On the Problem of Staff Turnover

Introduction

The Mosaic Company is a Fortune 500 company that deals with the production and international distribution of concentrated potash and phosphate crop nutrients. In a challenging business environment, the company has to address numerous issues, including high staff turnover. In recent decades, this problem has gained immense significance and has always been regarded by many scholars and employers as an adverse phenomenon in business since it impacts both the company’s productivity and team spirit.

Therefore, the purpose of this paper is to evaluate existing literature, contemporary HR policy, and practices relevant to employee turnover rate and conduct a systematic analysis of quantitative and qualitative information collected in the research. In addition, the paper will offer conclusions and recommendations for improvement supported by a cost-benefit analysis plan. Finally, the report will reflect my experience of doing the project.

The Evaluation of Existing Literature

The staff turnover has both a direct and indirect effect on the company’s budget and development since the hiring process itself is complicated, comprising the considerable time of worker’s replacement. According to the study performed by the Society for Human Resource Management (SHRM), this time accounts for approximately 42 days, with $4,129 of the average cost-per-hire (“Average Cost-per-Hire for Companies,” 2016). Moreover, after employment, managers spend on payment and the system of incentives, including insurance, training or education, and appreciation and healthcare programs, to stimulate employees’ adaptation, motivation, and loyalty.

Overall, the SHRM indicates that every organization pays $4000 on tuition per year and from six to nine months’ salaries when replacing a specific employee (“Average Cost-per-Hire for Companies,” 2016). Last but not least, because of high employee turnover, the company loses critical professional members and leaders, which eventually influences the team’s spirit and performance (Stewart and Brown, 2020). Concerning the Mosaic Company, its median employee tenure accounts for 1.1 years, according to PayScale’s survey (“Top 10 Companies,” n.d.). In this regard, it is worth examining the impact of different practices, policies, and factors on employee retention and turnover intention.

Compensation and Reward

In a straightforward sense, compensation is in the form of payment offered by a company for a particular service or work done by an employee. It may consist of salary, fringe benefits, perks, bonuses, financial and non-financial recognition programs, leaves, and medical insurance. However, compensation has a broader meaning since it can significantly affect employees’ job satisfaction and motivation, thereby enhancing workers’ commitment (Stamolampros et al., 2019; Oloke et al., 2017).

For example, a study by Mugaa, Guyo, and Odhiambo (2018) displays that fringe benefits tend to improve retention and have an apparent and substantial effect on attracting new employees through enhancing their performance. Furthermore, many scholars indicate that low salary and poor pay-scale procedure are among the most critical factors that make workers leave the job (Ghafoor, Ansari, and Moazzam, 2017; Sumiati, 2018; Santhanam et al., 2017). On the contrary, introducing a sound and transparent compensation system allows for retaining skillful workers by improving their satisfaction with an organization.

Training and Development

Training and education imply a complex process of teaching the company’s employees regarding technical and non-technical insight of the specific professional area and essential norms of corporate behavior. In terms of staff turnover, training is a critical implement that can promote worker loyalty since most applicants and employees appreciate the development and training opportunities that a specific company can give.

According to Oloke et al. (2017), above sixteen percent of all respondents state that training opportunity is a vital determinant of improving job satisfaction and motivation of employees. Furthermore, Glassdoor, a job, and recruiting website published the research in 2014, indicating that 72 percent of employees value specialized internal training more than a degree obtained in higher establishments (“7 in 10 Employees Value Skills,” 2014). Thus, the management should implement relevant training courses and seminars to encourage workers to stay in the company.

Performance Management

Undeniably, the failure or success of performance management of any company is determined by the ideological content related to business objectives, and the expertise and attitudes of those accountable for its realization. Performance management includes activities such as performance review, shared target-setting and discussion, robust interaction and communication, and mentoring in work-related tasks (Hutchinson, 2013). In particular, Waeyenberg et al. (2016) assert that when a team has internal consistency and when the company’s strategic goals and employees’ goals are linked, employees are less willing to leave a company. Nevertheless, when performance management does not align with employees’ aspirations and the company’s aims, it can place undue pressure on the team.

