1 2–1

2 2–2 The Psychological Contract Employers provide:Employers provide:  Competitive compensation and benefits  Flexibility to balance work and home life  Career development opportunities Employees contribute:Employees contribute:  Continuous skill improvement and increased productivity  Reasonable time with the organization  Extra effort when needed

3 2–3 Job Satisfaction, Loyalty, and Commitment Job SatisfactionJob Satisfaction  A positive emotional state resulting from evaluating one’s job experience. Loyalty and Organization CommitmentLoyalty and Organization Commitment  The degree to which employees believe in and accept organizational goals and desire to remain with the organization.  Employee engagement: the extent to which an employee is willing and able to contribute.  Continuance commitment: the likelihood that an individual will stay with rather than withdraw from the organization.

4 2–4 Figure 2.1 Factors Affecting Job Satisfaction and Organizational Commitment

5 2–5 Individual Employee Performance Individual Performance FactorsIndividual Performance Factors  Individual ability to do the work  Effort level expended  Organizational support Performance (P) = Ability (A) x Effort (E) x Support (S)

6 2–6 Components of Individual Performance

7 2–7 FIGURE 2.2 Drivers of Retention

8 2–8 Jobs and Retention Physical and Mental Health Job Performance Job Satisfaction Job Design and Person/Job Fit

9 2–9 Approaches to Job Design/Redesign Job enlargementJob enlargement Job enrichmentJob enrichment Job rotationJob rotation Person/job fitPerson/job fit

10 2–10 Figure 2-3 Some Characteristics of People and Jobs

11 2–11 Using Teams in Jobs Jobs assigned to teams of employeesJobs assigned to teams of employees  Team leaders develop Global teamsGlobal teams  Meet electronically Teams are likely to be successful if:Teams are likely to be successful if:  They have authority to make decisions

12 2–12 Figure 2-3 Managing Retention

13 2–13 Employee Absenteeism AbsenteeismAbsenteeism  Any failure to report for work as scheduled or to stay at work when scheduled.  Involuntary absenteeism  Unavoidable with understandable cause (e.g., actual illness)  Voluntary absenteeism  Avoidable without justifiable cause (e.g., feigning illness)

14 2–14 Figure 2-5 Employee Absenteeism Controls

15 2–15 Employee Turnover TurnoverTurnover  The process in which employees leave the organization and have to be replaced. Types of TurnoverTypes of Turnover Involuntary turnover—terminations for poor performance or work rule violations.Involuntary turnover—terminations for poor performance or work rule violations. Voluntary turnover—employees leave by choice.Voluntary turnover—employees leave by choice. Functional turnover—lower-performing or disruptive employees leave the organization.Functional turnover—lower-performing or disruptive employees leave the organization. Dysfunctional turnover—key individuals and high performers leave at critical times.Dysfunctional turnover—key individuals and high performers leave at critical times. Uncontrollable turnover—employees leave for reasons outside the control of the organization.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.Controllable turnover—occurs due to factors that could be influenced by the employer.

16 2–16 Employee Turnover Reasons for TurnoverReasons for Turnover 1. The employee moves out of the geographic area. 2. The employee decides to stay home with young children or elder relatives. 3. The employee’s spouse is transferred. 4. The employee is a student worker who graduates from college.

17 2–17 HR Metrics HR Metrics: Measuring AbsenteeismHR Metrics: Measuring Absenteeism  Incidence rate  Inactivity rate  Severity rate

18 2–18 HR Metrics Ways to Measure Turnover:Ways to Measure Turnover:  Job and job levels  Department, unit, and location  Reason for leaving  Length of service  Demographic characteristics  Education and training  Knowledge, skills, and abilities  Performance ratings/levels Computing the Turnover rate:Computing the Turnover rate:

19 2–19 HR Metrics Costs of TurnoverCosts of Turnover  Separation costs  Replacement costs  Training costs  Hidden costs

20 2–20 Figure 2-6 Simplified Turnover Costing Model