Essay on "Effects of Employees"

Essay 7 pages (1953 words) Sources: 1+

[EXCERPT] . . . .

Employees' Turnover on Human Resource Department

With the realization that the organizational staff members represented the most valuable asset of the company, managers strived harder than ever to create a favorable working environment, in which the employees could flourish both professionally as well as personally. The trend is obvious at the entire level of the business community and probably the most relevant evidence in this sense is offered by the fact that the large majority of modern day organizations possesses its own human resources department.

The human resource department is basically in charge of all operations related to the staff members. Its specified goal is that of improving the nature of the relationship between employees and managers, to the final benefit of both parties. There are numerous means in which the companies strive to improve the relationship with their staff members, such as enhanced communications, training programs or the offering of several financial and non-financial incentives.

In a context of intensified organizational efforts to improve the employees' satisfaction on the job (and as such their performances), a situation has been created in which the economic agents no longer compete just for customer base, but also for workforce. This has led to an intensified movement of the staff members, from one employer to the other, in search of better remuneration systems, enhanced promotional opportunities, better chances for professional development and so on. But the movement of employees, generally known as employee turnover, generates several costs for the employer, such as those registered with the replacement of the leaving staff and the training of the new staff.

2. Background

The organizational community began placing more emphasis on their staff members in the 1980s decade, as they realized the pivotal part played by the staff members. Until those times, the personnel members had been perceived as the force operating the machines. In time however, they came to be recognized as the most valuable organizational asset. And while this is true within all economic entities, it is even more so applicable within the companies delivering services, rather than material products. Sir Collin Marshall, former chief executive officer at British Airways: "In an industry like ours, where there are no production lines, people are our most important asset and everything depends on how they work as part of a team. This means that, to get the best results, managers have to care about how they (the employees) live and function, not just about how they work and produce" (Boyd, 2003).

The incremental emphasis placed on the staff members led to a situation in which economic agents competed for the best employees, with the ultimate outcome of incremental employee turnover rates. Simultaneously, the employees became more pretentious and demanding, and continually left current jobs in search of better ones. The higher turnover rates created additional challenges for the employers, who were forced to invest more financial resources into the replacement of the staff and the training of the new personnel members.

At a global level, the employee turnover rates vary from one location to the other. Low employee turnover rates are generally common in highly developed and mature markets, in which the employers recognized and embraced the role of organizational staff members in the overall success of the entity. In these global regions, the employment offerings of companies are similar and include various financial and non-financial incentives. Low employee turnover rates are also common in the less developed and underdeveloped economies, where the number of employers is low, and the opportunities for the employees are reduced.

Unlike underdeveloped and highly developed economies, emergent markets are the ones that reveal the highest levels of employee turnover rates. Here, the number of employers gradually increases and the staff members identify new possibilities of improving the quality of their life. In the emergent economies, the new employers offer to hire the domestic employees for better salaries and in better conditions. While some individuals will enjoy the working conditions within the new companies, others will decide to go back to their old job, or will continue their search. This state of events leads to high employee turnover rates.

A relevant example to reveal the differences between developed and emergent economies is offered by the comparison between China and Japan. In terms of automobile manufacturing, Japan has until recently represented the largest automobile manufacturer in the world. Throughout the past year however, this role has been assumed by China, but questions arise relative to the ability of China to maintain this position. Japan is a highly developed economy in terms of income, output or technologies. China on the other hand, despite the massive reforms for liberalization and economic restructuring of the past two decades, remains an emergent economy.

In terms of employee turnover rates, the difference is obvious. While Japan is a country with one of the lowest employee turnover rates in the world, China registers the highest employee turnover rates on the entire Asian continent. At a national level, the employee turnover rates in China are more than double those in Japan. At an organizational level, nearly half of the Chinese companies argued to have registered an employee turnover rate of over 10% in the past year; 13% of the companies had an employee turnover rate over 20%; the main causes for the high rates are the unsatisfactory wages, combined with insufficient opportunities for professional development (Han, 2008). This is extremely worrying in a context in which the modern day organizations strive to register employee turnover rates of no more than 2%.

