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Full text of "Workers on the move, labor turnover in the defense economy"

LI E) R.AR.Y 

OF THL 

U N IVERSITY 

or ILLINOIS 

331.1 
v\o. \- 2-5 



INSTITUTE OF 




LABOR AND INDUSTRIAL RELATIONS 



WORKERS ON THE MOVE 



NIVERSITY OF 




I N O 



I 



EDITORIAL NOTE 

The Institute of Labor and Industrial Relations was established in 
1946 to "inquire faithfully, honestly, and impartially into labor-manage- 
ment problems of all types, and secure the facts which will lay the founda- 
tion for future progress in the whole field of labor relations." 

The Institute seeks to serve all the people of Illinois by promoting 
general understanding of our social and economic problems, as well as by 
providing specific services to groups directly concerned with labor and 
industrial relations. 

The Bulletin series is designed to implement these aims by periodi- 
cally presenting information and ideas on subjects of interest to persons 
active in the field of labor and industrial relations. While no effort is 
made to treat the topics exhaustively, an attempt is made to answer ques- 
tions raised about the subjects under discussion. The presentation is non- 
technical for general and popular use. 

Additional copies of this Bulletin and others listed on the back cover 
are available for distribution. 

RoBBEN W. Fleming Barbara D. Dennis 

Director Editor 



I.L.I.R. PUBLICATIONS, BULLETIN SERIES, VOL. 6, NO. 1 



UNIVERSITY OF ILLINOIS BULLETIN 

Volume 50, Number 11; September, 1952. Published seven times each month by the Univer- 
sity of Illinois. Entered as second-class matter December 11, 1912, at the post office at 
Urbana, Illinois, under the Act of August 24, 1912. Office of Publication, 358 Administration 
Building, Urbana, Illinois. 






WORKERS ON THE MOVE 

Labor Turnover in the Defense Economy 

By Kenneth Lehmann and C. Edward Weber* 
Workers are on the move — to other cities, to other industries, and 
to other plants. This vaoving and shifting of workers in and out of the 
employer's work force is called labor turnover. If excessive, the effect is 
increased cost to management, to the union, and to the employee himself. 
In the defense economy, turnover is becoming a more important prob- 
lem. Civilian consumption, the defense program, and necessary industrial 
expansion are placing larger demands upon the economy. Unnecessary 
quits slow down production, making it difficult for the employer to meet 
his production goals. 

The first section of the bulletin is devoted to an analysis of factors 
that tend to increase turnover. The second part includes suggestions for 
management and labor leaders of ways to reduce turnover in order to 
contribute more fully to the defense needs of the nation. 

PART I 
WHY IS TURNOVER A PROBLEM? 

Past and Present Experience Indicates That Under the 
Defense Program Turnover Will Increase 

Present industrial expansion will accentuate some types of personnel 
actions and reduce the importance of others. Expanding industry needs 
an expanding work force, so the hiring aspect will be important. During 
most of the months of 1951, hiring in manufacturing industries exceeded 
the total layoffs, quits, and other separations, particularly in the aircraft, 
machinery and other metalworking industries.^ This, together with other 
employment data, points to continued gains in factory employment as 
defense production is accelerated and output of civilian goods is main- 
tained at high levels. 

As employment increases, quits, as a type of separation, become more 
important. High levels of employment go hand in hand with high quit 
rates. "It (turnover) is also a function of the availability of alternative 
employment opportunities."- Since it reflects the amount of voluntary 
job shifting, the quit rate is one of the most important factors in labor 
turnover and presents one of the most important challenges to the man- 
agement of individual firms and to labor leaders. 

* Prepared under the direction of Richard CI. Wilcock, .\ssistant Professor of 
Labor and Industrial Relations. 



AVERAGE QUIT AND AVERAGE SEPARATION RATES* 
(Per 1,000 Employees; Per Month) 



>- 

O 

.J 



o 
o 
o 



ec 

Q. 
(/) 

z 
o 

I— 
< 

< 

D. 



CQ 

z 




1939 1941 1943 1949 1950 1951 

♦ Source, U. S. Department of Labor, Bureau of Labor Statistics 



From the chart we see how quit rates became more important as 
America moved into the mobihzation period of the Second World War. 
Since the initiation of the defense program in 1950, average separations 
and quit rates again have begun to show an upward trend. As we move 
toward even greater expansion of our production faciHties, the im- 
portance of quits can be expected to increase even more. 

Factors in the Economy That Affect Turnover Are 
intensified by the Defense Program 

Although a few factors in the economy tend to reduce turnover, there 
are many more which tend to increase turnover in a defense period. 

A primary factor tending to stabilize the work force and thus to 
reduce turnover is union influence. By "belonging" to a group closely 
allied with their jobs, union members feel an additional attachment to 
these jobs. By having access to a formally recognized grievance system, 
many employees have a means of reversing pressures that once might have 
caused them to quit. These grievance proceedings also can provide man- 
agement with an index to areas where pressures are building up by pro- 
viding a channel of communication between employees and employers. 

