Critically evaluate possible reasons for Labour Turnover together with the adavantgaes and disadvantages of Labour Turnover. Provide recommendations to retain key talent within an organization with the application of relevant motivation theories.
Main purpose of this essay is to develop understanding about concept of labour turnover in human resource management and its impact on organization growth. For this purpose, it critically evaluates the advantages and disadvantages of labour turnover. This essay has a large scope for readers, students and future corporate professionals. The essay is effective to improve theoretical understanding of students and readers about practical aspects of business. For example, labour turnover is the main topic of essay, which is a practical human resource problem faced by organizations.
This essay critically evaluates the reasons of labour turnover problem in an organization. The understanding of reasons behind labour turnover will help students in their future career path. Students would be able to use their theoretical understanding about reasons of labour turnover situation in company. Along with this, the essay focuses on providing different recommendations for resolving the selected problem. For this purpose, different theories of motivation have been selected in essay for review. This review and analysis would help to know importance of motivation in satisfaction of employees with their job and organization. It would also facilitate theoretical knowledge among students about how the motivation of employees can be enhanced.
Critically evaluate reasons for labour turnover.
Job dissatisfaction is a major cause of labor turnover problem in companies. Job dissatisfaction is the unfavorable emotional reaction of the labor towards their particular job. It is stated that if an employee gets low actual outputs as compared to their expected desires then, they leave the job due to the unsatisfied job. Moreover, lack of pay packages, incentives, recognition and fringe benefits, lack of career opportunities and ineffective working conditions affect the job satisfaction of the employees (Khan and Aleem, 2014). As a result, employees leave the job from the organization.
It is very difficult for organizations to identify exact expectations of employees. Along with this, it is also difficult to meet every expectation and desire of man-power. Organizations also focus on fulfilling monetary needs of its employees. But, if they fail to recognize and fulfill non-monetary needs of their staff, they are likely to face labor turnover problems.
Lack of organizational commitment is another reason of labor turnover, because the organization does not involve their employees in the organizational activities and decision making. Moreover, it does not recognize their employees within the organization. Further, the organization provides negative feedback to their employees. In such cases, employees leave their job due to getting the unfavorable comment, lack of involvement and participation within the organization (Mowday, et al., 2013). Additionally, rude behavior, back-biting, assigning blame and retaliation have an adverse impact on labor turnover.
But at the same time, if organization fails to give appropriate feedback to employees according to their performance, it may face reduction in staff productivity. For this reason, the negative feedback is also very important. But the way of communication of performance issues can be improved by organizations for addressing labor turnover issues.
Inappropriate employee recruitment is also a major cause of labor turnover. For example, sometimes, organization hire those employees who are not eligible for this job hence, they unable to adjust to the culture and also unable to meet the goals of the organization (Powell, 2012). As a result, they will leave the job due to lack of understanding about the organization. It is mandatory for organizations to strictly follow the recruitment process and to ignore referral based selection of staff. Such types of recruitments also lead to hiring of wrong candidate.
Lack of training is another reason for labor turnover. It is explained that if a manager does not provide proper training to its employees then, they will unable to perform work efficiently. They get disinterested due to lack of knowledge about work (Khan and Aleem, 2014). In such case, they leave the job from the organization. Such types of problems are not only responsible for employee turnover, but it can also lead to accidental incidents at workplace.
Another reason for labor turnover is organizational instability. Some organizations constantly focus on reorganizing, changing directions and re-shuffling of employees. In this case, staff gets disconnected from the main purpose of organization. Further, they don’t understand that what is going on and what is the main concern of the organization (AlBattat and Som, 2013). As a result, it will lead to confusion and increase inefficiency among the labor. Due to instability of organization, the expertise of employees in doing certain job also gets weakened. This makes the employees to think to change company.
The poor working condition also leads to labor turnover. It is stated that unsafe and hazardous working conditions negatively affect to employee performance and motivation. It discourages the employees towards their work within the organization (McQuerrey, 2012). Consequently, they will leave the job from this organization. On the other hand, if organization provides safe and healthy working conditions, it will enhance health and productivity of employees.
The inappropriate relationship between the managers and employees is also a cause of labor turnover. It can be said that lack of coordination among the managers and employees declines the creativity and performance of employees (Powell, 2012). In addition to this, lack of coordination and support leads to limiting of ability and skills of staff. Hence, it creates dissatisfaction among the workers and they leave from the job.
Apart from these, lack of growth opportunity in organization is also a major cause behind employee’s tendency to leave their job. It is because, employees look for a job and organization, where there is security of their job and appropriate growth opportunity. In absence of this factor, employees start to look for bigger organization, where they can grow with time. In this context, companies should facilitate proper hierarchy of job position and pay hike system associated with performance of employees and time factor (McQuerrey, 2012). This can contribute to reduction in labor turnover problems. But, for small organizations, this can be a challenging factor, as there is limited scope for creation of high profile positions. In such organizations, it can become difficult to retain skilled and experienced employees.
Identify the advantages and the disadvantages of labour turnover
One of the basic advantages of labor turnover is reduction in manpower costs. If an employee stays with the organization for a longer period of time, then the organizations has to pay that employee more than the other employees performing the same task but are new to organization (Davidson et al., 2010). This leads to excessive manpower cost to organization, which hampers the profitability of organization. Moreover, Labour turnover sometimes brings new ideas to organization, as it open gates for new talent possessing fresh and innovative ideas, which helps the organization to grow. Employee attrition provides space for risk taking calibre in the organization (Snell and Bohlander, 2010).
