Chapter 10

Employee Separation and Retention

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Learning Objectives

1. Distinguish between involuntary and voluntary turnover and discuss how each can be leveraged for competitive advantage.

2. List and apply major elements that contribute to the perception of justice to discipline and dismissal.

3. Specify the relationship between job satisfaction and job withdrawal and identify sources of job satisfaction.

4. Design and use a survey feedback intervention program to promote retention of key personnel.

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Introduction

To compete, organizations must ensure: Good performers are motivated to stay. Chronically low performers are allowed, encouraged or if necessary, forced to leave.

2 Types of Turnover: Involuntary turnover—initiated by the organization (often among those who would prefer to stay). Voluntary turnover—initiated by employee (often those the company would prefer to keep).

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Managing Involuntary Turnover

Employment-at-will doctrine - in the absence of a specific contract, either an employer or employee could sever the employment relationship at any time.

Violence in the workplace caused by involuntary turnover has become a major organizational problem.

A standardized, systematic approach to discipline and discharge is necessary.

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Wrongful Discharge

A wrongful discharge suit attempts to establish that the discharge either(1) violated an implied contract or covenant (that is, the

employer acted unfairly) or(2) violated public policy (that is, the employee was terminatedbecause he or she refused to do something illegal, unethical, or unsafe).

Principles of Justice

Outcome fairness - the judgement that people make regarding outcomes received relative to outcomes received by others with whom they identify.

Procedural justice - focuses on methods used to determine the outcomes received.

Interactional justice - the interpersonal nature of how the outcomes were implemented.

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Six Determinants of Procedural Justice Table 10.1

(1) Consistency. The procedures are applied consistently across time and other persons.

(2) Bias suppression. The procedures are applied by a person who has no vested interest in the outcome and no prior prejudices regarding the individual.

(3) Information accuracy. The procedure is based on information that is perceived to be true.

(4) Correctability. The procedure has built-in safeguards that allow one to appeal mistakes or bad decisions

(5) Representativeness. The procedure is informed by the concerns of all groups or stakeholders (co-workers, customers, owners) affected by the decision, including the individual being dismissed.

(6) Ethicality. The procedure is consistent with prevailing moral standards as they pertain to issues like invasion of privacy or deception.

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4 Determinants of Interactional Justice

Progressive Discipline

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Example of Progressive Discipline Program Table 10.3

OFFENSEFREQUENCY ORGANIZATIONAL RESPONSE DOCUMENTATION

First offense Unofficial verbal warning Witness present

Second Official written warning Document filed

Third Second official warning, with threat of temporary suspension Document filed

Fourth Temporary suspension and “last chance notification Document filed

Fifth Termination with right to go to Arbitration Document filed

Open Door Policy

4 Stages of ADR

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Employee Assistance Programs

EAPs attempt to ameliorate problems encountered by workers who are drug dependent, alcoholic, or psychologically troubled.

EAPs are usually identified in official documents published by the employer.

Employee wellness programs take a proactive and preemptive focus on trying to prevent health-related problems in the first place.

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Outplacement Counseling

Helps displaced employees manage the transition from one job to another.

Services such as job search support, résumé critiques, job interviewing training and networking opportunities may be provided in-house or through an outside source.

Aimed at helping people realize that other opportunities exist.

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Managing Voluntary Turnover – Job Withdrawal

Progression of Withdrawal Theory-dissatisfied individuals enact a set of behaviors in succession to avoid their work situation.

3 categories:1. behavior change2. physical job withdraw3. psychological job withdraw

Withdrawal behaviors are related to one another, and partially caused by job dissatisfaction.

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Job Dissatisfaction-Job Withdrawal Process

Causes - Job dissatisfaction

- Personal disposition- Tasks & roles- Supervisors and coworkers- Pay and benefits

JobDissatisfaction

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Behavior Change

An employee's first response to dissatisfaction would be to try to change conditions that generate dissatisfaction.

When employees are unionized, dissatisfaction leads to increased grievances.

Employees sometimes initiate change through whistle-blowing-making grievances public by going to the media or government.

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Physical Withdrawal

4 ways a dissatisfied worker can physically withdraw from the organization:

1. Leave the job2. Internal transfer3. Absenteeism4. Tardiness

Companies spend 15 % of payroll costs to make up for absent workers on average.

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2 Forms of Psychological Withdrawal

Job Satisfaction and Job Withdrawal

Job satisfaction is a pleasurable feeling that results from the perception that one's job fulfills one's important job values. Three aspects of job satisfaction

1. Values2. Perceptions3. Importance

A frame of reference is a standard point that serves as a comparison for other points and thus provides meaning.

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Job Dissatisfaction

Sources

NegativeAffectivity

Job EnrichmentJob Rotation

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Unsafe Working Conditions

Each employee has a right to safe working conditions under the Occupational Safe and Health Act of 1970 (OSHA).

Financial bonuses linked to specific safety related goals help keep employees focused and pay for themselves over time.

Firms that emphasize safety send workers a clear signal that they care about them.

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Sources of Job Dissatisfaction

Personal Dispositions Negative affectivity is a dispositional

dimension that reflects pervasive individual differences in satisfaction with any and all aspects of life.

Tasks and Roles The nature of the task itself is the key

predictor of job dissatisfaction. Job Rotation Pro-social Motivation

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Sources of Job Satisfaction

Supervisors and Coworkers A person may be satisfied with his or her supervisor

and coworkers due to:shared values, attitudes, and philosophies,strong social support

Pay and Benefits Pay is a reflection of self-worth, so pay satisfaction

is significant when it comes to retention.

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Survey Feedback Interventions

Surveys: emphasize overall satisfaction. assess the impact of policy changes. allow the company to benchmark “best practices.”

If people fail to see timely actions taken on matters identified as problems in the survey, satisfaction is likely to be lower than it would be in the absence of a survey.

Any strategic retention policy has to consider surveying people who are about to become ex-employees.

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Summary

Involuntary turnover reflects a separation initiated by the organization.

Voluntary turnover reflects a separation initiated by the individual. It can be minimized by measuring, monitoring and surveying, then addressing problems found in the surveys.

Organizations can gain competitive advantage by strategically managing the separation process.

Retaliatory reactions to organizational discipline and dismissal decisions can be minimized.

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