14-1
CHAPTER FOURTEEN
Retention Management
Screen graphics created by:
Jana F. Kuzmicki, PhD
Troy State University-Florida and Western Region
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Staffing Organizations Model
Organization
Vision and Mission
Goals and Objectives
Organization Strategy
HR and Staffing Strategy
Staffing Policies and Programs
Support Activities
Core Staffing Activities
Legal compliance
Planning
Recruitment:
Selection:
External, internal
Measurement, external, internal
Job analysis
Employment:
Decision making, final match
Staffing System and Retention Management
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Chapter Outline
 Turnover
 Nature
 Types
and Its Causes
of Problem
of Turnover
 Causes
 Analysis
of Turnover
Initiatives:
Discharge
 Retention
Initiatives:
Downsizing
of Turnover
 Measurement
 Reasons
 Costs
 Retention
 Legal
Issues
for Leaving
and Benefits
 Retention
Initiatives:
Voluntary Turnover
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Turnover and Its Causes
 Nature
 Types
of problem
of turnover
 Causes
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of turnover
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Nature of the Problem

Employee retention can contribute to organizational
effectiveness

Turnover is not only costly but may be beneficial

Focus of retention strategies
 Number
 Who
of employees retained and
is retained

Turnover is inevitable

Approach to retention management
 Gather
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and analyze employees’ reasons for leaving
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Types of Turnover
 Exhibit
14.1: Types of Employee Turnover
 Voluntary
 Avoidable
- Could be prevented
 Try
to prevent
 Do
not try to prevent
 Unavoidable
- Could not be prevented
 Involuntary
 Discharge
 Downsizing
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Exhibit 14.1: Types of Employee Turnover Voluntary -- Employee Initiated
Avoidable
(could prevent)
Try to Prevent:
High-Value Employees
• High performance
• Strong KSAOs
• Valued intellectual
capital
• High promotion
potential
• High training
investment
• High experience
• Difficult to find
replacement
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Unavoidable
(could not prevent)
Do not Prevent:
Low-Value Employees
• Low performance
• Weak KSAOs
• Little intellectual
capital
• Low promotion
potential
• Low training
investment
• Low experience
• Easy to find
replacement
No attempt to Prevent:
Regardless of Value
• Retirement
• Dual career
• New career
• Health
• Child care or
pregnancy
• Elder care
• Return to school
• Leave country
• Take a break
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Exhibit 14.1: Types of Employee Turnover Involuntary -- Organization Initiated
Discharge
Downsizing
• Discipline
• Permanent layoff
• Poor performance
• Temporary layoff
• Site or plant closing,
relocation
• Redundancy due to
merger or acquisition
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Causes of Turnover: Voluntary
Exhibit 14.2: Causes of Voluntary Turnover
 Behavior of leaving preceded by intention to quit
 Factors affecting intention to quit

 Perceived
desirability of leaving
 Often
results from a poor person/job or
 Person/organization match
 Perceived
ease of leaving
 Represents
lack of barriers to leaving and
 Of being able to likely find a new job
 Available
alternatives
 Depends
on other job options both within and
outside organization
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Exhibit 14.2: Causes of Voluntary Turnover
Desirability of Leaving
Low job satisfaction
Shocks to employee
Personal (nonjob) reasons
Ease of Leaving
Favorable labor market conditions
General, transferable KSAOs
Low cost of leaving
+
+
Intention
to Quit
+
Quit
Alternatives
Internal: New job possibilities
External: Job offers
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+
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Causes of Turnover:
Discharge and Downsizing
 Discharge
turnover
 Mismatch
between job requirements and KSAOs
 Employee
fails to follow rules and procedures
 Unacceptable job performance
 Downsizing
turnover
 Mismatch
in staffing levels which leads to an
overstaffing situation
 Factors related to overstaffing
 Lack
of forecasting and planning
 Inaccuracies in forecasting and planning
 Unanticipated changes in labor demand and/or supply
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Analysis of Turnover
 Measurement
 Reasons
 Costs
for leavings
and benefits
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Measurement of Turnover: Formula
 Turnover
rate
of employees leaving 
average number of employees x 100
 Number
 Data
and decisions
 Identify
time period of interest
 Determine
type of employees that count
 Determine
method to calculate average number of
employees over the time period
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Measurement of Turnover:
Breakouts and Benchmarks
 Breakouts
 Analysis
of turnover data aided by deciding on
categories of data
 Type
of turnover
 Type of employee
 Job category
 Geographic location
 Benchmarks
 Internal
- Trend analysis
 External - Compare internal data with external data
 Exh.
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14.3: Sample Annual Separation (Turnover) Data
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Measurement of Turnover:
Reasons for Leaving
Important to ascertain, record, and track reasons
why employees leave
 Tools

 Exit
interviews
 Formal,
 Postexit
planned interviews with departing employees
surveys
 Surveys
 Employee
sent to employees soon after their last day
satisfaction surveys
 Surveys
of current employees to discover sources of
dissatisfaction which may become reasons for leaving
 Results can provide information to pre-empt turnover
 Require substantial resources
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Guidelines: Conducting Exit Interviews
Interviewer should be a neutral person who has
been trained in how to conduct exit interviews
 Training issues

 How
to put employee at ease and explain purpose
 How to follow structured interview format and take notes
 How to end interview on positive note

