Chapter 10

Employee Separation
and Retention

Source: McGraw Hill, Human Resource Management, Noe et el 2016

 Learning Objectives

LO 10-1 Distinguish between involuntary and voluntary turnover,

and discuss how each of these forms of turnover can be
leveraged for competitive advantage.
LO 10-2 List the major elements that contribute to perceptions
of justice and how to apply these in organizational contexts
involving discipline and dismissal.
LO 10-3 Specify the relationship between job satisfaction and
various forms of job withdrawal, and identify the major sources
of job satisfaction in work contexts.
LO 10-4 Design a survey feedback intervention program, and use
this to promote retention of key organizational personnel.

Source: McGraw Hill, Human Resource Management, Noe et el 2016 2

 Introduction

To compete, organizations must ensure:

1. Good performers are motivated to stay.
2. Chronically low performers are allowed,
encouraged, or if necessary, forced to leave.
3. Employees are not being made miserable by
supervisors or co-workers who are engaging in
unproductive, disruptive, or dangerous behavior.

Source: McGraw Hill, Human Resource Management, Noe et el 2016 3

 Turnover

Involuntary Voluntary
Initiated by organization Initiated by employee

Employee not planning Employee not planning

to leave to stay

Source: McGraw Hill, Human Resource Management, Noe et el 2016 4

 Common Reasons for Involuntary Turnover

Employee Employee
Caused Casualty

 Poor performance  Downsizing

 Policy violation  Position elimination
 Inappropriate  Restructuring
behavior

Employment relationship ends based on employer's circumstance,

not the employee's decision to leave.
Source: McGraw Hill, Human Resource Management, Noe et el 2016 5
 Reasons to Manage Involuntary Turnover

1. Avoid wrongful termination or discharge suits

2. Minimize employee retailation actions

Implement a standardized, systematic approach

Source: McGraw Hill, Human Resource Management, Noe et el 2016 6
 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

terminated because he or she refused to do
something illegal, unethical, or unsafe).

Source: McGraw Hill, Human Resource Management, Noe et el 2016 7

 The Cost of Doing Business

Source: McGraw Hill, Human Resource Management, Noe et el 2016 8

 Principles of Justice
Establishing standardized, systematic approaches to
discipline and discharge.

Outcome justice - 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.
10-13

Source: McGraw Hill, Human Resource Management, Noe et el 2016 9

 Six Determinants of Procedural Justice
(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.
Source: McGraw Hill, Human Resource Management, Noe et el 2016 10
4 Determinants of Interactional Justice

Explanation

Social Sensitivity

Consideration

Empathy

Source: McGraw Hill, Human Resource Management, Noe et el 2016 11

 Elements of Progressive Discipline

Offense Organizational Documentation

Frequency Response

First offense Unofficial verbal warning Witness present

Second offense Official verbal warning Document filed

Third offense Second official warning; threat Document filed
of temporary suspension
Fourth offense Temporary suspension and Document filed
“last chance notification”
Fifth offense Termination (with right to go to Document filed
arbitration)

Source: McGraw Hill, Human Resource Management, Noe et el 2016 12

 Alternative Dispute Resolution

Method of Arbitration
resolving
disputes
Mediation

Peer Review

Open Door Policy

Source: McGraw Hill, Human Resource Management, Noe et el 2016 13

 Components of a Discharge Program

 Fair and equitable selection processes

 Employee Assistance Programs
 Outplacement Counseling

Employee
Assistance
Source: McGraw Hill, Human Resource Management, Noe et el 2016 14
 Fair and Equitable Selection

• Establish a list of criteria to

guide the selection process
• Assure criteria has consistency
with job requirements and
business needs
• Implement criteria across the
board

Source: McGraw Hill, Human Resource Management, Noe et el 2016 15

 Employee Assistance Programs
Attempt to improve problems or challenges encountered
by workers in or outside of the work environment
Provide a wide range of services including:
Drug/alcohol dependency
Psychologically troubled
Financial counseling
Child/Eldercare
Employee
Wellness Assistance
Source: McGraw Hill, Human Resource Management, Noe et el 2016 16
 Outplacement Counseling

Helping employees realize other opportunities exist

 Aids displaced employees manage the transition

 Provides a variety of support services i.e., job
search, résumé critiques, job interviewing and
networking
 May be provided in-house
or through an outside
source.

Source: McGraw Hill, Human Resource Management, Noe et el 2016 17

 Common Reasons for Voluntary
Turnover

Dissatisfaction Other

• Job dissatisfaction • Retirement

• Manager dissatisfaction • Disability
• Pay/benefit • Death
dissatisfaction

Employment relationship ends based on the employee's

decision to leave.
Source: McGraw Hill, Human Resource Management, Noe et el 2016 18
18
 Why Manage Voluntary Turnover

Retaining good talent is more cost effective

Companies develop standardized, systematic

approaches to retaining good talent
Source: McGraw Hill, Human Resource Management, Noe et el 2016 19
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 Examples of Retention Programs
• Medical benefits
• Competitive compensation
• Career development
• Training incentives
• Coaching and Mentoring
• Tuition reimbursement
• Retirement savings matching
• Stock / ownership
• Flex time - to attend family or
personal events
• Onsite daycare
• Wellness programs
• Computer purchase assistance
• Magazine subscriptions
• Homebuyer / relocation
program
• Reduced prices for outside
events

Source: McGraw Hill, Human Resource Management, Noe et el 2016 20

20
 Sources of Job Dissatisfaction

Working
Conditions

Compensation Personal
and Benefits Characteristics
Dissatisfaction

Tasks and Supervisors &

Roles Coworkers

Source: McGraw Hill, Human Resource Management, Noe et el 2016 21

 Evolution of Job Withdrawal
Sources of Dissatisfaction
- Working Conditions
- Personal disposition Job
- Tasks & roles Dissatisfaction
- Supervisors and coworkers
- Pay and benefits
Withdrawal Behavior
- Changes in
behavior
Progression of
- Physically
Withdrawal withdrawing
Theory - Psychological
withdrawing

Source: McGraw Hill, Human Resource Management, Noe et el 2016 22

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 Behavior Change

Employee's first response to dissatisfaction is to change

conditions that generate dissatisfaction.

 Dissatisfaction of unionized employees leads to

increased grievances
 Dissatisfaction of non-union employees leads to
whistle-blowing or making grievances public by going
to the media or government
Source: McGraw Hill, Human Resource Management, Noe et el 2016 23
 Physical Withdrawal

Ways dissatisfied workers physically withdraw from

the organization:
•Increased tardiness
•Increased absenteeism
•Internal transfer
•Leave the company

Companies average 15 % of payroll costs to make

up for absent workers
Source: McGraw Hill, Human Resource Management, Noe et el 2016 24
 Psychological Withdrawal

Job Involvement Organizational

Commitment

Source: McGraw Hill, Human Resource Management, Noe et el 2016 25

 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

• A frame of reference is a standard point that

serves as a comparison for other points and thus
provides meaning

Source: McGraw Hill, Human Resource Management, Noe et el 2016 26

 Three Aspects of Job Satisfaction

Values Importance Perception

Source: McGraw Hill, Human Resource Management, Noe et el 2016 27

 Survey Feedback Interventions
Employee Surveys:
 emphasize overall satisfaction
 assess the impact of policy
changes
 allow the company to benchmark
“best practices”
 companies that fail to use
collected information see
employee satisfaction lower
Strategic retention programs consider surveying people who are
about to become ex- employees.
Source: McGraw Hill, Human Resource Management, Noe et el 2016 28
 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.

Source: McGraw Hill, Human Resource Management, Noe et el 2016 29