Worombye case scenario
While there are numerous difficulties at Worombye resulting from failing restructuring efforts by incompetent and ignorant general manager, the most pressing problem is staff retention. The problem is exemplified by the case of Sarina, who is experienced, professional and committed to the hospital, yet she is seriously considering looking for employment elsewhere. She feels that her efforts are underappreciated by her superiors and her requests for assistance (or even mere authorization) are often ignored. Similar problems are faced by other managers, and one of them is on stress leave. As a consequence, the turnover rate among managers is high. There is a consensus in management literature that turnover affects organizations in a very negative way because of costs involved in hiring and training new employees and losses in expertise and human capital when experienced staff leave. Therefore, the most important task for Worombye’s human resources is to implement an effective strategy aimed at employee retention.
High turnover is recognized as a serious problem in management literature. Sigler (1999) notes that “loss of talented employees may be very detrimental to the company’s future success” (p. 1). The costs associated with turnover are usually classified as direct and indirect. Direct costs are
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Indirect costs are associated with the loss of knowledge upon the departure of experienced employees. As the human capital theory suggests, the longer an employee stays in an organization, the higher are the chances to recuperate the costs spent on training this employee (Ramlall 2004). Furthermore, there are other types of indirect costs stemming from employee turnover. As Idson and Valletta (1996) note, high turnover, especially discharging senior and long-tenured workers, involves reputational costs because it sends a wrong signal to potential employees: an organizational that appears not to care about its workforce experiences problems not only with retaining but also with attracting talented workers.
High turnover implies hiring a lot of temporary workers or subcontracting to compensate for staff shortages, like in the case of Worombye. However, the problem with such workers is that they, in Studer’s (2004) terminology, have a “renter” rather than “owner” mentality and therefore little interest in the long-term survival and success of an organization. It is evident that the problem of employee retention represents a challenge for any organization, and efforts should be directed at reducing turnover and associated negative phenomena.
Job satisfaction and organizational commitment are the two most important factors in employee retention. It is often the case that healthcare employees leave their organization or even their field because “they feel the barriers to delivering high quality care are too many, they are confused about the direction of their organizations, and they no longer feel that their work is worthwhile” (Studer 2004, p. 52). Thus, employees should be provided with an overall sense of direction and a feeling that their work is valued. The latter point will be explored in greater detail in the subsequent section. Besides turnover, low levels of job satisfaction can lead to additional pressures on the organization, since employees “may demand higher wages, not comply to organisation practices, and not interact well with their coworkers or comply to their managers’ directions” (Sigler 1999, p. 1).
As for organizational commitment, Meyer and Allen (1991) argue that it is a complex and multifaceted concept that can be understood as a combination of: 1) desire (affective commitment, i.e. employees want to stay in the organization); 2) need (continuance commitment, i.e. employees are aware of the costs of leaving the organization); and 3) obligation (normative commitment, i.e. employees feel that they ought to stay in the organization). In turn, an empirical study by Somers (1995) has revealed that only affective commitment is an accurate predictor of lower withdrawal intentions, turnover and absenteeism. Therefore, a conclusion can be made that it is only employees’ desire to stay in an organization that can prevent them from dropping their job, and even risks associated with unemployment or perceived obligation to work do not stop them from leaving.
Frank, Finnegan and Taylor (2004) introduce an interesting concept of employee engagement defined as extra time, brainpower and energy that employees bring to work. Employee engagement, which can be deemed synonymous to employee involvement and closely related to organizational commitment, has been studied extensively in the recent years. A conclusion has been made that a high-involvement organization is “is employee-centered by design; information and decision-making power are dispersed throughout the organization, with employees at all levels taking on greater responsibility for its operation and success” (Guthrie 2001, p. 181).
While some attempts to create self-managed work teams have taken place at Worombye, such teams have not been given any substantial authority, since all decisions still have to be vetted by management. Therefore, self-managed work teams at the hospital have not achieved their purpose, which is greater employees’ ownership of decisions and higher level of commitment, involvement, and engagement.
As Taylor (2004) argues, there are several ways to increase employee engagement, namely by building trust between team members and leaders; building esteem in team members; communicating effectively to employees; creating an enjoyable and fulfilling work climate; acknowledging and adapting to individual needs and views; and coaching and developing employee talents. These recommendations are mirrored by Izzo and Withers (2002) who argue that employees nowadays have needs beyond high salaries: they “want to lead balanced lives, enjoy partnership with their employers, receive opportunities for personal and professional growth, be able to make a meaningful contribution to the world through their work, and experience opportunities to socialize at work” (p. 53).
At Worombye, none of these principles are respected. Sarina often has to take work home, which has a negative effect on her work-to-life balance. As for opportunities for personal and professional growth, promotions happen at the hospital, yet criteria applied remain unclear and perhaps arbitrary: with almost 20 years of experience, Sarina receives a salary slightly higher than senior secretaries. Most importantly, there is no relationship of trust between management and employees, and employees do not feel that their work is valued. As Gering and Conner (2002) argue, “if employers treat their employees as valued contributors, the employees will stay” (p. 40). This phenomenon is referred to as perceived organizational support in management literature. Perceived organizational support is defined as “the extent to which the organization values their contributions and cares about their well-being” (Sucharski & Rhoades 2002, p. 565). Thus, managers should constantly make their employees feel valued and cared about, collectively and individually.
At Worombye, the level of perceived organizational support is extremely low. If this is does not change in the foreseeable future, the organization will suffer from high turnover and low organizational commitment resulting in disengagement, absenteeism and lack of compliance with organizational guidelines. Employee turnover results in high direct and indirect costs for the organization. In order to prevent it, a relationship of trust has to be developed between management and employees, and every employee should feel that his or her contribution is valued. In this case, staff will first of all stay at the hospital and secondly stay productively engaged in their work.
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