To the extent that unionism tends toward a leveling of wages and 
conditions of work among different plants in the same industry, some of 
the inducements for workers to move from plant to plant are removed. 
Therefore, defense industries may not be able to rely as much on wage 
differentials to attract additional labor as during W'orld W'ar 11.^ 

Fringe benefits in a particular job tend to encourage a worker to 
stay on that job. The large number of employees covered by some type 
of health, welfare, or retirement benefit plan in automotive, steel, coal, 
railroad, and other industries* may be stabilized in their jobs as a result 
of these benefits. Nearly four times as many workers are now partici- 
pating in industrial pension plans than were covered in 1940. 

A tight labor market (meaning an abundance of job opportunities) is 
probably the strongest force tending to increase turnover in a defense 
economy. An estimated 3.6 million additional jobs must be filled in 1952 
and 1953. Such expansion will be difficult and ". . . will result in the 
tightest labor market experienced since the all-out mobilization effort of 
World War II."= 

When people know that other jobs are easily obtained, they will refuse 
to endure unpleasant working conditions. Also, in a tight labor market 
certain employees may become aware of new opportunities elsewhere 
which will prompt them to change jobs, regardless of their attachment 
to their present jobs. 

Rising prices and higher costs of living play an important role in 



influencing turnover. While it is becoming more apparent that people do 
not stay on jobs solely for the money they earn, it is also true that the 
employee's financial position is important to him. Increased costs of living 
can mean increased domestic and social pressures on the employee. If 
these pressures become great enough, he may start looking around for 
another job. 

Government efforts to divert workers from less essential industries 
into vital defense manufacturing can increase turnover.*^ Such a program 
would require certain policies to smooth the transition into defense work. 
Methods might include wage differentials, defense housing and trans- 
portation, child-care centers, and travel and settlement allowances for 
workers who must move. All of these would represent attempts to induce 
people to change to essential defense jobs. 

The Success of the Defense Program Is Affected by Turnover 

The defense program is dependent upon increased production. This 
means that fuller utilization of the work force is essential. When a man 
quits his job, time is lost while he seeks another job, and more time is lost 
introducing him to his new job. Thus the employer's effort to increase 
production is hampered. However, labor turnover may be beneficial to 
the defense program when workers in non-essential industries leave their 
jobs to work in essential industries. 

Increased Turnover Means Increased Costs — for Manage- 
ment, for the Union, and for the Worker 

For management. A high quit rate can work against efficient use of 
the work force by creating serious operating problems. Replacing a worker 
involves, among other things, recruitment office time and expense, em- 
ployment office time and expense, training time and expense, supervisory- 
attention, inefficient use of machinery, tools and materials, as well as 
disruption of part of the work force. Hours and dollars spent in replacing 
a worker who has quit realize little or no return. Thus, excessive turnover 
can create added operating costs to the business. 

Usually the pressures causing one worker to quit do not stop exerting 
influence on others in the plant. These workers, in turn, may also leave 
their jobs when the pressures catch up with them. 

Continuous change in the membership of a work force can be det- 
rimental to worker morale and efficiency. Turnover, if it means employ- 
ment of less-skilled workers to replace the quits, can undercut customer 
good will through delay in fulfillment of orders and inferior standards of 
production. 

In addition, those managers who recognize the values of promoting 



employees from within may feel the effects of excessive turnover; if turn- 
over is high, future plant leadership may be lost. 

For the union. Excessive turnover deserves serious consideration by 
the labor union, an organization composed of workers and functioning 
in an environment of workers. Continuous membership campaigns must 
be conducted if membership is to be maintained. As an organizer, the 
shop steward may have to work hard to keep even with labor turnover. 
As an educator, the union official has to tell and retell his story as fast 
as turnover demands. This duplication of effort can mean excessive at- 
tention to the new workers at the expense of attention to the interests of 
the older members. 

Turnover can create other administrative problems that must be 
dealt with by the union officials. The shop steward, in his role as a worker, 
may be among those who quit. Then the union will have to recruit and 
train a new shop steward. This out-drain of shop stewards and workers 
can cut into the potential leadership of the union and its solidarity. A 
rapid influx of workers, caused by the need for replacing those who have 
left or by expansion of the work force, may tend to bunch a large number 
of workers at the low end of the seniority list. Such a bunching of work- 
ers can cause difficulties in settlement of disputes concerning seniority. 
These examples serve to illustrate the turnover problems that unions may 
have to face. 

For the workers. Probably the party most affected by turnover is the 
terminating employee himself. Consider what happens to a person when 
he quits a job. Usually he is induced to change jobs because of one or 
two factors. Either he has been exposed to a working situation unpleasant 
enough to cause him to seek a new job or he is attracted into taking a 
new job by such inducements as higher pay, better opportunity for pro- 
motion, a more "suitable" type of work, or greater job security. 

Few workers are in a position to know all the facts about a prospec- 
tive "new" job and, therefore, a worker considering a new job is not able 
to make a precise comparison between that job and the one he already 
has. The question in his mind, "Shall I keep my present job or take my 
chances on another one?" shows that he is dissatisfied with his present 
job and is willing to "take his chances" on a new one. 

Usually the worker does not have another job when he quits. There- 
fore, before he finds his new job there is a period of temporary unemploy- 
ment when he and his family are without income. 

Turnover can prevent the maximum utilization of the work force by 
creating time- and money-consuming operating problems for both labor 
and management leaders. Turnover affects the worker by creating prob- 
lems of personal adjustment and temporary unemployment. 



