High labour turnover rate is prevalent in the insurance industry and especially 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/Insurance/Story/A1Story20090821-162517.html
The main cause of the high turnover is the organisation culture. Observable Artifact
Every Monday, all employees are required to wear white as a symbol of unity and recite the firm’s pledge, which is to place their family’s interest before their own.
While expecting the employee to perform his best, the firm should also provide adequate welfare for its employees. Otherwise, employees may feel discontented and choose to leave, thus, increasing the turnover rate.
The firm espouses the value of family. Family in this case, refers to one’s own 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”. Top 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 autocratic leadership, characterised by high concern for production and low concern for people.
http://www.kean.edu/~lelovitz/docs/EDD6005/humansideofenterprise.pdf Enacted Values
The espoused values are not exhibited boldly. Some meetings are on the weekends, preventing employees from spending family time. This discrepancy can cause higher turnover rate.
The firm adopted the Taylorism theory, which attempted to increase productivity by motivating its employees through monetary incentives.
Sales ranking charts are commonly seen in the office. Top employees are rewarded and highly regarded in the company, while the rest are neglected. By assuming that employees are only motivated by money, the employees’ morale is ignored.
Herzberg’s motivation-hygiene theory states that an employee’s satisfaction is dependent on “hygiene” issues and “motivators”. In Prudential, the hygiene factors 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.
3. Analysis of the theories
3.1 Taylorism’s theory
This 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 commission encourage salespeople to perform. However, Kurt Nelson’s 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 motivate them to perform. Furthermore, this study is based on a sales team, where the motivation to perform can be different from that of an individual salesperson.
3.2 HerzBerg’s Motivation-Hygiene theory
Herzberg's 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 manager
b) The desire for recognition from colleagues
For 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...