REX TECHNOLOGIES: EXPANING SAN FRANSISCO OFFICE 15
REX TECHNOLOGIES: EXPANING SAN FRANSISCO OFFICE 1
Introduction
The human resource management department uses a different metric to measure the performance of the employees in the organization. That way, it becomes easier for the organization to formulate decisions that can help to increase the employees’ productivity and the organization’s profit margin growth. The report herein will analyze the impact of the human resources metric that affects Rex Technology. These metrics include retention rate, salary competitiveness ratio (SCR), training completion rate (TCR), and overtime rate and are measured against the benchmark metric of the industry.
Situational Metrics
Metric
(remember – all metrics are numbers)
Why the Metric is being collected
Data Collection
(where can the data be found, how do we collect it)
Retention Rate
It is significant in finding the turnover level in the company, which is subject to comparison with other organizational factors. Retention rate will help Rex Technologies highlight the basic employees’ turnover and imply the information in the relevant areas in the firm.
Retention Rate is always available in the internal data of the company. TR is achieved by the total number of employees leaving the company divided by the average number of people in the company then multiplied by 100 to get the percentage. The 30 days industry will be the benchmark. Which is 13%-23%.
Salary Competitiveness Ratio (SCR)
Essential in determining salary competitiveness in the industry compared to what employees at Rex Technologies are rewarded.
Data can be derived from the internet publications of the Bureau of Labor Statistics. The reward and compensation data for an organization can be found in the company’s domestic data.
Training Completion Rate (TCR)
Training completion rate is essential in determining the efforts made by employees to complete training and development sessions.
The data can be derived from the domestic data systems of the organization on the employees’ profiles or data storage systems. Training Completion Rate is calculated by dividing the number of employees who complete their training by the sum of employees in training sessions multiplied by 100.
Overtime Rate
Overtime is significant in determining the amount rewarded to those employees that work on overtime. Rex technologies will initiate the overtime rate and the employees that work for the extended hours.
The overtime hours worked can be derived from the internal organizational records. This can be calculated by multiplying the hourly pay by 1.5 by the extended hours at work.
Retention rate is among the essential Human Resources metrics in an organization. It is significant in finding the turnover level in the company, which is subject to comparison with other organizational factors. Retention rate will help Rex Technologies highlight the basic employees’ turnover and imply the information in the relevant areas in the firm. Retention Rate will enable Rex Technologies company to determine suitable compensation by finding out the available employees that are leaving the organization after divided by the overall number of available and committed towards organizational productivity.
Employee retention rate is critical in the development of every organization. Every company needs to have employees that it can have for as long as possible. Management usually tries to ensure they minimize the costs that are involved in training new employees. When an employee comes into the organization, they usually have to be trained to get accustomed to the cultures and needs of the organization. Constantly training new employees can be capital intensive especially in an environment where there are constant changes. The technology industry requires one to have the right employees that will be dedicated to achieving the long-term goals of the organization. Vasquez (2014) notes that when a company has long-term goals, then they have to try and have employees that will be at the organization in the long term. In doing so, the company will have an easy flow of processes since every employee understands what is expected of them. Additionally, having a high retention rate ensures that employees are loyal to the organization. When the employees are treated well by the management, then they will become loyal to the organization. Having loyalty is essential in ensuring that employees are committed to achieving the goals of the company. The company has to have the ability to hold on to employees for as long as they are useful to the goals of the company. When a company can hold on to quality employees for a long time, then the quality of services that they render will be constantly improving. Employee retention is critical for the development of every organization.
Similarly, the Salary competitiveness rate is essential in determining salary competitiveness in the industry compared to what employees at Rex Technologies are rewarded. The organization uses a sample of its employees’ salaries averages and the current salary average in the industry (Mukherjee, 2016). That is pretty important in determining whether or not the company can increase its employees’ level of reward and compensation. On the same note, it allows workers to make more goods and services within an extended timeframe hence timely delivery of services and goods to the consumers based on their preferences/requirements.
The salary that every employee gets has to be comparable with the industry standard. Employees need to have a salary that is negotiated and the terms are favorable to them and the employer. Fort and Winfree (2020) opine that when the salary scale is the acceptable salary standard, then the employees will be more likely to be loyal to the company since they feel like the management is treating them well. Having a competitive salary rate ensures that the productivity of the employees is optimized since they have to put in the work that will help them continue being part of the company. When competitors of a company are paying better than the company, then quality employees are likely to move to that company. Such a move might be detrimental to any organization. Other costs are associated with having to constantly get new employees. Such costs usually contribute significantly to the operational costs of any business. Further, when the best employees are always moving from the company, then the development of the organization becomes stunted. Having the right employees is critical for any organization. For the employees to stay in the organization, they have to be adequately motivated by the management. The management has to use the remuneration aspect to ensure that quality employees do not easily leave the organization. Thus, having a competitive salary rate is critical in any organization.
Additionally, the Training completion rate is essential in determining the efforts made by employees to complete training and development sessions. That also outlines the seriousness of employees in the organization and how needy they are towards the organized training and development programs (Van & Bondar, 2017). This Human Resources Metric is essential in increasing the employees’ level of competencies thus, leading to promotions and salary increments at workplaces.