On contrary to this, due to employee turnover, the performance of organization decreases. If an employee leaves the organization suddenly, then the organization faces various difficulties like very less or no time to train new employee, who is going to take over the job. This hampers the productivity of organization as all team members got affected. In addition to this, Labour turnover also affects customer relationship with the organization (Wu, 2012). Usually customer connects themselves with the employees and if those employees leave the organization, then it creates a doubt in the mind of customers about product quality.
The other advantage of labor turnover is that it gives birth to higher performance of organization, because employees who are working from years used to start working at slow pace and this leads to slow growth and poor performance in the organization. On the other hand, new employees come with fresh talent. They work with greater enthusiasm and at a faster pace, which leads to satisfied client to organization and reduction in cost (Kucherov and Zavyalova, 2012). In addition to this, employees who are working from a long time generally started working against the organization from inside. When these employees leave organization, they do not cause any loss to organization.
Other disadvantage of labor turnover is that it leads to increase in cost because of hiring of new employee. High attrition rate will lead to negative brand image of the organization. Labour turnover negatively impact employee development programs of organization (Gerhart and Fang 2014). These plans involve a huge cost and time. When an employee leaves the organization, the investment done by organization in his development got wasted. Sudden attrition also leads to interruption in daily task management.
Conclusions and recommendations
The satisfaction of employee’s needs and expectations is one of the ways to overcome labour turnover problem. As per Maslow theory of motivation, there are five types of needs that are necessary for every organization to fulfil such as physiological needs, Safety needs, love/ belongingness need, Self Esteem and the self-actualisation need (Fleetwood and Hesketh, 2010). The employees feel motivated to do work, when these needs are fulfilled. Successful fulfilment of needs will help in reduction of labour turnover issues (Stredwick, 2013). Managers of an organization can design compensation and benefit programs according to need hierarchy provided by this theory.
To reduce the labour turnover, an organisation should make efforts for motivating the employees for good performance. It’s the first step in an organization to motivate the employees and it should take concern of the individual needs of employees. Employees should be rewarded for their good performance at their job (Briscoe, Schuler and Tarique, 2012). The salary expectation should be fulfilled by organization. Safe working environment should be there for the employees. If an organisation fulfils the employee’s desires like salary structure, employee family benefits like trip for family etc, it will be effective to meet satisfaction of staff. Similar to this, timely promotion of the employee is also important enhance employee satisfaction and to overcome labour turnover issues in business (Kramar and Syed, 2012). At the same time, if management fails to meet these needs, it will face negative results in the form of lack of creativity at work, low morale, low job satisfaction and labour turnover issues.
Mac Gregor theory ‘X’ and ‘Y’ is helpful to understand the nature of employees. Theory X provides that employees are lazy for the work and are irresponsible for the work. They are less ambitious. They are forced to do the work. They do not work willingly. They avoid the responsibilities. On the other hand, Theory ‘Y’ believes that employees are not lazy to do the work. They enjoy doing the work (Machado and Davim, 2013). They accept the responsibility with an interest. They target their work. They are very creative and give innovative ideas for the beneficial of an organisation. They take their own decisions. Employees are self-motivated.
Organization faces both the aspects of employees, provided by Theory X and Theory Y. The employees that come under Theory Y are already satisfied with their job and role. To improve theory X types of employees, motivation is necessary. Motivation is necessary to reduce the labour turnover from the organisations. As theory ‘X’ types of employees should be motivated for their work this helps the employees to perform well in the organisations. This helps in doing the work with interest (Mathis et al., 2016). Getting rewards for their performance in the work will motivate them. If, they do not work properly they should be punished and with this fear of punishment, they can do the work properly.
Herzberg’s two-factor theory of motivation is also very important to find out ways to overcome labour turnover problem. As per this theory, it is necessary for organizations to effectively implement both hygiene factors and motivational factors. Company’s failure to design hygiene factors in right manner can lead to dissatisfaction among employees. This invites the problem of labour turnover (Malik and Naeem, 2013). Example of hygiene involves pay, company policies and procedures, fringe benefits, working environment, status in organization, interpersonal relations, and job security.
On the other hand, there are certain factors, the absence of which does not result into employee dissatisfaction. But involvement of these factors can stimulate motivation and performance of employees on job. Examples of these factors involve recognition, sense of achievement, growth and promotional opportunities, responsibility, and meaningfulness of work. But, most of times an employee that is satisfied with his job leaves the organization due to absence of motivational factors (Lee et al., 2014). It is true that investment in motivational factors can enhance business cost of organization, but it would offer long term benefits in business.
References
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Alamdar Hussain, Khan. and Muhammad, Aleem. “Impact of job satisfaction on employee turnover: An empirical study of Autonomous Medical Institutions of Pakistan,” Journal of International Studies, 7(1), 2014, pp. 122-132.
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McQuerrey, L. (2012) What Are the Causes of High Labor Turnover Rate? [Online]. Available at: https://yourbusiness.azcentral.com/causes-high-labor-turnover-rate-4287.html (Accessed: 3 august 2016).
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