1. Individual/Organizational Relationships
The Psychological Contract
Unwritten expectations employees and employers have about the nature of their relationship.
Psychological Ownership
When individuals feel that they have some control and perceived rights in the organization, they are more likely to be committed to the organization.

2. Components of the Psychological Contract
Employers provide:
Competitive compensation and benefits
Flexibility to balance work and home life
Career development opportunities
Employees contribute:
Continuous skill improvement and increase productivity
Reasonable time with the organization
Extra effort when needed

3. Factors Affecting Job Satisfaction and Organizational Commitment

4. Job Satisfaction and Commitment
Positive emotional state resulting from evaluating one’s job experience.
Organization Commitment (Loyalty)
Degree to which employees believe in and accept organizational goals and desire to remain with the organization.
Continuance commitment: the likelihood that an individual will stay with rather than withdraw from the organization.

5. 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)

6. Components of Individual Performance

7. Individual Motivation
Desire within a person causing him/her to act to reach a goal.
Management Implications related to Motivation
Consistency in organizational rewards
Organizational support for employee efforts
Accurate measurement of employee performance
Desirability of rewards by employees

8. Retention of Human Resources
Myths About Retention
Money is the main reason people leave.
Hiring has nothing to do with retention.
If you train people, you are only training them for another employer.
Don’t be concerned about retention during a merger.
If solid performers want to leave, the company cannot hold them.
I’m Gone

9. Retention of Human Resources
Why People Stay or Leave—Links, Fit, and Sacrifice
Culture and values
Positive, distinctive company that is well-managed, and offers exciting challenges.
Attractive job
Compensation and lifestyle
Differentiated pay package, high total compensation, geographic location, and respect for lifestyle

10. Some Characteristics of People and Jobs

11. Employee Absenteeism
Any failure to report for work as scheduled or to stay at work when scheduled.
Involuntary absenteeism
Unavoidable with understandable cause (e.g., actual illness)
Voluntary absenteeism
Avoidable without justifiable cause (e.g., feigning illness)

12. Reasons for Unscheduled Absences
Source: Based on data from “2006 CCH Unscheduled Absence Survey,” CCH, Inc., October 26, 2006, All Rights Reserved. Reprinted with permission.

13. Controlling Absenteeism
Disciplinary approach
Positive reinforcement
Combination approach
Paid time-off (PTO)
“No fault” policy
Controlling Absenteeism

14. Employee Turnover
The process in which employees leave an organization and have to be replaced.
Impact of Turnover
Inability to achieve business goals
Loss of “image” to attract other individuals
High costs of turnover and replacement

15. Types of Turnover Turnover Involuntary Controllable Voluntary
Functional
Dysfunctional
Uncontrollable
Controllable

16. HR Metrics: Measuring Absenteeism
U.S. Department of Labor formula
Other Measures of Absenteeism:
Incidence rate—absences per 100 employees each day
Inactivity rate—percentage of time lost to absenteeism
Severity rate—average time lost per absent employee during a specified period of time

17. HR Metrics: Measuring Absenteeism (cont’d)
Costs of absenteeism:
Lost wages
Benefits
Overtime for replacements
Fees for temporary employees, if incurred
Supervisor’s time
Substandard production
Overstaffing necessary to cover absences

18. HR Metrics: Measuring Turnover
Computing the Turnover Rate
Costs of Turnover
Separation costs
Replacement costs
Training costs
Hidden costs

19. HR Metrics: Measuring Turnover
Ways 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

20. Simplified Turnover Costing Model
20,000
8,000
(40%)
28,000 20 3
3,500
70,000
Teller

21. FIGURE 3-8 Managing Retention

22. Possible Retention Interventions
Spot cash awards for good work
Develop profiles of successful employees and hire to the profile
Learning bonuses
Focus groups on employee issues
Voluntary job sharing
Realist job avenues
Excellent employee development
Payback agreement for moving expenses
Clear goals
Accurate performance appraisals
Competitive benefits
Career counseling
Mentoring
Diverse workplace
Sabbatical leaves
Facilitate promotion/transfer
Reward managers with low turnover
“Fair” pay
Fulfilling work
Avoid hiring those with a history of turnover
Tuition reimbursement and promotion for education
Retention bonuses
Subsidized child/elder care
Retrain for promotion/transfer
Pay tied to performance
Telecommuting
Recognize good work
Good working conditions
Friendly work culture/co-workers
Considerate supervisors
Improved Retention