Contemporary Issues in Entrepreneurship: Employee Turnover Analysis

This report examines employee turnover as a significant contemporary issue in entrepreneurship, focusing on its impact on small businesses like the Bridge house hotel. It explores the nature, causes, and consequences of high employee turnover rates, including monetary dissatisfaction, lack of skills, and increased competition. The report relates the issue to contemporary management theories such as contingency, systems, and chaos theories, providing a framework for understanding and addressing the problem. It identifies the scope and objectives of managing employee turnover, including improving service quality, increasing customer satisfaction, and fostering employee growth. The analysis highlights the importance of employee retention for business success and suggests strategies for creating a strong and motivated workforce. The report also highlights challenges faced in employee retention and proposes solutions to minimize employee turnover.

Contemporary Issues in
Entrepreneurship

Table of Contents
INTRODUCTION...........................................................................................................................3
Part B – Analysis of a contemporary issue - “ Employees Turnover” ............................................3
1.Employees Turnover - A Contemporary issue in entrepreneurship or a small business.........3
2. Relating Employee turnover to contemporary theories..........................................................4
3. Scope and objectives of the Employee turnover ....................................................................6
4. Critical analysis of the contemporary issue related to the Bridge house hotel ......................8
Conclusion.....................................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Employees turnover is observed as a highly effective issue related to a business or
entrepreneurship, it refers to the rate of employees resigning or leaving an organisation as well as
getting replaced by new employees. This report will discuss the nature, reason and impact of this
contemporary issue within a business. It will also demonstrate the awareness of the Employee
turnover issue by relating it to contemporary theories of management in order to determine the
understanding and knowledge of this contemporary issue in entrepreneurship. The report will
also identify and determine the objectives as well as scope of Employees turnover within a
business. The various concepts, theories and practices as well as contemporary information will
be included in this report. The various sources of minimising or managing this issue will be
identified and included in the following report. Furthermore, the report will include an in depth
analysis and debate in order to understand or evaluate the issue of Employee turnover.
Part B – Analysis of a contemporary issue - “ Employees Turnover”
1.Employees Turnover - A Contemporary issue in entrepreneurship or a small business
The Bridge house hotel has observed a major ups and down in their business cycle, as
observed by the review. The hotel company has stopped its operations due to various problems
and issues related to the entrepreneurship or business. One of the most affecting issue for the
Bridge house hotel was Employees turnover. The hotel was facing a lot of issues and problems in
retaining there employees. In order to achieve high profitability and a successful business every
business or organisation needs to develop and maintain an effective or strong workforce. The
employees are the key to success for each and every business or entrepreneurship, for
successfully operating a business an organisation needs to recruit and manage a highly skilled
and talented workforce (Gibson, 2014). This workforce is responsible for performing various
task and activities within the business organisation to achieve the organisational goal or
objective. The Bridge house hotel was not able to develop a strong workforce which was a major
issue or problem which caused the failure of their hotel business(Nica,2016) This contemporary
issue leads to the failure of their hotel business which clearly shows that the Employee retention
is very essential for each and every type of business or organisation. The employees of the hotel
were leaving their jobs due to various reasons which caused the employee's dissatisfaction, new
employees were replacing older ones in a very short span of time which was affecting the overall
performance of the hotel negatively. The difficulty in employee retention caused a high rate of

employee turnover for the Bridge house hotel. There are many challenges faced by the Hotel tin
employee retention as described below -
 Monetary dissatisfaction – It is a major reason for influencing an employee in leaving his
or her job or changing it. Every organisation or business has a budget for paying salary to
their employees, this budget can be increased to a certain limit. Employee retention
becomes difficult when an employee demands a high increment in the salary beyond the
budget of an organisation (McBarron, 2014). This causes monetary dissatisfaction among
the employees and becomes a major issue in employee retention leading to increase in the
rate of Employee turnover.
 Lack of skills and talent – The other reason for the failure to employee retention is the
lack of skills, talent or knowledge. Some individuals fake their interviews by using
various lies regarding their qualifications or experiences. These lies cause a problem in
fulfilling the job responsibilities or roles provided to the employees. Due to the lack of
knowledge and skills regarding a particular job or business it is difficult for the company
or business to retain their employees (Ehrhart and Kuenzi,2017).
 Increased competition and opportunities – The employees working in an organisation get
highly influenced or attracted by various other opportunities or organisations hiring
employees in the market. The organisation uses various tools and techniques which have
a high impact on the employees as well as influence them in changing their jobs (Kiis,
2014). This makes it difficult for the organisation such as the Bridge house hotel to retain
the employees and hence it increases the rate of employee turnover.
2. Relating Employee turnover to contemporary theories
The Bridge house hotel needs to focus on developing an effective workforce, the hotel
company needs to focus on decreasing employee turnover. Employees needs to be effectively
managed and closely attach themselves with the business which can help to stay loyal with their
company or organisation they are working in. In order to build a strong relationship with their
employees the Bridge house hotel needs to motivate the employees for developing interest and
loyalty with regards to their jobs and responsibilities (Gordon, 2013). The employee motivation
is very effective and important to develop an interest factor among the employees to perform
well and contribute in the success of the organisation or business. For better understanding of the

