Chapter 6: Developing employees (C8)

- Employee Development: The combination of formal education, job experiences, relationships,

and assessment of personality and abilities to help employees prepare for the future of their
careers.
1. Training, Development, and Career Management
a. Development and Training

- Many organizations now link training and development to business goals, making the
distinction between them less clear.
b. Development for careers
- The concept of a career has changed in recent years:
o Traditional view: career consists of a sequence of positions within an occupation or
organization.
o Today, protean career, one that frequently changes based on changes in the person’s
interests, abilities, and values and in the work environment
- To remain marketable, employees must continually develop new skills.
o Fewer of today’s careers involve repetitive tasks, and more rely on an expanding base of
knowledge
o Job less likely last a lifetime
o Beyond knowing job requirements, employees need to understand the business in which
they are working and be able to cultivate valuable relationships with co-workers,
managers, suppliers, and customers.
o need to follow trends in their field and industry, so they can apply technology and
knowledge that will match emerging priorities and needs.
- As organization provide for employee development, they need to
o Determine their interest, skills and weaknesses
o seek development experiences involving jobs, relationships, and formal courses
 career management or development planning helps employees select development activities
that prepare them to meet their career goals; employers select development activities in line
with their human resource needs.
- A psychological contract is the set of expectations that employees and employers have about
each other.
- psychological success is the feeling of pride and accomplishment that comes from achieving life
goals that are not limited to achievements at work.
2. Approaches to Employee Development
a. Formal Education
- May include workshops, short courses, university, and executive MBA
- involve lectures by business experts, business games and simulations, experiential programs, and
meetings with customers
- Can be provided by companies (operate training and development centers that offer seminars
and long term programs) or independent institutions
- Another trend in executive education is for employers and the education provider to create short
courses with content designed specifically for the audience.
b. Assessment
- Def: Collecting information and providing feedback to employees about their behavior,
communication style, or skills.
- Information for assessment may come from the employees, their peers, managers and
customers

- Main purposes:
o Identify employees with managerial potential
o Evaluate current managers’ strengths and weaknesses
o Assess team members' impact on team productivity
- For development, feedback must be shared with the employee along with actionable
suggestions (e.g., training, new job experiences).
- Employees should create action plans based on assessment results and development
opportunities.
- Assessment methods vary across organizations:
o Performance appraisals
o Psychological tests (e.g., Myers-Briggs Type Indicator, DiSC assessment)
o 360-degree feedback is the most widely used tool.
o Some organizations use assessment centers for comprehensive evaluations.
- Combining multiple assessment tools gives a well-rounded view of employee capabilities.

 Psychological Profiles

- include some type of questionnaire in which employees answer questions about themselves or
select words or statements they agree to describe themselves
- From the answers, a testing service creates an inventory or profile describing the person’s traits
or the way the person tends to behave.
- Myers-Briggs Type Indicator (MBTI): identifies individuals’ preferences for source of energy,
means of information gathering, way of decision making, and lifestyle.
o MBTI assesses personality by identifying preferences in four key areas:
 Energy Source: Extroversion (E): Energized by social interaction; Introversion (I):
Energized by internal thoughts and reflection.
 Information Gathering: Sensing (S): Focus on facts and details; Intuition (N):
Focus on possibilities and big-picture relationships.
 Decision Making: Thinking (T): Decisions based on logic and objective analysis;
Feeling (F): Decisions based on personal values and emotional impact.
 Lifestyle Preference: Judging (J): Prefer structure, planning, and clear goals;
Perceiving (P): Prefer flexibility, spontaneity, and adaptability.
o The assessment involves 100+ questions about behavior and preferences in various
situations.
o The Myers-Briggs Type Indicator (MBTI) results in 16 personality types, based on
combinations of four dichotomies.
o While people may show traits from different types, most have predominant preferences.
 o Example: ISTJ (Introverted, Sensing, Thinking, Judging) individuals are logical, practical,
organized, and goal-focused but may be rigid, impersonal, and struggle with unexpected
change.
o Application of MBTI in organizations:
 Improves understanding of communication, motivation, teamwork, and
leadership styles.
 Helps with team assignments: e.g., Intuitive types for brainstorming, Sensing
types for evaluating ideas.
 Aids in self-awareness and how others perceive one’s behavior.
o Limitations:
 Research is inconclusive on MBTI's reliability and validity.
 Personality types may change over time—only ~25% of people retain the same
type in retests.
 MBTI should not be used to measure job performance or determine promotion
eligibility.
 Still, it’s useful for personal development and communication awareness.
- DiSC: Brand of assessment tool that identifies individuals’ behavioral patterns in terms of
dominance, influence, steadiness, and conscientiousness
o The most widely used version is Inscape’s DiSC, which is validated for reliability—
employers should ensure they use a tested version.
o After taking the assessment, employees receive a profile outlining their:
 Behavioral style
 Preferred work environment
 Effectiveness strategies
o The DiSC acronym represents four behavior categories:
 Dominance (D): Results-driven, confident, direct, sees the big picture, likes
challenges.
 Influence (i): Relationship-oriented, persuasive, enthusiastic, collaborative, seeks
recognition.
 Steadiness (S): Calm, dependable, sincere, supportive, dislikes rushing.
 Conscientiousness (C): Detail-focused, quality- and accuracy-driven, objective,
prefers working independently.

