2 Staffing Organizations Model MissionGoals and ObjectivesOrganization StrategyHR and Staffing StrategyStaffing Policies and ProgramsSupport ActivitiesCore Staffing ActivitiesLegal complianceRecruitment: External, internalPlanningSelection: Measurement, external, internalJob analysisEmployment: Decision making, final matchStaffing System and Retention Management14-2
3 Chapter Outline Turnover and Its Causes Analysis of Turnover Nature of ProblemTypes of TurnoverCauses of TurnoverAnalysis of TurnoverMeasurementReasons for LeavingCosts and BenefitsRetention Initiatives: Voluntary TurnoverCurrent Practices and Deciding to ActDesirability of LeavingEase of LeavingAlternativesRetention Initiatives: DischargePerformance ManagementProgressive DisciplineRetention Initiatives: DownsizingWeighing Advantages and DisadvantagesStaffing Levels and QualityAlternatives to DownsizingEmployees Who RemainLegal IssuesSeparation Laws and RegulationsPerformance Appraisal
4 Learning Objectives for This Chapter Be able to differentiate among the types and causes of employee turnoverRecognize the different reasons employees leave their jobsEvaluate the costs and benefits of turnoverLearn about the variety of techniques companies use to limit turnoverSee how performance management and progressive discipline limit discharge turnoverUnderstand how companies manage downsizingRecognize a variety of legal issues that affect separation policies and practices
5 Discussion Questions for This Chapter For the three primary causes of voluntary turnover (desirability of leaving, ease of leaving, alternatives), might their relative importance depend on the type of employee or type of job? Explain.Which of the costs and benefits of voluntary turnover are most likely to vary according to type of job? Give examples.If a person says to you, “It’s easy to reduce turnover, just pay people more money,” what is your response?Why should an organization seek to retain employees with performance or discipline problems? Why not just fire them?Discuss some potential problems with downsizing as an organization’s first response to a need to cut labor costs.
6 Turnover and Its Causes Nature of problemTypes of turnoverCauses of turnover
7 Nature of the ProblemEmployee retention can contribute to organizational effectivenessTurnover is not only costly but may be beneficialFocus of retention strategiesNumber of employees retained andWho is retainedTurnover is inevitableApproach to retention managementGather and analyze employees’ reasons for leaving
8 Types of Turnover Exhibit 14.1: Types of Employee Turnover Voluntary Avoidable - Could be preventedTry to prevent for high value employeesDo not try to prevent for low value employeesUnavoidable - Could not be preventedInvoluntaryDischargeDownsizing
11 Causes of Turnover: Voluntary Exhibit 14.2: Causes of Voluntary TurnoverBehavior of leaving preceded by intention to quitFactors affecting intention to quitPerceived desirability of leavingOften results from a poor person/job orPerson/organization matchPerceived ease of leavingRepresents lack of barriers to leaving andOf being able to likely find a new jobAvailable alternativesDepends on other job options both within and outside organization
13 Causes of Turnover: Discharge and Downsizing Discharge turnoverMismatch between job requirements and KSAOsEmployee fails to follow rules and proceduresUnacceptable job performanceDownsizing turnoverMismatch in staffing levels which leads to an overstaffing situationFactors related to overstaffingLack of forecasting and planningInaccuracies in forecasting and planningUnanticipated changes in labor demand and/or supply
14 Analysis of Turnover Measurement Reasons for leaving Costs and benefits
15 Measurement of Turnover: Formula Turnover rateNumber of employees leaving average number of employees x 100Data and decisionsIdentify time period of interestDetermine type of employees that countDetermine method to calculate average number of employees over the time period
16 Measurement of Turnover: Breakouts and Benchmarks Analysis of turnover data aided by deciding on categories of dataType of turnoverType of employeeJob categoryGeographic locationBenchmarksInternal - Trend analysisExternal - Compare internal data with external dataExh. 14.3: Data from job openings and labor turnover survey
17 Measurement of Turnover: Reasons for Leaving Important to ascertain, record, and track reasons why employees leaveToolsExit interviewsFormal, planned interviews with departing employeesPostexit surveysSurveys sent to employees soon after their last dayEmployee satisfaction surveysSurveys of current employees to discover sources of dissatisfaction which may become reasons for leavingResults can provide information to pre-empt turnoverRequire substantial resources
18 Guidelines: Conducting Exit Interviews Interviewer should be a neutral person who has been trained in how to conduct exit interviewsTraining issuesHow to put employee at ease and explain purposeHow to follow structured interview format and take notesHow to end interview on positive noteStructured interview format should contain questions about unavoidable and avoidable reasons for leavingExh. 14.4: Examples of Exit Interview QuestionsInterviewer should prepare by reviewing interview format and interviewee’s personnel fileInterview should be conducted in private, before employee’s last dayInterviewee should be told interview is confidential
19 Measurement of Turnover: Costs and Benefits Costs and benefits can be estimated for each of the three turnover typesTypes of costsFinancialNonfinancialSome costs and benefits can be estimated financiallyNonfinancial costs and benefits may outweigh financial ones in importance and impact
20 Major Turnover Costs and Benefits Costs of turnoverSeparation costsStaff time and loss of productivityReplacement costsRecruiting and selecting new employeeTraining costsTeaching new employees the jobBenefits of turnoverPotentially better new employeesShort term labor cost savingsOpportunities to restructure work units
21 Costs and Benefits for Types of Turnover Voluntary turnoverExh. 14.5: Voluntary Turnover: Costs and BenefitsExh. 14.6: Example of Financial Cost Estimates for One Voluntary TurnoverDischargeExh. 14.7: Discharge: Costs and BenefitsDownsizingExh. 14.8: Downsizing: Costs and Benefits
22 Ex. 14.9 Most and Least Effective Retention Initiatives
23 Exh. 14.11: Decision Process for Retention Initiatives Do We Think Turnover Is a Problem?How Might We Attack the Problem?What Do We Need to Decide?Should We Proceed?How Should We Evaluate the Initiatives?
