Report on “BAX GLOBAL LIMITED: STAFF

TURNOVER IN MAINLAND CHINA”

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REPORT ON

“BAX GLOBAL LIMITED: STAFF

TURNOVER IN MAINLAND CHINA”

PREPARED BY

SUBMITTED TO

Name: Mohammed Aftab

ID# 101 0017 030

Section: 14

Course: MGT351

Instructor: Mr. Shadat

Khan (StN)

Lecturer

School of Business

North South University

Dhaka.

Date of Submission: 17th

October 2011

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MGT351 CASE# 1 BAX GLOBAL LIMITED: STAFF TURNOVER IN MAINLAND CHINA

(Answer the following questions.)

Problem Definition

- What problem does Carol Cai face?

- How big is this problem now?

-Will it get better or worse in the future?

-What are the strategic implications of this problem?

-What are the internal implications of this problem?

Motivations

-Why do some employees leave BAX China?

- Why do some employees stay with BAX china?

- What external/ Market factors influence their decisions?

-What internal factors influence their decisions?

Key Success Factors

-What are the key success factors for a logistics company in mainland China?

-What are the qualities/ qualifications that BAX China needs in its employees? What do

they need to be good at? The answers will vary between organizational levels.

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BAX Assessment

-What is your assessment of BAX China’s human resource practices, specifically with

regard to recruitment, selection, training, socialization, compensation and benefits?

-How do these practices relate to the key success factors and job requirements?

- How well are these practices addressing the turnover issue?

Solutions

- What should Cai do to address the turnover problem from this point onward? Consider

her priorities and create an action plan.

- Would any practices from your current employer or past employers help BAX China?

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As a Human Resource Manager for Logistics and Supply Chain management firm

BAX China, Carol Cai was facing problems in retaining the potential employees of the company.

Because, in China most logistics worker had a tendency of switching job very frequently in

search of higher salary and position. As a result, Cai was facing the problem of Employee

Turnover, and as a consequence the company started to lose also its potential customers day by

day.

This has become a real big problem. As we all know, China is the world‟s Third-

Largest trading nation. Moreover, Mainland China‟s Import-Export activity created intense

demand for logistics and supply chain management services. So, day by day competition among

the Logistics and Supply chain management firms is increasing. Eventually it is creating huge

pressure on labor market. If a company fails to fulfill the demands of the potential employees

then the company will lose its potential employees and for sure face employee crisis due to

Employee-Turnover. Moreover, lack of potential and efficient employees reduces productivity

and eventually company loses its reputation and fails to create goodwill.

What problem does Carol Cai face?

Ans

Ans

How big is this problem now?

Problem Definition

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This problem will definitely get worse in the future, if corrective actions are not

taken and important strategic changes are not made. Any firm which is providing Logistics and

Supply Chain Management services will face difficulties in surviving in the market due to

potential employee crisis and through competition among firms. In the consumers point of view

Logistics customers are always focused on time and price, more than delivery mode. As a result,

logistics firms will face difficulties in retaining their potential and loyal customers, due to the

availability of different options in the market for the customers.

Hiring Process

High price of recruiting, interviewing and hiring new workers, in addition to lost

productivity.

Actual Cost

The U.S. Department of Labor estimates that it costs about 33 percent of a new

employee's salary to replace the worker who left. This means major companies can spend

millions of dollars a year on turnover costs.

Lack of Staff

High turnover rates can create a lack of staff to complete essential daily functions of

a company. This can result in overworked, frustrated employees and dissatisfied customers.

Will it get better or worse in the future?

Ans

What are the strategic implications of this problem?

Ans

7

Loss of Productivity

New employees take some time to get up to speed, particularly in complex jobs.

Customer Dissatisfaction

For service-oriented careers such as account management and customer service, high

turnover can lead to customer dissatisfaction. Newer representatives lack expertise

1. Loss of faith in Management,

2. Feeling Unappreciated

3. Feeling Bored or Unchallenged

4. Negative impact on Employee morale,

5. Losing a close colleague can change the positive perception towards the Company,

6. A decrease in employee Efficiency (Employee doesn‟t give enough effort for job)

7. Putting the personal interests of an employee above what is best for the company, same

goes with the Managers.

What are the internal implications of this problem?

Ans

8

Some employees leave BAX China in favor of better opportunities in the China Market. A

Chinese Logistics worker who changes their employers frequently progresses faster than other

workers and their income level also rapidly rises.

Some employees stay with BAX China because they wanted to get the best out of

themselves, as they knew loyal employees developed more experience and skills. Moreover,

BAX China offered many effective options for employee career development, also provided

some external training and development program facilities which was considered the process of

sharing knowledge by BAX China.