 Assessment Centers

- assessment center: A wide variety of specific selection programs that use multiple selection
methods to rate applicants or job incumbents on their management potential.
o Assessment centers are off-site locations where multiple evaluators assess employee
performance through various exercises.
o Typically involve 6 to 12 participants at a time.
o Used to evaluate:
 Personality traits
 Administrative and interpersonal skills
 Teamwork abilities
o Primarily used to identify managerial potential or assess teamwork skills.
o High cost (up to $20,000 per session) means they are mainly used for senior-level
employees.
- Common exercises include:
o Leaderless group discussions: small teams solve a problem together.
o Interviews: explore work/personal experience, strengths/weaknesses, and career goals.
o In-basket exercises: simulate managerial tasks using documents.
o Role-plays: simulate workplace scenarios requiring specific skills (e.g., handling
performance issues).
o Tests: interest, aptitude, and personality tests assess traits like reasoning ability,
teamwork, and leadership.
- Assessors:
o Are trained managers who observe and rate behaviors.
o Each watches 1–2 employees per exercise.
o Ratings (e.g., 1–5 scale) are discussed and finalized collaboratively.
- Benefits:
o Valid predictor of job performance, salary, and advancement.
o Valuable for development, due to detailed feedback on skills and attitudes.

 Performance Appraisals and 360-Degree Feedback

- Performance appraisal is a formal method to measure and improve employee performance. For
development, it must:
o Clearly identify performance issues and improvement strategies.
o Highlight the gap between current and expected performance.
o Include plans for improvement and regular manager feedback.
- 360-degree feedback involves evaluations from supervisors, peers, subordinates, and customers.
o Rates work-related behaviors.
o Helps employees compare self-perceptions with others' views.
o Encourages communication and sets development goals.
- Benefits:
o Offers multiple perspectives.
o Improves performance and behavior, especially when feedback differs from self-
evaluations.
o Most effective when:
o Ratings are consistent, job-related, and development-focused.
o Delivered by a trained person with follow-up accountability.
- Limitations:
o Time-consuming.
o Risk of retaliation for negative feedback.
o Requires a facilitator to interpret results.
o Needs actionable development plans to be effective.

c. Job Experiences
- Job Experiences: The combination of relationships, problems, demands, tasks, and other
features of an employee’s job.

- Development is most effective when there’s a skills gap, requiring employees to stretch and
grow.
- Examples include international assignments and unfamiliar job roles.
- Research by the Center for Creative Leadership highlights valuable developmental events like:
o Challenging assignments
o Interpersonal relationships
o Transitions into unfamiliar roles
- Positive stressors (e.g., change, pressure, influence) stimulate learning.
- Negative stressors (e.g., lack of support, difficult bosses) can hinder development.
- Most job demands, except for obstacles, promote learning.
- Not just for managers: Line employees can develop skills (e.g., teamwork, conflict resolution)
through team roles or job changes.
- Types of developmental job assignments:
o Job enlargement
o Job rotation
o Transfers
o Temporary assignments
o Promotions or demotions (downward moves)

 These experiences help employees gain new skills, handle pressure, and prepare for future roles.

