Forms of Withdrawal BehaviorForms of Withdrawal Behavior

Individual Level OrganizationalVoluntary Nonvoluntary Level

Taking a day off Illness SubunitGoing to a wedding Jury Duty absenteeismStretching a vacation [Sick Child, rates or illness Personal business

mental healthdays = grey areas]

Quit Fired SubunitResign Laid off organizationalEarly Retirement Mandatory quit rates or

retirement hiring rates

Disorganized? Car Trouble

Absenteeism

Turnover

Tardiness

Why be concerned with absenteeism?Why be concerned with absenteeism?

•Absenteeism is on the rise

•Cost of Absenteeism is high (example)

•Affect on customer service

•Affect on employee morale and productivity

Example of cost of Absenteeism*Example of cost of Absenteeism*

•Salary ($12.46/hour for 8 hours) $ 99.70•Benefits 28.12•Replacement Employee training etc 10.23•Unabsorbed Burden(rent, lights etc) 67.75•Lost profit contribution 81.81

•Total cost of absence $287.61

*lower level employee, 2007

Causes of AbsenteeismCauses of Absenteeism

Type ofReason 1995 1998 2002 Absence

Illness 45% 22% 33% NonVol

Family Issues/business? 27% 26% 24% Gray area

Personal Needs 13% 20% 21% Vol.

Entitlement 9% 10% 10% Vol.

Stress Related 6% 16% 12% Vol.

Measuring AbsenteeismMeasuring Absenteeism

1. Frequency Measure

2. Severity Measure

3. Attitudinal Measure

4. Medical Measure

5. Blue Monday

6. Worst Day

Measuring Absenteeism: exampleMeasuring Absenteeism: example

FebruaryS M T W R F S 1 2 3 4 5 6 7 8 9 10 11 12 13 1415 16 17 18 19 20 2122 23 24 25 26 27 28 MarchS M T W R F S 1 2 3 4 5 6 7 8 9 10 11 12 13 1415 16 17 18 19 20 2122 23 24 25 26 27 2829 30 31 AprilS M T W R F S 1 2 3 4 5 6 7 8 9 10 1112 13 14 15 16 17 1819 20 21 22 23 24 2526 27 28 29 30

A Model of Employee AttendanceA Model of Employee Attendance

3.Personal Characteristics- Org. Tenure - Family Size- Age - Personality- Sex

2.Job Expectations(Including about attendance)Recruitment & Selection

7.Ability to Attend- Illness/accidents-Family Responsibilities -Transportation Problems-Travel Distance

1.Job Situation -Job Autonomy -Job Level -Work Group Size -Role Stress -Leader Style - Co-worker Relations -Flexible Scheduling

4. Job Attitudes -Job Satisfaction -Organizational Commitment -Job Involvement

6.Attendance Motivation

8.EmployeeAttendance

5.Pressures to Attend -Economic/Market Conditions -HR Practices (Incentives/Controls) -Work Group Norms/Culture -Profit Sharing/Employee Ownership

How Companies Fight AbsenteeismHow Companies Fight Absenteeism

Percentage of Companies using ProgramPrograms Effectiveness of Program (1-5 scale)

Disciplinary Action

Yearly Review

Illness Verification

PTO Bank

No Fault

Personal recognition

Buy Back/Well pay

Bonus

89%

82%

74%

60%

59%

57%

53%

51%

3.4

2.9

3.2

3.6

2.9

2.6

3.4

3.3

CCH: www.cch.coom/press/news/2007

A Systematic View of Reducing AbsenteeismA Systematic View of Reducing Absenteeism

•Simplify Absenteeism

•Increase Relevant Attitudes

•Motivation Programs

•Change the Nature of the Control System

•Encourage Physical Health

•Put Someone in Charge

Why be interested in Turnover?Why be interested in Turnover?

1. Changing Economic Trends

2. Changing Demographic Trends

3. Changing Employment Patterns

4. Affect on Customer Satisfaction

5. Cost of Turnover

Cost of T/O: Entry level Fortune 500 exampleCost of T/O: Entry level Fortune 500 example

1984 1998 2008Replacement Acquisition - Direct Hiring Costs $638 $ 1001 $1062 - Other Hiring Costs 403 632 670Replacement Training - Pre-assignment 1646 2583 2740 - Learning Curve 462 725 769 (MCI study: new hire can accomplish only 60% as much in first 3 months. Journal of Accountancy estimates rookie efficiency equals 1/3 of the cost of T/O

Other Costs - Unabsorbed burden 1481 2324 2466 - Lost Profit Contribution 843 1323 1404

