Impact of Employee Turnover on Business Performance and Growth in McDonalds

This report discusses the impact of employee turnover on business performance and growth in McDonalds. It explores the reasons for turnover, such as lack of training and growth opportunities, and how it affects productivity and culture. The report also provides recommendations for reducing turnover.

Assessment
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EXECUTIVE SUMMARY
In this report it has been described about the how employee turnover impact on business
performance and growth in McDonalds. Also, it is mentioned about background of topic
along with aims and objectives. Moreover, secondary data is gathered and analysed in
literature review. it is explained that there are many reasons of employee turnover that is
lack of training, growth etc. and it impact o business growth, culture etc. there are several
ways mentioned in it that is flexible working hours, hire right people to reduce turnover. the
problems faced by author has been discussed in it.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
BACKGROUND OF TOPIC..........................................................................................................4
AIMS AND OBJECTIVES.............................................................................................................5
LITERATURE REVIEW................................................................................................................5
PROBLEMS IDENTIFIED.............................................................................................................8
CONCLUSION AND RECOMMENDATION..............................................................................8
REFERENCES..............................................................................................................................10
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BACKGROUND OF TOPIC
In every company there are diversified employees that works together. They all belong to
different caste, creed, colour, etc. The staff works at different levels and are assigned roles and
responsibilities on basis of their skills and abilities. This results in creating a positive culture.
Alongside, organisation gain competitive advantage in terms of employee retention as well. so, it
is necessary for them to retain staff for long term. It not only helps in creating positive culture
but also boosting morale of new joined as well. However, when staff is retained it leads rise in
employee productivity. Moreover, goals and objectives are attained on time. But if employees
are not retained then it highly impact on business performance and growth. this is because
retention is related to growth of business (Al Mamun, and Hasan, , 2017). For instance – if staff
is not retained then it will create a negative environment in culture. Along with it, team work and
efficiency of employees will be affected as they will not be able to work in effective way. High
employee turnover is also known as a warning sign regarding low morale among the workforce
of the firm as it is one of the factor that impacts productivity of the firm. As everybody knows
that employee turnover is a very costly process as replacement cost includes search of the
external people that might be costly procedure. It also turned within the loss of the experienced
employees. Employee turnover has also a direct influence regarding revenue as well as
profitability. As it is noticed that the high turnover rate can be an outcome within low morale of
the workers as it may considered as a stem from those workers who have done overworked as
well as also have the enhanced responsibilities that is happened due to the lack of trained or
skilled workforce. It is also notice that the new workers are also not immune to the firm as they
are also suffering from low morale because they are also dealing with new job procedures and
duties and also handle the new peer pressures. If a firm can continuously work with the people
who have suffering from low morale can result within the firm to attract the high quality talent.
In addition to the cost of replacing there were several negative impacts that can combinedly
impact the profit of the firm. As sometimes the cost settlement of the employees advantages as
well as cost regarding litigations are considered as some separations that leads to the legal
disputes as well as combine to impact the performance of the firm. The issues of high employee
turnover are such as employees are not praised for their work, There were so many firms that
have inequity within their pay structure as this also causes dissatisfaction as well as motivates
some of the employees to leave the job. As description of the job is given earlier to the
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employees precisely so without giving the false hopes to the workers regarding growth as well as
advancement (De Winne, and Vanormelingen,, 2019).
AIMS AND OBJECTIVES
Aim- To identify the impact of high employee turnover over business performance and growth
of an organisation. A secondary research on McDonalds
Objectives
 To identify the main reason behind increasing high employee turnover at workplace of
McDonalds.
 To determine the negative effects of high employee turnover on growth and productivity
of McDonalds.
 To determine the ways used by McDonalds for overcoming the impact of high employee
turnover at workplace.
LITERATURE REVIEW
Reason behind high employee turnover
As said by Gjerløv-Juel and Guenther (2019), there are several reason due to employee
left job and company is not able to retain them. the reasons can be either personal or
professional. It is necessary to find out reason so that it can be overcome. thus, they are as
follows
Lack of training: The presence of on the job training facilities is less at McDonald. This
resulted into no skill and personality development. Also, employees have the perception that
without personality development not able to get efficient growth in profession. In last, this
increases employee turnover.
Lack of freedom: The employees do not have the freedom to provide their views about
improving creativity in business processes. This demotivates where they only have to follow
directions of higher authorities.
