Human Resource Management Individual Organization Relations and Retention

Human Resource Management Individual/ Organization Relations and Retention CHAPTER 5 Robert L. Mathis | John H. Jackson | Sean R. Valentine 14 e © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Learning Objectives Discuss four different views of motivation at work Explain the nature of the psychological contract Define the difference between job satisfaction and Chapter Objectives engagement © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Learning Objectives Identify a system for controlling absenteeism Describe different kinds of turnover and how turnover can be measured Summarize the ways of managing retention © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Individual Performance Factors Individual’s Effort ability to do the work expended Organizational support Performance (P) = Ability (A) x Effort (E) x Support (S) © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 1 - Components of Individual Performance © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Individual Motivation: Desire within a person causing that person to act Influences of motivation Performance Reaction to compensation Turnover Other HR concerns © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Approaches to Understanding Motivation Need theory Maslow classified human needs into five categories Physiological Safety needs and security needs Belonging Esteem and love needs Self-actualization needs Until the more basic needs are adequately fulfilled, a person will not fully strive to meet higher needs © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Approaches to Understanding Motivation Two factor theory Frederick Herzberg’s motivation/hygiene theory assumes that one group of factors, motivators, accounts for motivation But hygiene factors can cause dissatisfaction with work Implication of Herzberg’s research Employees may not be motivated to work together even when managers address hygiene factors © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 2 - Need Theory and Two Factor Theory Compared © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Approaches to Understanding Motivation Equity theory People want to be treated fairly at work Equity: Perceived fairness of what the person does compared with what the person receives for it Inputs - What a person brings to the organization Outcomes - Rewards obtained in exchange for inputs © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Approaches to Understanding Motivation Expectancy Brought theory about by Lyman Porter and E. E. Lawler Indicates that motivation is also influenced by people’s expectations Individuals base decisions about their behaviors on their expectations One or another alternate behavior is more likely to lead to needed or desired outcomes © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 3 - Simplified Expectancy Model of Motivation © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Motivation by Organizations Financial rewards Performance management Others Praise, trust, and recognition Autonomy to do one’s job Motivational T-shirts, speakers mugs, books, and videos © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Motivation by Organizations Motivation requires diagnosis of organization’s efforts and employee’s: Efforts Abilities Expectations © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Psychological Contract Unwritten expectations employees and employers have about the nature of their work relationships Useful in understanding individuals’ relationships with their employers Create positive or negative relationship between the employer and individual Based on trust that leads to meeting employer’s and employee’s expectations and needs © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Expectation of a Psychological Contract Employers will Provide • Competitive compensation and benefits • Flexibility to balance work and home life • Career development opportunities Employees will Contribute • Continuous skill improvement and increased productivity • Reasonable time with the Organization • Extra efforts and results when needed © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Global Psychological Contract Concerns Psychological contracts vary between foreign country employees and those from US Psychological contract expectations of employees from different cultures need to be met by multinational firms © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Job Satisfaction and Commitment Job satisfaction: Positive emotional state resulting from evaluating one’s job experience Morale - Job satisfaction of a group or organization Attitude survey: Focuses on employees’ feelings and beliefs about their jobs and the organization © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 5 - Components of Job Satisfaction © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Commitment and Engagement Organization commitment: Degree to which employees believe in and accept organizational goals and desire to remain with the organization Employee engagement: Extent to which an employee feels linked to organizational success Loyalty: Being faithful to an institution or employer © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 6 - Engaged and Disengaged Employees © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Employee Absenteeism Any failure by an employee to report for work as scheduled or to stay at work when scheduled Effective absence management is a balance between: Supporting Keeping employees who are legitimately not at work operational needs covered © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Employee Absenteeism Types Involuntary Voluntary absences © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 7 - Sources of Direct and Indirect Costs of Absenteeism © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Methods of Addressing Absenteeism Disciplinary approach People who are absent the first time receive an oral warning Subsequent absences bring written warnings, suspension, and finally dismissal Positive Giving reinforcement rewards for meeting attendance standards © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Methods of Addressing Absenteeism Combination approach Rewards desired behaviors and punishes undesired behaviors No-fault policy Employees must manage their own attendance unless they abuse that freedom Paid-time-off (PTO) programs Employees use days from their accounts at their discretion a paid-time-off account © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Measuring Absenteeism Formula suggested by the U. S. Department of Labor © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Measuring Absenteeism Other measures of absenteeism Incidence rate - Number of absences per 100 employees each day Inactivity Severity rate - Percentage of time lost to absenteeism rate - Average time lost © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Employee Turnover Process in which employees leave an organization and have to be replaced Impact of turnover Negative impact on several dimensions of organizational performance Safety Productivity Financial performance © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Types of Turnover Involuntary Turnover • Employees are terminated for poor performance or work rule violations Voluntary Turnover • Employees leave by choice Functional Turnover • Lower-performing or disruptive employees leave © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Types of Turnover Dysfunctional Turnover • Key individuals and high performers leave at critical times Uncontrollable Turnover • Employees leave for reasons outside the control of the employer Controllable Turnover • Employees leave for reasons that could be influenced by the employer © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Employee Turnover Churn: Hiring new workers while laying off others Employers sometimes complain about not being able to find skilled workers while they are laying off other employees © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Computing the Turnover Rate Categories in which data is gathered analyzed Job and job level Demographic Department, characteristics unit, and location © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Computing the Turnover Rate Education Reason and training for leaving Knowledge, Length skills, and abilities of service Performance ratings/levels © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Determining Turnover Costs Separation Vacancy costs Replacement Training costs Hidden/indirect costs © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Optimal Turnover costs and benefits can be calculated separately More turnover in certain segments of the organization can be beneficial if: It costs very little Those leaving are less valuable than their replacements © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Myths about Retention Money Hiring is the main reason people leave has little to do with retention If you train people, you are only training them for another employer Do not be concerned about retention during organizational change If high performers want to leave, the company cannot hold them © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 10 - Drivers of Retention © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 11 - Comment from High Performers as to Why They Stay Source: Adapted from John P. Hausknecht, et al. , “Targeted Employee Retention: Performance Based and Job-related Differences in Reported Reasons for Staying, ” Human Resource Management, 48, March–April 2009, pp. 269– 288. © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Retention Assessment and Metrics Some of the first areas to consider when analyzing data for retention Work Pay/benefits Supervision Occupations Departments Demographics of those leaving and staying © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Figure 5. 12 - Process for Managing Retention © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Retention Assessment and Metrics Employee Diagnose Identify surveys - Used to: specific problem areas employee needs or preferences Reveal areas in which HR activities are well received or viewed negatively Exit interview: Individuals who are leaving the organization are asked to give their reasons © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Retention Assessment and Metrics Effective first-year efforts lead to: Future career development Higher performance Other positive retention factors © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Retention Evaluation and Follow-Up Organizations must: Track intervention results Adjust intervention efforts Some firms use pilot programs to see how changes affect retention before extending them to the entire organization © 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.