Career Development

Career promotion is a dynamic practice directed at meeting managers’ and subordinates’ desires of self-actualization. Research conducted by Aguwamba, Chukwu, and Ezeabogu (2019) shows that when the opportunity of career progression decreases, staff turnover intention rises. Another study carried out in the software industry presents the same correlation between turnover intention and career advancement (Ghafoor, Ansari, and Moazzam, 2017). Stamolampros et al. (2019) hold to a similar opinion, indicating that career progression plays a critical role in employee turnover. In this regard, managers should be eager to stimulate employees to assume responsibility for their careers by providing continuous assistance and progress feedback since it promotes professional growth and helps to retain valuable employees.

Research Method

The selected method is the quantitative analysis method because this paper aims to understand the impact of HR practices on employees’ retention and turnover intention via a review of literature containing statistics. According to Marshall and Rossman (2016), a quantitative method needs data collection processes by utilizing numbers, testing hypotheses, random sampling, and examination of correlation and regression to identify cause-and-effect relationships, frequencies, and averages. The quantitative analysis approach can be used to interpret data collected from surveys, experiments, observations, and literature reviews.

Systematic Analysis

The given section aims to investigate the validity of the collected data and its relevance to staff turnover. The objective of the research conducted by Aguwamba, Chukwu, and Ezeabogu (2019) was to examine the correlation between employee turnover intention and career progression in the food and beverage industry in Nigeria. The authors applied a survey research method to gather primary data from 355 sampled firms’ staff in Nigeria. The collected data were analyzed via Pearson correlation and simple regression methods to test the hypothesis.

The linear regression model is the most used and most studied, while the Pearson correlation is regarded as the best method of measuring the correlation between variables. The empirical findings from both models demonstrated that there is a significant negative relationship between turnover intention and career progression. Low response rate, the reluctance of respondents to answer the questionnaire, and the presence of only one country are among the limitations. Overall, the study recommends stimulating career development among employees since it increases loyalty and commitment.

The goal of the study performed by Van Waeyenberg et al. (2016) was to produce evidence for the effectiveness of employee performance management (EPM) systems. The researcher designed a structured questionnaire to assess the vertical alignment of EPM systems, internal consistency, EPM system satisfaction, and turnover intentions. A large Flemish public-sector organization was chosen as a sample. 717 civil servants who follow the criteria obtained the questionnaire through e-mail, out of which 241 with age from 17 to 63 years old completed questionnaires. The hierarchical regression approach and Cronbach’s alphas were applied to validate the hypotheses. In summary, “this study supports the favorable effects of EPM systems on civil servants’ satisfaction with the system, their affective commitment, and turnover intentions” (Van Waeyenberg et al., 2016, p. 14).

The article by Stamolampros et al. (2019) examines the determinants of job satisfaction and employee turnover. The authors carried out a study utilizing employee review platforms, including Glassdoor, to review 297,933 employees’ opinions about their current and previous employers from 11,975 US tourism and hospitality companies for the period between 2008 and 2017. It has been revealed that career progression is crucial for staff turnover, and leadership and cultural values have an immense impact on job satisfaction.

The purpose of the study done by Ghafoor, Ansari, and Moazzam (2017) is to identify and evaluate the relationship between turnover intentions, career progression, and financial compensation. The data was gathered via a self-administered questionnaire from 167 employees in the software industry of Pakistan following the non-probability purposive sampling technique. The survey tool applied for collection data comprises 28 items Likert scale with five demographic questions. Regression and correlation analyses, along with SOBEL, were used to test the hypothesis. One of the notable disadvantages of the research is the small sample size. The study concluded that market competitive financial compensation and career progression are significantly connected with turnover intention and self-actualization.

The study by Sumiati (2018) primarily aims at determining the effect of compensation, communication, and spirituality on employee performance and turnover intention. The research method applied in this article is quantitative explanatory research, namely, the survey. Census sampling embarrasses the population of 84 individuals who work as technicians, marketing and administrative staff, and Account Executive in Muslim Voices Radio Network. Partial Least Square was employed as an analysis technique for testing the hypothesis. The finding showed that compensation, communication, and spirituality have a considerable negative impact on turnover intention.

