, musculoskeletal pain, depressive symptoms, psychotropic and antidepressant treatment, job dissatisfaction and absenteeism are consistent effects of burnout and that will eventually leads to an employee turn over.
DeleteAs you mentioned that Employee turnover can be different from a company to another, Ray Baumruk (2006) defines that companies with higher engagement levels move to get lack of productivity, higher level in total shareholders, excellent finance performance and the employee turnover rate is poor throughout the company.
ReplyDeleteAdditionally, Luthans et al. (2002) examined the role of managers with regard to employees’ levels of engagement and determined that levels of manager self-efficacy partially mediated the relationship.
DeleteFurther adding to your conclusion, Lack of job recognition in the workplaces is another factor affecting employee productivity and huge turnover. Gallup Organization conducted an extensive study (whereby 80,000 managers gave their responses) on the factors contributing to the quality of workplace. This study has found that recognition is a critical source of employee satisfaction and retention (Buckingham & Coffman, 1999). In fact, recognition and praise ranked fourth
ReplyDeleteamong 12 dimensions used in this survey.
The last two decades have witnessed the phase of transition from ‘satisfied’ employees to ‘committed’ employees (Avery et al, 2007; Buckingham and Coffman, 1999) who are not predisposed to attrition, rather immersed in the goal and success of their organization and often serve as the force behind organizational success.
DeleteIn addition to the contents in the blog, if I may suggest that there are factors external to the organization also affect the employee turnover. Torrington ,Hall and Taylor (2006) indicate employee turnover levels in UK tends to decrease in recessions and increase during economic booms further they add it vary depending on the industry and the region.
ReplyDeleteAgreed on what you have mentioned, Turnover is referred as an individual’s estimated probability that they will stay or not stay in an employing organization (Cotton & Tuttle, 1986). A number of terms 16 have been used for employee turnover, such as quits, attrition, exits, mobility, migration or succession (Morrell et. al, 2004).
DeleteHi Vianlo,
ReplyDeleteI agree with the facts you have raised and when considering the dynamics of employee outflow, higher initial employment growths are directly proportional to the higher levels of turnover and higher outflow of key employees (Gjerløv-Juel, 2018). Experienced employees might be at a higher risk of leaving because of declining motivation and commitments as well as conflicts arising that were not present in the early years when the company was growing (Garnsey & Heffernan, 2005). Tenured employees might also leave to found their own firm (Acs & Mueller, 2008), are headhunted away, given their greater outside options (Dahl, 2011), or may be attracted by a vibrant and entrepreneurial environment in another start-up, once structures in the growing start-up may become more bureaucratic or hierarchical (Wennberg et al., 2016). If more key employees leave, it would imply a greater human capital loss from employee outflow and put high-growth start-ups in a particular vulnerable situation (Hausknecht & Holwerda, 2013; Nyberg & Ployhart, 2013).
Yes of cause, Griffith et al. (2000) conducted a review research on employee turnover and described the most-cited variables that affect turnover. The model developed
Deleteby them incorporates the factors that explain the turnover process. It includes 18 variables related to both job content and external environment factors that explain turnover. It is generally believed that the process of employees’ turnover is the reversed transformation process of employees’ retention psychology and behaviors.
According to the Finney & Robbins (2013)Turnover can also advantage a company to have lower employee labor costs. In a large number of professions, incomes tend to increase over time, but there is no equivalent growth in productivity. Employees get annual raises, their salaries continue to grow each year, but Employees input is essentially unchanged. It’s not uncommon, for instance, for an employee with 10 years of service to be earning 40 to 100 % more than his or her colleague with 2 years of service—the difference in pay due exclusively to length of tenure in the organization. Additionally, given that employee benefits tend to be a percentage of direct labor costs, these too go up as employee superiority increases. As a case in point, a new employee may get only 2 weeks annual vacation while a senior counterpart gets 5 weeks.
ReplyDeleteTrue, In the shareholders point of view, Maher (2002) argues that it is typical for shareholders view(s) regarding financial performance to result in differing statements in an annual general meeting. Which in turn generates conflict among there different interests and
Deletegoals. If some shareholders feel that their money is being mismanaged, it can result to them withdrawing their shares, leading to costs such as litigation, withdrawal of majority shares which will eventually affect organization performance.(Ibid 2013).