In general, the scenarios in which employees want to stay with a company:

1. Expected work is known to employee

2. Availability of materials and equipment which helps to do well in the job

3. Opportunity of doing the best which an employee are capable of doing everyday.

4. Recognition or

Praise for doing good work.

Why do some employees leave BAX China?

Ans

MOTIVATIONS

Why do some employees stay with BAX china?

Ans

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5. Good Employee-Supervisor relationship.

6. Presence of inspiring leaders

7. The feeling of being important to Company

8. The mission or purpose of the company which helps to understand the employees, the jobs

importance.

9. Cooperation among employees and unidirectional effort.

External factors include family life, better salary and benefits offered by competitor

companies, availability of other jobs, Specific Market demands and other business relationships

Employee behavior and decisions, is a result of factors that influence the ways

employees respond to their work, leadership and customers. Identifying the internal and external

factors that affect their decisions can help the company understand why employees are

committed and motivated and why they are not.

Internal factors:

Fair treatment,

Good leadership,

Organizational structure,

The corporate culture, and

Opportunities for career development.

What external/ Market factors influence their decisions?

Ans

What internal factors influence their decisions?

Ans

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COST

QUALITY

FLEXIBILITY

TECHNOLOGY

Competitive pricing: all units/incremental units

discounts

Inco terms: Excellent understanding of pricing

structures

Budget for Employee Training and career

development facilities.

Goal: the right product at the right time and at the right place

Delivery flexibility: Respond quickly to changes

requested by the customer

Readiness to provide information at all stages

Flexibility in recruiting employees in short time

period and short term realistic ‘Job Preview’

facilities.

Ability/Eagerness to employ the latest concepts

and technologies in transportation logistics

Technology should be used to evaluate employee

performance and assessing employee job

satisfaction level.

Delivery time: Shorter

Delivery date: On time delivery

Delivery quality: Avoid quantitative & qualitative

defects en route

Systematic Work flow and maintaining Corporate

Governance

What are the key success factors for a logistics company in mainland China?

Ans

KEY SUCCESS FACTORS

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Logistics is a service industry, which is therefore a “people business”. To excel in the

service sector, strong customer service orientation is essential.

Of course, logistics industry experience is also beneficial in understanding the dynamics of the

supply chain and how it impacts our customers‟ businesses. In addition, resourcefulness,

initiative, and the ability to work in a dynamic environment are also essential.

Top (Higher) Management:

Attention to detail,

Self Control and dependability,

Making independent decisions,

IT knowledge.

Middle Management:

Personal flexibility In working within different groups and employees,

Communication and Cooperation,

Lower Management (Supervisors):

Initiative, persistence, and independence,

Focused towards „Future Career Development‟.

Stable Mentality (Towards job, Towards Company),

Enthusiastic, and Energetic,

What are the qualities/ qualifications that BAX China needs in its employees? What

do they need to be good at? The answers will vary between organizational levels.

Ans

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Recruitment:

According to my findings, BAX China‟s corrective recruitment procedures are very

effective. Employees recruited from selected universities where logistics and supply chain

management related courses are available ensure availability of fresh employees with fresh

knowledge in related field. And the approach of attracting mid-level high-level and

functional level staffs from the competitors and the labor market also ensure experienced and

skilled employees.

Selection:

While recruiting, Employee motivation was gauged, and searched the employees who

did not changed jobs frequently before. This reflects employee enthusiasm, mental stability,

and sincerity towards the job and the company.

Training:

Aside from salaries BAX China‟s primary means of combating employee turnover was its

focus on training and development. BAX china provided many external training development

facilities and programs to better its employees.

Socialization:

Employees recruited based on their positive attitude and enthusiasm can be trained well

and eventually socialization process becomes much easier with these types of employees.

What is your assessment of BAX China‟s human resource practices, specifically with

regard to recruitment, selection, training, socialization, compensation and benefits?

Ans

BAX ASSESSMENT

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These types of employees are maximum time acts as a team player and always possess

friendly nature.

Compensation and benefits:

BAX China had established scholarship programs with two universities that did

have programs in the logistics field. The company also offered internships to some of the

scholarship winners. Moreover, to convince potential employees the company offered

attractive salary.

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Recruitment

and Selection

Training

Socialization

Compensation

and Benefits

Effective recruitment and selection helps to get the

perfect employee for the perfect job. A skilled employee

works efficiently and increases the company

productivity and eventually helps the company in cost

cutting and ensuring the best quality.

Providing training facilities and skill development

facilities will enhance employee performance. Training

will help the company in technological upgrading.

Moreover, training facilities fosters the employee work

flexibility.

