© 2004 Wadsworth, a division of Thomson Learning, Inc 1 Employee Satisfaction and Commitment

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© 2004 Wadsworth, a division of Thomson Learning, Inc

Employee Satisfaction and Commitment

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Free WriteThink of a job in which you were really unhappy?

Why was it so bad?

Now think of a job in which you were very happy and satisfied. Why was it so good?

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Why Worry About Job Satisfaction?

.30Performance

.70Commitment

.24Organizational citizenship

.59Lateness

- .22Turnover

- .15Absenteeism

CorrelationOutcome

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Why Worry About Organizational Commitment?

.70Job satisfaction

- .29Lateness

- .27Turnover

- .23Absenteeism

CorrelationOutcome

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Individual Differences in Employee Satisfaction

• Important Findings– Consistency across jobs

– Consistency across time

– Relationship between life satisfaction and job satisfaction

• Why?– Genetic predispositions

– Core self-evaluations• self-esteem

• self-efficacy

• internal locus of control

• optimism/positive affectivity

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Judge and Bono (2001) Meta-Analysis

.19.24Emotional stability

.22.32Internal locus of control

.23.45Self-efficacy

.26.26Self-esteem

Correlation with Job Performance

Correlation with Job Satisfaction

Core-Evaluation Trait

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What is Your Predisposition for Satisfaction?Exercises 10-1, 10-2, 10-3

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Your Predisposition to be Satisfied

• Interest Inventory• Life Satisfaction Measure• Core Self-Evaluation

– self-esteem

– locus of control

– affectivity

• Job Satisfaction History

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Career InterestsCD-ROM Exercise

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International Differences in Job SatisfactionSousa-Poza and Sousa-Poza (2000)

• 5.69 Denmark• 5.66 Cyprus• 5.47 Switzerland• 5.45 Israel• 5.43 Netherlands• 5.40 Spain• 5.34 United States• 5.27 New Zealand• 5.24 Sweden• 5.22 Norway• 5.18 Italy

• 5.17 Germany• 5.17 Portugal• 5.13 Great Britain• 5.13 Czech Republic• 5.09 France• 5.05 Bulgaria• 4.95 Slovenia• 4.87 Japan• 4.86 Russia• 4.82 Hungary

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Discrepancy Theories

• Have the employee’s expectations been met?– Realistic job previews (RJPs)

• Have the employee’s needs, values and wants been met?– Maslow’s Needs Hierarchy

– ERG Theory

– Two-factor Theory

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Basic Biological Needs

Maslow’s Need Hierarchy

Safety Needs

Social Needs

Ego Needs

Self-Actualization Needs

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Discrepancy TheoriesERG Theory

• Growth

• Relatedness

• Existence

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Discrepancy TheoriesTwo-Factor Theory

• Motivators– responsibility

– challenge

– job control

• Hygiene factors– pay

– benefits

– coworkers

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Job Facets

• Are the tasks enjoyable?• Do the employees enjoy

working with their supervisors and coworkers?

• Are coworkers outwardly unhappy

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Are Rewards And Resources Given Equitably?

• Equity Theory• Components

– inputs

– outputs

– input/output ratio

• Possible Situations– underpayment

– overpayment

– equal payment

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Organizational Justice

• Distributive justice• Procedural justice• Interact ional justice

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Correlations with Perceptions of JusticeColquitt, Conlon, Wesson, Porter, and Ng (2001)

- .30- .31Negative employee reactions

.15 .36Performance

- .50- .46Withdrawal

.51 .61Trust

.51 .57Organizational commitment

.56 .62Job satisfaction

Distributive Justice

Procedural

Justice

Outcome

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Is There a Chance for Growth and Challenge?

• Enriched jobs– variety of skills needed

– employee completes entire task

– tasks have meaning

– employee has input/control

– employee receives feedback

• Methods– Job rotation

– Job enlargement

– Job enrichment

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Increasing Job Satisfaction

• Hire “Satisfied” Employees• Eliminate Dissatisfiers• Express appreciation and provide proper feedback• Increase opportunities to socialize• Hold special events and friendly competitions• Increase humor• Have surprises• Assign the right tasks to the right people

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Hire “Satisfied Employees”

• Test for Satisfaction Potential– Interest inventory

– Core self-evaluation

– Satisfaction history

• Provide a realistic job preview• Look for person-organization fit

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Eliminate Dissatisfiers

• Interpersonal conflict– Peers

– Supervisors

– Customers

• Inequity• Low pay• Job security• Poor working conditions• Work schedule issues

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Hold Special Events and Friendly Competitions

• Casual or spirit days• Increase socialization

through parties, picnics, and socials

• Hold fun contests• Celebrate birthdays and

special occasions• Encourage humor

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Express Appreciation and Provide Proper Feedback

• Liberal use of praise and thanks

• Positive feedback• Service and performance

awards• _________________• _________________• _________________

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Increase Opportunities to Socialize

• Picnics• Lunches• _______________• _______________• _______________• _______________• _______________

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Hold Special Events and Friendly Competitions

• Casual days• Company logo day• ________________• ________________• ________________• ________________

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Increase Humor

• Bulletin boards with humor• Attach cartoons to boring

memos• ________________• ________________• ________________

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Have Surprises

• Order lunch for everyone• Let everyone leave an

hour early• __________________• __________________• __________________• __________________

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Assign the Right Tasks to the Right People

• People have different interests

• People have different skills

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What did you think of the method used by Monical Pizza to increase job satisfaction?