When it comes to the advantage factor, Turnover can be beneficial for the organizations. It can allow the organization to hire new employees with more current training who are not locked into existing ways of doing things (Mello, 2011).Other positive consequences are higher quality, less expensive replacements (Heneman and Judge, 2009), displacement of poor performer, innovation, flexibility, adaptability (Achoui and Mansour, 2007), offer opportunities to promote talented, high performer (Mello, 2011).
DeleteLabor turnover can be demarcated as the intentional and unintentional permanent removal from an organization (Robbins & Judge, 2007). It is very difficult to measure actual turnover behavior, but concludes that purpose to turnover is a good and reliable forecaster of actual turnover behavior. Intention to leave is the immediate pioneer of actual withdrawal behavior Lingard (2003)
ReplyDeleteIt can also be concluded from the available literature that there are significant correlations between turnover intention and demographic variables such as age, qualification designation and it was found that age ,designation and experience are negatively significantly correlated with turnover intentions(Gurpreet Randhawa,2007).
DeleteResearchers have identified various factors that influence the employee turnover in different sectors. Kumar (2011) studied on sample of 138 employees from two textile companies of Ethiopia and his analysis provided a strong relation between age and turnover. Odiro (2017) Pawar and Chakravarthy (2014) suggested demographic of employees a major factor in analyzing employees' turnover.
ReplyDeleteAdding more on to what you have mentioned, While conducting research on textile industry of Pakistan, Bodla and Hameed (2008) took satisfaction with pay, working conditions and supervision as controllable factors, whereas Farooqui and Ahmed (2013) analyzed age and tenure as demographical factors and identified rewards and benefits, working environment, supervisor behavior, job security, better employment opportunities as important causes of employee turnover.
DeleteThe turnover of key employees can have a disproportionate impact on the business. The people that organizations wish to retain are often the ones most likely to leave( Amstrong,2014). Therefore, action is required to retain talented people, according to Stairs and Galpin (2010) high levels of engagement have been shown to relate to:
ReplyDelete●● lower absenteeism and higher employee
retention;
●● increased employee effort and productivity;
●● improved quality and reduced error rates;
●● increased sales;
●● higher profitability, earnings per share and
shareholder returns;
●● enhanced customer satisfaction and loyalty;
●● faster business growth; and
●● higher likelihood of business success.
Of cause, Companies may also focus on employees with high potential who might have the ability to take on a higher(executive) function in the future (Dries and Pepermans 2008; Pepermans et al. 2003).The increasing global competition for the ‘best’employees brought about by the shortfall in new workforce entrants in many advanced industrial economies makes essential companies’ability to ensure that their employees will keep on working for them in order to maintain their competitive advantage.
DeleteHi,Positive and negative outcomes of employee turnover has been discussed by Achoui and Mansour (2007).The cost, both tangible like recruitment, selection, training and production lost and intangible cost like moral impact, workload impact and tam performance disruption are the negative outcomes . Further separation and replacement are the negative cost of employee turnover both on financial and non-financial. The cost of people’s time, cost of materials and equipment, cash outlays, and productivity losses is being considered as financial cost. Although the other costs are difficult to value but may have an indirect negative impacts on organizational effectiveness such as lost of customer, business and damaged morale (Heneman and Judge, 2009).
ReplyDeleteWhen it comes to the cost factor, The economic costs of turnover can be staggering. It was noted that one technology company calculated turnover costs to average $200000 per employee. Merck and company, the pharmaceutical giant, has estimated that its turnover costs are between 150 % and 250 % of the employee’s annual salary (Mello, 2011).
DeleteHi,
ReplyDeleteAgree with you as an employee’s main source of income is the salary and the employees are to be informed of their salary and any change to same should be informed by written confirmation. Accordingly the relevant grading on employees should be indicated in the employee contract, there by providing transparent communication between employer and employee which will lead to retention of the employees in the organization (A T G Educational, 2008)
According to Adams (1965), managers must consider that employees will make situational comparisons between themselves and their coworkers. If an employee finds an inequity during this comparison it can impact their motivation significantly. Equity theory states that a person should be concerned about the way rewards are distributed in a group (Lane et al., 1971).
