Employee turnover is the percentage or the number of workers who voluntarily leave the organization they are working to search for a new job, and they are replaced with a new employee. The turnover of any company affects the overall performance of the company since it changes the ways of operation and how the organization responds to the demands of the customers. To understand the reason for the high turnover it is necessary that the management engages in measuring the employee turnover (Gholipour Soleimani & Einolahzadeh, 2017). The measurement helps the organization to estimate the cost required to hire new employees for budget purpose.
The reason for high job turnover is that the leader-member exchange is low especially in the intelligence product department. Therefore, our great focus will be on the software development department. The reason for giving a high concern on this is because it is the initiation area of all the operation in the organization. Without the production of the software, there is nothing to trade upon in the organization. The department deals with the most specialized employees in the organization who have advanced skills related to software development (Jian, 2015). Therefore, in the incident that the employees in the organization and in that particular department leave their job, it will cost the organization significantly.
The report covers the problem that is causing the high turnover in the company. It also addresses how the identified problem has a relation to job turnover. There is also identification of supporting theories that provide the basis for the problem and how it can be resolved. The report as well provides various recommendations on what should be done to help the company overcome the challenge of the high turnover. There are also limitations that are identified in the event of dealing with the recommendations provided.
The issue of great concern here is the leader-member exchange, and that is precisely what we are focusing on in this report. The leader-member exchange is an aspect in an organization where the leaders engage with the employees of the organization through meeting and face to the conversation. The leaders and their team members share ideas that are essential for organization growth. Therefore, the leader-member exchange is a two-way relationship that leaders have with their subordinates (Lowe, 2017). The interaction between people in the organization has a significant contribution to the success of the organization.
The reason for focusing on the leader-member exchange as a factor towards high job turnover in the company is that it has the strongest negative correlation with turnover intentions in the case study provided. It is also the factor that has the most significant standard deviation in the software development department in the case study. Therefore, such evidence indicates that the leader-member exchange has serious reasons why the company is experiencing high job turnover compared to the other factors (Hagger & Protogerou, 2018). There is a need to understand it better and try to solve the issues of the company from that point.
Another reason for focusing at this variable is that there is a high likelihood that the organization can solve all the turnover issues by first addressing this issue. The organization should put more concern to this factor since it will eliminate the doubt that the company is unable to solve its problems. However, the other variables that are known to contribute towards high turnover should also be considered and addressed as well to ensure that there is no loophole in the software development and that will lead to the overall success of the company (Martin, 2017). Therefore, it is necessary that every issue is considered to be of great importance since it has its effect on the success of the company.
The leader-member exchange theory is related to turnover. The approach contributes to the certain level of turnover in a company. The leader-member exchange plays a functional impact on staff turnover intentions. According to Gagné, Koestner, & Hope, (2014) in their study, they proved that for the employees who perceive lower quality leader-member exchange relationship with their leader has a higher intent of quitting their jobs than those who have a higher LMX. Various theories support the relationship between leader-member exchange and the rate of turnover (Gagné, Koestner, & Hope, 2014). The theories are social exchange theory, leader-follower congruence, and self-determination theory.
The social exchange theory is a concept that deals with social changes as a process of interactive changes between different people. The concept is used to explain the issue of communication in business, and that explains the commercial transactions. The theory presents the outcome of an individual within a social interaction. The result of the social exchange can be determined by the exchange of ideas and other resources during the communication that occurs within the social interactions (Erdogan & Bauer, 2013). The social exchange theory suggests that social behavior occurs as a result of an exchange process between two people. There is a cost that is incurred when two people interact, and as well there are attached benefits for the same interaction.
The exchange theory attempts to explain human behavior and that they must participate at the equal measure in the interaction and in the event of receiving and issuing ideas and opinions. The social exchange explains how the leaders must exchange their ideas with the team members and also receive feedback from them as well. When the social exchange theory is not utilized well in an organization, it leads to relationship breakup thus causing employees to move out of the area where their ideas are not valued (Chang, 2016). The social exchange theory shows that leader-member exchange has a relation with the rate of turnover.
