Transcript Mgmt 383 - University of Mississippi

Mgmt 383
Chapter 3
Organizational and Individual
Relations
Fall 2008
Psychological Contracts
• The unwritten expectations that employees
and employers have about the nature of
their work relationships
• Quid pro quo
• Loosely defines what actions are “fair” in the
workplace.
• Both tangible items and intangible items can
affect the psychological contract.
Psychological Contracts
• Generally, employers expect employees to
provide:
• Make continuous improvement
• Increase productivity
• Tenure (stay a reasonable time with the
organization)
• Provide extra effort when needed.
• If the psychological contract is not altered,
the employer may expect greater employee
commitment (loyalty).
Psychological Contracts
• Generally, employees expect employers to
provide:
•
•
•
•
Competitive wages
Competitive benefits
Career development opportunities
Flexibility to balance family and work
Factors Adversely Affecting
Individual & Organizational
Relations
•
•
•
•
Mergers and acquisitions
Self-employment and contingent work
Less management job tenure
Job insecurity (economic anxiety)
• Downsizing
• Global competition
• Job obsolescence
Factors Adversely Affecting
Individual & Organizational
Relations
• Executive pay v. the plight of the
workers.
• Some executives appear to be rewarded
for downsizing.
• As wages stagnate or decline, executive
pay appears to be increasing.
• Lack of reciprocity.
Factors Affecting Satisfaction
and Commitment
Individual Characteristics
Ability
Motivation
Support
The Job
• Design • Job elements
Job Satisfaction
Organizational
Commitment
Absenteeism/
Turnover
Individual Motivation
• Motivation - the inner strivings that initiate
a person’s action.
• Motivation - stimulating goal-directed
behavior.
• We can either motivate our employees to
stay or to leave.
Organizational Commitment
• Organizational Commitment – the
degree to which an individual believes
in and accepts organizational goals,
and the degree of desire to remain a
member of the organization.
Types of Organizational
Commitment
1. Normative Commitment - the
responsibility that the individual feels
toward the organization and its goals.
2. Affective Commitment - how strongly an
individual identifies with the organization.
3. Continuance Commitment - how strongly
the individual judges the consequences of
leaving the organization.
Low Organizational
Commitment Consequences
Low organizational commitment has two
consequences
• Higher absenteeism (costs about $505
per employee per annum)
• Higher turnover and related costs
• Recruiting costs
• Orientation costs
• Lost productivity
• Separation costs
Individual Performance Factors
Effort
Motivation
Attendance/turnover
Job design
Work ethic
Individual Performance
Ability
Support
KSA
Interests
Personality traits
Training & Development
Equipment
Performance Standards
Retention
• Again, one of the factors contributing to
organizational effectiveness.
• HR must to focus on keeping the people with
the critical KSA the organization needs to
accomplish its objectives.
• Sometimes referred to as tenure.
Retention
• Myths about tenure:
• Money is the main reason people leave. [WR
story]
• Hiring has nothing to do with retention.
• If you train people, you are training them for
another employer.
• Don not be concerned about retention during a
merger. [You may loses your most mobile
employees]
• If solid performers want to leave, the
organization cannot hold them.
Drivers of Retention
•
•
•
•
•
Character of the employer
Job design and work
Career opportunities
Rewards
Employee relationships
Character of the Employer
• Cultural and values
• Organization culture – the shared values and
beliefs of the organization.
• Working for a first rate institution, as opposed
to a diploma mill.
• Management – good leadership and vision
as opposed to self-serving and incompetent.
• Job Security
Job Design/Work
• Job Design – organizing TDR into a
productive unit of work. Reasons for
systematic job design:
• Maximize performance
• Enhance job satisfaction
• Reduce adverse affects to physical and mental
health.
• Person/Job Fit – matching the characteristics
of applicants with the characteristic of the job.
• Introvert with a sales job?
