Organizational Climate Partially Mediates: Employee Turnover And Staff Performance

Research problems, purpose, aims and objectives

Discuss about the Organizational Climate Partially Mediates.

Cohen, Blake & Goodman (2016), define “Employee turnover rate” as the changes over the years, in the percentage of employees in the total workforce of a company, who are fired or who quit within a period of time, usually one fiscal or calendar year. This in turn makes it immensely important for the business organizations to maintain their competitive edges and productive as well as cost efficiencies. Many of the organizations have appraisal system of the employees that experiences shortcomings of manual staff evaluating systems (Bertola, 1990). Strategic implementation of organizational curriculum results the firm employee turnover rate specifically.

The staff performance emphasizes on the enhancement, learning and improvement to the quality of works for achieving the inclusive “Business strategy” and for creating a workforce of high-performance. The gap between justification of pay and the enhancement of skills is a fact of concern for staff performance (Sheridan, 1985). The realization comprehensive approach management and reward performance was required. The approach of staff performance was enhanced. The human resource management is a strategic driver of staff performance completed by line managers throughout the congruency of objectives of the organization. The performance review and implementation of “Performance improvement plan (PIP)” confidently lead the meeting. The positive and motivational performance would improve the ability to interact the reporting of the employees.

The research report concentrates about concerning employee turnover rates and staff performance. The research highlights performance of the employees that ultimately influences the organizational effectiveness that leads to employee turnover. This research study detects the causes of employee turnover rate and suggest different recommendations or strategies for increasing organizational effectiveness.

The objectivity of the study is important from the point of view of the influence of employee turnover on staff performance. The employee turnover has a negative effect on the overall organizational performance with the theoretical and empirical-analysis. The following research study just reflects that truth. It also discusses the daily routine interruption of the organization. Many other researchers on the other side find that the organizations get advantages due to innovative thoughts in enhancement of staff performance as the impact of employee turnover (Hassler & Mora, 1999).

The aim is to propose the aspects of increment of staff-performance that grows motivational level to carry out employee turnover. An effective performance constructs the groundwork for excellence. The research also aims to focus on the performance objectives and expectations through the utilization of outcomes, behaviors and actions to make the contents of the performance review discussion to re-emphasize critical points.

Significance of research

To have the above purpose, the research study discourses the subsequent key objectives:

• To explore the responses of the hotel manager and employee turnovers.
• To determine the impact of the employee turnover in case of effectiveness of the organization.
• To test the various factors hampering employee turnover, the lesser employee turnover is required.

As per the assertion of the author, employee attrition is different from that of employee turnover in the sense that the former usually occurs due to the end of employee-employer relationship, caused by retirement, death, elimination of the job and others and is thus different from turnover as in case of the former, the vacancy created is not filled with a new worker while in case of the latter, new employees fill up the place (Liu et al., 2013).

Keeping this into consideration, the concerned section of the study, tries to conduct an extensive review of the vast literary and scholarly works existing in the global framework, in the aspects of employee turnover, the reasons behind the same, its implications on different aspects of the operations of the companies and the measures by which it can be averted. There exist different methods for measuring the turnover of workers of the companies, of which the most common method is that of calculation of “Employee Turnover Rate”.

As can be seen from the above discussion, in the contemporary period, with the global business framework becoming more inclusive, integrated and hugely inter-connected and with more business going global, the level of competition among the businesses of almost all types of industries across the globe has been increasing (Schaper et al., 2014). Augmenting the views of the previous scholars, Mowday, Porter & Steers (2013), define the concerned phenomenon of employee turnover as the percentage of employees present in a workforce, who leave within a certain time-period, which is usually one fiscal year or one calendar year. As per Ivancevich and Matteson (2004), “Personal background” and interest might be the reason of “Staff turnover”. Although the turnovers of the staffs have cost effects in organizations, it would cause the many customer complaints about the “Low-standard Service”. For this the companies need to address the different issues which hamper their productivity, profitability and sustainability, of which one of the primary one is “Employee Turnover” (Swift & Piff, 2014).

The term “Employee Turnover” being a broad notion has been defined by the scholars across the globe from different perspectives. However, in the generalized framework, as highlighted by Shukla & Sinha (2013), in their research paper, turnover of the employees refer to the percentages or the number of workers leaving an enterprise and getting substituted by fresh employees. In this context, Miller (2017), puts forward the difference between the notions of employee turnover and employee attrition, which are often used as synonyms or interchangeable terms.

