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According to CIRCADIAN P12P, overtime can be beneficial for both staffs and company because it provide employees extra income and assist the company to cover the unexpected absences. However, high overtime levels will create many consequences such as ...
the excessive hours of working time cause danger to health and conflict with family
responsibilities. This leads to the decision of resignation of the employees. Similar to
Alberta Institute, Beckers et al.15 indicated that overtime work affected negatively to
health because of less time for recovery after work. Beckers et al. 15 also expressed that
overtime work not only caused the health problems such as “high blood pressure,
increased risk of car-diovascular disease, and diabetes”, but caused mental fatigue.
Similar to the above opinions, in the real case of Parapex, because of the large orders, the
supervisor pushed workers to work more and more. This make them feel tired, stress and
have lack of time for family. Then, they decided to leave the company. This led to high
turnover rate and big decrease in profit of company. Through that, excessive hours of
overtime is a problem that needs to be solved to improve the turnover rate and the profit
2) PROBLEM 2: LOW SALARY
The salary is important factor which affect directly to the turnover rate of staffs. If the
other competitors are willing to pay the workers a significant higher salary, they may be
persuaded to leave the company. From that, low salary could be a reason for high labor
turnover for the business. Therefore, the company need to make sure that their pay rate is
competitive and in line with the industry averages. Even if the employers do not have a
good budget for significant pay raises or good benefit packages, they should consider
other ways for the compensation to the employees. For examples, the company may
provide the flexible time or paid time off to compete with their rivals. (Querrey 5)
In the same opinion with Querrey, the Overture Group 16 also stated that one of reasons of
high turnover rate is low salary or no salary increases. In the low growth years, the
budgets of the company may be cut to the bone and raises are too small in current jobs. In
this period, when other companies are committed to top grading and they are willing to
raise salary to attract new talent, the employees may be attracted to change their job.
However, although the salary is necessary, the intrinsic motivation seems to be more
important. The employees always expect their contribution to be evaluated by employers.
Sometimes, the employees may stay to assist the company in the difficult period, but they
will expect the company to recognize their efforts and provide them good compensation
when the economy picks up.
In Parapex case, the workers also said that they received not suitable salary compared to
their experience and their efforts. The low salary was also a problem that made them
decide to quit the job at Parapex and caused high turnover rate.
3) PROBLEM 3: STRICT PUNISHMENT POLICY
According to Vaden
discussed Casison’s opinion, strict punishment policy makes the
company to experience declines in productivity, high turnover rate, poor morale and lost
profits. Strict punishment policy causes a negative effect on employee job performance
and job satisfaction. Negative punishment may removes a reinforcing stimulus. In
addition, punishment is considered as a mistaken tool for motivation. This policy may
achieve the positive results in the short term but the main problem associated with it
because it breaks the positive relationship between the employees and managers. The
positive relationship is more sustained for the development of the company. Moreover,
“Using punishment as a control tool may foster an environment of fear in the workplace.
One side effect of using punishment inappropriately is that employees become afraid to
take risks. Risks allow companies to grow and gain competitive.” Vaden 17 also indicated
four types of risks that keep the employees to take chances such as “fear of failure”, “fear
of success”, “fearing what others think” and “fear of uncertainty”. Through that, strict
punishment policy will constrain the development of employees and the company.
In the real case of Parapex, strict punishment was also a problem that caused high
turnover rate. To illustrate, strict punishment policy caused negative influence on job
satisfactory of the workers. They felt depressed and did not want to continue to contribute
to the company.
C/ POTENTIAL PROBLEMS AND MAIN PROBLEM IS SELECTED TO
Through the interviews with the problem owners, the resignation workers, the supervisor
associated with the literature review, four potential problems are recognized that includes
Excessive working overtime, Low Salary, Strict Punishment Policy and the far location
the company. Within these potential problems, Excessive working overtime is
selected to be solved in this report because this problem is the most feasible for solving.
For the problem of location, company cannot be moved immediately to central of the city
because it will take a lot of costs and time. In addition, punishment policy was set up at
the beginning days of company’s operation so that it cannot be changed in the short time.
It needs to take time to discuss carefully to change the policy of company. Finally, the
salary cannot be increased too much because of the company’s budget. Also, the problem
owner believed that this salary is suitable for the employees. From the above reasons,
excessive working overtime is selected as the main potential problem that needs to have a
good plan for solving as soon as possible.
D/ INITIAL CAUSE AND EFFECTS MAP
Far Location of
Decrease in sale
PART 3 - CAUSES AND EFFECTS OF THE REAL PROBLEM
1) Causes and effects from Vice Director perspective
The supervisors had lack of training -> lack of required skills -> poor decision
making -> receiving too much orders without consideration -> workers had to
work overtime -> they feels tired and pressures -> they leave company
Reasons of lack of training:
Employer believed in employee’s resume: the supervisor provided good
background of education and experience in the resume for the recruitment position
Avoid the training cost
Believed in training at real job: company believed that training in the real job was
more effective rather than studying theory in class.
