© 2004 Wadsworth, a division of Thomson Learning, Inc 1 Employee Satisfaction and Commitment

© 2004 Wadsworth, a division of Thomson Learning, Inc 2 Free Write Think of a job in which you were really unhappy? Why was it so bad? Now think of a job in which you were very happy and satisfied. Why was it so good?

© 2004 Wadsworth, a division of Thomson Learning, Inc 3 Why Worry About Job Satisfaction?.30Performance.70Commitment.24Organizational citizenship.59Lateness -.22Turnover -.15Absenteeism CorrelationOutcome

© 2004 Wadsworth, a division of Thomson Learning, Inc 4 Why Worry About Organizational Commitment?.70Job satisfaction -.29Lateness -.27Turnover -.23Absenteeism CorrelationOutcome

© 2004 Wadsworth, a division of Thomson Learning, Inc 5 Individual Differences in Employee Satisfaction Important Findings –Consistency across jobs –Consistency across time –Relationship between life satisfaction and job satisfaction Why? –Genetic predispositions –Core self-evaluations self-esteem self-efficacy internal locus of control optimism/positive affectivity

© 2004 Wadsworth, a division of Thomson Learning, Inc 6 Judge and Bono (2001) Meta-Analysis.19.24Emotional stability.22.32Internal locus of control.23.45Self-efficacy.26 Self-esteem Correlation with Job Performance Correlation with Job Satisfaction Core-Evaluation Trait

© 2004 Wadsworth, a division of Thomson Learning, Inc 7 What is Your Predisposition for Satisfaction? Exercises 10-1, 10-2, 10-3

© 2004 Wadsworth, a division of Thomson Learning, Inc 8 Your Predisposition to be Satisfied Interest Inventory Life Satisfaction Measure Core Self-Evaluation –self-esteem –locus of control –affectivity Job Satisfaction History

© 2004 Wadsworth, a division of Thomson Learning, Inc 9 Career Interests CD-ROM Exercise

© 2004 Wadsworth, a division of Thomson Learning, Inc 10 International Differences in Job Satisfaction Sousa-Poza and Sousa-Poza (2000) 5.69 Denmark 5.66 Cyprus 5.47 Switzerland 5.45 Israel 5.43 Netherlands 5.40 Spain 5.34 United States 5.27 New Zealand 5.24 Sweden 5.22 Norway 5.18 Italy 5.17 Germany 5.17 Portugal 5.13 Great Britain 5.13 Czech Republic 5.09 France 5.05 Bulgaria 4.95 Slovenia 4.87 Japan 4.86 Russia 4.82 Hungary

© 2004 Wadsworth, a division of Thomson Learning, Inc 11 Discrepancy Theories Have the employee’s expectations been met? –Realistic job previews (RJPs) Have the employee’s needs, values and wants been met? –Maslow’s Needs Hierarchy –ERG Theory –Two-factor Theory

© 2004 Wadsworth, a division of Thomson Learning, Inc 12 Basic Biological Needs Maslow’s Need Hierarchy Safety Needs Social Needs Ego Needs Self-Actualization Needs

© 2004 Wadsworth, a division of Thomson Learning, Inc 13 Discrepancy Theories ERG Theory Growth Relatedness Existence

© 2004 Wadsworth, a division of Thomson Learning, Inc 14 Discrepancy Theories Two-Factor Theory Motivators –responsibility –challenge –job control Hygiene factors –pay –benefits –coworkers

© 2004 Wadsworth, a division of Thomson Learning, Inc 15 Job Facets Are the tasks enjoyable? Do the employees enjoy working with their supervisors and coworkers? Are coworkers outwardly unhappy

© 2004 Wadsworth, a division of Thomson Learning, Inc 16 Are Rewards And Resources Given Equitably? Equity Theory Components –inputs –outputs –input/output ratio Possible Situations –underpayment –overpayment –equal payment

© 2004 Wadsworth, a division of Thomson Learning, Inc 17 Organizational Justice Distributive justice Procedural justice Interact ional justice

© 2004 Wadsworth, a division of Thomson Learning, Inc 18 Correlations with Perceptions of Justice Colquitt, Conlon, Wesson, Porter, and Ng (2001) Negative employee reactions.15.36Performance Withdrawal.51.61Trust.51.57Organizational commitment.56.62Job satisfaction Distributive Justice Procedural Justice Outcome

