Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Essay:
Memo Re: High Turnover Rate
From: Human Resource Manager, DIY Supermarket
Managing Director, DIY Supermarket
Recently I surveyed our cashiers and clerks and found upsetting results. We have a very low morale with our shop-floor workers. Our staff is 80% part-time older women. These women do not like the way the shop floor supervisors treat them or are being "pushed around." Most of DIY shop floor supervisors are young full-time men who do not have management experience. Older women do not like being ordered around by young men. DIY has an 80% staff turnover of these shop-floor workers. A major reason for this turnover is this low morale.
Evidence from Research Studies:
Smaller retail organizations like our supermarket chain are always struggling to keep open. Competition keeps on growing. One of our biggest problems is finding ways to compete against the major grocery stores that build stores in prime locations. They offer more products and lower prices. Competition is Ireland, for example, is very high. There are many retail outlets that sell food and numerous convenience units. There are approximately 140 Aldi and Lidls, over 120 Tescos, more than 100 Dunnes Stores, 70 SuperValus and 20 Superquinns (Skelly 2010). That makes it very difficult for smaller groceries like DIY.
To compete against these large stores, we have to offer good service, excellent products, and a variety of different products. We also have to sell special products that our customers want. We have to keep our prices low. This is very difficult. Competition means we have to do more work and work harder. However, our employees have low morale. This lowers their productivity. They are not happy about extra work. Unhappy employees are not very good at their jobs. They also do not stay with the store for a long time. This high turnover of workers is not good for us. It costs a lot of money. Supermarkets should train the supervisors so people are more happy in their work and do not want to leave.
Cost of Turnover:
Many problems come from unhappy employees, such as poor customer service, increased mistakes and less productivity. In addition is the high cost of turnover when dissatisfied employees leave the company. Even in the 1990s, two decades ago, WH Smith group explained how costly turnover was. WH Smith employed about 33,000 people in the U.K. In 1993. It had an employee turnover of 40%, or nearly one-half of all its workers. In some stores, the number was even higher. The sales assistants had the highest numbers. As noted in Taylor (2002, p. 58) WH Smith said it paid £2,485 every time a sales assistant left the company. This amount of money came from the time allotted for training and new employee information. It also came from the 13 weeks it took for the employees to learn their jobs. It found that turnover was the highest in the first few months that people worked. When employees stayed for a year, they usually stayed a long time. WH Smith said that its annual cost of employee turnover was 11% of its pay bill. The company could save millions if it reduced its turnover from 40% to 15%. WH Smith estimated that every time a check-out person left, it cost the company £1500 in lost training, uniforms, and induction costs. The interference cost each year on this assumption came out at £120,000.
Importance of Satisfied Workers:
Unhappy employees lead to many problems. To the contrary, satisfied employees can greatly improve companies. Gallup (2006) surveyed employees to find out how employee loyalty lowers negative behaviour. It found that engaged employees remain longer with a company and are more likely to be innovative. Engaged or involved workers have passion and feel a strong connection with the company. Employees who are not connected are "checked out." They sleepwalk through the day. They are unhappy with their work and act out their unhappiness. They also undermine the work of others.
Importance of Training:
At DIY grocery, we do train our supervisors. Unfortunately, sometimes it takes up to a year for them to be trained. Many leave before they are trained. Also, by the time they are trained, the damage is done. They have already caused problems by not communicating well with their staff. The training we have for supervisors at DIY should be done within the first two weeks that a supervisor is hired. It also should be ongoing with additional sessions available during the year. In addition, internal communication is one of the most important subjects to learn in this training. DIY supervisory training consists mostly of operational topics. It does not deal much with the relationships of the supervisors with their staff.
Those who train their employees have positive results. GRO Foods in the U.K. sells a wide variety of products from stores in six countries, mainly Europe (60%) and the U.S. (25%). Recently, its sales growth has come from India and China that now account for 15% of total sales. GRO owns 700 stores and employs 150,000 people throughout the world. It is GRO's goal to invest in the skills and welfare of its employees and provide them with a safe place to work, give them skills that further their careers and develop their progress in the company. According to GRO, employees are its greatest advocates in the communities in which it operates. The company's success depends on the well-being and job satisfaction of the workers and their encouragement to offer the best customer service. Therefore, promoting the employees' welfare is fundamental to GRO's reputation. GRO recognises that it faces a great deal of competition from major organizations. It also understands that a high level of turnover of employees and absenteeism add considerable costs (e.g., at least £50 million in 2009). GRO has specific targets for employee engagement and improved morale: It wants to attain employee engagement scores of 70% or above and reduce employee turnover to 5% or less per year. In order to keep these costs as low as possible, GRO invests in £14 million of training annually. It furthers training to enhance employee skills. In return, this training provides more literate and skilled employees, which results in a better run business, and it makes a huge difference to employee satisfaction and consequent retention. GRO sees a return on this investment with reduced absenteeism and employee turnover down to 3.3% and 10.4% from a baseline of 3.5% and 11.0% respectively because of training (Accounting for Sustainability, nd).
Need for Enhanced Interpersonal Communication:
Based on the result of the DIY survey, it is clear that the young male supervisors require better training on how to communicate with the part-time older females who work on the store floor. The difficulty is one of gender (male/female), age (young men/older women) and attitude (assertive demands). Studies show that supervisors who are trained are more effective than those who are not. It seems essential to acknowledge that some form of training is required for those who are to become supervisors. Research finds that employees mostly want individual, face-to-face communication with their supervisor, especially for important or sensitive subjects (Kirkpatrick 2001). In order to implement changes at DIY, it is necessary to increase and widen the vehicles of communication between supervisors and staff, enhance the communication that takes place, and measure progress being made. Esterby-Smith and Araujo explain that organization learning can lead to very positive results. It can lead to increased productivity, higher morale and improved work climate, less turnover, less waste, improved financial performance, increased efficiency, more effective service to customers and employees who are better able to change more quickly (pg. 110). These authors say that an organization needs to develop and maintain a supportive working environment with continuous learning opportunities, open and system-wide communication and leaders who model continuous learning. Staff meetings can be improved by establishing a task force that plans and leads the meetings with a specific theme of interest. An informative and entertaining staff newsletter can be helpful. At Outpost Natural Foods Co-op, the general manager eats lunch with a randomly group of employees each month to listen to concerns and answer questions.
An employee's morale and participation often is based on the skill of the supervisor to effectively communicate about the employee's behaviour and skills (Adler, Rosenfeld, & Proctor 2001). Winsor, Curtis, and Stephens (1997) asked human resources managers to list the most important skills for a supervisor. They were: The ability to listen effectively, work well with others, operate effectively in small groups, collect information from others to make a decision, write effective reports, and give effective feedback. Studies also show that when employees receive a high degree of positive feedback, genuineness, empathy, and structure, their clinical behaviours change in positive directions. Some people believe that being an effective communicator is innate and people are born with skills that can be acquired without training. However, many supervisors do not have these necessary interpersonal skills (Adler et al., 2001). Training in…[continue]
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