Chapter 7: Retention and Motivation

Common reasons for employee turnover

1. Poor leadership 2. Conflicts with supervisor/managers 3. Workload 4. Job mismatch 5. Perception of unfair treatment 6. Lack of career advancement opportunities 7. Internal pay equity 8. Non-competitive benefits 9. Personal issues (external to job, health, etc.) 10. Conflict with company mission & values 11. Feeling unappreciated 12. Relocation of partner/spouse 13. Low job satisfaction

Examples of direct turnover cost

1. Recruitment cost 2. Advertising cost for new position 3. Orientation & training of new employee 4. Severance cost 5. Testing costs 6. Time to interview new replacement 7. Time to recruit and train new hirs

Six factors employees use to judge if a conflict outcome is fair

1. Resolution is/will be applied consistently 2. Bias Suppression - decision-maker is not biased 3. Information accuracy - decision based on correct info 4. Correctability - decision can be appealed and adjusted if needed 5. Representiveness - all stakeholders have been involved 6. Ethicality - decision is in line with moral societal standards

Drawbacks to using the "carrot"

- Demotivating if employees feel the goal is unatainable. - if only tactic used by orgs, other needs such as career growth wont be met.

Categories of direct turnover costs

- cost of leaving - replacement costs - transition costs

Examples of psychological withdrawal in job withdrawal

- disengagement in job and/or with team - less organizational commitment - become less productive

Examples of behavior change in job withdrawal

- increased grievances (if unionized) - whistle-blowing - change of conditions (such as applying for other jobs)

Examples of physical withdrawal in job withdrawal

- leaving the job - internal transfer - absenteeism - tardiness

Categories of indirect turnover costs

- loss of production - reduced performance

Requirements to make pay-for-performance work

- standards are specific and measureable - system is fairly applied to all - system is communicated clearly - encourages everyone's best work - rewards are given to performers (vs. non-performers) - updated as the business climate changes - substantial rewards for high performers

Drawbacks to using the "stick"

- takes a punitive look at retention - may motivate for short time, but not long term.

Motivation factors

1. Achievement 2. Recognition 3. The work itself 4. Responsibility 5. Advancement 6. Growth

Theory X manager beliefs

1. Average person dislikes work and will avoid it 2. People need to be threatened with punishment in order to work toward a goal 3. Average person needs to be directed 4. Most workers will avoid responsibility

Hygiene factors

1. Company policies 2. Supervision 3. Relationship with manager 4. Work conditions 5. Salary 6. Relationship with peers

Two ways to perform research for retention plan development

1. Exit interviews 2. Employee satisfaction surveys

Salary and benefit considerations to increase retention

1. Institute a standard process. 2. Pay communication strategy 3. Paid time off

Components of a retention plan

1. JDI survey results, other surveys and exit interview results 2. Current retention plan analysis of strengths and weaknesses 3. Goals of a retention plan (i.e. reduce turnover by 10%) 4. Individual strategies to meet retention and turnover reduction goals 5. Budgeting (understanding impacts such as payroll)

Theory Y manager beliefs

1. Most people want to make an effort 2. People will apply self-control & self-direction in pursuit of company goal 3. Commitment to objectives is a function of expected rewards received 4. People usually accept and actually welcome responsibility 5. Most workers will use imagination and ingenuity to solve problems

Examples of retention strategies

1. Salaries and benefits 2. Training and development 3. Performance appraisals 4. Succession planning 5. Flextime, telecommuting & sabbaticals 6. Management training 7. Conflict mgmt and fairness 8. Job design, job enlargement & empowerment 9. Pay for performance strategies 10. Work-life balance

Hackman & Oldham job characteristics that drive satisfaction

1. Skill variety or different activities 2. Task identity (being able to complete end to end) 3. Task significance 4. Autonomy to make decisions 5. Feedback or clear information about performance

HR components of a HPWS

1. Teamwork and team rewards 2. Employee's work is rewarding 3. Empowerment 4. Information sharing is encouraged 5. Pay systems are fair and transparent 6. Training 7. Formal performance feedback 8. Work processes encourage interaction amongst empoyees 9. Employees assist in planned change

Considerations when developing an employee satisfaction survey

1. communicate the purpose and goal 2. communicate what changes have been made as a result of the survey 3. assure employees their responses will be anonymous 4. involve management and leadership in survey development 5. ask clear, concise questions that get at the root of morale issues

Example of HR solutions that address all five Maslow needs

1. fair pay 2. safety standards at work 3. opportunities to socialize 4. compliments to raise self esteem 5. training opportunities for further development

Goals of succession plans

1. identify high potential employees capable of advancing 2. ensure development of identified individuals to get them ready for advancement 3. ensure diversity in the talent bench

Examples of indirect turnover cost

1. lost knowledge 2. loss of productiving while new hire is ramping up 3. cost associated with lack of motivation prior to leaving 4. cost associated with loss of trade secrets

Examples of Recreational Equipment Inc.'s Flextime, Telecommuniting and Sabbaticals retention tactics

1. offer 12 weeks paid leave (beyond FMLA) to pursue volunteering or travelling opportunities 2. with 15 years of org service, offers paid sabbaticals of four weeks beyond earned vacation time

Training and development considerations to increase retention

1. offer training programs & pay for empoyee to attend career skill seminars and programs 2. Offer tuition reimbursement and/or scholarships

Maslow's Hierarchy of Needs

1. physiological needs 2. safety needs 3. social needs 4. esteem needs 5. self-actualization needs

Five aspects of job satisfaction in JDI surveys

1. present job 2. present pay 3. opportunities for promotion 4. supervision 5. coworkers

job withdrawal theory

Dan Farrell & James Peterson people develop a set of behaviors in succession to avoid their work situation. - bahavior change - physical withdrawal - psychological withdrawal

X-Y Theory

Douglas McGregor (1960) - two fundamntal approaches to managing people; Theory X managers and Theory Y managers

HPWS

High Performance Work Systems A set of HR practices that create an environment where the employee has greater involvement and responsibility for the success of the organization.

JDI

Job descriptive index - measures five aspects - each aspect contains 9 or 18 questions

Initial findings of Hawthorne Studies

No matter the experiment/conditions, worker output improved b/c employees appreciated the attention.

Turnover formula

Number of separations during time period / total number of employees at mid time period x 100

Conclusion of Hawthorne Studies related to HR

Retention plans must include training and activities that make employees feel valued.

Herzberg's Two-Factor Theory

motivation and hygiene factors

arbitration

neutral third party hears both sides and makes a specific decision

mediation

neutral third party hears both sides and tries to facilitate parties to their own resolution

Carrot and Stick theory

poking and prodding to get employees to do something (stick) v. offering a reward or incentive to motivate employees (carrot).

Systems approach to work-life balence includes

policies and procedures allowing flexibility such as telecommuting and flextime options

Succession planning

process of identifying and developing internal people who have the potential for filling positions.

Hawthorne Studies

series of experiments in 1927-1932 conducted by Elton May at Western Electric to see how physical and environmental factors (lighting & break times) would affect employee motivation

Job enlargement

adding new challenges or responsibilities to a current job

Employee empowerment

allowing employees to make decisions and act upon those decisions with support of the org.

Cost to replace an $8/hr employee

Approximately $4000.00

involuntary turnover

employer-initiative termination

job enrichment

enhance a job by adding more meaningful tasks to make the work more rewarding

Performance appraisal

formalized process to assess how well an employee does his or her job.

voluntary turnover

initiated by the employee

Exit interview

interview performed by HR or a manager that seeks information as to what the employee liked and didn't like.

turnover

losing an employee