The Need to Understand Employee Turnover for Best Human Resources Management Practices - Essay Example

Running Head: HUMAN RESOURCE MANAGEMENT HUMAN RESOURCE MANAGEMENT [Name Of Student] [Name Of Institution] HUMAN RESOURCE MANAGEMENT INTRODUCTION The international market is turning into a progressively more complex place in which to run for modern day businesses, making ingenuity a priceless asset. This has resulted in a shift in the business focal point from monetary to intellectual assets. Company employees have therefore progressed from a resource to be viewed as an asset, which requires continuous development and needs to be safeguarded. The business spotlight on morale and employee recruitment or performance management through timely appraisals is not just about preserving a constructive employment nor does it simply mean that the best workforce should be committed to the business. It is actually about creating a method of doing things that might well be necessary to continued existence just a few years in future. AIM Human resource is the backbone of any business. Plus the ongoing success of an organization is expected to be improved by workers who embrace attitudes, worth and expectations that are directly associated with the corporate dream. Undoubtedly, hiring competent people is a smart point of exit in the progression, but building and supporting a dedicated labor force is more likely to be assisted by the service of refined human resource management setup. Questionably, the policies and practices of any HRM can be deliberately designed and established to encourage sought-after employee outcomes, which consist of the enrichment of the in responsibility and additional role behaviors of employees. Yet, in spite of such expensive reserves, firms are recurrently searching for techniques to develop and cement the connection amid human resources and their work force. In this paper, I wish to elaborate on the following statement: “Despite claims of involving a stakeholder approach to employee management, HRM is fundamentally about management decisions and behaviors used, consciously or unconsciously, to control, influence, and motivate those who provide work for the organization-the human resources.” (Purcell in Storey 2001:64). DEFINING HUMAN RESOURCE MANAGEMENT HRM includes everything and all connected with the management of service relations in the firm. We do not combine HRM exclusively with a high-commitment sculpt of labour organization or with any meticulous philosophy or approach of management. High-commitment plans do subsist, but we are also worried with the many cases in which administration is following performance goals all the way through lower levels of connection or is looking for managing a multipart, segmented labor force through changeable levels of dedication (Dale, 2000). To create better theory and facilitate improved practice, the educational restraint of HRM should recognize and assess the diversity of management styles that survive in contemporary workplaces. A general description of HRM is that it includes the attitudes, strategies and practices that influence the employees functioning for the business. This is a very narrow definition that consists of activities connected to hiring, tutoring and teaching, performance appraisal, rewards, etc. Prior to discussing the consequence that HRM has on worker contentment and loyalty, it is essential to characterize these two conceptions. UNDERSTANDING THE ROLE OF STAKE HOLDERS The Harvard framework for human resource management (HRM) recognizes the different stakeholder interests that affect staff behavior and performance. This is useful in considering the benefits or disadvantages of change on different groups. The key to excellence in organizations lies in achieving a state of shared values among all members of the organisation. HRM PRACTICES – RECRUITMENT AND SELECTION Further to examine the degree to which HRM practices turn out to be official as organizations progress in dimension and the allegations of the changes for effectual and aggressive HRM practices. The HRM performance examined in this section is recruitment and selection. Kaman et al. (2001) distinguished that these are HRM areas flat to enlarged formalization with firm expansion. In this context, it extends further than certification and consistency of procedures, roles, and directives to embrace justifiable sources of recruitment and the employment of specialists for selection (Dale, 2000). It is anticipated that as organizations develop, the skills and aptitudes required to execute different functions and actions no longer would be existing from the well-known and unofficial recruitment basis favored by the owner-manager. Thus, a better variety of prescribed recruitment sources would be used to catch the attention of suitable applicants. Kuratko (1990) reported widespread use of paper advertisements, administration and private service agencies, worker referrals, and unwanted applications among tiny firm recruitment practices. Their findings are constant with others who recognized bigger use of proper hiring procedures as organizations nurture. In contrast, employment in U.K. little organizations is mostly through casual channels and networks bottomed on preceding facts of the person by the holder, management, or dependent employees (Salt, 2006). For very small organizations, meaningful the entity is practically a precondition for recruitment