Human resource exam

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1. Describe the hospitality industry’s turnover problem, demonstrate how to calculate turnover rates, and identify the costs of turnover.

2. List causes of turnover, summarize several methods for reducing turnover, and discuss the impact of diversity on turnover.

3. Explain the proper use of discipline in a hospitality organization and describe approaches to employee discipline.

Competencies

Managing Hospitality Human Resources Chapter 13: Turnover, Discipline, and Exits

4. Describe possible appeals processes in an employee discipline program.

5. Describe the appropriate use of discharge in an employee discipline program and identify several important concerns associated with using discharge.

6. Outline an effective exit interview system.

The following method, which includes both desirable and undesirable turnover, is used to determine total annual or monthly turnover rates:

Annual turnover rate = Average # of employees

# of terminations x 100

A second method can be used to adjust for loss of undesirable employees (desired turnover):

Annual turnover rate Average # of employees

# of terminations 100= x

− Desired terminations

• Turnover is the term for the replacement cycle that occurs each time a position is vacated

• The rate of turnover can be calculated for any time period or any group of workers

Determining Turnover Rates

Facts About Turnover in Hospitality

• Turnover average 50.4% annually overall • Not as high in lodging industry as previously

thought • Managerial and supervisory turnover low • Few properties calculate separate turnover

rates for part time and full time employees • 9.3% maintain separate turnover rates for

different departments

Costs of Turnover • Hotel employee turnover cost (avg)

– $3,000 - $10,000 per employee

• Restaurant turnover costs (avg) – $5,000 per line level employee – $50,000 or more for managers

• Tangible costs – incurred directly when replacing employees

• Intangible costs – intangible do not relate directly to out-of-pocket expenses

• Separation costs • Training costs

Causes of Turnover • Researchers have found three causes of turnover in

all businesses – low compensation – faulty or inadequate hiring practices – poor management that weakens morale

• 3 factors impact hospitality industry turnover – culture – hiring practices – promotion practices

• Both managers and employees cite the quality of supervision as the number one cause of turnover in the hospitality industry.

1. Quality of supervision

Top 15 Major Causes of Hospitality Turnover

2. Ineffective communication 3. Working conditions 4. Quality of co-workers 5. Inappropriate “fit” with

company culture

6. Low pay and few benefits 7. Lack of clear definition

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8. No direction on what to do

Top 15 Major Causes of Hospitality Turnover (con’t)

9. Commercialized expectations

10. No career ladder 11. Changes in leadership 12. Limited career opportunities 13. Changes in philosophy or practices 14. Lack of clear direction on a

company-wide basis 15. Job transferability

Short Term Turnover Remedies

• Employee retention programs • Collecting and using information to address

immediate concerns including – Surfacing the organization’s culture – Finding out why employees leave – Finding out why employees stay – Asking employees what they want – Giving employees a voice

Short Term Turnover Remedies

• Making managers aware of their biases • Developing recruiting programs that meet the

company needs • Developing orientation programs that reflect

the culture • Increasing attention on the interview process • Take managing turnover seriously

Long Term Turnover Remedies

• Focus on making changes to create a company in which employees want to work including – Developing socialization programs – Developing training programs – Establishing career paths – Implementing profit-sharing programs – Implementing incentive programs – Providing child care and family counseling – Identifying alternative sources for employee recruitment – Evaluating pay scales

Keys to Successful Retention Programs

• Executive level support • Managerial follow through on program

implementation, maintenance and support • Expenditures of time and money

Disciplinary Systems

• Managers must establish rules of conduct for the workplace and then communicate how those rules should be followed

• It is imperative that managers: – Establish reasonable rules – Make sure employees know the rules – Enforce the rules fairly, without discrimination – Document each employee action or behavior that

results in discipline

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Approaches to Discipline • Three basic approaches

– Hot stove approach – Progressive discipline – Preventative discipline

• The first two are traditional approaches in that they are reactive – emphasize the administration of discipline after an

employee fails to follow organizational standards.

• The third approach is proactive – it attempts to establish a means of directing

employee behavior

The Hot Stove Approach • This approach holds that employees who break a rule are

subject to disciplinary action – Immediacy

• Corrective action must be taken immediately – Warning

• provide clear ground rules for behaviors and adequately warn employees that “hot stoves will burn.”

– Consistency • A hot stove will burn everyone to the same degree

– Impersonality • Discipline must be linked with the behavior, not the person

– Appropriateness • The degree of discipline must equal the infraction

Progressive Discipline • Progressive discipline relies on a clear and complete

definition of behaviors that will be penalized • Sets a specific type of discipline for each infraction

– Oral warning • An informal warning with no or little documentation

– Written warning • A formal warning in which a copy of the documentation is

placed in the employee’s file

– Suspension • Time off, usually without pay

– Discharge • Termination of employment

Preventative Discipline

• Preventive (positive) discipline places disciplinary emphasis on recognizing and reinforcing good performance rather than punishing bad performance

• Stages include: – Oral reminders – Written reminders – Paid-decision making leave – Discharge

Appeals Mechanisms

• It allows each party to present its side of an issue

• It provides evidence of managerial efforts to ensure due process for employees

Appeals Processes • The hierarchical appeals process

– based on an organization’s chain of command

• The open-door appeals process – employees appeal to any manager in the organization

• Peer review appeals process – requires that committees of employees and managers hear

appeals and issue final rulings

• The ombudsman appeals process – involves the use of an ombudsman who investigates

complaints or a mediator who listens to both sides of a case and attempts to mediate an acceptable solution

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Wrongful Discharge • Wrongful termination lawsuits account for 13% of all

lawsuits in US, second only to shareholder suits • Employees can sue employers for back pay, front pay,

and punitive damages • A transfer can be viewed as wrongful discharge if it is

used as a method of avoiding a termination or layoff • A demotion can be viewed as wrongful discharge if it

involves no record of employee wrongdoing. • Managers must enforce the same rules and penalties

fairly at all times if companies wish to avoid or win wrongful discharge cases

Employment at Will

Why do managers have to worry about documenting employee issues if there are

EMPLOYMENT AT WILL laws???

Public Policy • Employees cannot be fired for

– filing workers’ compensation claims – serving on juries – refusing to commit perjury – Whistleblowing

• informing on other employees or managers or turning them in to authorities for illegal acts

• These rights have been reaffirmed in more than 40 states as exceptions to either employment at will or employer-employee contract arrangements

Discharge Interviews

• Discharge is the maximum penalty an employer can levy on an employee, thus it should be taken only as a last resort.

• The purpose of a discharge interview is to – relate the history that has led to the interview – explain why the manager must take such severe

disciplinary action – complete the discharge

Exit Interviews • Conducted with employees who leave no matter

what the reason • Purpose is to collect information on why employees

leave and learn what can be changed • Can be used to find out if a departing employee is

likely to sue the company – far more important to use them to find out why good

employees leave

• Exit interviews are most effective when conducted by a third party

Guidelines for Conducting Exit Interviews

• Conduct interviews in the final week of employment, but not on the last day if at all possible.

• Make every effort to ensure either anonymity or confidentiality

• Probe for the real reasons employees are leaving • Schedule a follow-up interview one to three months

after the employee leaves. • Close the interview with guarantees of confidentiality

and warm thanks.