How Fleet Bank Fought Employment Flight – Case Study

In view of these findings the company made some retention plans like increasing the Mobility and Marketability of employees as well as making their contacts in the company more solid and increasing their pay as well and due to these efforts the turnover rate declined dramatically, 40% among salaried employees and 25% among hourly employees. The company saved $50 million.

Background:

In the late 1990s, Fleet Bank was facing high and rising employee turnover, particularly in its retail operations. Overall turnover had reached 25% annually, and among some groups, such as tellers and customer service reps, turnover was as high as 40%.

In last regulations were changed then fleet was change the strategy initially for 20 years. In 1985 its first actuation outside from Rhode, Island fleet was get 40 banks during the 1980s. At initial stage fleet was going towards prosperity but due to the costs of mergers financial crises were occurred. In 1803 Elkanah was started the State Bank of Albany to inland water transportation systems. In the next century bank was changed his name and the new name was Norstar. Fleet and Norstar were wanted to emerge and finally in 1988 they were emerged. Fleet was wanted to be a New England Financial Power House. During 1980s the Bank of England was facing major financial problems and at least it was put for sale. In 1995 Fleet was emerged New England rival Shawmut which was the number 1^st of New England and the number 9^th of United States. In 1988 fleet was scrutinize about Bank of Boston. Finally, fleet was successful to achieve the biggest mergers of banks and it was the 7^th largest bank of the nation. Employees of bank were 50,000 people, Serviced over 20 million customers The company was served 20 million retail and 6 million commercial customers worldwide and has had more than 50,000 U.S employees and 10,000 employees abroad.

Issues, Causes and Solutions:

The issues and cause regarding employee turnover are following:

• Fleet Bank was rich in Financial Resource as it was the second-largest financial services and seventh largest financial holding company in the country. There was also no problem with the Physical Resources. But there was a problem as far as Human Resources and Organizational Resources was concerned because there was no system which could help employees to stay in the company and there most expert employees were leaving the organization. In 1990s the biggest issue faced by the Fleet was the turnover of potential employees. It was 25% annually and among some groups such as tellers and customer services representative it was over 40%. This turnover was damaging the overall strategies focusing the customer issues big time.

• Employees were not willing to give correct information about their disposal. That indicates us that there was a lack of trust of employees in the organization and it also depicts about the cultural loop holes and formal reporting structure inside the company. In a survey that was conducted in 1997 to know about the reasons for this turnover, the results suggested that there are two reasons for their disposal i.e. inadequate pay and heavy workload. The main cause for this result was that employees were not giving correct reasons that was resulting their disposal from the company. If they point instead to the way he company is run, they risk antagonizing people whom they may one day need for a reference or job.

• After they used Mercers methodology, they were able to find the direct link between turnover and the company’s busy history of mergers and acquisitions. In particular, antitrust policy of the bank in which the company required some branches to be closed down. According to Hawthorne studies conducted in late 20s and its not the incentives that are required more by employees but their in-between relations that matters most for them. This high rate of involuntary turnover let the other employees to think that even their job is insecure under these circumstances and that was the biggest reason for this huge rate of turnover.
• There was also a problem that they were not putting The Right Person at a Right Place because the highest risk of turnover was in two groups: very high performing employees that are in their current positions for two or three years and those employees who have recently completed their postgraduate studies. This indicates that many deserving employees were not getting promotions. That also means they were not promoting individual growth.
• Fleets investigation also showed that higher turnover rates among managers had also hurt the overall retention rate. Simply, if an employees supervisors left, the likelihood of that employees leaving in the next year almost doubled. By this we can conclude that there was a problem as far as Job Design is concerned because after the disposal of the manager the employees felt so insecure that they were even willing to leave the job. Managers departure leaves an impression on an employee that there are more opportunities outside the company and the employees will also feel disconnected from the company.

Recommendations and Justification:

• The companies must use sources other than those surveys or questionnaire that are filled by the employees on their disposal because those surveys don’t reflect the true picture about their leavings. Fleet used Mercers methodology and examined data collected from HR, Finance, Operations and sales departments for the past four years. Then they were able to find that the real reason for the employees turnover was the involuntary turnover
• Extra salary was not everything for the employees. Their main concern was the insecurity about the job. Career progress and mobility of all the significant factors identified, those related to career progress and development. Promotion and career growth with pay growth are the real factors for the retention.
• Broadening the employee expertise and making them marketable also reduces the turnover a great deal. It gave the compelling reason to work and stay in the organization and postponed their departures. environment even more than they value higher pay.
• job mobility is much more superior form of compensation because it promises better protection then savings in event of job loss.
• The employees who were high performers with who had just completed their under or post graduate programs were more likely to go; the company urged their supervisors and managers to make sure that they were satisfied in their current positions. Job fairs and seminars is also another option.
• Increasing the growth of the employees is also another option of retaining them in there current positions.
• Incentives programs also reduce the turnover of the employees.
• To reduce the negative effects of the manager departures on employees, Fleet acted to sure those employees had strong contacts inside the company. So if their manager goes, they have also strong links with the manager who will take his place.

Conclusion:

After studying this case study, we are able to find that doesn’t matter how big is the company or how much finance they hold, its the Human Resource that is required for them to excel in the market. We were able to understand the importance of HRM.