Business and Management IA

What strategies can be taken by Kuehne + Nagel to solve the high levels of staff turnover?
[Pick the date]

Canadian International School of Singapore Chanutda Wittemaier Candidate Number: 001347-008

Research Proposal:497 Executive Summary: 162 Written Report:1678
2011-2012

Table of Contents

Cover Page..1 Contents Page..2 Acknowledgement3 Executive Summary.4 Research Proposal ..5 Chapter 1: Introduction..6 Chapter 2: Review of Related Theories.7 Chapter 3: Procedure or method8 Chapter 4: Main Results and Findings..9 Chapter 5: Analysis and Discussion..10 Chapter 6: Conclusions and Recommendations11

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Acknowledgement

I would like to take this opportunity to thank all those who have helped me in writing this project and making it a success. A particular thanks to:

Erwin Wittemaier, the president of Kuehne+Nagel Singapore for his help and support as well as giving permission to interview at the company and access to past data

Miss Lena Phua, Human Resources Manager, for her help and support and doing interviews

Mr. Joe Ah-Tieng for his help and support throughout this project. I would also like to thank him for his guidance throughout.

To the workers of Kuehne+ Nagel for voluntarily cooperating in the questionnaire

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Executive Summary

The aim of this project is to answer the following question: what strategies can be taken by Kuehne + Nagel Singapore to solve the problems of high staff turnover?

An interview with human resources was held to see that the workers are happy with their responsibilities but there seems to be a lack of communication within the managers and subordinates of the company. A survey was also conducted to see that the workers lack motivation due to lack of recognition, no job security and sense of belonging.

It was suggested or recommended that Kuehne + Nagel regards the communication and leadership style taken. If the company is unable to raise the certainties of job security and motivation of the employees by recognizing achievements, appraisals and so on, the companys staff turnover would keep increasing. Also, training seems to be a concern and recommended that training should be given to all employees as well as holding social events to enhance relationships amongst workers.

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Research Proposal and Action Plan

Research Question: What strategies can be taken by Kuehne + Nagel Singapore to solve the problems of high staff turnover?

Rationale:

Kuehne + Nagel (Switzerland) are one of the largest non-vessel operating common carriers in the global transportation and logistics. Since the last few years, the branch in Singapore has been experiencing high levels of staff turnover. The manager of the branch expressed that every year, there are about 25 staff members leaving the company each year. So, the manager is very keen to find strategies to better retain the companys employees, as it costs time and money to train new employees.

Areas of the syllabus

2.1- Human Resource Planning (Recruitment and Selection) 2.3- Communication (Types and Network) 2.4- Leadership and Management (Styles) 2.5- Motivation ((Maslow, Herzberg, Theory X and Y)

Theoretical Framework Theories such as Maslow, Herzberg, and Theory X and Y will be used to examine the motivation level of employees and suggest strategies for improvement. The recruitment and selection method will be analyze to evaluate retention capacity. Types of communication and network will be used to examine the impact of communication 4|Page Chanutda Wittemaier 001347-008

process within the company and suggest improvements as well as evaluating the different leadership and management styles existing to suggest alternatives. Methodology and Individuals to be approached

Primary Research: An interview with the head of the human resources department to collect information on the staff motivation, leadership styles, communication and HR planning that is done in the company. I will conduct a survey to collect sufficient data from the staffs of the company to overview the feelings and possible causes for the high levels of staff turnover.