Total Costs $5473 $8588 $9,111

2008 is based on entry level salary of $45,555

Cost of T/O by Company and PositionCost of T/O by Company and Position

Company Position Cost

Automobile Manufacturer HR Manager $133,688

Machine Works Salaried Machinist $102,376 Hourly Machinist $58,564

Insurance Manager $79,672

Software Project Leader $32,160 Systems Engineer $34,365

Fast-Food Chain Store Manager $20,765 Counter Person $1,204

Source: Kepner & Tregoe, Bulletin to Management, 6-17-99, Jan. 1999

T/O Rates Among Fortune’s 100 Best CosT/O Rates Among Fortune’s 100 Best Cos

Est. T/O cost Reducing T/O 1% Company T/O Rate per Employee est. savings/year

Merck 9% $7592 $2,765,000

Cerner 14% $8000 $240,000

Charles Schwab 12% $8329 $1,512,000

MBNA 15% $4800 $1,000,000 America Bank

Avg. U.S. Co. 15.6% $5000 $500,000

Data from Fortune’s 100 Best Companies to Work For, Jan 2001Est. T/O costs calculated at 20% of common entry level salary.

T/O Rates Vary Considerably: ex. Mental HealthT/O Rates Vary Considerably: ex. Mental Health

HR AssistantSecretaryMaintenance WorkerDriverTherapistCookCase ManagerTeachersBehavior Health Tech.Teacher’s AideSupervisorClinical DirectorAccountantHR ManagerControllerExecutive Director

200%

66%14%

27%0%

34%40%

47%92%

16%60%

36%100%

33%60%

0%

Firms with lowest T/O ratesFirms with lowest T/O rates

2008 Rank, BestCompany Co. to work for % T/O

S.C. Johnson 27 2Herman Miller 96 3Alcon Laboratories 60 3Cisco Systems 6 4So. Ohio Med Ctr 75 4General Mills 69 4SAS Institute 29 5Mayo Clinic 59 5

Forms of T/OForms of T/O

•Non-voluntary

•Voluntary•Functional•Dysfunctional

•Gray Area

How do we measure T/O?How do we measure T/O?

1. Separation Rate

2. Instability Rate

3. Wastage Rate

4. Average Length of Service

Managing TurnoverManaging Turnover

Functional Dysfunctional

Effect of T/O on the Org.

Voluntary

NonVoluntary

Motivationfor the T/O

Forms of T/O: example of nursesForms of T/O: example of nurses

Turnover14.6%

Voluntary87%

Nonvoluntary13%

Functional42%

Dysfunctional58% (7.37% of T/O)

A Model of Employee TurnoverA Model of Employee Turnover

3.Personal Characteristics- Org. Tenure - Family Size- Age - Personality- Sex - Other (experience etc)

2.Job Expectations- Realistic Job Previews

7.Pressures to Leave-Perceived job availability-Low job performance

1.Job Situation -Job Enrichment -Task Repetitiveness -Work Group Size -Role Stress -Leader Style -Co-worker Relations -Flexible Scheduling

4. Job Attitudes -Job Satisfaction -Organizational Commitment -Job Involvement

6.Job Search Motivation

8.EmployeeTurnover

5.Pressures to Stay -Economic/Market Conditions -HR Practices (Incentives/Controls) -Union Presence -Profit Sharing/Employee Ownership

Pre-employment predictors of T/OPre-employment predictors of T/O

•Prior T/O behavior•Time (months) on prior job•Employee referral•# friends/family in present organization•“overt” intent to stay•Desire for the job

Effect of RJPs on T/OEffect of RJPs on T/O

Sewing MachineOperatorsWest Point Cadets

Telephone Operators

Insurance Agents

Bank Tellers

US Marines

Nurses

0 10 20 30 40 50Turnover Rates

40%11.1%11.5%

6%50%

33.8%27%

19%

35%15%

33.1%22.4%

21.1%8.5%

= Control Group

= RJP Group

Job performance and T/OJob performance and T/O

•Low performers quit more than high performers

•Low and high performers quit more than average performers.

Summary of Strategies for Managing TurnoverSummary of Strategies for Managing Turnover

1. Promote Job Designs that reduce T/O (Box 1)2. Encourage Small Group Sizes (Box 1)3. Reduce Job Stress (Box 1)4. Improve HR skills of Supervisors (Box 1)5. Clarify Job Expectations (Box 2)6. Use pre-employment techniques to hire more carefully7. Improve Placement to Emphasize Person-Job Fit (Box 3)8. Address non-work causes of turnover (EAPs) (Box 3)9. Promote Job Satisfaction (Box 4)10. Promote Organizational & Job Commitment (Box 4)11. Combat Non-work causes of T/O as long as economical (Box 5)

