Hrm10e Chap03

Human ResourceHuman ResourceManagementManagement

TENTH EDITONTENTH EDITON

© 2003 Southwestern College Publishing. All rights reserved. PowerPoint Presentation

by Charlie Cook

PowerPoint Presentation

by Charlie Cook

Individual PerformanceIndividual Performanceand Retentionand Retention

Individual PerformanceIndividual Performanceand Retentionand Retention

SECTION 1Nature of

Human Resource

Management

SECTION 1Nature of

Human Resource

Management

Chapter 3Chapter 3

Robert L. Mathis Robert L. Mathis John H. Jackson John H. Jackson

© 2002 Southwestern College Publishing. All rights reserved. 3–2

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning 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.


Individual Employee PerformanceIndividual Employee PerformanceIndividual Employee PerformanceIndividual 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)


Components of Individual PerformanceComponents of Individual PerformanceComponents of Individual PerformanceComponents of Individual Performance

Figure 3–1


Individual MotivationIndividual MotivationIndividual MotivationIndividual 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


Individual Motivation (cont’d)Individual Motivation (cont’d)Individual Motivation (cont’d)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


Equity as a MotivatorEquity as a MotivatorEquity as a MotivatorEquity 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.

OutcomesInputs

OutcomesInputs

Other

Other

Individual

Individual


Expectancy TheoryExpectancy TheoryExpectancy TheoryExpectancy 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


Simplified Expectancy Model of MotivationSimplified Expectancy Model of MotivationSimplified Expectancy Model of MotivationSimplified Expectancy Model of Motivation

Figure 3–2


Management Implications for Management Implications for Motivating PerformanceMotivating Performance

Management Implications for Management Implications for Motivating PerformanceMotivating 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.


Individual/Organizational RelationshipsIndividual/Organizational RelationshipsIndividual/Organizational RelationshipsIndividual/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


Job Satisfaction and Job Satisfaction and Organizational CommitmentOrganizational 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.


Factors Affecting Job Performance Factors Affecting Job Performance and Organizational Commitmentand Organizational Commitment

Factors Affecting Job Performance Factors Affecting Job Performance and Organizational Commitmentand Organizational Commitment

Figure 3–3




Absenteeism– Involuntary absenteeism

• Unavoidable with understandable cause (e.g., actual illness)

– Voluntary absenteeism• Avoidable without justifiable cause (e.g., feigning

illness)

– Measuring absenteeism

100days) work of(Number employees) ofnumber (Average

period during absence jobgh lost throu days-person ofNumber


Reasons for Reasons for Unscheduled Unscheduled

AbsencesAbsences

Reasons for Reasons for Unscheduled Unscheduled

AbsencesAbsences

Figure 3–4Source: Based on data from CCH Absenteeism Survey, CCH Human Resources Management, November 1, 2000.




Controlling Absenteeism

Disciplinary approach Increasingly severe disciplinary action leading eventually to dismissal

Positive reinforcement Rewarding attendance with prizes and bonuses

Combination approach Use of both discipline and rewards to motivate employee attendance.

“No fault” absenteeism Reasons for absence do not matter. Absenteeism in excess on normal limits can trigger disciplinary action and lead to eventually to dismissal

Paid time-off programs Time-off is not categorized by type. Absences in excess of employer-paid time-off are unpaid.




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.




Turnover Types

Functional turnover Lower-performing or disruptive employees leave the organization.

Dysfunctional turnover Key individuals and high performers leave at critical times.

Uncontrollable turnover Occurs for reasons outside the impact of the organization.

Controllable turnover Occurs due to factors that could be influenced by the employer


Retention of Human ResourcesRetention of Human ResourcesRetention of Human ResourcesRetention 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


Retention of Human ResourcesRetention of Human ResourcesRetention of Human ResourcesRetention 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


Most Common Reasons Why Most Common Reasons Why Employees Voluntarily LeaveEmployees Voluntarily Leave

Most Common Reasons Why Most Common Reasons Why Employees Voluntarily LeaveEmployees Voluntarily Leave

Figure 3–5Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested.


Retention Retention DeterminantsDeterminants

Retention Retention DeterminantsDeterminants

Figure 3–6


Desired Organizational CharacteristicsDesired Organizational CharacteristicsDesired Organizational CharacteristicsDesired Organizational Characteristics

Figure 3–7Source: The Right Communiqué, First Quarter 2001, 7. Used with permission


Work Schedule FlexibilityWork Schedule FlexibilityWork Schedule FlexibilityWork Schedule Flexibility

Figure 3–8Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested.


The Retention The Retention Management Management

ProcessProcess

The Retention The Retention Management Management

ProcessProcess

Figure 3–9


The Retention Management ProcessThe Retention Management ProcessThe Retention Management ProcessThe 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:

100 midmonthat employees ofnumber Total

month theduring sseparation employee ofNumber


Simplified Turnover Costing ModelSimplified Turnover Costing ModelSimplified Turnover Costing ModelSimplified Turnover Costing Model

Figure 3–10



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.



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

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