Employee Separation and Retention

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Chapter 10 of Human Resource Management: Gaining a Competitive Advantage

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  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Chapter 10 focuses on employee separation and retention. It discusses what can be done to retain high-performing employees who warrant further development as well as managing the separation process for low-performing employees who have not responded well to developmental opportunities and examines involuntary and voluntary turnover.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Learning objectives include: Distinguish between involuntary and voluntaryturnover and discuss how each can be leveragedfor competitive advantage. List and apply major elements that contribute to the perception of justice to discipline and dismissal. Specify the relationship between job satisfaction and job withdrawal and identify sources of job satisfaction. Design and use a survey feedback intervention program to promote retention of key personnel.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Retaining top performers is not always easy, however. Similarly, the increased willingness of people to sue their employer, combined with an unprecedented level of violence in the workplace, has made discharging employees legally complicated and personally dangerous. To compete, organizations must ensure : G ood performers are motivated to stay. C hronically low performers are allowed, encouraged or if necessary, forced to leave. 2 T ypes of Turnover : Involuntary turnover —initiated by the organization (often among those who would prefer to stay). Voluntary turnover —initiated by employee (often those the company would prefer to keep).
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Despite a company’s best efforts in the area of personnel selection, training, and design, some employees will occasionally fail to meet performance requirements or will violate company policies while on the job. In addition to the financial risks associated with a dismissal, there are issues related to personal safety. Violence in the workplace has become a major organizational problem in recent years.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- A standardized, systematic approach to discipline and discharge is necessary. Outcome fairness refers to the judgment that people make with respect to the outcomes received relative to the outcomes received by other people with whom they identify. Procedural justice is a concept of justice focusing on the methods used to determine the outcomes received (Table 10.1). Interactional justice is a concept of justice referring to the interpersonal nature of how the outcomes were implemented (Table 10.2).
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Except in the most extreme cases, employees should generally not be terminated for a first offense. Rather, termination should come about at the end of a systematic discipline program. Effective discipline programs have two central components: documentation (which includes specific publication of work rules and job descriptions that should be in place prior to administering discipline) and progressive punitive measures. Punitive measures should be taken in steps of increasing magnitude, and only after having been clearly documented. At some point, later offenses may lead to a temporary suspension. Effective discipline programs have two central components—documentation and progressive punitive.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Interactional justice refers to the interpersonal nature of how the outcomes were implemented. When the decision is explained well and implemented in a fashion that is socially sensitive, considerate, and empathetic, this helps defuse some of the resentment that might come about from a decision to discharge an employee. 4 Determinants of Interactional Justice (1) Explanation. Emphasize aspects of procedural fairness that justify the decision. (2) Social sensitivity. Treat the person with dignity and respect. (3) Consideration. Listen to the person’s concerns. (4) Empathy . Identify with the person’s feelings. Explanation. Emphasize aspects of procedural fairness that justify the decision.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Alternative dispute resolution (ADR ) is a method of resolving disputes that does not rely on the legal system. In general, this form of resolution proceeds through four stages: open door policy, peer review, mediation, and arbitration. Stage 1: Open-door policy The two people in conflict (e.g., supervisor and subordinate) attempt to arrive at a settlement together. If none can be reached, they proceed to Stage 2: Peer review A panel composed of representatives from the organization that are at the same level of those people in the dispute hears the case and attempts to help the parties arrive at a settlement. If none can be reached, they proceed to Stage 3: Mediation A neutral third party from outside the organization hears the case and, via a nonbinding process, tries to help the disputants arrive at a settlement. If none can be reached, the parties proceed to Stage 4: Arbitration A professional arbitrator from outside the organization hears the case and resolves it unilaterally by rendering a specific decision or award. Most arbitrators are experienced employment attorneys or retired judges.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Employee assistance programs are basically referral services that supervisors and employees can use to seek professional treatment for various problems. Many EAPs are now fully integrated into companies’ overall health benefit plans, serving as gatekeepers for healthcare utilization. Both supervisors and employees may be trained in using the referral system. Evaluation of their success is important because they are just evolving.Given EAPs’ wide range of options and evolving nature, we need to constantly analyze their effectiveness.