The growth of organization is dependent on the smooth functioning of the skilled workforce of the same as per the objectives. Maximization of staff turnover rates in organizations affects the overall performance of the same due to lack of retention of knowledgeable and skilled employees in the processes. As per the case, Amazon’s HR policies have affected the rate of retention of the employees in the business model. The report aims at understanding the different issues that are faced by the organization relating to the high staff turnover rates that is encountered by the same (Ng and Feldman 2013). The report will also investigate the manner in which the increased rate of staff turnover affects the business performance and thereby analyze the situation of the business in the international markets. The significance of undertaking the research is to understand the manner in which staff turnover affects the business performance.
Amazon is an American e- commerce and cloud computing enterprise, which is based in Seattle, Washington. Jeff Bezos founded the organization on the year 1994 and since then the development of the business is primarily based on the modifications in the systems. The revenue of the organization is around US$177.86 billion and the net income was around US$3.033 billion, which was compounded by the end of the fiscal year 2017 (Kantor and Streitfeld 2015). However, the operating income is portrayed to be degraded to US$4.106 billion due to different issues that are faced by the organization in the workforce.
The unfavorable HR policies and the negative workplace culture that are enforced by Amazon on the employees have resulted to the high rates of turnover that is encountered by the business. Chiang and Hsieh (2012) stated that the different radical changes that are planned by Jeff Bezos has helped the business in undertaking its growth in a short span. Tony Galbato, Amazon vice president for human resources stated in a report that the employees in the organization can survive only through “compromise and not debate”, which has resulted to the higher rates of dissatisfaction among the employees (Kantor and Streitfeld 2015). Discontent among the employees has resulted to the enhanced rates of staff turnover, which has affected the organizational operations through loss of skilled workforce. Most of the employees holds the opinion that the lack of empathetic nature of the employers has affected the turnover ratios in the workforce (Mai et al. 2016).
The induction of negative workplace culture in the organization has affected the mentality and behavior of the people while working on the different objectives of the business. Sageer, Rafat and Agarwal (2012) stated that the organization introduced the system of internal phone directory, which allows the employees to share secret feedbacks to the bosses for sabotaging colleagues. The system induced a negative workforce culture relating to competition for survival in the workforce. The organization has gained from the different practices that are induced by the same. However, the interests of the employees are compromised through the induction of such unethical discourses. Alfes et al. (2013) stated in a report that the organization holds a staff turnover ratio of 13.2%, which is far above the other competitors in the market.
The CEO of the organization believes that the higher staff turnover ratio has helped the organization in avoiding situations of knowledge saturation in the firm. he also stated that the high staff turnover ratio has helped the organization in inviting new talents for operating as per the objectives of the business (Kantor and Streitfeld 2015). However, Hancocket al. (2013) stated that the operations of the management violated the CSR operations of the same, which was imposed by the federal governments, through proposition of negative workplace culture.
Park and Shaw (2013) stated that the high rate of staff turnover ratio has affected the goodwill of the organization and the productivity of the same. On the other hand, Jensen, Patel and Messersmith (2013) argued that the higher rate of staff turnover in the organization has affected the knowledge management practices of the business. The lack of suitable workplace culture has affected the behavior and attitude of the employees towards the organizational objective. The management of the organization induced competition in the workplace, which has affected the ethical considerations of the same while operating in diverse working conditions.
On the other hand, Anitha (2014) stated that the lack of integration among the workforce has affected the collaborative functioning of the employees towards the common goal of the venture. The profitability of business enterprises are dependent on the smooth functioning of the workforce as per the objectives of the business. Fine (2012) stated that Jeff Bezos undertook the most radical changes through induction of conflicts in the workforce. It has helped the organization in achieving its objective of short term profitability. However, for the long term aspirations discontent of the employees has resulted to maximization of the rates of staff turnover.
The maximization of staff turnover in the organization has also increased the costs that are incurred by the business for undertaking recruitments. Kehoe and Wright (2013) stated in a study that the higher rate of staff turnover costs the organization with around 16 % of annual salary for low-paying jobs. The enhanced costs that are undertaken by the organization through the maximization of the staff turnover have affected the revenue streams of Amazon. The key changes in the organizational performance are based on the smooth functioning of the workforce while operating on diverse business environments. The maximization of the staff turnover rates in Amazon has affected the goodwill of the business.
