Please click here to access the new HRM Failures case associated with this chapter. HRM
Failures features real-life situations in which an HR conflict ended up in court. Each case
includes a discussion questions and possible answers for easy use in the classroom. HRM
Failures are not included in the text so that you can provide your students with additional
real-life content that helps engrain chapter concepts.
Chapter Summary
The purpose of this chapter is to focus on employee separation and retention. The chapter is
divided in two sections. The first examines involuntary turnover, that is, turnover initiated by the
organization. The topics covered include principles of justice, progressive discipline, alternative
dispute resolution, employee assistance programs, and outplacement counseling. The second
part deals with voluntary turnover, that is, turnover, initiated by employees. The topics covered
include job withdrawal and job satisfaction and how survey feedback interventions can be used
to retain high performers.
Learning Objectives
After studying this chapter, the student should be able to:
1. Distinguish between involuntary and voluntary turnover, and discuss how each of these
forms of turnover can be leveraged for competitive advantage.
2. List the major elements that contribute to perception of justice and how to apply these in
organizational contexts involving discipline and dismissal.
3. Specify the relationship between job satisfaction and various forms of job withdrawal, and
identify the major sources of job satisfaction in work contexts.
4. Design a survey feedback intervention program and use this to promote retention of key
organizational personnel.
Extended Chapter Outline
Note: Key terms appear in boldface and are listed in the “Chapter Vocabulary” section.
Opening Vignette:
“Churning” About to Heat Up
Employee churn (voluntary separation from current employment – often to take on new jobs the
employee has already arranged) has traditionally been high in the US. This type of turnover does
not impact the economy in general and often is beneficial to employers who can attract the best
workers. During the period from 2007-2009 (the start of the recent economic downturn),
employees had been reluctant to leave their employers and decreased the churn rate. The rate
jumped again in 2010 and 2011 again appears to be poised to continue rising. While churn may
be have its benefits, it also costs employers nearly $2 trillion in recruitment and training costs.
Discussion Question
1. What might be some of the benefits of churn to the employment market? The
individual employer? The economy in general? What might be some drawbacks?
Student’s answers will be varied as each will bring a different view of churn.
Benefits to the market might include an increase in employees in the market for
I. Introduction
To compete effectively, organizations must take steps to ensure that good performers are
motivated to stay with the organization, whereas chronically low performers are allowed,
encouraged, or if necessary, forced to leave. Retaining top performers is not always easy,
however. Similarly, the increased willingness of people to sue their employer, combined
with an unprecedented level of violence in the workplace, has made discharging
employees legally complicated and personally dangerous.
A. Involuntary turnover—turnover initiated by the organization (often among
people who would prefer to stay)
B. Voluntary turnover—turnover initiated by employees (often whom the company
would prefer to keep).
II. Managing Involuntary Turnover
Despite a company’s best efforts in the area of personnel selection, training, and design,
some employees will occasionally fail to meet performance requirements or will violate
company policies while on the job. The company must then utilize its discipline policy
that may lead to the individual’s discharge.
The employment-at-will doctrine is a doctrine that, in the absence of a specific
contract, either an employer or employee could sever the employment relatonship
at any time. Today, however, this policy is not always upheld and employees
sometimes sue their employers for wrongful discharge.
In addition to the financial risks associated with a dismissal, there are issues
related to personal safety. Violence in the workplace has become a major
organizational problem in recent years.
A standardized, systematic approach to discipline and discharge is therefore
necessary.
A. Principles of Justice
1. Outcome fairness refers to the judgement that people make with respect
to the outcomes received relative to the outcomes received by other people
with whom they identify.
2. Procedural justice is a concept of justice focusing on the methods used to
determine the outcomes received (Table 10.1).
3. Interactional justice is a concept of justice refering to the interpersonal
nature of how the outcomes were implemented (Table 10.2).
B. Progressive Discipline
Effective discipline programs have two central components—documentation and
progressive punitive measures (Table 10.3). This may start with an unofficial
warning for the first offense, followed by a written reprimand for additional
offenses. At some point, later offenses may lead to a temporary suspension.
C. Alternative dispute resolution (ADR) is a method of resolving disputes that
does not rely on the legal system. In general, this form of resolution proceeds
through four stages: open door policy, peer review, mediation, and arbitration
(Table 10.4).