Turnover Can Have Beneficial Effects 

However, while excessive turnover may be harmful to management, 
unions, and the worker, all turnover is not harmful. It may be valuable 
and a certain amount of turnover during a mobilization period is un- 
avoidable. 

People will quit jobs to take better positions elsewhere or to enter 
military service. At the local plant level a certain amount of turnover 
is beneficial when it brings employees with new skills and fresh ideas into 
an organization. There will always be a need for younger, stronger em- 
ployees to replace those who leave for reasons of health or age. Also the 
movement of workers from non-essential industries into essential indus- 
tries is necessary for a mobilization program. 

The worker who finds himself a better job than the one he has left 
represents a benefit of turnover. If the work he is now doing is more to 
his liking, if his working associates and surroundings are more pleasant, 
and if his concern about his future is alleviated, he will contribute more 
to the organization and be a happier person. 

Within due limits, labor turnover can be an asset to an organization 
and to its employees, and can mean a more productive labor force. 
Beyond these limits such turnover may be destructive of organizational 
and individual stability and of mobilization needs. 

PART II 
WHAT CAN THE EMPLOYER DO TO REDUCE TURNOVER 

Two types of turnover actions — additions to the work force and 
voluntary quits — become more important in the defense economy. Ad- 
ditions to the work force will be governed by national needs and will 
mean inducement of millions of people to get into vital war work. On 
the other hand, leaders at the local plant level can take definite steps 
in controlling excess quits. The remainder of the bulletin is devoted to 
an analysis of how a plan for controlling quits can be developed. Such a 
plan can serve as a guide for action by local management and labor 
leaders and thus contribute to America's defense needs by reducing 
voluntary quits. 

How can voluntary quits be reduced? Those in industry who are 
concerned with the problem of labor turnover agree that turnover is 
essentially a problem of worker morale. They will make statements like 
this: "Turnover is a sensitive measure of morale," "Probably one of the 
most important indicators of poor employee relations and one of its most 
costly consequences ... is labor turnover," or "Turnover reflects un- 
certainty over present or future work prospects and a search for security." 



Positive measures to improve the status, the feeling of security, and 
the job satisfaction of the individual employee will go far toward raising 
a worker's morale. The expense of labor turnover, therefore, need not 
be written off as a fixed overhead charge since the problem has con- 
fronted and has been successfully solved in many companies. Special 
studies of plants operating in the same community, where employees face 
common problems, show that while turnover is seriously impeding pro- 
duction in one firm, another may have little or no turnover problem. 

Actually the final decision an employee makes in quitting his job seems 
to be closely related to the company's policies and working conditions. 

A program to reduce turnover takes place at the local plant level. In 
the plant, the industrial relations organization, the union and the super- 
visory force all participate. A successful program is reviewed and changed 
at regular intervals. 

Even when the costs of, and many of the reasons for, high turnover 
are known, no single remedy can be used as a cure-all for this symptom 
of organizational ill-health. But over a period of time turnover can be 
reduced by working to prevent its causes. 

The Employer Will Need Certain Information About 
His Turnover Problem 

The first step in a positive program for combatting turnover is a col- 
lection and analysis of information relevant to the existing conditions and 
the individuals involved in the quits. Additional information is required 
on the employees that don't quit and on those that have a high absentee 
rate. 

Answers to three questions about employees who quit may go far in 
helping cut the rate of voluntary separations by isolating conditions sur- 
rounding voluntary quits.' 

1. Why are employees quitting their jobs? 

2. From what location in the company are people quitting? 

3. What kind of employee is quitting? 

Why are the employees quitting their jobs? Do people give up jobs 
because they think they can find better jobs somewhere else? Are they 
dissatisfied with their supervisor, working conditions or their fellow 
employees, or do they feel they are "getting nowhere"? Are people leav- 
ing their jobs for unavoidable reasons such as illness, marriage, preg- 
nancy, "needed at home," or reopening of school ? 

Although investigation of an employee's reasons for leaving a job will 
uncover a variety of different causes,* the reason given by the employee 
will center around two areas. In the first, and by far most important, 



area are conditions within the control of the company or union — in- 
cluding wages,^ job placement, supervision and promotional opportuni- 
ties. The second area will cover those conditions not subject to company 
or union control — including family moving, marriage, and health. The 
handicap that arises here is the difficulty in distinguishing between factors 
that can be controlled and those that cannot. For example, should man- 
agement and the labor union acknowledge responsibility for such things 
as transportation difficulties, poor housing, and child care facilities? 

A reason given by the employee for his quitting will be of little help 
in itself, although it is useful in pointing out trouble areas in the plant. 
The "reason" may be only the "straw that broke the camel's back," the 
final pressure in a series of pressures. 

One recent study of turnover^" attempted to get behind the employees' 
immediate stated reason for quitting. The results shown below are back- 
ground causes in the working situations as viewed by the employees who 
had quit their jobs. 

Supervisory problems 39% 

General company problems 13 

Disliked particular job 11 

Disliked company 10 

Work load 7 

Working conditions 6 

Job placement 5 

Recreation 5 

Hours of work 3 

Disliked co-workers 1 



100% 

"Supervision," leading the list in the above table, includes such under- 
lying causes as unfairness, treatment of suggestions, over-supervision, and 
on-the-job training, and accounts for nearly four persons out of ten 
quitting. 

