Description
Solution
(AC3.3) Explain the impact of dysfunctional employee turnover.
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 300 words |
Dysfunctional Turnover
Dysfunctional turnover is the voluntary departure of high-performing employees, who are important for organisation’s success (Morlin, 2023). This kind of turnover can be harmful, particularly because it can negatively impact performance and the morale of everyone involved, resulting in lost knowledge, skills, and productivity. Ways Dysfunctional Turnover Can Impact ParcelCare Loss of Key Knowledge: Dysfunctional turnover can cause the company to lose employees with critical expertise, and hence it loses the valuable knowledge and skills. The company could struggle to find replacements with an equivalent experience, which could have an effect on operational efficiency and customer service quality (Grecek, 2024). It may also be an expensive and time-consuming activity to onboard new staff and get them to the same level as the lost skills. The indirect cost is that of potential customer dissatisfaction, which could potentially harm ParcelCare’s reputation. Increased Recruitment and Training Costs: ParcelCare also has to incur extra recruitment costs to fill high performing positions when the employees leave. These include advertising, recruitment agency fees, and the cost of time interviewing and selecting for candidates. After new employees are hired, training programs to get them to certain levels of performance are necessary as Hazelton (2024) explains. The return on investment is likely to be delayed, putting a financial strain on the organisation while the investment is ongoing. Psychological and Morale Impact on Remaining Employees: The loss of some key employees can diminish the morale of the rest of the employees. In particular, employees may feel insecure or demotivated, if they believe the company cannot retain its top talent. The end result is declining job satisfaction, increased stress, and declining productivity (Grecek, 2024). Over time, this can lead to further turnover. It can also make employees disengaged and less likely to take their role a step above what is expected, which has an overall effect on a team in terms of performance.
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Solution Permanent, full-time contracts Permanent, full-time contracts for delivery drivers offer both benefits and drawbacks, making their suitability dependent on ParcelCare’s operational needs and goals. Pros Permanent, full-time contracts provide job security and consistent income for delivery drivers, enhancing employee satisfaction and loyalty. This stability can lead to higher motivation and productivity, reducing turnover rates and the associated costs of recruitment and training as evidenced by Personio (2023). Full-time contracts also facilitate better workforce planning, ensuring ParcelCare has reliable staffing to meet delivery demands. Cons However, these contracts can be less flexible and more costly for the company. Full-time employees typically require benefits such as health insurance, paid leave, and retirement plans, increasing operational expenses. Additionally, the rigidity of permanent contracts may not align with fluctuating delivery volumes, leading to inefficiencies during low-demand periods. Suitability For ParcelCare, full-time contracts can be suitable if delivery volumes are consistently high, ensuring a stable workforce. However, a mixed model that includes part-time or flexible contracts might offer the necessary flexibility to adapt to changing demands while controlling costs. Part-Time Contracts Part-time contracts offer flexibility for delivery drivers, allowing them to balance work with other commitments. Drivers benefit from a stable income, albeit at reduced hours, while ParcelCare can adjust staffing levels according to demand. A significant advantage of part-time contracts is reduced costs associated with employee benefits, as part-time workers may not qualify for full benefits packages (Abogados, 2019). However, part-time drivers may lack the same commitment or availability as full-time employees, potentially impacting reliability and consistency. Zero-Hours Contracts Zero-hours contracts provide maximum flexibility, allowing ParcelCare to scale staffing up or down based on delivery demand without a fixed commitment to provide hours (CIPD, 2023c). For drivers, these contracts offer freedom to accept or decline work, appealing to those seeking flexibility. However, they also result in income uncertainty and lack of guaranteed hours, which can be challenging for drivers seeking stability. For ParcelCare, zero-hours contracts minimise costs during low-demand periods but may lead to difficulties in maintaining a loyal and consistent workforce due to potential driver dissatisfaction. Part-time contracts are most suitable for ParcelCare’s delivery drivers. They offer a stable income and consistent work schedule, which can enhance job satisfaction and reliability while allowing ParcelCare to adjust staffing levels as needed. This balance supports both operational needs and employee stability. Please click the following icon to access this assessment in full
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