Important Issues to Consider: SummaryImportant Issues to Consider: Summary

1. Need to differentiate between voluntary and nonvoluntary turnover.

2. Are voluntary leavers leaving for work or non-workrelated reasons?

3. Need to ascertain who quits.

4. What is the impact of T/O on those who remain?

5. T/O is not to be eliminated, but managed.

Positive and Negative Consequences of T/OPositive and Negative Consequences of T/O

Positive Consequences Negative Consequences

Lose low performers Lose high performers

Cost savings (new hires cheaper) Costly

Stimulate changes in policies Negative PR from leavers

Increased satisfaction among stayers Decreased satisfaction

Increased internal mobility opportunities Increased workload

Infusion of new knowledge/change Decreased cohesion

Decrease in other withdrawal behavior Disrupted social/comm. patterns

StressStress

Stress occurs when an individual cannotadequately respond to job or organizationalstimuli without damage or excessive wearand tear on their system (fatigue, worry, heart disease).

Reasons for Studying StressReasons for Studying Stress

1. Economic Self-Interest

2. Legal Reasons/Liability/Worker’s Compensation

3. Moral, Ethical, Humanistic Reasons

General Adaptation Syndrome (Hans Selye)General Adaptation Syndrome (Hans Selye)

InstrumentalFunctioning

StressAlarm

Resistance Exhaustion

Occupations and StressOccupations and Stress

High Stress Low Stress

Inner City H.S. Teacher Farm Laborer (nonowner)Police Officer MaidMiner Craft WorkerAir Traffic Controller Animal/stock HandlerMedical Intern Heavy Equip. OperatorStockbroker College ProfessorJournalistCustomer Complaint ClerkWaitressSecretary

Sample of 250 Jobs Rated for StressSample of 250 Jobs Rated for Stress

High Stress Low Stress

1. U.S. President 103. Market Researcher2. Fire Fighter 119. Economist3. Senior Executive 122. Mechanical

Engineer6. Surgeon 149. Retail Sales Person10. Air Traffic Controller 173. Computer Programmer12. PR Executive 193. Purchasing Agent20. Stockbroker 245. Actuary

Common Factors for High Stress JobsCommon Factors for High Stress Jobs

•Little control over work

•Major responsibility for human/financial resources

•Unpleasant working conditions

•Repeated exchanges with others

•Unstructured as opposed to structured tasks

Types of Role StressTypes of Role Stress

Role ConflictIntrasender ConflictIntersender Conflict

Interrole ConflictPerson Role Conflict

Role Ambiguity

Role OverloadQuantitative OverloadQualitative Overload

Role Underutilization

Resource Inadequacy

Type A and Type B PersonalitiesType A and Type B Personalities

Type A Type B

Excessive competitiveness Feels no need to display orTries to stretch abilities, even in discuss achievements social situationsImpatient PatientSense of time urgency Unhurried in work or mannerInvests long hours on the job Can relax without guiltTries to do several things at once More reflectiveSeldom expresses feelings of anxiety Exhibits concern for broadSeldom afflicted with minor illnesses ramifications of decisionsIf exercise at all, plays 36 holes of Plays for fun and relaxation, golf; takes a stop watch jogging not just to win

Stress and PerformanceStress and Performance

Traditional View Current View

Stress Stress

Distress Eustress Distress

Source: adapted from Quick & Quick, Organizational Stress and Preventative Management (New York: McGraw-Hill, 1984, P. 7 & 12)

Performance

Approaches to Stress ManagementApproaches to Stress Management

1. Dissipation

2. Selection and Training

3. Training

4. Job Design

Health/Life Style ProgramsHealth/Life Style Programs

“Carrot” vs “Stick” approaches

HyVee reduction in health insurance for nonsmokersGuideOne reductions in health insurance for nonsmokers and

drinkers and extra coverage for those who volunteer and have regular church attendance

Gannett, General Mills, NW Airlines monthly surcharge forsmokers not attending cessation programs

U-Haul International Biweekly health insurance surchargefor tobacco use or excessive weight

Current Wave: SmokersCurrent Wave: Smokers

Smoking on decline in US, but still 23% of Iowans smoke

Center for Disease Control estimates smokingcosts the nation $167 billion.

Federal studies show smokers cost businessesan average of $5606 more per year due to increased medical and absences

Over a lifetime, employees who smoke incur$16,000 more in medical bills.

Next wave: ObesityNext wave: Obesity

1 in 3 adults is obese (BMI >30)Obesity costs the nation $100 billion.Obesity accounts for 5-7% of health care costs

For a co. of 1000 employees, an extra $395,000.Programs to combat obesity are on the rise.

(Google, Caterpillar putting healthier food in vending, charging less for healthier food in cafeterias)

Alabama charges $25/mo more for insurance if obese (BMI>35)

Source: Conference Board, 2008