 Job enlargement: adding challenges or new responsibilities to employees’ current jobs.  not
only makes a job more interesting, but also creates an opportunity for employees to develop
new skills.
 Job rotation: moving employees through a series of job assignments in one or more functional
areas
- Pros: helps employees gain an appreciation for the company’s goals, increases their
understanding of different company functions, develops a network of contacts, and improves
problem-solving and decision-making skills; increase their salary and earn promotions faster
- Cons: employees have short-term perspective on problems and their solutions.; feel less satisfied
and motivated because they have difficulty developing specialized skills and leave the position
too soon to fulfill any challenging assignments; hurt productivity and increase the workload of
those who remain after employees are rotated out
- likely to succeed when it meets certain conditions:

o Clear policies define which positions are eligible for job rotation.
o Both employees and managers understand and agree on expectations, including skill
development.
o Program goals align with overall business objectives (e.g., leadership development,
mentoring).
o The rotation schedule is realistic, considering learning and task completion time.
o Top management is committed to supporting the program.
o A designated person is responsible for measuring the program’s success.
 Transfers, Promotions, and Downward Moves
- Transfer: Assignment of an employee to a position in a different area of the company, usually in
a lateral move.
o do not necessarily increase job responsibilities or compensation; are usually lateral
moves (moves to a job with a similar level of responsibility)
 o May involve relocation to another part of the country or even another country:
Relocation might be stressful (families, new house, health care, lack the support,..) 
provoke anxiety  employees most willing to accept in case of those having high career
ambitions and beliefs that the organization offers a promising future and that accepting
the transfer will help the company succeed
- Downward Move: Assignment of an employee to a position with less responsibility and
authority.
o because of poor performance or move the employee to a lower-level position in another
function so that the employee can develop different skills
o temporary cross-functional move is the most common way to use downward moves for
employee development.
o Employees often view transfers and downward moves as punishment, not development.
 often decide to leave an organization rather than accept such a change, and
then the organization must bear the costs of replacing those employees
 Employee will accept if the organization provides information about the change
and its possible benefits and involves the employee in planning the change
- Promotion: Assignment of an employee to a position with greater challenges, more
responsibility, and more authority than in the previous job, usually accompanied by a pay
increase.
o Usually promotions include pay increases
o employees are more willing to accept promotions than lateral or downward moves
o Even so, employers can increase the likelihood that employees will accept promotions by
providing the same kind of information and assistance that are used to support transfers
and downward moves.
o Organizations can more easily offer promotions if they are profitable and growing. In
other conditions, opportunities for promoting employees may be limited.

 Temporary Assignments with Other Organizations

- Externship: Employee development through a full-time temporary position at another
organization
o Beneficial for employees in analytical roles who need exposure to new challenges.
o Helps prevent boredom and fosters learning of fresh ideas and techniques.
o encourage skills-based volunteering

 Employees use and enhance their skills through community service projects.
 Company pays employees for the time spent volunteering.
 Provides meaningful application of skills while contributing to social causes.
- Sabbatical: A leave of absence from an organization to renew or develop skills.
o Employees on sabbatical often receive full pay and benefits.
o allow employees more time for personal pursuits, work in other organizations (NGO,
study…)
d. Interpersonal Relationships
- Mentors: An experienced, productive senior employee who helps develop a less experienced
employee (a protégé).
o develop informally as a result of interests or values shared by the mentor and protégé:
likely to seek and attract a mentor have certain personality characteristics (emotional
 stability, ability to adapt their behavior to the situation, and high needs for power and
achievement);
o the relationship can develop as part of the organization’s planned effort to bring
together successful senior employees with less experienced employees.
o Advantage: ensure access to mentors for all employees, regardless of gender or race.
 can ensure that high-potential employees are matched with wise, experienced
mentors in key areas
o However, mentors may have difficulty providing counseling and coaching  can be
addressed by looking for more than one mentor, including informal relationships with
interested people outside the organization.
o Mentoring programs tend to be most successful when they are voluntary and
participants understand the details of the program

 Managers should be rewarded for participating in employee development.

