Employee Resourcing and Staff Turnover: Impact on Organisational Performance

This essay discusses the impact of staff turnover on organisational performance and highlights different ways in which staff turnover is noticed by the company. It also covers staff appraisals method which is essential to enhance employee performance and development.

Module title: Resourcing the
Organisation

Table of Contents
Introduction......................................................................................................................................3
MAIN BODY...................................................................................................................................3
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Introduction
Employee resourcing is referred as the function of management that deals with
identifying and selecting suitable workforce in order to ensure smooth functioning of the
organisation. The main goal of employee resourcing is to obtain right workforce with suitable
skills, knowledge and ability for doing future trainings. It helps the company to recruit right
candidates at the right time and at the right place. The essay will provide explanation to the staff
turnover and will identify the issues faced by company due to staff turnover. The essay will
further highlight different manners in which staff turnover is noticed by the company. In addition
to this, the essay will discuss about critical assessment of the impact of staff turnover have on
the operations of the organisation. Furthermore, the essay will cover staff appraisals method
which is essential to enhance employee performance and development.
MAIN BODY
The staff turnover is defined as the number of employees leaving the company which are
then replaced by new employees in the company. It is concerned as the rate at which employer
loses employees in the organisation. The higher turnover rates is often considered as the
challenge in front of company if skilled employees are leaving which can harm the productivity
level of firm. Staff turnover can be of two types such as internal or external turnover. Internal
turnover includes an employees exchanging their current job positions with the new higher
positions within the same company (Silva, Silva and Martins, 2019). Whereas, External turnover
involves employees that are leaving to another job roles in different companies due to relational
disruptions. In context to Sainsbury, the company is suffering with high turnover rates due to
decrease in the payment structure of employees. There are some issues in regards to management
that can lead to high turnover rates. The first issue is Lack of focus on employee growth, the lack
of focus by company in enhancing the skills and knowledge of employees can lead to their exit
from the organisation. The inability to properly align the goals of organisation with objectives of
employees is the most common challenges faced by multinational companies due to which
worthy employees are quieting their job positions. The second issue is Overworking, it is also
considered as major cause of higher turnover as it involves putting more pressure on employees
by offering them extra job responsibilities with a deadline (Logan, Cumming and Wong, 2020).

This force employees to work higher than their actual work hours which can turn workers
stressed out and less motivated to their jobs. Hence, this could lead employees to leave the
organisation. The third issue is Lack of feedback and recognition, the shortage of open
communication channels can deprive workers in receiving proper feedback of their performance.
In addition to this, the lack of recognition to deserving candidates may negatively effect their
motivation to work in their best ability which can further result in high turnover rates. Moreover,
the fourth issue is Toxic work-culture, the toxic and unhealthy working culture of organisation
can demotivate employees to work better and can create negative work-life balance which force
employee to leave from their job responsibilities(Caballero-Anthony and et.al., 2021).
There are different ways through which an organisation can understand staff turnover
reasons in relation to Sainsbury's are: The first point is Voluntary turnover, this step of exit is
taken by employees when their desire and needs are not fulfilled by the management of company
the needs can be classified as need for higher payments, need for recognition and many more.
The inability of company on these needs may force workers to leave the company and find other
suitable options. The second step is Involuntary turnover, this type of exit is done when the
employer ask employee to leave the organisation. This can be due to poor performance by
employee or behavioural issues with the employees. In addition to this, the turnover can also
increase due to budget cuts by the company (Panday and Bhagat, 2018). The third stage is
Retirement, this stage is common and out of the company's control as employee leaves the firm
when their tenure is over with the organisation. The fourth stage is Internal transfers, it is
related with employees holding new positions within same company. This type of employee
turnover is considered as healthy turnover as compared to other types of turnover because it
doesn't effect the functioning of organisation towards reaching goals.
The high turnover rates can have negative effects on goal reaching behaviour of both
employees and the company. It can temporarily stop operations of the company which can leads
to wastage of time and resources. The following are the negative impact that high turnover rates
can have on the growth of company are: The first impact can be on Revenue of the firm as high
turnover rates have damaging impact on financial growth and profitability of the company. In
addition to this, the hiring expenses can become the liability for company rather than asset or
investment for growth and development(Sabbagha and et.al., 2018). Moreover, the cost involved
in training employees can also turn into waste which can negatively hamper financial strength