DeleteEmployee turnover is a key element in any organization. It’s directly affects the performance. Hence it is essential to identify the needs and wants of the employees & most of the employees leave an org due to several reasons.
ReplyDeleteIn a psychological perspective – Maslow's Hierarchy of Needs is a great way to illustrate the importance of both physical and mental wellbeing but specially in a work place.
Yes, Maslow introduced the concept of positive psychology in the early 1950s within the field of humanistic psychology (Maslow, 1959). Proponents of positive psychology state that its aim is to understand and then promote those factors that allow individuals, communities, and societies to flourish, and that it is a descriptive rather than prescriptive endeavor (Keyes et al.,2000).
DeleteAccording to Meenakshi., Subrahmanyam. & Ravichandran. (2013), work life balance is “about creating and maintaining supportive and healthy work environments, which will enable employees to have balance between work and personal responsibilities and thus strengthen employee loyalty and productivity”.This is a major concern in an employment. If this is not met turnover will be normal for most of the employees.
ReplyDeleteHi Taniya, Agreed to what you have mentioned, In addition to that there are two factors that are not good for work-life balance are work overload and technological advancement. With regard to workload, studies have repeatedly emphasized that excessive work overload or work overload is detrimental to work-life balance (Vogel, 2012).
DeleteHi Vino,
ReplyDeleteLLOYD (2017) confronted that compensation are important though, the key for staff retention is to train them well.
Hi Dishan, Majority of the respondents felt that remuneration practices affect staff motivation hence retention in organizations. This is consistent with the findings of (Bergiel et al. 2009) who noted that research findings suggest that there is a significant and positive relationship between compensation and job embededness.
DeleteIt can be added as Employees who have desire to enhance their job capacity, are capable of achieving Job Satisfaction (Witt & Nye, 1992). The job satisfaction should be reviewed from the output from the individual. Brown and McIntosh (1998) identified the relationship between wage and job satisfaction which is having a close relationship since it offers monitory compensation, both within the sector and among other sectors as well.
ReplyDeleteIn addition to that, Rahman and Nas (2013) assert that obtaining a balance between work and life has a great role in employee‘s decision to remain with the organization. Armstrong (2010), identified job autonomy as the degree to which the job provides substantial freedom, independence, and discretion to the individual‘ in work content, the method for accomplishing the work, and the pace at which work is accomplished.
DeleteWould also like to add that the key factor of all the organizations are Employee Satisfaction. The Employee factor has a major impact on the economy, eg the growth of the economy and the considered living standards. Therefore for an organization to be profitable they need to satisfy the employees. Marcson (1960) forwarded the idea that for an organization to be profitable, they need to provide the employee a job which is more demanding and challenging. The theory of Herzberg’s (1968) explains the job satisfaction very well. This would be consider to retain the employees.
ReplyDeleteThe spillover approach to QWL according to Sirgy et al. (2001) posits that satisfaction in one area of life may influence satisfaction in another. Shin and Johnson (1978) define life satisfaction as a global assessment of a person’s quality of life according to his chosen criteria. Judgments about satisfaction are determined upon a comparison of one’s circumstances with what is thought to be an appropriate standard.
DeleteAlso, it should be noted that an environment of weak security of tenure can weaken the development of "firm-specific" human capital. Such general climate of insecurity will result encouraging employees to focus only on developing their externally marketable rather than internally relevant skills for the organization (Harcourt and Wood, 2007). The organization I work for, conducts employee-engagement surveys to identify if any impressions or development of such tendencies are being formed among employees, and mitigates with them accordingly as and when needed.