Scope of the report

On the other hand, an employee job performance is a procedure that obtains management evaluation and feedback. It relates activities expected to a worker and the process how it is executed. Many business personnel directors evaluate the performance of the employees on a monthly, quarterly or annual basis to support them to identify suggested segments for enhancement.

Hom et al. (2012), in their literary work, differentiates between the various types of employee turnovers which can be seen in the global framework, the primary ones being as follows:

Involuntary Turnover- This kind of turnover does not involve the decision of the employees to leave the organization. Generally, this kind of turnover occurs due to poor performance, workplace policies violation or absenteeism of the employees.

Voluntary Turnover- This occurs when the employees of an organization voluntarily or willingly terminates their employment relationships. Voluntary turnover generally occurs, when the concerned employees get better employment somewhere else, relocates to other places or for other personal reasons (Bryant & Allen, 2013).

Desirable Turnover- When the employees whose performances fall below the standard or expectations of the company are terminated and are replaced by a better performing individual, then this kind of turnover is known as desirable turnover as it helps in increasing the efficiency, profitability and prospects of the concerned company (Chow et al., 2006).   

Undesirable Turnover- This type of turnover usually has negative implications on the company as this signifies the phenomenon in which the companies lose out those workers whose performance and skill levels are high and who are valuable resources for the companies. Usually in this type of turnovers, the employee who replace the terminated ones do not have skills or efficiency levels of that level of the terminated ones and this form of turnover is most harmful for the companies, as put forward by Croucher et al. (2012).

It is known to all that “Employee Performance Management” is a fact of aligning the organizational aims with the measures, developing plans, skills, contemporary requirements and delivery of outcomes (Dess & Shaw, 2001). “Fresh classified employees” or “Classified employees” are tending towards a “New position” needed to attend a “Probationary Service Period”. The span of this period is resolute by the cooperative applicability to bargain “Agreement” or “Employment program”. Professional staff do not have a probationary or trial service period.

As highlighted by Hausknecht & Holwerda (2013), proper measurement of employee turnover is considerably important for the employers as the same helps them not only to analyze the reasons behind the turnover occurring in their organizations but also contribute in estimation of cost-to-hire and other costs occurring due to employee turnover in the companies.

Literature Review

The staff performance has various types of measurements of employees that are –

• Planning for the year
• Evaluation of employees especially new employees
• Staying connected with the evaluation of staff performance
• Reviewing the staff performance monthly, quarterly and annually (Ongori, 2007)
• The performance should be measured by written evaluation or one-on-one meeting
• Preparation of measures to reform the evaluation charts

Through performance appraisal, the supervisors understand employing criteria that could be understood and accepted by the “Skills of underlings”. The assistants and underlings can also comprehend and generate faith and poise under managers. The performance of the staffs should be reduced and the inequality in salary structure would be uplifted. The specialization and division of labor would help to perform various types of jobs and fixed salaries. It helps to select the employees for determining job evaluation taken into account. The healthy association between staff performance and employee turnover could be maintained between employees and management.   

Over the years, there exist considerable debates and opinions across the globe, regarding the plausible reasons behind turnover the workers in different organizations and the assertions can be seen to be varying hugely depending on the types of companies, geographical regions and periods. However, the most common factors, as can be seen in the literary evidences are as follows:

