individual/organization relations and retention mn 301 – human resource management craig w....
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Individual/Organization Relations and Retention
MN 301 – Human Resource Management
Craig W. Fontaine, Ph.D.Pine Manor College
Fall 2014
Individual Performance Factors
Individual’s ability to do the work Effort expended Organizational support
Performance (P) = Ability (A) x Effort (E) x Support (S)
Components of Individual Performance
Individual Motivation
Motivation: Desire within a person causing that person to act
Influences of motivation Performance
Reaction to compensation
Turnover
Other HR concerns
Approaches to Understanding Motivation
Need theory Maslow classified human needs into five categories
Physiological needs
Safety and security needs
Belonging and love needs
Esteem needs
Self-actualization needs
Until the more basic needs are adequately fulfilled, a person will not fully strive to meet higher needs
Approaches to Understanding Motivation
Two factor theory Frederick Herzberg’s motivation/hygiene theory
assumes that one group of factors, motivators, accounts for motivation But hygiene factors can cause dissatisfaction with
work
Implication of Herzberg’s research…
Need Theory and Two Factor Theory Compared
Approaches to Understanding Motivation
Equity theory (Social Comparison Theory) People want to be treated fairly at work
Equity: Perceived fairness of what the person does compared with what the person receives for it
Inputs - What a person brings to the organization
Outcomes - Rewards obtained in exchange for inputs
Approaches to Understanding Motivation
Expectancy theory (Cognitive Theory) Brought about by Lyman Porter and E. E. Lawler
Indicates that motivation is also influenced by people’s expectations
Individuals base decisions about their behaviors on their expectations…
Simplified Expectancy Model of Motivation
Motivation by Organizations
Financial rewardsPerformance managementOthers
Praise, trust, and recognition
Autonomy to do one’s job
Motivation by Organizations
Motivation requires diagnosis of organization’s efforts and employee’s: Efforts
Abilities
Expectations
Psychological Contract
Unwritten expectations employees and employers have about the nature of their work relationships Useful in understanding individuals’ relationships
with their employers
Create positive or negative relationship between the employer and individual
Based on trust that leads to meeting employer’s and employee’s expectations and needs
Expectation of a Psychological Contract
Employers will Provide
• Competitive compensation and benefits
• Flexibility to balance work and home life
• Career development opportunities
Employees will Contribute
• Continuous skill improvement and increased productivity
• Reasonable time with the Organization
• Extra efforts and results when needed
Global Psychological Contract Concerns
Psychological contracts vary differ by country
Psychological contract expectations of employees from different cultures need to be met by multinational firms
Job Satisfaction and Commitment
Job satisfaction: Positive emotional state resulting from evaluating one’s job experience Morale - Job satisfaction of a group or
organization
Attitude survey: Focuses on employees’ feelings and beliefs about their jobs and the organization
Components of Job Satisfaction
Commitment and Engagement
Organization commitment: Degree to which employees believe in and accept organizational goals and desire to remain with the organization
Employee engagement: Extent to which an employee feels linked to organizational success Loyalty: Being faithful to an institution or
employer
Engaged and Disengaged Employees
Employee Absenteeism
Any failure by an employee to report for work as scheduled or to stay at work when scheduled
Effective absence management is a balance between: Supporting employees who are legitimately not at
work
Keeping operational needs covered
Employee Absenteeism
Types Involuntary absences
Voluntary absences
Sources of Direct and Indirect Costs of Absenteeism
Methods of Addressing Absenteeism
Disciplinary approach People who are absent the first time receive an
oral warning
Subsequent absences bring written warnings, suspension, and finally dismissal
Positive reinforcement Giving rewards for meeting attendance standards
Methods of Addressing Absenteeism
Combination approach Rewards desired behaviors and punishes
undesired behaviors
No-fault policy Employees must manage their own attendance
unless they abuse that freedom
Paid-time-off (PTO) programs Employees use days from their accounts at their
discretion a paid-time-off account
Measuring Absenteeism
Formula suggested by the U.S. Department of Labor
Number of person-days lost through job absence during period 100
(Average number of employees) (Number of workdays)
Measuring Absenteeism
Other measures of absenteeism Incidence rate - Number of absences per 100
employees each day
Inactivity rate - Percentage of time lost to absenteeism
Severity rate - Average time lost
Employee Turnover
Process in which employees leave an organization and have to be replaced
Impact of turnover Negative impact on several dimensions of
organizational performance Safety
Productivity
Financial performance
Types of Turnover
• Employees are terminated for poor performance or work rule violations
Involuntary Turnover
• Employees leave by choice
Voluntary Turnover
• Lower-performing or disruptive employees leave
Functional Turnover
Types of Turnover
• Key individuals and high performers leave at critical times
Dysfunctional Turnover
• Employees leave for reasons outside the control of the employer
Uncontrollable Turnover
• Employees leave for reasons that could be influenced by the employer
Controllable Turnover
Employee Turnover
Churn: Hiring new workers while laying off others Employers sometimes complain about not being
able to find skilled workers while they are laying off other employees
Computing the Turnover Rate
Categories in which data is gathered and analyzed Job and job level
Demographic characteristics
Department, unit, and location
Number of employee separations during the month 100
Total number of employees at midmonth
Computing the Turnover Rate Education and training
Reason for leaving
Knowledge, skills, and abilities
Length of service
Performance ratings/levels
Determining Turnover Costs
Separation costs Vacancy costs Replacement costs Training costs Hidden/indirect costs
Optimal Turnover
Turnover costs and benefits can be calculated separately
More turnover in certain segments of the organization can be beneficial if: It costs very little
Those leaving are less valuable than their replacements
Myths about Retention
Money is the main reason people leave Hiring has little to do with retention If you train people, you are only
training them for another employer Do not be concerned about retention during
organizational change If high performers want to leave, the
company cannot hold them
Drivers of Retention
Figure 5.11 - Comment from High Performers as to Why They Stay
Source: Adapted from John P. Hausknecht, et al., “Targeted Employee Retention: Performance Based and Job-related Differences in Reported Reasons for Staying,” Human Resource Management, 48, March–April 2009, pp. 269–288.
Retention Assessment and Metrics
Some of the first areas to consider when analyzing data for retention Work
Pay/benefits
Supervision
Occupations
Departments
Demographics of those leaving and staying
Process for Managing Retention
Retention Assessment and Metrics
Employee surveys - Used to: Diagnose specific problem areas
Identify employee needs or preferences
Reveal areas in which HR activities are well received or viewed negatively
Exit interview: Individuals who are leaving the organization are asked to give their reasons
Retention Assessment and Metrics
Effective first-year efforts lead to: Future career development
Higher performance
Other positive retention factors
Retention Evaluation and Follow-Up
Organizations must: Track intervention results
Adjust intervention efforts
Some firms use pilot programs to see how changes affect retention before extending them to the entire organization