Causes of Employee Turnover - Research Paper Example

EMPLOYEE TURNOVER In the current world of innovation, advancements and technology, the businesses are moving towards resilience and flexibility. They assess their business operations and environment for efficiency and enhancements of their core and advanced business functions. During all the process of organizational development, the Human Resource Management department plays a significant role in keeping the employees and workforce of the organization motivated and satisfied. In relation to the vitality of the business functions in the present age, the role of employee is crucial in the success of an organization. This paper will present the concept of employee turnover and the fundamental details and background of the subject. This concept will be linked to the performance, productivity and the efficiency of the organization. Employee Turnover The concept of employee turnover is the significantly used approach in the context of human resource management in a business organization. The simplest way to describe the term is that it pertains to the rate or extent at which the employer or an organization loses and gains its employees or the workforce. Turnover is basically measured for the individual firms as well as for the entire industry. The concept of employee turnover refers to the workers’ rotation within and around the labour market, and continues between occupations, firms and different jobs. It also exists between the condition of unemployment and employment within a state (Abbasi et al., 2000). The term ‘turnover’ was further defined by Price (1977) as the ratio of the number of members in an organization who have left the workplace during a certain period divided by the average number of people in that organization. Very often, turnover is regarded with the complete process linked to the filling of a vacancy. According to the studies, every time that an employee vacates a position, involuntarily or voluntarily, there arises a dire need for the hiring and training of a new employee, and the cycle goes on. Causes According to many research studies, it has been suggested that the concept of turnover in an organization arises from the employees being unhappy with the organization or dissatisfied from the job. However, this is not the only reason for the employees leaving the organizations voluntarily or involuntarily. There are various other factors for the occurrence of high employee turnover and they are described as follows: The Economy In the exit interviews conducted with the employees, one of the major reasons discovered for leaving the organizations include the availability of the higher paid jobs. In the United States, it has been examined that some of the workers working on minimum wage, left their jobs for another job which paid them only 50cents more per hour (Shamsuzzoha, n.d.). Thus, in the better economies, the vacancies in higher paying jobs would increase the employee turnover in many other less paying organizations. The characteristics of the job There are some jobs which are fundamentally more attractive and higher paid than other jobs in the same field. The attractiveness of a job is influenced by the challenges, repetitiveness, perceived significance, inherent dangers, and the growth opportunities. A bad match between the employee's skills and the job Every job requires a proper match and parallel characteristics between the employee and the job. However, those employees, who are normally hired for the tough jobs or do not match the qualifications and expertise required by the job, leave the organization in a short span of time. Therefore, the turnover rate in an organization also increases due to the lack of compatibility between the job specification and job description. Substandard equipment, tools or facilities An organization with substandard working conditions is likely to increase the employee turnover rate. This may include the workplace lacking essential facilities such as furniture, lighting, health and safety provisions and other aspects of a healthy workplace. Lack of opportunity for advancement or growth The employees should be informed before hiring if the job bears a dead-end position. The jobs which do not guarantee advancements and growth opportunities to the employees are more likely to raise the turnover rate. Feelings of not being appreciated According to the Maslow’s hierarchy of needs, the employees need to be appreciated in order to make them bear a sense of affiliation, belongingness, and achievement. Since, the motivated employees generally perform well, they need to be recognized and appreciated for their efforts. Therefore, those organizations which do not follow such practice bear more chances of employees quitting the job and leaving organization. Turnover and Organizational Productivity The concept of turnover is directly related with the productivity and efficiency of the organization. The increased employee turnover is likely to hinder the general productivity of the entire organization and may also become a reason for the occurrence of many other difficulties. The turnover hampers the productivity in an organization in the sense that it results into a replacement which is usually time consuming and costly. It might involve many formalities of hiring and training in order to fill a vacancy in the