Company Background
Discuss about the Investigation into high employee turnover rate during company restructure in TSL Jewellery.
In the current sustainable changing environment does not only have an impact on the companies that are operational but even on the employees who working within the companies (Huang et al., 2016). It is seen that human resource management has a significant role to play in the management of the organizational resources and how the employees have treated within the companies (Call et al., 2015). The employees are a vital asset to every company, enterprises and it is seen that the success of each and every organization is reliant entirely on the efficiency of their employees.
There are numerous ways with the help of which the businesses or the organizations may enhance the efficiency of their employees. This can be attained with the help of frequent training events and sustainable motivation in the working environment, empowerment of the employees, bonus and promotional programs etc (Fu, & Deshpande 2014). These activities and the strategies generally ask an organization to spend significant amount of resources in order to make sure that their employees are satisfied with their job and work effectively in order to attain the pre-constructed organizational goals and objectives (Holtom, & Burch 2016). However, with the efforts that have explained earlier, the businesses and the organizations even face the challenge of higher degree of employee turnover and therefore low rate of employee retention. These are the factors that significantly affect the success of the businesses and the organizations as they are robbed from their most valuable assets which have been their employees (Ahammad et al., 2016).
Selden, & Sowa (2015) explains turnover to the ratio of the employees of a company who resigned at a specific time period with the aggregate number of employees in that company during the same time frame. Anitha, (2014) explained that an organization who is successful generally has a high rate of employee retention.
Tse Sui Luen Jewellery (TSL Jewellery) International Limited is known to be one of the largest jewellers in Asia that is significantly associated in the designing of the jewellery, producing them thereafter trading, wholesaling and retailing the same. TSL is a family business and run by Tse’s family and the aim of the company has been to concentrate on the Chinese market as the performance in China has been pleasing in the recent times (2015-2018).
Problem Background
The company even looks to move the headquarter from Hong Kong to Guangzhou due to the effective level of business performance. It is even seen that the decision making process of the company would even be transferred to the management team in China rather than the management team of Hong Kong.
It is due to this factor that the Chairman of the company declared about undertaking a restructuring process in the overall framework in the year 2016 and this change would take place for the coming 3 year till the year 2019. The changes that would take place within the company would constitute of the freezing of the headcount like controlling of costs, redesigning of the job by increasing the work load of the employees (ir.tslj.com 2018).). The changes have led to the fall in the morale of the employees and therefore 75% of the senior management resigned from the organization. The overall outcome of the changes that have taken place in the company has led to the rise in the employee turnover and the rate has increased from the year 2015 to the year 2017. The restructuring process would continue in the company till the year 2019 (ir.tslj.com 2018).
This research has been undertaken in order to discover the factors that have led to the rise in the employee turnover in TSL Jewellery. The company started facing issues in accordance to the rise in the employee turnover simply due to the discontent of the employees due to the process of restructuring. The rise in the employee turnover had significant impact on the operational activities of the company and therefore various measures and strategies have been taken by the company in order to understand the issues and discover ways of recovering from the same. The outcome has indicated that the headcount of the turnover of the office employees explains the fact that the in the year 2015, 297 employees were there in the company and the turnover rate has been 9.60%. In the next year the employee count fell to 250 and the percentage of employee turnover has been 18.70% and in 2017 the headcount has been 218 and the rise in the percentage has been 23% (ir.tslj.com 2018). This has been the main problem for the company as the rise in the employee turnover percentage had an impact on the performance of the company.
The main intention of this paper has been to assess the significant factors in TSL Jewellery that had an impact on their operational performance. One of the key factors has been the rise in the employee turnover rate and this would be based on the employees of the company in their office and thereafter looking for insights in the rates of employee retention within the industry. The main reason for the employee turnover has been the job insecurity, style of the management, prospect of the career of the employees, satisfaction level in accordance to the salary given and the culture of the firm (Madden et al., 2015). The results have indicated the fact that 40% of the top management and 75% of the senior management has resigned from the company. Therefore, the purpose has been to understand the factors that led to this issue in the firm.
Purpose of the Study
The aim of the paper has been to understand the factors that have led to the rise in the percentage of employee turnover in TSL Jewellery after the undertaking of the restructuring process
Q1. What are the factors that have led to the rise in the percentage of employee turnover in TSL Jewellery after the undertaking of the restructuring process?
Introduction
The literature review has been constructed in order to provide an understanding about what other researchers have provided in accordance to the topic by assessing the similar researches that have been undertaken in the past in order to have an idea about the factors that have led to the rise in the percentage of the employee turnover. The background of TSL Jewellery has indicated the fact that there are several factors related to restructuring process that have led to the rise in the percentage of the employee turnover and therefore analysis with the researchers would even be taken into consideration.
Employee Turnover
Newman et al., (2015) cited that employee turnover is the rate of individuals who resigning from their jobs and turnover is expensive as well disruptive for a company. Sikora et al., (2015) employee turnover is inevitable because of the fact that certain employees retire from a company and in certain instances move to other companies as well. Employees even leave a company due to sickness and other personal factors and therefore a low rate of turnover will be existent even after the companies have been taking measures in order to satisfy their employees (Zhong et al., 2016). Employee turnover can be damaging for a company as this increase their costs and wastage of time as the new employees who would be recruited need to be provided with extensive training and knowledge in accordance to the work they have to perform and the goals and the objectives of the company as well. It is role of the human resource department to take care of their employees and construct plans and strategies in order to satisfy and motivate them so that the rate of employee turnover would be reduced.
Factors leading to employee turnover due to the Restructuring Process
Mulki et al., (2015) cited that there are several factors that lead to the rise in the percentage of employee turnover in case restructuring has taken place in a company and it is the responsibility of the organizations to assess their internal environment in order to have an idea about the factors that would lead to the development of a better working environment.