Feeling undervalued- Everyone wants respect and rewarded for a job they have done. It's a
basic nature. Recognition does not mean to be always monetary, as sincere appreciation is also
most effective recognition. Recognizing employees through a better communication is also one
of the best way as employees for the positive efforts. Most of the firms such as McDonalds
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Employers not make to feel employees to be better as employees feels undervalued and leave
jobs.
Work life imbalance- Nowadays there is very high economic pressures as firms continue
demanding that one person can do the work of two or more than two persons and this leads to the
strong hours works and even weekend work. Workers are forced to choose between a work life
or a personal life. This is not suited with the current employees and especially women will not
able to balance (Hom, and Hausknecht, 2017).
Faith and confidence shaken – When staff members are asked to do more and more work and
leads to shaken their confidence, an do they with the increase of the workload packages of the
employees are also increases so that they believes the firm. McDonalds needs to stop talking to
them as they are best assets for the firm and at the same time treating like consumables. If
McDonalds needs to meet the demands of the consumers so at the same time they require
demonstrating appreciation of their employees not only vocally also taking appreciation actions
towards them (Al Mamun, and Hasan, , 2017.
Lack of opportunity regarding for growth- If the job is regarding a dead end position within
McDonalds then the employers must be not misleading the employees they have to inform them
earlier during the selection and interview time and if the candidates join the workplace after
knowing this will never leave the join on the behalf of misleading. Employees are also facing
lacing lack of opportunity regarding their future as firms provides them false hopes for growth of
their own as well as firms.
Impact of employee turnover on business growth
According to Nahar Islam and Ullah (2017), there is a great impact on employee turnover
in organisation. it affect on productivity and culture. moreover, business growth is impacted as
well. the other impact are
Growth: High employee turnover does not allow the expansion of business with rapid rate
because not able to implement the strategies without the support of talented employees. As
managers always needs to focus on recruiting of employees more than the operations of the firms
which directly impact the firm.
Productivity: High employee turnover not allows the optimum utilization of available resources
because new one is not able to get the effective results from the current level of knowledge.
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Work quality suffers- When employees are leaving jobs there is a disruption faces both by
present employees and existing employees. When a firm experiences that a team can be work
together and provides a better performance. In the meantime any employees within that team
eaves the job impacts the quality of the products and services negatively (Puni,, Agyemang, and
Asamoah, 2016).
Morale of the employees also goes down- When the firm has facing the turnover problems then
the remaining workers suffers as those employees feel the workload as well as also deals with the
disruption of their daily routines. Workers are also felt demotivated when their close colleagues
leave job or who hold the topmost position left job, this leads to hurt the productivity as well as
disengagement as leads employees to make several errors within their work. In addition to this
the workers who planned to be quit creates negatively within working environment. As it also
lowered the morale of the existing employees. Hearing continuously to quit might sometimes
causes most experienced employees to rethink that they will have to leave the firm or stay within
the firm.
Hurts workforce effectiveness- As employees turnover impacts negatively as it may distracted
the mission of the firm and unable to work productivity to meet the vital goals of the firm. As
effectiveness of working teams also suffered when the key employees replaced or quit.
Hurts bottom line- When employees are replaced then there is also firm's expense is involved
and this will vitally effects the turnover on the bottom line. There is a need to focuses on the
costs such as interviewing, recruiting, selecting, training after replaced and many more.
Ways to reduce employee turnover at work place
In the view of Saridakis and Cooper (2016) it is necessary to reduce employee turnover
so that positive culture is created and performance is gained. for this there are several ways
which are defined as
Hire right people for right job-
The managers of McDonalds need to recruit the right people for right job as this is the
basic goal of the managers to recruit the candidate who have strong skills and able to fit within
the position. As managers needs to asks them questions about workplace culture and some
psychological questions to know whether they have positive or negative behaviour.
Give a Recognition
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It is a basic thing that workers need boost and encouragement. When they do something right so
their peers needs to show some appreciation towards them. When they accomplish something
difficult and large project before the deadline then peers needs to show some encouragement as
well as congratulate them in front of everyone within office. Praise them and made them realises
that firms can recognizes their work (Srivastava, and Mishra, 2018). It is not necessary that
McDonalds needs to show every time recognize their can do but where workers truly doing
something that worth congratulations than give them to it. It creates a positive environment
within workplace.
Allow the flexible work schedules
With the help of the flexible work schedules employees creates a balance between work live
balance as they can adjust their work location as well as time. From this they can pursue their
things simultaneously doing the work as they go for doctor's appointment, attend parents meeting
in school and many more things.