In the same study it was found that direct causes given by employees 
for quitting jobs were somewhat different from their predisposing or 
background causes. "Desire for higher wages," "promotion," a "better 
job," "more schooling," and "better supervision" headed the list of im- 
mediate causes. 

Of all the explanations given as immediate causes for quitting, only 
12.5% were reasonably beyond the labor or management leaders' control. 

Final results of an analysis of voluntary quitting are: (1) Employees 



10 



quit jobs because of continuous exposures to a series of personal dissatis- 
factions; and (2) Most of the pressures forcing people to leave an 
organization of their own accord can be reduced or eliminated. 

From what location in the company are employees quitting? Within 
any one organization there may be a disproportionate amount of turnover 
in certain departments or sections. Which departments are these? What 
kind of work is being performed, under what conditions, and under 
whose supervision? The answers to a set of questions such as these serve 
to point out areas in the organization that are breeding quits. 

Once such areas within the organization are pinpointed, closer ex- 
amination of the trouble areas can be made. Supervisory treatment may 
be the cause of high turnover (an expanded production schedule means 
the use of more foremen who may be technically competent but lacking 
in human relations skills) ; job placement may be the trouble as a result 
of rushing women, older workers, and new. young workers into jobs re- 
quiring physical strength, endurance or adequate training; or the prob- 
lem may not be so readily recognized. By isolating high turnover sections 
within the organization a more fruitful study can be made of the sore 
spot. 

What kind of employee is quitting? The age, sex, marital status, 
nationality, length of service, and skill of the employee who voluntarily 
leaves his job are items worthy of attention. Are voluntary separations 
occurring among the younger employees, among the ones most recently 
employed, among the unskilled workers, or among the skilled long- 
service employees? By knowing the type of person who is quitting, an 
employer is better able to take measures to remove the particular source 
of irritation. 

There is little excuse for smugness when turnover is high in the 
"common laborer" group. Instead, an employer with this problem could 
ask: Can we reduce these separations by supplying more and better 
opportunities for advancement, participation, or by improving working 
conditions? 

It need not be accepted that all young people are "flighty." Instead, 
the employer might ask if the young people in his organization are made 
to feel that their youth is an asset, that their ideas are valuable, and that 
their potential skills will be suitably rewarded. 

Why are some employees staying on the job? To complete his col- 
lection of background information the employer also needs data on the 
reasons employees do not quit. What keeps them on the job? What are 



11 



the factors in a job situation that brings them satisfaction? If he knows 
what factors are at work in making up job satisfaction, then he will 
know better what personnel factors need to be supplied to keep workers 
on their jobs. 

On what basis does a worker decide whether a job is worth keeping? 
It is difficult to determine which factors are more important than others. 
There is a running argument, for example, on the importance of wages to 
the employee. Therefore it is more important to determine the cluster 
of factors making up job satisfaction than it is to attempt an evaluation 
of any one most important factor. Each factor in the job situation is 
capable of becoming the most important in a particular case. If wages 
are low enough, everyone might mention this as the most important 
source of dissatisfaction. If working conditions are hard, everyone might 
mention this as most important. Factors in a job situation influencing the 
employee may vary from time to time and from plant to plant. 

One study of factors in job satisfaction shows five points of primary 
importance. 

1. Independence and control. Involved in this factor are freedom 
from too close supervision and a chance to voice an opinion on how 
the job should be done. This and other studies emphasize the im- 
portant effect supervisors have in influencing job satisfaction. 

2. Physical characteristics of the job. The nature of the job itself 
(clean or dirty, light or heavy, safe or dangerous) , physical plant con- 
dition (cleanliness, light, ventilation, toilet facilities), and the typ)e 
of machinery (modern or obsolete, physical condition) all contribute 
to a worker's satisfaction with his job. 

3. Adequacy of wages. Wages play a role in worker satisfaction 
in the "cost of living" sense — the means by which the worker sup- 
ports himself and his family. In addition, wages are used by the 
worker as an estimation of how fairly he is being treated in relation 
to fellow-workers in his or other plants. 

4. Fairness of treatment. The worker's wage position (mentioned 
above) influences his feelings of fair treatment. Examples of other 
influences are rewards to the worker as a result of his length of service 
and performance on the job, prompt settlement of grievances, and 
promotion (important for its prestige rather than for the extra 
income) . 

5. Job interest. The extent to which a job is interesting to the 
worker is an important factor in influencing job satisfaction. Particu- 
larly important are the presence or absence of variety in the work, 
the extent of contact with people, and the opportunity to use his skills 
completely.^' 

12 



These five factors in job satisfaction do not exhaust the list since 
"security" and "fringe payments" might be included. They are listed as 
a guide to worker satisfaction — and possible dissatisfaction if they are 
not provided. 

What is causing absenteeism? Absenteeism, as a kind of "part-time" 
turnover, is included in the study of turnover since the same general 
lines of questioning are followed. A study of absenteeism can aid in 
solving the turnover problem by providing clues to possible future turn- 
over. Dissatisfactions reflected in absenteeism may be the same ones which 
will cause quits. 