Secondary Research: I will ask for permission of collection of relevance past data ex: of staff turnover rates, company profile Internet research of related theories to be discussed and applied in the project. Solutions Take a larger number of people to increase reliability Specify suggestions for this branch only

Anticipated Difficulties Sample may not be representative of all the employees The research is only on one branch and therefore suggestions may only benefit this branch only Difficulty of gathering sufficient primary and

Arrange meetings with other staff members to

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secondary sources

fulfill the needed information Carry our surveys using email, if not found as a secondary source Collect as many as possible data so that it is more reliable Acknowledge in conclusion

Biased answers from questionnaires by employees

Action Plan: Starting Date 06/01/2011 Discuss with teacher of possible plan, subject, and company to research on 08/21/2011 09/17/2011 09/18/2011 10/01/2011 12/28/2011 01/01/2012 01/11/2012 Complete research proposal and action plan First Interview with HR Manager, and send out questionnaires Complete Introduction Complete review of related theories Complete main results and findings Analysis of Findings Complete conclusion and recommendations Action

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02/07/2012 02/10/2012 02/15/2012 02/27/2012

Complete appendices, bibliography, and executive summary Complete 1st draft Complete 2nd draft Submit the final draft

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Chapter 1: Introduction

1.1: About the Company August Khne and Friedrich Nagel founded the forwarding and commissioning business in 1890 in Bremen, Germany, concentrating on cotton and consolidated freight, and until the mid-twentieth century operated nearly exclusively in the seaports of Germany. In the early 50s, Alfred Khne initiated the company's international expansion, and first offices were opened in Canada, followed by the Benelux region, and soon thereafter the Middle East. As of the mid-1960s, Klaus-Michael Khne - following in his grandfather's and father's footsteps - continued with the expansion of the company's network and scope of services and products. The Group employs approximately 61,500 people in 900 offices in more than 100 countries and has approximately 7 million sqm of warehouse space under management.

Seafreight: Number 1 global seafreight forwarder Airfreight: Top 3 global air cargo forwarder Contract Logistics: Top 3 global contract logistics provider Road & Rail: European Top 6 provider

1.2: Statement and Significance of the problem

The company is facing high staff turnover, losing a number of valuable workers between 2010-2011. The decrease in number of workers impact the productivity and

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profit earned by Kuehne+Nagel. The company must find solutions to retain the number of workers and reduce the staff turnover rate.

1.3: Purpose of Study

To build up strategies that can be taken by Kuehne + Nagel to solve the problems of high staff turnover. To consider motivational and demotivational factors within the company to suggest solutions to reduce staff turnover and prevent workers from leaving in the future.

1.4: Research Question

What strategies can be taken by Kuehne + Nagel Singapore to solve the problems of high staff turnover?

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Chapter 2: Review of Related Theories1

The following theories were reviewed:

Maslows Hierarchy of needs McGregors Theory X and Y Herzbergs Two Factor Theory Types of Communication and network Recruitment and Selection process Types of Leadership and Management styles

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Chapter 3: Methodology
Primary research consisted initially of a detailed interview with the head of the Human Resources of Kuehne+Nagel, Singapore on:
General Information of staffs Staff Motivation Leadership and management styles Communication styles within the company HRM planning used

I conducted a survey to collect sufficient data from the staffs of the company. The survey will consist of questions on the feelings of the staffs working at the company and possible reasons for the high levels of staff turnover. I also undertook secondary research involving access into the companys past data of staff turnover rates in the past years.
Analysis of the companys past turnover rates Surveys took by staffs to come to a conclusion of causes and process strategies that can be taken by the company. Internet Research: relevant studies and theories that is involve in the companys high staff turnover rate

It must be noted that the data collected is only considering one branch of the company and staffs of that branch. Also, the data and information collected is only a sample and not the whole staff number is taken into account.

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Chapter 4: Main Results and Findings

4.1: Summary of Interview of G.M

Kuehne+Nagel is a logistics company that provides services in Singapore and around the world. Ms. Phua noticed the increasing level of staff turnover in these past few years. She recognized that there was an increasing lack of motivation amongst employees and the communication within the company was decreasing. There seems to be a disconnection between superiors and subordinates resulting in lowered motivation and negative relationships. Also, there is a high percentage of employees who dont feel secured in their position at the company. It is believed that increase wages or rewards can motivate employees as they feel acknowledged and motivate employees. Increasing communication amongst the employee should also be regarded to bring together the superiors and subordinates as to create a positive working atmosphere. This is planned to be trips or events that benefit the company and employees such as charity events of trips to other places to improve the relationship across the company.

