Human Resource Management SECTION 1 Nature of Human

Human Resource Management SECTION 1 Nature of Human Resource Management TENTH EDITON Robert L. Mathis John H. Jackson Chapter 3 Individual Performance and Retention © 2003 Southwestern College Publishing. All rights reserved. © 2002 Southwestern College Publishing. All rights reserved. Power. Point Presentation by Charlie Cook

Learning Objectives After you have read this chapter, you should be able to: – Discuss how motivation is linked to individual performance. – Identify the changing nature of the psychological contract. – Describe several types of absenteeism and turnover. – List the five major retention determinants and identify activities related to them. – Outline the retention management process and how to measure and assess turnover. © 2002 Southwestern College Publishing. All rights reserved. 2

Individual Employee Performance § Individual Performance Factors – Individual ability to do the work – Effort level expended – Organizational support Performance (P) = Ability (A) x Effort (E) x Support (S) © 2002 Southwestern College Publishing. All rights reserved. 3

Components of Individual Performance Figure 3– 1 © 2002 Southwestern College Publishing. All rights reserved. 4

Individual Motivation § Motivation – The desire within a person causing that person to act to reach a goal. § Maslow’s Hierarchy of Needs – Categories of needs that ascend in order; lower needs must be fulfilled before person will strive to meet higher needs. • • • Physiological needs Safety and security needs Belonging and love needs Esteem needs Self-actualization needs © 2002 Southwestern College Publishing. All rights reserved. 5

Individual Motivation (cont’d) § Herzberg’s Motivation/Hygiene Theory – Motivators—account for job satisfaction and motivation • Achievement • Recognition • Work itself • Responsibility • Advancement – Hygiene factors—cause dissatisfaction with work • Interpersonal relationships • Company policy/administration • Supervision • Salary • Working conditions © 2002 Southwestern College Publishing. All rights reserved. 6

Equity as a Motivator § Equity – The perceived fairness of what the person does compared to what the person receives. – The perception of the fair value of rewards (outcomes) for efforts (inputs) that individuals make when comparing their results to others in the organization. © 2002 Southwestern College Publishing. All rights reserved. 7

Expectancy Theory § Expectancy – Individuals base decisions about their behaviors on their expectations that one or another behaviors is more likely to lead to needed or desired outcomes. – Effort-to-Performance Expectations • Belief in the ability to perform the task well – Performance-to-Reward Linkage • Belief that high performance will result in receiving rewards – Value of Rewards • The rewards have value to the individual © 2002 Southwestern College Publishing. All rights reserved. 8

Simplified Expectancy Model of Motivation Figure 3– 2 © 2002 Southwestern College Publishing. All rights reserved. 9

Management Implications for Motivating Performance § The need for comprehensive strategies and tactics to address both equity and expectations of employees. § The provision of training to encourage high performance. § The development of evaluation methods that properly appraise and reward performance. § An understanding of what kinds of rewards are desired and valued by employees. © 2002 Southwestern College Publishing. All rights reserved. 10

Individual/Organizational Relationships § The Psychological Contract – The unwritten expectations employees and employers have about the nature of their work relationships. Affected by age of employee and changes in economic conditions. – Employers provide: • Competitive compensation and benefits • Career development opportunities • Flexibility to balance work and home life – Employees contribute: • Continuous skill improvement • Reasonable time with the organization • Extra effort when needed © 2002 Southwestern College Publishing. All rights reserved. 11

Job Satisfaction and Organizational Commitment § Job Satisfaction – A positive emotional state resulting from evaluating one’s job experience. § Organization Commitment – The degree to which employees believe in and accept organizational goals and desire to remain with the organization. © 2002 Southwestern College Publishing. All rights reserved. 12

Factors Affecting Job Performance and Organizational Commitment Figure 3– 3 © 2002 Southwestern College Publishing. All rights reserved. 13

Job Satisfaction and Organizational Commitment § Absenteeism – Involuntary absenteeism • Unavoidable with understandable cause (e. g. , actual illness) – Voluntary absenteeism • Avoidable without justifiable cause (e. g. , feigning illness) – Measuring absenteeism © 2002 Southwestern College Publishing. All rights reserved. 14

Reasons for Unscheduled Absences Source: Based on data from CCH Absenteeism Survey, CCH Human Resources Management, November 1, 2000. © 2002 Southwestern College Publishing. All rights reserved. Figure 3– 4 15

Job Satisfaction and Organizational Commitment © 2002 Southwestern College Publishing. All rights reserved. 16

Job Satisfaction and Organizational Commitment § Turnover – The process in which employees leave the organization and have to be replaced. § Types of Turnover – Involuntary turnover—terminations for poor performance or work rule violations. – Voluntary turnover—employee leaves the organization by choice. © 2002 Southwestern College Publishing. All rights reserved. 17

Job Satisfaction and Organizational Commitment © 2002 Southwestern College Publishing. All rights reserved. 18

Retention of Human Resources § Impact of Retention Failure – Inability to achieve business goals – Loss of “image” to attract other individuals – High costs of turnover and replacement © 2002 Southwestern College Publishing. All rights reserved. 19

Retention of Human Resources § Why People Stay – Great company • Value and culture, well-managed, and offers exciting challenges – Great job • Freedom and autonomy, exciting challenges, and career advancement and growth – Compensation and lifestyle • Differentiated pay package, high total compensation, geographic location, and respect for lifestyle © 2002 Southwestern College Publishing. All rights reserved. 20

Most Common Reasons Why Employees Voluntarily Leave Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested. © 2002 Southwestern College Publishing. All rights reserved. Figure 3– 5 21

Retention Determinants Figure 3– 6 © 2002 Southwestern College Publishing. All rights reserved. 22

Desired Organizational Characteristics Source: The Right Communiqué, First Quarter 2001, 7. Used with permission © 2002 Southwestern College Publishing. All rights reserved. Figure 3– 7 23

Work Schedule Flexibility Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested. © 2002 Southwestern College Publishing. All rights reserved. Figure 3– 8 24

The Retention Management Process Figure 3– 9 © 2002 Southwestern College Publishing. All rights reserved. 25

The Retention Management Process § Measuring Turnover – Ways in which to measure turnover • • • § Job and job levels • Department, units, and location Reason for leaving • Length of service Demographic characteristics Education and training Knowledge, skills and abilities Performance ratings/levels Computing the turnover rate: © 2002 Southwestern College Publishing. All rights reserved. 26

Simplified Turnover Costing Model Figure 3– 10 © 2002 Southwestern College Publishing. All rights reserved. 27

The Retention Management Process § Costs of Turnover – Hiring costs –Training costs – Productivity costs –Separation costs § Employee Surveys – Attitude survey—focuses on employees’ feelings and beliefs about their jobs and the organization. § Exit Interviews – An interview in which individuals are asked to identify reasons for leaving the organization. © 2002 Southwestern College Publishing. All rights reserved. 28

The Retention Management Process § Retention Interventions – Provide realistic job previews during the recruiting process – Improve the selection process so that there is a better person-job fit for new hires – Conduct effective job orientation and initial training – Offer competitive, fair, and equitable compensation – Provide an adequate benefits package – Offer career development and training – Engage in fair and nondiscriminatory employee relations © 2002 Southwestern College Publishing. All rights reserved. 29