Human Resource Management

TENTH EDITON

SECTION 1
Nature of Human Resource Management

Robert L. Mathis John H. Jackson

Chapter 3

Individual Performance and Retention

2003 Southwestern College Publishing. All rights reserved.

PowerPoint Presentation by Charlie Cook

Learning 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.
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Individual 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)

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Components of Individual Performance

Figure 31
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Individual Motivation

Motivation
The desire within a person causing that person to act to reach a goal.

Maslows 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
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Individual Motivation (contd)

Herzbergs Motivation/Hygiene Theory

Motivatorsaccount for job satisfaction and motivation
Achievement Responsibility Recognition Work itself Advancement

Hygiene factorscause dissatisfaction with work

Interpersonal relationships Company policy/administration Supervision Salary Working conditions

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Equity 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.

InputsIndividual InputsOther OutcomesIndividual OutcomesOther

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Expectancy 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

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Simplified Expectancy Model of Motivation

Figure 32
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Management Implications for Motivating 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.

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310

Individual/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
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Job Satisfaction and Organizational Commitment

Job Satisfaction
A positive emotional state resulting from evaluating ones job experience.

Organization Commitment
The degree to which employees believe in and accept organizational goals and desire to remain with the organization.

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Factors Affecting Job Performance and Organizational Commitment

Figure 33
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Job Satisfaction and Organizational Commitment

Absenteeism
Involuntary absenteeism
Unavoidable with understandable cause (e.g., actual illness)

Voluntary absenteeism
Avoidable without justifiable cause (e.g., feigning illness)

Measuring absenteeism
Number of person - days lost through job absence during period 100 (Average number of employees) (Number of work days)

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Reasons for Unscheduled Absences

Source: Based on data from CCH Absenteeism Survey, CCH Human Resources Management, November 1, 2000. 2002 Southwestern College Publishing. All rights reserved.

Figure 34
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Job Satisfaction and Organizational Commitment

Controlling Absenteeism
Disciplinary approach Positive reinforcement Combination approach No fault absenteeism Increasingly severe disciplinary action leading eventually to dismissal Rewarding attendance with prizes and bonuses Use of both discipline and rewards to motivate employee attendance. Reasons for absence do not matter. Absenteeism in excess on normal limits can trigger disciplinary action and lead to eventually to dismissal Time-off is not categorized by type. Absences in excess of employer-paid time-off are unpaid.
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Paid time-off programs

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Job Satisfaction and Organizational Commitment

Turnover
The process in which employees leave the organization and have to be replaced.

Types of Turnover
Involuntary turnoverterminations for poor performance or work rule violations. Voluntary turnoveremployee leaves the organization by choice.

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Job Satisfaction and Organizational Commitment

Turnover Types
Functional turnover Dysfunctional turnover Uncontrollable turnover Controllable turnover Lower-performing or disruptive employees leave the organization. Key individuals and high performers leave at critical times. Occurs for reasons outside the impact of the organization. Occurs due to factors that could be influenced by the employer

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Retention 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

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Retention 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

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Most Common Reasons Why Employees Voluntarily Leave

Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested. 2002 Southwestern College Publishing. All rights reserved.

Figure 35
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Retention Determinants

Figure 36
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Desired Organizational Characteristics

Source: The Right Communiqu, First Quarter 2001, 7. Used with permission
2002 Southwestern College Publishing. All rights reserved.

Figure 37
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Work Schedule Flexibility

Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested. 2002 Southwestern College Publishing. All rights reserved.

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The Retention Management Process

Figure 39
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The 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:

Number of employee separations during the month 100 Total number of employees at midmonth

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Simplified Turnover Costing Model

Figure 310
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The Retention Management Process

Costs of Turnover
Hiring costs Training costs Productivity costs Separation costs

Employee Surveys
Attitude surveyfocuses 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.

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The Retention Management Process

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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