Business Research Project Part 2: Literature Review
Business Research Project Part 2: Literature Review
Learning Team C has chosen QuickMart Inc. to research and analysis information measuring how employee satisfaction is related to turnover rates and how these turnover rates affect bottom line profitability.
With rising costs of living and changing legislation regarding healthcare and wages, QuickMart has become the center of many discussions creating a query from management in South Florida to determine if employees have greater satisfaction will they company turnover rates decline. If the turnover rates decline, how does this affect bottom line profitability. To understand independent and dependent variables associated with this research, insight into the employee satisfaction of QuickMart employees, issues affecting South Florida retail employees, and costs associated with employee turnover provides support and reason to the analysis.
In businesses it is essential to make sure what you are doing to make your employees happy doesn’t undercut the bottom line of the organization. In the article Make More Money by Making Your Employees Happy they discuss different avenues for increasing employee morale. One avenue would be to give employees pay increases which affects the bottom line long term, another avenue is to “keep promises and show compassion for their employees” (Cooper, 2012, para. 4). Another avenue that organization could take to increase employee satisfaction would to be given time off awards, employees enjoy time of work that they are being paid for. This type of morale booster affects the bottom line over a month or two instead of a pay increase which affects the bottom line for the length of time the employee stays with the organization. The article also discusses an interesting study released by Bright Horizons in that “they found that 89% of employees with high levels of well-being reported high job satisfaction and nearly two thirds of those employees reported consistently putting in extra effort at work” (Cooper, 2012, para. 10). This study is proof that a happy employee equals a productive employee; which positively affects the bottom line.
Does higher pay actually increase employee satisfaction? In the journal of Vocational Behavior the editors wanted to prove just that. This study used meta-analysis to estimate the correlation between increased pay and employee satisfaction. Their study “cumulated across 115 correlations from 92 independent samples, results suggested that pay level was correlated .15 with the job satisfaction and .23 with pay satisfaction” (Elsevier, 2010). Based on this study the results show that pay plays a small role in overall satisfaction.
There is a definite need for employee loyalty and satisfaction, particularly in respect to retention rates. Employee turnover is costly, so ensuring that an organizations employees’ are committed to their job is one of the main goals of Human Resource Management. “Companies have to make sure that employee satisfaction is high among workers, which is a precondition for increasing productivity, responsiveness, and quality and customer service” (Sageer, Rafat, & Agarwal, 2012, p. 32). When employees get a sense of satisfaction from their jobs this in turn relates to customer satisfaction that is perceived through the value of the service they are receiving. “Value is created by satisfied, loyal and productive employees”(Sageer et al., 2012, p. 33).
Across the nation, QuickMart employees pay standards are the lowest in the industry by one percent (“Average Hourly Rate For Walmart Employees”, n.d.). Independent studies have proven that employee satisfaction is directly tied to pay and that average cost of employee turnover for employees earning less than $30,000 annually is 16.1% percent (“There Are Significant Business Costs To Replacing Employees”, 2012). The problem facing South Florida QuickMart managers is the increasing amount of employee turnover and how this turnover is reducing regional profits. The independent variable that Team C has identified is employee satisfaction, and the dependent variable is employee turnover rates that relate to employees dissatisfaction with their hourly pay. Team C is in search of how these two factors affect the bottom line of QuickMart Inc.
From this study:
Cooper, S. (2012). Make More Money By Making Your Employees Happy. Retrieved from http://www.forbes.com/sites/stevecooper/2012/07/30/make-more-money-by-making-your-employees-happy/
Elsevier. (2010, October). Journal of Vocational Behavior. Elsevier, 77(2). Retrieved from http://www.timothy-judge.com/Judge,%20Piccolo,%20Podsakoff,%20et%20al.%20(JVB%202010).pdf
Sageer, A., Rafat, S., & Agarwal, P. (2012). Identification of Variables Affecting Employee Satisfaction andTheir Impact on the Organization. IOSR Journal of Business and Management, 5, 32-39. Retrieved from http://iosrjournals.org/iosr-jbm/papers/Vol5-issue1/E0513239.pdf
Average Hourly Rate for Walmart Employees. (n.d.). Retrieved from http://www.payscale.com/research/US/Employer=Wal-Mart_Stores%2c_Inc/Hourly_Rate
There Are Significant Business Costs to Replacing Employees. (2012). Retrieved from http://www.americanprogress.org/issues/labor/report/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/