Human Resources Manager in retaining its talents. T Company is a public utility firm which obtain 2,300 employees. The overall turnover rate In T Company is 5%; however, it is found that most of the leavers are from Customer Service Hotlist Department ("CASH") which Its own turnover rate is 30% and 20% In 2010 and in 2009 respectively. Among the total number of leave within the hotlist department (33 employees out of 110 employees) 80% of the leavers were Generation Y.
Since customer service is crucial for the success of T Company in terms of its profit and brand image, especially among the hotlist department which has a rack record in delivering trustworthy and outstanding services to the customers and distinguishing itself from its competitors, high turnover rate will definitely threatening the competitive edge of T Company. The Job responsibilities of a customer service officer is diverse and requiring lots of skills set, e. G. DOD communication and interpersonal skills, customer service skills, computer skills and product knowledge, thus it is reflected that the Job nature is generally stressful. Not only handling customer's enquiries on telephone, they have to handle complaints, help customer to register new user account and even selling reduces through phone call. More remarkably, they have to possess sufficient product knowledge and knowledge in handling of emergency cases e. G. Suspect of gas leakage, due to damage of the products. Heavy workload and stressful job nature may be one of the underlying cause of high turnover 2.
Purpose of the Study The mall purpose of the study Is to examine the reason for high turnover rate In Generation Y group In the hotlist department In T Company. And base on the research findings, to advise possible solutions for the human resources manager to retain its employees, so as to uphold the service pledge in T Company for improving TTS organizational performance. 3. Importance of Problem I remover study Is regard as gallants In Don camel Ana managerial perspective. High turnover rate was detrimental in several aspects to the company e. G. Economic, staff morale, loss of intellectual asset, etc.
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Economically, it will increase the training and recruitment cost, while inadequate manpower brought about failure in meeting service standard, potential loss of business opportunities, which as a result decrease gross profit of the company. Besides, turnover may also bring about intangible negative impact, like, staff morale, customer service corruption, burnout/absenteeism among remaining employees, and the loss of institutional knowledge among experienced employees. (Mathis 2006) However, turnover could be beneficial to a company, which we regard it as functional turnover.
For instance, when a weak performer is substituted by a more productive employee and when a senior retirement allows the promotion or acquisition of welcome 'fresh blood' who may bring about synergies and new insights to the company. Yet, for the case of T Company, as supported by the figure of declining service standard and inadequate manpower bought by turnover, it is significant to advise Seibel retention method to the manager to tackle the problem of dysfunction turnover. Meanwhile, it is academically important, since lots of scholars had been doing research in finding out underlying causes of turnover.
We may take this chance to understand and apply what we have read and learn from existing turnover model to real case. 4. Scope of the Review This research study enables the researchers to understand and analyze various reasons for turnover in the organization. This report provides enough scope to know about the characteristics of Generation Y people. It also facilitates to understand the activities and performances of the Generation Y employees in the organization. Various theories and models related to the turnover have been explained which will enhance the researcher's knowledge about the subject.
The research method has been properly designed to analyze the overall cause, outcome and steps of the organization to control it. This research study enables the researchers to gain knowledge about the research methods which may be beneficial in future research work. 5. Literature Review Researches done be scholars related to of turnover are reviewed in this part. For instance, the study of Generation Y turnover, Organizational Commitment and Job satisfaction which relate with employee turnover. I remover Introduction Turnover occurs due to the decisions of both company and the employer.
The reallocation of Job is due to devastation and creation of Jobs across industries. The creation and devastation of Job rates as a directory of labor market have been used by "Organization for Economic Corporation and Development". In a well-organized economy Job reallocation is highly important because it is related to the career of the individuals. An employee, who has been displaced after long term, suffers a lot from getting a Job or a permanent earning (Lane, 2000). Organization make different management decisions in setting an employment contract because there are different costs associated with hiring and firing employees.