and that relaxed methods of recruitment stay leading as organizations grow. As organizations grow, manifold selection techniques would be used, in accumulation to interviews, to decrease errors in selecting staff recruited from sources unknown to the owner-manager. One-to-one interviews are the mainly accepted selection techniques in mutually small and big organizations, with big organizations also expected to use written tests and board interviews in the selection procedure. Increasing distinction of application forms and reference confirmations in the selection method as organizations enlarged in size is also evident from the study of a variety of sources (Salt, 2006). Larger companies are inclined to rely on goal qualifications and tend to utilize a greater quantity of selection measures in making hiring choices. Technical skills and affirmative work ethics established high precedence in the selection practices of more than a few of the winning small developed and processing organizations. As a result, "high-quality" possible employees are not chosen because they may be apparent as a danger to the valued sovereignty of the owner-manager. While fitting in would carry on to be stressed as a selection decisive factor as organizations develop, concentration also will be given to talent and ability of candidates (Moorhead, 2004). The embracing of prescribed service procedures at the executive level will wait behind that at the equipped level for tiny organizations, as owner-managers favor to occupy the few managers vital from family and friends. This divergence is estimated to weaken with extra growth, as these familiar bases no longer are talented to provide to the expert skills required. The argument that HRM practices will turn out to be formal with firm expansion suggests the subsequent hypotheses: H1: A better variety of prescribed recruitment sources is engaged with firm development. H2: Screening of applicants is strengthened through the use of manifold selection methods as firm dimension boosts. H3: The request of official employment procedures at the decision-making level lags at the back than at the equipped level for minor organizations. The Need To Understand Employee Turnover For Best HRM Practices There are two major reasons for gauging and investigating different stages of employee turnover: Control: object measurement is indispensable if the charge of worker turnover is to be planned correctly. There is no generally 'tolerable' level – it will depend on aspects such as profession, business, segment, area, etc Forecasting: if upcoming recruitment and employment needs are to be anticipated dependably, explanation will need to be taken of history levels of employee turnover. Best Practices The notion that “they have no other place to go” strategy for retaining employees does not really produce a dedicated work force. A dedicated and loyal work force is a direct outcome of satisfying the employees and so for those companies that consider the excellence of their people is innermost to building worth, it’s the time that they adopt a framework of policies that pleases and nurtures those who are a part of the company’s team. A lot of organizations are doing just that, and they are discovering that the key to preservation is found in a policy that considers mutually their employees' individual aspirations (career expansion, acknowledgment, compensation) and the ambition they have for business expansion and success (Lievegood, 2001). Following are some of the best HRM practices that ensure a steady and dedicated, pleased and contended work force for any organization: Focusing on the individual Employees tend to be loyal to the company if they see future prospects and career growth for themselves in that specific firm. Thus, organizations that are grave about retaining key aptitude have a great chance to generate a work atmosphere that allows for elasticity, future expansion, and progress to its employees. Realizing what employees want—for themselves and the business An additional dominant influencer of employee retention in which the human resource manager's responsibility is innermost is "providing job that superlative suits any individuals' meticulous well-being. Persons vary greatly in this regard. A business should exercise some endeavor and commence some examination to settle on the non-monetary interests and inclinations of its key staff, and then try to put up these favorites in implementation (Lievegood, 2001) Building an atmosphere of employee retention in nearly all job markets, whether good or bad, there are always chances for top performers. The real challenge is to create an environment where all employees feel satisfied and engender an affirmative response to queries such as: Is my idea and effort valued? Do they give respect to my opinion? Will they welcome my or any body’s new idea? Are employees treated with respect and are their problems understood? Am I judged and rewarded on my good performance? Does management act with honesty?" (Woodman, 2002) HRM PRACTICES – PERFORMANCE MANAGEMENT AND APPRAISAL Defining Performance Management The expression "performance management" (PM) appeared in the late 1980s and can be regarded as an extension of "performance appraisal"--a practice used to evaluate an individual employee's past performance. Today, however, performance appraisal is considered as one of several key elements of PM, the others being the communication