Technical Affairs

Mike Aamodt, Associate Editor

This month's column will answer an ACN reader's question about turnover and include a piece of HR humor sent by an ACN reader.

Turnover

Question:

We are currently experiencing a high degree of turnover in our police department and are trying to convince City Council to let us raise salaries to reduce turnover. Any thoughts on this?

Answer:

Increasing salary and benefits will only reduce turnover when three conditions are met.

1. Employees are leaving due to low compensation and benefits.

Employees leave organizations for many reasons, only one of which is low pay. Some of these reasons include:

Uncontrollable factors (e.g., illness, family issues, job transfer of a spouse)
Unmet needs
Escape from people (management, coworkers, customers)
Escape from working conditions
Escape from stress
Unmet expectations about the job, organization, or advancement opportunities
A chance for advancement (e.g., promotion, higher pay)

It is tempting to assume that employees are leaving due to low pay, but that may not be the case. There are three common methods to determine why employees are leaving: exit interviews, employee surveys, and salary surveys.

Exit Interviews

The best way to determine why employees are leaving is to conduct exit interviews with employees when they leave. Departing employees usually have no problem being candid about why they are leaving. Though exit interviews can be done through questionnaires, personal interviews provide the best qualitative information.

Attitude Surveys

Employee attitude surveys can also be conducted with current employees. Though there are many standard job satisfaction surveys (e.g., JDI, MSQ), a custom-designed survey is probably your best bet.

Salary Surveys

Salary surveys are useful in determining how your organization's salary and benefits package compares to that of other organizations. Though salary survey data do not provide as direct a link to turnover causes as do exit interviews, it might be safe to say that an organization paying salaries at the 10^th percentile is probably losing employees due at least in part, to low pay.

2. The salary increase will be a psychologically meaningful amount.

This is tough to quantify, but the salary increase must be attractive enough to keep employees from leaving. An annual salary increase of $300 per employee is probably not enough to keep employees from going to higher paying organizations.

3. The number of employees leaving is high.

The commonly accepted method of determining the cost of turnover is to multiply the departing employee's salary by 1.5. This estimate includes such direct turnover costs as advertising charges, referral bonuses, travel, and staff time to interview applicants and process applications. The estimate also includes such "hidden costs" as loss of productivity, inefficiency, overtime, and training costs.

To demonstrate this point, look at the table below. The table depicts the budget for a police department with 100 sworn personnel with an average salary of $25,000. Column A represents the budget if 5 officers left each year, Column B represents the budget if 15 officers left each year, and Column B represents the budget of we gave each officer a $2,500 raise which resulted in no officers leaving the force. As you can see from the table, if giving a $2,500 raise decreased turnover by 15 officers, the department would actually save $242,500. However, if the raise decreased turnover by only 5 officers, the department would lose $132,500.

	A	B	C	Budget Difference
	No raise	No Raise	$2,500 raise	C - A	C - B
Average salary	25,000	25,000	27,500
Benefits (28% of salary)	$7,000	$7,000	$7,700
Number of employees leaving	$5	$15	$0
Number staying	$100	$100	$100
Personnel cost (100 employees)	$3,200,000	$3,200,000	$3,520,000	$320,000	$320,000
Direct turnover cost (32% of salary)	$40,000	$120,000	$0
Academy + FTO salary cost (26 weeks)	$62,500	$187,500	$0
Personnel + direct turnover cost	$3,240,000	$3,320,000	$3,520,000	$280,000	$2,000,000
Personnel + direct turnover + training	$3,302,500	$3,507,500	$3,520,000	$217,500	$12,500
Personnel + total turnover costs (1.5 times salary)	$3,387,500	$3,762,500	$3,520,000	$132,500	$-242,500

HR Humor

The following piece of HR humor demonstrates how employees can use humor in stressful situations.

Occasionally, airline attendants make an effort to make the "in-flight safety lecture" and their other announcements a bit more entertaining. Here are some real examples that have been heard or reported:

1. From a Southwest Airlines employee - "There may be 50 ways to leave your lover, but there are only 4 ways out of this airplane..."

