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Organizational Behavior Critical Thinking Essay

I have chosen three theories to address the problem. The first theory is Schwartz’s Value Theory. According to the theory, everyone has each own set of personal values and the attainment of these personal values is crucial. Conflict of values or failure in attaining them might lead to employees’ turnover. From the article, the senior staffs claimed that the bonuses they received were below average. I infer that some of the staffs’ personal values were not attained, which in this case possibly power and achievement. Their personal values might also have conflicted with the company’s values, which lead to their departure. Herzberg’s Motivator-Hygiene Theory is also applicable in addressing this issue. According to the theory, there are some factors those lead to both work “satisfaction” (motivators) and “dissatisfaction” (hygiene). The absence of recognition which is one of the motivators leads to no satisfaction and the presence of hygiene factors such as poor salary and violation of company’s policies such as not paying bonuses that the executives deserved might lead to “dissatisfaction”.

This presence of “dissatisfaction” might be the major reason for the staffs to quit. Lastly, according to The Three-Component Model of Organizational Commitment there are three types of commitment that create a binding force, those may reduce the high turnover. They are namely Normative, Continuance and Affective commitment. Affective commitment is mainly influenced by personal characteristics and values and is closely related to the Schwartz’s Value Theory. This commitment also takes into consideration work experience, which might support the executives’ decision to quit. Violation of psychological contract is a factor that may cause Normative commitment to be ruptured. UBS has failed to meet the expectation of some of their executive and this can be seen as hygiene factors according to Herzberg’s Motivator-Hygiene Theory which leads to “dissatisfaction”. The model, so far, has covered the other two theories.

Adding on to that, this model also includes the possibility of external factors that might lead someone to leave a company. In this case, availability of job alternatives in other companies, which compromise their Continuance commitments, might be another force that encouraged executives to leave their positions in the company. Therefore, I conclude that this model, in comparison with the others, is the most appropriate model to address the problem of high turnover in UBS as it covers more possibilities and gives us a more complete view of why the senior staffs may have left the company. UBS is very sensitive to the performance of the world’s economy as it runs in the area of financial service. Poor global economic performance or recession is a major factor that influences the problem of high turnover faced by UBS. Most of the decisions must be made carefully by the company as it involves very high risk level.

Through these decisions, UBS has to maintain or even improve the job satisfaction level of its employee and at the same time, continue to give excellent performance. Wrong decisions might cause UBS to lose its employees even its key executives. In the time of financial crisis, it is more difficult for UBS to maintain both its employees’ job satisfaction and also its performance. This depends largely on the company’s policy and also the decisions made by the company. For instance, in Wall Street Meltdown in 2008 UBS made a US$32 billion loss and its stock value plunged by almost 70% (Gross, 2008). One of the decisions that the company made was to fire 8900 employees worldwide (“Ubs lay off,” 2008). The increased in the regulation of financial industry such as tax on financial may also affect the performance of UBS negatively. Financial Analysts predicted that this increase in regulation will reduce the size of the industry (Adams, 2011) and this leaves UBS with no other option than cutting off the number of its employees. This decision made might negatively impact the rest of the employees as they would feel insecure in their positions.

This factor can also be seen as one of the hygiene factors which lead to “dissatisfaction” and this result in the high turnover. Apart from that, the competitive nature of the industry itself intensifies the challenge faced by UBS. Due to lower bonuses that it paid to its executive in comparison to the rival companies might encourage the executives to switch company. For example, Edward Cook who has worked for UBS for 28 years decided to join Morgan Stanley very recently (Philbin, 2011) and Suneel Kamlani, who has worked for 21 years in UBS, decided to join RBS just last year (Muñoz, 2010). This shows that it is definitely a challenge for UBS to elicit higher levels of commitment of its employees and executives. Availability of position and better payment offered by rival companies will test the loyalty of the UBS’s employees.

Hence, the high competition among banks also induces the high turnover in UBS. To reduce turnover, managers should cultivate the company’s value in the employees. This will reduce Individual-Organizational value conflict and it can be done through training sharing of the company’s vision. Managers also have to respect the psychological contract and should propose more-defined policies to company as it may reduce job dissatisfaction. In time of crisis, company may also maintain the Continuance Commitment of the employees by paying the bonuses by using the company’s share. However, all of the solutions I proposed may not be successful as they do not take into account the other external factors and the success also depends on the personal characteristics of the employees.

References
Shehan, Tom, S. ,. T. (n.d.). How to retain employees: a high turnover rate is costly in both direct and indirect costs. . Retrieved from http://www.allbusiness.com/management/447495-1.html Gross, D. (2008, July 07). Phil gramm’s ubs problem. http://www.slate.com/id/2194933/ Ubs lay off job cut: may fire 1900 employees. (2008, October 01). Retrieved from
http://www.finance-trading-times.com/2008/10/ubs-lay-off-job-cut-may-fire-1900.html Adams, B. (2011, August 30). The big layoff: struggling financial giant fires thousands of employees. Retrieved from http://www.theblaze.com/stories/the-big-layoff-struggling-financial-giant-fires-thousands-of-employees/ Philbin, B. (2011, September 14). Street moves: morgan stanley hires rbc, ubs financial advisers. Retrieved from http://online.wsj.com/article/BT-CO-20110914-711796.html Muñoz, S. S. (2010, April 12). Rbs hires key executive from ubs. Retrieved from http://www.efinancialnews.com/story/2010-04-12/rbs-hires-kamlani-executive-ubs


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