DBAX 8151 Week 6 Organizational Problem Statement Example

Six in Ten Gone Within a Year: A Problem Statement on First-Year Associate Turnover at a Fort Worth Grocery Distribution Center, Stated With Its Scale, Its Cost and Where It Concentrates

Student Name

Walden University

DBAX 8151: Organizational Leadership: Doctoral Theory and Practice

Instructor Name

Month Day, Year

Six in Ten Gone Within a Year: A Problem Statement on First-Year Associate Turnover at a Fort Worth Grocery Distribution Center, Stated With Its Scale, Its Cost and Where It Concentrates

The Organization

The organization is a grocery distribution center in Fort Worth, Texas, which receives products from manufacturers and ships them to about ninety supermarkets in north Texas. It employs roughly 620 hourly associates who receive, store, pick and load products across three temperature zones: dry goods, a cooler kept just above freezing and a freezer kept well below zero. The center runs around the clock in three shifts. Each shift lead oversees about thirty associates, and associates on nights and weekends are moved between leads as volume shifts between zones. This center is a composite of the site where I work, and its details are changed.

The Problem in Numbers

Table 1

First-Year Turnover at the Center, Last Fiscal Year

Figures from the center's human resources records, rounded; the composite alters exact values.

Where the Losses Concentrate

The losses are not spread evenly. Most first-year leavers go in their first three months. Turnover is highest in the freezer and on the night shift, the two places where the work is hardest and leads change most often. Associates who stay past a year mostly remain; the problem is getting them there.

What It Costs

Each early departure means another recruitment, another week of training and weeks of lower output as each replacement learns the routes and the scanning equipment. The center's own estimate puts the direct cost of replacing an associate at about $4,200, before counting overtime paid to cover the gap and errors made by new pickers. At 251 first-year departures, that is more than $1 million a year in direct costs. Allen et al. (2010) note that turnover costs are often underestimated because organizations count recruiting and training while missing lost productivity and the burden placed on remaining staff.

What Departing Associates Say

Exit interviews are incomplete, since many associates simply stop coming. Of the 112 first-year leavers who were interviewed last year, 38 percent mentioned their shift lead or how they were treated, 44 percent mentioned pay or a job elsewhere and 29 percent mentioned the cold, the pace or physical strain. Many gave more than one reason. Exit interviews record reasons people are willing to give, which may differ from the reasons that drove them.

What the Center Has Already Tried

Two efforts preceded this statement. Three years ago the center raised starting pay by seventy-five cents an hour; first-year turnover dipped for two quarters and then returned to its earlier level once a competitor matched the raise. Last year it added a half-day orientation with a site tour and a safety video. Associates rated the orientation well, but ninety-day losses did not change. Both efforts treated the problem as one of attraction or information. Neither touched the daily experience of the job after the first shift, which is where most of the losses occur and where any leadership explanation would have to act. Recording these attempts matters for the analysis to come, since an explanation that predicts the pay raise should have worked for longer, or that the orientation should have helped, would need to explain why it did not.

The Problem, Stated

The problem is that six in ten newly hired associates quit before their first anniversary, the majority inside ninety days, with the heaviest losses in the freezer and on nights, at a direct cost of more than $1 million a year. The problem statement does not yet name a cause. Hom et al. (2017), reviewing a century of turnover research, describe turnover as shaped by many forces at once, from job attitudes to labor market alternatives; a statement that assumed one cause at this stage would narrow the analysis before it began.

Why the Theory Is a Candidate

Leader-member exchange is a candidate explanation because the exit interviews mention leads and because the theory links exchange quality to leaving. It is not the only candidate. Griffeth et al. (2000) found that job content, alternatives and pay all predicted turnover, and the center has strong versions of each. The analysis in the coming weeks will ask whether the theory explains this pattern, including its concentration in the freezer and on nights, better than its rivals.

References

Allen, D. G., Bryant, P. C., & Vardaman, J. M. (2010). Retaining talent: Replacing misconceptions with evidence-based strategies. Academy of Management Perspectives, 24(2), 48-64. https://doi.org/10.5465/amp.24.2.48

Griffeth, R. W., Hom, P. W., & Gaertner, S. (2000). A meta-analysis of antecedents and correlates of employee turnover: Update, moderator tests, and research implications for the next millennium. Journal of Management, 26(3), 463-488. https://doi.org/10.1177/014920630002600305

Hom, P. W., Lee, T. W., Shaw, J. D., & Hausknecht, J. P. (2017). One hundred years of employee turnover theory and research. Journal of Applied Psychology, 102(3), 530-545. https://doi.org/10.1037/apl0000103