Hrm10e Chap03


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Hrm10e Chap03

  1. 1. Human Resource Management TENTH EDITON Individual Performance and Retention © 2003 Southwestern College Publishing. All rights reserved. PowerPoint Presentation by Charlie Cook SECTION 1 Nature of Human Resource Management Chapter 3 Robert L. Mathis  John H. Jackson
  2. 2. Learning Objectives <ul><li>After you have read this chapter, you should be able to: </li></ul><ul><ul><li>Discuss how motivation is linked to individual performance. </li></ul></ul><ul><ul><li>Identify the changing nature of the psychological contract. </li></ul></ul><ul><ul><li>Describe several types of absenteeism and turnover. </li></ul></ul><ul><ul><li>List the five major retention determinants and identify activities related to them. </li></ul></ul><ul><ul><li>Outline the retention management process and how to measure and assess turnover. </li></ul></ul>
  3. 3. Individual Employee Performance <ul><li>Individual Performance Factors </li></ul><ul><ul><li>Individual ability to do the work </li></ul></ul><ul><ul><li>Effort level expended </li></ul></ul><ul><ul><li>Organizational support </li></ul></ul><ul><ul><li>Performance (P) = Ability (A) x Effort (E) x Support (S) </li></ul></ul>
  4. 4. Components of Individual Performance Figure 3 –1
  5. 5. Individual Motivation <ul><li>Motivation </li></ul><ul><ul><li>The desire within a person causing that person to act to reach a goal. </li></ul></ul><ul><li>Maslow’s Hierarchy of Needs </li></ul><ul><ul><li>Categories of needs that ascend in order; lower needs must be fulfilled before person will strive to meet higher needs. </li></ul></ul><ul><ul><ul><li>Physiological needs </li></ul></ul></ul><ul><ul><ul><li>Safety and security needs </li></ul></ul></ul><ul><ul><ul><li>Belonging and love needs </li></ul></ul></ul><ul><ul><ul><li>Esteem needs </li></ul></ul></ul><ul><ul><ul><li>Self-actualization needs </li></ul></ul></ul>
  6. 6. Individual Motivation (cont’d) <ul><li>Herzberg’s Motivation/Hygiene Theory </li></ul><ul><ul><li>Motivators —account for job satisfaction and motivation </li></ul></ul><ul><ul><ul><li>Achievement • Recognition • Work itself </li></ul></ul></ul><ul><ul><ul><li>Responsibility • Advancement </li></ul></ul></ul><ul><ul><li>Hygiene factors—cause dissatisfaction with work </li></ul></ul><ul><ul><ul><li>Interpersonal relationships </li></ul></ul></ul><ul><ul><ul><li>Company policy/administration </li></ul></ul></ul><ul><ul><ul><li>Supervision • Salary • Working conditions </li></ul></ul></ul>
  7. 7. Equity as a Motivator <ul><li>Equity </li></ul><ul><ul><li>The perceived fairness of what the person does compared to what the person receives. </li></ul></ul><ul><ul><li>The perception of the fair value of rewards (outcomes) for efforts (inputs) that individuals make when comparing their results to others in the organization. </li></ul></ul>
  8. 8. Expectancy Theory <ul><li>Expectancy </li></ul><ul><ul><li>Individuals base decisions about their behaviors on their expectations that one or another behaviors is more likely to lead to needed or desired outcomes. </li></ul></ul><ul><ul><li>Effort-to-Performance Expectations </li></ul></ul><ul><ul><ul><li>Belief in the ability to perform the task well </li></ul></ul></ul><ul><ul><li>Performance-to-Reward Linkage </li></ul></ul><ul><ul><ul><li>Belief that high performance will result in receiving rewards </li></ul></ul></ul><ul><ul><li>Value of Rewards </li></ul></ul><ul><ul><ul><li>The rewards have value to the individual </li></ul></ul></ul>
  9. 9. Simplified Expectancy Model of Motivation Figure 3 –2
  10. 10. Management Implications for Motivating Performance <ul><li>The need for comprehensive strategies and tactics to address both equity and expectations of employees. </li></ul><ul><li>The provision of training to encourage high performance. </li></ul><ul><li>The development of evaluation methods that properly appraise and reward performance. </li></ul><ul><li>An understanding of what kinds of rewards are desired and valued by employees. </li></ul>
  11. 11. Individual/Organizational Relationships <ul><li>The Psychological Contract </li></ul><ul><ul><li>The unwritten expectations employees and employers have about the nature of their work relationships. Affected by age of employee and changes in economic conditions. </li></ul></ul><ul><ul><li>Employers provide: </li></ul></ul><ul><ul><ul><li>Competitive compensation and benefits </li></ul></ul></ul><ul><ul><ul><li>Career development opportunities </li></ul></ul></ul><ul><ul><ul><li>Flexibility to balance work and home life </li></ul></ul></ul><ul><ul><li>Employees contribute: </li></ul></ul><ul><ul><ul><li>Continuous skill improvement </li></ul></ul></ul><ul><ul><ul><li>Reasonable time with the organization </li></ul></ul></ul><ul><ul><ul><li>Extra effort when needed </li></ul></ul></ul>
  12. 12. Job Satisfaction and Organizational Commitment <ul><li>Job Satisfaction </li></ul><ul><ul><li>A positive emotional state resulting from evaluating one’s job experience. </li></ul></ul><ul><li>Organization Commitment </li></ul><ul><ul><li>The degree to which employees believe in and accept organizational goals and desire to remain with the organization. </li></ul></ul>
  13. 13. Factors Affecting Job Performance and Organizational Commitment Figure 3 –3
  14. 14. Job Satisfaction and Organizational Commitment <ul><li>Absenteeism </li></ul><ul><ul><li>Involuntary absenteeism </li></ul></ul><ul><ul><ul><li>Unavoidable with understandable cause (e.g., actual illness) </li></ul></ul></ul><ul><ul><li>Voluntary absenteeism </li></ul></ul><ul><ul><ul><li>Avoidable without justifiable cause (e.g., feigning illness) </li></ul></ul></ul><ul><ul><li>Measuring absenteeism </li></ul></ul>
  15. 15. Reasons for Unscheduled Absences Figure 3 –4 Source: Based on data from CCH Absenteeism Survey, CCH Human Resources Management , November 1, 2000.