According to Peng & Wang, (2016) they stated that the leader-follower congruence is the state that is attained when a leader and their followers come together and is a condition that the two have to agree. Therefore, the leader has to come into consensus with the team members on how they perform their activities. The leader-follower congruence has the relationship with turnover intentions. When the employees fail to enter into agreement with their leaders, there is a possibility that the employees will leave the job resulting in a high turnover (Peng & Wang, 2016). Therefore, the leader-follower congruence has some relation to the leader-member exchange.
By the application of leader-follower congruence, three results are likely to occur, and that proves that there is a relationship between leader-member exchange and turnover. It is evident that leader-member exchange rose as the issue of loneliness in the workplace fell while followers had lower leader-member exchange when they were lonelier than their leaders. The leader-member exchange in some way had some impact on the leader-follower congruence or incongruence effect in the organization loneliness on followers’ turnover intention.
The self-determination theory is a theory that integrates personality, the motivation of an individual and how they function. The self-determination theory shows that two main types of motivation occur as a result of the leader relationship with employees or on individual levels. The two motivational types are intrinsic and extrinsic. The extrinsic motivation is a drive to behave in certain ways, and that comes from external forces and is attached to external rewards (Sypniewska, 2014). The external sources can be grading systems, employee evaluation, respect and admiration of others.
Therefore, the self-determination theory supports the aspect of leader-member exchange by the use of the extrinsic motivation factor. The motivation from the external forces shows that the actions of their leaders can motivate the employees. The leaders need to interact with the employees and exchange ideas with them. When the leaders exchange ideas with their members, there is a likelihood that they are going to increase their productivity in the organization. Failure to motivate your team members will lead to the failure of the members being productive and will eventually lose focus with the job which ultimately leads to job turnover.
The leaders need to make use of all the theories that support leader-member exchange to ensure that they get the best out of their employees. It is the responsibility of the leaders to ensure that they integrate very well. The leaders of the company failed to heed to the feedback and suggestions they received from their employees. The employees lost focus with the organization since they noticed that they were not part and parcel of the organization (Zhang, Wang, & Shi, 2012). It is essential for the company to ensure that their leaders engage their employees in various forums that will make the employees feel like part of the organization.
The recommendations that will be offered in this report will be meant to change the current situation in company X and ensure that the high turnover rate is reduced to a level that will not affect the productivity level of the company. The company needs to utilize such recommendations since they are useful in changing the overall company performance (Sumiyati, Masharyono, Senen, & Rahmawati, 2017). It is the responsibility of the leaders to analyze the worthiness of the recommendations and is expected of them. There is a need to make effective use of such recommendations for the benefit of the organization.
The leaders need to create new strategies on how they can engage their employees through communication. Communication is a vital tool in the organization. From the case study, it is evident that the leaders of the company have failed dramatically in communicating with their employees and this has resulted in a high turnover (Mardanov, Heischmidt, & Henson, 2018). The correlations between variables show that the leader-member exchange has the highest negative value and that proves that the relationship between the employees and their leaders has deteriorated.
Therefore, there is a need to improve in this aspect, and they will make the turnover rate to reduce. There is a likelihood that the organization has devalued their employees and if they can identify their problem, they can get a solution (Hesselgreaves & Scholarios, 2014). The company management needs to train their leaders on how they can interact with their team members and how to buy ideas from them instead of ignoring them.
Another recommendation is that the leaders should engage in training and mentoring their team members. The training and the mentoring does not require to be formal, but they can participate in informal mentoring and training to motivate the workers and to make them feel like part of the organization. The mentoring is helpful in solving the issue within the leader-member exchange in that it helps the leaders to understand how the leaders will interact with their employees (Baker & Baker, 2017). The leaders need to equip the employees with the skills they require, and that motivates the employees to be engaged in their jobs.