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Measuring Job Satisfaction

• Faces Scale• Job Descriptive Index (JDI)• Minnesota Satisfaction

Questionnaire• Job in General Scale• Custom designed inventories

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1994

1995

1996

1997

1998

1999

2000

2001

2002

Year

$593

$662

$603

$572

$757

$602

$610

$755

$789

Cost of Absenteeism

U. S. Absenteeism Rate

2.69

2.80

1.602.80

1.502.85

1.603.25

1.702.70

1.702.10

1.702.20

2.10

BNA SurveyCCH Survey

www.radford.edu/~maamodt/HR%20Statistics/employee_absenteeism_rates_US.htm

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International Differences – Nutreco (2000)

7.2Norway

7.8Netherlands

6.3Belgium

4.0France

3.8Spain

3.2United Kingdom

2.7Chile

2.3Poland

1.9Ireland

1.6Canada

Absenteeism Rate (%)Country

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Reason for Missing Work (CCH Survey)

6

11

12

16

19

5

19

12

Stress

45

28

26

20

21

40

32

33

Illness

13

20

22

24

20

20

19

21

Personal Needs

27

26

26

21

21

21

21

24

Family Issues

1995

1996

1997

1998

1999

2000

2001

2002

Year

9

15

14

19

19

14

9

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Sense of Entitlement

www.radford.edu/~maamodt/HR%20Statistics/reasons_employees_are_absent.htm

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Why Employees Are Absent

• No consequences for attending or missing work

• Illness and personal problems

• Individual differences• Unique events

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Increasing Attendance by Having Consequences for Missing Work

• Rewards for Attending– Financial incentives

• Well pay

• Games

• Financial bonuses

– Paid Time-off Programs

– Recognition programs

• Discipline for Not Attending• Unclear Policy and Record Keeping

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Increasing Attendance by Reducing Employee Stress

• Overload• Conflict

– peers

– supervisors

• Boredom• Safety Issues

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Increasing Attendance by Reducing Illness

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Types of Wellness ProgramsSHRM 2002 Survey

14On-site medical care

21Stress reduction programs

22Weight loss program

26On-site fitness center

28Subsidize off-site fitness center dues

29Smoking cessation program

42On-site health screening

58Some form of wellness program

61On-site vaccinations

% OfferingWellness Program

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Effect of Absence Control MethodsJohnson (1990) Meta-Analysis

.086Games

.177Financial incentives

.186Wellness programs

.306Recognition

.3612Discipline

.445Compressed work schedules

.5910Flextime

.864Well pay

Effect Size# of StudiesAbsence Control Method

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CCH Absence Control Surveys

3.43.43.4501717Buy-back programs

3.03.33.1545621Bonus programs

3.02.93.7575831No-fault systems

2.72.53.1596233Personal recognition

3.63.63.9595821Paid leave bank

3.0n/an/a71n/an/aVerification of illness

3.03.03.2818158Performance appraisal

3.43.43.5939388Disciplinary action

200220012000200220012000

Absence Control Method

Effectiveness RatingPercent Using

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What did you think of Mike Parker’s approach at International Products to reduce absenteeism?

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CD-ROM Absenteeism Exercise

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Why Do Employees Leave?

• Unavoidable Reasons– school ends

– job transfer

– illness

– family issues

• Advancement– more responsibility

– better pay

• Unmet Needs

• Escape From– people

• management

• coworkers

• customers

– working conditions

– stress

• Unmet Expectations– organization

– job

– career

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Why Are Your Employees Leaving?

• Exit Interviews

• Attitude Surveys

• Salary Surveys– pay

– benefits

– time off

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The Cost of TurnoverVisible Costs Per Hire

• Advertising charges• Agency fees• Referral bonuses• Staff time & benefits

– processing applications

– interviewing

• Overhead

• Travel Costs– staff

– applicants

• Relocation Costs• Miscellaneous Costs

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The Cost of TurnoverHidden Costs

• Loss of Productivity– employee leaving

– other employees

– vacant position

– new employee (1 year)

• Inefficiency• Overtime• Training Costs

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Estimating the Cost of Turnover• Industry Norms

– rate is 1.4% per month

– cost is 1.5 times salary

• Custom Statistics– www.advantagehiring.com/calculators/

calc_turnover.shtml

– www.uwex.edu/ces/cced/publicat/turn.html

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Financial Savings From Turnover Reduction

• Last Year– 5 employees leave

each month (60 per year)

– Average salary is $20,000

– Cost of turnover is 60 * $20,000 * 1.5 = $1,800,000

• This Year– 4 employees leave each

month (48 per year)

– Average salary is $20,000

– Cost of turnover is 48 * $20,000 * 1.5 = $1,440,000

– $360,000 saved through reduced turnover

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Reducing TurnoverCompensation Issues

• Match the market

• Use job evaluation to ensure internal equity

• Offer retention/tenure bonuses (stay for pay)

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Increasing Salary and Benefits Will only work if:

• Employees are leaving due to low compensation or benefits

• The turnover rate is high• The salary increase will be a

meaningful amount

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Reducing TurnoverSelection Issues

• Conduct realistic job previews• Look for person-organization fit• Study predictors of people who leave

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Reducing TurnoverOrganizational Issues

• Provide training• Show appreciation• Mediate conflicts• Meet employee needs

– safety

– social

– growth

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Strategic Use of Benefits to Attract and Retain Applicants

• By Providing– Health care for

domestic partners

– Daycare benefits

– Meal benefits

– Paid time-off

– Flexible schedules

– Tuition/books

• You Can Attract/Retain– Gay employees

– Dual career families and parents on public assistance

– Students and retirees

– Young people

– Homemakers/parents

– Students

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What did you think of the methods used by Ernst & Young and by London Central to reduce

turnover?

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Exercise 10-4 Case Study

Documents

© 2004 Wadsworth, a division of Thomson Learning, Inc 1 Employee Satisfaction and Commitment