Employee Attrition Caused By a Rigid HRM

Introduction:

Human resource management has a direct personal impact on us as employees in shaping the nature of our work, our pay and our career prospects (Huczynski and Buchanan, 2007).One of the major problems encountered in today’s business world is dealing with high employee attrition. Attrition is the reduction in the number of employees through retirement, resignation or death.This article addresses the issue of high employee attrition taking place in an organization. Sometimes it’s impossible to ensure the retention of a particular group of employees; in those cases, companies can learn to adopt (Cappelli, 2001).

Root Cause of Attrition:

Skills can be stretched in many directions, but if they are not going in the right direction employees are at risk of becoming dissatisfied and uncommitted (Butler and Waldroop, 2001). Company following the Hard HRM practice where emphasizes is given on the full utilization of employees in a formal, calculating and dispassionate manner results in high attrition rate in strategical business units of the company (Huczynski and Buchanan, 2007).

Some of the factors which influenced employee turnover:

• Lack of proper management, facilities, training and motivation
• Poor infrastructure
• Compensation is much below industry standards
• Lack of respect for employees and favoritism
• Saturdays working
• Appraisals, career and personal development nonexistent
• Low quality of workforce
• Lack of leadership qualities in manager

The corporate boards of directors tend to be dominated by the finance and accounting function, which pushes ‘soft’ personnel voices aside ( Huczynski and Buchanan, 2007).One of the issues that have influenced personnel management practice is the unspoken agreement, or psychological contract, between employee and organization (Rousseau, 1990, 1995), where employees expects the fair treatment, a degree of security and personal development.

According to David Guest and Zella King (2001):

• Managers may not be aware of psychological contract research;
• Managers may feel that research evidence does not apply to their strategic business unit;
• Managers may believe that they already have appropriate practices;

Impact of Attrition:

Staff turnover creates costs, but these are difficult to measure. When employees leave, output is lost. Costs are then incurred in advertising and interviewing, then training the new recruits. Turnover is often a symptom of low morale, which can reduce corporate profitability by depressing staff performance .For example- William Mercer was able to demonstrate to Quest Diagnostics that if staff turnover were reduced by just 5 percentage points, this would make an annual profit contribution of US$31 million. Faced with this evidence, managers who had been complacent about the company’s staff turnover were shocked into action.(based on Cathy Copper, ‘In for the count’, People Management, vol. 6, no.20, 12 October 2000a, pp, 28-34). Also Robinson and Rousseau (1994) found that 55 per cent of their management sample said their psychological contract had been broken by their employer. The consequences are damaging for both the individuals and the organization, and include low job satisfaction, poor performance, high staff turnover, feelings of anger and betrayal and the erosion of trust.

Measures to control Attrition:

Employees are investments if effectively managed and developed, provide long-term awards for organization hence policies, programs, and practices must be created that satisfy both the economic and emotional needs of employees. A working environment must be created in which employees are encouraged to develop and utilize their skills to the maximum extent (Carrell and Elbert, 2000).

‘Profit through people’ can be produced through people management policies such as reducing status differentials and sharing information across the organization (Based on Jeffrey Pfeffer, The Human Equation, Harvard Business School Press, Boston, MA, 1998).Guest (1989) identified that there must be senior management support for the success of HRM.

‘Like it or not, it’s the younger generation that will have to mentor us rather than the other way around’ (Coutu , 2001).Supervisors can provide guidance to their subordinates by assisting and guiding them, by making them available to answer questions otherwise letting subordinates work things out by themselves (Hackman and Suttle, 1997). The employer should practise Soft HRM which is people-oriented, rooted in human relations thinking, emphasizing motivation, communication and leadership (Huczynski and Buchanan, 2007). By treating employees well, organizations profits can rise. A central ethics committee should be set up to reinforce the values of respect, honesty, efficiency, care and trust (based on Georgina Fuller,’ Come the revolution’, People Management, vol. 11, no.17, 1 September 2005, pp.38-40).

Two main factors in Huselid’s list of 13 high performance practises:

• Skills developments: the acquisition and development of employee skills, through selection, induction, training and the use of performance appraisal systems
• Job design: the designs of jobs, including skill flexibility, job responsibility, variety and the use of teams

Conclusion:

According to Narayan Murthy (CEO Infosys), ‘Our assets walk out of the door each evening, we have to make sure that they come back the next morning’, employer should treat their employees as customers, by understanding their needs which drives employer satisfaction. Making adjustments is as important as achieving results (Phillips and Connell, 2003), hence by applying bath’s model, managers should provide adequate support and motivation for their team. There should be good communications in every strategical business unit, emphasis on team work and rewards on organizational performance should be proposed. The basic purpose of these strategies is to boost employee morale and hence achieve retention.

From the above study I want to conclude that employees are the capital of an organization. So in order to retain employees, organization has to satisfy their employees. By doing the same, Organization can retain their best employees, who would in turn add to the growth and success of the organization.From Neil Conway. ‘Promises, promises’. People Management, vol 10, no. 23, 25 November 2004, pp.42-3.Therefore an organization can promise:

• Pay commensurate with performance
• Opportunity for training and development
• Opportunities for promotion
• Recognition for innovation or new ideas
• An attractive benefits package
• Respectful treatment
• Reasonable job security
• A pleasant and a safe working environment