company (Rosemary, 2011). There is a strong relationship between the employee turnover and their performance in the organization. In case of the quitting or dismissal of an able employee, the organization has to counter a lower productivity in the short-terms. This may be due to the fact that the organization and productive resources have to wait until the new employee becomes trained and proficient in the field. Furthermore, the long-term productivity and organizational performance relies on the question whether the newly hired employee is more capable and skilled than the dismissed employee or not. This certainly cannot be predicted in the context where labor pool and the selection processes of organizations stay unchanged. Moreover, the generally higher turnover in an organization is more likely to raise the transaction costs by demanding higher ratios of management to workers. This might be one of the causes to undermine the organizational rules which establish the fundamentals of the organizational control. Besides this, the resources and the experienced workforce of the organization would need to be shifted away from the everyday routine in order to train and motivate the novice workers. On a wider perspective, the social fabric, social capital and the bond of mutual trust, which contribute to the organizational performance, might also be disrupted (Shaw et al., 2005). The higher turnover in an organization may also lower the resilience and flexibility of the internal rotation or deployment across various departments, skills or jobs. Methods to Control Employee Turnover Due to the rising organizational costs, and increasing inefficiencies in the organizational performance and productivity, various measures have been suggested by the researchers and experts to control the turnover. They are described as below: Realistic Job Previews RJPs or the Realistic Job Previews are one of the significant controllers of employee turnover. In such a context, sensible and extensive associations and links about the job to new or potential employees during orientation or induction can improve their terms in the employment. The successful RJPs have proven to be the significantly effective element for the employee survival and retention in the organization. They prevent the employees form expecting more from the jobs, and strengthen their assurance and commitment with the existing jobs. Job Enrichment One of the other factors in reducing the employee turnover is the role played by the job enrichment. It encourages and motivates employees at the workplace by giving them wide options and platforms for utilizing their skills and abilities. Frederick Hertzberg, an American psychologist, was the first person to develop this idea. Socialization Practices The concept of turnover is more rigorous amongst the newly hired fresh candidates in the organization. These individuals are those whose promises with the organization and confidence in job drop below the standards just at the initial stages of being inducted at the job. One of the major reasons for the untimely resignations of employees is due to the inadequate socialization practices and opportunities in the organizations. Compensation Practices The pay or compensation dissatisfaction is one of the primary reasons for high employee turnover in the organization. It has been noted, without any doubts, that the element of pay fosters the employee faithfulness which result due to the competitive salaries. Without any doubt, it can be noticed that the higher and more competitive pay structures in the organizations help reduce the employee turnover and make them stay for a longer time period at the workplace. Conclusion The employee turnover is one of the crucial factors in the business organizations these days. It refers to the employees leaving the organizations either voluntarily or involuntarily. There are many factors which account for the increasing turnover in the business organizations these days. They include the lower pay structures, better job opportunities in other companies, dissatisfaction form the current jobs and lack of socialization and growth opportunities. As a result of the increasing employee turnover, the firms have to counter various consequences in the shape of increasing costs of hiring, training and motivating the new employees along with the disruption in organization’s current performance and productivity. The organizations can undertake to control the turnover rate through RJPs, better compensation structures, and a good availability of opportunities and workplace satisfiers. References Abassi S.M., Hollman K.W., 2000, Turnover: the real bottom line, Public Personnel Management, 2 (3), Print Batt, R., 2002, Managing customer services: Human resource practices, quit rates, and sales growth, Academy of Management Journal, Volume 45. Rosemary Batt, 2011, An Employment Systems Approach to Turnover: Human Resources Practices, Quits, Dismissals, And Performance, Academy of Management Journal, Volume 54, No. 4. Shamsuzzoha AHM, n.d., Employee Turnover-a Study of its Causes and Effects to Different Industries in Bangladesh, Web, Retrieved on April 22, 2012 Shaw, J. D., Gupta, N., & Delery, J. E., 2005, Alternative conceptualizations of the relationship between voluntary turnover and organizational performance, Academy of Management Journal, Volume 48 Read More