D. Employee assistance programs (EAPs) attempt to ameliorate problems
encountered by workers who are drug dependent, alcoholic, or psychologically
troubled. They are basically referral services that supervisors and employees can
use to seek professional treatment for various problems. Many EAPs are now
fully integrated into companies’ overall health benefit plans, serving as
gatekeepers for healthcare utilization.
1. EAPs are usually identified in official documents published by the employer
(employee handbook). Both supervisors and employees may be trained in
using the referral system. Evaluation of their success is important because
they are just evolving.
2. The key to the effectiveness of an EAP is striking the right balance between
collecting information that can be used to promote employee health on the one
hand and the employee’s right to privacy on the other.
E. Outplacement counseling is counseling to help displaced employees manage the
transition from one job to another.
III. Managing Voluntary Turnover
A. Process of Job Withdrawal—Progression of withdrawal is a theory that
dissatisfied individuals enact a set of behaviors in succession to avoid their work
situation (see Figure 10.2).
1. Behavior Change
a. An employee’s first response to dissatisfaction would be to try to
change the conditions that generate the dissatisfaction. This could
lead to supervisor-subordinate confrontation, perhaps even
conflict, as dissatisfied workers try to bring about changes in
policy or upper-level personnel.
b. When employees are unionized, dissatisfaction leads to an
increased number of grievances being filed.
c. Employees sometimes initiate change through whistle blowing,
making grievances public by going to the media or government.
Integrity in Action:
Whistleblower or Traitor: The Role of HR in Making the Call
This case discusses the ethical dilemma created by the Edward Snowden case. Snowden
revealed security practices being used by the US government to monitor telephone interactions
between individuals (US citizens as well as potential terrorists) in order to determine social
networks of possible terrorists. Some people call Snowden a traitor, others call him a
whistleblower. The question is which trust is more important – the trust between employer and
employee, or the trust between employee and the larger society.
Discussion Question
1. Imagine that HR professionals were able to accurately predict who would become a
whistleblower. Would firms be motivated to screen out such individuals from being hired,
and if so, would this be an ethical practice from the view of the larger society?
Students responses here will most likely be varied and the debate possibly heated. This is
2. Physical Job Withdrawal
a. A dissatisfied worker may be able to solve his or her problem by
leaving the job. This could take the form of an internal transfer.
3. Psychological Withdrawal—Employees that are unable to change their
situation or physically remove themselves from the situation may
“psychologically disengage” themselves from their jobs.
a. If the primary dissatisfaction has to do with the job itself, the
b. If the dissatisfaction is with the employer as a whole, the employee
may display a low level of organizational commitment.
Organizational commitment is the degree to which an employee
B. Job Satisfaction and Job Withdrawal
1. Job satisfaction is a pleasurable feeling that results from the perception
2. Three important aspects of job satisfaction are values, perceptions, and
importance.
a. Job satisfaction is a function of values.
b. Different employees have different views of which values are
c. An individual’s perception may not be a completely accurate
3. Frame of Reference is a standard point that serves as a comparison for
other points and thus provides meaning.
Evidence-Based HR
Recent survey evidence indicates that, although an employee’s own level of job satisfaction in an
important predictor of turnover, what the employees around a person think and feel can also
influence their decision to leave. This evidence indicates that it is important for employers to
have accurate knowledge of the job satisfaction levels associated with different units of their
organization
Exercise
Facilitate a class discussion where students recall times in their own employment (and this could
certainly include part time and seasonal employment) when they thought about leaving their job
and the reasons for it. Also have them discuss their level of job satisfaction with that job during
that period of time. Ask them to react to the results of the study highlighted in this vignette, and
whether or not how people around them felt had an impact on their thoughts of or intentions to
leave their employer.
C. Sources of Job Dissatisfaction—Many aspects of people and organizations can
cause dissatisfaction among employees.
1. Unsafe Working Conditions
a. Each employee has a right to safe working conditions under the
Occupational Safety and Health Act of 1970 (OSHA).
b. Financial bonuses to attaining specific safety related goals, in the
long run, pay for themselves.