Training is usually critical in helping employees acquire new skills and improve the current skills which makes them more useful in an organization. For a company that intends to increase its productivity, there should be a focus on the training completion of every employee. The skills that have been gathered from such a process should be effectively utilized by the organization. According to Ward et al., (2017) every company should focus on what every employee can achieve individually and not just as a group. In most cases, the success of the organization is usually the total of the efforts that have been made by the employees. The efforts of every individual employee are critical since it is what determines how the company is improving. With constant training, the company ensures that it is constantly equipping its human resource with the right skills that will be used in advancing the goals of the organization. When every employee is completing the training process, then it shows that even the employees are committed to improving their skills over time. Such commitment can help ensure that a company has long-term sustainability. When a majority of the employees are supporting training, new employees will adopt the culture which will increase the competitive edge of the organization. Training completion rate helps an organization in establishing the number of employees that are performing at their peak.
Lastly, the Overtime rate is another crucial HR metric applicable in determining the amount rewarded to employees who work on overtime. Rex technologies will initiate the overtime rate and the employees that work for the extended hours. The OR will be paramount in finding the additional compensation rewarded to employees who work on overtime hours/basis.
Overtime rate helps in assessing the number of employees that are willing to put in extra hours and helps the company develop further. The overtime rate helps one in assessing the number of employees that are willing to work extra hours for the organization. With such a rate, Kageyama et al., (1998) note that one can understand if the employees are willing to achieve the goals of the company and how fast they intend to achieve the goals. When employees put in extra hours to achieve the goals of the company, then it shows their commitment to the goals of the organization.
Overtime is usually not desirable for employers. However, when an employer needs to have the right skills working on a specific job that is urgent, then they have to get the services of their employees. Companies that have more employees that are on overtime are usually more productive. During the overtime hours, the roles are likely to be defined and the employees have a specific target that they should meet within a short time. consequently, the employees are usually more productive during such a time. further, such a company will have more competitive labor and the right people will be likely to come to the company if they feel that they will be catered to with the additional income that comes from overtime.
Collection Results
Metric
(remember – all metrics are numbers)
Result
Comments
(as needed)
Retention Rate
70%
Boston office is 89%
Salary Competitiveness Rate
0.8
Revenue per Employee at Rex Technologies is 46%, and the Boston office is 89%. That indicates that the SCR is 0.46 divided by 0.89 then multiplied by 100.
Training Completion Rate
83%
Out of 18 employees at the San Francisco office who were put under the training program, 15 completed the training program, thus increasing the performance rate, translating to high organizational productivity at Rex Technologies.
Overtime Rate
54%
Approximately 20 workers showed interest in committing to the organizational strategic plan and working overtime to ensure that Rex Technologies achieves its financial goal of $114M by the 6th fiscal year. Also, the managers from Rex Technologies headquarter explained that they are ready to allocate any relevant resources that are required to ensure that the office in San Francisco is expanded.
Hypotheses
As SCR increases, the Retention Rate increases.
An increase in Training Completion causes an increase in Rate Retention Rate
With an increase in Overtime, Retention Rate increases
Test
The regression analysis will be performed to establish the relationship and the correlation of the retention rate variables and predictors factors such as training completion, overtime rate, and an increase in employee’s average retention rate. The Pearson correlation coefficients denoted by the letter R indicate the linear relationship between the two variables. Therefore, if the result is zero, there is no linear relationship between the two variables. If the result is 1, it means there is a positive relationship between the variables and if the coefficient value is -1, it means there is a negative relationship between the two variables. The r-square coefficient explains the degree of r-square variance that can be explained using the three variables. On that account, if the r is 0.6, then r-squared is .36. In that case, the predictors’ variables, that is, training completion, overtime rate retention, and an employee’s average retention rate can explain the dependent variable with 36%. In that case, the higher the r-square, the greater the predictor variables explain the causation effects. Also, the three hypotheses can only be accepted if the model is significant and the r-square can explain the dependent variables. Subsequently, r-square explains causations effects variables.
To determine if the retention rate increases with an increase in the SCR, linear regression analysis for six months, one year, two years, and three years period was performed (Adam, 2020).similary, the regression analysis for overtime rate and training completion rate will be performed to explain the relationship between the retention rate and the two variables. Therefore, if the model is significant, then the hypothesis will be accepted. If the correlation is greater than zero, it means that the model is fit and there is a linear relationship, otherwise, if r is nil, then there is no linear relationship
Findings
The regression analysis for retention rate with Training Completion Rate, overtime rate retention, and Employees’ average Retention is as follows:
Retention Rate and SCR: r=0.8, r-square is 0.642, thus 64% of the rise in retention rate could be explained by rising 64 % rise in SCR
Retention Rate and training completion rate: r=1, r-square is 0.999, thus 100% of the rise in retention rate could be explained by rising 100 % rise in SCR
.
Retention Rate and Overtime: r=0.43, r-square is 0.02, thus 20% of the rise in retention rate could be explained by a rising 220% rise in training completion rate.
