6 staffing system and retention management

Staffing System and Retention
Management

Chapter Outline
• Staffing system management
• Turnover and its causes
• Retention initiatives voluntary
• Discharge and downsizing.
14-2

Turnover and Its Causes
• Nature of problem
• Types of turnover
• Causes of turnover
14-3

Nature of the Problem
• Employee retention can contribute to organizational
effectiveness
• Turnover is not only costly but may be beneficial
• Focus of retention strategies
– Number of employees retained
– Who is retained
• Turnover is inevitable
• Approach to retention management
– Gather and analyze employees’ reasons for leaving
14-4

Types of Turnover
• Types of Employee Turnover
• Voluntary
– Avoidable - Could be prevented
• Try to prevent for high value employees
• Do not try to prevent for low value employees
– Unavoidable - Could not be prevented
• Involuntary
– Discharge
– Downsizing
14-5

Types of Employee Turnover -
Voluntary -- Employee Initiated
14-6

Types of Employee Turnover -
Involuntary -- Organization Initiated
14-7

Causes of Turnover: Voluntary
• Behavior of leaving preceded by intention to quit
• Factors affecting intention to quit
– Perceived desirability of leaving
• Often results from a poor person/job or
• Person/organization match
– Perceived ease of leaving
• Represents lack of barriers to leaving and
• Of being able to likely find a new job
– Available alternatives
• Depends on other job options both within and
outside organization
14-8

Causes of Voluntary Turnover
14-9

Causes of Turnover:
Discharge and Downsizing
• Discharge turnover
– Mismatch between job requirements and KSAOs
• Employee fails to follow rules and procedures
• Unacceptable job performance
• Downsizing turnover
– Mismatch in staffing levels which leads to an overstaffing
situation
– Factors related to overstaffing
• Lack of forecasting and planning
• Inaccuracies in forecasting and planning
• Unanticipated changes in labor demand and/or supply
14-10

Analysis of Turnover
• Measurement
• Reasons for leaving
• Costs and benefits
14-11

Measurement of Turnover: Formula
• Turnover rate
– Number of employees leaving 
average number of employees x 100
• Data and decisions
– Identify time period of interest
– Determine type of employees that count
– Determine method to calculate average number
of employees over the time period
14-12

Measurement of Turnover:
Reasons for Leaving
• Important to ascertain, record, and track reasons
why employees leave
• Tools
– Exit interviews
• Formal, planned interviews with departing employees
– Postexit surveys
• Surveys sent to employees soon after their last day
– Employee satisfaction surveys
• Surveys of current employees to discover sources of
dissatisfaction which may become reasons for leaving
• Results can provide information to pre-empt turnover
• Require substantial resources
14-13

Measurement of Turnover:
Costs and Benefits
• Costs and benefits can be estimated for each of the
three turnover types
• Types of costs
– Financial
– Nonfinancial
• Some costs and benefits can be estimated financially
• Nonfinancial costs and benefits may outweigh
financial ones in importance and impact
14-14

Major Turnover Costs and Benefits
• Costs of turnover
– Separation costs
• Staff time and loss of
productivity
– Replacement costs
• Recruiting and selecting
new employee
– Training costs
• Teaching new
employees the job
• Benefits of turnover
– Potentially better new
employees
– Short term labor cost
savings
– Opportunities to
restructure work units
14-15

Most and Least Effective Retention Initiatives
14-16

Guidelines for Increasing Job Satisfaction and
Retention
• Extrinsic rewards
– Rewards must be
meaningful and unique
– Rewards must match
individual preferences
– Link rewards to retention
behaviors
– Link rewards to
performance
• Intrinsic rewards
– Assign employees to jobs
that meet their needs
– Provide clear
communication
– Design fair reward
allocation systems
– Ensure supervisors provide
a positive environment
– Provide programs to
enhance work-life balance
14-17

Ease of Leaving
• Two points of attack
– Provide organization-specific training
• Should organization invest in training to provide general or
organization-specific KSAOs?
• Combine training strategy with a selection strategy focused on
assessing and selecting general KSAOs
– Increase cost of leaving by providing
• Above-market pay and benefits
• Deferred compensation
• Retention bonuses
• Desirable location of company’s facilities
14-18

Alternatives
• Approaches to make internal alternatives more
desirable than outside alternatives
– Internal staffing
• Encourage employees to seek internal job opportunities
• Provide attractive internal options outside of traditional internal
staffing system
– Responding to external job offers entails developing
appropriate policies
• Decide whether to provide counteroffers or not
• Determine types of employees to provide counteroffers
• Decide who will develop counteroffer and nature of approval
process
14-19

Retention Initiatives: Discharge
• Performance Counseling and Disciplinary Process
– Identify performance problems
– Assess causes
– Develop corrective actions
– Develop and discuss clear consequences for failure to
improve
– Document incident, corrective actions, and consequences
for continued problems
– Termination if problem is not resolved
14-20

Retention Initiatives: Discharge
• Progressive discipline
– Five requirements of a progressive discipline
system
• Give employees notice of the rules of conduct and
misconduct
• Give employees notice of the consequences of
violation of the rules
• Provide equal treatment for all employees
• Allow for full investigation of the alleged misconduct
and defense by the employee
• Provide employees the right to appeal a decision
14-21

Retention Initiatives: Downsizing
• Weigh advantages and disadvantages
• Staffing levels and quality
– View retention in two ways
• Balance a financial quick fix against unlikely return of downsized
employees if economic conditions improve
• Approach reductions in selective or targeted terms, rather than
across the board
– Determine who should be retained, if cuts are made
• Retain most senior employees
• Make performance-based decisions
• Retain “high-value employees” and layoff “low-value employees”
14-22

Retention Initiatives: Downsizing
(continued)
• Alternatives to downsizing
– No layoff or guaranteed employment policy
– Layoff minimization programs
• Layoff Minimization Examples
• Employees who remain
– Potential results of ignoring survivors
• Increased stress levels
• Critical appraisals of downsizing process
• Examples of “survivor sickness”
– Provide programs to meet needs of survivors
• Enhanced communication programs
• Morale-boosting events
• Promotion of EAPs
• Stress-related training
14-23

6 staffing system and retention management

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