ReplyDeleteAlthough the longer-term consequences of high turnover have been little studied, its immediately harmful effects and high costs have recently been confirmed (Davidson et al., 2010). More specifically, an environment of weak security of tenure mitigates against the development of firm specific human capital; a general climate of insecurity will result in employees focusing on developing their externally marketable rather than internally relevant skills and knowledge (Harcourt and Wood, 2007)
DeleteAccording to Mitchell et al (2001), employee turnover imposes extensive cost both the individual and the organisation level. At individual level, it does not matter if the person leaves voluntarily to another job or is forced to leave and take a personal toll. For organisation level, the problem arises when leaving employees take their valuable knowledge and expertise gained through experience with them.
ReplyDeleteThere is no universally accepted account for why people choose to leave organisations (Lee and Mitchell 1994)
DeleteLeeetal’s(1999)‘unfolding model’of voluntary turnover
represents a divergence from traditional thinking (Hom and Griffeth 1995), By focusing more on the decisional aspect of the phenomenon, and indeed it is based on a theory of decision making (Beach 1990), One means of diagnosing the amount of influence organisations have over turnover, is to look at the extent to which decisions to leave are described as‘avoidable’ by leavers (Campion 1991; Morrell et al 2001).
Hi Vianlo, In organisations where there was a high level of inefficiency there was also a high level of staff turnover (Alexander et al., 1994). Therefore, in situations where organisations are not stable employees tend to quit and look for stable organisations because with stable organisations they would be able to predict their career advancement.
ReplyDeleteHi Nishad, There are also other factors which make employees to quit from organisations and these are poor hiring practices, managerial style, lack of recognition, lack of competitive compensation system in the organisation and toxic workplace environment Abassi et al. (2000).
DeleteIf the organizations develop proper career development path for their employees the potential employees will retain with in the organization with better opportunities (Das and Baruahm, 2013)
ReplyDeleteAgreed on your status, Research shows that there exists considerable variability in the way HR interventions are experienced by their intended beneficiaries (Whitener, 2001;Wright et al., 2001). When employees experience lesser support from their supervisors, they do not put maximum effort into work (Dysvik et al., 2014). Due to this fact, supervisors have been rarely reported to delay the effective implementation of HR policies (Purcell et al., 2009).
DeleteAccording to Ongori, H ( 2007), excessive employee turnover will heavily impact the bottom line. Replacement cost begins with advertising, screening and interviewing candidates, training new hires. If a professional and a management staff tenders resignation, replacement cost will increase further due to the loss of expertise.
ReplyDeleteHi Chandrika, When considering the cost factor, William et al (2006) break these costs down to include: Separation costs, which include cost of exit interview’s time, cost of terminating employee’s time, cost of administrative functions related to termination, separation pay and increase in unemployment tax. There also Vacancy costs, which include cost of additional overtime, cost of additional temporary help and wages and benefits saved due to vacancy.
DeleteThe business would have the capacity to get in a dynamic situation by. Regarding their employees as one of their assets which Human Resources Management, needs a lot of consideration. Employees are the backbone of any organization,( Arokiasamy 2013)
ReplyDeleteYes of cause, It embraces management aspects beyond the normal human resource management functions and roles to take on board all macro concerns and strategies for organisational excellence such as quality management, organisational commitment, managing culture, organisational change and development (Agarwala 2009)
DeleteIt is necessary to measure employee turnover and calculate its costs to divine future losses for planning purposes and to identify the reasons that people leave the organization. Plans can then be made to attack the problems causing unnecessary
ReplyDeleteturnover and to reduce costs. (Armstrong,2014)
Agreed, Employee turnover maybe costly for organizations as 80% or more of turnover costs are hidden expenses such as recruitment, training and relocation costs (Phillips, 1990). When an employee leaves, organizations incur hiring, orientation, and decreased productivity costs as well as temporary replacement cost (Kovner, Brewer, Greene, & Fairchild, 2009)
DeleteAgreed, Training and learning opportunities will also have a significant impact on the institution's employees. If institutions are not offered the chance to learn by the company, employees can not improve their skills. In other words, employees are most unlikely to get self realization so that they can not continue to grow in the company. As a result, employees may tend to give up the job (Liu et al, 2006).
ReplyDeleteOf cause it may happen, Asma Mehmood (2012) argue that training influence on organization commitment and retention towards the performance of employee.
Delete