Job Design/Work
• Some factors in Design that have a positive
impact on retention:
•
•
•
•
Good equipment
Up-to-date technology
Good working conditions
Good physical workplace environment (space,
lighting, temperature, and noise)
• A safe working environment
Time Flexibility Considerations
• Global Work Scheduling Differences
• Shift Work
• Shift differentials for evening and graveyard
shifts.
• Compressed Work Weeks
• Flextime
• Core time
• Many jobs are not conducive to flextime.
Work Flexibility Considerations
•
•
•
•
•
•
•
•
•
Compressed Work Weeks
Leave for children’s school functions
Job Sharing
Telecommuting
On-site child care
On-site elder care
EAPs
Wellness programs
Fitness facilties
Career Opportunities
• Training/Development and mentoring.
• Confidence that you can perform your job
enhances job satisfaction.
• Lack of self-confidence leads to turnover.
• Career Planning/Advancement Opportunities
• Promotion show that you are valued by your
employer.
Rewards
• Compensation and benefits must be
competitive. External inequity causes
dissatisfaction.
• Performance-based compensation rewards
exceptional performance and indicates it is
recognized and valued.
• Why work hard if everyone is paid the same.
• If everyone is special, then no one is special.
• Recognition
• Tangible rewards ($)
• Intangible rewards (plaques)
Employee Relationships
• Are policies and practices fair.
• Nondiscriminatory in an EEO sense.
• Not given to favoritism or nepotism.
• Are actions consistent?
• Do you receive sufficient mangment and
organizational support?
• Do you get along with your co-workers?
Types of Employee Absenteeism
• Voluntary – avoidable
• Involuntary – unavoidable
• Sick leave
• Death in the family
Reasons for Absenteeism
•
•
•
•
•
Family Issues - 22%
Personal Illness - 36%
Stress - 11%
Personal Needs - 18%
Entitlement Mentality - 13%
Source: CCH 2003 study.
Controlling Absenteeism
• Discipline
• Positive reinforcement – rewards for good
attendance.
• Combination
• “No fault” policies - reason for absence
does not matter after “x” absences,
disciplinary action is automatic.
• Paid-time-off (PTO) - once they run out,
they are no longer paid for absences.
Types of Employee Turnover
• Involuntary – employer terminates
employment.
• Voluntary - employee terminates employment.
• Functional – low performers or disruptive employees
leave.
• Dysfunctional – key employees or high performers leave.
• Uncontrollable – employee moves out of area,
employee stays home to raise kids, spouse is
transferred, returns to school, etc.
• Controllable – employee leaves due to factors
influenced by employer (pay, level of supervision,
etc.)
Retention
• Measuring the turnover rate
Number of employee separations per mo. x 100
Total number of employees
Turnover Costs
• Separation Costs
•
•
•
•
Processing costs
Legal fees if separation is challenged
Continued benefits (COBRA)
Accrued vacation and paid time off.
• Replacement Costs
•
•
•
•
•
•
Recruiting and selection costs
Employment referral fees
Lost supervisor’s time
Employment testing expenses
Overtime for replacements
Fees for temporary employees (if used)
Turnover Costs
• Training Costs
• Orientation for replacement (this is paid time with no
production)
• Lost supervisor’s time
• Training staff wages
• Training materials costs
• Hidden Costs
•
•
•
•
•
Lost supervisor’s time
Lost productivity
Missed deadlines
Decreased customer service
Decreased morale and turnover of other employees
Retention Interventions
•
•
•
•
Better Selection
Good Orientation/Training
Equitable Compensation & Benefits
Good Talent Management (Career Planning
& Development)
• Good Employee Relations (Fair Policies
and Discipline)
• Realistic Job Previews
Realistic Job Previews
• A Realistic Job Preview (RJP) is any part
of the selection process that gives the
applicant a clear idea of what it will be like
to work at the job if they are hired.
•
•
•
•
Special characteristics of the job
Hours
Specific requirements
“Typical" day on the job
• Allows the candidate an opportunity to quit
before he or she is hired.