4.2: Main Results of Survey of Employees

Survey for the current employees is obtained from the questionnaire (appendix 2). The questionnaire relates to the Maslows Hierarchy of needs, McGregors Theory X and Y, and Herzbergs two factor theory. This helps identify specific positives and negatives

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aspects of the business that need to be regarded. The answers are presented in graphs for statistical purposes and brief explanation.

1)Are you satisfied with the pay system adopted by Kuehne+Nagel

30 20 10 0 Yes No

Questions 1-3 relates to the basic needs of Maslows Hierarchy of

needs and Herzbergs

two factor theory. The graph gives a positive response which the most of the employees are satisfied with their salary, hence satisfying the basic needs and hygiene factor.

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30 25 20 15 10 5 0

2)Are You Happy With Your Salary?

Very Happy

Happy

Not Happy

3)Does your remuneration package offer you with enough money to acquire basic life needs such as food, clothing and maintain a proper shelter?
30 25 20 15 10 5 0 Not at all Somewhat Yes

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4)Are you given job security by the company

20 15 10 5 0 Yes No

Question 4-6 relates to Maslows Hierarchy of

needs and Herzbergs

two factor theory. The graph shows that the working environment is safe, hence satisfying the safety needs of Maslows theory and hygiene factor of

5)Do You Feel Safe While in Your Working Environment?

25 20 15 10 5 0 Yes No

Herzbergs Theory.
However, there is a high percentage of employees who are not satisfied with their job security.

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6)Are You Satisfied with the Working Conditions (working hours, workplace, facilities, etc)?
20 15 10 5 0 Not at all Somewhat Yes

Question 7 and 8 deals with the belonging and love needs of Maslows theory and the hygiene

factor; office and

subordinates relationship of the Herzbergs theory. The results who that the relationship is quite

7)Do You Hold Good Relationships Amongst Subordinates and Superiors Within the Company?
30 25 20 15 10 5 0 Not at all Somewhat Yes

concerning. The results in question 8 show that

most employees do not

feel there is enough recognition for their achievements by superiors.

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8)Are Your Achievements Acknowledge and Recognized by Superiors?

30 25 20 15 10 5 0 Not at all Somewhat Yes

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10)Are you happy with the responsibility and role you are given at work?
25 20 15 10 5 0 Not at all Somewhat Yes

Questions 9-10 relates to self -actualization

needs of Maslows
hierarchy of needs and motivation of Herzbergs two factor theory and Theory x and y. The results show that there is somewhat a satisfaction and the

9)Do You Feel the Company Offers Enough Possibilities for Your Personal Growth?
30 25 20 15 10 5 0 Not at all Somewhat Yes

employees are happy

with the amount of responsibility and role they are given.

4.3: Analysis of Former Employee Surveys I was able to survey 4 former employees through mail. Three out of four answered no for reasonably salary, two out of four answered no for rewards in terms of recognition and two answered sometimes. In decision making, they were always participated. 18 | P a g e 001347-008 Chanutda Wittemaier

Questions Reasonable Salary Reward Decision Making

Yes 1 0 4

Sometimes 0 2 0

No 3 2 0

Chapter 5: Analysis and Discussion

5.1: Introduction Firstly, the identification of motivational factors within the employees of Kuehne+Nagel using three theories: Abraham Maslows hierarchy of needs, Herzbergs two factor theory and McGregors Theory X and Theory Y. 5.2: Abrahams Maslows Hierarchy of Needs.

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Psychological Needs: This is the first and basic needs which employees need to be able to survive and protect their dependents. Therefore, the income form employment should be high enough to meet the basic necessities such as food, shelter, clothing, etc. From the data collected, workers are fairly satisfied with their salaries and working conditions. 78% of the workforce enjoys their daily tasks, and 80% of workers agree that his/her and their familys needs are met. Hence, Kuehne+Nagel fulfills the physiological needs of its workforce and progress to the next level.