 Mentors should be carefully selected, trained, and the program should be
evaluated.

o Benefits for Protégés

 Career support: coaching, sponsorship, exposure, and challenging tasks.
 Emotional support: trusted role model, acceptance, and someone to talk to.
 Enhanced career outcomes: faster promotions, higher salaries, and greater
influence.
o Benefits for Mentors
 Improved interpersonal skills and a sense of contribution.
 Technical knowledge enhancement through collaboration with protégés.
o Group Mentoring Programs
 One mentor is assigned to 4–6 protégés.
 Protégés learn from both the mentor and each other.
 Activities may include individual assignments or group projects.
 Helps protégés understand the organization and plan their careers.
- Coaching: A peer or manager who works with an employee to motivate the employee, help him
or her develop skills, and provide reinforcement and feedback.
o Coaches may play one or more of three roles:
 1. Working one-on-one with an employee, as when giving feedback.
 2. Helping employees learn for themselves—for example, helping them find
experts and teaching them to obtain feedback from others
 3. Providing resources such as mentors, courses, or job experiences

o Benefits and Process of Coaching

 Coaching helps managers identify improvement areas and set clear goals.
 Effective coaching requires a long-term commitment (at least six months of
regular sessions).
 Coaches use assessments, ask deep questions, help create action plans, and
provide follow-up.
 Employee dedication and consistent practice are essential for success.
3. Systems for career management

a. Data Gathering
- Self-Assessment: The use of information by employees to determine their career interests,
values, aptitudes, and behavioral tendencies.
- Purpose of Data Gathering in Career Management
o Helps identify gaps in development practices and provides individuals with self-insight.
o Employees use this data for self-assessment—to explore career interests, values,
aptitudes, and behavioral traits.
o Employees identify areas for improvement; organizations provide tools and support for
assessment.
- Common Self-Assessment Tools
o Myers-Briggs Type Indicator: assesses personality types.
o Strong-Campbell Interest Inventory: identifies job/occupational interests.
o Self-Directed Search: matches preferences to work environments (e.g., sales,
counseling).
o Tools may also explore values around work vs. leisure and career fit.
- Support in the Self-Assessment Process
o Exercises help employees evaluate current status and career goals.
o Counselors may assist with interpreting test results and planning development.
b. Feedback
- Feedback: Information employers give employees about their skills and knowledge and where
these assets fit into the organization’s plans.
- Purpose of the Feedback Stage in Career Management
o Employees receive insights on their skills, knowledge, and how they align with
organizational plans.
o Employee’s role: Identify skills they can realistically develop based on available
opportunities.
o Organization’s role: Share performance evaluations and inform employees of potential
opportunities (e.g., promotions, transfers).
- How Feedback Is Delivered
o Typically part of performance appraisals or performance management.
o Some organizations separate performance feedback from career development
discussions.
c. Goal Setting
- Goal Setting in Career Management: Based on self-assessment and feedback (reality check),
employees set short- and long-term career objectives.
- Goals may relate to:
o Desired positions (e.g., sales manager in 3 years)
o Skill application (e.g., improving budgeting to help unit performance)
o Work setting (e.g., transferring to corporate marketing)
o Skill acquisition (e.g., learning HR information systems)
- Best Practices for Goals
o Should be specific, challenging, realistic, and include a deadline.
o Employee is responsible for setting and tracking progress toward the goals.
o Manager and organization help ensure goals are appropriate and provide support.
d. Action Planning and Follow-up
- Employee’s Responsibility: Identify specific steps and a timetable to reach short- and long-term
career goals.
- Employer’s Role:
o Provide resources such as courses, job experiences, mentors, or coaching.
o Support and monitor progress through regular meetings.
- Development Methods May Include: Training, assessment, job experiences, and/or
mentoring/coaching, depending on needs.
- Example:
o An information systems manager uses feedback to realize the need for project
management software knowledge.
o His plan: read articles (education), meet vendors (networking), and contact users (job
experience), with a six-month goal.
- Outcome:
o A career development plan that outlines:
o Strengths and weaknesses
o Career goals
o Development activities for each goal

