Project Proposal Project Proposal on Employee Turnover Tiffanie Jenkins [email protected] com Professor Patrick Kinane GM 591 Leadership and Organizational Behavior July 17, 2011 Overview of organization The organization that will be the topic of discussion in my final project is Wal Mart. Wal Mart is public multinational corporation that runs chains of large discount department stores and warehouse stores whose headquarters are in Bentonville, Arkansas.
The company is the world’s 18th largest public corporation, according to the Forbes Global 2000 list, and the largest public corporation when ranked by revenue. The average turnover rate for the entire retail industry in 2006 is 34 . 7 percent but at Wal-Mart , some stores have experienced turnover rates of as much as 85 percent and 104 percent. Although the turnover rate varies per store , the large disparity between the average turnover rate in the industry and the turnover rate at Wal-Mart.
I am not actually associated with Wal Mart but I have 6 years experience as a manager in the retail industry and have worked with people who have had a negative outlook towards that company. Wal-Mart stores supports claims of the unprecedented level of turnover at Wal-Mart three major reasons explain the high turnover rate of Wal-Mart employees . First , the firm pays an hourly wage barely above the minimum wage . Wal-Mart management disclosed that its average hourly rate is 9 . 63 for all its stores in the United States but the workers union states that the average wage is actually 6 . 5 per hour for the workers. The higher per hour rate reported by the firm was due to the inclusion of the hourly wage of managers and executives . As such , low wage continues to be a justification for the high turnover rate of employees at Wal-Mart . Second , Wal-Mart continues to move against the complete unionization of its workforce. Although Wal-Mart workers have a union there is little room for the development of industrial relations , more so when the firm has a high turnover rate , esulting to a rapidly changing workforce that prevents collective action much less collective bargaining . Third , the firm prefers to employ workers part time , which prevents workers from achieving regular employment that lessens firm responsibility for legal benefits. The uncertain status of employees also contributed to high turnover rate whether Wal-Mart intended this or not addressing high turnover rate of Wal-Mart employees dealing with high turnover rate of Wal-Mart involves multi-dimensional change involving change in management culture and better wage rates and benefits .
While it is true that Wal-Mart ‘s value offering to customers is low prices , which means it has to manage costs , this implies that it has to weigh the cost of providing higher and standardized wage with the cost of turnover. Preliminary Problem Statement The business problem to be illustrated is the high employee turnover that Wal-Mart experiences. A look into why employee retention is so high and the associated costs of this high turnover will be explored.
Illustrations will show Wal-Mart’s problem of high turnover in statistical terms and list a set of recommendations to reduce employee turnover. Dependent and independent variables will be illustrated, the null and alternative hypothesis and the theories to support these hypotheses will be evaluated, primary and secondary data sources will be defined, how samples were selected and Wal-Mart has a current need to change their organizational culture in a manner that the change will lead to an increase in employee retention and productivity.
Analysis of Importance of the Problem The current situation at Wal-Mart is low paying wages and high turnover rate. Inadequate pay can be a major factor driving and organization’s turnover rate. A high turnover rate can be very costly to any organization, as the organization is constantly spending funds to train new employees. The higher the turnover rate the more funds are spent on training a higher number of new employees each year.
These are unnecessary costs that Wal-Mart can invest in other areas of the business. Independent and Dependent Variables: Supported Evidence Wal-Mart’s turnover rate is the dependent variable. I would like to make my paper on the suggested threaded discussions, how to turn Wal Mart into an HPO. Research will be done on what is needed to turn the company into HPO and how the company will benefit from the research. I will show what steps needed to put the company in the right direction.