3. Objectives

Having realized the context of employee turnover rates, as well as comprehended their gravity in the context of a real life instance, it is now important to reveal the objectives of the study. These virtually refer to the presentation of the threats posed by employee turnover rates, as they are presented within the specialized literature. This objective will be realized throughout the following section. The second goal of the research is that of drawing lessons from the specialized literature and the real life situation, all organized in the presentation of several solutions which could be implemented for the reduction of employee turnover rates. This objective will be accomplished throughout the section dedicated to Findings and Analysis. The paper comes to an end with a section on concluding remarks, which will restate the most important aspects of the research conducted.

4. Literature Review

The specialized literature has been focusing on the subject of employee turnover rates for over a decade now, but the most comprehensive studies have only been written throughout the past five years, as both practitioners and academicians comprehended the negative impact of high employee turnover rates. Before presenting the commonly forwarded negative implications of high employee turnover rates, it has to be stated that the phenomenon of some employees leaving the organization can also have some positive effects, such as:

Reducing stagnation and the risk of running into a rut

The elimination of underperforming staff members, or the stimulation of motivation and self development (Droege and Hoobler, 2003).

While these benefits are incontestable, it is also true that they are obvious when low rates of employee turnover arouse. When the rates are consistently increasing, the negative impacts would not tardy. Some of the most important ones include:

Incremental expenditures with the selection, hiring and training of new employees

Low employee morale and the adjacent reduced levels of organizational productivity and operational efficiency

Loss of reputation within the community due to the company's inability to retain staff members; this could easily translate into more challenging relations with various categories of stakeholders, such as shareowners or customers

Finally, the company loses its tacit knowledge (Droege and Hoobler). This virtually means that it finds itself in the impossibility of capitalizing on the investments made in the training of the employees who leave the entity, and alongside, take their expertise and knowledge

5. Findings and Analysis

Extrapolating the case of China, it can be concluded that high rates of employee turnover are common within economic agents who fail to professionally and financially stimulate their staff members. And despite the incremental emphasis placed by the modern day business community on the management of human resources, the high employee turnover rates come to attest the mistakes of some procedures. In other words, the most important findings is that the human resource departments ought to no longer focus their entire efforts and energy into the selection and hiring of new staff members, but rather on the retention of the current ones.

These current employees are already accustomed to the internal organizational processes; they are trained within their profession and possess the valuable know-how. Additionally, they are fully integrated within the organizational culture. A new employee on the other hand has to be identified, trained and integrated, all at high costs. All these elements lead to the realization that making the current employees more loyal to the organization is much more cost efficient, as well as effective, than hiring new… READ MORE

How to Reference "Effects of Employees" Essay in a Bibliography

Related Essays:

Effects of Employee Turnover Term Paper

Direct and Indirect Costs Associated With Employee Turnover

Direct And Indirect Costs Associated

with employee turnover

The objective of this work is to research and examine the effects of employee… read more

Term Paper 6 pages (1782 words) Sources: 8 Style: APA Topic: Career / Labor / Human Resources

---

Effective Employee Feedback Programs Term Paper

Employee feedback programs are programs that are developed for companies to gather feedback from employees, whether negative or positive, and give them a chance to have their voice heard. These… read more

Term Paper 10 pages (2835 words) Sources: 10 Topic: Management / Organizations

---

Effects of Employees Managers Interaction on Employees Attitude Towards Their Company Thesis

Additionally, a sample of 250 respondents may be significantly unrepresentative for a perceptual study of this magnitude, and the author figures out that the findings would have been more accurate… read more

Thesis 12 pages (6950 words) Sources: 8 Style: APA Topic: College Admissions / Financial Aid

---

Employees and Motivation Term Paper

Employee Motivation Study Proposal

Axis manufacturing is a 5000 employee facility that specializes in the manufacture of aircraft components for the U.S. military. Recently, orders have increased to the point… read more

Term Paper 12 pages (3497 words) Sources: 4 Style: APA Topic: Career / Labor / Human Resources

---

Employee Involvement and Workplace Productivity in Today Essay

Employee Involvement and Workplace Productivity

In today's hyper-competitive, increasingly globalized world, one of the most critical resources a company can wield is their human resources. Maximizing productivity is in today's… read more

Essay 6 pages (1682 words) Sources: 4 Topic: Career / Labor / Human Resources

---

View 100+ more related papers  >>