Absenteeism, like turnover, may be voluntary or involuntary and 
actual cases cover a wide range. At one extreme are involuntary absences 
caused by physical disability of a worker through sickness or accident. 
At the other extreme arc absences which occur because the worker chooses 
to be someplace other than on the job. It's tempting to say that voluntary 
absences are caused by "frivolous" reasons, but to do so would be mana- 
gerial buck-passing. Keeping a worker on the job is a problem of em- 
ployee motivation. 

Between the two extremes are the borderline or semi-voluntary ab- 
sences. Semi-voluntary absences may be caused by necessity of shopping, 
seeking housing, child care, and the like. Such absences can be avoided 
only at great inconvenience. Semi-voluntary absences are closely related 
to labor turnover since the same personal difficulties and inconveniences 
which cause such absenteeism may eventually move the employee to seek 
a more permanent solution by changing his place of employment. 

The Employer Begins Reducing Turnover with the 
Hiring Process 

Once the necessary information on the turnover problem is collected, 
the process of reducing a plant's quit rate begins. The first real contact 
an employee makes with the firm is on the day he is hired; his impres- 
sions of the firm and his attitude about his job are likely to be made 
during his first few days at work. Does an air of general friendliness and 
a businesslike approach prevail? Or is the applicant greeted with a curt 
nod and a detailed questionnaire to be filled out? 

The difTerence in the behavior of new and old employees in regard 
to the frequency with which they quit is markedly diflfercnt. One study 
shows new employees quitting their jobs 156% more often than the 
old ones.^" 

Older employees are accustomed to the work routine. Th(^y know what 
liberties they are allowed and what limitations are placed on them. They 

13 



have lost the initial tenseness on the job. New employees are still in the 
process of adjusting to the firm's methods of operation and have not 
developed an emotional attachment to the job. It is important to the 
turnover control program that the employee's adjustment to the firm 
and his job be smoothed. 

The first time a prospective employee talks with someone about a job 
can be an important stage in the induction program. Every firm cannot 
employ seasoned vocational counselors but friendliness and understand- 
ing on the part of those handling the interviews will give the prospective 
employee the important good first impression. 

Employee counseling emphasizes the individual approach. The aim is 
— through testing, diagnosis and counseling — to help the worker find 
the kind of job for which he is best fitted rather than to adjust a specific 
job to the worker. If such a policy is used, a worker will be more satisfied 
with his job and industry will benefit through reduced labor turnover 
in the future. 

In many cases the practice of testing applicants for employment is 
largely a selfish method for the employer to fit an individual into the job 
that happens to be open. If the results of employee testing are discussed 
with the worker, he will be better adjusted to his new job. The worker 
who is not hired will know why, and this will help him in getting another 
job. 

The hiring process itself involves procedures of many steps (including 
further interviewing and a physical exam), each of which will contribute 
to the employee's attitude about the company. During this process it is 
up to the induction team to put across the idea that the firm is fair 
and just. 

Unfortunately, there is widespread ignorance on the part of those who 
work in industry about the functions and aims of the organization in 
which they find themselves. They may not understand just what they are 
contributing to the product, how they are contributing to it, and what 
part the product plays in the defense effort. Instruction on this point is 
especially important when persons without previous industrial experience 
are being hired. 

Company policy on wage payment, overtime premium payment, pro- 
motions, safety rules, and vacations is explained to the new employee 
as soon as possible. Union representatives explain any grievance pro- 
cedures or benefit programs. 

A worker is far less likely to seek other employment if he is placed 
in a job for which he is mentally and physically suited. Hiring inter- 
views, aptitude tests, and medical exams are carried out mainly to insure 
that the worker will meet the employer's standards for the job. Proper 

14 



placement, from the worker's standpoint, is a guiding policy in job place- 
ment since a worker placed outside his proper skill, intelligence or wage 
level is no bargain if he cjuits after brief employment. 

Once the worker is in the shop and at his place of work, he needs 
additional help. He is told what his job is, how it is to be performed, who 
his boss is, where to obtain tools and materials, location of personal facili- 
ties, and so on. Too often a new worker is brought into the shop and 
forgotten and he rapidly develops a "lost" feeling. 

Even with due attention to proper placement and induction, satisfac- 
tory adjustment will not necessarily follow automatically. A systematic 
follow-up some weeks after entrance on the job may locate potential 
trouble in time to permit preventative action. 

A check of this type covers both the worker and his supervisor and it 
reveals whether the worker is happy with his job and satisfactory in it. 
This period, when the worker is adjusting to plant routine, is probably the 
most critical of all in determining whether or not he will stay. Placements 
at the wrong skill level or in the wrong job, personality conflicts, incon- 
venient shift assignments, and similar difficulties may be located and 
remedied before they cause the worker to seek other employment. 

Most organizations do not have a regular staff to do follow-up inter- 
viewing and must rely on foremen to maintain new employee contact. 
Most of the responsibility for the adjustment of the new worker will fall 
on the shoulders of the foreman and it is necessary for him to realize 
the vital importance of: (1) Seeing that the new worker is comfortable, 
mentally and physically; (2) Encouraging him in his work by giving 
praise and recognition when due; and (3) Offering honest, tactful 
criticism when needed. 

The Supervisor Has a Key Role in the Turnover 
Control Program 

The entire turnover control program may be made or broken by the 
supervisory force. A great deal is gained from going to the terminating 
employee's supervisor for information on causes for the quit. Aside from 
information he may provide, these supervisory contacts help to get the 
supervisor acquainted with the turnover problem. 

