Running Head: Organization Behaviour Applications 1

Applications of Organization behavior concepts for XYZ company

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Organization Behaviour Applications 2

Applications of Organization behavior concepts for XYZ company

Introduction and information gathering process

The employee turnover refers to the rate at which an organization is replacing employees

who have left the organization with new or existing employees within a period (Bilau, Ajagbe,

Sholanke, & Sani, 2015). The employee is a relevant stakeholder in an organization and

contributes substantially to its success. The significant contribution to employee turnover is the

failure by the company to meet employee demands, hence leading to a low job satisfaction (Bilau

et al., 2015). High employee turnover is costly for business as it increases the cost of training

new hires for replacement, further draining its limited resources, especially for small and

medium-sized companies. Also, it also reduces the morale of other employees to continue

working in an organization. Therefore, a turnover of 50% is significantly high for the XYZ

costing the company $2.2 million as the expenses for training new replacements. At 50%, the

turnover is higher than the industry average by 20% implying that the financial loss experienced

by the company from the employee turnover is more than the industry levels. The $2.2 million

incurred by the XYZ company results from a range of factors associated with high employee

turnover. This includes the cost of advertising vacant positions, conducting interviews, training

for new staff among several others (Butali, Wesang'ula, & Mamuli, 2013).

Also, among them include reduced productivity. Experienced employees have a higher

productivity and efficiency than new ones as a result of their gained experience while working

with the organization (Butali, Wesang'ula, & Mamuli, 2013). Also, they can be used to train new

employees, therefore, improving an organization's operation processes. Therefore, when a

company loses some of its experienced employees, it experiences a significant cut on

Organization Behaviour Applications 3

productivity. Also, the current employees are also affected due to increased workload as they

compensate for the extra work. Their productivity is also affected as they train new

replacements.

Employees working in the human resource department are also required to overwork

sometimes to carry out interviews to find suitable new hires to join the organization. Another

effect to the company is the Loss of employee morale due to low motivation and broken society

norms and culture upheld by working as a group as employees have to undergo a new cycle of

understanding and working with new replacements. Another effect associated with employee

turnover is management frustration as the managers get frustrated with revolving employees. The

management has to constantly supervise the new staff as they are new to the operating

procuresses of the company. Also, the customer service also reduces with new hires and clients

and suppliers to a company feel more comfortable when dealing with an employee they are used

to than new ones. It takes some time for the company customers to build personal relationships

and familiarity with the new hires, therefore, the business rapport with his clients. Lastly,

business with high employee turnover reports poor performance than their counterparts with a

relatively lower turnover. This is because the level of expertise with new workers is low as they

lack essential information and experience on critical company processes such as production and

sales (Thomas, 2013).

Therefore, what causes such a high employee turnover as for the case of XYZ company?

Several professionals and researchers have attributed high rates of employee turnover to various

factors both internal and external. The Xyz company needs to investigate these factors to reduce

further losses in revenue due to employee turnover. According to the information provided by

the company, a loss of 2.2 Million annually and a turnover 20% higher than the market average,
Organization Behaviour Applications 4

a combination of factors is responsible for the situation at the XYZ, higher above the common

factors experienced in the industry. Consequently, To investigate these factors, the XYZ

company needs to conduct an extensive research using appropriate data collection approaches as

collecting employee feedbacks using interviews, questionnaires, field studies and case studies.

Numerous studies have investigated causes for high employee turnover among companies, and

the internal factors include low job satisfaction, the mismatch between the job and the employee.

Others include few opportunities for growth, feeling of devaluation or lack of recognition by

employees, stress from overworking and poor working conditions and lack of trust and

confidence with the management. Although a zero employee turnover for the XYZ company is

inevitable, these factor provides suggestions which the company can investigate to establish the

causes of high employee turnover reported by the firm. Also, there are also external conditions

that may be the cause such as unfavorable labor markets, and low skill job entry requirements

that attract minimum wage works (Jagun, 2015).

Issues affecting the XYZ company

Therefore, to narrow down the prominent factors are the cause of high employee turnover

for the XYZ company, I conducted research using the survey as the appropriate data collection

process. The study focused questions related the working environment, training, and

development, opportunities for career development, management, and employee relationship.

Others are cultural diversity issues, motivation, and promotion, opportunities for the employees

to develop their career as internal factors and the assessment of the employees’ perception of the

labor market as an external factor. However, survey alone was not adequate to access the

required information on the causes of high employee turnover in XYZ as they are subject to bias.

