Human Resource Management_8

Individual/Organizational Relationships

•The Psychological Contract

ØThe unwritten expectations employees and employers have about the nature of their work relationships. Affected by age of employee and changes in economic conditions.

ØFocuses on expectations about “fairness” that may not be defined clearly by employees.

•Psychological Ownership

ØWhen individuals feel that they have some control and perceived rights in the organization, they are more likely to be committed to the organization.

Components of the Psychological Contract

•Employers provide:

ØCompetitive compensation and benefits

ØCareer development opportunities

ØFlexibility to balance work and home life

•Employees contribute:

ØContinuous skill improvement

ØReasonable time with the organization

ØExtra effort when needed

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Job Satisfaction, Loyalty, and Commitment

•Job Satisfaction

ØA positive emotional state resulting from evaluating one’s job experience.

•Organization Commitment (Loyalty)

ØThe degree to which employees believe in and accept organizational goals and desire to remain with the organization.

ØContinuance commitment: the likelihood that an individual will stay with rather than withdraw from the organization.

•Absenteeism

ØAny failure to report for work as scheduled or to stay at work when scheduled.

ØInvoluntary absenteeism

vUnavoidable with understandable cause (e.g., actual illness)

ØVoluntary absenteeism

vAvoidable without justifiable cause (e.g., feigning illness)

Employer Absenteeism Control Actions

•Disciplinary approach

ØIncreasingly severe disciplinary action leading eventually to dismissal

•Positive reinforcement

ØRewarding attendance with prizes and bonuses

•Combination approach

ØUse of both discipline and rewards to motivate employee attendance.

•“No fault” absenteeism

ØReasons 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

ØTime-off is not categorized by type. Absences in excess of employer-paid time-off are unpaid.

Employee Turnover

•Turnover

ØThe process in which employees leave the organization and have to be replaced.

•Impact of Turnover

ØInability to achieve business goals

ØLoss of “image” to attract other individuals

ØHigh costs of turnover and replacement

Types of Turnover

•Involuntary turnover—terminations for poor performance or work rule violations.

•Voluntary turnover—employees leave by choice.

•Functional turnover—lower-performing or disruptive employees leave the organization.

•Dysfunctional turnover—key individuals and high performers leave at critical times.

•Uncontrollable turnover—employees leave for reasons outside the control of the organization.

•Controllable turnover—occurs due to factors that could be influenced by the employer.

HR Metrics: Measuring Absenteeism

Measures of Absenteeism

ØIncidence rate—the number of absences per 100 employees each day

ØInactivity rate—the percentage of time lost to absenteeism

ØSeverity rate—The average time lost per absent employee during a specified period of time

•Calculations of the costs of absenteeism should usually include:

ØLost wages

ØBenefits

ØOvertime for replacements

ØFees for temporary employees, if incurred

ØSupervisor’s time

ØSubstandard production

ØOverstaffing necessary to cover absences

•Ways to Measure Turnover:

ØJob and job levels

ØDepartment, units, and location

ØReason for leaving

ØLength of service

ØDemographic characteristics

ØEducation and training

ØKnowledge, skills and abilities

ØPerformance ratings/levels.

•Computing the Turnover Rate:

•Costs of Turnover

ØSeparation costs

ØReplacement costs

ØTraining costs

ØHidden costs

•Individual Performance Factors

ØIndividual ability to do the work

ØEffort level expended

ØOrganizational support

Performance (P) = Ability (A) x Effort (E) x Support (S)

Individual Motivation

•Motivation

ØThe desire within a person causing that person to act to reach a goal.

•Management Implications for Motivating Individual Performance

ØBroad-based strategies and tactics to address individual employee concerns about:

vInconsistency in organizational rewards

vOrganizational support for employee efforts

vAccurate measurement of employee performance

vDesirability of organizational rewards by employees

Retention of Human Resources

•Why People Stay or Leave—Links, Fit, and Sacrifice

ØCulture and Values

vPositive, distinctive company that is well-managed, and offers exciting challenges.

ØAttractive Job

vFreedom and autonomy, exciting challenges, and career advancement and growth

ØCompensation and lifestyle

vDifferentiated pay package, high total compensation, geographic location, and respect for lifestyle

Managing Retention

•Retention Measurement and Assessment

ØEmployee Surveys

vAttitude survey—focuses on employees’ feelings and beliefs about their jobs and the organization.

ØExit Interviews

vAn interview in which individuals are asked to identify reasons for leaving the organization.