High Turnover Rate Essay

1. Key issueHigh labour turnover rate is prevalent in the insurance industry and especi everyy in prudential. Thus, the firm may have to incur more costs and time to train new employees.http//business.asiaone.com/Business/My%2BMoney/Building%2BYour%2BNest%2BEgg/ restitution/Story/A1Story20090821-162517.html2. CausesThe main cause of the high turnover is the organisation purification. Observable ArtifactEvery Monday, all employees are required to wear white as a symbol of unity and recite the firms pledge, which is to place their familys interest before their have.While expecting the employee to perform his best, the firm should besides digest adequate welfare for its employees. Otherwise, employees may feel discontented and choose to leave, thus, increasing the turnover rate.Espo utilize ValuesThe firm espouses the value of family. Family in this case, refers to ones take in family as well as the firm. Everyone has an obligation to work hard for their family.It is taboo for the employee to raise their point of view during meetings, as they have to respect the seniors in the family. slip away performing employees are rewarded handsomely while underperforming employees are pressured to hit their quota or be forced to leave the firm.Based on the Blake-Mouton Managerial Grid, Prudential has an positive leadership, characterised by high concern for production and low concern for people.http//www.mindtools.com/pages/article/newLDR_73.htmhttp//www.kean.edu/lelovitz/docs/EDD6005/humansideofenterprise.pdf Enacted ValuesThe espoused values are not exhibited boldly. Some meetings are on the weekends, preventing employees from outgo family time. This discrepancy can cause higher turnover rate.Basic AssumptionThe firm adopted the Taylorism theory, which attempted to add productivity by motivating its employees done monetary incentives.Sales ranking charts are comm nevertheless seen in the office. Top employees are rewarded and highly regarded in the company, whil e the rest are neglected. By take for granted that employees are only incite by money, the employees morale is ignored.Herzbergs motivation-hygiene theory states that an employees satisfaction is dependent on hygiene issues and motivators. In Prudential, the hygiene factors the like work/life balance and good inter-personal relationship with the superiors are lacking. Thus, employees are more inclined to leave the firm, contributing to its high turnover rate.http//research-methodology.net/frederick-hertzbergs- dickens-factor-theory/ http//www.businessballs.com/herzberg.htm3. Analysis of the theories1.2.3.3.1 Taylorisms theoryThis theory assumes that each employee will maximise his productivity in order to earn the bonuses. When interviewed by Kurt Nelson in his study of pharmaceutical sales teams, all of them stated that the incentives for the top achievers were very motivational. This theory corresponds with a research done by Michele Marchetti in 1998, which indicates that comm ission encourage salespeople to perform. However, Kurt Nelsons study involved only four employees, of which all of them worked together as a team. The small number of the employees is insufficient in proving that monetary incentives can go them to perform. Furthermore, this study is found on a sales team, where the motivation to perform can be different from that of an individual salesperson.3.2 HerzBergs Motivation-Hygiene theoryHerzbergs theory can be used to detect issues that need to be mitigated. In a study conducted by Jones and Lloyd, employees who contribute ideas in a meeting usually exhibit the following motivations a) A desire for recognition from a line managerb) The desire for recognition from colleaguesFor instance, the use of this theory can help Prudential in strengthening its family culture and allow the voices of the employees to be heard.However, there are also several limitations too. Herzbergs theory is still a generalization which cannot be applied to all ind ividuals. It is also based on interviews with accountants and engineers. An accountant may be motivated by add-ond pay while the Prudential employee may be more motivated by flexible work timings. Furthermore, giving an employee responsibility they are not ready for can be overwhelming and become a demotivator. 4. Authors perspectivesTo rectify this issue, the management at Prudential should adopt a healthy balance of the Taylorism theory and Herzbergs theory. Providing incentives for the employees to perform in the Taylorisms theory is barely a hygiene factor in Herzbergs theory. The management need to incorporate other factors to encourage lower turnover. Studies have shown that to predict voluntary turnover, an increase in individual values enactment corresponds with a decrease in turnover. citation Another study which includes 2,622 employees from a hospital located in the US, found that the presidencys incorporation of a values enactment measurement establishment into the fo rmal performance evaluation process benefited the organization by retaining employees more potential to conform to the organizations espoused values. citation Hence, Prudential should first boldly exhibit its espoused values. Incentives should also include things like family trips.Performance measures should not only be united to sales quota only, but the number of trainings conducted by the senior employees to the junior employees, the amount of time spent with their own family and more. While recruiting employees, Prudential need to conduct a thorough interview, to screen the employees with the same values as the firm, as they would be more likely to stay in the firm. While such recommendations can motivate employees, it is difficult to measure the amount of time one spends with his family as the data could be easily fabricated. The cost of recruiting new employees must be equivalent to the increase of sales made from this new strategy, for this change to be justifiable. Resistan ce to change will also be expected from the management as the previous system has been very successful in ensuring high profits for the firm, despite the high employee turnover rate.In a study conducted by Caliper Human Strategies Inc., a human resource consulting firm in Princeton, NJ, and Automotive News magazine, reveals that top salespeople in 3000 car dealerships have several temper traits (Sawyers, 1997). Some of the strong personality traits are Ego drive( the need to motivate people), Ego strength (ability to handle rejections), Self structure( a strong ability to organise ones own work), Assertiveness(persuading others to adopt a different point of view). Prudential can use these traits listed in order to hire the right person for the project. Perhaps a job trial can be conducted for the candidate rather than the standard interview.5. Conclusion6. Appendix* A newcomer should not be employed with the same stipend system as the veteran. (us automobile ) * Changing the comp ensation system to a more comfortable and predictable system such as the salary based payment will greatly increase the retention rate of the salespeople. This has been proven in different dealerships throughout the country.Abetter alternative is to allow the salespeople to switch between the two compensation methods. During a lean period, the dealership would allow the salespeople to switch to salary based, and during the boom period to switch to risk based compensation method.* Foster a more-family like culturehttp//www.businessballs.com/herzberg.htmhttp//www.managementstudyguide.com/herzbergs-theory-motivation.htm