  16. 16. Job Satisfaction and Organizational Commitment
  17. 17. Job Satisfaction and Organizational Commitment <ul><li>Turnover </li></ul><ul><ul><li>The process in which employees leave the organization and have to be replaced. </li></ul></ul><ul><li>Types of Turnover </li></ul><ul><ul><li>Involuntary turnover —terminations for poor performance or work rule violations. </li></ul></ul><ul><ul><li>Voluntary turnover—employee leaves the organization by choice. </li></ul></ul>
  18. 18. Job Satisfaction and Organizational Commitment
  19. 19. Retention of Human Resources <ul><li>Impact of Retention Failure </li></ul><ul><ul><li>Inability to achieve business goals </li></ul></ul><ul><ul><li>Loss of “image” to attract other individuals </li></ul></ul><ul><ul><li>High costs of turnover and replacement </li></ul></ul>
  20. 20. Retention of Human Resources <ul><li>Why People Stay </li></ul><ul><ul><li>Great company </li></ul></ul><ul><ul><ul><li>Value and culture, well-managed, and offers exciting challenges </li></ul></ul></ul><ul><ul><li>Great job </li></ul></ul><ul><ul><ul><li>Freedom and autonomy, exciting challenges, and career advancement and growth </li></ul></ul></ul><ul><ul><li>Compensation and lifestyle </li></ul></ul><ul><ul><ul><li>Differentiated pay package, high total compensation, geographic location, and respect for lifestyle </li></ul></ul></ul>
  21. 21. Most Common Reasons Why Employees Voluntarily Leave Figure 3 –5 Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested.
  22. 22. Retention Determinants Figure 3 –6
  23. 23. Desired Organizational Characteristics Figure 3 –7 Source: The Right Communiqué , First Quarter 2001, 7. Used with permission
  24. 24. Work Schedule Flexibility Figure 3 –8 Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested.
  25. 25. The Retention Management Process Figure 3 –9
  26. 26. The Retention Management Process <ul><li>Measuring Turnover </li></ul><ul><ul><li>Ways in which to measure turnover </li></ul></ul><ul><ul><ul><li>Job and job levels • Department, units, and location </li></ul></ul></ul><ul><ul><ul><li>Reason for leaving • Length of service </li></ul></ul></ul><ul><ul><ul><li>Demographic characteristics </li></ul></ul></ul><ul><ul><ul><li>Education and training </li></ul></ul></ul><ul><ul><ul><li>Knowledge, skills and abilities </li></ul></ul></ul><ul><ul><ul><li>Performance ratings/levels </li></ul></ul></ul><ul><li>Computing the turnover rate: </li></ul>
  27. 27. Simplified Turnover Costing Model Figure 3 –10
  28. 28. The Retention Management Process <ul><li>Costs of Turnover </li></ul><ul><ul><li>Hiring costs – Training costs </li></ul></ul><ul><ul><li>Productivity costs – Separation costs </li></ul></ul><ul><li>Employee Surveys </li></ul><ul><ul><li>Attitude survey —focuses on employees’ feelings and beliefs about their jobs and the organization. </li></ul></ul><ul><li>Exit Interviews </li></ul><ul><ul><li>An interview in which individuals are asked to identify reasons for leaving the organization. </li></ul></ul>
  29. 29. The Retention Management Process <ul><li>Retention Interventions </li></ul><ul><ul><li>Provide realistic job previews during the recruiting process </li></ul></ul><ul><ul><li>Improve the selection process so that there is a better person-job fit for new hires </li></ul></ul><ul><ul><li>Conduct effective job orientation and initial training </li></ul></ul><ul><ul><li>Offer competitive, fair, and equitable compensation </li></ul></ul><ul><ul><li>Provide an adequate benefits package </li></ul></ul><ul><ul><li>Offer career development and training </li></ul></ul><ul><ul><li>Engage in fair and nondiscriminatory employee relations </li></ul></ul>