of company strategy through individual objective setting, links to training and development planning, and possibly compensation Performance Management deals with the formulation and putting into practice strategies and policies the sole aim of which are to Performance employees justly, equitably and in perfect harmony and consistently with respect to their value and worth to the organization and further, to assist the organization to reach its strategic targets (Berry,1999). The Importance Of Performance Management  The importance of employee management cannot be undermined if the organization aims to succeed in today’s cutthroat competitive environment. Also, it cannot de denied that employees are the basic building block of any organization. It is vital for the organization to reward and manage its basic resource in the best possible manner in order to derive maximum benefit from it. It has been observed that over the past few decades there have been significant shifts in the trends in the labour market. This has had its due impact on the way organizations Performance and manages their work force. However, what has remained unaltered in all these years is the basic fact that a proper and fair Performance Management system: constitutes an economic exchange is imperative in forming an employee’s perception of fairness teaches employees values growth and boost in overall performance for fair incentivizing particular types of performance (Lindsay,2003) Understanding Effective Performance Systems It would be too great a task to develop a new perspective for psychologists in understanding the labour market in this paper, so discussion will be limited to giving a few thoughts as to where a fruitful search for enlightenment might start. Mainstream economic theories are unhelpful for a number of reasons (Sherman, 2003). In the first instance, most economic theories of the labour market are more interested in explanation at the macro level, whereas a psychological interest will be more interested in phenomena at the individual and small-group level. And whereas economists are more interested in the effects of the human psyche on economic behavior, the study of psychological well-being is more concerned with the opposite relationship, the effect of the economy on the individual (Berry,1999). However, one theoretical perspective that might provide a bridge between psychological and socio-economic studies of the labour market is labour market segmentation theory. Rather than starting from the mainstream economic premises that all 'agents' in the labour market are essentially profit- or wage-maximizing decision makers, differing primarily in the education (or 'human capital') and intrinsic ability they bring to the labour market, segmentation theory attempts to understand the labour market as a social phenomenon. Within that paradigm the expectations and power that different individuals and groups bring to the labour market are seen as being of central importance. Some groups (a 'primary segment') obtain and retain powerful positions in the labour market because of their individual and collective (through trade unions, professional associations, etc.) behaviour. They are typically employed by firms in stable or expanding product markets, using economies of scale and modern mass-production techniques (Sherman, 2003). Such firms actively seek to reduce labour turnover by creating 'healthy' employment environments conducive to high levels of motivation and low levels of turnover. However, other groups of employees, because of the weaker bargaining positions that they come to the labour market with, tend to be employed by less profitable firms where lower wages, poorer conditions and worse job security and promotion prospects are the norm (women and ethnic minorities are sometimes held to be synonymous with the term 'secondary segments'). The forces that maintain these two groups as separate and essentially non-competing factions in the labour market are complex and varied, but the different expectations and psychological experiences of those individuals are seen as potential factors. Early theorists in this tradition (Lindsay,2003) suggested that, after a period of time working in the conditions of the secondary labour market, workers would internalize a more casualized attitude to work, thus perpetuating their exclusion from the primary sector. Whilst later theorists have tended to downplay these 'feckless worker' explanations, and emphasized instead the role of the demand side in structuring the labour market into segments where very different processes and rewards operated, nevertheless it is still accepted that labour markets must be treated as multifarious phenomena where the psychological state of the workforce is potentially capable of structuring the system (Lindsay,2003). Thus, within this framework, psychologists could not only investigate the effects of the labour market on the individual, but also the part played by those effects on the operation of the labour market. Such a theoretical framework could also add to a more theoretically informed treatment of the different ways in which unemployment affects different groups. By starting with the assumption that labour markets are socially constructed, it follows that they will be constructed differently by different groups. For instance, it has been assumed (Berry,1999) and demonstrated empirically (Armstrong, 2006) that gender