PROBLEMS IDENTIFIED
It is found that there are several problems which is identified in this. the first is that as
project was initiated for first time so I was not having any experience in how to gather data and
analyse it. besides that, I faced problem in taking consent of company manager to do research on
their employees. The manager did not agree to do study in company. then, I took help of my
supervisor and then we took consent of manager. furthermore, I was not able to evaluate and
analyse secondary data. in that I got confused as it was difficult for me to analyse data. besides
that, I did not manage my time and did activities. this led to delay in completion of project and
rise in cost.
CONCLUSION AND RECOMMENDATION
From the above it had been concluded that job training facilities resulted within skill and
personality development as it increases employee turnover. Everyone basic nature. Recognizing
employees through a better communication the best way as the positive efforts. One of the most
basic reason for the employees turnover is that employees failed to maintain work life balance,
and they becomes see-saw between personal life and professional, so they leave their jobs
especially females. It is also focused that Lack of opportunity regarding for growth dead end
position provides them false hopes for growth of their own as well as firms. As employees
turnover impacts negatively as it may distracted the mission of the firm and unable to work
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productivity to meet the vital goals of the firm a need to focuses on the costs such as
interviewing, recruiting, selecting, training after replaced and many more. It is also focused that
Ways to reduce employee turnover at work place Hire right people for right job recruit the
candidate who have strong skills and able to fit within the position. They give a Recognition
workers need boost and encouragement. It needs to show every time doing something that worth
congratulations than give them to it. It creates a positive environment within workplace. For
reducing employee managers of Firms provides the Flexible working hours as they needs to task
care of their personal as well as professional life maintained as flexible working hrs provides a
satisfaction to them as they build trust towards the firm and becomes loyal to the firm.
Recommendation
 McDonalds needs to give the employee of the month award to the employees where at
the end of the month they will praise the best employees of the month who completes his
deadlines on time or before time and praised through managers in front of all other
employees so all the employees are also motivates as well as the person himself feel
proud and becomes more loyal to the firm (Park, and Lee, 2019).
 It is also recommended that manager's of McDonalds firm provides rewards such as
discounted food vouchers, discounted health check-up, vocational holidays yearly so that
the employees feel motivated. Rewards are given to those employees who perform well
throughout the year and also behaves properly with peers.
 McDonalds allows them alternatively flexible time schedule so that both the firm and
employees can work accordingly and not feeling frustrated and low because of less
maintained of the personal life. As McDonalds allows video calling for some important
work so when the employees are not physically present than they will coordinate to
others through Skype or any other online.
 Managers of McDonalds tries that they choose Right employee for Right job as initially
when they select, they take their psychological test also according the duties performed
by those potential candidates. They have enough skills and motivation to work within
the firm so managers of the Human Resource take care while choosing the candidates.
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REFERENCES
Books and journals
Al Mamun, C.A. and Hasan, M.N., 2017. Factors affecting employee turnover and sound
retention strategies in business organization: A conceptual view. Problems and
Perspectives in Management, (15, Iss. 1), pp.63-71.
De Winne, S. and Vanormelingen, S., 2019. The impact of employee turnover and turnover
volatility on labor productivity: a flexible non-linear approach. The International Journal
of Human Resource Management, 30(21), pp.3049-3079.
Gjerløv-Juel, P. and Guenther, C., 2019. Early employment expansion and long-run survival:
examining employee turnover as a context factor. Journal of Business Venturing, 34(1),
pp.80-102.
Hom, P.W. and Hausknecht, J.P., 2017. One hundred years of employee turnover theory and
research. Journal of applied psychology, 102(3), p.530.
Nahar, R., Islam, R. and Ullah, K.T., 2017. Identifying the factors for reducing employee
turnover rate in aviation business: Bangladesh context. Australian Academy of Business
and Economics Review, 3(1), pp.39-46.
Park, C. and Lee, I., 2019. The impact of job retention on continuous growth of engineering and
informational technology SMEs in South Korea. Sustainability, 11(18), p.5005.
Puni, A., Agyemang, C.B. and Asamoah, E.S., 2016. Leadership styles, employee turnover
intentions and counterproductive work behaviours. International Journal of innovative
research and development, 5(1), pp.1-7.
Saridakis, G. and Cooper, C.L., 2016. Introduction: the state of employee turnover. In Research
Handbook on Employee Turnover. Edward Elgar Publishing.
Srivastava, U.R. and Mishra, M.K., 2018. Impact of High Performance HR Practices on
Organizational Citizenship Behavior (OCB) and Turnover Intentions of Insurance
Professionals. Psyber News, 9(1), pp.20-36.
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