24 Guidelines for Increasing Job Satisfaction and Retention Extrinsic rewardsRewards must be meaningful and uniqueRewards must match individual preferencesLink rewards to retention behaviorsLink rewards to performanceIntrinsic rewardsAssign employees to jobs that meet their needsProvide clear communicationDesign fair reward allocation systemsEnsure supervisors provide a positive environmentProvide programs to enhance work-life balance
25 Ease of Leaving Two points of attack Provide organization-specific trainingShould organization invest in training to provide general or organization-specific KSAOs?Combine training strategy with a selection strategy focused on assessing and selecting general KSAOsIncrease cost of leaving by providingAbove-market pay and benefitsDeferred compensationRetention bonusesDesirable location of company’s facilities
26 AlternativesApproaches to make internal alternatives more desirable than outside alternativesInternal staffingEncourage employees to seek internal job opportunitiesProvide attractive internal options outside of traditional internal staffing systemResponding to external job offers entails developing appropriate policiesDecide whether to provide counteroffers or notDetermine types of employees to provide counteroffersDecide who will develop counteroffer and nature of approval process
27 Discussion Questions for This Chapter For the three primary causes of voluntary turnover (desirability of leaving, ease of leaving, alternatives), might their relative importance depend on the type of employee or type of job? Explain.Which of the costs and benefits of voluntary turnover are most likely to vary according to type of job? Give examples.If a person says to you, “It’s easy to reduce turnover, just pay people more money,” what is your response?
29 Retention Initiatives: Discharge Ex : Performance Counseling and Disciplinary ProcessIdentify performance problemsAssess causesDevelop corrective actionsDevelop and discuss clear consequences for failure to improveDocument incident, corrective actions, and consequences for continued problemsTermination if problem is not resolved
30 Retention Initiatives: Discharge Progressive disciplineFive requirements of a progressive discipline systemGive employees notice of the rules of conduct and misconductGive employees notice of the consequences of violation of the rulesProvide equal treatment for all employeesAllow for full investigation of the alleged misconduct and defense by the employeeProvide employees the right to appeal a decision
31 Retention Initiatives: Downsizing Weigh advantages and disadvantagesSee Exh. 14.8Staffing levels and qualityView retention in two waysBalance a financial quick fix against unlikely return of downsized employees if economic conditions improveApproach reductions in selective or targeted terms, rather than across the boardDetermine who should be retained, if cuts are madeRetain most senior employeesMake performance-based decisionsRetain “high-value employees” and layoff “low-value employees”
32 Retention Initiatives: Downsizing (continued) Alternatives to downsizingNo layoff or guaranteed employment policyLayoff minimization programsExh : Layoff Minimization ExamplesEmployees who remainPotential results of ignoring survivorsIncreased stress levelsCritical appraisals of downsizing processExamples of “survivor sickness”Provide programs to meet needs of survivorsEnhanced communication programsMorale-boosting eventsPromotion of EAPsStress-related training
33 Discussion Questions for This Chapter Why should an organization seek to retain employees with performance or discipline problems? Why not just fire them?Discuss some potential problems with downsizing as an organization’s first response to a need to cut labor costs.
34 Legal Issues: Separation Basic tenet of employee separationFair and consistent treatment of employeesLaws and regulations governing separation processPublic policy restrictions on employment-at-willEmployment discrimination laws and regulationsAffirmative action requirementsEmployment contract principlesLabor contract provisionsCivil service laws and regulationsNegligent supervision and retentionAdvanced warning about plant closings
35 Legal Issues: Suggestions for Performance Appraisal Systems Appraisal criteria should be job-related, specific, and communicated in advanceManager/rater should receive training in overall performance appraisal process and how to avoid rating errorsManager should be familiar with employee’s job description and actual performanceAgreement should exist among different raters in evaluating an employee’s performanceEvaluations should be in writingEmployee should be able to review evaluation and make comments before it becomes finalEmployee should receive timely feedback about the evaluation and an explanation for any outcome decisionProvide upward review of employee’s appraisalProvide appeal system for employees dissatisfied with their evaluations
36 Ethical IssuesIssue 1Consider a circumstance where your organization is doing exit interviews and has promised confidentiality to all who respond. Your supervisor has asked you to give the name of each respondent so she can assess the information in conjunction with the person’s supervisor. What obligation to corporate HR employees have to keep information confidential in such circumstances?
37 Ethical IssuesIssue 2There are numerous negative organizational consequences to firing employees, including the discomfort of the supervisor who delivers the termination information, conflict or sabotage from the departing employee, and the potential for a lawsuit. In response, many supervisors provide problem employees unpleasant work tasks, reduced working hours, or otherwise negatively modify their jobs in hopes that the problem employees will simply quit. What are the ethical issues raised by this strategy?