Obtaining information and advice from the supervisor brings the 
problem to his immediate attention and lets him know that the company 
considers turnover an important enough problem to be given serious con- 
sideration. In many cases a supervisor may have become so used to the 
ebb and flow of employees through his department that he accepts turn- 
over as a natural phenomenon. He can be shown in terms of actual ex- 

15 



perience in his own department just how conditions influencing high 
turnover reduce production standards. 

The supervisory force is right in the middle of the turnover control 
program and by participating in the program, the supervisor is more 
inclined to give enthusiastic support to it. He is an important source of 
employee satisfaction or dissatisfaction and his attitudes and understand- 
ing are vital in reducing labor turnover. 

Use of supervisors for advice and information is a direct form of 
attack on turnover at the source where turnover seeds are planted. 

The Exit Interview Is of Limited Usefulness 

The exit interview, held when the employee calls for his final pay 
check, is probably the most used — and perhaps the least reliable — 
method of obtaining information on employee turnover. In theory, such 
an interview has three main objectives: (1) It is sometimes considered 
a device that will induce the employee to stay with the company; (2) It 
is used as a means of determining the "true" reason why the worker 
wishes to quit or has to leave the company; (3) It is used to promote 
personnel and public relations by allowing the terminating employee to 
voice his dissatisfactions. 

Unfortunately few employees are "salvaged" as a result of a termi- 
nation interview. They are already at a point where they feel so strongly 
about a situation that it is difficult to change their thinking. The proper 
time for salvage attempts is before the employee's dissatisfaction becomes 
more important than his job. 

To determine, in an exit interview, the real reason why a worker 
wishes to quit requires time and ingenuity. It is unlikely that a worker 
on his way out will tell the interviewer that he can't stand the job any 
more. Rather he will give a reason that sounds better. In an Illinois 
study^^ it was found that terminating employees give the full and real 
reason for quitting only 22 9(" of the time. Many workers feel that criti- 
cisms of their jobs will be used against them when they seek other work. 

Even if the employee were willing to give the reason for his termina- 
tion, it is unlikely that the reason would represent the entire source of the 
dissatisfaction. Instead it would probably be the end reason in a chain 
of dissatisfactions. 

The exit interview is of value as a means of promoting good public 
relations. The terminating employee may be an actual or potential cus- 
tomer and his friends may be potential employees or customers. If the 
terminating employee feels he has been given a good chance to tell his 
story to a company representative, he leaves the firm feeling better about 
his stay there. 

16 



Because of its rather touchy nature, the exit interviewing program 
requires high caUber interviewers. The skill of the interviewer will de- 
termine the value of the exit interviewing program in reducing turnover. 
One representative of a leading auto manufacturer admits quite readily 
that they place personnel employees "who have not worked out well else- 
where" in their exit interviewing jobs. With such a view of termination 
interview function, this firm's exit interview program is of little value in 
reducing turnover. If the program is given adequate support and is con- 
ducted by high status company representatives, it can be a prime source 
of information on why employees quit. To give the complete picture 
of the particular situation, additional information is gathered from the 
terminating employee's supervisor, shop steward, and close fellow workers. 

If the records assembled from the termination interviews are used 
as guides for action, they can be of real value. As papers in a file cabinet, 
they are useless. 

Turnover Record Keeping Is of Value 

Since so many different factors affect turnover in various plants, in 
departments within the plants, and among types of employees, only a 
continuing record will determine the exact nature of the turnover prob- 
lem. The whole program of turnover control is based on accurate, cur- 
rent, and complete turnover data. 

In larger plants summary information on turnover should be regularly 
available to management for control and policy purposes. In smaller 
plants, because of the more personal setting, the figures need not be so 
detailed. 

Statistics on turnover are usually compiled on a monthly basis and are 
expressed in terms of the number of separations and the number of hires 
per 100 employees on the payroll. When compared with similar data on 
other plants in the same industry or in the same labor market, turnover 
figures show the magnitude of th(^ problem at the given plant. Trends 
established by the continuing figures point out the need for new or in- 
tensified action. Tabulations in greater detail — by departments, shifts, 
sex, or length of service — may point out trouble spots which otherwise 
might be obscured in the general picture. 

Current figures on labor turnover, which may be used for comparative 
purposes, are published monthly by the U. S. Department of Labor, 
Bureau of Labor Statistics. Their figures cover 5000 manufacturing 
establishments representing 144 different lines of manufacturing and 
covering more than 2 million workers throughout the United States. 
These figures, together with methods used in computing turnover rates, 
may be obtained on request. 

17 



SUMMARY 

The demands placed upon American industry by the defense program 
require redoubled eflforts to achieve the complete and efficient utiliza- 
tion of our labor force. One vital step is to keep the labor force on the 
job through reduction and control of labor turnover. 

The nature of our mobilization places particular emphasis on two 
phases of turnover — additions to the work force and voluntary separa- 
tions. Voluntary separations^ or quits, create a problem for action at the 
local plant level and one where real gains can be made in the interests of 
efficient production. 

