Pay Satisfaction, Job Satisfaction and Turnover Intent - Term Paper Example

? HRD Major Project affiliation HRD Major Project Introduction Taylor (2002) d that, employee turnover is one of themajor challenges affecting an organization. Several researches have noted that employee turnover has increased in the business. Other studies have indicated an average turnover among non-management organizations employees in the United States at about fifty percent and about twenty-five percent for management workforce. Research carried out by Gautam (2005), the American Hotel and Motel Association provides approximations of standard employee turnover of sixty percent to three hundred percent. Senior management officers within an organization including human resource specialists, and engineering psychologists have obtained a lot of information on the impact of employee turnover, whereby several organizations invest a lot to maintain their employees. It is very important for the managers to ensure that they control the rates of employee turnover for the benefits of the organization (Taylor, 2002). This literature review is divided into five parts; factors leading to employee turnover, job satisfaction, effects of employee turnover, the ways to minimize employee turnover within an organization, and Maslow theory of motivation in relation to job satisfaction. Factors contributing to employee turnover According to Soltani and Liao (2010), turnover refers to the transfer of employees out of an organization. It is the replacement of staffs around the employment industry, between institutes, jobs and occupations (Soltani and Liao, 2010). Turnover can also be explained as the discontinuance of involvement in a group or institute. From these definitions, we can conclude that employee turnover is the transfers of workers, who obtained monetary reimbursement from the company, by alternating around the employment market, between institutions, jobs, and professions, usually current in terms of the income rate. Yin-Fah et al. (2010) reveled in their study that, managers who communicate frequently with workers reduce the chance of developing a labor force that feels devalued and unacknowledged. Retaining staff informed about administrative changes, recruitment plans and changing business difficulties is one method of ensuring workers stay in the company. Kalliath and Beck (2011) noted that, by abandoning or avoiding staff fears concerning job self-assurance through poor communication or ignoring workers from making discussions that affect their performance, like policy or bureaucratic changes, adversely influences the way workers view their boss. Their opinions change to discontent and finally leading to low productivity because of low self-esteem and disengagement. Therefore, employees have a strong need to be informed through proper communication because organizations that has well-developed techniques of communication enjoy low rates of employee turnover. Eucker (2007) stated that, the turnover can be calculated using the total amount of leavers in a specific period as a proportion of the total number of employees at that specific period. This calculation can be conducted quarterly or annually within the year. This turnover rate at times is known as the separation rate. Eucker (2007) continues to argue that the cost of replacing an employee can be estimated at the rate of fifty percent to one hundred and fifty percent annual salary of the workers. In the findings, Eucker (2007) also argue that the cost of turn over might include vacancy costs, separation costs, replacement costs, difference in performance costs, and the benefits costs. They further revealed in this study that, the turnover rate can be described as the rate of departure of something or individual and it must be reinstated for productivity high rates of these turnovers can affect the rates of productivity and lead to customer dissatisfaction (Eucker, 2007). According to this study, several factors can influence employee job turnover, and they include low job moral, stressful working conditions, poor job marching, poor pay, as well as poor benefits within an organization (Eucker, 2007; Singh & Loncar, 2010). They also identified institutions that have experienced severe job turnover these include, childcare organization, and food service organizations (Eucker, 2007). Therefore, some of the factors contributing to employee turnover are job related factors and organizational factors. Generally, the factors that lead to employee turnover include push and pull factors within the organization. Employees are usually pulled out of an organization by a number of factors motivating them outside the organization. Pull factors are those issues that pull the interests of an employee outside the organization (Eucker, 2007). This could be because of job dissatisfaction or influence of outside factors that are not part of the organizational factors. Here you find employees leaving a particular job to satisfy their own individual needs. Push factors emerge from the organization. They occur when the employee is not satisfied with the organization thus he or she is pushed out of the organization (Eucker, 2007). Employee job satisfaction and Employee turnover According to a study conducted by Trevor (2001), job satisfaction is an important factor within an organization. It is correlated to life satisfaction. Therefore, people who are satisfied with their lives tend to be satisfied with their jobs. Therefore, satisfied workers will feel contented with their jobs and stay within the company for a long time without shifting from organization to another. This study revealed that, productivity within an organization relates to workers’ ability to work hard and their ability to work with their own intelligence. This could be highly influenced by job pride, interests in what they are doing, and their recognition especially through promotions for had working staffs (Trevor, 2001). This study also revealed that satisfied employees also lead to high production within an organization because the influence customer satisfaction positively (Trevor, 