Juicy Red Tomato Company - Essay Example

Juicy Red Tomato Company (JRT) is facing problems of rising costs. The company has identified some external factors such as weather conditions but we need to dwell into the issue and look at what internal factors may be leading to high labor costs. The problem of high employee turnover has been singled out and its possible reasons could be the company policy of ‘promoting from within—the longer you stay with the company the more you can rise.’ This proposal is aimed at looking at the problem and its possible reasons in a step by step fashion. Introduction Juicy Red Tomato Company is a tomato grower which operates in Florida. It was formed 15 years ago and has had stable growth till the last three years when it started incurring high costs. The company feels that issues like unexpected temperature drops, outbreak of pests and rising labor costs has lead to the increase in costs in recent years. Moreover, the company intends to expand its facilities and so it must address this major issue of employee turnover. Step 1: General Observation Broad area of research interest identified In the recent past employee turnover has increased and key personnel are leaving. This is having a broad effect on internal costs. The acts of hiring new employees, training them, enabling them to grow as professionals all incur huge costs. This is evident by the statistics presented which indicate that company growth is stable at 5% but costs have been rising at an average of 2.5-4% in the past 3 years. If this trend continues then ultimately JRT will head towards major financial losses. Such losses can be very heavy for a consumer product company which needs to invest substantially in marketing and advertising. However, losses would mean slashing advertising budgets. Moreover, JRT’s reputation in the industry will be effected which will lower the moral of the existing employees and in turn reduce their productivity. Step 2: Preliminary Data Gathering Interviewing Key personnel turnover can occur if managers feel dissatisfied and do not see opportunities to grow. The most basic problem arises when senior managers feel their productivity is reaching a stage of stagnation. This could be possible if they feel their job is not challenging enough, or perhaps if they consider it monotonous and boring. For this purpose it will also be important to talk to as many people as possible to gauge the nature and extent of the issues involved. Several in depth interviews need to be conducted in order to find the main cause of dissatisfaction at work   To get a better hold of the issue we also need to survey and analyze existing financial documents of JRT. This would include recent balance sheets, profit and loss statements, cash flow statements, financial disclosures etc. We also need to evaluate pay scales of existing employees and also of those key personnel who have already quit. Step 3: Problem Definition Research Problem Delineated To what extent is the organizational structure effective producing committed long term employees? As per the company’s HR policies, is it choosing, hiring and retaining efficient managers? Literature Review & Research Questions In order to get a better hold of the issue identified we need to start with some data gathering activity. For this purpose we need to read professional magazines, recent newspaper articles and other research sources to analyze why the problem of key personnel turnover takes place. Recent articles on this issue will help in knowing the latest industry trends and market activity. Questions like the following need to be addressed: ‘Are you satisfied with your job?’ ‘Does your job provide you opportunity to grow?’ ‘Would you like to see any changes in your work responsibilities?’ ‘Do you feel your job is annually appraised?’ Step 4: Theoretical Framework High employee turnover can be due to a variety of reasons. The most basic problem can be as identified the company policy of promoting employees on the basis of tenure rather than on qualification and competency. This can cause dissatisfaction among those recently hired but highly qualified managers who would not like to report to a superior who is less qualified then themselves. Apart from this, if the company’s working conditions are not conducive to work, employees may have a hard time in concentrating at work. Work settings play a very important role in creating the right mood to work. Issues like proper temperature in the office, proper ventilation, adequate space to work, comfortable furniture, suitable working hours etc all play an important role in enhancing employee productivity. However, the basic problem at work starts if an inappropriate individual is hired for a position. If he is over or under qualified for his job, he will be dissatisfied. Most organizations have a strict hiring procedure where the candidate goes through different tests and interviews so that the management can determine how well he works under pressure and with limited resources. JRT needs to re examine its hiring policies. Apart from this, it is important to note what growth opportunities are offered by the company. Does it provide trainings to his workers? If a job does not offer room to grow than any employee can be highly frustrated at work. If such problems are not addressed by the Human Resources Department the company will be unable to retain its existing employees. In order to improve employee retention, the company needs to provide growth possibilities to its workforce and offer training courses when needed. Employees can be retained if they genuinely feel that the company is making an effort to resolve their problems and issues. One of the most important features that must be looked into is to determine if there is any sort of discrimination at work. Discrimination can be of various types: gender, ethnic, sexual and racial. Perhaps employees feel that they are being discriminated on the basis o age groups, long standing tenure, educational levels etc. Two interlinked variable are those of peer relationships and organizational structure distortion. Perhaps the employees are not comfortable with their superior’s attitudes and working styles. The leadership style of superiors can be a source of discomfort. An authoritative style of leadership can be too suffocating for some at work. For other used to team leadership, any other style of their superiors can be difficult. Moreover, employees need to feel comfortable as they work with their colleagues and subordinates. If their subordinates are more qualified than them, it may become tricky to manage in such cases. If relationships among different organizational levels are not on good terms, communication will be effected. Workers will not feel comfortable describing their problems to their superiors. Similarly downward communication can be hampered in a situation where the subordinate is more skilled than the manager himself. Finally, compensation is a very important feature that must be looked into. Poor compensation policies can create discontent. Appropriate bonuses, increments are very important in order to retain employees. Benefits, both monetary and non monetary must match industry standards. Step 5: Generation of Hypothesis Ho1: Juicy Red Tomatos selection policies of managerial personnel are efficient Ho2: Juicy Red Tomato’s retention policies are capable to encompass the planned expansion program Ho3: Juicy Red Tomato’s does not need to invest in retention of front line employees Ho4: Juicy Red Tomatos organizational structure provides room for professional growth Ho5: Juicy Red Tomato’s organizational structure allows smooth two-way communication to take place Conclusion Juicy Red Tomato Company is facing several problems. Most of the problems seem to be deep rooted within in appropriate HR policies. If these problems are looked into, the company can be successful in hiring and retaining its key personnel. Although high dependence on key personnel can be a recipe for disaster but since JRT is incurring costs due to high employee turnover it must address this issue. BIBLIOGRAPHY Bernardin & Russell (2000). Human Resource Management—An Experiential Approach, McGraw Hill Series, USA. Read More