Another recommendation to solve the problem in the organization is by the use of rewarding forums. The employees are motivated by the aspect of being rewarded for the achievements they make in the organization. There should be recognition of those show outstanding results in the organization, and this will make them achieve greatly and feel that their efforts are recognized. Those who fail will also be motivated by the rewards issued to other team members, and this will increase competition in the organization. The leaders can also engage in taking a cup of tea with their members (Gagné & Gagné, 2014). Such an aspect can be referred to as the time to drink more tea. Such a forum of taking a cup of tea by the leaders and his team members will increase their level of interaction, and they will be free to exchange ideas with the leader. The recommendations mentioned above are meant to build good relationships between the leader and the followers.
In the standard deviation scale, the LMX has a high standard deviation. Trying to change this scale will require a lot of effort from each part, and this poses a challenge in solving the problems. The issues at the group level need to be addressed first, and this will pave the way for solving the problems within the organization. Such efforts are regarded as the limitations to the organization solving its problems.
Conclusion
In conclusion, the report has tried to check on the issues affecting the organization. The report has outlined how the problem in the organization is related to the overall turnover of employees in the company. The report has also included some of the recommendations that are useful for the company if they follow. The company needs to utilize such recommendation on to solve the issue of high turnover in the organization.
References
Baker, J., & Baker, C. (2017). Leader–Member Exchange Theory: Barack Obama. doi:10.4135/9781526426680
Chang, Y. O. (2016). The Effects of Ethical Leadership and Resonant Leadership on Job Satisfaction and Turnover Intention of Youth Workers. Korean Journal of Youth Studies, 23(2), 175. doi:10.21509/kjys.2016.02.23.2.175
Erdogan, B., & Bauer, T. N. (2013). Leader-Member Exchange (LMX) Theory: The Relational Approach to Leadership. Oxford Handbooks Online. doi:10.1093/oxfordhb/9780199755615.013.020
Gagné, M., & Gagné, M. (2014). Self-Determination Theory in the Work Domain. The Oxford Handbook of Work Engagement, Motivation, and Self-Determination Theory. doi:10.1093/oxfordhb/9780199794911.013.026
Gagné, M., Koestner, R., & Hope, N. (2014). A Self-Determination Theory Approach Goals. The Oxford Handbook of Work Engagement, Motivation, and Self-Determination Theory. doi:10.1093/oxfordhb/9780199794911.013.025
Gholipour Soleimani, A., & Einolahzadeh, H. (2017). The mediating effect of leader–member exchange in relationship with emotional intelligence, job satisfaction, and turnover intention. Cogent Business & Management, 4(1). doi:10.1080/23311975.2017.1419795
Hagger, M. S., & Protogerou, C. (2018). Affect in the Context of Self-Determination Theory. Oxford Scholarship Online. doi:10.1093/oso/9780190499037.003.0007
Hesselgreaves, H., & Scholarios, D. (2014). Leader-member exchange and strain: a study of job demands and role status. Human Resource Management Journal, 24(4), 459-478. doi:10.1111/1748-8583.12042
Jian, G. (2015). Leader-Member Exchange Theory. The International Encyclopedia of Interpersonal Communication, 1-9. doi:10.1002/9781118540190.wbeic195
Lowe, K. B. (2017). Expanding Perspectives and Outcomes of Leader and Follower Role Congruence. Academy of Management Proceedings, 2017(1), 14961. doi:10.5465/ambpp.2017.14961symposium
Mardanov, I. T., Heischmidt, K., & Henson, A. (2018). Leader-Member Exchange and Job Satisfaction Bond and Predicted Employee Turnover. Journal of Leadership & Organizational Studies, 15(2), 159-175. doi:10.1177/1548051808320985
Martin, J. J. (2017). Self-Determination Theory. Oxford Scholarship Online. doi:10.1093/oso/9780190638054.003.0019
Peng, J., & Wang, X. (2016). I will perform effectively if you are with me: Leader-follower congruence in followership prototype, job engagement and job performance. Acta Psychologica Sinica, 48(9), 1151. doi:10.3724/sp.j.1041.2016.01151
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