fundamentals of

Human Resource Management 4th

by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

edition

CHAPTER 10

Separating and Retaining Employees

McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.

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What Do I Need to Know?

1. Distinguish between involuntary and voluntary turnover, and describe their effects on an organization. 2. Discuss how employees determine whether the organization treats them fairly. 3. Identify legal requirements for employee discipline.

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What Do I Need to Know? (continued)

4. Summarize ways in which organizations can fairly discipline employees. 5. Explain how dissatisfaction affects employee behavior. 6. Describe how organizations contribute to employees job satisfaction and retain key employees.

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Introduction
Every organization recognizes that it needs satisfied, loyal customers. In addition, success requires satisfied, loyal employees. Research provides evidence that retaining employees helps retain customers and increase sales. Organizations with low turnover and satisfied employees tend to perform better.
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Managing Turnover
What was the primary reason youve ever quit a job?
a) b) c) d) I Didnt like my boss or coworkers I wasnt a fit with the company culture Better pay somewhere else More interesting or challenging work somewhere else e) I was fired or laid off f) Other
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Managing Voluntary and Involuntary Turnover

Involuntary Turnover
Turnover initiated by an employer. Often with employees who would prefer to stay.

Voluntary Turnover
Turnover initiated by employees. Often when the organization would prefer to keep them.

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Table 10.1: Costs Associated with Turnover

10-7

Test Your Knowledge

True (A) or False (B) 1.A manager who decides to fire an employee should quietly take action alone and then let others know afterwards. 2.Separating employees has financial and personal risks.

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Employee Separation
Organizations must develop a standardized, systematic approach to discipline and discharge. These decisions should not be left solely to the discretion of individual managers or supervisors. Policies should be based on principles of justice and law. Policies should allow for various ways to intervene.

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Principles of Justice
Outcome Fairness A judgment that the consequences given to employees are just. Procedural Justice A judgment that fair methods were used to determine the consequences an employee receives. Interactional Justice A judgment that the organization carried out its actions in a way that took the employees feelings into account.
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Figure 10.1: Principles of Justice

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Test Your Knowledge

A company whose earnings are very low has to reduce the amount given in raises to avoid laying people off. The amount of the raise for each employee is determined objectively based on their performance. An employee working for this company will most likely feel ____________ and _________________.
a) b) c) d) High outcome fairness; high interactional injustice Low outcome fairness; high procedural justice Low interactional justice, high outcome fairness Low outcome fairness, low procedural justice

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Legal Requirements
Wrongful Discharge
The discharge may not violate an implied agreement.
e.g., employer had promised job security e.g., the action is inconsistent with company rules

Discrimination
Employers must make discipline decisions without regard to a persons age, sex, race, or other protected status. Evenhanded, carefully documented discipline can avoid such claims.

The discharge may not violate public policy.

e.g., terminating the employee for refusing to do something illegal or unsafe.

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Legal Requirements (continued)

Employees Privacy: Employers need to ensure that the information they gather and use for discipline is relevant. Privacy issues also concern the employers wish to search or monitor employees. Employers must be prudent in deciding who will see the information.
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Organizations such as day care facilities and schools must protect employees right to privacy in their lives and on the job while balancing the need to protect children from harm.

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Table 10.2: Measures for Protecting Employees Privacy

10-16

Test Your Knowledge

Pam Jones worked for 41 years at the same company and had positive performance ratings and personnel records. She needed a calculator for work which she purchased with her own money but was not reimbursed because she lost the receipt. Later, a security guard stopped her as she was leaving work and discovered the calculator in her belongings. After a brief internal investigation, she was fired and it was announced through internal notices that she had committed a theft. The employee sued for libel, saying the company used her as an example to prevent other thefts. A. What are the key issues in this case? B. As an HR Director, how would you have handled this case?

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Legal Requirements (continued)

Notification of Layoffs: Organizations that plan broad-scale layoffs may be subject to the Workers Adjustment, Retraining and Notification Act (WARN). Employers covered by the law are required to give notice before any closing or layoff.

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Test Your Knowledge

After hiring Bob for a newly created marketing specialist position, his boss assures him that he will be secure in the job until he retires. A year later, that department is eliminated. Bob complains he was guaranteed employment until retirement. Is he right?
a) No, an employer can hire or fire someone whenever they want. b) No, there was no written contract. c) Yes, he was given a verbal contract.

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Progressive Discipline
Hot-Stove Rule Principle of discipline that says discipline should be like a hot stove, giving clear warning and following up with consistent, objective, and immediate consequences. Progressive Discipline A formal discipline process in which the consequences become more serious if the employee repeats the offense.

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Figure 10.2: Progressive Discipline Responses

10-21

Progressive Discipline (continued)

The rules of behavior should cover disciplinary problems such as the following behaviors encountered in many organizations:
Tardiness Absenteeism Unsafe work practices Poor quantity or quality of work Sexual harassment of coworkers Coming to work impaired by alcohol or drugs Theft of company property Cyberslacking
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Figure 10.3: Typical Stages of Alternative Dispute Resolution

Alternative dispute resolution (ADR) methods of solving a problem by bringing in an impartial outsider but not using the court system.

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Alternative Dispute Resolution

Open-Door Policy An organizations policy of making managers available to hear complaints. Peer Review Process for resolving disputes by taking them to a panel composed of representatives from the organization at the same levels as the people in the dispute.

