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Leadership and Organizational Behavior

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Leadership and Org Behavior (MGMT591)

August 5, 2012


Personnel Support Activity Department (PSD) North Island provides pay, personnel, administrative, and passenger transportation services to over 112 commands, and 17,000 service members on Naval Base San Diego. PSD aims to ease the financial strains that are imposed on the service members and their families.

In terms of my role with this company I have been asked to assume the role of a consultant. I was asked to offer my expertise in handling the large employee turnover rate. In this industry the turnover rate can be as high as 50% to 85%. I feel that with the right management strategies in place this employee turnover rate can be decreased. It is essentially all about getting the right people for the right jobs by shifting focus and investing in the people of the organization. This new investment in the employees of the organization is the right change in culture that management is looking for to ultimately decrease the unwanted and expensive employee turnover rate.

Problem statement

PSD does not have enough well-trained employees for the company. PSD deals with service members who have to deploy at a moment's notice, and the last thing that they need is to be worried about their families financial, and wellbeing while deployed away from them. PSD does not provide the customer service, or have a well trained staff to take care of the service member's needs. Having untrained employees can cause both emotional and physical implications which could cause the service members to gravely endanger their lives and those of their command. PSD has tried to cut down their costs by asking their current employees to take on more responsibilities without giving them the proper training. The employees that they currently have are not well trained, and many can only handle one task and are unfamiliar with the responsibilities being asked of them.

Literature Review

A company that is driven to reduce employee turnover to decrease the exceptionally large expenses that come with it. It is safe to say assume that as a company reduces its employee reduces its employee turnover rate the more production will be seen. Saving money, reducing costs, and increasing profits are serious motivations that most companies use to reduce employee turnover. What is the cost of employee morale, bell-being, efficiency, quality of work, and productivity? According to Laser (1980), "While these human costs may be less tangible, their expense is equally significant (p. 17)

Being able to determine the driving force behind why people leave a company is essential. A common misconception is that money is the sole reason why people leave an organization. If it were actually that easy to understand then every company could just pay their employees more and be able to keep their people, this sadly is not always the case. Mowday (1984) suggest that, "organizations that understand the reason why their employees leave can take steps to reduce turnover" (p. 366). Money is not always the sole motivator. There are individuals that have certain needs, wants, and desires that money alone can't buy. Being able to understand the needs of the employees who work for an organization is the first step in understanding employee turnover rates for a company. If all of the employees are leaving for the same reasons then management needs to address those reasons in order to decrease the employee turnover.

Job satisfaction tends to correlate with employee turnover. If employees are satisfied where they work then there is no reason to leave. A company is responsible for maintaining a high level of job satisfaction among its employees. According to Covey (2007), "Learning and career development opportunities often are in the top three decision criteria when people are considering joining a particular company" (p.1). Money is not even in the top three reasons why people pick jobs. "Ensuring there is a positive culture means that the business retains and cultivates their employee's talents, knowledge and skills, so that we can maximize deliver of our business objectives." (Winnard, 2012) It is important to understand what satisfies employees, and effectively target it. Since money isn't the top incentive companies will have to put more time into understanding what their own people want in order to be able to truly satisfy them.

If money isn't enough to motivate people, then what else is there? According to Schermerhorn, Hunt, Osborn, and Uhl-Bien, "These factors are related to job content-what people actually do in their work. They include such things as a sense of achievement, opportunities for personal growth, recognition, and responsibility." (p. 115). Job satisfaction, has been defined as a pleasurable emotional state resulting from the appraisal of one's job; an affective reaction to one's job; and an attitude towards one's job. (Weiss (2002) has argued that job satisfaction is an attitude but points out that researchers should clearly distinguish the objects of cognitive evaluation which are affect (emotion), beliefs and behaviors.(Yanhan, 2012).

In summary, minimizing employee turnover is a multidimensional task in which a company needs to invest in their employees. When companies can effectively and honestly invest in their employees, the end result is a boost in employee job satisfaction in turn decreasing employee turnover. A company who invests in their own employees has the better chance to decrease their employee turnover.


PSD is an organization that has not been able to effectively retain its employees. Employee turnover is high because there is a lack of job satisfaction. One of the main reasons is that there is very minimal room for growth and lack of opportunity to grow. PSD has a reputation for hiring people based off of prior friendships or vague recommendations. These workers are brought in and are given every opportunity to advance, while the employees who have been there are constantly overlooked. The managers and supervisors show favoritism to their friends and they only put forth an effort to helping those employees that they like or favor. This leaves over 80% of the staff personnel to feel disregarded and with their personal needs not being met which lead to the employee turnover.

PSD does not have a stable recognition program, which is a cause for concern. PSD is allocated over $2,500 a quarter to



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