2001). This satisfaction is also positively related to employee behavior, which in turn affects their turnover within the firm (Johnson, Griffith, and Griffin, 2002). Positive outcomes within an organization can be achieved through evaluating employee job satisfaction. This evaluation can be conducted from time to time to ensure that the needs of the workers are identified ensuring their satisfaction. This evaluation tends to reduce absenteeism and turnover within the organization (Branham, 2000). Shahzad, et al (2011) reported in their findings that, turnover and absenteeism are closely related to job satisfaction within an organization, which is a result of low esteem among the workers. The Mobley model they used, described how job satisfaction within an organization leads to employee turnover within an organization in this study (Shahzad, et al., 2011). Effects of employee turnover From the organization point of view, the effects of employee turnover are expensive to maintain. For instance, the voluntary resignations which require immediate replacement are usually expensive and very abrupt. Expenses include searching for external sources to replace the one who left the organization. Kalliath and Beck’s (2011) business research surveys conducted revealed that the major challenges organizations face is the issue of maintaining qualified workers. In areas like the United States, the rate of maintaining qualified staffs for almost all companies ranges between zero to twelve percent (Kalliath and Beck, 2011). Research has also indicated some of the ways that benefit organizations from employee turnover include factors like replacing poor performance workers with hardworking workers (Soltani and Liao, 2009). Promotions when a senior management individual retires helps in motivating the hardworking individual. Employee turnover also helps in reducing employee costs in companies where business amounts are unstable monthly (Soltani and Liao, 2009). It can be noted that the employee turnover cost at times are very expensive and affect the organization financially. These costs include recruitment and training costs. Other expenses may include overtime expenses and the costs of coworkers and this makes the management to take employee turnover seriously (Soltani and Liao, 2009). Several researchers claim that high rates of employee turnover within an organization can have undesirable effects on the effectiveness or productivity of organizations if they are not well managed. Soltani and Liao (2009) argue that employee turnover might also include some expenses like lost production, lost transactions, and administration’s time, approximate the turnover expenses of an employee per hour to be 3,000 dollars to 10,000 dollars each. This mainly proves that turnover influences the success of the company and if not well managed it would lead to undesirable effect on the employee turnover. Employee turnover is deeply rooted to the organization effectiveness as it may greatly affect the general productivity of an organization and is frequently an indication of other complications. Therefore, the organization managers should have plans immediately employee turnover takes place, like planning for training services for the newly recruited member, this because employee turnover immediately leads to high cost of production because of high cost of replacement and training (Soltani and Liao, 2009). Newly employed workers might experience ill-treatment, which in turn affects their productivity. Similarly, previous workers might fail to cooperate with the new workers, which might lead to low productivity within the organization. The new employed staffs are prone to accident and they increase the number accidents, which cause loss of productivity and rise in medical expenditures and charge of repairs. They also lead decrease in invention because of incompetence and inexperience of recently employed workers (Soltani and Liao, 2009). It can be noted from the review, that several adverse effects of employee turnover are highly related to working quality, however information from the other sources like the encyclopedia states that organizations with higher rates of employee turnover might struggle to accomplish all compulsory or significant daily tasks. For example, if ten workers are needed to achieve a given task in the organization and the organization only has seven, then it will be forced to get three workers to cover for the ones missing which is expensive for the company (Branham, 2000). This turnover within an organization characteristically has a negative implication, mainly because of the hypothetically high charges associated with reinstating a departed employee. However, about twenty-five percent can really be deemed desirable (Branham, 2000). There are some occurrences where the positives of an employee leaving can overshadow the negatives. For instance, when a turnover means a bad character leaving the company then this is a positive turnover, which leads to increased productivity. It can also be positive when the organization replaces a veteran worker stuck in his or her conducts with a person or worker who brings in the organization new ideas (Branham, 2000). Turnover can also lead to improved diversity within an organization by replacing people with others new workers from different backgrounds to bring in new ideas, which leads to high productivity (Branham, 2000). Abassi and Hollman (2002) note that effective administrators understand how to make staff members improve their implementation skills and constantly provide coaching services and reaction to all staff members. Ineffective administrators do not consider providing feedback to their staff members even though they automatically know that providing and giving honest reaction is important for the development their organizations. How to reduce employee turnover Employee turnover can be reduced through employing the right individuals from the beginning. Most professionals approve this as the best technique to lessen staff turnover. It is important to interview and scrutinize candidates cautiously, and ensure they possess