Various costs are associated with hiring process. These costs generally differ depending on the type of employee and the nature of the production processes. Turnover rate has been raised widely with the economy as the turnover is high in service sector than manufacturing sector. The attachment level of the Job is pended on various types of employees. Thus, the 'quit level' also varies considerably. Turnover is also termed as the combined decision taken by the employee and the employer or the firm. Consequently, less educated employees who are engaged in Job have high turnover with comparatively less working experiences (Lane, 2000).
The extent of turnover is determined in two ways. First is the employee based survey and the second is the employer based survey. Employee based survey denotes the number of Jobs a employee have had within a definite time period. Employer based revere is the records of administration to examine the number of employees who has left or need to be hired. According to "Survey of Income and Program Participation" data, it has been estimated that average monthly turnover rate in 1991, in US was 7. 1%. Turnover rate varies depending on the age, sex, industry and skill.
Manufacturing organization faces lower turnover rate than the service industry. A new firm may also experience high turnover due to low wages to the employees (Aerospace, 1997). According to Burblers, until 2006 over 1. 2 million cashier Jobs was available, but out of only 1 Job was available and others were turnover. On the other hand, out of 6. 5 million Jobs opening as low skilled work, only 1 million were new Jobs (Lane, 2000). Turnover varies according to the level of industry. The rate of turnover is highest in retail and construction industry whereas lowest in manufacturing, administration, real estate along with finance.
In retail and professional services out of 5 Jobs, 1 Job is available and the rest is employee based turnover. For new and small organization turnover rate is high. On the other hand, rate is low for large and older employers. Thus, differences of employers results in significant proposition for the employment of low income employees. High turnover firms have numbers of Job openings than low turnover firms (Lane, 2000). I en rate AT turnover Is comparatively enlarger In young employees tan ten 010 ones. Adult men with education only from high school changes Job frequently at a level of 40% higher than the college educated one.
In 1997, Henry S. Barber stated that former mobility is a good forecaster of leaving the new Job. In 1996, one out of four employees with high school education lasted in a Job for less than a year after having Ewing compared with six numbers of college educated employees. The forecasted term period of Job is a vital determinant of decisions in training (Faber, 1997). Turnover Rate and Vacancy Rate of Hong Kong According to the First Quarter 2010 Survey of Manpower Statistics from Hong Kong Institute of Human Resource Management ("HOKIER), the turnover rate for the first quarter of 2010 was 2. 54%, 0. 5 percentage point higher than the fourth quarter of 2009 which was 2. 29%. Compared with the same period in 2009, it can be analyzed that the turnover rate is 0. 98 percentage point higher. Consequences of Turnover The highest turnover of Job in firm has no direct influence on the survival of the firm. When the turnover rate is high the employers are more likely feel the consequence of such a scenario. It can be examined that as the turnover rate of firm is high, there are less expectation to invest in training and human capital. There is less employees to transfer the specific knowledge of firm and offer fewer fringe benefits.
The change in Job leads to the suffering of the unskilled employees for a longer time. The less earning also makes them to suffer unemployment. The loss of work time embodied with lost skills result in unemployment. For skilled employees it leads to a reduction of skills pushing previously high-wage employees into the low-wage unskilled group. As the cause of the turnover is Job loss, employees have less chance of employment, advanced prospects of part-time work and lower earnings. These costs are higher for the least-educated employees. The earning which is lost from the dislocation is rather large and determined.
After the several years of dislocation the estimation ranges from 10 to 25 percent. The results on the growth of wage along with the wage levels are of vital significance. Another outcome of higher turnover probability is reduced training, which may bring in flatter earnings. Thus, it has been observed that new Jobs have less benefit such as fringe benefits and other health insurances (Lane, 2000). The rate of high turnover is found where there is less unemployment and also in the place where people can be secured from the alternative employment.
It has been found that the turnover rate is highest among service industry. The rates of turnover have lessened in the previous couple of years in demanding economic situation (CHIP, 2010). Theories and Concepts What is Motivation? Motivation is a reason for doing something and motivation is concerned with the factors that influence people to behave in certain ways (Armstrong 2007). Arnold et al (III cleat In Armstrong ) suggested tense components motivation . Nines are Direction - What a person is trying to do; Effort - how hard a person is trying; and Persistence - how long a person keeps on trying.
