Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

CHAPTER 10 SEPARATIN

G

AND RETAINING EMPLO

YEES

FUNDAMEN

TALS OF

HUMAN RESOURCE

MANAGEMENT

5TH ED

ITION

BY R.A. N

OE, J.R. H

OLLENBECK, B

.

GERHART,

AND P.M. W

RIGHT

Need to Know

1. Difference between involuntary and voluntary turnover, and their effects on an organization.

2. How employees determine whether the organization treats them fairly.

3. Legal requirements for employee discipline.4. Ways to fairly discipline employees.5. How dissatisfaction affects employee

behavior.6. How organizations contribute to employees’

job satisfaction and retain key employees.10-2

Introduction

• Every organization recognizes that it needs satisfied, loyal customers.

• In addition, success requires satisfied, loyal employees.

• Retaining employees helps retain customers and increase sales.

• Organizations with low turnover and satisfied employees tend to perform better.

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Managing Turnover

What was the primary reason you’ve ever quit a job?a) I Didn’t like my boss or coworkersb) I wasn’t a fit with the company culturec) Better pay somewhere elsed) More interesting or challenging work

somewhere elsee) I was fired or laid offf) Other

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Managing Voluntary andInvoluntary Turnover

•Turnover initiated by an employer.•Often with employees who would prefer to stay.

•Turnover initiated by employees.•Often when the organization would prefer to keep them.

Involuntary Turnover Voluntary Turnover

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Table 10.1: Costs Associated with Turnover

10-6

Test Your Knowledge

True (A) or False (B)1. A manager who decides to fire an

employee should quietly take action alone and then let others know afterwards.

2. Separating employees has financial and personal risks.

10-7

Employee Separation

• Organizations must develop a standardized, systematic approach to discipline and discharge.

• These decisions should not be left solely to the discretion of individual managers or supervisors.

• Policies should be based on principles of justice and law.

• Policies should allow for various ways to intervene.

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Principles of Justice

10-9

Figure 10.1: Principles of Justice

10-10

Test Your Knowledge

A company whose earnings are very low has to reduce the amount given in raises to avoid laying people off. The amount of the raise for each employee is determined objectively based on their performance. An employee working for this company will most likely feel ____________ and _________________.

a) High outcome fairness; high interactional injusticeb) Low outcome fairness; high procedural justicec) Low interactional justice, high outcome fairnessd) Low outcome fairness, low procedural justice

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Legal Requirements

•Discharge may not violate an implied agreement.

– e.g., employer had promised job security

– e.g. action inconsistent with company rules

•Discharge may not violate public policy.

– e.g., terminating employee for refusing to do something illegal or unsafe.

• Employers must make discipline decisions without regard to a person’s age, sex, race, or other protected status.

• Evenhanded, carefully documented discipline can avoid such claims.

Wrongful Discharge Discrimination

10-12

Legal Requirements

Employees’ Privacy:• Employers need to ensure that the information

they gather and use for discipline is relevant.• Privacy issues also concern the employer’s wish to

search or monitor employees.• Employers must be prudent in deciding who will

see the information.

10-13

Table 10.2: Measures for Protecting Employees’ Privacy

10-14

Test Your Knowledge

Pam Jones worked for 41 years at the same company and had positive performance ratings and personnel records. She needed a calculator for work which she purchased with her own money but was not reimbursed because she lost the receipt. Later, a security guard stopped her as she was leaving work and discovered the calculator in her belongings. After a brief internal investigation, she was fired and it was announced through internal notices that she had committed a theft. The employee sued for libel, saying the company used her as an example to prevent other thefts.

10-15

Legal Requirements

Notification of Layoffs:• Organizations that plan broad-scale layoffs may be

subject to the Workers’ Adjustment, Retraining and Notification Act (WARN).

• Employers covered by the law are required to give notice before any closing or layoff.

10-16

Test Your Knowledge

After hiring Bob for a newly created marketing specialist position, his boss assures him that he will be secure in the job until he retires. A year later, that department is eliminated. Bob complains he was guaranteed employment until retirement. Is he right?

a) No, an employer can hire or fire someone whenever they want.

b) No, there was no written contract.c) Yes, he was given a verbal contract.

10-17

Progressive Discipline

•Principle of discipline that says discipline should be like a hot stove, giving clear warning and following up with consistent, objective, and immediate consequences.

•A formal discipline process in which the consequences become more serious if the employee repeats the offense.

Hot-Stove Rule Progressive Discipline

10-18

Figure 10.2: Progressive Discipline Responses

10-19

Progressive Discipline

Rules of behavior should cover disciplinary problems such as:•Tardiness•Absenteeism•Unsafe work practices•Poor quantity or quality of work•Sexual harassment

• Coming to work impaired by alcohol or drugs

• Theft of company property

• Cyberslacking

10-20

Guidelines to Respond to Misconduct

1. Be clear about performance standards.2. Be consistent.3. Don’t ignore the problem behavior.4. Investigate complaints ASAP.5. Record statements in writing, with signatures &

dates.6. Focus on behaviors not personalities7. Documentation should be clear and complete.8. Be honest.

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Figure 10.3: Options for Alternative Dispute Resolution

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Alternative Dispute Resolution

An organization’s policy of making managers available to hear complaints.

