Treadway Case Study High Turnover Rate at Treadway

Answer

Treadway Case Study High Turnover Rate at Treadway

While the main objective of every organization is to make as much profit as possible to meet the target, this goal can be impended by several factors that may be internal or external. Some of such factors include the price of raw materials, employee performance, customers’ perception, and quality of products and quantity of production (Grissom, Viano, & Selin, 2016). This essay discusses factors that affect the performance of Treadway’s Lima Tire plant and provides specific solution since the company has myriad of issues that should be addressed in order to ensure smooth production.

The specific problem that I would like to solve is high turnover rate. Defined as the percentage of workers that leave a company within a specific period of time, turnover has significant impact on the performance of an organization. Specifically, high turnover rate means that many employees leave the company within a certain duration.  High turnover rate is costly to the company as the organization has to continuously replace the exiting employees with new ones (Grissom, Viano, & Selin, 2016). This process does not only consume the organization’s time, but also resources. The new employees have to be oriented or even trained since each and every organization conducts it routine activities in different ways, hence the new employees must be well conversant with such activities through orientation and training. Additionally, continuous exit of experienced employees leaves the firm with junior and unexperienced workers who may not perform as the exiting workers. Lastly, high turnover rate damages the reputation of the firm, a factor that may go down up to the customers, hence the firm may not sell products as required due to bad attitudes of the customers towards the company.  It is in this context that the high turnover rate that is experienced by Treadway’s Lima Tire plant requires immediate solution for it to remain competitive in the market. 

Based on the case study, high turnover rate is the main issue of the company besides high cost of raw materials. According to the information provided, out of the total 50 foremen at the facility, 23 of them turned over in the year 2007. This is more than 40 percent turnover rate which is critical for smooth performance of any company. In the case of Treadway’s Lima tire plant, foremen are a very critical group of employees in the company. They have several core duties and form the main part of salaried employees, hence their high turnover significantly affects the organization. The management reveals that the foremen works in 12 hour shift while conducting numerous activities, an information which reveals that there is burnout hence the high turnover rate.

The specific plan to stop turnover is to boost the morale of the employees. According to the study conducted Hom et al. (2016), it is difficult for an employee to move away from a firm that meets their needs and appreciate their value in the organization. One of the ways of boosting the morale of the employees, especially the foremen that the firm has control over is increasing their salaries and allowances.  The top priority of working for any organization is to get paid, and the pay should be that which can comfortably meet the bills. When there is increase of salary, employees feel valued and appreciated, hence tend to stay in the firm as long as possible.  In addition, it is important to recognize every single employee’s birthday and send gifts for new babies and weddings (Grissom, Viano, & Selin, 2016). It is of great importance to get involved in employees’ lives to let them feel appreciated and valued not only as employees, but also as family members and as human beings.

While the move to increase the salaries and allowances of the employees, especially the foremen, has significant importance as far production and performance are concerned, it has certain risks. The first one is that it will increase the production cost which is already burdened by the cost of raw materials. Significantly increasing the salary and allowances of several individuals in the company financially affects the production cost. Secondly, the move may force the hourly paid employees through their unions to demand for more salaries, a factor that can further increase production cost. However, it is important to note that several studies from different organizations reveal that increasing salaries of employees increase their morale that in turn increase performance. In the end, the company gets more revenues hence does not incur any losses.

In conclusion, based on the case study of Treadway’s Lima tire plan, the organization needs to solve the issue of high turnover rate that the company is currently experiencing among the most important workforce of the firm.  The best way of reducing the turnover rate is by boosting the morale of workers by increasing their salaries and allowances. However, the step has certain risks such as increasing the production cost and forcing other employees to demand for pay increase, a factor that will further affect the production cost.