Human resrouce management 12th mathis jacson chapter 003

CHAPTER Organization/Individual Relations and Retention © 2008 Thomson/South-Western All rights reserved PowerPoint Presentation by Charlie Cook The University of West Alabama Chapter Chapter Objectives Objectives After you have read this chapter, you should be able to: ■ Identify the changing nature of the psychological contract ■ Discuss how motivation is linked to individual performance ■ List the five major drivers of retention and activities related to them ■ Describe different kinds of absenteeism and turnover ■ Explain two ways to measure absenteeism and turnover ■ Outline the steps in managing retention © 2008 Thomson/South- 3–2 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 Focuses on expectations about “fairness” that may not be defined clearly by employees • Psychological Ownership When individuals feel that they have some control and perceived rights in the organization, they are more likely to be committed to the organization © 2008 Thomson/South- 3–3 Components of the Psychological Contract Employers provide: Employees contribute: • Competitive compensation and benefits • Continuous skill improvement and increase productivity • Flexibility to balance work and home life • Reasonable time with the organization • Career development opportunities • Extra effort when needed © 2008 Thomson/South- 3–4 FIGURE 3-1 Factors Affecting Job Satisfaction and Organizational Commitment © 2008 Thomson/South- 3–5 Job Satisfaction, Loyalty, and Commitment • Job Satisfaction  A positive emotional state resulting from evaluating one’s job experience • Organization Commitment (Loyalty)  The degree to which employees believe in and accept organizational goals and desire to remain with the organization  Continuance commitment: the likelihood that an individual will stay with rather than withdraw from the organization © 2008 Thomson/South- 3–6 Individual Employee Performance • Individual Performance Factors Individual ability to the work Effort level expended Organizational support Performance (P) = Ability (A) x Effort (E) x Support (S) © 2008 Thomson/South- 3–7 FIGURE 3-2 Components of Individual Performance © 2008 Thomson/South- 3–8 Individual Motivation • Motivation  The desire within a person causing that person to act to reach a goal • Management Implications for Motivating Individual Performance  Broad-based strategies and tactics to address individual employee concerns about:  Consistency in organizational rewards  Organizational  Accurate support for employee efforts measurement of employee performance  Desirability of rewards by employees © 2008 Thomson/South- 3–9 Retention of Human Resources • Myths About Retention Money is the main reason people leave Hiring has nothing to with retention If you train people, you are only o I’m G ne training them for another employer Do not be concerned about retention during a merger If solid performers want to leave, the company cannot hold them © 2008 Thomson/South- 3–10 FIGURE 3-3 Drivers of Retention © 2008 Thomson/South- 3–12 FIGURE 3-4 Some Characteristics of People and Jobs © 2008 Thomson/South- 3–13 Employee Absenteeism • Absenteeism  Any failure to report for work as scheduled or to stay at work when scheduled  Involuntary absenteeism  Unavoidable with understandable cause (e.g., actual illness)  Voluntary absenteeism  Avoidable without justifiable cause (e.g., feigning illness) © 2008 Thomson/South- 3–14 FIGURE 3-5 Reasons for Unscheduled Absences Source: Based on data from “2006 CCH Unscheduled Absence Survey,” CCH, Inc., October 26, 2006, www.cch.com/press/news/2006 All Rights Reserved Reprinted with permission © 2008 Thomson/South- 3–15 Controlling Absenteeism Disciplinary approach Positive reinforcement Controlling Absenteeism Paid time-off (PTO) Combination approach “No fault” policy © 2008 Thomson/South- 3–16 FIGURE 3-6 Employee Absenteeism Control Actions © 2008 Thomson/South- 3–17 Employee Turnover • Turnover  The process in which employees leave an organization and have to be replaced • Impact of Turnover  Inability to achieve business goals  Loss of “image” to attract other individuals  High costs of turnover and replacement  Churn—hiring new workers while laying off others © 2008 Thomson/South- 3–18 Types of Turnover Involuntary Controllable Voluntary Turnover Uncontrollable Functional Dysfunctional © 2008 Thomson/South- 3–19 HR Metrics: Measuring Absenteeism • Measuring Absenteeism  U.S Department of Labor formula: Number of person-days lost through job absence during period ×100 (Average number of employees) × (Number of work days) • Other Measures of Absenteeism: Incidence rate—absences per 100 employees each day Inactivity rate—percentage of time lost to absenteeism Severity rate—average time lost per absent employee during a specified period of time © 2008 Thomson/South- 3–20 HR Metrics: Measuring Absenteeism (cont’d) • Calculations of the costs of absenteeism should usually include:  Lost wages  Benefits  Overtime for replacements  Fees for temporary employees, if incurred  Supervisor’s time  Substandard production  Overstaffing necessary to cover absences © 2008 Thomson/South- 3–21 HR Metrics: Measuring Turnover • Computing the Turnover Rate: Number of employee separations during the month × 100 Total number of employees at midmonth • Costs of Turnover Separation costs Replacement costs Training costs Hidden costs © 2008 Thomson/South- 3–22 HR Metrics: Measuring Turnover (cont’d) • Ways 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 © 2008 Thomson/South- 3–23 FIGURE 3-7 Simplified Turnover Costing Model Teller (40%) 20,000 8,000 28,000 20 3,500 70,000 © 2008 Thomson/South- 3–24 FIGURE 3-8 Managing Retention © 2008 Thomson/South- 3–25 FIGURE 3-9 Possible Retention Interventions Improved Retention • Spot cash awards for good work • Develop profiles of successful employees and hire to the profile • Learning bonuses • Focus groups on employee issues • Voluntary job sharing • Realist job avenues • Excellent employee development • Payback agreement for moving expenses • Clear goals • Accurate performance appraisals • Competitive benefits • Career counseling • Mentoring • Diverse workplace • Sabbatical leaves © 2008 Thomson/South- • • • • • • • • • • • • • • • Facilitate promotion/transfer Reward managers with low turnover “Fair” pay Fulfilling work Avoid hiring those with a history of turnover Tuition reimbursement and promotion for education Retention bonuses Subsidized child/elder care Retrain for promotion/transfer Pay tied to performance Telecommuting Recognize good work Good working conditions Friendly work culture/co-workers Considerate supervisors 3–26 [...]...Retention of Human Resources • Why People Stay or Leave—Links, Fit, and Sacrifice  Culture and values  Positive, distinctive company that is well-managed, and offers exciting challenges  Attractive job  Freedom