As during the World War II mobilization period, certain factors in 
the defense economy will be working for or against local efforts to reduce 
cjuits. Employees may not tolerate cost of living squeezes or in-plant dis- 
satisfactions when there are many employment opportunities in the tight 
labor market. New and unskilled members of the labor force may be 
tempted to "shop" for jobs, while older skilled workers may be tempted 
to change by real or imaginary opportunities in other jobs. 

On the other hand, the large number of workers who have had nearly 
continuous employment and training for the past 10 years may be more 
closely tied to their jobs because of length of service. Their union affilia- 
tions and benefits can also induce them to stay on the job. 

Government interests in turnover will be, first, to induce workers to 
move into essential jobs in vital plants, and second, to reduce indiscrimi- 
nate amounts of turnover among workers in local labor market areas. 

Specific turnover conditions will vary from firm to firm since volun- 
tary termination is not characteristic of all workers and all work situa- 
tions. Therefore, a program to control the effects of turnover resulting 
from quits starts with a collection and analysis of information. Such in- 
formation must be relevant to the conditions prevailing at the time and 
to the individuals involved. Recommendations based on the results of 
such a study are then applied to the employment and supervisory policy 
of the organization concerned and are reviewed and modified at regular 
intervals. 

Special importance is attached to voluntary changes of employment 
since they involve positive action by the worker. The decision of the 
employee to continue work with the organization, in spite of annoyances, 
is influenced by his work attitudes. An employee whose attitude is one of 
dissatisfaction with his duties, dislike for his supervisor, or resentment 
over the way he is being treated is more likely to quit his job — or to do 
such poor work that he is dismissed. 

Through the skillful use of personnel techniques, and with the 

realization that turnover is fundamentally a morale and motivation 

problem in terms of the individual worker, turnover can be controlled. 

18 



APPENDIX 

What Is Labor Turnover? 

To many people "turnover" is the term used to mean workers quitting 
their jobs voluntarily. While quits make up an important part of turn- 
over, there are a number of other ingredients in the term "labor 
turnover." 

In general, it may be said that labor turnover is a process of move- 
ment into and out of the work force of an employer. It occurs whenever 
there is some change in the working personnel of a plant. 

Accessions mean movements into an organization and cover all addi- 
tions to the work force, including the hiring of new employees and 
the rehiring of former employees. Also, the term "accessions" 
covers both hiring of replacements for those who have left and 
hiring to expand the work force. 
Separations mean movements out of an organization and include 
several types of terminations of employment. 

Quits are separations initiated by the employee. (The U. S. Bureau 
of Labor Statistics includes those workers absent without authori- 
zation for seven consecutive calendar days as "quits.") 
Discharges are separations initiated by the employer because of 
dissatisfaction with the employee's performance, conduct, etc. 
Layoffs are separations, also initiated by the employer (and ex- 
pected to last seven or more days), because of reductions in the 
work force or because jobs are being eliminated. Layoffs usually 
result from a curtailment of production brought about by general 
business conditions. (Suspensions of employees for less than seven 
days and suspensions for inventor)' or vacation periods are not 
considered layoffs.) 

Miscellaneous separations are terminations for other reasons, in- 
cluding permanent disability, death, retirement, or entrance into 
armed forces.^* 
Net labor turnover for any period is the gain or loss in the average 
work force. It is accessions (hires) minus the separations. This gain or 
loss in the average work force can be expressed in terms of a rate for a 
given number of employees. 

How Is Turnover Measured? 

The method used in measuring labor turnover depends largely upon 
the individual concept and definition of what labor turnover is. The 
most commonly used measurements take two forms: 

19 



1. Rate of separations — This measure is the relationship between 

the total number of separations from the company and the aver- 
age number of employees on the payroll. For example, a firm 
having an average work force of 200 people for the year loses four 
of them during the year. Expressed as a rate of so many per 
hundred employees, its separation rate for the year would be 2 
per 100 employees. 

2. Rate of accessions — This is a measure of the relationship between 

the number of hires and the average number employed. If the firm 
desires to maintain its work force at the same level the accession 
rate will be the same as the separation rate. (Using our example 
above, the accession rate would also be 2 per 100 employees since 
that is all the firm needs to hire to replace those who leave.) If 
the firm expands its work force its accession rate will exceed its 
separation rate. If it reduces its work force its accession rate will 
be less than its separation rate. 
The net turnover rate is positive if hiring exceeds separations, and 
negative if more leave than are hired. 

Turnover rates can be useful in determining whether or not a firm 
actually has a turnover problem. If it has, the turnover rate will indicate 
how big the problem is and to what degree efforts should be made to 
solve it. Turnover rates also can indicate the nature of the turnover prob- 
lem and serve as a guide for meaningful action. Translating the move- 
ments of employees into and out of the organization into numerical rates 
will simplify analysis of the turnover situation. Rates will permit com- 
parisons with other establishments in the community or in the indus- 
try as well as facilitating in-plant comparison from department to 
department. 



20 



NOTES 

1. Monthly Labor Review, (U. S. Department of Labor, Bureau of Labor 
Statistics) October, 1951, p. 495. Factory hiring for June, 1951, for example, was 
conducted at a rate of 49 per 1000 employees. Total separations for the same 
month was at a rate of 43 per 1000 employees. Thus net turnover for June, 1951 
was + 6 per 1000 employees. 

