Employee Turnover in Dryburgh Footware Company - Case Study Example

Case analysis: Dryburgh Footware Company Student’s Name Institutional Affiliation Introduction Due to the changing technology, change is inevitable mostly in our organizations. It is important to note that the changing world and demand and the greater expectation from stakeholders of the respective organization as well as companies, there has been a need for extensive research conducted all over. This has led to the process of change initiation with the organization set up so that they business activities will align or meet the demands or the objectives of the stakeholders. However, change has been a difficult aspect for most employees or employers to incorporate. The reasons behind this repulsion to change have been associated with the aspect of the cost associated to change, the loss associated to change among other factors (Bohlander & Snell, 2010). Notably, some detest that the process of implementation of new systems, structures, policies in an organization may be very long, complicated as well as tedious and at times, if not careful, the change being implemented may lead to very serious and huge losses (Bohlander & Snell, 2010). Therefore, this paper will analyze the situation evident in Dryburgh Footware Company, the issue of absenteeism and employee turnover that has made the respective company to incur so much cost instead of safeguarding its resources for better investment. Secondly, as an agent for a change I will attempt to give my recommendation to the management of the company in detail and see whether the change is beneficial to the success of Dryburgh Footware Company. Finally, the paper will draw its conclusion on the same. Hence, in the beginning, the paper will introduce the case. Absenteeism and Employee turnover Dryburgh Footware Company The issue of absenteeism and employee turnover is not a new thing, as it has been affecting most companies; it is an issue that has affected the financial resources of many companies, and in other instances, it has led to the closure of many companies (Mowday, et. al., 1981). Dryburgh Footware Company is not an exemption. The situation had affected the company’s resources to the point where Bill Brown who was the personnel officer in the company made a decision to compile the annual employee turnover as well as the absenteeism of the company. He was concerned with what really what was the management’s issue to the approach of this situation. From the findings, the company had an employee turnover rate of not less than a hundred percent. In other words, the turnover rate was more than 100 percent. Notably, the average rate of the level of absenteeism was more than 4.5 percent. The preliminary estimates indicate the total cost of the company was substantial; to mean the cost was over the normally expected cost. According to Brown, the issue of absenteeism was impairing the performance output of the company, even though it was quite challenging to set the exact cost in the figure on the issue. The direct cost comprised of the sick pay for those employees that were absent, however, there were also hidden or indirect cost involved. The over estimated cost was linked to the lost production, the lower employee productivity due to the level of inexperienced replacements, disruptions to workflows, reduced work quality, additional training, redirection of management or supervision and also adverse effects on morale of the employees. The calculations induced by the company was double the daily direct costs of labor and that of the absent. Moreover, this finding was also in line with skill and academic experiences the researcher had. My role as an agent of change First, a change agent refers to the person who works from inside or from outside and assists an organization or companies transform it structures through focusing on matters such as company effectiveness, company development, as well as company improvement, among other factors. The focus is mainly on the people working within the organizational setup and their interaction with each other. Hence, as an agent of change, my core purpose will be to focus entirely on Dryburgh Footware Company and attempt to address the major concern affecting the company in line with achieving the company’s financial targets and financial objectives. I will incorporate all departments entirely, assess every report, and later find a way to cope and introduce the solution to the company’s management team. The company’s diagnosis The company, Dryburgh Footware Company, has an issue to curb its financial resources due to the existing high employee turnover and employee absenteeism. In definition, employee turnover refers to the percentage of the workforce of an employee that has to be replaced due to the voluntary as well as the involuntary separation of workers from the employment (Deery, 1995). Notably, the voluntary turnover refers to a situation where one leaves or abandon his or her employment to illness, retire or to advance his or her academics and better his or her career opportunities, whereas involuntary turnover refers to the process of laying off and termination of workers due to their disciplinary issues or their performance. The high level of employee absenteeism, as well as employee turnover, has affected the company through causing serious problems and challenges for Dryburgh Footware Company. Absenteeism has affected the company’s productivity, and as such, it has led to the loss of the company’s financial resources (Deery, 1995). For instance, the rate of absenteeism is beyond the normal rate with most absenteeism occurring from reasons such as sickness (Mowday, et. al., 1981). Notably, the employees located at the assembly line are the most affected by the issue of absenteeism. They must operate the complex machines, which requires more training. Hence other employees with n skills and training and skills cannot operate the machines. Hence, the level of production will, in turn, drop down (Deery, 1995). Furthermore, the most case of absenteeism is sick pays, which means that the labor cost is still the same regardless of whether production is high or low. Although Bill suspects that most of these workers are entirely abusing their sick leave, it is challenging and difficult to validate (Larson, et.al., 1989). Turnover is even the most serious issue for Dryburgh Footware Company. Not only can the issue of turnover trigger productivity issues, but it can also lead to the loss of human resources that may be difficult to replace in the future (Deery, 1995). For instance, most of the company’s resourceful workers such as engineers and researchers have voluntarily abandoned their services from the company and instead they have opted to seek other available opportunities. The loss of these workers will not only hurt the productivity of the company but will also weaken the company strategies due to the loss of the