The LAMP model is one of the methods used for the evaluation of the employees in an organization. As Cascio notes, “The letters in LAMP stand for logic, analytics, measures, and process, four critical components of a measurement system that compels strategic transformation and the effectiveness of the organization ” (45). This model helps the firms to measure systematically the various employee attributes like reliability, completeness, timeliness, consistency, and employee turnover. In the business world, measurement, which helps to decide which one is a good program or activity to invest in, is the most important tool for decision making. For example, without the LAMP model, the measurement costing turnover is going to be a difficult process and it might not be as accurate it is needed to be. By using the LAMP system, the firms can make effective and efficient decisions especially when the firms want to know, “what are the benefit programs to be undertaken or strategies to be used?”
One of the reasons why companies experience low performance and high employee turnover rate is employees’ attitude toward job satisfaction, and organizational commitment. According to Cascio, “Managers are interested in employees’ job satisfaction and commitment principally because of the relationship between attitude and behavior.” (46). Employees tend to work harder if they have a good attitude towards their job and organization. On the other hand, they might be disloyal by selling the company’s information to the rivals. Furthermore, the dissatisfaction of the job and organization will affect the work performance and customer satisfaction. For example, the bad attitude salesmen have will result in them serving the customers badly. Consequently, the customers develop a negative attitude towards the company at its services. The most important link that the organization can have with its customers is through people. These people are always the employees. Whatever the services the employee is involved in fixing equipment, answering the phone, or reconciling a disputable agreement, the attitude with which he or she does this will help the customers determine how much the organization cares about them. Customers always want to be served by upbeat employees with a positive attitude.
Costing employee absenteeism
The cost of employee absenteeism becomes one of the major expenses in large organizations. The cost incurred might be direct or indirect. First of all, when the employees are absent or do not come to work for any reason, the company still has to pay the salaries, this is an example of the direct costs. Another cost of employee absenteeism is indirect such that there might be delays in output, customer dissatisfaction, and changes in organizational culture. There might also be a reduction in the morale of the other employees especially when they feel that those who are absent go scot-free. How much does is it cost? As Cascio records that, “it may cost some large employers more than $1 million.” (49) in a given year. As a result, many firms set up policies governing what kind of reasons for absenteeism are accepted with evidence of the valid document. For instance, an employee might be absent and claims that he or she was sick. This is a valid reason that must be proved by the presentation of a sick-leave form and a doctor’s note that the employee was examined and treated by the doctor. Such policies or rules may reduce some of the problems in employee absenteeism. However, some employees may still be illegally absent, and more stringent measures should be put in place to avoid this. Unless employees have a balance between working and life, employee absenteeism will not be a problem that will end shortly. Therefore, HR managers should help employees to manage their responsibilities which will have tremendous effects on the performance of the organization.
Costing employee turnover
A high employee turnover rate is a serious problem in many firms because it involves not only high monetary costs but also consumes a lot of time during the recruitment processes. When employees leave the company or quit their job, there are many kinds of the cost involved which may be direct or indirect costs. An example of direct costs is the cost of replacement and training new employees. The process of replacement and training reduces the overall profit and takes more time depending on the complexity of the business and the expertise of the new employees. For example, the cost of replacing an engineering position may be more than that of replacing a line worker in a manufacturing firm. A real cost of employee turnover is the cost of paying vendors who render such services as temporary staff or advertising. Next, firms will pay not only direct costs but also indirect costs which are difficult to determine. For instance, it is hard to determine the cost of lost business and decrease in productivity. The firms may solve such problems by increasing the salaries, improving the tools that will bring about job satisfaction, or improving the working environment.
Costing the effects of training activities
Effective training programs result in increased performance, productivity, and profit. Many firms spend multimillion-dollar investments in training their employees to improve the working skills of their employees. For example, Edward Jones uses a lot of money on every new broker to make sure he or she only passes the series 7 and 66. Moreover, if the firm wants to build an organizational culture like Starbucks, training activity is one of the most important processes. Indeed, it could reduce the employee turnover rate and improve the working environment. However, poor training programs usually cost the firms a lot of money and time. To sum up, good training activities puts the company on a good competitive edge since there is increased production and employee performance.
The effectiveness of work-life programs
Today, many companies are concerned about work-life programs such as employee compensation schemes or pension schemes. As mentioned by Cascio, The work-life programs cover child care programs, flexibilities of working, leave options, information services and HR policies, and Organizational cultural issues (57). However, the work-life programs have both advantages and disadvantages to the firms.
Some of the advantages of these programs are reducing the employees’ stress and conflict between work and life. It helps them to obtain the balance between work and life hence they can work effectively and then there will be increased productivity. Like the flexibility to work, employees are allowed to choose the best time for maintaining a balance between work and life. If the employees have low stress and a good attitude coupled with job satisfaction, productivity will be increased. Indeed, firms’ profits will increase as well.
Nevertheless, the work-life programs cost the companies a lot of money. If the firms miss calculating between the cost of work-life programs and increases in profit, they then incur profit and business losses. On the other hand, if the firms do not offer enough work-life programs, they might lose the potential competitive employees to their rivals.
Briefly, the work-life programs have caused both positive and negative effects depending on how the firms design the programs. The effective programs will generate profits for the firm but the inefficient programs will cost the firm a lot of money.
Casio, W.E. Managing Human Resources: Productivity, Quality of Life (8th ed). 2006. Burr Ridge, II: McGaw-Hill/Irwin.