of the firm. For example, Walmart company's revenue is negatively effected due to pandemic as
it forced employees to work in remote areas which caused mental tension among workers leading
to their exit from the organisation. The second negative impact is Low workplace morale, the
high turnover rates can diminish the morale of employees to work optimally (Alemayehu and
Woldemariam, 2021). In relation to this, the employees who leave the company due to
overworking conditions or because of higher job responsibilities can put negative impression in
the minds of new employees which can demotivate them to work in appropriate manner. For
instance, the Sainsbury company is facing a challenge in attracting new talents because of
overworking conditions caused due to COVID pandemic. The third negative impact of high
turnover rates on company is Deteriorating product or service quality, the high turnover rates
may leads to disruptions in the day to day operations which can cause lower productivity levels
and lower quality of products or services (De Sousa Sabbagha and et.al., 2018). Furthermore, the
low number of experienced employees due to high turnover ratio can hamper the quality of
products and services. For example, In Sainsbury company the higher turnover rates of
employees due to pandemic situation can result in making less qualitative products which can
impact its competitive position in the market. The fifth negative impact on organisations is
Reduction in marketing return on investment, In order to attract new customers however the
marketing expenses remain consistent but the return on investment diminishes if the firm is
loosing customer retention and referrals due to inexperienced staff and lower products quality.
The higher turnover rates can damage the marketing activities of the company if the talented
sales professional leaves the company resulting in low returns on marketing investments. For
example, the higher turnover rates in Walmart company can hamper its return on marketing
investments due to presence of uncompetitive workforce or new employees in the
organisation(Chang and et.al., 2019).
On the other side, the high turnover rates can also put positive and favourable impact on
the growth and development of the company. It can help the organisation to avoid exit by top
talented employees and minimise hiring of poor and unskilled workers. The following are the
points related to the positive impact of high turnover rates on improving efficiency of the
company (Henderson, 2020). The first point is Employee upgrade, one of the most important
impact is the up-gradation of employees in a better one. It involves subtraction of low
performance or problematic employees and the addition of new and more competent employees

that can support organisation to create positive and healthy working environment. Furthermore,
the manager can recognise under-performing candidates and can substitute them with new and
talented workers which can help the firm to achieve smoothness in operations. For example, the
reduction of employees by Sainsbury due to negative attitude or low performance of employees
assists the firm in creating a highly competent workforce. The second point is Gaining fresh
ideas, the employee turnover to a certain extent is valuable for the organisation as it can allow
flow of new ideas and perspectives by new employees which can aid organisation in improving
its competitive position in the market (Taylor, 2018). In addition to this, the new ways of doing
things can support the firm in effectively adopting external forces for change. For example,
Walmart company is benefited by employing new and talented candidates which helped the
company in attaining respectable position in market. The other benefits related to employee
turnover is Removal of negative influence, it helps the company to remove employees who are
negative thinkers or are the reason for unhealthy working environment in the company. The
removal of problematic candidates with the new and positive one will support the firm in making
and enhancing positive working environment. For instance, Sainsbury firm was able to foster a
positive working environment which allows firm to foster healthy working conditions and
boosting employee morale towards their job role. The other benefits in relation to employee
turnover is Salary reduction, the discharge of high salary and low performing employees
supports the company in surviving during tough financial conditions. In addition to it, the
replacement of highly paid ,low performing candidates with more productive and less costly
candidates can aid the firm in cutting costs and expenses. For example, Walmart during
pandemic situation fired highly paid but less productive workers with that of new productive and
less costly employees (Philip and Arrowsmith, 2020). This aided the firm in managing financial
conditions more properly. The other positive attributes related to turnover rates is Improving
diversity, the employee turnover helps the company to employ candidates of different religion,
countries and sex. This leads to the formation of highly diversified workforce with new ideas,
opinions and attitudes which can support the firm in taking advantage of their new opinions in
order to boost competitive edge in market. For example, Walmart have highly diversified
workforce which enable it to identify innovative ways of doing business processes in the most
appropriate manner.

The staff turnover rate is linked to poor staff performance as it creates a sense of pressure
in the minds of workers to consistently perform better in order to retain in the organisation.
Along with it, this builds up a highly toxic working environment which can further demotivate
employees to perform better and in proper manner. The following are points explaining about
negative influence of employee turnover on organisational performance. The first point is that
employee turnover creates a Loss of organisational memory related to highly experienced and
talented employees that can hamper the growth and development of company due to decrease in
employee performance (Esop and Timms, 2019). The other point is Loss of knowledge and
skills, the turnover rate can impact the performance of organisation as it leads to loss of
competent knowledge and idea that can aid firm in reaching newer heights in the market. In
relation to this, it leads to the wastage of efforts and money related to training programs. The
other point is Decreased morale of team, high turnover rates can decrease morale among
employees to perform actions in the most suitable and proper manner. Moreover, it can create
disarrangements among staff members and a lack of support can turn hamper the performance of
staff members in the company. This negatively effect the performance of employees to do
better. The other attribute of turnover related to poor performance is Reduction in Qualitative
work, high turnover rates can influence the quality of work if more talented and experienced
professionals leaves the company. This can create the situation of low quality work resulting in
poor performance by inexperienced candidates. The other factor related to high turnover rate
among employees is Lowered productivity, a lack of motivation towards their own job roles can
have an impact on the efficiency of the employee and their productivity level. In addition to this,
these negative perceptions can affect other employees also which increases the likelihood of
widespread poor performance in the organisation(Mohammad and et.al., 2019).
The following are advantages of staff appraisal method that can be used in order to
improve employee performance and development. The first point is it Creates a career growth,
the staff appraisal assists the employee in growing and advancing in their professional careers. In
addition to this, the consistent evaluation of employee performance by performing 360 feedback
can support them to realise their mistakes and make necessary improvements in order to function
in the best of their ability. The second point is Improving performance, the staff appraisal ways
helps the candidate by providing proper feedback which assists employees to work with higher
motivation levels. In relation to this, positive feedback will allow employees to focus on their

