Chapter 10 Employee Separation and Retention McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Management: Gaining a Competitive Advantage

Learning Objectives  Distinguish between involuntary and voluntary turnover and discuss how each can be leveraged for competitive advantage.  List and apply major elements that contribute to the perception of justice to discipline and dismissal.  Specify the relationship between job satisfaction and job withdrawal and identify sources of job satisfaction.  Design and use a survey feedback intervention program to promote retention of key personnel. 10-2

Introduction  To compete, organizations must ensure:  Good performers are motivated to stay.  Chronically low performers are allowed, encouraged or if necessary, forced to leave.  2 Types of Turnover:  Involuntary turnover—initiated by the organization (often among those who would prefer to stay).  Voluntary turnover—initiated by employee (often those the company would prefer to keep). 10-3

Managing Involuntary Turnover  Employment-at-will doctrine- in the absence of a specific contract, either an employer or employee could sever the employment relationship at any time (the employee can be fired for any reason or no reason at all).  Violence in the workplace caused by involuntary turnover has become a major organizational problem.  A standardized, systematic approach to discipline and discharge is necessary. 10-4

Managing Involuntary Turnover – Wrongful Discharge If employees are covered by a contract (individual or collective bargaining), they can only be discharged for cause Wrongful Discharge Suits 1. Violation of an implied contract or covenant (unfair action by employer) 2. Violation of public policy (terminated for refusal to do something illegal, unethical, or unsafe 3. Statutory violations (employment discrimination) 4. Whistle blower suits – only apply in certain federal cases and in some statescertain federal casessome states McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved

Wrongful termination suits can be difficult for the employee to win, and expensive for the employer to defend

Principles of Justice  Outcome fairness-the judgement that people make regarding outcomes received relative to outcomes received by others with whom they identify.  Procedural justice- focuses on methods used to determine the outcomes received.  Interactional justice- the interpersonal nature of how the outcomes were implemented. 10-7

McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved Determinants of Procedural Justice

4 Determinants of Interactional Justice 10-9

Progressive Discipline Documentation Progressive Punitive Measures

Open Door Policy 4 Stages of ADR

Employee Assistance Programs  EAPs attempt to ameliorate problems encountered by workers who are drug dependent, alcoholic, or psychologically troubled.  EAPs are usually identified in official documents published by the employer

Outplacement Counseling  Helps displaced employees manage the transition from one job to another.  Services such as job search support, résumé critiques, job interviewing training and networking opportunities may be provided in-house or through an outside source.  Aimed at helping people realize that other opportunities exist

Managing Voluntary Turnover – Job Withdrawal  Progression of Withdrawal Theory-dissatisfied individuals enact a set of behaviors in succession to avoid their work situation.  3 categories: 1. behavior change 2. physical job withdraw 3. psychological job withdraw  Withdrawal behaviors are related to one another, and partially caused by job dissatisfaction

Job Dissatisfaction- Job Withdrawal Process Causes - Job dissatisfaction - Personal disposition - Tasks & roles - Supervisors& coworkers - Pay&benefits Manifestations - job withdrawal - Behavioral change - Physical job withdrawal - Psychological job withdrawal Job Dissatisfaction Job Withdrawal 10-15

Behavior Change  An employee's first response to dissatisfaction would be to try to change conditions that generate dissatisfaction.  When employees are unionized, dissatisfaction leads to increased grievances.  Employees sometimes initiate change through whistle- blowing-making grievances public by going to the media or government

Physical Withdrawal  4 ways a dissatisfied worker can physically withdraw from the organization: 1. Leave the job 2. Internal transfer 3. Absenteeism 4. Tardiness  Companies spend 15 % of payroll costs to make up for absent workers on average

2 Forms of Psychological Withdrawal Job involvement Organizational Commitment 10-18

Job Satisfaction and Job Withdrawal  Job satisfaction is a pleasurable feeling that results from the perception that one's job fulfills one's important job values.  3 aspects of job satisfaction: 1. Values – what a person consciously or unconsciously desires to obtain 2. Importance of values (personal utility) 3. Perceptions – depend upon frame of reference (standard of comparison with others) 10-19

Sources of Job Dissatisfaction 10-20

Unsafe Working Conditions  Each employee has a right to safe working conditions under the Occupational Safe and Health Act of 1970 (OSHA).  Financial bonuses linked to specific safety related goals help keep employees focused and pay for themselves over time.  Firms that emphasize safety send workers a clear signal that they care about them

Sources of Job Dissatisfaction  Personal Dispositions  Negative affectivity is a dispositional dimension that reflects pervasive individual differences in satisfaction with any and all aspects of life.  Tasks and Roles  The nature of the task itself is the key predictor of job dissatisfaction.  Job Rotation – systematically moving the worker from one job to another  Pro-social Motivation – where jobs help others, the job itself often motivates the employees 10-22

Sources of Job Satisfaction  Supervisors and Coworkers  A person may be satisfied with his or her supervisor and coworkers due to: shared values, attitudes, and philosophies, strong social support  Pay and Benefits  Pay is a reflection of self-worth, so pay satisfaction is significant when it comes to retention

Standardized Job Satisfaction Scale McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved

Survey Feedback Interventions  Surveys:  emphasize overall satisfaction.  assess the impact of policy changes.  allow the company to compare itself with others in the same industry.  allow the company to check for differences between units and benchmark “best practices.”  If people fail to see timely actions taken on matters identified as problems in the survey, satisfaction is likely to be lower than it would be in the absence of a survey.  Any strategic retention policy has to consider surveying people who are about to become ex-employees

Summary  Involuntary turnover reflects a separation initiated by the organization.  Voluntary turnover reflects a separation initiated by the individual. It can be minimized by measuring, monitoring and surveying, then addressing problems found in the surveys.  Organizations can gain competitive advantage by strategically managing the separation process.  Retaliatory reactions to organizational discipline and dismissal decisions can be minimized