Safety and Security Needs:

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Kuehne+Nagel fulfills the safety and security needs of its workforce with about 70% of workers feeling that they have a clear outlined career path and secured job. The company is also engaged in the safety of its workers and provides the workforce with effective tools, resources, and processes. 70% of workers are satisfied with tools, resources and processes.

Social Need: Social need is the last lower order before progressing to the higher order needs. Workers need to have a sense of belonging as it allows for affiliation and direction. The graph gives a positive response which the most of the employees are satisfied with their salary, hence satisfying the basic needs and hygiene factor.

5.3 Herzbergs Two Factor Theory

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Hygiene Factor: The hygiene factor is satisfied to an extent in the company. From the results (appendix 2), the workers are happy with their salary but feel that there is no job security and relationship amongst workers. The results in question 8 show that most employees do not feel there is enough recognition for their achievements by superiors. This could be due to

management style and lack of communication.

Motivational Factor: Recognition, sense of personal achievement, and opportunity for growth and advancements are part of the Herzbergs motivational factor. From the results, it seems that there is a lot of uncertainty and somewhat in that the company offers the employees enough possibilities for personal growth as well as the recognition of achievements. 22 | P a g e 001347-008 Chanutda Wittemaier

5.4 McGregors Theory X and Theory Y

From the results of the survey, it seems the employees are targeted towards Theory Y as compared to Theory X. A high number of employees are happy with the responsibilities and role that they are given, workers desires to satisfy social and selfactualizing needs, and most people seek responsibility and recognition for achievements.

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Chapter 6: Conclusion and Recommendations

6.1 Conclusions All in all, it is conclusive from the questionnaires and analysis that

Workers need more motivation to work. There is somewhat a lack of motivation to an extent which leaves them uncertain of their jobs.

Maslows Heirarchy of needs, Herzbergs and McGregors theories are not fully fulfilled to enhance the company and the employees.

There is a lack of communication within subordinates. Recognition and job security are uncertain for the employees, leaving them wanting to leave for another job.

6.2 Recommendations

6.2.1 Motivation The lack of motivation in the company is due to feelings of not being recognized for their roles and achievements to the company and that they feel there is no job security.

The company should introduce more appraisals, awards to recognize workers for their achievements to increase the motivations of the employees so they feel that they are valued as a valuable person to the company.

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Workers who demonstrate good work should be rewarded. A recommended motivational method is awarding employee of the month to increase self-actualization needs and sense of achievements of the employees.

6.2.2 Leadership Style and 6.2.3 Communication There seems to be an autocratic leadership style as the employees feel they are not participated in the company and recognized.

Leaders should arrange social events or charitable events that the employees and manager can participate in. This can be done monthly or annually to give the workers and managers the opportunity to bond and communicate. This will enhance and strengthen the relationships and communication within the company

6.2.4 Training

Training should be given to all employees when they are recruited. Training should involve on and off-site training to enhance the necessary skills and preparation for the company. This will strengthen the skills of the employees to be given opportunities for increase growth.

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6.3 Limitations and Improvement for Further Research

However, a better approach to this issue would need a research on the training needs to enhance this research project. Therefore further research on the training processes and recruitment should be done to analyze the possible factors that staffs turnovers are increasing.

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Bibliography and References

Jones, Rob, Carlo Raffo, and Alain Aderton. "Marketing Mix, Marketing Share." Business Studies. By Dave Hall. Fourth ed. Pearson Education. Print.