1. Overworked employees-As cited by Jha (2014), often in the organizations, the workload is not appropriately distributed among the different workers, which in turn leads to creation of huge work pressure for few particular workers, who in turn feel to be exploited and not paid as per the works they do. This in turn may lead to employee turnover.
2. Better Prospects-One of the primary reasons behind turnover of the employees in companies across the globe, is that of the availability of better prospects in other places or organizations. As per the work of Sinha & Sinha (2012), a major share of workers leaves the companies when they are offered higher wages and lucrative packages by other companies and this type of turnover is generally higher in the companies which offer miserly salaries to the workers and are also reluctant to give raises to the workers.
3. Toxic company culture-The presence of healthy and productive working environment is immensely necessary for increased productivity of the companies. In presence of toxic, biased and discouraging work culture, the happiness of the workers is directly and negatively affected, which in turn leads to employee turnover (Branham, 2012).
4. Employees are not recognized- Queiri, Yusoff & Dwaikat (2014), argue that turnover of workers is higher in those companies where the efforts of the employees are not properly recognized, thereby creating huge discouragement among the employees.
5. Career development opportunities-Absence of enough career development opportunities for the workers of an organization also leads to higher employee turnover in the concerned organizations.
6. Inefficient management-Qiu et al. (2015) also highlights the detail that in the presence of “Inefficient management” and “Unproductive leadership” in the business organizations, the employees tend to leave the organizations with lower level of satisfaction.
7. Performance appraisal- The performanceappraisal determines the packages, salaries and wages of compensation records. It identifies the “Strengths and Weaknesses” of the workers for placing “Appropriate men” on proper joining. It maintains and evaluate the “Potential extant” in an individual to develop and grow.
8. Influencing working habits-The feedback of employees regarding the performance and associated status serves the basis for influences.
9. Promotion and compensation-The “Performance Appraisal” assistances to mark the compensation packages for the staffs. “Performance Appraisal” and “Compensation Packages” frame the “Training Policies and Programs”. It assistances to analyze the “Strengths and Weaknesses” to of the staffs so that the authorities frame policies and programs related to the high “Salary rates”, “Extra benefits”, “Bonus”, “Pre-requisites” and “Allowances” are relied upon appraisal of the performance.

Apart from these reasons, however, factors like that of company’s own strategic designs, competitive policies, employees’ own reasons, technological innovations and shift in skill requirements as well as many other factors contribute in the turnover statistics of the employees of different organizations across the global scenario. Effective managers elaborate both positive staff performance and areas for improvement on the daily basis. The documentation of job planning and job expectations with a written agreement might help to enhance employee’s self-evaluation. It would develop the level of staff performance. Excellent staff performance would help to motivate the employees and further it would continue to be grown, developed and successful. The “Performance Appraisal” assistances the controllers to make out the “Validity” and “Urgency” of the selection method.

Turnover of employees, as experienced by different organizations, have considerable impacts on the operational framework, as can be seen to be discussed by different literary works, the most significant ones being as follows:

1. Increase in the expenses-According to Mohr, Young & Burgess Jr. (2012), the primary implication of employees of an organization is that of increase in the operational costs of the organizations in terms of loss of “Human capital” and rise in the cost of investing in the same. These costs include those of selection of substitutes, their formal and informal trainings and other costs (Shaw, 2011).
2. Loss of experienced and skilled employees-High turnover rates in organizations, leads to loss of trained and skilled employees, as argued by Medina (2012). This lead to the loss of knowledge and talent pool, which according to the authors, negatively affect the overall productivity and sustainability of the companies.

iii. Staff performance and appraisal- One of the most crucial implications of employee turnover, as highlighted by Nica (2016), is that of the effects on the overall productivity and performance of the employees. According to the author, when skilled employees leave a company, it leads to loss of experience and new employees take their place, who requires to be trained to perform the same roles. However, it takes considerably large amount of time to train them to perform the same responsibilities with same efficiency, which in turn indicates towards an overall loss in the productivity and also hampers the overall performance of the workforce in the organization (Aarons et al., 2009).

1. Profit-As per the assertions of AlBattat & Som (2013), high turnover of employees leads to lack of the overall loss of profitability and sustainability of the companies in the global scenario.

Types of Employee Turnover and its relation with Staff Performance

The performance review practices the recommendations in your performance review meetings that would establish the significant tool for the management. The performance review could be able to enhance the association of the employees and improve performance for the organization especially “Employee-Manager Communication”. The better and significant association between employee turnover and staff performance would bring a boon for consumer and work relationship. The method to determine the employee turnover for various kinds of jobs become standardized through evaluation of jobs. It helped to bring the uniformity into the structure of salary. The managers are capable of making allowances, salary revisions and other benefits related to the staff performances (Luna-Arocas & Camps, 2007). The turnover of the staff might be affected due to “Low-renumeration”, “Job dissatisfaction” and “Wrong treatment”. The employee turnover is estimated by separation, replacement, recruitment and training costs driven by level of staff performances.

