Challenges Of Job Satisfaction And Employee Turnover Commerce Essay

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Job satisfaction and employee turnover are the cores of this research to study what motivators the manufacturing organizations should concentrate in order to satisfy, maintain, and retain the value labours at present and how the management learns an avoidance of negative factors which brings about staff termination.

Moving on to the base of origin, Thailand's domestic economy has been obviously depended on two sectors, which are agricultural and non-agricultural (manufacturing/industrial) sectors for growth of the country. As far as it goes, the trend in manufacturing sector has decreased since 2008 and there are three major rationales behind this critical situation.

Firstly, the economic downturn has affected many industrialized countries in the globe such as the United States, China, and India. Next, the political conflict in the nation has seriously caused fluctuation in overall Gross Domestic Products (GDP). Lastly, a change in work lifestyle of new generation takes away labours from manufacturing workplaces. (Office of Industrial Economics 2009)

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To illustrate this, the economic crisis since 2008 has influenced a number of manufacturing businesses in the whole nation, many of which re-managed the organizational structure through workforce redundancy in order to control the firm's expenditure. However, when the circumstance has been improved, the force of manpower is in need to increase the production process.

What's more, the politic condition is correlated to the previous reason, which leads to the difficulty for companies running business normally because of less product purchases from consumers. Considerable contraction of outputs has resulted in worker reduction in the firms.

Last but not least, there is a demographic transition to elderly society; therefore, the existing workers are about to retire and the new young people avoid working in low work condition and inconvenient environment. This triggers a shortfall of labours approximately more than one million workers in manufacturing field nowadays and the continuity is still on the progress. (Siam Daily news 2010; Kohpaiboon et al. 2010).

Owing to above situation, the number of labour employment in manufacturing sector shows the decline in the last few years, referred to Figure 1-1. In spite of first quarters depicting the highest numbers of workforce, there is a steady fall from 2008 to 2010.

Figure 1: Statistics of Labors Employment in Manufacturing Sectors during 2008-2010Source: Adapted from National Statistical Office, 2004 (Thailand)

Table 1: Adapted from National Statistical Office, 2004 (Thailand)

(in thousands)

Year

Quarter 1

Quarter2

Quarter 3

Quarter 4

2008

5800.7

5568.3

5231.4

5212.6

2009

5585.0

5388.6

5300.7

5221.4

2010

5565.8

5480.0

5189.2

N/A

Source: Adapted from National Statistical Office, 2004 (Thailand)

PROBLEM STATEMENT

As mentioned in the previous section, employee turnover has become a big issue that is faced by manufacturing enterprises in Thailand in the last few years. The significant reason is a rapid demographic transition to an aging society (Bangkok Post 2010); therefore, a new generation of labour comes into place with different perspectives towards work and lifestyles. This thinking process causes less and less people to work in factories and more people are turning towards comfortable workplaces such as offices and earning a large amount of income.

This shift has forced the management of manufacturing companies to set off new human resource strategy in order to motivate new workers, including the existing ones to feel secured when working for their organizations.

Specifically, improperly motivational techniques will lead manpower to a resignation from time to time because the entrepreneur has no intention to encourage them to work in the long term. Similarly, workers are unlikely to meet the degree of job satisfaction despite suitable motivational factors being applied, which might trigger employee turnover in the near future.

According to the above reasons, the management of these organizations confronts a small number of experienced labours to generate an efficient production to maximize productivity, and also, the company may face time-consuming issue required to train new staff through training development because newcomers usually have no knowledge to work well and this will result in more product damage. Similarly, poor performance caused by an absence of job satisfaction in labour mindset contributes to more loss due to product spoilage.

Thus, the key problem is what motivational factors are able to satisfy employees the most or, in turn, diminishing their desires to leave the job in this critical circumstance.

RESEARCH SCOPE

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The further research has been conducted by the comparative study of two locally plastic manufacturing companies, which are Organization A and Organization B. The detail of these two firms will be discussed in the next chapter. The research will identify motivational variables: need of motive, expectancy, job characteristics, and social comparison. These factors could lead manpower to success or failure in meeting the right need of individuals. The need of people in workplace will be finalized by their behaviour; job satisfaction or turnover. Thus, the finding would be capable of guiding the direction of people attitudes and behaviour in order to manage employees in both organizations.

RESEARCH OBJECTIVES

To examine and identify the motivational factors leading to job satisfaction and employee turnover in both organizations

To examine the causes of employee turnover in order to improve Human Resource Management in both organizations

To critically study the mutual relationship between job satisfaction and employee turnover

To help the design of appropriate motivational technique in chosen organizations, based on theories in relation to motivation, job satisfaction and employee turnover

SIGNIFICANCE OF RESEARCH

There are a number of studies in relation to job satisfaction, motivation, and employee turnover; nevertheless, the location and the area of the research are different. Thailand is the interesting and reputable nation in means of low cost of labours and a variety of natural resources such as agricultural crops.