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Alternative Dispute Resolution (continued)

Mediation Nonbinding process in which a neutral party from outside the organization hears the case and tries to help the people in a conflict arrive at a settlement. Arbitration Binding process in which a professional arbitrator from outside the organization (usually a lawyer or judge) hears the case and resolves it by making a decision.

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Employee Assistance Programs

Employee assistance program (EAP) a referral service that employees can use to seek professional treatment for emotional problems or substance abuse. Many EAPs are fully integrated into employers overall health benefits plans.

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Outplacement Counseling
Outplacement counseling a service in which professionals try to help dismissed employees manage the transition from one job to another. The goals for outplacement counseling are to help the former employee address the psychological issues associated with losing a job while at the same time helping the person find a new job.
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Job Withdrawal
Job Withdrawal a set of behaviors with which employees try to avoid the work situation physically, mentally, or emotionally. Job withdrawal results when circumstances such as the nature of the job, supervisors and coworkers, pay levels, or the employees own disposition cause the employee to become dissatisfied with the job.

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Figure 10.4: Job Withdrawal Process

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The Causes of Job Dissatisfaction

Personal Dispositions Tasks and Roles
Negative affectivity Core self-evaluations Role Role ambiguity Role conflict Role overload

Supervisors and Coworkers

Pay and Benefits

Negative behavior by managers Conflicts between employees Pay is an indicator of status in the organization Pay and benefits contribute to self-worth
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 Military reservists who

are sent overseas often experience role conflict among three roles: 1. soldier 2. family member 3. civilian employee Overseas assignments often intensify role conflicts.

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Actions Employees Take When Dissatisfied

Behavior changes
Change the condition Whistle-blowing Bring a lawsuit Lodge complaints

Physical job withdrawal Psychological withdrawal

Decrease in job involvement Decrease in organizational commitment
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Unpleasant Employees Are Bad for Business

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Job Satisfaction
Job satisfaction a pleasant feeling resulting from the perception that ones job fulfills or allows for the fulfillment of ones important job values. The three important components are:
Values Perceptions Ideas of what is important

People will be satisfied with their jobs as long as they perceive that their jobs meet their important values.

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Figure 10.5: Increasing Job Satisfaction

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Appropriate tasks and roles include safety precautions, especially when work could involve risks to workers health and safety.

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Figure 10.6: Steps in the Role Analysis Technique

Role analysis technique: A process of formally identifying expectations associated with a role.

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Job Satisfaction: Supervisors and Co-workers

The two primary people in an organization who affect job satisfaction are co-workers and supervisors. A person may be satisfied with these people for one of three reasons:
1. The people share the same values, attitudes, and philosophies. 2. The co-workers and supervisor may provide social support, meaning they are sympathetic and caring. 3. The co-workers or supervisor may help the person attain some valued outcome.

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Co-worker relationships can contribute to job satisfaction, and organizations therefore try to provide opportunities to build positive relationships.

10-39

Test Your Knowledge

Serena feels her job processing payroll checks is boring and uninteresting. Which intervention would be most appropriate to retain Serena?
a) b) c) d) Communicating the companies values Increasing her pay Expanding her job Hiring someone she can chat with during the day

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Monitoring Job Satisfaction

Employers can better retain employees if they are aware of satisfaction levels, so they can make changes if employees are dissatisfied. The usual way to measure job satisfaction is with some kind of survey. A systematic, ongoing program of employee surveys should be part of the organizations human resource strategy. This allows the organization to monitor trends and prevent voluntary turnover.
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Figure 10.7: Example of Job Descriptive Index (JDI)

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Figure 10.8: Example of a Simplified, Nonverbal Measure of Job Satisfaction

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Exit Interview
Exit interview: a meeting of a departing employee with the employees supervisor and/or a human resource specialist to discuss the employees reasons for leaving. A well-conducted exit interview can uncover reasons why employees leave. When several exiting employees give similar reasons for leaving, management should consider whether this indicates a need for change.
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Summary
Involuntary turnover occurs when the organization requires employees to leave, often when they would prefer to stay. Voluntary turnover occurs when employees initiate the turnover, often when the organization would prefer to keep them. Both are costly because of the need to recruit, hire, and train replacements. Involuntary turnover can also result in lawsuits and even violence.
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Summary (continued)
Employees draw conclusions based on the outcomes of decisions regarding them, the procedures applied, and the way managers treat employees when carrying out those procedures. Employee discipline should not result in wrongful discharge, such as a termination that violates an implied contract or public policy. Discipline should be administered evenhandedly, without discrimination.

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Summary (continued)
Discipline should follow the principles of the hotstove rule, meaning discipline should give warning and have consequences that are consistent, objective, and immediate. A system that can meet these requirements is progressive discipline, in which rules are established and communicated, and increasingly severe consequences follow each violation of the rules. Organizations may also resolve problems through alternative dispute resolution.
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Summary (continued)
Circumstances involving the nature of a job, supervisors and coworkers, pay levels, or the employees own disposition may produce job dissatisfaction. When employees become dissatisfied, they may engage in job withdrawal. To prevent job withdrawal, organizations need to promote job satisfaction.
Job satisfaction is related to a persons values. Different employees have different views of which values are important. Job satisfaction is based on perception.
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