Therefore, everything else being equal, those who do quit during an economic recession may have to be more dissatisfied with certain HRM practices compared to those who quit during an economic boom. The aim of this study is to investigate which HRM practices affect employee turnover under different economic cycles.
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Literature Review.
HRM Audit.
The HRM audit is an analytical tool that allows a firm to systematically assess its HRM practices against its business objectives (Lee & Heard, 1998). It is used to determine which HRM activities contribute to the firm's bottom-line and reveals which HRM practices have a negative impact on the firm's level of effectiveness. The HRM audit gathers information on the firm's HRM activities so that they can be compared against best practices (Burn & Thompson, 1993). It also analyzes the time a firm spends on various HRM activities, the costs of providing such services, and the quality of the services provided. Information from the audit serves as a benchmark against which future progress of the HRM activity can be measured against. An annual or periodic HRM audit check will allow a firm to proactively identify and correct employment-related problems before they reach a critical stage of paralyzing the firm's business operations (Spognardi, 1997).
In essence, the HRM audit allows the firm to measure the extent to which the following HRM problems exist, as these may lead to employee dissatisfaction and ultimately to employee turnover (Lee & Heard, 1998):.
A lack of strategic focus by the HR department, which invalidates its role as a strategic business partner;.
A lack of HR skills in the firm, which makes it difficult to decentralize HR functions to line managers to respond more quickly to employee needs;.
A lack of due process, because the firm has no established work-related guidelines, making it difficult for employees to see the consistency and fairness in its rules and procedures;.