Furthermore, a growth of industrial sector increasingly attracts investors and international buyers because of the premium quality and reasonable price. Hence, a majority of manufacturing products will be associated with exports, which support many manufacturing companies to gain profit and build up GDP of the whole nation. Recently, manufacturing field has been impacted by the labour shortage so that the progress of company productivity has been barred.

Although the solution involves in several institutes such as government, organizations and people to collaborate one another, the necessary task is still belonged to the entrepreneurs to be responsible for seeking motivational techniques. According to this, the research will focus on this significant sector, specifying two locally plastic manufacturing companies the researcher has known intimately to study and examine following the study framework.

RESEARCH HYPOTHESES

Job satisfaction consists of several important causes in both companies.

Employee turnover consists of several important causes in both companies.

Job satisfaction is negatively correlated to employee turnover

There is an existence of several motivational factors leading to job satisfaction and employee turnover

LIMITATIONS

Firstly, conducting research in the areas of job satisfaction and employee turnover focuses on the internal information of the chosen organizations, which might be relevant to personal opinions of each staff and entrepreneur, and the procedure of human resource management in the companies; consequently, the actual name of these two organizations will not be disclosed, as any negative issues may impact their reputation.

In addition, language difficulty is one of the important factors that may obstruct data-collection method in obtaining the best responses from labours because the majority of workers who work in manufacturing companies reside in lower class of the social status with low level of education or no education.

Lastly, due to the theoretical base of this study, the workers may have to give an answer strictly within limited variables in the context of job satisfaction, turnover and motivation. As a consequence, the feedback from participants' responses may not be naturalistic from the fact. Also, the recommendation will be relied on related theories, which ultimately may be impractical in the real situation for both organizations.

ABOUT THE ORGANIZATIONS

Organization A

The plastic manufacturing company has been operated for over nine years by a group of entrepreneurs. The area of the business directs to a variety of household products made of plastic. There are approximately 100 employees excluding the management group of its business. With the continuous growth, the firm has been expanded from one to three constructions. So far, the organization has been located in three different areas: the main office in the capital city, the factory store in the outskirts, and the production area in another province. (Company brochure)

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Basically, three different locations have been administered by three major managements. Each is charged by two directors in the area of production, store, and sale office, referred to Figure 1. At first, when customer's order comes, the working process begins at production place. Once finishing the whole process including assembling, packaging and checking, the product will be delivered to a company store in a city because it is located nearby several delivery agencies so that the agency will send the goods to customers wherever they are in the country. Occasionally, products will be delivered to the sale office to add up more stocks due to insufficient products when customers come to purchase. (Company brochure)

Figure 1: Working Process in Organization AProduction

Two directors

Store

Two directors

Sale Office

Two directors

Source: Researcher

Moving to the problem of the company, it has been occurred in two locations outside the main city because there are a shortage of labours and high rate of turnover to execute an efficient production. Being worse, the whole production affects the overall working process such as producing, assembling, packaging, or delivering. Labours usually come and go without prior notice. Because of this, some working processes have been disrupted from time to time and become the main obstacle for the management, especially when customers order a large quantity of products and request the company to deliver the goods in short time.

Recently, the entrepreneurs have attempted a HR strategy to push up their performance if the situation is still in crisis. For example, high performance will get higher pay plus monetary reward, sometimes intrinsic ones. However, the difficulty lies in the fact that lesser number of workers has to be responsible for more assigned tasks. That is, multi-tasking is required from workers. This causes more burdens and pressure to each worker to handle in a day-to-day basis, including the concern of any mistake to be incurred. Even though new HR strategy has been used to encourage employees, they might not put up with such stress in long term. Therefore, the management desires an addition of new labours and a strategy to motivate them in the long run.

Organization B

The new plastic manufacturing company commenced its business since 2008. Household containers are the main product contribution of the enterprise. There are approximately 140 employees excluding the groups of management. According to its junior business, the firm has been owned and set up only one location to run the whole production process and sell the products (Company brochure)

There are several departments in the firm, which are similar to Organization A. The organizational structure is in flat pattern; as a consequence; the major entrepreneurs and workers are able to work closely with efficiency and effectiveness. Though many departments have been controlled, the business owners usually help each other to get through the problem. Also, communicating with workers is the way to consult and inform them about what took place in the company.

However, the problem occurred in this organization is similar to the previous one; labour deficiency in every working process in the factory, including merchandising the goods. Besides, employee turnover is quite high because most of new workers usually come to try new experience in new places. If they dislike the rules, procedures or co-workers, they prefer leaving than continuing to work.

In general, one standard policy of manufacturing business is to have sufficient stocks in the store and this stage will not be achieved if less staff members are handling it. In case of the need of market shares, the management occasionally accepts several orders from clients at the same time, which give serious burden to the existing workers. Besides, there is no motivation from the employers to encourage new labours, except minimum wage. Only workers who have worked for the company for a long time will be made an increase in pay as a reward. In the mean time, employee turnover brings about the transition from experienced to inexperienced people, which brings about more loss of product spoilage.

From the above situations, it troubles the entrepreneurs to seek for human resource solution in order to maintain the better and adequate workers for company efficiency and effectiveness in production and operation.