Case Three - Turnover Reduction

Case Three - Turnover reduction

Turnover can have a crippling effect on organizations. For example, the grocery retailer, Kroger; calculates that its employee turnover rate is such that its cost was $80 million a year. As with other companies, Kroger is recognizing the cost that turnover can exact and is taking steps to get it under control. To help with its turnover rate, Kroger has begun a pilot study aimed at hiring workers who will have a lower propensity to quit. Specifically, Kroger has set up kiosks in selected stores where job seekers can electronically fill out an application form. Applications can also be made online via the Internet. The pattern of responses to questions on the application can be analyzed with a computer designed to produce the likely retention rate of each applicant. For example, applicants might be asked to provide the last name of their supervisor from two jobs ago.

The assumption is that if someone can accurately provide this information, he or she is more likely to have stronger ties in the workplace and stay on the job longer. The application system also does other screening tasks, including background checks. Kroger may be moving from doing this in a pilot project to fully working employment program in the future. Kroger said that it is planning other actions in an attempt to reduce its turnover rate.

Critical Thinking Questions:

1. Kroger's emphasis on the application process focuses on characteristics of workers as an important causal factor in turnover. Do you think that its approach will be effective? Why or why not?

Kroger's emphasis on the application process will not be effective for several reasons. First, characteristics can be subjective in nature. It is very difficult to parallel certain character attributes, given via online application answers, as sufficient means of data for turnover determinants. Kroger does not have an effective "control" for measuring the responses given at the kiosk. In the application process, applicants will fill out predetermined questions that will be analyzed to find a pattern or trend. With this type of statistical progression, there has not been a continuous amount of information collected, especially since this is a pilot run. My prediction is that Kroger will need at least three full years of information to produce an accurate result for pattern and standard deviation that can be calculated and applied to the turnover rate.

Characteristics of applicants are also hard to pinpoint for a specific trend that will give an accurate depiction of factors in turnover. Certain open-ended questions would have to be asked that, even when filled out, may draw misleading or inaccurate information. As with any application online, it is hard to gage the responses until they are brought in for a face-to-face interview. The online application only gives Kroger a "snapshot" of the applicant. The information provided being accurate is only going to be an assumption because of the nature of online applications. Most applicants will be smart enough to put the best answer even if it is not the truth, in order to get the job. Self preservation and need for employment will always outweigh the integrity on any application, especially an online application, where certain characteristics are known to be employer friendly.

2. Are there system characteristics that might be important determinants of retention and turnover? In other words, what factors about jobs or organizations might be important in determining whether someone decides to quit