weaknesses more effectively which can help the employees to perform with higher productivity
levels. The management can also offer bonuses or rewards to the hard-working employees which
can support them in doing their jobs in most suitable manner. The third point related to boosting
employee performance is Increasing employee engagement, motivating employees to regularly
take part in performance review process can enhance more engagement by employees in the
decision making process of the company. Moreover, this boosts morale and sense of
belongingness among employees that can trigger them to work optimally. The manager can
boost participation of employees in decision making process by adopting open communication
channels. The other benefits of staff appraisals is that it helps in Determining training, the
performance appraisals allows the organisation to ascertain the level of training required by each
individual in order to attain self objectives of employees (Jackman and et.al., 2019). In relation
to this, this helps the management to offer most suitable training options to candidates which can
help them in realising their true potential. This can also leads to lower turnover rates as the
employees will have required skills and knowledge needed to perform in the best manner. The
another advantage of employee appraisal is Clarifies expectations, the staff appraisal method
helps the employee to consult correctly about their job roles and responsibilities and also support
employees to better understand what the manager wants from employees. In relation to this, this
can result in building a positive image for mangers in the minds of employees which can leads to
improvement in the performance of employees. The last benefit of performance appraisals is that
it Allows for conversations, the performance appraisal methods can help workers to discuss
more openly about the issues and problems they are facing within their job responsibilities.
Along with it, this support the workers in achieving valuable informations without any
distractions. In this, the manager provides tips and coaching to employees in order to boost their
performance and development. Furthermore, this can also helps in decreasing employee turnover
rates as the employee feel free to hold conversations with managers in order to solve their
queries and problems related to their job roles.
There are some disadvantages of performance appraisals techniques adopted by the
organisation that can negatively impact its operations. The following are the demerits associated
with staff appraisal. The first point is it Creates negative experience, the performance
enhancement techniques if not done in the right manner can create a negative working
environment for both the employees and mangers. The manager if undertake irrelevant training

sessions can leads to wastage of efforts, time and money(Siegel, 2018).In relation to this, it can
also leads to dissatisfaction among workers which can increase the employee turnover rate. The
second point is its Time consuming, the performance appraisal method is often considered as
time consuming process as it involves knowing problems and issues of each of the employees
and also includes proper evaluation of performance of each workers in order to identify and
apply best staff appraising techniques. In addition to this, sometimes it can also become a long
and tiresome process to undertake staff appraisals techniques. The third point is Natural biases,
the Siegel, M., 2018. Building resilient organisations: Proactive risk management in
organisations and their supply chains. Journal of Business Continuity & Emergency Planning,
11(4), pp.373-384.performance appraisal is often subjected with the biased behaviour of mangers
while evaluating performance of the employees. The manager may give preference to their
favourite employees or decide on the basis of sex, religion etc. while offering solutions to their
problems and evaluating performances. This behaviour of manager can result in dissatisfaction
and negative attitude among employees which can force them to discontinue a contract with the
organisation. The fourth point is it creates Stressful workplace, the staff appraisals can
sometimes trigger toxic and stressful work-culture if done in proper manner. This can create
stressful situations for the both the parties namely employee and manager when the performance
appraisal techniques is performed in the wrong manner. In addition to this, it can force employee
to leave the company leading to higher turnover rates.
Conclusion
It has been concluded that employee resourcing is critical in terms of recruiting right
talent at the right place and at right time in order to avoid any disruptions in the performance of
the organisation. It has been discussed that staff turnover negatively impact day to day operations
of the company. The essay has covered the main causes that can influence employee to leave
from the company and has also highlighted the various ways in which an employee can leave the
organisation. In addition to this, the essay was able to critically explain the positive and negative
impact of turnover rates on the management of the company. Furthermore, it has been analysed
that staff turnover can leads to poor performance by employees. In addition to this, it has been
critically analysed that staff appraisal technique can support the employees to manage and
improve their performance and development in the organisation.

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