2. Personal Disposition—Since dissatisfaction is an emotion that ultimately
reside within the person, it is not surprising that many who have studied
these outcomes have focused on individual differences.
a. Negative affectivity is a term used to describe a dispositional
dimension that reflects pervasive individual differences in
satisfaction with any and all aspects of life.
b. Employees high in negative affectivity report higher levels of
aversive mood states, including anger, contempt, disgust, guilt,
fear, and nervousness across all contexts.
c. People who are high in negative affectivity tend to focus exten-
sively on the negative aspects of themselves and others and may be
relatively dissatisfied regardless of what steps the organization or
the manager takes.
d. Research has shown that negative affectivity in early adolescence
is predictive of overall job dissatisfaction in adulthood. Also,
research on identical twins who were raised apart suggests that
there may be a genetic component. Thus, there is evidence that
these people may be relatively dissatisfied regardless of what steps
the organization takes.
e. Core self-evaluations are basic positive or negative bottom-line
opinions that individuals hold about themselves.
1. Positive core evaluation—person’s self-image on a number
of more specific traits
a. Includes: high self-esteem, high self-efficiency, internal
locus of control, and emotional stability
2. Negative core evaluation—person’s tendancy to attribute
dissatisfying features of their lives or work to the acts of
other people, who they blame for all their problems.
a. These people are less likely to work toward change,
instead either doing nothing or acting agressively
twoeard those they blame for their misfortunes.
3. Tasks and Roles
a. Three primary aspects of tasks affect job satisfaction: the
complexity of the task, the degree of physical strain and exertion
on the job, the ancient of flexibility in where and when the work is
done, and the value the employee puts on the task.
1. There is a strong, positive relationship between task
complexity and job satisfaction.
2. Boredom generated by simple, repetitive jobs and boredom
generated by jobs that monitor critical events that rarely
occur can lead to a lack of concentration.
b. Job rotation is the process of systematically moving a single indi–
vidual from one job to another over the course of time
Competing Through Globalization
Riot Puts Spotlight on Working Conditions
A recent riot at Chinese based Han Hoi’s (a.k.a. Foxconn) factory that started with 2 workers
having an altercation eventually involved over 2,000 employees and 5,000 paramilitary forces.
These types of incidents are increasing in frequency in China – and this is not the first public
image black-eye for Foxconn. This is the same company who installed nets to the sides of their
buildings to catch workers who were jumping off of top floors to commit suicide due to poor
working conditions.
Discussion Question
1. In what ways are the factors that cause job dissatisfaction universal across
cultures, and what does this imply for countries that seek competitive advantage
by exploiting workers?
There are a number of directions that this question can go. Primarily it appears
that in this case, the issue of boring and tedious work combined with long hours
2. What does this say about global companies like Apple that outsource work to such
countries?
Answers here will also very. These events spell big problems for this business
c. Prosocial motivation is the degree to which people feel energized
to do their jobs because it helps other people.
4. Supervisors and co-workers—The two primary sets of people in an
organization who affect job satisfaction are co-workers and supervisors.
a. A person may be satisfied with his or her supervisor and coworkers
for one of two reasons:
1) The person may have many of the same values, attitudes, and
philosophies that the co-workers and supervisors have.
2) The person may be satisfied with his or her supervisor and
co-workers because they provide social support, the degree to
which the person is surrounded by other people who are
sympathetic and caring.
b. Because of the powerful role played by supervision and other more
experienced workers in items of supporting the organization’s
culture, some organizations are going to great lengths to develop
the mentoring skills of their managers and other highly
experienced workers.
Competing Through Sustainability
Flextime: Has Its Time Come and Gone?
Flextime programs appear to be waning in their popularity for many companies today. The first
major corporation to publicly do away with the program was Yahoo, with Best Buy following
shortly behind. Many companies will believe in the cost savings and benefits derived from such
programs.
Discussion Question
1. Discuss how the nature of a company’s workers and the nature of the work itself might
influence when flextime is a good policy and when it is a poor strategy. Why might a
“one-size-fits all policy” for flextime be unrealistic?
The discussion here will be varied as student views of these programs differ. One big
5. Pay and Benefits—For many people, pay is a reflection of self worth, so
pay satisfaction takes on critical significance when it comes to retention.
a. Satisfaction with benefits is another important dimmension of
overall pay satisfaction.
b. In order to make costs better reflect revenues, organizations are
increasingly adopting variable pay schemes that reward employees
for specific accomplishments related to either individual or
organizational performance.