The Absenteeism and Employee Turnover - Report Example

Integrative Case: Absenteeism and Employee Turnover: Dryburgh Footware Company, In Organisational Change Strategies by Deery S. J. Student’s Name Institution Course Name & Number Date of Submission Integrative Case: Absenteeism and Employee Turnover: Dryburgh Footwear Company, In Organisational Change Strategies by Deery S. J. Introduction Staff turnover and absenteeism can have adverse implications on a company. There are many companies that have collapse due to high turnover and absenteeism by employees. In fact, absenteeism and high turnover are some of the yardsticks used to show that there are problems in a company. The case of Dryburgh Footwear Company, an Australian footwear company acquired by a British company, Imperial Enterprises in 1957 is one of the cases that show the serious problems that absenteeism and high turnover can have on a company (Deery, 1995). The case analysis will begin by diagnosing the case to understand the reasons for absenteeism and high turnover at Dryburgh. The paper will proceed to formulate an intervention plan and strategies to address the situation facing the company. Diagnosing the Problem Staff absentee and turnover usually has adverse impact on a company. The case indicates that Dryburgh was once a pioneer company in Australia, making huge sales growth and high profits due to high productivity of its labor force. However, high turnover and absenteeism rates have been a major impediment to Dryburgh as it seeks to gain a competitive advantage in the Australian footwear industry. According to Bill Brown, the company’s personnel officer, a review of staff turnover rates indicates that Dryburgh had been experiencing a turnover rate of more than 100% in a single year (Deery, 1995). Similarly, analysis conducted by Brown found that absenteeism has been a common thing at the company occurring at an average monthly rate of more than 4.5% (Deery, 1995). The high rates of absenteeism and staff turnover have been caused by a combination of factors that are at play that leads to employee dissatisfaction and low morale in the job. First, high handedness by the top managers is one of the reasons for the high turnover and absenteeism at Dryburgh. The case indicates that the management of the company adopts a highly autocratic and authoritarian leadership style in which subordinates or lower level employees are not allowed to air their opinions. The presence of authoritarian leadership style at the company was demonstrated when Brown tried to bring to the attention of Greg Jackson, the company’s general manager about high rates of absenteeism and turnover rates (Deery, 1995). Brown could not question the reply he got from Jackson who exhibit a dominating personality and would not accept his opinion to be questions. The authoritarian leadership style could not go well with the employees as this meant that they could not be engaged in the decision making process in the company. Accordingly, the feeling that employees are being seen as machines caused dissatisfaction and a decline in employee morale, thus resulting in increased rates of absenteeism and high turnover. The problems of high rates of absenteeism and turnover at Dryburgh were also triggered by low wages paid to employees. The case indicates that, because the factory employees worked under federal footwear industry award system, Dryburgh management offered its factory employees only the minimum amount allowed by law because the company was cost conscious with the management interested in keeping the costs as low as possible (Deery, 1995). Accordingly, this resulted in a situation, where factory employees were paid as low as $240 and $260 per week (Deery, 1995). Besides, as much as the company offered a bonus, the terms under which the bonus were being awarded by the company was not favorable to the employees as the company set a resulting production target for employees to earn a bonus while there was also too much incidences of rotation on jobs, which made it difficult for them to earn the bonus. In other words, the bonus targets was unrealistic and unachievable in most cases and this meant that most employees had to contend with the minimum wages given, which in most cases was not enough to sustain the workers, this resulting in high turnover and absenteeism. In fact, the case indicates that employees complained that the management squeezed their incomes unfairly through poor production planning and their inability to control the runaway turnover and absenteeism. Additionally, the high turnover rates and absenteeism at Dryburgh was caused by poor employer-employee relationship. The case indicates that the employees expressed a great deal of dissatisfaction with authoritarian way of decision making in which employees of the company were only viewed on payroll numbers, resources to be exploited and as costs to be eliminated (Deery, 1995). Accordingly, the dissatisfied workers opted to either fail to report to work or leave the company. The other factor that caused absenteeism at Dryburgh included high levels of burnouts because the employees who had remained after their colleagues had left had to perform the roles that their colleagues did before they left (Deery, 1995). Accordingly, this resulted in stress and burnout, thus turnover and high absenteeism rates witnessed. Additionally, some workers opted out of the company because the management paid more attention to the JIT production system, while ignoring the plight and interest of employees working on conventional methods. Intervention Plan From the case analysis, it emerged that absenteeism and turnover is a big problem facing Dryburgh as it is impacting on the company’s productivity and bottom line. Accordingly, there is a need for intervention in the situation to ensure long-term success of the company. In order to successfully introduce the necessary changes to correct the situation at Dryburgh, the firm and most important thing to do is to create the readiness for change proposed by Weick (1993). Creating readiness for change involves making the people concerned to see the need for change and helping them make sense of continuous change. From the case, it emerged that the