With vast amounts of research and theories on motivation, it is often difficult to define a universally accepted definition. However, what is widely established is that motivational theories are concerned with he way people behave in a certain way, with a basic underlying question of "why do people do what they do? " In general terms, motivation can be described as " the direction and persistence of action" (Mulling, 2005). Intrinsic Vs. Extrinsic Herbert suggested that there are two different sets of factors affecting motivation and work, which he identified as 'hygiene' and 'motivator' factors.
Hygiene factors included status, salary, environment, Job security and policy, and related to Job context. They are mainly concerned with Job environment and are extrinsic to the Job itself (Mullions 2005). These factors do not necessary give positive satisfaction but dissatisfaction would be predominant if they were absent. On the other hand, motivator factors - which are separate from hygiene factors - are related to the content of the work itself and these include being challenged, receiving recognition, gaining responsibility, achievements and many other intrinsic aspects of the Job role.
Mullions (2005) comments: " The strength of these factors will affect feelings of satisfaction or no satisfaction, but not dissatisfaction. " Herrings theory is more directed and applicable to the workplace and provides a better understanding of titivation factors when compared to Mascots Hierarchy of Needs Theory. However, Herrings theory has also been criticized for its application. Its critics claim that this model applies to people with largely unskilled Jobs or those with a less challenging and repetitive role, and lack of context.
Also, different situations will affect one's motivational and hygiene factors. Broom 1964 Expectancy Model Expectancy theory aims to explain and predict individual behaviors in motivation. The theory explains how individuals assess the probable outcomes of behaviors and place values on these outcomes. Broom's model is based on three key variables: valence (the attractiveness of, or preference for, a particular outcome), instrumentality (the perceived probability that behavior will lead to a reward) and expectancy (the perceived probability that effort will result in obtaining the reward) (Mullions, 2005).
It is also about expectations and the possible dangers of misconception and misjudgment in anticipation for a reward that does not get delivered for the performance and effort made, which can cause dissatisfaction. Mullions (2005) also suggests that this theory goes beyond feelings of satisfaction individual gains when the task is completed buy the feeling of anticipation in gaining satisfaction. Expectancy theory further assumes that behavior is rational, and that we are conscious of our motives.
This model offers to explain why people leave; if individuals feel that their effort is not awarded or reflected in some reward as they expected to receive then they will feel dissatisfied and denominated and therefore consider leaving. Subsequently, it is important for organizations to manage Analgesia's expectation Ana Tanat positive Demeanor Is acknowledge w ten n re It Is non- financial or financial. Managing expectations - Psychological Contract The psychological contract goes beyond any motivation theory and suggests a possible explanation of a more long term theory of why employee may choose to stay or leave an organization.
Professor David Guest defined the psychological contract as "the perceptions of the two parties - employee and employer - of what their mutual obligations are towards each other" (CHIP, 2008) Arnold et al (2005) further identify that the psychological contract is "an individual employee's beliefs about the right and obligations of both sides in the employment relationship. " These obligations mess as promises or expectations can be vague. However, Mullions (2005) offers possible expectations that employees may have of the organization.
These include providing a safe and hygienic working environment, Job security, respect, provisions of challenging and satisfying Jobs, training and development, and rewarding all employee fairly according to their contributions and performance. These expectations are somewhat similar to Herrings two factor theory. As the psychological contract is a reciprocal "agreement", employers will expect employees to work hard, sustain company reputation, show loyalty to the organization, be legible and be honest (CHIP 2008).
Mullions (2005) further proposes that employer will expect employees to adhere to the rules, policies and procedure of the organization and maintain amicable relationship with colleagues. When the psychological contract is positive, employee commitment and satisfaction will increase thus having a positive impact on individual performance (Armstrong 2007). Similar to motivation, the psychological contract may also reveal denominating factors. When the psychological contract is breached I. E. Here employees believe that the organization have broken promises or failed to deliver on their expectations, employees will show clear signs of dissatisfaction, thus have a negative effect on Job satisfaction and commitment. It is unlikely that all expectation of the employee or of the employer will be met fully by employer must at least attempt to fulfill some expectations, otherwise employees may seek an alternative psychological contract with another organization. Organizational Commitment Theory Organizational commitment is playing a vital role in the study of organizational behavior.