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Appendices

Appendix 1:
Abraham Maslow, in 1943 put forward the theory that people are motivated by certain needs. These needs consist of 5 types and levels, which he named the hierarchy of needs. Maslow argued that people tend to satisfy their needs systematically that is one after another in a hierarchy (second one cannot be satisfied until the first one is satisfied)

McGregors theory X and Y McGregor states that there are two opposing management attitudes towards workers and these will affect how workers are motivated, according to him, managers can be classified as theory X managers and theory Y managers Theory X managers assume that workers: Theory Y managers assume that workers:

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1. Are lazy and will try to avoid work as far as possible. 2. Are not ambitious, dislike responsibilities, and prefer to be led. 3. Want security above all and work only for money 4. Must be forced, controlled and threatened by punishment

1. Enjoy work and in fact consider work as natural as play. 2. Are ambitious, like to accept and take responsibilities. 3. Can gain job satisfaction and do not work only for money 4. Are capable of working independently and are capable of imagination to solve problems

Herzbergs two-factor theory According to Frederic Herzberg theory, 1959, there are two groups of factors, which are important to workers; they are hygiene and motivation factors. Hygiene factors (mainly physical aspects) Hygiene or maintenance factors, contribute very little to motivate workers but prevent dissatisfaction. Workers can be demotivated if hygiene factors are absent, or inadequate. Examples of hygiene factors include:
Adequate salary Job security (contract, pension) Safe working conditions Proper policies Quality of supervision

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Hygiene factors are basic requisites for workers to work, but most of them will not make them work harder. For example, higher wages may not lead to higher performance but if workers are under paid their performance will go down. Motivating factors (mainly psychological aspects) Motivating factors or satisfiers encourage personal development and pride. When they exist workers are motivated and perform better. For example:
Responsibility Challenging work Opportunities for promotion Recognition for good work Sense of achievement

Importance of Herzberg theory This is important because it allows managers to see clearly two categories of factors. They can then motivate workers by making the work more rewarding and also ensure that hygiene factors are present so that workers are not demotivated Criticism of Herzberg theory The theory does not apply to low-level workers because they lack education of ability for promotion and therefore are not interested in more responsibilities, challenging work, etc. Taylors scientific theory Taylor developed his theory of scientific management as he worked from a labourer to a works manager. He observed that workers, when left on their own, will work at a much slower pace than their capabilities (soldiering effect). He argued that: 30 | P a g e 001347-008 Chanutda Wittemaier

1. A managers job is to plan the tasks of the workers and tell them what to do. 2. An employees job is to do what it being told and get paid 3. An employee is an individual and is mainly concerned with maximizing his economic gain. 4. A managers duty is to design incentives to motivate workers.

Taylor, therefore, suggested that:

Proper job design will increase productivity. This can be done by simplifying jobs into specialized sequence of motion (division of labour or specialization). This can be determined by scientific study Workers can be motivated by paying them more if they work hard and therefore pay should be linked to output through a system of piece rate. Workers should be selected and assigned individual tasks based on their abilities.

Influences of Taylors ideas:

They were first adopted by Ford Motor Co. by using conveyor belts in the mass production of cars Most factories are using the principles of scientific management Many non-manufacturing businesses, like McDonalds, are now using a system of scientific management: same cooking temperatures, times, etc. throughout the world.

Weaknesses in Taylors approach:

It ignores the non-financial factors that motivate workers. Money is an important factor but many people work for reasons other than money, ex. To achieve something

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It ignores the differences between people. While the output of factory workers can be measured, it is not easy to measure the output of professionals such as doctors, teachers etc.

Appendix 2

Questionnaire

1) Are you happy with the pay system adopted by Kuehne + Nagel? Yes No

2) Are you happy with your salary?

Not Happy

Happy

Very Happy

3) Does your remuneration package offer you with enough money to acquire basic life needs such as food, clothing and maintain a proper shelter?

Yes

Somewhat

No

4) Are you given job security by the company Yes Somewhat No

5) Do You Feel Safe While in Your Working Environment? Yes Somewhat No

6) Are You Satisfied with the Working Conditions (working hours, workplace, facilities, etc)? Yes Somewhat No

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7) Do You Hold Good Relationships Amongst Subordinates and Superiors Within the Company? Yes Somewhat No

8) Are Your Achievements Acknowledge and Recognized by Superiors? Yes Somewhat No

9) Are you happy with the responsibility and role you are given at work? Yes Somewhat No

10) Do You Feel the Company Offers Enough Possibilities for Your Personal Growth? Yes Somewhat No

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