The Treadway Tire Company had eight manufacturing units, one of which was the Lima Tire Plant. On November 2007, the turnover of the Plant was very high. The problem was that there were over one thousand foreman on the Plant, and there was no clear communication between workers and managers. The dissatisfaction and turnover was unbelievable that time, for the 2007 it was the highest turnover in the last ten years. The Treadway Tire Company had 46% of turnover that year.
So what did exactly happen? At the beginning of 2000, the Treadway Tire Company modernized the plants, and the Lima Tire Plant was thought to become the prior plant in the company. In 2006, one of the company’s plants, Greenville, was shut down, because it was no use to modernize it, and the most of job was done by the workers at the Lima Tire Plant. They had a twelve-hour working day, with just one break for meal and two coffee breaks. That helped the company to spare money for the further amortization and modernization.
Foremen constituted the main part of all the employees. They worked mostly in production, maintenance, quality assurance and material control departments. In December 2006, it was decided that every foreman should not be only skilled, but also educated. According to the statistics, only 16% of workers were the alumni of the local colleges, and 4% were experienced workers from the other plants of the Treadway Tire Company, the others were unionized workers of the Lima Plant. Wall said that that time she did not see people striving to make career, those who strive for more. That is why it was decided to increase the amount of the college alumni in the Lima Plant. Wall expected 30% of the graduates to work for the Lima Plant in two years.
As the statistics shows, there were 40 internal hire and only 8 external hire in December 2006, but in eleven months, which is November 2007, there were 38 internal hire and 10 external hire. The voluntary turnover of the external hire was the same as the involuntary turnover, three persons, but the voluntary turnover of the internal hire workers was six and the involuntary one was even more – ten. According to the calculations, made by Ashley Wall, 43% of the turnover was voluntary and the rest involuntary. More than half of the external hired workers left for their own will, voluntary, and more than 40% of the internal hired workers left voluntary. This has shown to the company that the workers are dissatisfied, and the college courses would not help.
But a miser pays twice. In 2007, after a lot of the employees left the Lima Tire Plant, the Treadway Tire Company tried to hire new workers. The hourly workers got $30 per hour, which is 16% higher than it was. They were also paid for the overtime work, the skills and experience of the worker was taken into account while counting the salary. It seemed that the company began to work properly again. But the problem was that most of the qualified stuff had left the Lima Tire Plant. That is why the Treadway Tire Company had to pay for the training for the new workers. Let us try to count the approximate cost of the turnover. The economists have designed some formulas, according to which one may think about the turnover and its influence. According to the formula, the difference between the cost of an old worker and a new one will be $50,241. The direct cost depends on this difference, plus cost of the seeking the new employers and interviewing them. The direct cost in the Lime Tire Plant was $1455.67. But, besides, there is indirect cost, which includes compensation for the new worker, the Turnover Effect on Morale and so on. For one new worker the indirect cost would be $7.846. This calculation shows that the turnover is rather expensive. Even now it seems to be very expensive, although not everything was taken into account. In this formula we did not take into account the cost of modernization and amortization, of training, of the interviewing the job-seekers. If one looks deeper he or she may understand that the turnover was not spontaneous. There were some specific reasons:
- If we take into consideration the work conditions then the working day lasted twelve hours, and, as said above, the employees had only one lunch break and two coffee breaks. Such working day may cause not only physical, but also mental disorders.
- No good career could be made at the Lima Tire Plant. The workers were either uneducated or did not strive for more. The company did not give any way to develop both oneself and the Lima Tire Plant. Even if a person becomes a supervisor, there is no guarantee that he or she will be able, and allowed to change something.
- There was no particular training for the new comers. They were told only about the organizational issues and some features of the work itself. The training was very important, but those who came to the Lima Tire Plant in 2007 did not get the proper training, and they lacked knowledge.
- The relationships on the Lima Tire Plant. The workers were not friendly or kind with each other, they were trying to find something bad about the colleague and report them to the chief. As everybody knows, the good colleagues may make even the most boring job the most interesting. But on the Plant the situation was opposite. The workers were angry, mad at each other and, of course, frustrated not only in their job, but in their lives.
Therefore, there is no wonder that most of them decided to change the work place. In my opinion, the managers of the Lima Tire Plant were not totally right, by firing the workers and then taking on their places the new ones, who also got higher salary, but did not know anything about the peculiarities of the job. In my opinion, the managers of the Lima Tire Plant should have used the sales FORMAN (Force Management) system. This system was developed to automate the sales functions; it is a part of the relations between the companies and the workers; according to that system one may control the process of getting the salary. The system includes signing the contract, the record of the efforts of the worker, and his or her skills.
The process of such management includes several stages:
- Establishing aims, according to the income
- Assigning those who will be responsible for the achieving the aim
- Controlling the process of achieving the aim in two different ways: controlling the time, and the validity of the work done
- Unpredictable circumstances
There are other conditions, which should be taken into account while counting the salary. These are:
- Time management – the more the worker does, the better he or she can manage his or her work time, and so the better salary he or she will get
- Account management – the account is measured by the tools and aims for the every project
- Territory management
- Sales force management – training of the stuff, exchanging the experience between the departments or even plants and so on
From my point of view, the Lima Tire Plant should have used another scheme of actions. They should have made some connection and communication between the workers and supervisors, make the working atmosphere more friendly. This can be done very simple, even going out with the department, or having a picnic together. After that the workers would probably want to help the company, to give the ideas how to make it better. Even such a small thing as a picnic with some friends and colleagues would make people motivated.
The second thing that should have been done is a proper training. The new comers should study not about the history of the company, but about the difficult cases that may occur during the work. They should go to the line fully prepared, and be ready to cope with every situation.
The last, and probably, one of the main suggestions, is to change the working schedule. Nobody should work twelve hours per day, although the eight hours day is allowed by law. The company should understand that they hire people and not robots, and those people have families, hobbies, they want to be alone, and to spend time with friends and not live at work.
If the Lime Tire Plant will implement at least one piece of advice given here, it will survive without any turnover; the workers will not even want to leave such a company. In addition, as a result, they will have higher production, and higher benefits. Everyone is an architect of his own happiness, and if the Treadway Company and the Lima Tire Plant think over the way they run their business and change something in people’s benefit than there might be positive outcome.