Innovative Theory and Empirical Research on Employee Turnover - Case Study Example

Student’s Name: HRM Instructor’s Name: Course Code & Name: Date of Submission: Table of Contents 2 Table of Contents 2 Abstract 3 1.0 Introduction 4 2.0 Newmont Mining Corporation 4 3.0 Problem Identification 5 4.0 Analysis of the problem 6 4.1 Job Dissatisfaction 6 4.2 Organizational Culture 7 5.0 Solutions to the problems 8 5.1 Retention Strategies 8 5.2 Creating a Strong culture 9 6.0 Implementation of the solution 10 Conclusion 11 References 12 Abstract Managing human resources is a critical activity that is undertaken by all organizations in order to ensure their long term success. However, high employee’s turnover rate creates difficulties to the organization ability to achieve success in its operations. This report tries to explore, understand and analyze the high rate of employee turnover evident in Newmont Australia. The report begins by identifying the problem of high employees’ turnover rate in Newmont Australia. The report then tries to analyze the courses of the high labour turnover in the company. The report then tries to come up with solutions to solve the problem. Finally, the report recommends the methods to be utilized in implementing the solutions. 1.0 Introduction The ability of an organization to be successful is largely determined by its human resources. This means that human resources play a key role in driving the performance of an organization. According to Bohlander and Snell (2009) organizations are currently aiming to compete by using their human resources. The ability of human resources to think and to become innovative presents an organization with the best tools to utilize in order to create and build competitive advantage. However, high employee’s turnover rate can create a major barrier to an organization ability to gain competitive advantage. High labour turnover leads to a reduction in the organization productivity. Moreover, the organization can lose its key employees as well as its unique talents through employees’ turnover. Aamodt (2012) argues that employee’s turnover is a problem to an organization because of the high cost involved in recruiting and training new employees. An organization must lay down policies so as to manage its employees hence this will ensure that it does not incur the negative implications associated with employee’s turnover.. The purpose of this report is to explore and analyse the causes of high level employee’s turnover in Newmont mining company. In addition, the report will identify the solutions to the problem and how the company can implement those solutions in order to solve the problem. 2.0 Newmont Mining Corporation Newmont Mining Corporation is primarily involved in producing gold (Newmont, 2012). The company is part of the words largest miners and produces of gold. The company is headquartered in Denver U.S.A and it has around 43000 employees and contractors globally. Newmont started its operations in Australia in 2002 by acquiring Normandy mining. The company has also acquired several minefields in both the Western and the Northern Territories. The company values its employees by continuously developing them in order to achieve excellence in its operations. Moreover, the company believes that rewarding its employee’s commitment, determination and creativity will enable it to excel. Newmont Australia believes that its success is attached to its employees (Newmont, 2012). Therefore, the company has built a workplace that provides all its employees with an opportunity to grow, contribute and excel in their tasks. The company offers its employees with training and development programs as well as performance management programs. The company’s culture has enabled its employees to demonstrate strong leadership in safety issues as well as to protect the environment and the society at large. The company is committed towards sustainable development by contributing positively to the environment, protecting the safety and health of its employees and undertaking corporate social responsibility programs (Newmont, 2012). 3.0 Problem Identification A study carried out by Beach, Brereton and Cliff (2003) found out that mining companies in Australia were characterized by high employee’s turnovers rates. The study indicated that Newmont Australia experienced the highest labour turnover rate of 21% with the whole industry recording an average of 20.2%. The study notes that this fact was emphasized by the company when it publicly declared in its website that it was facing high labour turnover rates. The study recorded highest labour turnover rates in the managerial and professional staff as well as in the mining operations spot. In addition, the study found out that there was no evidence that the labour turnover rates would reduce in the long run. According to them, the Australian mining companies regard the high labour turnover rate as a normal and inescapable condition. According to Newmont (2012) the Australian division experienced 20% labour turnover rate in 2011. This was the highest rate as compared to other divisions owned by the company. Most of the employees who left the company were between the ages of 30 to 50 years. 4.0 Analysis of the problem 4.1 Job Dissatisfaction Beach, Brereton and Cliff (2002) indicate that the high level turnover experienced by Newmont Australia can be attributed to the external labour market. This means that there exists a link connecting the state of the external labour market with the high level of employee turnover in the company. New projects that start in the areas that surround the company mines cause employees to leave the company. The company employees tend to move to new projects that are started by the new companies because they view the new projects as more suitable job opportunities. Murray and Peetz (2010) emphasize this by stating that the Australian mining industry is faced by high employee turnover rate due to the fact that employees in this sector constantly leave their jobs to go elsewhere. The external labour market offers the employees with a more fitting working environment. Employees in Newmont are expected to work for more hours as compared to other industries and this has motivated them to move to other jobs in the external labour market. The company mining sites are located in interior locations and this means that the employees have to commute while going to work. This has made the employees to prefer to move to the external labour market where they can live close to their homes. The current growth in the coal industry can also be associated with the high level of employee’s turnover experienced by the company. Beach, Brereton and Cliff (2002) note that the coal industry offers higher wages and this has attracted the company’s experienced personnel. Therefore job satisfaction has been a major factor that has led to the high rates of labour turnover in Newmont Australia. 