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Outplacement counseling is counseling to help displaced employees manage the transition from one job to another. Services such as job search support, résumé critiques, job interviewing training, and networking opportunities may be provided in-house or through an outside source.Aimed at helping people realize other opportunities exist.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- An employee's first response to dissatisfaction would be to try to change the conditions that generate the dissatisfaction. This could lead to supervisor‑subordinate confrontation, perhaps even conflict, as dissatisfied workers try to bring about changes in policy or upper‑level personnel.At the organizational level, turnover results in lowered work unit performance, which, in turn, harms the firm’s financial performance. withdrawal behaviors are clearly related to one another, and they are all at least partially caused by job dissatisfaction
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Process of Job Withdrawal is a theory that dissatisfied individuals enact a set of behaviors in succession to avoid their work situation (see Figure 10.3). If the source of dissatisfaction relates to organization wide poli­cies, organizational turnover is likely.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- An employee's first response to dissatisfaction would be to try to change the conditions that generate dissatisfaction. Although at first this type of conflict can feel threatening to the manager, on closer inspection, this is really an opportunity for the manager to learn about and perhaps solve an important problem. Behavior change could lead to supervisor‑subordinate confrontation, perhaps even conflict, as dissatisfied workers try to bring about changes in policy or upper‑level personnel. Sometimes going to the media or government, through whistle-blowing, is enough to initiate the change than an employee wishes to see.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- A dissatisfied worker may be able to solve his or her problem by leaving the job. This could take the form of an internal transfer. If the source of dissatisfaction relates to organization wide poli­cies, organizational turnover is likely. In a recent survey, on average, companies spend 15 percent of their payroll costs to make up for absent workers.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Job satisfaction is a pleasurable feeling that results from the perception that one's job fulfills or allows for the fulfillment of one's important job values. Three important aspects of job satisfaction are values, perceptions, andimportance. This definition reflects three important aspects of job satisfaction. First, job satisfaction is a function of values, defined as “what a person consciously or unconsciously desires to obtain.” Second, this definition emphasizes that different employees have different views of which values are important, and this is critical in determining the nature and degree of their job satisfaction. One person may value high pay above all else; another may value the opportunity to travel; another may value staying within a specific geographic region. An important aspect of job satisfaction is perception. An individual’s perceptions may not be a completely accurate reflection of reality, and different people may view the same situation differently. Different employees have different views of which values are important, and this is critical in determining the nature and degree of their job satisfaction. In particular, people’s perceptions are often strongly influenced by their frame of reference. A frame of reference is a standard point that serves as a comparison for other points and thus provides meaning.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Many aspects of people and organizations can cause dissatisfaction among employees. Sources of job satisfaction include unsafe working conditions, personal disposition, task complexity, co‑workers and supervisors and pay satisfaction.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Each employee has a right to safe working conditions under the Occupational Safety and Health Act of 1970 (OSHA ). Financial bonuses to attaining specific safety related goal over timepay for themselves. Upper level management needs to continually emphasize and stress compliance with worker safety regulations and carefully monitor statistics related to workplace accidents. Many employers link financial bonuses to attaining specific safety-related goals, and this helps keep employees focused on doing the job the right way every day and payfor themselves over time. Firms that emphasize safety send workers a clear signal that they care about them. This is an important aspect of organizational culture which strengthens the employee–employer relationship and promotes both attraction of new employees and retention of current employees.