The research by Mugaa, Guyo, and Odhiambo (2018) is directed at evaluating the influence of fringe benefits on employee performance. The study implemented a descriptive research design and positivist philosophy. The target population involves 22,856 employees engaged in the six commercial banks in Nairobi City County. Morgan and Krejcie’s sample size determination table was applied to make a sample of 377 respondents. Primary data was collected via structured questionnaires and examined utilizing SPSS. In addition, the study conducted stationarity, normality, multicollinearity, autocorrelation, and heteroscedasticity tests.

According to the results obtained, there is an evident and positive relationship between fringe benefits and employee performance. The authors firmly recommend the adoption of fringe benefits to motivate, retain, and attract skilled and qualified employees.

The study performed by Oloke et al. (2017) aims at examining the impact of the incentive package and base salary on employee motivation and productivity. The researchers applied a panel survey approach and three questionnaires conducted in 117 estate firms, from which 34 in Victoria Island, 79 in Ikeja, and 4 in Lekki. A 5-point Likert scale and ranking were adopted to rank and determine the variant in order of importance. Panel data regression analysis was used to define the link between incentives and firms’ performance. It is worth noting that base pay, pension, and leave rank first among respondents.

The purpose of the paper of Santhanam et al. (2017) is to determine the correlation between HR management practices and employee turnover intentions in the Indian hospitality sector. The study adopted a survey design and a multiple regression approach to test the hypothesis. The sample size includes 294 frontline employees in the front office and food and beverage services. HR practices were evaluated using a 26 item, 5-point Likert-type scale, while employee turnover intention was assessed by five items of the scale designed by Landau and Hammer (1986) and two items from Lum et al. (1998). Overall, selection, compensation, and training practices have been revealed to be the most influential factors for employees’ turnover intentions.

Recommendations and Conclusion

A cost-benefit analysis (CBA) is the systematic procedure to measure the strengths and weaknesses of different decisions and alternatives to identify the best way of attaining a particular objective. Generally, CBA has several essential steps needed to be followed to reach successful results, namely, the definition of objectives, alternatives, and stakeholders, as well as offering recommendations (Anthony et al., 2018).

Thus, the goal of this plan is to identify the most cost-effective variant among HR practices, including compensation and rewards, training, career development, or performance management, to retain employees in the Mosaic Co. The possible stakeholders consist of the CEO, HR manager, financial manager, accountant, and employees. In particular, the CEO is responsible for implementing and controlling the plan, and the role of an HR manager is to identify the problems causing high staff turnover and collect employee-related information.

Since the company currently is experiencing a slight economic downturn, it primarily should give priority to improving career opportunities and the development of the appropriate performance management system. The first approach is consistent with the needs of employees’ self-actualization, while the second will help to create a suitable and favorable corporate environment and make the employees feel valued. Finally, the manager should ensure that workers receive competitive and adequate compensation because it is an integral factor in employee satisfaction. The accepted measures can significantly decrease turnover intentions and hold competent and qualified employees, which ultimately results in better company productivity and increased revenue.

Reflection

In this part, I will reflect on my experience and knowledge gained during writing my project that aims to examine the issue of staff turnover, the appropriate HR solutions, information collected in the research. A reflective report is a necessary tool that helps individuals to summarise and evaluate the findings of the project and identify problematic areas needing further consideration. Due to the project, I have managed to gain an in-depth understanding of a given issue as well as notably improve my writing and researching skills.

First, I have revealed that researching and evaluating literature is a challenging task that requires considerable effort and critical thinking ability. In the beginning, because of the abundant information proposition from searching machines, I faced the problem of identifying the material that directly or, at least, partly relates to the employee turnover and HR policies. However, due to the gradual discovery of common connections and concepts, I have selected, in my opinion, the most relevant articles. The selected articles broadly unfold the given issue by performing various types of studies and providing pertinent recommendations.