specialized skills as well as creativity that was brought by the departed employees. Finally, even if the management team from Dryburgh Footware Company attempt to seek for the same potentiality in workers, they will have to induce more time, training, and money (Deery, 1995). Solution As an agent of change, there are several strategies I will attempt to present for the company so that the issue or problems of employee turnover as well as absenteeism will reduce or be eliminated. In this scenario, extrinsic as well as intrinsic motivational techniques can be incorporated to assist reduce the degree of the employee turnover (Yayici, 2013). In definition, extrinsic rewards refer to those means taken by the company to motivate the employees to stay or remaining as the company’s employee through providing rewards (Kissack, January 01, 2001). Such rewards are merit raises, promotions, flexible schedules, childcare, rises to remain competitive with the market, increased benefits such as vision, health care among others. On the other hand, intrinsic can as well as be a strategy to reduce the levels or the rate of employee turnover. The intrinsic motivation comes from within an employee rather than the external surroundings. It refers to the personal satisfaction an employee as an individual receives or acquires from his or her work (Kissack, January 01, 2001). Notably, the intrinsic motivation is difficult for the human resource professionals to establish due to the fact that they have minimal control over them. However, the company may attempt to develop and create a work environment that fosters a greater sense of the work satisfaction upheld by an employee (Yayici, 2013). Other strategies set in place to reduce this situation in the company include first, keeping the compensation as well as the benefits up to date. The company should ensure that the employees are receiving affair compensation for their hard work in the company and offer competitive benefits. Second, encourage the employees towards generosity as well as gratitude. In this case, the company should encourage a pro-social behavior in their employees. If the employees are allowed to connect with each other through acts of generosity as well as express themselves in gratitude, employees, in turn, will be healthier and happy. They will be less likely to seek for opportunities in other companies. Notably, through encouraging your employees to be vigilant in seeking good behaviors, they will have a sense of belonging and as such, they will feel that the company appreciates and value them. Lastly, the company should recognize and rewards their employees through offering them full-time recognition and appreciation by celebrating their efforts and successes. The manager should be specific, be social, and support them by rewarding them with tangible goods. Stages The first step is to understand the psychological part of the entire workforce and learn those issue that will affect them negatively as well as those that will affect the positively. This is because the level of perception differs across employees, and as such, each of them will have a specific and different perception of the information (Mowday, Porter & Steers, 1982). Some employees may think that the management team is being so personal whereas it is for the benefit of the entire organization. Second, change is not incorporated one, but in a breakdown sequences. In other words, the proposed change should be applied in a sequence manner from the simplest step to the complex step (In Paul, In Cadle & In Yeates, 2014). Moreover, through the implementation process of the strategies, the proponents or those concerned should continuously keep a check and continue updating and listing the shortcoming and attempt to adjust the strategies or the change to fit the company’s objectives and goals (Mowday, Porter & Steers, 1982). At most times, through the process of change, most employees tend to shy away and impose obstacles so that the process will not be effective. They do these through ensuring that they are not efficient in their work. This and others are some of the challenges that the company’s team of management need to keep in place so that the change will not encounter obstacles and more problems while implementing it. Conclusion The issue of change is contagious in all most every company. One cannot avoid this factor. The world of business is changing so do the dynamics within a company. There is much competition and companies have incorporated various ways to compensate their workers to sustain and maintain them so that they will not seek for other opportunities in other big companies. Notably, a workforce that highly skilled and qualified to perform different tasks in a company is highly wanted and as such, companies are very keen to ensure such workforce are satisfied and are appreciating their job within the company (Jex & Britt, 2008). This should also apply in the case of Dryburgh Footware Company as noted or discovered by Brown. Competitive compensation is vital to maintaining its workforce to avoid the high rates of employee turnover. There should also be policies in place to prevent the absenteeism rate due to issues of sickness (Seyfarth, et.al., 1965). As noted it was very high in the case of the Dryburgh Footware Company where workers were even paid during sick leaves. Reference Bohlander, G. W., & Snell, S. (2010). Managing human resources. Mason, OH: South-Western Cengage Learning. 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, Longman, Melbourne, Chapter 21, pp. 240-250. In Paul, D., In Cadle, J., & In Yeates, D. (2014). Business analysis. Jex, S. M., & Britt, T. W. (2008). Organizational psychology: A scientist-practitioner approach. Hoboken, N.J: John Wiley & Sons. Kissack, B. (January 01, 2001). Correlation between job satisfaction and employee turnover and absenteeism in the Human Resources department at St. Luke's Episcopal Hospital. Larson, S. A., Lakin, K. C., Braddock, D. L., Bruininks, R. H., & American Association on Mental Retardation. (1998). Staff recruitment and retention: Study results and intervention strategies. Washington, D.C: American Association on Mental Retardation. Mowday, R. T., Porter, L. W., & Steers, R. M. (1982). Employee-organization linkages: The psychology of commitment, absenteeism, and turnover. New York: Academic Press. Mowday, R. T., Spencer, D. G., Steers, R. M., Porter, L. W., & OREGON UNIV EUGENE GRADUATE SCHOOL OF MANAGEMENT AND BUSINESS. (1981). The Influence of Task and Personality Characteristics on Employee Turnover and Absenteeism Incidents. Ft. Belvoir: Defense Technical Information Center. Seyfarth, Shaw, Fairweather & Geraldson., & Intercompany Labor Relations Study Group. (1965). Employee turnover, absenteeism and tardiness. Chicago. Yayici, E. (2013). Business analyst's mentor book: [with best practice business analysis techniques and sotfware requirements management tips]. Read More