Therefore, I added interviews a data collection method by interviewing several people across
Organization Behaviour Applications 5

different organization levels. The research questions included in the questionnaire and the

interview focused on the issues selected above.

My choice for the issues that I will narrow down to during my research was influenced by

the results of previous studies on the greatest contributing factors to high employee turnover. The

survey questionnaires were anonymous to safeguard the privacy and confidentiality of the

employees and avoid them being victimized. Also, the details for the respondents were also

withheld for similar reasons.

The results of the research identified three major issues that were the cause of high

employee turnover in the XYZ company which are:

Poor working environment

The majority of the respondents reported that the XYZ company has poor working

conditions and the biggest contributor of the employee to find employment elsewhere. The

biggest challenges noted by XYZ employees included irregular work schedules and reporting

times. Other noted the unfavorable nature of the supervisors and overwork. Some of the

respondents pointed out that they had no relative control over the work environment in the

company and work flexibility was very minimal. Numerous studies have associated poor work

environment with an adverse outcome for employee’s behavior. According to Das & Burah

(2013), work environment contributes to high employee turnover as organizations which

employees have a relative control over their work environment report low employee turnover as

it encourages motivation towards the long term company goals and objectives. Similarly,

(Arnoux-Nicolas et al., 2016) associates poor work environment with increased turnover

intentions. In addition, Therefore, failure of the XYZ company to improve their working
Organization Behaviour Applications 6

conditions for their employees was contributing significantly to the massive cost due to high

employee turnover.

Lack of promotions, benefits, and rewards

The employees interviewed also noted that the company, does not offer any promotion or

rewards or benefits as a form of recognizing their work as well as limited their opportunities to

develop their career. Therefore, the majority expressed their intention to leave in search of better

jobs where they would feel recognized and had better opportunity to expand their careers.

According to Jagun, (2015), rewarded employees feel more appreciated and wanted by their

organization, and they have a greater bond with their company. Similarly, Armstrong (2008)

notes that businesses that have promotion, benefits and rewards systems in place report higher

employee retention and low turnover. The author further notes that rewards and benefits are

better in motivating and engaging employees, creating an enduring impression towards the

company. Therefore, the XYZ companies must start to make their employees feel more wanted

and valued if they have to minimize the high employee turnover experienced by the firm.

The poor relationship between the management and employees

The third issue identified by the employees of the XYZ company is poor relationship

between the management and the employees. Employees regard a good relationship with their

superiors very crucial in determining their satisfaction with their work environment (Armstrong

(2008). This implies that superior-subordinate relationship in the XYZ company is a major

contributor to the company’s financial loss experienced by massive employee turnover. Jagun
Organization Behaviour Applications 7

(2015), further emphasizes that good working relationship between the employees and

management determines their quality of their daily experiences in the workplace. It also affects

the level of job satisfaction, therefore, reducing the intention of employees wishing to stay longer

in a work environment as well as their commitment to the organization goals and objectives.

Applicable organizational behavior models to XYZ Situation

Various organization behavior models apply to the XYZ company scenario. The

autocratic model of organization behavior provides the relationship between the management

and the employee relationship in cases which applies to the XYZ situation. According to the

model, the management poses authoritative power over their employees. On the other hand, the

employee is dependence and obedient on the authority. However, the performance of employees

based on this model is minimal, contributes to low morale, paralysis decision making and

contributes largely to high employee turnover (Davis, 1968). The model is only useful when the

employees have no alternative and in situations of organizational crisis.

The custodial type of organization behavior is very is the best models which provide the

relationship between good working environment and performance. According to this model, the

performance results from passive corporation between the employee and the employees, a very

critical factor that is missing in the XYZ company. Similarly, the supportive model of

organization behavior is the best applicable to reduce the high rate of XYZ employee turnover, in

this model, the employees are contented that their needs are met are oriented towards improving

their job performance and participation. This model leads to strong motivation for an employee

where they proudly identify with the company with an awakened work drive as their status is

recognized and needs are well addressed (Davis, 1968).

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Proposed solutions

The XYZ company must address the three issue to achieve a low employee turnover and

cut on high costs. These issues include poor working environment, lack of motivations,

promotions and rewards and poor management –employee relationship.