It is worth noting that I chose papers, the studies of which were conducted in different countries, such as India, Nigeria, Pakistan, USA, UK, Indonesia, among others. While reading the literature, I have encountered many widespread HR practices used by managers to promote employee retention, among which are adequate compensation, career growth, training, and professional development, and performance management. Besides, I have learned the influential factors that have both positive and negative relations to staff turnover, including employee motivation, job satisfaction, commitment, loyalty, the presence of the right skills.

In addition to the relevance of the literature, determining its validity was the second significant problem since every article has its limitations and claims. In this regard, the first time I faced such a task, which makes me analyze each article carefully. To ensure the articles’ cogency and actuality, I focus on the presence of sample size, collection and analysis data methods, related participants, the credibility of journals, and even the educational or professional degree of authors. Additionally, it was important to me to select the most recent articles, namely, those that were published in the last decade. This, altogether, allows me to polish and deepen my research skills.

In general, the given project equipped me with comprehensive and up-to-date knowledge about sound HR practices and modern tendencies as well as advanced a clear understanding regarding the complexity of HR management. Based on the obtained information, I managed to develop the cost-benefit analysis plan that helped me make relevant recommendations concerning necessary improvements in the Mosaic Company.

Moreover, I had an excellent opportunity to enhance my writing, critical thinking, and decision-making skills. In particular, I profoundly got acquainted with the nuances and fundamental requirements of academic writing style. Finally, the specified skills and knowledge will have an immense significance in my professional development, help me make appropriate decisions supported by ample and substantial evidence, as well as facilitate my career growth.

Reference List

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Anthony, E. B., Greenberg, D. H., Aidan, R. V. and Weimer, D. L. (2018). Cost-benefit analysis: concepts and practice. Cambridge University Press.

Average Cost-per-Hire for Companies Is $4,129, SHRM Survey Finds (2016). Society for Human Resource Management (SHRM). Web.

Ghafoor, S., Ansari, N. and Moazzam, A. (2017). ‘The effect of financial compensation and perceived career progression on employee turnover intentions with self-actualization as a mediator.’ Governance & Management Review, 2(1), pp. 1-25.

Hutchinson, S. (2013) Performance management: theory and practice. London: CIPD – Kogan Page.

Marshall, C. and Rossman, G. (2016). Designing qualitative research (6th ed.). Thousand Oaks: Sage.

Mugaa, L. G., Guyo, W. and Odhiambo, R. (2018). ‘Influence of fringe benefits on employee performance in large commercial banks in Nairobi city county in Kenya.’ Journal of Strategic Management, 2(2), pp. 31-49.

Oloke, O. C., Oni, A. S., Babalola, D. O. and Ojelabi, R. A. (2017). ‘Incentive package, employee’s productivity, and performance of real estate firms in Nigeria.’ European Scientific Journal, 13(11), pp. 246-260.

Santhanam, N., Kamalanabhan, T. J., Dyaram, L. and Ziegler, H. (2017). ‘Impact of human resource management practices on employee turnover intentions.’ Journal of Indian Business Research, 9(3), pp. 212-228.

7 in 10 employees value skills training more than degrees; glassdoor employment confidence survey. (2014). Glassdoor. Web.

Stamolampros, P., Korfiatis, N., Chalvatzis, K., and Buhalis, D. (2019). ‘Job satisfaction and employee turnover determinants in high contact services: insights from employees’ online reviews.’ Tourism Management, 75, pp. 130–147. Web.

Stewart, G. L. and Brown, K. G. (2020). Human resource management: linking strategy to practice (4^th ed.). Hoboken, NJ: John Wiley & Sons.

Sumiati, S. S. (2018). ‘Effect of compensation, communication and spirituality at work on the performance of the turnover intention as an intervening variable.’ Archives of Business Research, 6(10).

Top 10 companies with the least loyal employees. PayScale. Web.

Van Waeyenberg, T., Decramer, A., Desmidt, S. and Audenaert, M. (2016). ‘The relationship between employee performance management and civil servants’ turnover intentions: a test of the mediating roles of system satisfaction and affective commitment.’ Public Management Review, 19(6), pp. 747–764. Web.