4. Development-Related Challenges
a. The glass Ceiling
- Glass Ceiling: Circumstances resembling an invisible barrier that keep most women and
minorities from attaining the top jobs in organizations.
- Causes of the Glass Ceiling:
o Limited access to:
 Training programs
 Developmental job experiences
 Mentoring and professional networks
o Differences in advancement strategies:
 Women often get mentors who offer advice, while men get senior mentors who
sponsor them.
  Women advance more when they stay at the same company and promote their
achievements; self-promotion has less impact for men.
- Organizational Solutions:
o Use formal development systems to identify needs and create objective action plans.
o Managers should avoid gender-based stereotypes in developmental assignments.
-
b. Succession Planning
- Succession Planning: The process of identifying and tracking high potential employees who will
be able to fill top management positions when they become vacant
- Why Succession Planning Matters:
o Workforce is aging; many leaders are retiring.
o Downsizing and early retirements increase the urgency.
o Many middle managers are unprepared for top roles.
o Succession planning ensures future leadership readiness.
- Benefits:
o Encourages regular talent reviews by senior leaders.
o Ensures leadership talent is available when needed.
o Provides clear development paths for aspiring leaders.
o Attracts and retains ambitious managers.
- Focus: High-potential employees who can grow into roles like general manager, function director,
or CEO.
- Development Methods:
o Individual development plans.
o Executive mentoring/coaching.
o Job rotation based on paths of current leaders.
o Special assignments (presentations, task forces).
- Three Stages of Effective Programs:
o Selection – Based on performance, education (e.g., MBA), and assessments.
o Developmental Experiences – Tests for leadership traits, communication, sacrifice, and
results.
o CEO Involvement – Cultural fit and visibility; can take 15–20 years to reach this stage.
- Steps in the Succession Planning Process:
o Identify key positions and candidates.
o Set position requirements and potential metrics.
o Review current talent.
o Integrate with HR systems.
o Provide employee feedback on career paths.
o Measure and refine the plan.
c. Dysfunction Managers
- Def: A manager who is otherwise competent may engage in some behaviors that make him or
her ineffective or oven “toxic” – someone who stifles good ideas and drives away employees.
- Problem: Some otherwise competent managers exhibit toxic behaviors—such as arrogance,
insensitivity, poor teamwork, bad conflict management, resistance to change, or failure to meet
goals—that hinder effectiveness and drive away employees.
- Example: A technically skilled but abrasive manager may demotivate and alienate team
members.
- Solution: If the manager is valuable and willing to improve, organizations can intervene with:
Assessment; Training; Counseling
- Special Programs: Programs like Individual Coaching for Effectiveness (ICE) offer personalized
development through diagnosis, coaching, and support from psychologists. These help managers
adopt new, effective behaviors.
- Outcome: Research shows such programs can improve managerial performance and reduce
terminations, suggesting it's beneficial to invest in struggling but high-potential employees—not
just top performers.
Chap 7: Creating and Maintaining High-performance organizations
1. High-performance work system
- High-performance work system: An organization in which technology, organization structure,
people, processes work together seamlessly to give an organization an advantage in the
competitive environment
o All elements must work together as a cohesive, smoothly functioning whole.
o Manufacturers often use advanced processes such as:
 Flexible manufacturing technology
 Total quality management (TQM)
 Just-in-time (JIT) inventory control
o These processes require skilled people to operate effectively.
o Organizations must:
 Identify the right type of employees
 Recruit, train, and motivate them accordingly
o Research shows that implementing integrated HPWS leads to:
 Increased productivity
 Improved long-term financial performance
- Creating a high-performance work system contrasts with traditional management practices.
o In the past, decisions about technology, organizational structure, and human resources
were treated as if they were unrelated
o Recently, value how elements work together
a. Elements of high-performance work system

