1. Human Resource Management TENTH EDITON
SECTION 1 Nature of Human Resource Management
Robert L. Mathis  John H. Jackson
Chapter 3
Individual Performance and Retention
PowerPoint Presentation by Charlie Cook
© 2003 Southwestern College Publishing. All rights reserved.

2. After you have read this chapter, you should be able to:
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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3. 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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4. Components of Individual Performance
Figure 3–1
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5. Individual 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
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6. 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
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7. 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.
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8. 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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9. Simplified Expectancy Model of Motivation
Figure 3–2
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10. 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.
© 2002 Southwestern College Publishing. All rights reserved.

11. 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
© 2002 Southwestern College Publishing. All rights reserved.

12. Job Satisfaction and Organizational Commitment
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.
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13. Factors Affecting Job Performance and Organizational Commitment
Figure 3–3
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14. 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
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15. Reasons for Unscheduled Absences
Source: Based on data from CCH Absenteeism Survey, CCH Human Resources Management, November 1, 2000.
Figure 3–4
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16. Job Satisfaction and Organizational Commitment
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17. Job Satisfaction and Organizational Commitment
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.
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18. Job Satisfaction and Organizational Commitment
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19. 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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20. 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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21. 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.
Figure 3–5
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22. Retention Determinants
Figure 3–6
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23. Desired Organizational Characteristics
Source: The Right Communiqué, First Quarter 2001, 7. Used with permission
Figure 3–7
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24. Work Schedule Flexibility
Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA: Society for Human Resource Management, 2000). Permission requested.
Figure 3–8
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25. The Retention Management Process
Figure 3–9
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26. 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:
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27. Simplified Turnover Costing Model
Figure 3–10
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28. The Retention Management Process
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.
© 2002 Southwestern College Publishing. All rights reserved.

29. 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
© 2002 Southwestern College Publishing. All rights reserved.