Human Resource Management

1
Human ResourceManagement

• Individual Performanceand Retention

Chapter 3
2
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.

3
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)

4
Components of Individual Performance
Figure 31
5
Individual Motivation

• Motivation
• The desire within a person causing that person to
  act to reach a goal.
• Maslows 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

6
Individual Motivation (contd)

• Herzbergs Motivation/Hygiene Theory
• Motivatorsaccount for job satisfaction and
  motivation
• Achievement Recognition Work itself
• Responsibility Advancement
• Hygiene factorscause dissatisfaction with work
• Interpersonal relationships
• Company policy/administration
• Supervision Salary Working conditions

7
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.

8
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

9
Simplified Expectancy Model of Motivation
Figure 32
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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.

11
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

12
Job Satisfaction and Organizational Commitment

• Job Satisfaction
• A positive emotional state resulting from
  evaluating ones job experience.
• Organization Commitment
• The degree to which employees believe in and
  accept organizational goals and desire to remain
  with the organization.

13
Factors Affecting Job Performance and
Organizational Commitment
Figure 33
14
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

15
Reasons for Unscheduled Absences
Source Based on data from CCH Absenteeism
Survey, CCH Human Resources Management, November
1, 2000.
Figure 34
16
Job Satisfaction and Organizational Commitment
17
Job Satisfaction and Organizational Commitment

• Turnover
• The process in which employees leave the
  organization and have to be replaced.
• Types of Turnover
• Involuntary turnoverterminations for poor
  performance or work rule violations.
• Voluntary turnoveremployee leaves the
  organization by choice.

18
Job Satisfaction and Organizational Commitment
19
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

20
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

21
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.
Figure 35
22
Retention Determinants
Figure 36
23
Desired Organizational Characteristics
Source The Right Communiqué, First Quarter 2001,
7. Used with permission
Figure 37
24
Work Schedule Flexibility
Source Based on 2000 SHRM Retention Practices
Survey (Alexandria, VA Society for Human
Resource Management, 2000). Permission requested.
Figure 38
25
The Retention Management Process
Figure 39
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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

27
Simplified Turnover Costing Model
Figure 310
28
The Retention Management Process

• Costs of Turnover
• Hiring costs Training costs
• Productivity costs Separation costs
• Employee Surveys
• Attitude surveyfocuses 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.

29
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