- Organizational structure: the way the organization’s people are group into useful divisions,
departments, and reporting relationships
o Top managers make decisions  affect how well employees coordinate their activities
and respond to change
o In HPWS, it promotes cooperation, learning and continuous improvements
- Task design: how the details of the organizations necessary activities will be grouped ( into jobs
or group responsibilities)
o In HPWS, task design make jobs efficient while encourage high quality
- People: Key element of HPWS
 o HRM provide people who are well suited to and well prepared for their jobs
o HR personnel help the organization recruit and select people with the needed
qualifications
o Training, development and career management ensure that these people are able to
perform their current and future jobs with the organization.
- Reward systems:
o Encourage pp to strive for obj that support the organization’s overall goals
o Include performance measure, methods of measuring performance, incentive pay…
o HRM is important in developing and administrating rewards systems
- Information systems
o Managers make decision about types of information to gather and sources of
information; decide who in the organization should have asses the information and how
they will make the in4 available

b. Outcomes of HPWS

- HPWS lead to higher productivity and efficiency  higher profits

- In HPWS, the outcomes of each employee and work group contribute to the system’s overall
high performance
- When the organization adds or changes goals, pp are flexible and make changes as needed to
meet the new goals
2. Conditions that contribute to high performance
a. Teamwork and Empowerment
- One of the most popular ways to empower employees is to design work so that it is performed
by teams
- Teamwork and empowerment contribute to high performance when they improve job
satisfaction and give the organization fuller use of employees’ ideas and expertise.
- For empowerment to succeed, managers must serve in linking and coordinating roles8 and
provide the team with the resources it needs to carry out its work.
b. Knowledge Sharing
- Learning organization: An organization that supports lifelong learning by enabling all employees
to acquire and share knowledge.
o The pp in learning organization has resources for training, and they are encouraged to
share their knowledge with colleagues
- Key features:

o Continuous learning: Employees regularly gather and apply knowledge to improve

performance.
o Knowledge sharing: Training focuses on creating and sharing knowledge, supported by
HR and digital tools.
o Critical, system thinking is widespread: Employees are encouraged to analyze, test
ideas, and learn from results.
o Learning culture: Learning is rewarded and supported; risk-taking and innovation are
encouraged.
o Employees are valued: Seen as key knowledge sources; their development and well-
being are prioritized.

 Continuous learning and knowledge sharing can support an environment of employee

empowerment.

c. Job Satisfaction and Employee Engagement

- Employee engagement: The degree to which employees are fully involved in their work and the
strength of their job and company commitment.
o Being fully engaged tends to require that employees experience their jobs as fulfilling or
allowing them to fulfill important values.
o Links between job satisfaction and job performance
 most engaged employees have significantly greater customer satisfaction,
productivity, and profitability (Gallup)
 Companies scoring high in employee engagement tend to report superior sales,
strong operating margins, and returns to shareholders, especially at companies
that also have strong leadership, positive reputations, and a focus on
performance management
 Organizations that want to beat the competition with highly engaged employees
have plenty of room to compete
- Brand Alignment: The process of ensuring that HR policies, practices, and programs support or
are congruent with an organization’s overall culture (or brand), products, and services.

d. Ethics
- In the long run, a higher-performance organization meets high ethical standards.
o Ethics establishes fundamental principles for behavior (honesty, fairness…)
o To maintain long-term relationships with customers and their community, org and pp
must meet these standards
- Ethical behavior results from values held by org’s leaders + system promoting ethical behavior
- Some org systems that promote ethical behaviour:
o written code of ethics: esp effective if developed with input from employees about
situations they encounter
 o org should provide channels employees can use to ask questions about ethical behaviour
o training in ethical decision making training for supervisors in how to handle employees’
concerns about ethical matters and how to provide ethical leadership.

- Ethical behavior is vital in HRM, supported by training, performance management, and

discipline. A strong ethical culture attracts talent, while ethical lapses can hurt performance and
retention. Holly Nowak notes that ignoring employee concerns can lead to declining productivity,
turnover, and reputational damage.

3. HRM’s contribution to high performance

a. Job design
- Enable the organization benefit from teamwork and employee empowerment (2 work conditions
associated with high performance)
- Job design aimed at empowerment includes access to resources such as information technology.
b. Recruitment and selection
- R&S aims at obtaining employees who are enthusiastic about and able to contribute to
teamwork, empowerment, and knowledge sharing.
- Creative and ability to corporate play a large role in selection decisions
- High-performance org need selection methods that identify more than technical skills like ability
to perform accounting and engineering tasks
- Employers may use group interviews, open-ended questions, psychological test to find out pp
who innovates, share ideas and take initiative
c. Training
- When organizations base hiring decisions on qualities like decision-making and teamwork skills,
training may be required to teach employees the specific skills they need to perform the duties
of their job.
- hen organizations delegate many decisions to work teams, the members of those teams likely
will benefit from participating in team development activities that prepare them for their roles
as team members
- high-performance org are developing their talents to move into positions with greater
responsibility