In the three cases, there is a positive coefficient between the retention rate and the three predictors’ variables. This scenario, confirms that the hypothesis to a different degree. Training completion rate has the highest coefficient meaning that to retain the employees one needs to train the employees fully. Therefore if Rex Technologies invest in employee technologies there is a high likelihood that the company will retain the employees in the long run. . Also, the salary competitiveness rate has a coefficient above 50%, indicating that this variable is a predictor of the employee retention rate. Consequently, if the organization wants to improve the retention rate it has to increase the salary of its employee to be at least high with 5% to 6% above the industry rate or 4% above the company’s competitors. On that account, the company can offer attractive pay to attract the right personnel with the right skills which in turn will improve the retention rate of the employees. However, overtime has the lowest coefficient meaning that even if one pays the employees the overtime, it may not retain them for long. Consequently, Rex technologies should focus on improving the salary comparatives rate and invest in employee training to increase the retain its employees.
In each computation case of the three items, the rates are greatly dependent on the other, proving the essence of an increase in retention rate increases the SCR at Rex Technologies.
Recommendation
The firms should start to research the salary of their peer comparators and that one of the industry and compare and contrast the rate of payment. As such, the company should try to increase the rate by at least 5% above its competitors. Also, Rex Technologies should invest in the employees’ training to ensure that the company employees are well skilled and have adequate knowledge of whatever there is doing. Therefore, investing in the company employee will add value to the well-being of the employees and eventually improve their retention rate. As such the company should focus on these two predictors.
Impact on Business Objectives
Financial
Business Objective: Financial – double revenue
HR Initiative impact(s):
Increasing the average revenue for the available employees will increase the average turnover of each employee (Krylova, 2021).as such the higher the average revenue, the higher the productivity, and the higher the rate of SCR.
HR
Business Objective: Human Resources – acquire and maintain a skilled and engaged workforce that exceeds customer expectations
HR Initiative impact(s):
If Rex Technologies consider increasing its Revenue per Employee will automatically lead to an increase in the SCR, thus attracting more qualified candidates for the vacant positions.
Innovation
Business Objective: Innovation – stay on the cutting edge of technology to provide market-leading, effective, and secure product
HR Initiative impact(s):
The majority of the employees at San Francisco who are committed to working are the organization’s source of new ideas and inventions, leading to high productivity. According to Gabriele & Luo (2017), a high level of commitment must eventually yield a high productivity level.
Sales/Marketing
Business Objective: Sales & Marketing – create a strong brand position and grow customer base (double west coast customers)
HR Initiative impact(s):
An increase in employee training completion rate will eventually lead to high customer service at Rex Technologies, thus increasing the company’s goodwill. Training increase knowledge exposure and advancement in competencies (Mahler & Boudreau, 2017)
References
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Fort, R., & Winfree, J. (2020). 1 Player Salary Demands Increase Ticket Prices. In Two Sports Myths and Why They’re Wrong (pp. 5-24). Stanford University Press. Retrieved on 2nd December from https://www.degruyter.com/document/doi/10.1515/9780804789288-002/html
Gabriele, T., & Luo, H. (2017). Analysis of delay impact on construction project based on RII and correlation coefficient: Empirical study. Procedia Engineering, 196, 366-374.
Kageyama, T., Nishikido, N., Kobayashi, T., Kurokawa, Y., Kaneko, T., & Kabuto, M. (1998). Long commuting time, extensive overtime, and sympathodominant state assessed in terms of short-term heart rate variability among male white-collar workers in the Tokyo megalopolis. Industrial Health, 36(3), 209-217. Retrieved 2nd December 2021 from https://www.jstage.jst.go.jp/article/indhealth1963/36/3/36_3_209/_article/-char/ja/
Krylova, A. (2021). HR METRICS FOR THE EFFECTIVENESS OF BUDGETING OF SOME SUB-PROCESSES OF PERSONNEL MANAGEMENT IN THE ORGANIZATION. Journal «Human Progress» http://progress-human. Com, 7(1).
Mahler, J. H., & Boudreau, J. W. (2017). An evidence-based review of HR Analytics. The International Journal of Human Resource Management, 28(1), 3-26.
Mukherjee, K. (2016). Human resource metrics: Action Research in an Indian firm. ALAR: Action Learning and Action Research Journal, 22(1), 31-68.
Van den Heuvel, S., & Bondar Ouk, T. (2017). HR analytics’s rise (and fall?): A study into the future application, value, structure, and system support. Journal of Organizational Effectiveness: People and Performance.
Vasquez, D. (2014). Employee retention for economic stabilization: A qualitative phenomenological study in the hospitality sector. International Journal of Management, Economics and Social Sciences (IJMESS), 3(1), 1-17. Retrieved on 2nd December from https://www.econstor.eu/handle/10419/93235
Ward, S. T., Hancox, A., Mohammed, M. A., Ismail, T., Griffiths, E. A., Valori, R., & Dunckley, P. (2017). The learning curve to achieve satisfactory completion rates in upper GI endoscopy: an analysis of a national training database. Gut, 66(6), 1022-1033. Retrieved 2nd December 2021 from https://gut.bmj.com/content/66/6/1022.short