From the above discussion of the existing literary works and empirically evidenced scholarly papers, it can be asserted that the phenomenon of Employee Turnover holds immense relevance and significance in the global business framework as much of the operational structure, smoothness of productive activities as well as the prospects, competitiveness, profitability and long-term sustainability of the companies as well as the welfare of the employees are reflected by the same (Ongori, 2007). As per the literatures studied, the companies need to take into account this aspect to stay relevant and prospering. However, although the literatures provide extensive evidences regarding the term, its calculation, the types of employee turnover, reasons behind the same and also on the impacts of the same, detailed literary works are however found to be absent regarding the actual impacts of high employee turnover on the overall staff performance of the companies (Leggat, Bartram & Stanton, 2011). The job assessment represents an effort for determining the associating value of every jobs from the staffs as per employee turnover. The concerned research tries to explore this issue and to interpret the same in light of the evidences collected and analyzed.

A methodology is a proper way out of “How the researcher knows what they know about the research topic?”. A well-constructed methodology would identify the approaches carried out by other researchers that have studied the same type of phenomenon. More of it, the research methodology detects the research questions and its segments. In methodology section, we majorly discuss data collection procedure, characteristics of data and research, data analyzing techniques and advanced ideas and concepts relevant to our business condition. The data analytical procedure relies up on existing knowledge, compare and contrast credible aspects of logics. A “Standard Structured Questionnaire” was directed to every “Target respondents” for determining the insights of staffs about the influence of “Stuff-turnover” on the efficiency of organization and performance of the employees (Hollway & Jefferson, 2000).  

There exist two common methods for the research designs that are “Qualitative” and “Quantitative”. For determining the influence of the turnover of staffs on the “Employee performance” and “Organizational effectiveness”, the questionnaires should be utilized to gather the data set. It includes “Structured questions” directed to numeral respondents for their responses that obtains consequences statistically tabulated and tested (Denzin & Lincoln, 1994). The research design must arrange a qualitative design that permitted the research to be accomplished as proficiently as possible generating most information with negligible “Expenses of time”, “Money” and “Effort” (Tracy, 2013).  

The commonly utilized “Primary data” collecting processes are the “Interview” and “Questionnaire”. Many other researches are concerned to obtain the responses. It could be said that, “Questionnaire” and “Interview” are data gathering instruments that make the researcher to posture questions to the themes as per research questions (Saunders, Lewis and Thrornhill, 2009). Primary sources use structured questions for the need of empirical investigation (King, 1994). Therefore, primary data is utilized in this research with the help of structured questionnaire.

One more important aspect that is required for data analysis is proper selection of “Target Population”. A “Target Population” is the entire group of possible contributors to whom the analyst would like to accomplish the research (Zikmund, 2003). The “Target population” must be acquainted with the maneuver of the authority and were capable to provide the analyst more information about the influence of the turnover of the staffs on the efficiency of the organization and the presentation of the employees through the administered questionnaire (Qu & Dumay, 2011).

The survey process permits the assortment of significant amount of data in an efficient and economical way (Nunan, 1992). As the sample size of the target population is 1, therefore, the researcher felt about no need to choose a sample. The personally administered questionnaire helped to collect the necessary data. The interview process may be time taking and prolonged (Brinkmann, 2014). However, the method is cheap and effective. The data is collected from the verbal responses of the researchers. Questionnaire allows a respondent a adequate quantity of time for considering responses before replying.

The explanatory data analysis analyses the specific audience. Such types of analysis determine the specific needs for the communication. Exploratory data analysis is very much useful in explaining the interpretable outcomes (Bontis, 1998). The objective is also to explore that data discovering novel and unexpected patterns as well as investigation. The explanatory data analysis is based on theoretic data mining, interactive data exploration and analytics (Talja, 1999). This type of analysis method collect data, filter that data and elaborate the data. The appropriate statistical and economic process analyzes explanatory spatial data. The greater explanatory nature refers the greater certain preferences (Tukey, 1977).