Structured interview format should contain questions about
unavoidable and avoidable reasons for leaving
 Exh.
14.4: Examples of Exit Interview Questions
Interviewer should prepare by reviewing interview format and
interviewee’s personnel file
 Interview should be conducted in private, before employee’s
last day
 Interviewee should be told interview is confidential

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Measurement of Turnover:
Costs and Benefits
 Costs
and benefits can be estimated for each of
the three turnover types
 Types
of costs
 Financial
 Nonfinancial
 Some
costs and benefits can be estimated
financially
 Nonfinancial
costs and benefits may outweigh
financial ones in importance and impact
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Costs and Benefits for Types of Turnover
 Voluntary
turnover
Costs
Benefits
 Exh.
14.5: Voluntary Turnover:
Costs and Benefits
 Exh.
14.6: Example of Financial Cost
Estimates for One Voluntary Turnover
 Discharge
 Exh.
14.7: Discharge: Costs and Benefits
 Downsizing
 Exh.
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14.8: Downsizing: Costs and Benefits
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Retention Initiatives: Voluntary Turnover
 Current
 What
practices and deciding to act
do organizations do?
 Exh.
14.9: Retention Initiatives: Usage and Effectiveness
 Decision
 Exh.
process
14.10: Decision Process for Retention Initiatives
 Desirability
of leaving
 Exh.
14.11: Guidelines for Increasing Job
Satisfaction and Retention
 Ease
of leaving
 Alternatives
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Exh. 14.10: Decision Process
for Retention Initiatives
 Do
We Think Turnover Is a Problem?
 How
 What
Might We Attack the Problem?
Do We Need to Decide?
 Should
 How
We Proceed?
Should We Evaluate the Initiatives?
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Exh. 14.11: Guidelines for Increasing
Job Satisfaction and Retention
Match rewards to employee preferences
 Make rewards unique
 Rewards must be meaningful
 Link rewards to retention behaviors
 Deliver on rewards that are promised
 Reward permanency is important
 Remember intrinsic rewards
 Fairness and justice are key
 Communicate continuously
 The manager matters

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Ease of Leaving
 Two
points of attack
 Provide
organization-specific training
 Should
organization invest in training to provide general or
organization-specific KSAOs?
 Combine training strategy with a selection strategy focused
on assessing and selecting general KSAOs
 Increase
cost of leaving by providing
 Above-market
pay and benefits
 Deferred
compensation
 Retention bonuses
 Desirable location of company’s facilities
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Alternatives
 Approaches
to make internal alternatives more
desirable than outside alternatives
 Internal
staffing
 Encourage
employees to seek internal job opportunities
 Provide attractive internal options outside of traditional
internal staffing system
 Responding
to external job offers entails developing
appropriate policies
 Decide
whether to provide counteroffers or not
 Determine types of employees to provide counteroffers
 Decide who will develop counteroffer and nature of
approval process
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Retention Initiatives: Discharge
 Performance
 Exh.
management
14.12: Performance Management Process
 Manager
training and rewards
 Progressive
discipline
 Five
requirements of a progressive discipline system P. 701
 Actions
to take
 Exh.
14.13: Progressive Discipline Examples: Misconduct
and Penalties
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Exh. 14.12: Performance Management Process
Organization Strategy
Work-Unit Plans
(1) Performance Planning
Goals
Competencies
(4) Decisions
(2) Performance Execution
Pay
Training/career plans
Performance problems
Retention
Resources
Coaching
Feedback
(3) Performance Appraisal
Goal attainment
Competency ratings
Written comments
Feedback
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Retention Initiatives: Downsizing

Weigh advantages and disadvantages
 See

Exh. 14.8
Staffing levels and quality
 View
retention in two ways
 Balance
a financial quick fix against unlikely return of
downsized employees if economic conditions improve
 Approach reductions in selective or targeted terms, rather
than across the board
 Determine
who should be retained, if cuts are made
 Retain
most senior employees
 Make performance-based decisions
 Retain “high-value employees” and layoff “low-value
employees”
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Retention Initiatives: Downsizing
(continued)

Alternatives to downsizing
 No
layoff or guaranteed employment policy
 Layoff minimization programs
 Exh.

14.14: Layoff Minimization Examples
Employees who remain
 Potential
results of ignoring survivors
 Increased
stress levels
 Critical appraisals of downsizing process
 Examples of “survivor sickness”
 Provide
programs to meet needs of survivors
 Enhanced
communication programs
 Morale-boosting events
 Promotion of EAPs
 Stress-related training
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Legal Issues
 Separation
laws and regulations
 Performance
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appraisal
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Legal Issues: Separation

Basic tenet of employee separation
 Fair

and consistent treatment of employees
Laws and regulations governing separation process
 Public
policy restrictions on employment-at-will
 Employment discrimination laws and regulations
 Affirmative action requirements
 Employment contract principles
 Labor contract provisions
 Civil service laws and regulations
 Negligent supervision and retention
 Advanced warning about plant closings
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Legal Issues: Suggestions for
Performance Appraisal Systems









Appraisal criteria should be job-related, specific, and communicated in
advance
Manager/rater should receive training in overall performance appraisal
process and how to avoid rating errors
Manager should be familiar with employee’s job description
and actual performance
Agreement should exist among different raters in evaluating an
employee’s performance
Evaluations should be in writing
Employee should be able to review evaluation and make comments
before it becomes final
Employee should receive timely feedback about the evaluation and an
explanation for any outcome decision
Provide upward review of employee’s appraisal
Provide appeal system for employees dissatisfied with their evaluations
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