There is a great relationship between the organizational commitment along with behavior and attitude in the workplace of the organization. According to Bateman and Stresses, "organizational commitment is multidimensional in nature involving an employee's loyalty to the organization, willingness to exert effort on behalf of the organization, degree of goal and value congruency with the organization, and desire to maintain membership" (San Francisco State University, n. D. ). The empirical research study has shown that organizational commitment is an Important Interpreter AT turnover.
According to Dalton, lord Ana Crankiest In 1 there were two types of turnover, which are dysfunctional turnover and functional turnover. From the viewpoint of organization, dysfunctional turnover takes place when an employee willing to quit the Job and there is positive evaluation to organization. Functional turnover occurs when an employee leaves Job on their own discretion but there is negative organization's evaluation of the employee (Blab & Bola, 1987). Price-Mueller Model, the model of voluntary and involuntary turnover has been described.
Involuntary turnover generally takes place where the employee has no choice in their termination, such as long term sickness, death, or employer-initiated termination. Voluntary turnover occurs by the willingness of the employees. According to the opinion of Price, economic model also can explain the reason of turnover. The economists have proposed that the maximum sum of monetary income as a determinant has led to less turnover. Increase money may decrease turnover by increasing the Job satisfaction of the employees (Griffith & Homo, 2010). This model is illustrated along with a diagram provided below.
The four exogenous variables in this model are: primary group, pay, communication and centralization. Pay is considered as a monetary income of the employees. It cannot be an important determinant unless it is valuable to the employees. The second is the participation in a primary group. Communication means transfer of information within organization. Centralization is the distribution of power within an organization (Griffith & Horn, 2010). Pay is generally important for the employees and is highly prioritize. High centralization leads to high turnover.
The two variables of this model are Job satisfaction and opportunity. Both of these variables have a different impact on turnover. Job satisfaction has positive impact towards organization. Opportunity refers to number of Jobs in the organization (Griffith & Homo, 2010). The exogenous variable can affect the Job satisfaction and dissatisfaction of employee. When the number of Jobs are increase in the market, there is an positive impact of turnover. The factor of opportunity also possess an effect on turnover. When there is plenty of Job in the market, it has positive impact in turnover intention (Griffith & Homo, 2010).
High Turnover Rate of Generation Y People in workplace Generation Y is a group of individuals who have been born between the year 1982- 2000 (Cringle, n. D. ). Generation Y are different from other groups of people. Generation Y people are usually influenced by pragmatism and peers (Cringle, n. . ). This group of people desire for the relations beyond friendship and want understanding along with respectful community. This generation group also wants guidance in the form of a navigator (Cringle, n. D. ). This generation people work for living but they do not survive for work.
Their communication style is also different from other generations of people. Generation Y people are advanced technology and are access to all the sophisticated technology (Cringle, n. D. ). I en companies nave Take tremendous generalness In order to attract Ana retain Generation Y people. This group of people has a shorter time period in the organization which lasts from 2-5 years (Sandusky & Freer-Reed, 2009). As a result companies bear losses from the huge turnover of this generation. Generation Y are fast and they enjoy challenging and they desire to have innovative style in their Job. They need quick promotion.
Thus, if they get bored of the Job, they will quit the Job (Sandusky & Freer-Reed, 2009). They are not loyal to their employers, but they are loyal to their peers and managers (Sandusky & Freer-Reed, 2009). They may leave the over burden Job in order to maintain their personal and professional life. Generation Y people want freedom in the workplace. The latest technological equipments in the workplace can fulfill their desires. Apart from advanced technology, they are interested in the companies where can inspire them to grow and provide them with technological resources for self development (Sandusky & Freer-Reed, 2009).