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Since dissatisfaction is an emotion that ulti­mately reside within the person, it is not surprising that many who have studied these outcomes have focused on individual differences. Negative affectivity is a term used to describe a dispositional dimension that reflects pervasive individual differences in satisfaction with any and all aspects of life. Individuals who are high in negative affectivity report higher levels of aversive mood states, including anger, contempt, disgust, guilt, fear, and nervousness across all contexts (work and nonwork). People who are high in negative affectivity tend to focus extensively on the negative aspects of themselves and others. They also tend to persist in their negative attitudes even in the face of organizational interventions, such a increased pay levels, that generally increase the levels of satisfaction of other people. Some individuals tend to bring low satisfaction with them to work and may be relatively dissatisfied regardless of what steps the organization or the manager takes. The linkage between these kinds of traits and job satisfaction suggests the importance of personnel selection as a way of raising overall levels of employee satisfaction. The nature of the task itself is the key predictor of job dissatisfaction The primary aspects of taskthat affect job satisfaction include the complexity of the task, the degree of physical strain and exertion on the job, the ancient of flexibility in where and when the work is done, and the value the employeeputs on the task. There is a strong positive relationship between task complexity and job satisfaction. That is, the boredom generated by simple, repetitive jobs that do not mentally challenge the worker leads to frustration and dissatisfaction. One of the major interventions aimed at reducing job dissatisfaction by increasing job complexity is job enrichment. Another task-based intervention is job rotation. This is a process of systematically moving a single individual from one job to another over the course of time. Although employees may not feel capable of putting up with the dissatisfying aspects of a particular job indefinitely, they often feel they can do so temporarily. Job rotation can do more than simply spread out the dissatisfying aspects of a particular job. It can increase work complexity for employees and provide valuable cross-training in jobs so that employees eventually understand many different jobs. This makes for a more flexible workforce and increases workers’ appreciation of the other tasks that have to be accomplished for the organization to complete its mission. The most important aspect of work in terms of generating satisfaction is the degree to which it is meaningfully related to core values of the worker. Prosocial motivation is often used explicitly to capture the degree to which people are motivated to help other people. When people believe that their work has an important impact on other people, they are much more willing to work longer hours.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- The two primary sets of people in an organization who affect job satisfaction are co‑workers and supervisors. A person may be satisfied with his or her supervisor and co­workers for one of two reasons: The person may have many of the same values, attitudes, and philosophies that the co‑workers and supervisors have. The person may be satisfied with his or her supervisor and co‑workers because they provide social support,the degree to which the person is surrounded by other people who are sympathetic and caring. Satisfaction with pay and benefits is another important dimension of overall pay satisfaction. Social support is a strong predictor of job satisfaction and lower employee turnover. Pay is also seen as an indicator of status within the organization as well as in society at large. For many individuals, the standing of their pay relative to those within their organization, or the standing of their pay relative to others doing similar work for other employers, becomes even more important than the level of pay itself. In order to make costs better reflect revenues, organizations are increasingly adopting variable pay schemes that reward employees for specific accomplishments related to either individual or organizational performance.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Most attempts to measure job satisfaction rely on workers' self-­reports such aspay, the work itself, supervision, co‑workers, and promotions). Also engaging in an ongoing program of employee satisfaction provides a means of empirically assessing the impact of changes in policy. Surveys: emphasize overall satisfaction. assess the impact of policy changes. allow the company to compare itself with others in the same industry. allow the company to check for differences between units and benchmark “best practices . ” If people fail to see any timely actions taken on matters identified as problems in the survey, satisfaction is likely to be even lower than it would be in the absence of a survey. Any strategic retention policy also has to consider surveying people who are about to become ex-employees. Exit interviews with departing workers can be a valuable tool for uncovering systematic concerns that are driving retention problems. If properly conducted, an exit interview can reveal the reasons why people are leaving, and perhaps even set the stage for their later return.
  • Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Involuntary turnover reflects a separation initiated by the organization, often when the individual would prefer to stay a member of the organization. Voluntary turnover reflects a separation initiated by the individual, often when the organization would prefer that the person stay a member. Organizations can gain competitive advantage by strategically managing the separation process so that involuntary turnover is implemented in a fashion that does not invite retaliation, and voluntary turnover among high performers is kept to a minimum. Retaliatory reactions to organizational discipline and dismissal decisions can be minimized by implementing these decisions in a manner that promotes feelings of procedural and interactive justice. Voluntary turnover can be minimized by measuring and monitoring employee levels of satisfaction with critical facets of job and organization, and then addressing any problems identified by such surveys.