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· Utilization of strategies relating to cost leadership, differentiation, and focus · Brand name of the organization · Enhanced supply chain and logistics of the business · Worldwide networking |
· Enhanced cost of operations due to provisions of free shipping and the like which has reduced the profit margins · Enhanced costs of labor force have affected the proper functioning of the business |
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· Increasing the diversity of products under its brand · Expanding to the different economies where they could not reach up yet |
· High rate of staff turnover which has affected the smooth functioning of the diverse processes as per the objectives of the same · High competition in the e-Commerce business markets |
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· The political stability of the developing countries acts as an opportunity for the growth of the business while operating in diverse economies. · The governmental support for the growth of e- commerce industry has acted both ways, like an opportunity and threat, for the organization. The governmental support has helped in the proactive growth of the business. However, the advancement of the e- commerce businesses in the developing countries like China acts as a constraint for the growth of the business in the respective economies. |
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· The Economic stability of most of the developed nations has helped in the growth of the business in the respective regions. Moreover, the increase in the disposable income in the developing countries acted as an opportunity for the organizational growth in the respective areas. · However, the economic recessions in some of the countries (like China) have affected the sales volume of the organization. |
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· Disparity in wealth has affected the growth of the organization in diverse regions due to the lack of affordability of the people · The increasing online buying habits of the consumers has helped in the growth of the organization while operating in diverse developing economies |
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· Rapid technological obsolescence and advancements has helped the organization in undertaking continuous innovation for maintaining the sustainability of the same while operating in diverse international markets. The adaptation of the organization to the different available technologies has helped the same in enhancing the operations of the same as per the needs of the customers. · Increasing cyber crime acts as a threat to the growth of the organization as private data of the consumers might be breached while operating in diverse economies, which will be affecting the goodwill of the same (Jensen, Patel and Messersmith 2013). |
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· The rising interest of environmental friendly operations has helped in the growth of the organization while operating in the diverse international markets. |
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· The rising product regulations has helped the organization in gaining huge market bases while operating in different markets, as the regulations are the resultant of the societal demands (Kantor and Streitfeld 2015) · Easing import and export regulations has helped the organization in undertaking trade more viably in different economic conditions. The tax and custom reliefs has helped the organization to undertake a cost reduction strategy |
Conclusion
Therefore, from the above research it can be stated that the higher rate of staff turnover affects the organizational performance drastically. The case of Amazon exemplifies the different impacts that are created by the enhanced staff turnover rates. The discontent of the staffs through the management’s functions has affected the goodwill and the productivity of the business. The report also enumerates a situation analysis of the organization in order to understand the current position of the business in the competitive markets.
References
Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C., 2013. The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model. The international journal of human resource management, 24(2), pp.330-351.
Anitha, J., 2014. Determinants of employee engagement and their impact on employee performance. International journal of productivity and performance management, 63(3), p.308.
Chiang, C.F. and Hsieh, T.S., 2012. The impacts of perceived organizational support and psychological empowerment on job performance: The mediating effects of organizational citizenship behavior. International journal of hospitality management, 31(1), pp.180-190.
Fine, S., 2012. Estimating the economic impact of personnel selection tools on counterproductive work behaviors. Economics and Business Letters, 1(4), pp.1-9.
Hancock, J.I., Allen, D.G., Bosco, F.A., McDaniel, K.R. and Pierce, C.A., 2013. Meta-analytic review of employee turnover as a predictor of firm performance. Journal of Management, 39(3), pp.573-603.
Jensen, J.M., Patel, P.C. and Messersmith, J.G., 2013. High-performance work systems and job control: Consequences for anxiety, role overload, and turnover intentions. Journal of Management, 39(6), pp.1699-1724.
Kantor, J. and Streitfeld, D., 2015. Inside Amazon: Wrestling big ideas in a bruising workplace. New York Times, 15, pp.74-80.
Kehoe, R.R. and Wright, P.M., 2013. The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of management, 39(2), pp.366-391.
Mai, K.M., Ellis, A.P., Christian, J.S. and Porter, C.O., 2016. Examining the effects of turnover intentions on organizational citizenship behaviors and deviance behaviors: A psychological contract approach. Journal of Applied Psychology, 101(8), p.1067.
Ng, T.W. and Feldman, D.C., 2013. Changes in perceived supervisor embeddedness: Effects on employees’ embeddedness, organizational trust, and voice behavior. Personnel Psychology, 66(3), pp.645-685.
Park, T.Y. and Shaw, J.D., 2013. Turnover rates and organizational performance: A meta-analysis. Journal of Applied Psychology, 98(2), p.268.
Sageer, A., Rafat, S. and Agarwal, P., 2012. Identification of variables affecting employee satisfaction and their impact on the organization. IOSR Journal of business and management, 5(1), pp.32-39.
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