The paper "Voluntary Turnover as a Major Problem for Organisation" is a perfect example of management coursework. For an organisation to function fully, it has to obtain and retain a talented and cohesive workforce. The organisation must be able to retain and nurture its employees. Voluntary turnover occurs when an employee leaves the company on their own volition. In this case, an employee makes the decision to terminate their employment relationship with the organisation. This is unlike involuntary turnover where the employer terminates the employment relationship (Shaw et al. , 1998).
This essay discusses voluntary turnover as a major problem for the organisation. This is due to the fact that voluntary turnover leads to a reduction in organisation performance, loss of human capital, costs in replacement and general administration. To reduce the costs from voluntary turnover, the essay discusses strategies to prevent and predict potential turnover. This is through reinforcing social network structure between workers, recognising right attitude and intentions of applicants and lastly maintaining continuous training. Discussion Several kinds of research show that there is a link between performance and turnover. The link is more specific in aspects such as promotion rate and pays growth.
When considering voluntary leaving the organisation, employees are highly likely to consider both internal and external conditions of the organisations. Expectancy theory shows that high performing employees expect a relationship to exist between their performance and rewards compared to lower performers when deciding to voluntary leave the organisation. According to the equity theory, employees will always compare their relative outputs and inputs to others. In this case, if an employee perceives that others are being paid more for less input, they may ask for a salary raise or reduce their inputs.
Both expectancy and equity theory explain why higher performers leave early in most cases than low performing employees (Nyberg, 2010). Employee reward and performance determine their motivation. The most vital rewards are pay growth, pay performance and promotions. When there is high pay growth, high performing employees are less like to voluntarily leave. Also, when there are low performance and low pay growth, less performing employees leaves voluntarily to organisations where there is a low link between pay and performance.
This shows that there is a negative relationship between performance and voluntary turnover. Equity theory shows that low pay growth for high performers, there is a weakened negative relationship between voluntary performance and voluntary turnover. When there is salary growth, the level of voluntary turnover is reduced. This is strongest for the best performing employees (Nyberg, 2010). Promotions enhance employees’ attachment to the organisation. Also, it is important to note that promotions make the employees more visible to the external market which may make it easy for them to make voluntary movements.
Promotions help a lot in increasing employees’ attachment to the organisation and are also associated with pay growth. Low chances of promotions reduce the levels of attachment and may lead to voluntary turnover. The economy plays a major role in determining the level of voluntary turnover. This is due to the fact that the economy determines the level of unemployment hence alternative jobs. Also, the level of job satisfaction plays a role in voluntary turnover. Satisfaction plays a role in making the decision to leave or stay in an organisation (Nyberg, 2010).
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