issue, Employee turnover can relate to contemporary theories of management. These theories are
as described below -
 Contingency theory – The first theory which can be understood with relation to the
employee turnover issue. The contingency theory states that when managers or seniors
comes to a decision, they need to analyse all the elements of the present situation as well
as act upon those elements or components that they are highly affecting the current
situation or scenario. Therefore, in order to understand and manage the current issue of
employee turnover the Bridge house hotel needs to focus on contingency theory or
principle(Carroll and et.al,,2016). This theory states that the leadership style should be
developed and implemented according to the current condition or situation of an
organisation. The Bridge house hotel is facing an issue currently which is the high rate of
employee turnover. According to the hospitality business the Bridge house hotel needs to
analyse the current situation and adopt a more facilitative and participative leadership
theory.
 Systems theory – This theory or approach has an important impact on management
science and understanding businesses or organisations. It is important understand what is
a system, a system is a collection of areas or parts incorporated in order to accomplish an
overall objective or goal of a business or organisation. It states that if one part of a system
is removed the whole nature of the system will change (Mathieu and et.al,2016). In the
case of Bridge house hotel and its contemporary issue “ Employee turnover” it can be
observed that the employees are the part in-fact essential part of their business or system.
Each and every employee of an organisation or business is important in performing his or
her specific duties or responsibilities. The overall system or business gets affected by
reduction or employee turnover. It is difficult for an organisation or business to train a
new employee for performing a task or activity as performed by the earlier already
trained employee. Therefore, employee turnover can relate to System theory as it affects
the overall system and performance of a business of organisation(Grohar-
Murray,DiCroce and Langan,2016). It is important for Bridge house hotel to understand
that employees are very important part of a system or organisation and it needs to be
considered while choosing a leadership theory which can effectively manage the
employees or workforce of a business.

 Chaos theory – This theory or principle states that there various processes that
perpetually change over time. This theory is generally against all the other management
theories that have specific pattern. Chaos theory states that small changes in initial
conditions or situation can create a huge impact on the overall business or organisation.
Employee turnover is a change within the workforce or human resources of Bridge house
hotel. This change negatively affected the overall performance of the hotel as it is a major
issue for a business that their employees (Huang and et.al,2016). The chaos theory can be
analysed or applied in understanding the contemporary issue of Bridge house hotel. The
workforce is changing constantly due to high rate of employee turnover and decreased
level of employee retention. The Bridge house hotel is facing a major issue due to the
changes in their workforce, the organisational operations are not accomplished
effectively. In order to adopt an effective leadership theory it is important to measure the
various changes and their impact on the business or organisation(Azar and
Vaidyanathan,2016).
The most related theory which is related to the Employee turnover issue can be the
Contingency theory which states that the leadership theory should be developed according to the
current situation or condition of the business or organisation such as in the Bridge house hotel.
The employee turnover rate is increasing which is affecting the overall performance of the hotel
in order to retain the employees and develop an effective workforce the Bridge house hotel needs
to adopt or implement most effective leadership style in order to develop a strong workforce.
3. Scope and objectives of the Employee turnover
Employee turnover is major element which affect the performance of a business or
organisation as it is clear that employees are the main part of an organisation or business.
Employees are the key elements within each and every business as they are responsible for
performing all the business activities and operation helping the organisation to achieve the
organisation goals or objectives effectively and efficiently. The high rate of Employee turnover
causes many disadvantages for an organisation such as the Bridge house hotel such as customer
dissatisfaction, Poor service delivery, Increased work load for the existing employees (Azar and
Vaidyanathan,2016). This disadvantages can create a major problem or barrier in achievement of
organisational goals or objectives. Managing or reducing the rate of employee turnover can

render many benefits and advantages to an organisation or business. These benefits or objectives
are as described below -
 Delivery of High quality services – Reduced employee retention will give rise to
effectiveness among the employees, the employees will be retained by the company or
organization which helps them to gain experience and develop their skills or talent for
performing a particular task or operation (Grohar-Murray,DiCroce and Langan,2016).
This will develop and improve the effectiveness and efficiency of an employee and the
whole staff or team working within the business. Due to the increased knowledge and
skills employees will also improve their performance which will help the overall business
ton perform well and deliver impressive services to their customers. Therefore, Employee
turnover has a major scope or objective of improving the quality of services provided to
the customers by an organisation or company.
 Increased customer satisfaction – The employees if develops effectiveness and improve
their performance, the overall business will enhance their service quality and business
performance. This improvement will help the business such as the Bridge house hotel to
serve their customers in a good manner which will lead to the achievement of customers
satisfaction as the customers will like and will be happy with the effective as well as high
quality services provided by the business or organisation (Carroll and et.al,,2016).
Therefore, reducing employee turnover has a major objective or scope in increasing the
customer satisfaction.
 Growth and development of employees – The other major scope or objective of employee
turnover is to provide growth and development to the employees. If the organisation
reduce the rate of employee turnover it will create a chance of development or growth to
the employees. Employees can learn and develop their own skills and experience while
working an organisation for as longer time (Gordon, 2013). The employees can earn
various other benefits including monetary benefits, career development and growth etc
which can be beneficial for themselves in the future. Therefore, a business or
organisation should focus on reducing the employee turnover by understanding the
employee interests and desires as well as aware them with the objectives of staying or
working in an organisation for a longer period.