© 2004 Wadsworth, a division of Thomson Learning, Inc 19 Is There a Chance for Growth and Challenge? Enriched jobs –variety of skills needed –employee completes entire task –tasks have meaning –employee has input/control –employee receives feedback Methods –Job rotation –Job enlargement –Job enrichment

© 2004 Wadsworth, a division of Thomson Learning, Inc 20 Increasing Job Satisfaction Hire “Satisfied” Employees Eliminate Dissatisfiers Express appreciation and provide proper feedback Increase opportunities to socialize Hold special events and friendly competitions Increase humor Have surprises Assign the right tasks to the right people

© 2004 Wadsworth, a division of Thomson Learning, Inc 21 Hire “Satisfied Employees” Test for Satisfaction Potential –Interest inventory –Core self-evaluation –Satisfaction history Provide a realistic job preview Look for person-organization fit

© 2004 Wadsworth, a division of Thomson Learning, Inc 22 Eliminate Dissatisfiers Interpersonal conflict –Peers –Supervisors –Customers Inequity Low pay Job security Poor working conditions Work schedule issues

© 2004 Wadsworth, a division of Thomson Learning, Inc 23 Hold Special Events and Friendly Competitions Casual or spirit days Increase socialization through parties, picnics, and socials Hold fun contests Celebrate birthdays and special occasions Encourage humor

© 2004 Wadsworth, a division of Thomson Learning, Inc 24 Express Appreciation and Provide Proper Feedback Liberal use of praise and thanks Positive feedback Service and performance awards _________________

© 2004 Wadsworth, a division of Thomson Learning, Inc 25 Increase Opportunities to Socialize Picnics Lunches _______________

© 2004 Wadsworth, a division of Thomson Learning, Inc 26 Hold Special Events and Friendly Competitions Casual days Company logo day ________________

© 2004 Wadsworth, a division of Thomson Learning, Inc 27 Increase Humor Bulletin boards with humor Attach cartoons to boring memos ________________

© 2004 Wadsworth, a division of Thomson Learning, Inc 28 Have Surprises Order lunch for everyone Let everyone leave an hour early __________________

© 2004 Wadsworth, a division of Thomson Learning, Inc 29 Assign the Right Tasks to the Right People People have different interests People have different skills

© 2004 Wadsworth, a division of Thomson Learning, Inc 30 What did you think of the method used by Monical Pizza to increase job satisfaction?

© 2004 Wadsworth, a division of Thomson Learning, Inc 31 Measuring Job Satisfaction Faces Scale Job Descriptive Index (JDI) Minnesota Satisfaction Questionnaire Job in General Scale Custom designed inventories

© 2004 Wadsworth, a division of Thomson Learning, Inc 32

© 2004 Wadsworth, a division of Thomson Learning, Inc Year $593 $662 $603 $572 $757 $602 $610 $755 $789 Cost of Absenteeism U. S. Absenteeism Rate BNA SurveyCCH Survey

© 2004 Wadsworth, a division of Thomson Learning, Inc 34 International Differences – Nutreco (2000) 7.2Norway 7.8Netherlands 6.3Belgium 4.0France 3.8Spain 3.2United Kingdom 2.7Chile 2.3Poland 1.9Ireland 1.6Canada Absenteeism Rate (%)Country

© 2004 Wadsworth, a division of Thomson Learning, Inc 35 Reason for Missing Work (CCH Survey) Stress Illness Personal Needs Family Issues Year Sense of Entitlement

© 2004 Wadsworth, a division of Thomson Learning, Inc 36 Why Employees Are Absent No consequences for attending or missing work Illness and personal problems Individual differences Unique events

© 2004 Wadsworth, a division of Thomson Learning, Inc 37 Increasing Attendance by Having Consequences for Missing Work Rewards for Attending –Financial incentives Well pay Games Financial bonuses –Paid Time-off Programs –Recognition programs Discipline for Not Attending Unclear Policy and Record Keeping

© 2004 Wadsworth, a division of Thomson Learning, Inc 38 Increasing Attendance by Reducing Employee Stress Overload Conflict –peers –supervisors Boredom Safety Issues

© 2004 Wadsworth, a division of Thomson Learning, Inc 39 Increasing Attendance by Reducing Illness