4.2 Organizational Culture Robbins at el (2009) argues that organizational culture plays an important role in influencing employees to remain in an organization. Strong organizational culture makes the employees to feel valued and posses a feeling of shared purpose with the organization as well as with the other employees. Organizational culture influences employees behavior and this leads to a reduced rate in relation to labour turnover. Organizational culture includes policies, altitudes, communication and management behavior. A high turnover rate makes it difficult for an organization to build and maintain its culture. According to the study conducted by Beach, Brereton and Cliff (2002) Newmont Australia site managers held different views in relation to the relevance of culture on employee’s retention. The study found out that internal politics played a major role in contributing to the high labour turnover experienced by the company. Moreover, the study established that the company had poor culture which made it difficult for the employees to cope with and this encouraged them to leave the company. The study realized that mining companies which had relatively low turnover rates emphasized the need for management employee relationship as well as the call for human resource policies. Therefore, poor organizational culture has played a key role in making Newmont Australia to experience high labour turnover rates. 5.0 Solutions to the problems 5.1 Retention Strategies According to Baker (2011) retention strategies can be used to reduce employee’s turnover by improving job satisfaction. Retention strategies are aimed at reducing the turnover problem by engaging employees with the company. Newmont Australia can reduce the high turnover rates by improving its recruitment procedures and methods so as to ensure that the candidates get the real idea of the job and the company. This will enable the candidates to connect with the goals and the mission of the company hence fill part of it. Moreover, the company can improve its employee’s retention by supporting its new recruits during the vital and difficult days in the job. Management support is critical to new employees as it gives them trust with the management hence an effective tool of ensuring long term retention of employees (Phillips and O’Connell, 2003). Through supporting the new recruits, communication with the top management increases and this builds organizational integrity which is a key factor towards ensuring employee retention. Newmont Australia should also provide its employees with interesting work, clear career paths and support its employees personal development. Job dissatisfaction is closely associated with failure of an organization to provide its employees with interesting working conditions and this eventually leads to high turnover rates. Furthermore, the company should ensure that it keeps its pay in line with other industries in the market. This will ensure that the company employees are satisfied with their salaries hence act as a means of retaining them. In addition, the company should come up with strategies of creating satisfying working environment by offering its employees with attractive benefits and continuously consulting and communicating with them in order to determine their needs and the problems they may be facing at the workplace. 5.2 Creating a Strong culture A strong culture ensures that an organizations core values are widely shared and deeply held (Jain, 2005). Strong organizational culture improves the way employees interact in the organization hence this has an impact towards making the organization to be more effective. Griffeth and Hom (2004) argue that incase an organization adopts a turnover favoring culture the employees will adopt a state of mind that resigning is acceptable, right and normal. However, through a strong organizational culture, employees are able to intensely hold and accept the core values and this leads to greater employee commitment to the organization. Newmont Australia should create a strong culture in order to reduce the high level of employee’s turnover. The strong culture will play a major role in influencing and shaping the behavior of the company employees because the deeply and widely held values will create an interior climate of high commitment hence reduce the high turnover rate. Moreover, the strong culture will enable the employees to lay bare their high agreement about what the company aims to achieve. This will in turn create loyalty, cohesiveness and commitment to the company and thus reduce the probability of the employees leaving the company. Furthermore, by creating a strong culture Newmont Australia will be able to create a form of feeling that the employees own the company. The values and norms associated with a strong culture will create strong employees obligation hence they will strive at ensuring that the company succeeds by displaying high levels of commitment. 6.0 Implementation of the solution According to Daft (2008) implementing the solution to a problem involves the utilization of the managerial and administration skills. An organization should establish the problem priorities and set the time period so as to ensure successful implementation of the solutions. Newmont Australia first priority is to provide job satisfaction to its employees. To do this, the company should begin by providing financial resources in order to offer its employees with competitive salaries as well as to finance the development of their skills and abilities. In addition, the company should change its recruitment policies so as to provide applicants with more information about the company. On the other hand, the management should be encouraged to increase its interactions with the employees in order to easily identify and solve employee’s problems. Furthermore, the company should change its working pattern in order to provide its employees with flexible and interesting working environment. The company must ensure that these activities are accomplished within 3 years. Newmont Australia second priority for the management is to build a strong organizational culture. Jain (2005) notes that in order to build a strong culture the company must hire employees who fit with the organizational culture. Moreover, the company should retrench those employees who continuously deviate from the accepted norms and behavioral requirements. The management should also be encouraged to act as a role model by coaching and teaching the company employees. Moreover, the company should hold ceremonies and rituals so as to enhance its culture. The company must undertake these activities within 2 years so as to ensure that they are successfully implemented. Conclusion Human resources are the most important assets to an organization and this means that they must be effectively managed. High level turnover rates can affect the ability of a company to successfully achieve its goals. This is the case with Newmont Australia which has continuously experienced high labour turnover rates. Lack of job satisfaction and the company’s inability to build a strong culture has made it to experience high rates of labour turnover. However, Newmont Australia can minimize this problem by adopting retention strategies and creating a strong organizational culture. References Aamodt, M. (2012). Industrial/Organizational Psychology. Mason: South-Western Cengage Learning. Beach, R., Brereton, D., & Cliff, D. (2002). Workforce Turnover in FIFO Mining Operations in Australia: An Exploratory Study. CSRM and MISHC, 1(1), 1-77 Becker, G. (2011). The Oxford Handbook of Human Capital. Oxford: Oxford University Press. Bohlander, G., & Snell, S. (2009). Managing Human Resources. Mason: South-Western Cengage Learning. Griffeth, R., & Hom, P. (2004). Innovative Theory and Empirical Research on Employee Turnover. New York: Information Age Publishing Inc. Jain, N. (2005). Organizational Behavior. New Delhi: Atlantic Publishers & Distributors. Murray, G., & Peetz, D. (2010). Women of the Coal Rushes. Sydney: University of South Wales. Robbins, S., Judge, T., Odendaal, A., & Roodt, G. (2009). Organizational Behavior. Cape- Town: Pearson Education South Africa. Read More