 Effective management – The employees working within an organisation are responsible
for the effectiveness of the management of an organisation. Strong and effective
workforce will help the management to practice and implement various management
principles and strategies within the business operations along with the support of
employees. This will help to develop coordination among the various areas of
management that will help in performing various business operations effective and
efficiently. The management can successfully apply their theories and principles with the
support of the employees who are dedicated and effective in their business activities or
performance (Kim,2014)..
 Growth of the business – Along with the growth and development of employees there is
another scope or objective of Employee turnover that is the growth or expansion of the
business. A business or organisation can increase its productivity or profitability with the
help of effective and strong workforce working for them with full dedication or will
(Kiis, 2014). This employee dedication can help a business or organisation to serve the
customers with thigh quality services or products leading to the achievement of customer
satisfaction. These achievements will combine together to increase the profit of a
business organisation. The customers will be attracted towards a business with a good
brand image and objective of satisfying customers (Ehrhart and Kuenzi,2017). The
business will earn high profits which will help to grow and expand its roots for further
success as well as attainment of higher organisation goals.
The Employees turnover ratio can have various benefits or objectives, as the reduced
employee turnover ratio will lead to the development of strong and effective workforce which is
the key to success for each and every organisation or business.
4. Critical analysis of the contemporary issue related to the Bridge house hotel
Employees are considered to be as an important factor in the context of hotel industries.
In other words, they are considered as an important resource used in the achievement procedures
of an organisation. As discussed earlier, the cited venture, i.e. Bridge House Hotel and group was
initially dissolved due to a large number of employees turnover that was prevailing among the
hotel staff appointed. This turnover had a devastating impact on the cited organisation, some of
which are listed as follows:

 Level of coordination: Coordinating as well as cooperating is the core essential for the
firms that deals with providing hospitality services to its customers. Coordination is
required to be developed among the various departments and its employees that are
operating in mentioned firm (McBarron, 2014). As a result of employee turnover, the
level of coordination among the hotel staff of Bridge house which has resulted in poor
facilities provided to customers. Thus, the visitors of the hotel were highly unsatisfied
with the services that were provided and hence, it led to dissolution of the venture.
 Overall performance: The overall performance of an organisation is highly driven by the
personnel appointed in that firm to carry out operational activities. Thus, a lot of
emphasis is given to human resource management in a business. Since, the major
problem that had arisen with present hotel was relating to its employees and their
turnovers, it adversely affected the performance of the hotel as well as its earnings and
profits (Huang and et.al,2016).
There are numerous theories that are applicable for effective as well as efficient
management of human resources, which can be adopted by the mentioned hotel. Three major
theories explaining the solutions regarding employee turnover to the mentioned venture is
presented as follows:
 System approach of management: As per this approach adopted in managing the
employees and reducing turnover, the mentioned hotel is required to develop an
environment which involves formation of team in order to perform a task collectively. In
simple words, as per this approach there is a need to develop an environment in the
organisation which consists of coordination as well as cooperation (Nica,2016). Adopting
coordination among the hotel staff would result in better results for present hotel.
 Contingency approach of management: As per this approach of management, the human
resource managers are required to frame decisions or plans in accordance with the
situations that are prevailing in mentioned hotel (Gibson, 2014). As a result, the
employees and their benefits are given utmost importance in the organisation, which is
currently facing this issue of employee turnover.
 Bureaucratic approach to management: Adopting this model of management of
employees appointed requires the cited business to structure itself in a hierarchy, which
involves top level, middle level as well as lower level in the organisation. The lower level

employees are directed as per the clearly stated legal rules made in the interests of
individual working with any venture. Adopting this would generate a sense of security
among the employees and in turn would result in reduction of turnover on the part of
employees(Mathieu and et.al,2016)
Conclusion
The above report concluded that the Employee turnover is a major issue for each and
every business such as the Bridge house hotel. The report identified and described the nature and
impact of the contemporary issue faced buy the organisation in their business operations. The
report also includes the relation between the Employee turnover with the contemporary theories
of management such as contingency theory, systems theory and chaos theory. Furthermore, the
report included the critical analysis of the contemporary issue related to the Bridge house hotel
along with the scope and objectives of the Employee turnover issue.

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