© 2004 Wadsworth, a division of Thomson Learning, Inc 40 Types of Wellness Programs SHRM 2002 Survey 14On-site medical care 21Stress reduction programs 22Weight loss program 26On-site fitness center 28Subsidize off-site fitness center dues 29Smoking cessation program 42On-site health screening 58Some form of wellness program 61On-site vaccinations % OfferingWellness Program

© 2004 Wadsworth, a division of Thomson Learning, Inc 41 Effect of Absence Control Methods Johnson (1990) Meta-Analysis.086Games.177Financial incentives.186Wellness programs.306Recognition.3612Discipline.445Compressed work schedules.5910Flextime.864Well pay Effect Size# of StudiesAbsence Control Method

© 2004 Wadsworth, a division of Thomson Learning, Inc 42 CCH Absence Control Surveys Buy-back programs Bonus programs No-fault systems Personal recognition Paid leave bank 3.0n/a 71n/a Verification of illness Performance appraisal Disciplinary action Absence Control Method Effectiveness RatingPercent Using

© 2004 Wadsworth, a division of Thomson Learning, Inc 43 What did you think of Mike Parker’s approach at International Products to reduce absenteeism?

© 2004 Wadsworth, a division of Thomson Learning, Inc 44 CD-ROM Absenteeism Exercise

© 2004 Wadsworth, a division of Thomson Learning, Inc 45

© 2004 Wadsworth, a division of Thomson Learning, Inc 46 Why Do Employees Leave? Unavoidable Reasons –school ends –job transfer –illness –family issues Advancement –more responsibility –better pay Unmet Needs Escape From –people management coworkers customers –working conditions –stress Unmet Expectations –organization –job –career

© 2004 Wadsworth, a division of Thomson Learning, Inc 47 Why Are Your Employees Leaving? Exit Interviews Attitude Surveys Salary Surveys –pay –benefits –time off

© 2004 Wadsworth, a division of Thomson Learning, Inc 48 The Cost of Turnover Visible Costs Per Hire Advertising charges Agency fees Referral bonuses Staff time & benefits –processing applications –interviewing Overhead Travel Costs –staff –applicants Relocation Costs Miscellaneous Costs

© 2004 Wadsworth, a division of Thomson Learning, Inc 49 The Cost of Turnover Hidden Costs Loss of Productivity –employee leaving –other employees –vacant position –new employee (1 year) Inefficiency Overtime Training Costs

© 2004 Wadsworth, a division of Thomson Learning, Inc 50 Estimating the Cost of Turnover Industry Norms –rate is 1.4% per month –cost is 1.5 times salary Custom Statistics – –

© 2004 Wadsworth, a division of Thomson Learning, Inc 51 Financial Savings From Turnover Reduction Last Year –5 employees leave each month (60 per year) –Average salary is $20,000 –Cost of turnover is 60 * $20,000 * 1.5 = $1,800,000 This Year –4 employees leave each month (48 per year) –Average salary is $20,000 –Cost of turnover is 48 * $20,000 * 1.5 = $1,440,000 –$360,000 saved through reduced turnover

© 2004 Wadsworth, a division of Thomson Learning, Inc 52 Reducing Turnover Compensation Issues Match the market Use job evaluation to ensure internal equity Offer retention/tenure bonuses (stay for pay)

© 2004 Wadsworth, a division of Thomson Learning, Inc 53 Increasing Salary and Benefits Will only work if: Employees are leaving due to low compensation or benefits The turnover rate is high The salary increase will be a meaningful amount

© 2004 Wadsworth, a division of Thomson Learning, Inc 54 Reducing Turnover Selection Issues Conduct realistic job previews Look for person-organization fit Study predictors of people who leave

© 2004 Wadsworth, a division of Thomson Learning, Inc 55 Reducing Turnover Organizational Issues Provide training Show appreciation Mediate conflicts Meet employee needs –safety –social –growth

© 2004 Wadsworth, a division of Thomson Learning, Inc 56 Strategic Use of Benefits to Attract and Retain Applicants By Providing –Health care for domestic partners –Daycare benefits –Meal benefits –Paid time-off –Flexible schedules –Tuition/books You Can Attract/Retain –Gay employees –Dual career families and parents on public assistance –Students and retirees –Young people –Homemakers/parents –Students

© 2004 Wadsworth, a division of Thomson Learning, Inc 57 What did you think of the methods used by Ernst & Young and by London Central to reduce turnover?

© 2004 Wadsworth, a division of Thomson Learning, Inc 58 Exercise 10-4 Case Study