  • Employee Separation and Retention

    1. 1. Human Resource Management: Gaining a Competitive Advantage <ul><li>Chapter 10 </li></ul><ul><li>Employee Separation and Retention </li></ul>Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
    2. 2. Learning Objectives <ul><li>Distinguish between involuntary and voluntary </li></ul><ul><li>turnover and discuss how eachcan be leveraged </li></ul><ul><li>for competitive advantage. </li></ul><ul><li>Listand apply major elements that contribute tothe perceptionof justiceto disciplineand dismissal. </li></ul><ul><li>Specify the relationship between job satisfaction and </li></ul><ul><li>job withdrawal and identify sources of job satisfaction. </li></ul><ul><li>Design and use a survey feedback intervention program to promote retention of key personnel. </li></ul>10-
    3. 3. Introduction <ul><li>To compete, organizations must ensure : </li></ul><ul><ul><li>G ood performers are motivated to stay. </li></ul></ul><ul><ul><li>C hronically low performers are allowed, encouraged </li></ul></ul><ul><ul><li>or if necessary, forced to leave. </li></ul></ul><ul><li>2 Types of Turnover : </li></ul><ul><ul><li>Involuntary turnover —initiated by the organization </li></ul></ul><ul><ul><li>(often among thosewho would preferto stay). </li></ul></ul><ul><ul><li>Voluntary turnover —initiated by employee </li></ul></ul><ul><ul><li>(often those the company would prefer to keep). </li></ul></ul>10-
    4. 4. Managing Involuntary Turnover <ul><li>Employment-at-will doctrine - in the absence </li></ul><ul><li>of a specific contract, either an employer or employee could sever the employment relationship at any time. </li></ul><ul><li>Violence in the workplace caused by involuntary turnover has become a major organizational problem in recent years. </li></ul><ul><li>A standardized, systematic approach to </li></ul><ul><li>discipline and discharge is necessary. </li></ul>10-
    5. 5. Principles of Justice <ul><li>Outcome fairness -the judgement that people makeregarding outcomes receivedrelative to outcomes received by others with whom they identify. </li></ul><ul><li>Procedural justice - focuses on methods used </li></ul><ul><li>to determine the outcomes received . </li></ul><ul><li>Interactional justice - refers to the interpersonal nature of how the outcomes were implemented . </li></ul>10-
    6. 6. Progressive Discipline 2 Components of Discipline Programs 10-
    7. 7. 4 Determinants of Interactional Justice 1. Explanation 3. Consideration 2. Social sensitivity 4. Empathy 10-
    8. 8. Peer Review Open Door Policy Mediation Arbitration 4 Stages of ADR 10-
    9. 9. Employee Assistance Programs <ul><li>EAPs attempt to ameliorate problems encountered by workers who are drug dependent, alcoholic, or psychologically troubled. </li></ul><ul><ul><li>EAPs are usually identified in official documents published by the employer. </li></ul></ul><ul><ul><li>There are several issues in controversy regarding EAPs . </li></ul></ul>10-
    10. 10. Outplacement Counseling <ul><li>Helps displaced employees manage the transition from one job to another. </li></ul><ul><li>Services such as job search support, résumé critiques, job interviewing training and networking opportunities may be provided </li></ul><ul><li>in-house or through an outside source. </li></ul><ul><li>Aimed at helping people realize that other opportunities exist. </li></ul>10-
    11. 11. Managing Voluntary Turnover – Job Withdrawal <ul><li>Progression of Withdrawal Theory -dissatisfied individuals enact a set of behaviors in succession to avoid their work situation. </li></ul><ul><li>3 categories : </li></ul><ul><ul><li>behavior change </li></ul></ul><ul><ul><li>physical job withdraw </li></ul></ul><ul><ul><li>psychological job withdraw </li></ul></ul><ul><li>Withdrawal behaviors are related to one another, and partially caused by job dissatisfaction. </li></ul>10-
    12. 12. Job Dissatisfaction- Job Withdrawal Process Causes - Job dissatisfaction - Personal disposition - Tasks&roles - Supervisors& coworkers - Pay&benefits Manifestations - job withdrawal - Behavioral change - Physical job withdrawal - Psychological job withdrawal Job Dissatisfaction Job Withdrawal 10-
