Create a short summary of how to orient the COO to the definition of human capital and the different kinds of turnover. Include how all forms of employee turnover affect the organization and its employees.

The COO called Kimberly and Dana up to her office, and she was clearly frustrated over a couple of very important issues in their division. “We are hoping your team can tackle this. We need to find out why our turnover is so high. It is affecting morale and cutting into the bottom line!”

Later, back in the HR office, Dana said worriedly, “Kimberly, are we in trouble because of the high turnover?”

“No. I am not even sure it is very high. We will not know until we measure the turnover and figure out the reasons people are leaving. Management always bears some responsibility, too, right?”

Dana laughed. “As someone who used to be part of management, I would have to agree. However, my view was always from a small unit in a large company. So, how do we measure turnover?”

“Well,” Kimberly explained, “there are several simple ways, but one measurement by itself will not be enough. We need to see if there are parts of the company where turnover is high and whether some units have low turnover. In an organization this large, it is unlikely to be the same in every division. If turnover is much higher in some places than others, things begin to get very challenging. The hard part is reporting it. We may even see some really successful units that have high turnover.”

“Oh, so in that case it could be the work is difficult and people burn out from the workload?” Dana speculated.

“That could be it, or there could be a high level of conflict between the manager and employees or there might be a bully. It really is a mystery to solve when people are leaving what seem to be good, well-paying jobs in a prestigious company. The COO is right, though. Even a small amount of turnover—just 1 or 2 percent —can affect the company’s bottom line. Let’s get started.”

The use and application of human capital strategy allow the organization to get the most out of the organization’s resources. Turnover has many aspects that can be described as beneficial, detrimental, and expected.

To help the COO understand the definition of human capital, and the different kinds of turnover, you will help Kimberly and Dana by preparing a short summary for this week’s discussion.

Resources

The following resources will help you prepare:

Human Capital

Burns, S. (2018). Human capital and its structure. Journal of Private Enterprise,33(2), 33–51.

Sprajc, P., Podbregar, I., & Hribar, N. (2018). Strategic aspects of the human capital management in the development of organizational culture. Varazdin: Varazdin Development and Entrepreneurship Agency (VADEA), 106–112.

Turnover

Heneman, H. G., III, Judge, T. A., & Kammeyer-Mueller, J. (2019). Staffing organizations (9th ed.). New York, NY: McGraw-Hill Education. ISBN:9781259756559.

In Chapter 14, read the following sections:

“Analysis of Turnover,” pages 695–707.

“Retention Initiatives: Voluntary Turnover,” pages 707–720.