Similarly, to address poor working environment, the XYZ company need to improve the

working condition for their employees to address both the physical and behavioral components

of the workplace. This includes providing the employee a comfortable environment to work on

such as infrastructure and adequate working tools. The company must also hire sufficient

workers to reduce work overload for their staff and increase their productivity (Sarode &

Shirsath, 2012). Also, the company management should adhere to laid standard operating

procedures to ensure regular schedules and timing. Also, the company requires promoting work

interaction among employees by encouraging good communication practices by providing

appropriate training and encouraging teamwork among employees to reduce the high employee

turnover.

Therefore, to resolve the issue on lack of promotions, rewards, and benefits, the company

has to reward employees consistently as stated in the reinforcement theory. The company should

promote positive and ethical behavior among employees and reward them for their outstanding

achievements which were one of the issues identified in the research. Lack of rewarding or

encouraging employees significantly affects their morale towards meeting the organization goals

and objectives, a factor that discourages motivation and promoting high employee turnover.

According to Dobre (2013), employee motivation significantly increases employee performance.

Organization Behaviour Applications 9

XYZ company should come up with rewarding employees’ programs as a way of motivating

them.

Resolve the last issue on poor relationship between the management and staff requires the

company to set aside adequate resources to work towards this culture. The company needs to

provide training to its management on effective leadership styles that create a good relationship

with the employees. According to Jagun, (2015), the maintaining a good relationship with

employee increase the probability of their stay in an organization. Good leadership style

management which the survey identified as missing in the XYZ company promotes employee

commitment to an organization goal and achievement and work to achieve a real satisfaction

towards their assigned work. This will significantly reduce the high cost experienced by the

company as well as promote positive performance.

Conclusion

The employee turnover refers to the rate at which an organization is replacing employees

who have left the organization with new or existing employees within a period. High employee

turnover is costly for business as it increases the cost of training new hires for replacement,

further draining its limited resources, especially for small and medium-sized companies. Also, it

also reduces the morale of other employees to continue working in an organization. Therefore, a

turnover of 50% is significantly high for the XYZ costing the company $2.2 million as the

expenses for training new replacements.Numerous studies have investigated causes for high

employee turnover among companies, and the internal factors include low job satisfaction, the

mismatch between the job and the employee. Others include few opportunities for growth,

feeling of devaluation or lack of recognition by employees, stress from overworking and poor
Organization Behaviour Applications 10

working conditions and lack of trust and confidence with the management. The XYZ company

must address the three issue to achieve a low employee turnover and cut on high costs. These

problems include poor working environment, lack of motivations, promotions and rewards and

poor management –employee relationship

References

Armstrong, M., (2008) How to manage people. Ist ed. London: Kogan Page

Arnoux-Nicolas, C., Sovet, L., Lhotellier, L., Di Fabio, A., & Bernard, J.-L. (2016).

Perceived Work Conditions and Turnover Intentions: The Mediating Role of

Meaning of Work. Frontiers in Psychology, 7, 704.

http://doi.org/10.3389/fpsyg.2016.00704

Bilau, A. A., Ajagbe, A. M., Sholanke, A. B., & Sani, T. A. (2015). The impact of

employee turnover in small and medium construction firms: A literature

review. International Journal of Engineering Research & Technology

(IJERT), 4(2), 977-984.

Butali, N. D., Wesang'ula, P. M., & Mamuli, L. C. (2013). Effects of Staff Turnover on

the Employee Performance of Work at Masinde Muliro University of Science and

Technology. International Journal of Human Resource Studies, 3(1), 1.

Organization Behaviour Applications 11

Das, B. and Baruah, M. (2013) “Employee Retention: A Review of Literature”. Journal

of Business and Management 14 (2): pp 8-16

Davis, K. (1968). Evolving models of organizational behavior. Academy of Management

Journal, 11(1), 27-38.

Dobre, O. I. (2013). Employee motivation and organizational performance. Journal of

Management and Socio-Economic, (1).

Jagun, V. (2015). An Investigation into the High Turnover of Employees within the Irish

Hospitality Sector, Identifying What Methods of Retention Should Be

Adopted (Doctoral dissertation, Dublin, National College of Ireland).

Sarode, A. P., & Shirsath, M. (2012). The Factors Affecting Employee Work

Environment & It’s Relation with Employee Productivity. Int. J. Sci. Res, 3,

2735-2737.

Thomas, J. (2013). Study on Causes and Effects of Employee Turnover in Construction

Industry. International Journal of Science and Research (IJSR), 2319-7064.