2. Ross Stagner, Inter-Disciplinary Approach to the Study of Labor-Manage- 
ment Relations, Institute of Labor and Industrial Relations, University of Illinois. 

3. Factory Management and Maintenance, September, 1950, p. 69. For ex- 
ample, average wages in the electrical machinery industry increased 85 per cent 
in the past 10 years — in textiles the average increase was 164 per cent. 

4. Louis S. BofTo outlines more completely the nature and extent of employee 
benefit plans in Pension Plans in Collective Bargaining, Institute of Labor and 
Industrial Relations, University of Illinois. 

5. Projected Manpower Requirements and Supply 1952-1953 (Bureau of 
Labor Statistics, Manpower Report No. 14), pp. 1-6. 

6. In "Manpower Controls Next?" Fortune, March, 1951, it is suggested that 
by June, 1952 nearly a million and one-half workers will have to be diverted from 
the trade and service lines into manufacturing. 

7. These questions are suggested by Paul Pigors and C. A. Myers in Personnel 
Administration, McGraw-Hill, 1946, p. 103. 

8. Robert D. Loken, Why They Quit, Business Management Service, College 
of Commerce and Business Administration, University of Illinois, 1951, p. 26. In 
asking employees why they had quit jobs he uncovered 21 different reasons. 

9. Reynolds, L. G. and Shister, Joseph, Job Horizons, Harper, 1949, p. 37 and 
Loken, p. 50. Dissatisfactions with wages when given as reasons for quitting usually 
means dissatisfactions with internal wage inequities. Most employees take work 
elsewhere at the same or reduced rate of pay. 

10. Loken, p. 47. 

11. This section is based on findings reported by Reynolds and Shister, Ch. 2. 
Their study was carried out in a New England manufacturing city of 350,000 
population. Manufacturing in this city was diversified and 43 per cent of the 
working force was employed in manufacturing industries. 

12. Industrial Medicine, December, 1945, "Rates of Absenteeism and Turn- 
over in Personnel." 

13. Loken, p. 46. 

14. These classifications of employee movement are based on definitions used 
bv the Bureau of Labor Statistics. 



21 



SELECTED BIBLIOGRAPHY 

Loken, Robert D. Why They Quit. Urbana, 111. : Business Management 
Service, College of Commerce and Business Administration, University of 
Illinois, 1951, 52 p. 

Mayo, Elton and Lombard, George F. F. Teamwork and Labor Turnover in 
the Aircraft Industry of Southern California. Boston: Graduate School of 
Business Administration, Harvard University, 1944, (Business Research 
Studies No. 32) 30 p. 

Reynolds, Lloyd G. The Structure of Labor Markets. New York: Harper, 
1951, 328 p. 

Slichter, Sumner H. The Turnover of Factory Labor. New York: D. Appleton- 
Century, 1921, 460 p. 

Bureau of Labor Statistics. Projected Manpower Requirements and Supply, 
1952-1953. Washington: The Bureau, January 1952, (Manpower Report 
No. 14) 9 p. 

. Suggestions for Control of Turnover and Absenteeism. Wash- 
ington: The Bureau, October, 1951, 30 p. (includes sample forms). 

Bureau of Labor Standards. Controlling Absenteeism: A Record of War Plant 
Experience. Washington: The Bureau, 1943, (Special Bulletin No. 12) 
57 p. 

Walters, Joseph F. "Reducing Labor Turnover," Personnel Journal. July- 
August, 1949, pp. 102-108. 

Young, Raymond J. "Reducing Excessive Turnover Costs Through Proper 
Analysis," Personnel. July, 1950. pp. 75-79. 



22 



I.L.I.R. Announces 

"Legislation by Collective Bargaining" by Gilbert Y. Sfeiner 

Thr first detailed description and analysis of the "agreed bill" process, 
through which representatives of management and labor seek to work 
out a pattern for legislative action through negotiation. 

This is a study of a way in which state labor laws are enacted and 
changed, using Illinois Unemployment Compensation Legislation as the 
example. 

The book follows unemployment compensation legislation from initial 
agreement and enactment, in 1937, through the last meeting of the Illi- 
nois State Legislature in 1951. It shows the successes and failures of 
collective bargaining legislation. u «i ^^n 

Paper $1.00 

"Channels of Employment" by Murray Edelman and others 

A report of research on the influence of public employment offices and 
less formal hiring channels on local job markets in eight areas in Illinois. 
The areas studied range in size from a large metropolis to a three-county 
area with a total population of less than 75,000, served by one centrally 
located Employment Service office. 

Focused on the demand side of the labor market, the study analyzes 
variations in use of the different hiring channels, employer and union 
attitudes toward them, the non-placement services of public employment 
offices, and the relationship between unemployment compensation and 

P^"^^"^^"*- Cloth $3.50 

Paper $2.50 
Three-chapter edition 50 cents 



23 



I.LI.R. Bulletins 

Single copies of these Institute Bulletins are available without cost to 
individuals and groups in Illinois. A charge of ten cents a copy is made 
for additional copies and for requests outside the state. 

Health Programs in Collective Bargaining 

Unions, Management, and Industrial Safety 

Recent Trends in Occupational Disease Legislation 

What Tests Can Do for Industry 

Who's Too Old to Work? 

Trends and Problems in Unemployment Insurance 

Job Evaluation 



24