High Turnover Rate at an Organisation

Topics: Employment, Management, Organizational culture Pages: 9 (2699 words) Published: September 18, 2008
The objective of this report is to analyze the high turnover rate of EAV Singapore using organizational behavior concepts. Our data collection methods include an interview with an employee in the corporation and online research. The structure of the paper will include the company’s background, the problem faced according to the interviewee’s viewpoint, the consequences and possible causes, and the most applicable model to analyze the problem, followed by a brief conclusion.

Company Background
EAV is a Multinational Company based in the United States, specialising in the electrical and fluid power sectors. The firm has a local office that serves as a link between its production lines worldwide and regional customers. The 50 staff in the local branch comprises a general manager, 6 departmental managers, and low level staff ranging from 2 to 6 per department. They help promote and distribute EAV's products regionally, handling orders, payment and customer relationship management.

Description of the Problem
Despite EAV’s success story, the local branch is facing a serious problem: a high turnover rate. There is a serious shortage of staff across the organisational hierarchy. During the interviewee’s stint there, two managers left without proper replacement. Furthermore, only one out of the three HR personnel (three was already a shortage) remained in the company. As a result, a HR manager had to be brought in from the main office to deal with the crisis.

The shortage in staff has led to delayed order processing and delivery, causing inefficiency and increased operating costs. Although sales have increased in the Asia-Pacific region last year, this growth is mainly due to the expanding Asia-Pacific market . The inefficiency arising from insufficient staff could possibly have reduced potential growth, and threaten EAV’s sustainability and growth as the industrial leader globally.

Workload has also increased for remaining employees. Due to management personnel leaving the company without proper replacement, some managers have to take charge of more than one department simultaneously. This creates a domino effect as the increment in workload then causes more managers to resign. Furthermore, the high turnover rate has also raised expenditure for staff training, as there is a constant flow of new staff that needs to be trained. This in turn affects the staff morale, as they have to keep adapting to new colleagues.

Possible Causes
We shall look at the possible causes from different perspectives across the hierarchy, namely all hierarchy levels, the employees (this includes departmental managers but not the general manager, i.e. GM), and the employers.

All levels
Weak Organisation Culture
For new employees, the initial contact with the organization is crucial as that is when they first form impressions of the workplace and culture, thereby forming a mental model on the appropriate modes of behaviour. However, in EAV there is no proper induction programme to introduce new staff. Existing employees do not take the initiative to make new colleagues feel welcomed, owing to the lack of sense of belonging to the organisation. Thus, new staff experience little “sense making” of the organization culture which is already barely there in the first place. The organization therefore continues to be culture-less. Eventually, workers will develop a “me attitude” and will not be committed to EAV. They will also tend to put their own personal interest before the company’s .

Values Incongruence
Another possible cause for the high employee turnover can be a conflict in espoused-enacted values. When compared with the interview, EAV’s stated core values immediately highlighted an inconsistency between espoused and enacted values within the organisation.

Accordingly, the relevant core values include EAV:
Treating each other with respect,
And being fair, honest and open in their...
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