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Human Resource Management:
Gaining a Competitive Advantage
Chapter 10
Employee Separation and Retention
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
 Distinguish between involuntary and voluntary turnover
and discuss how each can be leveraged for competitive
advantage.
 List and apply major elements that contribute to the
perception of justice to discipline and dismissal.
 Specify the relationship between job satisfaction and job
withdrawal and identify sources of job satisfaction.
 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 (the employee can be
fired for any reason or no reason at all).
 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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Managing Involuntary Turnover –
Wrongful Discharge
 If employees are covered by a contract (individual
or collective bargaining), they can only be
discharged for cause
 Wrongful Discharge Suits
1. Violation of an implied contract or covenant (unfair action by
employer)
2. Violation of public policy (terminated for refusal to do
something illegal, unethical, or unsafe
3. Statutory violations (employment discrimination)
4. Whistle blower suits – only apply in certain federal cases
and in some states
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Wrongful termination suits can be difficult for the employee to win, and
expensive for the employer to defend
McGraw-Hill/Irwin
©2012 The McGraw-Hill Companies, All Rights Reserved
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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Determinants of Procedural Justice
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4 Determinants of Interactional Justice
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Progressive Discipline
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4 Stages of ADR
Open Door Policy
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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.
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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 change
2. physical job withdraw
3. psychological job withdraw
 Withdrawal behaviors are related to one another,
and partially caused by job dissatisfaction.
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Job DissatisfactionJob Withdrawal Process
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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 whistleblowing-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.
2.
3.
4.
Leave the job
Internal transfer
Absenteeism
Tardiness
 Companies spend 15 % of payroll costs to
make up for absent workers on average.
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2 Forms of Psychological Withdrawal
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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.
 3 aspects of job satisfaction:
1. Values – what a person consciously or unconsciously
desires to obtain
2. Importance of values (personal utility)
3. Perceptions – depend upon frame of reference
(standard of comparison with others)
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Sources of
Job
Dissatisfaction
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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 – systematically moving the worker
from one job to another
 Pro-social Motivation – where jobs help others, the
job itself often motivates the employees
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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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Standardized Job Satisfaction Scale
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Survey Feedback Interventions
 Surveys:
 emphasize overall satisfaction.
 assess the impact of policy changes.
 allow the company to compare itself with others in the
same industry.
 allow the company to check for differences between units
and 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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