•Process for resolving disputes by taking them to a panel composed of representatives from the organization at same levels as the people in the dispute.

Open-Door Policy Peer Review

10-23

Alternative Dispute Resolution

•Nonbinding process in which a neutral party from outside the organization hears the case and tries to help the people in a conflict arrive at a settlement.

•Binding process in which a professional arbitrator from outside the organization (usually a lawyer or judge) hears the case and resolves it by making a decision.

Mediation Arbitration

10-24

Employee Assistance Programs

Employee assistance program (EAP) – a referral service that employees can use to seek professional treatment for emotional problems or substance abuse.

• Many EAPs are fully integrated into employers’ overall health benefits plans.

10-25

Outplacement Counseling

Outplacement counseling – a service in which professionals try to help dismissed employees manage the transition from one job to another.

• Goals for outplacement counseling are to help former employee address psychological issues associated with losing a job while helping them find a new job.

10-26

Job Withdrawal

Job Withdrawal – a set of behaviors with which employees try to avoid the work situation physically, mentally, or emotionally.

• Job withdrawal results when circumstances such as the nature of the job, supervisors and coworkers, pay levels, or the employee’s own disposition cause the employee to become dissatisfied with the job.

10-27

Employee Engagement

Employee engagement is the degree to which employees are fully involved in their work and the strength of their commitment to their job and company. •Employees who are engaged and provide a clear competitive advantage to that firm, including higher productivity, better customer service, and lower turnover.

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Figure 10.4: Job Withdrawal Process

10-29

Causes of Job Dissatisfaction

10-30

Military reservists who are sent overseas often experience role conflict among three roles:

• soldier• family member• civilian employee

Overseas assignments often intensify role conflicts.

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Actions Employees Take When Dissatisfied

• Behavior changes– Change the condition– Whistle-blowing– Bring a lawsuit– Lodge complaints

• Physical job withdrawal• Psychological withdrawal

– Decrease in job involvement– Decrease in organizational commitment

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Office Workers Appreciate Help Balancing Roles and Learning New Skills

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Job Satisfaction

Job satisfaction – a pleasant feeling resulting from the perception that one’s job fulfills or allows for the fulfillment of one’s important job values.

3 components of job satisfaction are:1. Values2. Perceptions3. Ideas of what is important

People will be satisfied with their jobs as long as they perceive that their jobs meet their important values.

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Figure 10.5: Increasing Job Satisfaction

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Figure 10.6 Steps in the Role Analysis Technique

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Job Satisfaction:Supervisors and Co-workers

Co-workers and supervisors affect job satisfaction.

• A person may be satisfied with them because they

1. share same values, attitudes, and philosophies.

2. provide social support, meaning they are sympathetic and caring.

3. help the person attain some valued outcome.

10-37

Co-worker relationships can contribute to job satisfaction, and organizations therefore try to provide opportunities to build positive relationships.

10-38

Test Your Knowledge

• Serena feels her job processing payroll checks is boring and uninteresting. Which intervention would be most appropriate to retain Serena?a) Communicating the companies valuesb) Increasing her payc) Expanding her jobd) Hiring someone she can chat with during

the day

10-39

Monitoring Job Satisfaction

• Employers can better retain employees if they are aware of satisfaction levels, so they can make changes if employees are dissatisfied.

• Usual way to measure job satisfaction is to survey.

• A systematic, ongoing program of employee surveys should be part of the organization’s HR strategy to monitor trends and prevent voluntary turnover.

10-40

Figure 10.7: Example of Job Descriptive Index (JDI)

10-41

Figure 10.8: Example of a Simplified, Nonverbal Measure of Job Satisfaction

10-42

Exit Interview

• Exit interview: a meeting of a departing employee with the employee’s supervisor and/or a human resource specialist to discuss the employee’s reasons for leaving.

• A well-conducted exit interview can uncover reasons why employees leave.

• When several exiting employees give similar reasons for leaving, management should consider whether this indicates a need for change.

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Summary

• Involuntary turnover occurs when the organization requires employees to leave, often when they would prefer to stay.

• Voluntary turnover occurs when employees initiate the turnover, often when the organization would prefer to keep them.

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Summary

• Employees draw conclusions based on outcomes of decisions regarding them, procedures applied, and way managers treat employees when carrying out those procedures.

• Employee discipline should not result in wrongful discharge, such as a termination that violates an implied contract or public policy.

• Discipline should be administered evenhandedly, without discrimination.

10-45

Summary

• Discipline should follow principles of the hot-stove rule, meaning discipline should give warning and have consequences that are consistent, objective, and immediate.

• A system that can meet these requirements is progressive discipline, in which rules are established and communicated, and increasingly severe consequences follow each violation of the rules.

• Organizations may also resolve problems through alternative dispute resolution.

10-46

Summary

• Circumstances involving the nature of a job, supervisors and coworkers, pay levels, or employee’s own disposition may produce job dissatisfaction. When employees become dissatisfied, they may engage in job withdrawal.

• To prevent job withdrawal, organizations need to promote job satisfaction which is related to a person’s values and based on perception.

Different employees have different views of which values are important.

10-47