The data analysis depends on cross-sectional survey that is explanatory study by qualitative method. Qualitative research qualifies data and typically applies some form of statistical analysis (Liamputtong, 2009). Quantitative research quantifies data based on staff performance level. This type of research is used so that pertinent and precise information could be found. The data is collected from primary sources. Hence, it is a primary research survey. The primary sources of information were structured through structured questions (Burnard, 1991). The structured questionnaire developed for data collection collected the primary qualitative data. The qualitative data is collected by interview method. Convenient sampling methods were utilized for explanatory research study (Zikmund et al., 2013). Only one responder (Hotel manager) were chosen as a sample size for the study. The response rate of the questionnaire was found to be 100%. The questionnaires were designed for the descriptive, regression and correlation techniques. We applied research problem as the researchers required flexibility in approaching the research problem.

The qualitative data is collected from the interview of a hotel manager. The qualitative data is analyzed in case of employee turnover. The major reason of employment is found as per interview. It is “High work-load”. The other types of significant reason of employment turnover are – “Offering of more money”, “Culture of the company”, “lack of development scopes”, “Lack of recognition or reward” and “Miscommunication with boss”. The employee turnover is dependent up on the employees. The responder stated that the people working in a company grow their skills and find employment with greater scopes and monetary benefits that would encourage them vastly. The responder defines the employee turnover as the firing or voluntary leaving of the employees of a company. As per his comment, generally, turnover indicates the overall employment satisfaction that changes with the change of the organization in their operations. The way of employee turnover could be decreased in hospitality industry in the ways like “Proper wages”, “Performance bonus”, “Acknowledgements” and “Praising”. However, training is the most crucial and effective way to lower the hospitality industry. As per responder’s consent, companies do not generally fire the employees who are well trained.

The specific cause for the turnover of employees in the “Hospitality industry” is “Higher competition” and “Many options for the skilled employees”. The “Industry-specific measures” could be taken to decrease the turnover of the employees in the “Hospitality industry”. Many international competitor spaces in the markets with highly cost-effective business structure and trained employees with training. For reducing employee turnover, hospitality industry is needed to focus to design the income structures, incentives as well as perks.

The hotel manager also answered about the association between employee turnover and employee productivity. The knowledge and experience of the job influences the customers. The loyal companies would come for the goodwill and will mostly decrease the demands. The key responsibilities and turnover amount of the organization majorly influences the productivity of the employees. The proposed way out of the staff productivity is given by increased productivity of the workers of various industries especially in hotel industry. The devising strategies trains the employees and it also manages the skills of the employees for better offers. Not only that, the compensations and some productive working scopes are needed to be delivered to the employees that should indicate the various tasks as per creditability of the good performance.

The hotel manager informed that “Training” is the primary way to enhance the productivity of the workers. The modes of training for employment productivity are the requirements of training and planning. The plan is to developed and executed as per purpose. “Learning by Doing” is the most effective way to impart training and disseminating knowledge. The responder also informed that the personal contact holds the value in the retention of the employees in the ways of selecting the opinions and importance that enhances the loyalty and sense of responsibilities to motivate the existing professional commitment for a prolonged period.

The organization enhanced personal contact with the employees by conversing each level at an individual level. He/she recommended that the managing authority must play the important roles in this context. It is necessary to maintain a transparent, unbiased and one-on-one channel with each of the employees. Here, the employees could be able to freely share their considerations and concepts. It would enhance the personal contact of the organization with its employees at a high-level planning.

• Top authority and management must create scopes for the advancement of the career in the group. Generation of scopes for career-advancements might assist staffs to become more skilled and to rejoice their work even-better.
• Managing authority must comprise staffs in the “Decision-making” procedure.    Managing authority must possess the effectiveness. The employee involvement might be via meeting representatives.
• Higher authority should improve the working circumstances within the organizations. Each staff individually must also obtain “Regular” and “Timely” feedback on the fact how they are performing (Duh, Chow & Chen, 2006). The authority should have timely feedback on how they are being challenged in their jobs with adequacy.
• Management should appreciate the input of the workers in the organization when they achieve organizational goals. Obligation could be executed by incentives, notice-board presentation and letter of commendation.
• Authority must deliver “Induction and orientation” to fresh staffs to decrease the high “Consumption of resources”. Providing “Training” to the fresh staffs would assist in decrement of “Consumption of resources” at the time of settling of new members.
• Higher management must enhance the quality of delivery of service in the organization. Martin (2003) told that the turnover of staffs might contain overwhelming harms on facility extracted by the association. These factors might welcome the lack to meet the demand of the customers.
• Higher authority must employ more workers to lessen the gap left by preceding management to decrease the stress due to work of the current staffs. Higher managing authority must inspire “Team work” within the association (Grizzle & Pettijohn, 2002). They must deliver training to fresh employees to decrease expenditure of sources when fresh staffs settle in and at the consequent time to enhance service-quality.
• Higher authority must provide the credit to its “Internal employees” when there exists new position in the authority. The working environment could motivate the workforce, which also increases the productivity and efficiency (Gelade & Ivery, 2003). That is why, the employees might lose their eagerness in the work environment to the management. Staffs might drop keenness in their tasks and may dispense the authority.
• The management must decrease the monotonous due to boredom to employees by revisiting job description of the employees. If there exist no similarity between “Employee” and the “Job” tasks on the job description of the employees that have unrealistic challenges.