Before they get hired by the company they want to know their Job responsibilities and career path. According to KEY Group research team in 2008, 1020 respondents of Gene Y have provided prior preference to the health benefits provided in the organization. This benefit is followed by salary, work-life balance and rumination prospects (Sandusky & Freer-Reed, 2009). They prefer performance appraisal frequently because they want to know their work feedback and want to make correction if required. This will help them to make improvement rapidly (Sandusky & Freer-Reed, 2009).
Generation Y people are friendly in nature and provide preference to maintain relationship within the organization. They build both social and professional relationship with peers (Robert Half International, 2008). 6. Qualitative Methodology: Reasons of Choosing Qualitative Research and Data Source Qualitative research methodology is a descriptive research process. This type of research method produces in depth interview and collects broad information regarding the subject. The information includes broad understanding of the whole situation. This kind of research method helps the investigator to collect the total picture of the research.
The detailed information related to the research are collected which enables the researchers to analyze the problem in detail related to the findings (Key, 1997). Qualitative research helps to build new theories and search for new research areas. This method enables the researchers to deal with valuable questions that are squired in the research process (Oklahoma State University, 2011). Qualitative research work also prefers open-ended questions than close-ended questions as it describes the details of the questions to be asked to the respondents.
The broad concept of information can be collected from the respondents. In this research work qualitative research process has catered importance as it will enable the researchers to recognize and examine the details of the problems and issues related to ten project work. I en qualitative research work provokes Drama concept and knowledge about the research topics. The sources selected for the research work are the former employees, current employees, supervisors and the Human Resources Manager of T Company. The demography details have also been collected but these are kept confidential.
Besides questionnaires and interviews, data is also be collected from the organizational chart of T Company which turnover figure and number of vacancy are highlighted. From this point, turnover of employees in the Hotlist Department can be analyzed. 7. Rationale Used For Selecting the Sources to Analyze For analyzing the overall causes and outcomes of high turnover rate among Generation Y employees in T Company, rationale has been selected by the company. The former employees have been chosen to analyze their reasons for leaving.
The contact details of former employees are provided by the Human Resources Department. The opinions of current Generation Y employees have been taken into consideration in order to understand their expectation and the turnover intention of the employees. The main reason for turnover in this period was due to uncompetitive benefits and lack of career development opportunities. Therefore, the company is failed to meet the requirement of their employees. Supervisors are selected to understand the reason of high turnover rate among the Generation Y employees in their point of views.
They are analyzed to examine the causes and outcomes of high turnover. Human Resource Manager has been interviewed to understand the retention strategies of T Company. 8. Data Collection Procedures Qualitative data collection procedure plays a significant role in providing information for understanding the process behind observed result. It also assesses changes in the perception of people. However, the data collection process used in the qualitative search method is time consuming and act as a constraint to the research paper (University of Wisconsin-AAU Claire, 2005).
In order to collect data for high turnover rate in T Company, four rationales had been chosen from the company. Five numbers of former employees had been chosen, thirty current employees, three supervisors and one Human Resources Manager were selected as respondents. Separate questionnaire consisting of five questions had been provided to current employees. In the questionnaire, demographic information consisting of age, gender, marital status; education level and tenure were collected from each of them through e-mail. Data collected from former employees by phone interview.
While for supervisors and Human Resources Manager, the data is collected by face-to-face interview. The questionnaires are nana over to can Dormer Ana present employee, supervisors Ana Human Resources Department through e-mail. The response of the employees, supervisors and Human Resources Manager are observed properly through which various information of the company. 9. Data Analysis Qualitative data analysis is a simple process. The analysis was commenced after collecting all the data from former employees, current employees, supervisors and
Human Resources Manager. Observation The information can be collected through observing members of the company and from the organizational chart in which the annual turnover rate has been mentioned. It has been observed that the company is facing a problem of high turnover rate of Generation Y employees from the last few years. Human Resources Department is implementing various strategies in order to retain employees. For example, training programs are conducted in order to upgrade their communication skills as well as providing growth opportunities to them.
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