Human resources strategies for managing employee turnover at Cardington Yutaka Technologies

Human Resources

Managing Underperformers and Turnover at Cardington Yutaka Technologies, Inc.

Cardington Yutaka Technologies, Inc., is a subsidiary of Honda Motor Company, Ltd. Cardington Yutaka is a supplier of pre-market components for cars assembled by Honda. Their products include torc converters, brake parts, and catalytic converters. Cardington Yutaka Technologies, Inc. (CYT) began in 1995 in response to demand by Honda of America (Manta, 2008). They have approximately 875 full time employees and a variable staff of temporary employees. The number of temporary employees varies according to workload.

The demographics of the plant are largely younger employees under the age of thirty. The number of older employees is shrinking. The company employees consist of 70% males and 30% females. The racial mix is 87% white Caucasian, 9% African-American, and 3% Hispanic and 1% other. The demographic makeup of the plant clearly matches that of the community at large. However, CYT does attract employees from the larger surrounding area. Many are willing to drive a small distance to work at CYT. The excellent pay attracts many to apply for a job with the company. Attracting applicants has never been a problem in the area, which has a sufficient workforce in the area to supply the company's needs.

Employees range in education according to their position within the company. A minimum of a High School Diploma is required for employment. However, 2% of the employees have a GED to meet the age requirement. Lower level managers must meet the minimal educational requirement, but they can work their way up through performance and demonstrated dedication and skill. Middle and upper level managers must have at least an associate's degree in order to meet the minimum requirements of their positions. Only 7% of the employees have degrees higher than a High School Diploma.

The average tenure with the company is two years. The main reasons cited for leaving are finding another job. Approximately 20% of the employees have been with the company longer than the average employee. Another 2% have been with the company over five years. The profile of the average employee reflects inexperience in performing their job tasks. This places the employee at a disadvantage, in terms of maximum productivity and quality. The most desirable employee is the one that knows their job and can do it quickly and efficiently. Employee retention must be improved so that the company can continue to produce quality products, reduce operating costs and ensure operation will into the future. The company's future relies on the ability of human resources to resolve employee retention problems.

Analysis of Problems

For the past several years, turnover rate at CYT has been on the rise. They went from a 3% turnover rate to a 15% turnover rate over the past six months. This number reflects turnover in regular employees and does not include temporary employees. In addition, the number of parts rejected by Honda as defective has increased by over 30%. The contract with Honda may be jeopardized, if this trend continues. It is believed that the high turnover rate is related to the decrease in quality. In addition, to a marked decrease in quality, the plant has also experienced a decrease in overall productivity. To compound problems, CYT has experienced higher absentee rates as well.

Compared to other companies in the local area, CYT offers higher base pay, than any other company in the area. They offer excellent benefits, compared to other companies in the area. However, employees have been overheard complaining by management, calling it a "sweat shop" and comparing it to slave labor. These comments indicate a high level of employee discontent, which is assumed to be driving factor in conditions at the company. Employees receive many hours of extra overtime. The company has been on continual overtime for over a year. It may be that employees are simply tired.

CYT recognizes the value of experienced, happy employees. Reduced productivity and low employee morale are a major concern. Long-term, experienced employees are leaving in droves. Younger employees and temporary employees are more apt to make mistakes than experienced employees. This makes the situation even more urgent, as they are not only losing employees, but are losing their most valuable employees.

The situation has become desperate and managers are beginning to worry about their ability to meet the needs of their major, and only, customer. In addition, the accident rate of the company has gone up.

It is up to human resources to determine which issues are the most important in resolving the crisis. They have been assigned the task of diagnosing the problem and devising viable solutions to the problem. It is suspected that employee retention and morale are at the heart of the crisis. The following will summarize the analysis, explore appropriate theories and will present a plan to remedy the problems.

Solutions and Implementation

The first step in resolving the dilemma surrounding CYT and its inability to retain employees is to determine the root cause of the problem. The best way to accomplish this task is to engage the employees themselves, regardless of longevity and examine intrinsic factors that affect the likelihood that they will stay with the company. An employee survey is the most common means to assess employee attitudes and how they influence employee behavior. However, there are several factors that must be considered before engaging in a task such as this.

The first consideration is that employees may be reluctant to reveal their innermost feelings about the company for fear that they will be punished for their responses. For this reason, it is imperative that employees are assured of absolute anonymity. This will also encourage honest answers and be the most likely to result in discovering the root causes of the problem. Employees will be able to respond anonymously by dropping their folded responses into a box by human resources.

Those that feel good about their job may be more eager to respond to a survey than those that are unhappy. A voluntary response would be more likely to result in a biased sample population. It is important that the sample is representative of the entire plant, rather than a small, select group. Therefore, employees will be told that the survey is mandatory. Although, there will be no real way to identify the employees that responded from those that did not respond, if the employees feel that it is mandatory they will be more likely to respond than if they feel that it is voluntary.

The importance of the survey in improving plant conditions will be stressed. The cooperative nature of the survey will be stressed. It is expected that these survey techniques will result in a minimal 85% response rate. Employees will be assured that their responses will be confidential and that their responses will only be used in aggregate. This will encourage honesty in their answers.

The survey instrument will be brief and will consist of open-ended questions. The survey instrument will not contain any information that could be use to decipher which employee is represented by a particular response. The instrument will use qualitative methods that will allow the employee to expand on their responses and to speak freely about their concerns. This method was chosen, as opposed to quantitative methods, as a more in-depth analysis is desired. Quantitative survey methods are appropriate when the data can be easily reduced to numerical form. However, this type of survey methods will allow the researcher to answer research questions, but it will not allow for much detail in the responses. Quantitative will answer the question of whether something is happening, but it is difficult to discern why something is happening. Qualitative methods are much more suitable when the researcher wishes to discover the root cause for why something happens. A qualitative research instrument is much more suitable for the type of research being conducted.

The survey will be devised based on assumptions obtained through observing individual employees in the plant. However, there may be items that are not known to the researcher at the time of instrument design. Therefore, the survey will reserve the last question to allow the employee to expand and add any comments that they wish to make. The survey will be designed and administered as soon as possible due to the dire nature of the situation with the Honda contract.

The situation facing CYT is of highest priority. Resolving issues concerning employee retention, absenteeism, productivity and quality are essential to the continued operation of the plant. Human resource theory suggests that social factors, as well as intrinsic motivational factors are at the root of the problem. The survey method chosen will provide the insight needed to develop solutions to the current problems facing CYT and the Human Resources Department it is believed that this situation is resolvable, provided that management can get to the root of the problem.