LHR305:

Lesson Overview

For the past several lessons we have explored the various roles that human resource management plays in recruiting, selecting, training and compensating employees. Those functions put employees “in place” to perform consistently with desired organizational objectives. This chapter will focus on issues related to employee retention – how we develop relationships that avoid voluntary turnover of human capital – as well as the issues surrounding involuntary turnover, particularly with respect to employee discipline.

Lesson Objectives

Upon successful completion of this lesson, you should be able to

• explain the difference between job satisfaction and employee engagement;
• explain the manner in which job satisfaction and employee engagement affect organizational outcomes;
• explain the difference between voluntary and involuntary turnover; and,
• apply critical policies in the context of an employee dismissed for cause.

Lesson Readings & Activities

By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 12 Course Schedule.

Human Resource Management

Human resource management plays key roles in recruiting and eventually placing successful applicants in various roles within an organization. What we have learned is that every single decision that occurs in these processes can affect the quality of the hire, and eventually the quality of that person’s service to the organization. Those decisions are reflected in a variety of metrics that help us measure the quality of HR’s work. For example:

• Who we recruit can help determine the efficiency and effectiveness of the hiring process (e.g., cost per hire);
• How we select applicants can have a profound impact on the quality of work (e.g., average performance of new hires during first year of employment).
• How we onboard staff can help connect new employees more effectively to the organization’s mission, values and vision.

We also spend considerable time developing compensation and benefit packages designed to respond to employee motivations and organizational strategy.

Retaining Employees

Once hired, those employees represent the successful applicants that HR and others speculate will be successful in their roles. Many, probably most, will perform with sufficient competence to remain employed. One of the important metrics valued by most organizations is the voluntary turnover rate. In most organizations, the lower the rate, the better. Given the cost of recruitment, selection and training, voluntary turnover represents a phenomenon most organizations wish to avoid.

By the same token, even if staff choose to remain, organizations continue to be engaged with staff in order to create outcomes that are as effective and efficient as possible. In this context we often read about the role of “discretionary effort”, that amount of energy that a person is willing to expend beyond that required to perform consistent with expectations. In other words, what will encourage staff to extend themselves beyond expected levels of achievement?

Dan Airley is the James P. Duke Professor of Psychology and Behavioral Economics at Duke University. His TedTalk discussion related to employee engagement helps us understand the complex motivations that affect the degree to which employees are truly  connected to their work.[1]

As you work through the readings in this lesson, reflect on Dr. Airley’s message. Does the video connect with any passages, for example, in the text?

In summary, to the extent an organization is able to retain desired employees (i.e., reduce voluntary turnover), that result reduces the need to recruit replacements. Also, merely satisfying staff will help retain them; finding ways to engage staff will additionally encourage them to exhibit greater productivity.

Separation

Of course, not everyone is equally successful. Some become the “rock stars”, the coveted talent the organization wants to retain as much as others want to recruit. Probably the largest proportion of hires perform well enough, providing a cohort of solid employees that add value to the company but could be replaced if circumstances required as much. A smaller group ultimately perform at levels so inadequate the organization feels duty bound to remove them from employment.

This latter group represent those who are most likely to experience involuntary turnover. In this case the adjective (“involuntary”) refers to the employee’s perspective. The removal occurs against the employee’s wishes. In some cases involuntary turnover is the result of a reduction in force. Reductions may occur for economic reasons (e.g., a downturn in the economy), or be forced upon a company by virtue of competitive pressures. In either case outsourcing and/or offshoring might replace the local workforce to produce the same or similar product or service.

In other cases the employer might decide that an employee should be removed “for cause”. Removal for cause can occur because of someone’s poor work performance, or a variety of inappropriate behaviors that violate one or more work rules. In these situations the text provides a set of concepts used to judge the manner in which an employer creates the separation. The removal process is evaluated with respect to:

• Outcome Fairness[1]
• Procedural Justice
• Interactional Justice

The justice associated with these concepts will be the focus of  the discussion that is one of the assignments for this lesson.