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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 pp. 655).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. Frost & Sullivan is a global growth consulting company which has over 45 years of experience in assisting clients with their decision making and growth issues (frost & Sullivan). This article presents the study on addressing the issue of why there is high employee attrition taking place in an organization like Frost & Sullivan which itself is focused on addressing client s growth objectives. Sometimes it s impossible to ensure the retention of a particular group of employees; in those cases, companies can learn to adopt (Harvard business review on finding and keeping the best people, 2001 pp 41).
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 (Harvard business review on finding and keeping the best people, 2001 pp 180).Frost & Sullivan has been following the Hard HRM practice where emphasizes is given on the full utilization of employees in a formal, calculating and dispassionate manner (huczynski and buchanan, 2007 pp. 666).
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.
? Saturdays working.
? Appraisals, career and personal development nonexistent.
? Low quality of workforce and projects.
? Lack of leadership qualities in manager.
One of the issues that has influenced personnel management practice is the unspoken agreement, or psychological contract, between employee and organization (Rousseau, 1990, 1995). 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 pp. 659).
According to David Guest and Zella King (2001):
? Managers may not be aware of this research;
? Managers may feel that research evidence does not apply to their organization;
? Managers may believe that they already have appropriate practises;
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 .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).
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, Elbert and Hatfield, Human Resource Management: Strategies for Managing a diverse and global Workforce sixth edition,2000).
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, Improving life at work, yale university, 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 pp. 666).By treating employees well, organizations profits can rise. A central ethics committee to 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.
The Bath Model - a process perspective:
The Bath model attempts to explain how HR policies are linked to performance, or the so-called black box problem (Purcell et al., 2000). This approach focuses on the underlying processes through which HR policies influence employee behaviour and performance.
Purcell and his colleagues oberve that, for people to perform beyond the minimum requirements of a job, three factors labelled AMO (Ability, Motivation, Opportunity) are necessary. If one of these factors is weak or missing, then an individual s performance is likely to be poor. You may have the skills and enthusiasm, but if your supervisor watches you closely and prevents you from sharing ideas with colleagues or deviating from standard procedure, then your performance is unlikely to excel. You will probably not go the extra mile .
What encourages employees to go extra mile and exercise their discretion in ways to improve their job performance lies in the process of the model that established a linked sequence of events as shown in the The Bath People and Performance Model .
The HR policy areas identified by the model are:
1. Recruitment and selection that is careful and sophisticated;
2. Training and development that equips employees for their job roles;
3. Career opportunities provided;
4. Communication that is two-way, and information sharing;
5. Involvement of employees in management decision-making;
6. Team working;
7. Performance appraisal and development for individuals;
8. Pay that is regarded as equitable and motivating;
9. Job security;
10. Challenge and autonomy in jobs;
11. Work-life balance.
Like it or not, it s the younger generation that will have to mentor us rather than the other way around (Harvard business review on finding and keeping the best people, 2001 pp 137)
What 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.
(From Neil Conway. Promises, promises . People Management, vol 10, no. 23, 25 November 2004, pp.42-3).
Guest (1989) identified that there must be senior management support for the success of HRM.
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).