    13. 13. Behavior Change <ul><li>An employee's first response to dissatisfaction would be to try to changethe conditions that generate dissatisfaction. </li></ul><ul><li>When employees are unionized, dissatisfaction leads to an increased grievances. </li></ul><ul><li>Employees sometimes initiate change through whistle-blowing - making grievances public by going to the media or government . </li></ul>10-
    14. 14. Physical Withdrawal <ul><li>4 ways a dissatisfied worker can physically withdrawal from the organization: </li></ul><ul><ul><li>Leave the job </li></ul></ul><ul><ul><li>Internal transfer </li></ul></ul><ul><ul><li>Absenteeism </li></ul></ul><ul><ul><li>Tardiness </li></ul></ul><ul><li>Companies spend 15 %of payroll costs to make up for absent workers on average. </li></ul>10-
    15. 15. Job Satisfaction and Job Withdrawal <ul><li>Job satisfaction is a pleasurable feeling that results from the perception that one's job fulfills one's important job values. </li></ul><ul><li>3 aspects of job satisfaction: </li></ul><ul><ul><li>values </li></ul></ul><ul><ul><li>perceptions </li></ul></ul><ul><ul><li>Importance </li></ul></ul><ul><li>Frame of Reference serves as a comparison for other points and provides meaning. </li></ul>10-
    16. 16. Pay and Benefits Tasks and Roles Sources of Job Dissatisfaction Personal Dispositions Unsafe Working Conditions Supervisors and Coworkers 10-
    17. 17. Unsafe Working Conditions <ul><li>Each employee has a right to safe working conditions under the Occupational Safety </li></ul><ul><li>and Health Act of 1970 (OSHA) . </li></ul><ul><li>Financial bonuses linked to specific safety related goals help keep employees focused </li></ul><ul><li>and pay for themselves over time. </li></ul><ul><li>Firms that emphasize safety send workers a clear signal that they care about them. </li></ul>10-
    18. 18. Sources of Job Dissatisfaction <ul><ul><li>Personal Dispositions </li></ul></ul><ul><ul><ul><li>Negative affectivity is a dispositional dimensionthat reflects pervasive individual differences in satisfaction with any and all aspects of life. </li></ul></ul></ul><ul><li>Tasks and Roles </li></ul><ul><ul><ul><li>The nature of the task itself is the key predictor of job dissatisfaction. </li></ul></ul></ul><ul><ul><ul><li>Job Rotation </li></ul></ul></ul><ul><ul><ul><li>Prosocial Motivation </li></ul></ul></ul>10-
    19. 19. Sources of Job Dissatisfaction <ul><li>Supervisors and Coworkers </li></ul><ul><ul><li>A person may be satisfied withhis or her supervisor and coworkersdue to: </li></ul></ul><ul><ul><ul><ul><li>shared values, attitudes, and philosophies, </li></ul></ul></ul></ul><ul><ul><ul><ul><li>strong social support </li></ul></ul></ul></ul><ul><li>Pay and Benefits </li></ul><ul><ul><li>For many people, pay is a reflection of self worth, so pay satisfaction takes on critical significance when it comes to retention. </li></ul></ul>10-
    20. 20. Survey Feedback Interventions <ul><li>Surveys: </li></ul><ul><ul><li>emphasize overall satisfaction. </li></ul></ul><ul><ul><li>assess the impact ofpolicy changes. </li></ul></ul><ul><ul><li>allow the company to compare itself with others in the same industry. </li></ul></ul><ul><ul><li>allow the company to check for differences between units and benchmark “best practices . ” </li></ul></ul><ul><li>If people fail to see timely actions taken on matters identified as problems in the survey, satisfaction is likely to be lower than it would be in the absence of a survey. </li></ul><ul><li>Any strategic retention policy has to consider surveying people who are about to become ex-employees. </li></ul>10-
    21. 21. Summary <ul><li>Involuntary turnover reflects a separation initiated by the organization. </li></ul><ul><li>Voluntary turnover reflects a separation initiated by the individual. It can be minimized by measuring, monitoring and surveying, then addressing problems found in the surveys. </li></ul><ul><li>Organizations can gain competitive advantage by strategically managing the separation process. </li></ul><ul><li>Retaliatory reactions to organizational discipline and dismissal decisions can be minimized. </li></ul>10-

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