According to the interview with Vice Director, the supervisor of the 3rd factory had lack
of required skills such as forecasting and planning because of lack of training. This led to
making wrong decision of receiving too much orders from customers without
consideration of the human resources and capability of production. Vice Director stated
that “the main problem was from lack of forecasting ability and planning skill of
supervisor which leads to the wrong decision making in receiving the large orders even
though we have lack of human capability. This causes too much overtime working and
high pressure for workers.”
When the old supervisor (Mrs.Yen) got maternity leave, Mrs.Nguyen (the current
supervisor) was promoted to this position. The new supervisor had many experience in
production and had many contributions for company. Besides that, she was so hard
working and had a business management certificate of Institute for Asian Studies so that
she was considered to promote to this position. However, she still had lack of training on
forecasting and planning skills. The Vice Director mentioned “I think that the main cause
is lack of training so that I asked you to make the plan for training the supervisor
because I believe that she needs to be trained more about soft skills.”
She also stated “at the beginning, when Mrs.Yen (old supervisor) took a maternity leave,
Mrs Nguyen was promoted to this position because she had many experiences in
production, had many contributions to company and work hard. Also, in the resume, she
had business management certificate of Institute for Asian Studies.”
In addition, The Vice President said that at the beginning, the company thought that
training through working directly in the real job was more effective than training at
school. Also, it assisted to save time and cost for training.
Through the interview, it could be recognized that the supervisor had lack of skills
because she did not obtain enough training in all aspects of her job. The reason of lack of
training was that the employers believed in the employee’s resume or application and
employers thought that training through working everyday was more effective than
training at school and saved time and cost for training.
2) Causes and effects from Human Resource perspective
Supervisor of factory had lack of training -> lack of skills in planning -> receiving big
orders although lack of workers for production -> workers work overtime too much ->
the workers feel pressures and quit job
Main reasons of lack of training
Company considered carefully the education background and working experience
to select the candidates for recruiting position.
Save cost of training
The boss believed that training in the real job was more effective rather than
studying theory in class.
According to Mrs. Trang (HR officer), the main problem was that the supervisor did
not have enough experience in management and lack of necessary skills such as forecast
and planning skills. She said “Nguyen did not have enough experience in management,
did not make the good production plan so there were lack of workers for production.
When she received big orders, she had to ask our boss to recruit more workers or
planned to move the workers from other factories. Lack of workers was a serious
problem. Then, workers would be stress and pressured if they worked too much.”
Similarly to the Vice President, Mrs. Trang also mentioned that the main cause of
problem was that Nguyen had lack of training. She stated “Nguyen was not trained
enough so this led to lack of necessary skills such as forecast and planning skills.”
The reasons of lack of training was that company considered carefully the education
background and working experience to select the candidates for recruiting position.
The boss also believed that training in real job would be more effective and save cost
than training in school. Mrs. Trang expressed “Until now, our company usually
encouraged the old staffs to train the new ones. The new ones would catch up the work
when they worked in the real job. The employees may just know the theory rather than
the real job when they were trained by joining in a course. Also, it would take more cost
3.2) Literature review
1) Receiving too much orders
In the above opinion of W.Blog 10, when a business is developed, there are more
customers, more orders and more work. From that, working overtime is a quick
solution for company to increase output with low cost.
There are many reasons of long working hours such as increase salary, the
increase volume of work, culture of long working hours, occupational
commitment, and career enhancement (IES 13)
In the case of Parapex, the supervisor of the 3rd factory received too much orders
without consideration about the capacity and number of workers. Then, she
selected working overtime as a solution for producing on time of orders.
2) Effects of poor decision making
According to Edmunds
, decisions managers made might address a specific
problem in a department or the main goal of the company. Profitability is one of
obvious influences of business decisions. If the manager made a poor decision, it
may cause a serious problem on the profit of company.
In addition, Edmunds 13 mentioned that the poor decision may cause effects on the
human resources or production. Edmunds
also stated “If you overburden your
staff, you might start losing key employees.”
3) Decision making skill and reasons of poor decision making.
According to Alton19, the role of “decider” is one of crucial roles in business.
Alton 19 mentioned that decision making is like any other skills that need to be trained
and practiced. If people did not have experienced in decision making, their
performance would be suffered.
There are many reasons to make the poor decision.
The first reason is lack of doing research. The manager should spend enough time and
effort on research such as the potential cost, the potential risks, the current human
resources or the potential outcomes or what impacts have arisen as the result of
similar decisions in the past before making decision on receiving the large orders.
Alton 19 also stated that the second reason was “going on instinct”. It means that some
managers made decisions based on charisma and intuition.
The other reasons were that some managers made decisions too fast without thinking
carefully because of the pressure of time. They were worried if they got a long time to
make decision, it may cause some bad influences. However, when they made the poor
decisions, it would lead to the more serious effects.
Overall, decision making was considered as a necessary skill that needs to be trained
for the better working performance.