Research Aim
Job Insecurity
Job insecurity is one of the key factors that plays in the mind of the employees if they discover that the job they are performing is not secured. Lu et al., (2016) explained that job insecurity in an employee develops when they are not satisfied with the management of the company and they feel that their employment may not be permanent. Job insecurity generally occurs when the management decides to undertake restructuring process and therefore changes in the management policies and providing extra burden on the employees by putting in additional task to the employees takes place. Job insecurity is one that employees take into consideration as if the employees are not satisfied with the work they are performing, then they become unwilling to work for the organization.
Management Style
The style and the approach that is undertaken by the management of an organization in order to operate their businesses has an impact on the employees as well. The employees are a part of the organization and they get motivated if the management are considering their issues and concerns as well. Fabi et al., (2015) explained that there are several kinds of management style that can be made use of by the companies and it is the discretion of the management to choose the ideal strategy in accordance to the aims and the goals of the company. It is seen that the employees feel satisfied if the management incorporates plans and strategies where they would consider the feedback of the employees, consider their ideas and plans as well and motivate them to perform in a better way. The rate of employee turnover increases in circumstances when the management enforces their decisions over the employees and thereby the employees lose their motivation. Paillé et al., (2014) cited that management style that incorporates the decisions of the employees reduces the rate of employee turnover within an organization. The change in the management style is even a consequence of a restructuring process that is undertaking in a company and therefore this has significant amount of impact on the percentage of employee turnover in an organization.
Career Prospect
The employees join an organization in order to secure a safe and developing career for themselves. The prospect of developing career influences the employees to perform effectively so that their development would be possible and thereby the employee can get promotion and thereby develop their career. The rate of employee turnover would reduce if the employees discover that the career prospect would be higher and this would lead to efficient performance from the employees as well (Singhapakdi et al., 2015). The companies need to make the employees aware of the future prospect within the organization and this in return would be helpful for the employees in understanding their development within the company and thereby they would perform accordingly in order to excel in their career. These aspects need to be addressed when the restructuring process is taking place so that the employee becomes aware and the employee turnover rate remains low.
Research Question
Salary Dissatisfaction
The dissatisfaction among the employees with respect to their salaries is another factor that leads to employee turnover. The changes in the salary generally take place when restructuring takes place in a company. In this scenario dissatisfaction among the employees take place in accordance to their salary and this leads to the rise in the extent of employee turnover. The employees work in a company in order to earn income with the help of which the employees would be able to meet their daily expenses and maintain their standard of living. Hom et al., (2017) addressed that one of the essential factor leading to the rise in the employee turnover has been the employees receiving job offers from other companies with better salaries look to change their job in order to improve their level of income and even enhance their career prospect. It is the responsibility of the management of the companies to assess whether the salary paid to the employees are equivalent to the task performed by them as employees would be satisfied once they find that they are receiving equal salary in accordance to the effort that is given from their part (Javed et al., 2014).
Company Culture
The culture of an organization is a pivotal part in the development of a company and the culture changes when the companies are planning to restructure. The culture of an organization motivates the employees to perform in a better way and the culture determines the work environment of the company. The changes in the company culture can have an impact on the mind-set of the employees as their performance depends on the culture that is existent within an organization (Nica et al., 2016). The development of a company would be dependent on the performance of the employees and therefore changes in the culture should be undertaken after consulting with the employees.
Summary of the Literature
The literature in relation to this topic has looked to explain employee turnover and how it has an impact on the performance of TSL Jewellery. The literature has therefore evaluated the aspects that leads to employee turnover and each of the aspects have been explained in an explicit manner so that an idea can be attained in accordance to the relationship these factors have with the actual scenario of TSL Jewellery in the current time period after the management of the company decided to undertake the process of restructuring.
Literature review
Reference List
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Anitha, J. (2014). Determinants of employee engagement and their impact on employee performance. International journal of productivity and performance management, 63(3), 308.
Call, M. L., Nyberg, A. J., Ployhart, R. E., &Weekley, J. (2015). The dynamic nature of collective turnover and unit performance: the impact of time, quality, and replacements. Academy of Management Journal, 58(4), 1208-1232.
Fabi, B., Lacoursière, R., & Raymond, L. (2015). Impact of high-performance work systems on job satisfaction, organizational commitment, and intention to quit in Canadian organizations. International Journal of Manpower, 36(5), 772-790.
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Hom, P. W., Lee, T. W., Shaw, J. D., &Hausknecht, J. P. (2017). One hundred years of employee turnover theory and research. Journal of Applied Psychology, 102(3), 530.
Huang, Y. H., Lee, J., McFadden, A. C., Murphy, L. A., Robertson, M. M., Cheung, J. H., & Zohar, D. (2016). Beyond safety outcomes: An investigation of the impact of safety climate on job satisfaction, employee engagement and turnover using social exchange theory as the theoretical framework. Applied ergonomics, 55, 248-257.
ir.tslj.com – Tse Sui Luen Jewellery (International) Limited – Company Background. (2018). Ir.tslj.com. from https://ir.tslj.com/eng/company/
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Sikora, D. M., Ferris, G. R., & Van Iddekinge, C. H. (2015). Line manager implementation perceptions as a mediator of relations between high-performance work practices and employee outcomes. Journal of Applied Psychology, 100(6), 1908.
Singhapakdi, A., Lee, D. J., Sirgy, M. J., &Senasu, K. (2015). The impact of incongruity between an organization’s CSR orientation and its employees’ CSR orientation on employees’ quality of work life. Journal of Business Research, 68(1), 60-66.
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