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

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.
© 2002 Southwestern College Publishing. All rights reserved. 3 –2

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)
© 2002 Southwestern College Publishing. All rights reserved. 3 –3

Components of Individual Performance
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –1
3 –4

Individual Motivation


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
© 2002 Southwestern College Publishing. All rights reserved. 3 –5

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
© 2002 Southwestern College Publishing. All rights reserved. 3 –6

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.
Individual
Individual

Other
Other
© 2002 Southwestern College Publishing. All rights reserved. 3 –7

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
© 2002 Southwestern College Publishing. All rights reserved. 3 –8

Simplified Expectancy Model of Motivation
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –2
3 –9

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. 3 –10

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. 3 –11

Job Satisfaction and
Organizational Commitment


Job Satisfaction
– 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.
© 2002 Southwestern College Publishing. All rights reserved. 3 –12

Factors Affecting Job Performance and Organizational Commitment
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –3
3 –13

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
Number of person days lost throu
(Average number of employees) gh job absence during period

(Number of work days)

100
© 2002 Southwestern College Publishing. All rights reserved. 3 –14

Reasons for
Unscheduled
Absences
Source: Based on data from CCH Absenteeism Survey, CCH
Human Resources Management , November 1, 2000.
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –4
3 –15

Job Satisfaction and
Organizational Commitment
Controlling Absenteeism
Disciplinary approach Increasingly severe disciplinary action leading eventually to dismissal
Positive reinforcement Rewarding attendance with prizes and bonuses
Combination approach Use of both discipline and rewards to motivate employee attendance.
“No fault” absenteeism Reasons for absence do not matter.
Absenteeism in excess on normal limits can trigger disciplinary action and lead to eventually to dismissal
Paid time-off programs Time-off is not categorized by type. Absences in excess of employer-paid time-off are unpaid.
© 2002 Southwestern College Publishing. All rights reserved. 3 –16

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.
© 2002 Southwestern College Publishing. All rights reserved. 3 –17

Job Satisfaction and
Organizational Commitment
Turnover Types
Functional turnover Lower-performing or disruptive employees leave the organization.
Dysfunctional turnover Key individuals and high performers leave at critical times.
Uncontrollable turnover Occurs for reasons outside the impact of the organization.
Controllable turnover Occurs due to factors that could be influenced by the employer
© 2002 Southwestern College Publishing. All rights reserved. 3 –18

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
© 2002 Southwestern College Publishing. All rights reserved. 3 –19

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
© 2002 Southwestern College Publishing. All rights reserved. 3 –20

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.
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –5
3 –21

Retention
Determinants
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –6
3 –22

Desired Organizational Characteristics
Source: The Right Communiqué , First
Quarter 2001, 7. Used with permission
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –7
3 –23

Work Schedule Flexibility
Source: Based on 2000 SHRM Retention Practices Survey (Alexandria, VA:
Society for Human Resource Management, 2000). Permission requested.
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –8
3 –24

The Retention
Management
Process
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –9
3 –25

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:
Number of employee separation s during the month

100
Total number of employees at midmonth
© 2002 Southwestern College Publishing. All rights reserved. 3 –26

Simplified Turnover Costing Model
© 2002 Southwestern College Publishing. All rights reserved.
Figure 3 –10
3 –27

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. 3 –28

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. 3 –29