HRT 350 Lecture 13: Chapter 13 - turnover, discipline & exits

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Chapter 13 Turnover, Discipline, and Exits
Employee Turnover
The replacement cycle of new employees after current employees vacate positions either
voluntarily or involuntarily
Turnover in Numbers
Average hourly employee turnover:
o 129%T for quick service restaurants (McDonald’s)
o 119% for fast casual/family dining (Panera Bread)
o 101% for casual dining (Chili’s)
o 83% for casual/fine dining (Outback)
Average management turnover:
o 42% for quick service restaurants (McDonald’s)
o 30% for fast casual/family dining (Panera Bread)
o 26% for casual dining (Chili’s)
o 27% for casual/fine dining (Outback)
Calculating Turnover
Divide the number of terminations for a time period by the average number of employees
for the same period:
o 75 terminations for the year
o 25 servers staffed on average
o 75 / 25 = 3 (x 100 for percentage) = 300% turnover
Adjusting Turnover
What about desired (good) terminations?
o When you remove desired (good) turnover, it lowers your total turnover number
o Example:
75 terminations for the year less 10 desired (good) turnovers (65)
25 servers staffed on average
65 / 25 = 2.6 (x 100 for percentage) = 260% turnover… instead of
300%
Example 1
Starting number of employees (3/1): 205
Ending number of employees (3/31): 195
Number of retired employees of March: 5
Number of terminations of March (other than retirement): 15
o What is the overall turnover rate?
# of separations / average # of employees
(5 + 15) / [ (205 + 195) / 2]
= 20 / 200 = 10%
o What is the adjusting turnover rate?
# of undesired separations / average # of employees
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15 / [ (205 + 195) / 2]
15 / 200 = 7.5%
Costs of Turnover
Separation costs severance pay, paperwork, un-employment taxes
Replacement costs recruiting, advertising, screening, interviewing, testing, moving
expenses, etc.
Training costs orientation, printing manuals, conducting training, etc.
Productivity costs lower productivity from new workers
Effects of Turnover
Intangible costs
Poor service
No uniformity of service
Wages deflated (lower profits)
Loss in quality of staff
Wasted management time
Lower sales
Top Causes of Turnover
Low compensation long hours, overnight, weekends/holidays
Faulty or inadequate hiring practices un-realistic job descriptions
Poor management (weakened morale) poor communication, poor supervision
Lack of dignity & respect for position
Lack of advancement opportunities
Lack of recognition
Poor working conditions
‘commercialized expectations’
Short-Term Remedies for Turnover
Surface the organization’s culture
o Bring out deeply held but often unspoken or unrecognized cultural values
Find out why employees leave
o Conduct exit interviews
o Create profiles of employees who leave
Find out why employees stay
o Attitude surveys
Ask employees what they want
o Opinion surveys
Give employees a voice
o Grievance procedures, suggestion systems, informal management meetings
Make managers aware of their biases
o Find out what employees want
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