top managers, such as Greg Jackson are aware that there is high turnover and absenteeism among employees. However, when asked by Brown what he things, Jackson replies simply as “Well, so what?” (Deery, 1995). This implies that top managers have taken absenteeism and turnover as a normal thing that should not worry the company. Unfortunately, as indicated in the analysis, these issues are impacting negatively on Dryburgh’s bottom line and need to be addressed to ensure growth and success. For this reason, to introduce positive change, it will be important that top managers be informed about the problems caused by high turnover and absenteeism so that they can recognize that there is a need for change (Weick, 1993). Informing the management of the need for change will be important in intervening in the situation at the company as it will make the leadership of the company understand that the company actually needs change and this will help minimize resistance to change (Lewis, 2011). This is important as it emerged from the case analysis that managers of the company are not ready for change due to the fear of the unknown. However, to make the leadership see the need for change, gap analysis tool will be used. Gap analysis is a decision making tool that compares desired performance with actual performance achieved (Lewis, 2011). In the case study provided, gap analysis will be used to explain to the leadership of Dryburgh the negative impacts that absenteeism and turnover is having on the company and what is making employees to leave or avoid reporting to work. From the case, it emerged that there were a variety of causes of employee turnover and absenteeism that managers needed to understand and change, including autocratic management style, low wages, poor employer-employee relationship, stress and burnout, as well as favoring JIT production system while ignoring the plight of conventional workers. These gaps has resulted in high turnover and absenteeism whose consequence has been grave, including declined employee productivity, lost production, workflow disruption, increased cost in recruitment and training and reduced employee morale (Deery, 1995). It is by explaining to the leadership the impact that absenteeism and turnover is having on the company that the management will see the need for change and participate in implementing the necessary changes proposed. Intervention Strategy The high staff turnover and absenteeism is affecting the performance of Dryburgh and as such, appropriate intervention is needed to address the problems. First, it emerged from the case that autocratic management style that gives employees little room to express their opinions is one of the major causes of employee dissatisfaction that trigger turnover and absenteeism. With this management style, employees feel that they are being seen as payroll numbers, resources to be exploited and as costs to be eliminated and this case dissatisfaction (Deery, 1995). Therefore, to address the problem, it is recommended that the leadership of Dryburgh to adopt a participating/democratic leadership style. Participative/democratic style is a management style where the managers involve employees in decision making process (Snell et al., 2015). This is important as it make employee see their input as being important to the company and this helps boost their morale and commitment to the company and its objectives. Consequently, this helps minimize employee absenteeism and turnover. Second, the company should consider intervening by improving the employee wages and benefits. Wages rank among the top issues that employees consider when choosing an employer. Unfortunately, employees of Dryburgh are paid low wages and this is one of the causes of dissatisfaction that prompt some to stop reporting to work or leave the company. For this reason, the company needs to offer its workers better terms by offering competitive wages and attractive bonuses and other benefits to boost the morale of the employees, increase their satisfaction, and their commitment to the company. Consequently, this will help minimize turnover and absenteeism that have become problems at the firm. Additionally, the company can intervene by minimizing stress and burnout on the workers. This can be achieved by ensuring that there are enough employees and that employees are not assigned too much work that they can cope with as too much stress and burnout are some of the triggers of employee absenteeism and turnover (Snell et al., 2015). Conclusion The case indicates that staff turnover and absenteeism are serious problems that at Dryburgh. Unfortunately, the management of the company appears to see the problem as a normal thing that should not be of any concern. However, from analysis, it became clear that high turnover and absenteeism is affecting the company negatively in the form of declined employee productivity, lost production, workflow disruption, increased cost in recruitment and training and reduced employee morale and this affects the company’s bottom line. Therefore, as part of intervention, the management needs to be explained to why high rates of absenteeism and turnover are affecting the company negatively and why change is needed as this would help minimize resistance to change as well as ensure the leaderships’ involvement in implementing the desired change. Some of the changes needed to address the problems include a change of management style, offering attractive rewards and benefits, improving employer-employee relationship as well as minimizing employee burnouts and stress on their jobs. References Deery, S. J. (1995). Absenteeism and employee turnover: Dryburgh Footware Company, in Organisational change strategies: Case studies of human resource and industrial relations issues, eds M. Patrickson, V. Bamber, & G. J. Bamber, Melbourne: Longman. Lewis, L. (2011). Organizational change: Creating change through strategic communication. Upper Saddle River: John Wiley & Sons. Snell, S. A., Morris, S., & Bohlander, G. W. (2015). Managing human resources. Oxford, NY: Cengage Learning. Weick, K. E. (1993). The collapse of sensemaking in organizations: The Mann Gulch disaster. Administrative Science Quarterly, 38(4), 628–652. Read More