2. Pilot -- "Folks, we have reached our cruising altitude now, so I am going to switch the seat belt sign off. Feel free to move about as you wish, but please stay inside the plane till we land...it's a bit cold outside, and if you walk on the wings it affects the airflow pattern."

3. After landing: "Thank you for flying Delta Business Express. We hope you enjoyed giving us the business as much as we enjoyed taking you for a ride."

4. As the plane landed and was coming to a stop at Washington National, a lone voice comes over the loudspeaker: "Whoa, big fella. WHOA."

5. After a particularly rough landing during thunderstorms in Memphis, a flight attendant on a Northwest flight announced: "Please take care when opening the overhead compartments because, after a landing like that, sure as hell everything has shifted."

6. From a Southwest Airlines employee - "Welcome aboard Southwest Flight XXX to YYY. To operate your seatbelt, insert the metal tab into the buckle, and pull tight. It works just like every other seatbelt and if you don't know how to operate one, you probably shouldn't be out in public unsupervised. In the event of a sudden loss of cabin pressure, oxygen masks will descend from the ceiling. Stop screaming, grab the mask, and pull it over your face. If you have a small child traveling with you, secure your mask before assisting with theirs. If you are traveling with two small children, decide now which one you love more."

7. Weather at our destination is 50 degrees with some broken clouds, but they'll try to have them fixed before we arrive. Thank you, and remember, nobody loves you or your money, more than Southwest Airlines."

8. "Your seat cushions can be used for flotation and in the event of an emergency water landing, please take them with our compliments."

9. "As you exit the plane, please make sure to gather all of your belongings. Anything left behind will be distributed evenly among the flight attendants. Please do not leave children or spouses."

10. "Last one off the plane must clean it."

11. From the pilot during his welcome message: "We are pleased to have some of the best flight attendants in the industry...Unfortunately none of them are on this flight..."

12. Overheard on an American Airlines flight into Amarillo, Texas, on a particularly windy and bumpy day. During the final approach, the Captain really had to fight it. After an extremely hard landing, the Flight Attendant came on the PA and announced, "Ladies and Gentlemen, welcome to Amarillo. Please remain in your seats with your seatbelts fastened while the Captain taxis what's left of our airplane to the gate."

13. Another flight Attendant's comment on a less than perfect landing: "We ask you to please remain seated as Captain Kangaroo bounces us to the terminal."

14. An airline pilot wrote that on this particular flight he had hammered his ship into the runway really hard. The airline had a policy that required the first officer to stand at the door while the passengers exited, smile, and give them a "Thanks for flying XYZ airline." He said that in light of his bad landing, he had a hard time looking the passengers in the eye, thinking that someone would have a smart comment. Finally, everyone had gotten off except for this little old lady walking with a cane. She said, "Sonny, mind if I ask you a question?" "Why no, Mam," said the pilot, "what is it?" The little old lady said, "Did we land or were we shot down?"

15. After a real crusher of a landing in Phoenix, the Flight Attendant came on with, "Ladies and Gentlemen, please remain in your seats until Captain Crash and the Crew have brought the aircraft to a screeching halt up against the gate. And, once the tire smoke has cleared and the warning bells are silenced, we'll open the door and you can pick your way through the wreckage to the terminal."

16. Part of a Flight Attendant's arrival announcement: "We'd like to thank you folks for flying with us today. And, the next time you get the insane urge to go blasting through the skies in a pressurized metal tube, we hope you'll think of us here at US Airways."

Mike Aamodt, a Professor of Psychology at Radford University serves as our Associate Editor for the Technical Affairs column and as our unofficial humor editor. If you have a technical question you want answered/discussed, wish to comment on this month's article, or want to share a humor item please contact Mike. He may be reached by email (maamodt@runet.edu), phone (540) 831-5513 or fax (540) 831-6113.