Socialization helps to enhance employee efficiency

and company productivity. When employees feels

free to work, and maintain a good positive

„Employee-Supervisor‟ relationship it automatically

helps to reduce extra company costs and helps to

create flexibility.

Better salary and compensation helps to attract

better employee, it helps to motivate employees. A

motivated employee ensures good quality of their

work, and eventually helps maintaining quality and

constant costs.

How do these practices relate to the key success factors and job requirements?

Ans

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Through innovative and effective recruitment process BAX China is recruiting from

selected sources which is allowing the company to pick the perfect employee for the perfect job,

this type of approach reduces „Employee-Turnover‟ risk. BAX China is offering attractive

compensation and benefits which will to some extent reduce the „Employee-Turnover‟

percentage as employees remains satisfied and also motivated. BAX China also offering few

effective Training facilities, and also career development programs which is very essential for

any employee. And at last after recruiting and selecting potential employees and through

different training services BAX China trying to enhance a positive Socialization process for the

new recruits so that they can work more freely and comfortably and thus give their best effort.

How well are these practices addressing the turnover issue?

Ans

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Training and development opportunities

A safe working environment A healthy working environment

Responsive scheduling

Positive employee-supervisor relationships

Reasonable job demands

Competitive pay and benefits

Employee communication and influence

Personally rewarding work

Job security

Thoughtful job design

SOLUTIONS

What should Cai do to address the turnover problem from this point onward? Consider

her priorities and create an action plan.

Ans

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The Company I worked for is very small compared to BAX China, so I don‟t think any

practices from my past employer can help BAX China. But based on my findings I can propose a

standard model or suggest a solution map for BAX China which will help them in many ways.

Logistics providers need to manage all the complexities for their customers, across borders and

through various modes of transport.

The following items are presented as the key HR Best Practices that I have found, and that can

be practiced in BAX China.

Analyzing every job: Taking the time to conduct a job analysis and write job descriptions

for all of positions.

Effectively recruiting new people:

o Developing customized recruitment strategies

o Providing interim human resource and accounting professionals

o Engaging a retained search for key positions

o Designing and implementing a college recruitment program

o Outsourcing specific staffing functions

o Providing assistance and support with job fairs, job sites and interviewing

o Applying market research, salary surveys, and competitive analysis.

Making well-informed hiring decisions: There are substantial costs associated with

hiring the wrong person for an opening. This is relevant for hourly workers, but even

more so for managerial and supervisory positions. Poor hiring decisions are related to

many negative outcomes, from increased turnover to legal fees to lower quality.

Conduct realistic job previews: All prospective employees should be given a realistic job

preview of where they will be working, what they will be doing, and when and how they

will be doing it (i.e., shift work).

Would any practices from your current employer or past employers help BAX China?

Ans

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Maintaining fair and competitive compensation: Paying higher wages attracts better

quality people who in turn increase companies‟ productivity and profitability. Results

suggest that the increased cost of paying higher wages is offset by increased profitability.

Making work meaningful: Offering training programs, showing employees the

importance of their work, or enhancing their ability to contribute to company goals and

objectives will eventually expand employee knowledge.

Foster good communication: Good communication is not only a key component of your

human resources system; it is also a hallmark of good management. Company leaders

should regularly communicate downward to employees, but should also encourage and be

open to upward communication from the hourly ranks.

Enhancing supervisory skills: Leaders should keep in mind the saying that “People

don‟t leave companies, they leave supervisors”. Training production supervisors in

people management skills is likely to represent a small investment that could yield

performance improvements within a short time frame and over time contribute to long-

term competitive sustainability.

Offer skill testing: If they want to decrease employee turn-around, they can perform skill

tests on their job applicants. This is one of the tools that will help determine whether they

have found the best fit for each position the company has open. Not only that, but it also

cuts down on your new applicant recruitment costs.

Holding regular review sessions: When employees are closely attached to their

management team, they are more likely to feel involved. More involved employees tend

to perform at a higher level and are more likely to achieve longer tenure.

Doing exit interviews: Labor laws suggest that we cannot hold a person from leaving.

When an employee goes, he/she just has to go. It will be very beneficial to know the

cause of why the employee chose to leave. Possible factors may be: a better job offer,

pursuit for growth, poor colleague relationships, below average compensation, dislike for

the nature of work, etc. Knowing what problems to address, and taking action on them,

will eventually lessen turnover rates in the future.

Giving awards and rewards for achievement: Awards can be items such as

employees‟ pins for good attendance or cash incentives for increased department

productivity.

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Offering employees the option of cross-training: Though there are many employees

who only want to know their own job, many get bored and like the challenge of learning

new skills. Having employees who know more than just their own job benefits both to

company and them.