For the influence of employee turnover on Staff Performance could be increased by- “Planning”, “Organizing”, “Guiding”, “Directing”, “Motivating”, “Training”, “Coaching” and “Developing Subordinates” (Nelson & McCann, 2010).

1. The companies should establish the development of staff-supporting programs in the association to support staffs with issues to demolish the “Absenteeism” or “Staff turnover”.
2. Top managements must be aware of organizational assistance. Assistance program is of crucial importance whereby the workers could get-in-house guidance after being capable to manage with challenges that have a adverse influence on the presentation which might hamper delivery of services (Parker & Skitmore, 2005).
3. The better working conditions that is conductive for employee’s health and safety must be implemented (Selden & Sowa, 2011). While the adverse properties of “Physical Work Environment” are not presented, the employees might not be able to work better and superior.
4. The management must provide the advantages that would entice the finest staffs for remaining in the authority to enhance the delivery of services. The combination of job responsibilities and employee remuneration of the employees would help to motivate the improvement of the performance (Aarons & Sawitzky, 2006).
5. The managing authority must provide training to new staffs to concise the gap left by former workers to decrease “Work-pressure” to represent workers and to decrease intensely.
6. The employees are to be worked to the bone to make work-life balance. On the other hand, the team members are to be treated somewhat differently.
7. The team members and workers should make high amount of money creating the toxic culture in the company.
8. The employees should not follow up career development opportunities. Employees have not been recognized for their hard work.
9. The multi-dimensional staff performance is required by five factors that are-

• “Supervision”
• “Non-job-specific task proficiency”
• “Job-specific task proficiency”
• “Written and verbal communication proficiency” and
• “Administration and Management” (Jensen, Patel & Messersmith, 2013).

Conclusion:

The study highlights the influence of turnover of stuffs on “Organizational Effectiveness” and “Employee Performance”. Staff-turnover might be instigated by scarcity of scopes for growth of career, “Working condition” and “Remuneration”. Turnover of staffs is very much essential as the consideration would affect the outlook of the association, where the consumers would mislay trust in that association. The lack of stuff turnover would cause the scarcity of trust. Payment of employees related to market-oriented wage might help the management authority to retain valuable employees. The production of the company would reduce also whereas the staffs would be discouraged to work for an association with greater “Staff-Turnover Rate”. It is so much crucial to confirm that frontline employees are geared up for dealing with customer requests, ability and inability of frontline staffs.

The “Qualitative concept” was instigated in this analysis and the “Structured questionnaire” was utilized to gather information from the respondent. In this research, the most of the respondents had various views in case of turnovers of staff and act of the employees. Qualitative processes could permit the researcher to utilize interviews for collecting enriched data from the respondents. The scholars would investigate the research for making a comparative analysis. It is extracted from analysis that “Top Management” must grow a standard performance for the employees to measure the performance of the employee. Bad service delivery outcomes in damage of clients in the association. Hence, higher authority must provide services to the consumers for improving customer satisfaction.

Obviously, it is important for organizations to decrease turnover rates. However, for reducing the turnover rates, authority of the organizations should understand the major reasons for employment leave for other sections too. Performance appraisal describes a method of judging, coaching, feedback and assessment of performances of staffs that has huge impact on employee turnover. The expenses due to salary to hire an employee with recruiting and onboarding should be managed. Organizations must do everything within its limits and power to decrease turnover as much as possible. Employee expectations, monetary rewards and employee recognition are the organizational achievements on the job. The success deserves recognition for the job satisfaction and employee turnover.

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