is one of the main structuring supply-side variables. Furthermore, women's work is itself very heterogeneous, with the women's differing domestic circumstances being a central determinant of their diverse positions in the labour market (Dale, 2000). When considered against such a backdrop, the search for simple gender or ethnic origin differences in psychological reactions to unemployment can be seen to be far too reductionist. What Makes A Good System? A good performance management system is simple, yet effective. A few straightforward characteristics prevail. The system focuses employee effort on the common activities that drive organizational success. It is easier to gain employee buy-in at all levels because the program makes business sense. It also serves as an excellent communication vehicle, outlining corporate and business unit directions for all employees (Salt, 2006). The inclusion of "all employees" is key. Linking to pay--at all levels--demonstrates that the organization is committed. The process also provides for a common vision. Often performance appraisals are flawed because appraisers and employees have very different views of the organization' reality and needs. Supervisors may also have a distaste for making subjective judgements about their subordinates. If performance is managed, goals are explicit, objective and articulated, rather than arbitrary and subjective. In our experience, employees readily appreciate the goals and hurdles facing the organization. The ongoing appraisal process is often multidirectional, involving client feedback and bottom-up assessments (Moorhead, 2004). Employees are more likely to perceive fairness in evaluation and compensation when they know what is behind the process. A performance management system must start as, and remain, a work in progress. Even the most rigorous use of measures, focus groups and employee communication will not ensure a perfect roll-out. Performance management, like the business plan, will have to evolve to meet changing conditions. Two Examples An insurance company wanted to improve its market share significantly by allowing prospective customers to buy directly through call centers. The company revised its pay system so that the call center staff could advance through the pay-for-performance plan by improving their results and competencies at what they did best: responding to customer inquiries (Salt, 2006). These employees do not have to advance from the front line to the supervisor level to gain superior rewards. Instead, they are assessed against the core competencies driving the organization's success (e.g. communication, teamwork, mentorship, innovation) and against very specific business-related results (e.g. premium increases, average claim costs, loss ratios and the sales/quote ratio). The employees took ownership and this new performance management system is instrumental in the organization's success. In January 1996, 15,000 calls were taken by 200 staff; one year later, 70,000 calls were taken by 300 staff. Earnings and market share have grown explosively (Moorhead, 2004). A large manufacturing company (nonunion) introduced performance management to the production workers. Employees develop their own goals in direct connection to departmental goals; for example, the. speed, production quotas and safety standards of their particular production unit. Each department's objectives are aligned with corporate goals every performance cycle. Employees are asked to use their own initiative in filling in the 'white space' in the organization chart. Under this system, the performance discussion is not a negotiation, a confrontation, a balancing exercise, or waste of time. Employees know that they may benefit personally and financially in the long run (Dale, 2000). They know they are rewarded for results and how they are achieved, not for time on the job. They, together with their supervisors, agree on what is expected each year. They receive training and coaching in areas that need improvement. The productivity of the plant has improved dramatically, and the workforce will double in size, to about 6,000, starting in six months with a new plant. CONCLUSION Re-humanizing is an innovative idea transforming the role of staff and human resources. HR managers and employee benefits managers turn out to be customer-centered marketing managers where their clients are older management, division heads, present employees, future staff, and people who have retired. Their products are conventional benefits--those that have a financial worth such as time off, leaving accounts, learning allowances, etc. and non-traditional values--those that focus on employee standards (Dale, 2000). Worker values include acknowledgment for contributing to the accomplishment of a mission, spending more time with family unit and society, functioning in a group setting, teaching for individual development, training to perk up job presentation, being held responsible, and considering others held answerable. We can thus conclude that HRM practices have a great role for employee retention and managing employee turnover rate. The first step in restraining employee turnover is an understandable one – employ the right workers to start with. Once the correct people have been appointed, it is then entirely the human resources’ duty to foster and environment that keeps all the employees motivated, inspired, challenged and above all pleased. Read More