the correct skills and that they are qualified and fit with the organization culture, administrators and co-workers. Managers should also set the right benefits and compensation for their workers to ensure that they are motivated to work and their needs are taken into consideration (Abassi and Hollman, 2002). These packages should be reviewed yearly to ensure that they fit the current market trends. Managers should also consider the employees’ individual needs and present a lot of flexibility where they can. Managers should consider presenting telecommuting, reduced schedules, or even day care services. The administration should always show appreciation for their workers because it develops an individual self-esteem, which leads to high rates of productivity. They should also be encouraged by encouraging them using polite words and areas of correction rather than intimidating them (Abassi and Hollman, 2002). Finally, it is important to hold regular review sessions with employees because they do feel involved when the management team involves them in the daily reviews of the company (Abassi and Hollman, 2002). The management ought to look for information and provide training, compensation, competitive holiday, competitive salary and holiday compensation and dividends. The company should come up with a career expansion program for staff members whereby, they are allowed to attend training programs organized by professional bodies and colleges to enhance their productivity. They should also employ workers from the local community to avoid conflicts with the local community, which in turn can affect the relationship between workers and their customers. Maslow theory of motivation in relation to job satisfaction Maslow’s’ theory of motivation is based on three norms. First, those individuals must fulfill lower or basic wants before progressing on to the next level in the hierarchy of needs. Secondly, that actions (or motivation) are only inspired by unfulfilled wants (Woods, 2002). Thirdly, that people needs vary from the essential to the more multifaceted needs in life. According to this theory, the needs are grouped into five levels in the hierarchy of needs (Woods, 2002). The first level of needs is the psychological needs theses are mainly basic essential needs. In an organization, these include food health facilities organized by the organization. The second level are the security needs, these are job security within the company, working conditions and the insurance policies taken for them. The third level is the social needs, which are the social activities organized by the company to make the staff members work together and team building (Woods, 2002). The fourth level entails the self-esteem needs and these are the individual reputation, acknowledgment, titles, approval, status representation, accountability, promotions, and growth (Woods, 2002). The last stage is self-actualization stage, where the worker or staff members in an organization seek to achieve their full potential through acquiring knowledge. This would suggest that the organization must seek ways of motivating its workers to retain them within the system and avoid employee turnover. Conclusion From the review, we note that, workers who have a sense of possession of the company are not likely to depart from the company. Managers need to develop a sense of proprietorship by providing obligation to workers. They should make their responsibilities look like accountability and not just action. They ought to communicate appreciation frequently. They also need to offers rewards success particularly together, making everybody feel they contributed to the combined success. Workers who feel valued, respected, and successful are not likely to look for other jobs. Therefore, if these strategies were taken into consideration the company would be in a position to exist within a dynamic challenging business environment. Employees within an organization are the backbone of the company and thus they should be motivated and maintained for the success of the company. Managers need to investigate the effects of employee turnover and provide recommendation on the best method to correct the factors that lead to employee turnover, consequently that the company can retain its employees, and improve their effectiveness in the developing dynamic business oriented world through consultations. Managers should know clearly that workers within the companies should be handled as precious resources of the company which in turn makes the business endure the challenges of business development. Some reasons for turnover cannot be avoided within an organization such as ill health, old age, and resignations. However, organizations can increase employee retention through different motivation strategies. They can increase workers retention by carrying out and acting on workers satisfaction studies. Finally, organizations cannot eradicate employee turnover. Some of the general employee turnover techniques include asking leavers to resume if appropriate roles increase in the future. Administrators should not observe the wish of youthful, movable workers to change occupation as a lack of responsibility. Instead they should assist workers to accomplish their professions, maintaining communication and motivate them to come back if their determinations and the business's needs overlap. Employees that come back tend to understand the organizational culture and philosophy. They come with them new ideas, skills and connections of importance to the organization. Under some circumstances, some employees who return usually accept even low rates of payment. Employee turnover also permits flexibility in the manner the organization works. References Abassi, S. & Hollman, K.W. (2000) Turnover the real bottom line. Public personal management 2(3): 333-342. Branham, L. (2000). Six Factors That Push Good Employees Out The Door. Kansas City Star, Vol. 8. Eucker, T. (2007). Understanding the impact of tacit knowledge loss. Knowledge Management Review, Vol. 7. Gautam, A.  M. (2005). The Challenge of Hotel Employee Turnover. Retrieved from:   Read More