d. Performance management
- In a high-performance organization, this requires making sure that employees know the
organization’s goals and what they must do to contribute to goal achievement
- The performance management system that meets those requirements applies the process of
employee performance, diagrammed in Figure 9.3.
 o Individuals bring a set of skills and abilities to the job, and by applying a set of behaviors
to the skills and abilities, they achieve result
o The organization’s goals should influence each step of that process.
o The situation also has an influence on every step. (VD: an organization’s culture might
influence how hard individuals try to please customers, and economic conditions might
influence how much a salesperson sells, no matter how hard she tries.)
- Guideline for performance management
o Each aspect of performance management should be related to the organization’s goals
o business goals should influence the kinds of employees selected and their training, the
requirements of each job, and the measures used for evaluating results.
 General, org identifies what each dept do to gain their desired goals, and how individual
should contribute to achieve their dept goals
Specifically:
o Define and measure in precise terms: focus on outcome that can be defined; include
ways employee can add value; include behavior that go beyond the minimum
requirements
o Link performance measure to meeting customer needs: external and internal customers
(employs receiving services from a co-worker). Service goals for internal customers
should be related to satisfying external customers.
o Measure and correct for the effect of situation constraints: economic conditions,
organization’s culture, employee’s performance
e. Compensation
- supports high-performance organizations when it is linked in part to performance measures.
(chapter 13)
- Compensation also can be tied to performance-related conditions such as successful teamwork
or—for a manager—job satisfaction among employees in the manager’s department.
- can increase empowerment and job satisfaction by including employees in decisions about
compensation and communicating the basis for pay decisions
- share financial information with employees or have them participate in setting group goals used
as the basis for paying bonuses

4. HRM Tech
Human resource departments can enhance both their own and their organization's performance by
effectively using new technology, which typically involves automation and collaboration. Automation
increases HR efficiency by handling routine tasks, allowing HR professionals to focus on strategic
goals. Technology also supports knowledge sharing within learning organizations through tools like
databases, online directories of employee skills, and digital libraries of training resources.
a. HRM Applications
- Transaction processing: Computations and calculations involved in reviewing and documenting
HRM decisions and practices.
o documenting decisions and actions associated with employee relocation, training
expenses, and enrollments in courses and benefit plans
o activities required to meet government reporting requirements, such as filling out EEO-1
reports, on which employers report information about employees’ race and gender by
job category.
o enable companies to perform these tasks more efficiently
o Employers can fill out computerized forms and store HRM information in databases
(data stored electronically in user-specified categories), so that it is easier to find, sort,
and report.
- Decision support systems: Computer software systems designed to help managers solve
problems by showing how results vary when the manager alters assumptions or data.
o include a “what if?” feature that managers can use to enter different assumptions or
data and see how the likely outcomes will change.
o By applying internal data and research results, help managers make decisions for HR
planning
 Assumption about turn over rate affect the number new employees needed
 Availability of a certain skill in labour market to see the different of recruiting
plans
 Forecast (c5) and succession planning (c8)
- Expert systems: Computer systems that support decision making by incorporating the decision
rules used by people who are considered to have expertise in a certain area.
o Help users make decisions by rcm action based on the decision rules and the in4
provided by users
o is designed to recommend the same actions that a human expert would in a similar
situation.
o help employees decide how to allocate their money for benefits (when the company
offers a set of choices) and help managers schedule the labor needed to complete
projects.
o helps avoid the errors that can result from fatigue and decision-making biases, such as
biases in appraising employee performance.  increase efficiency by enabling fewer or
less-skilled employees to do work that otherwise would require many highly skilled
employees.
b. Human Resource Information Systems
- A standard feature of a modern HRIS is the use of relational databases, which store data in
separate files that can be linked by common elements.
- The ability to locate and combine many categories of data has a multitude of uses in human
resource management
- One of the most creative developments in HRIS technology is the HR dashboard: A display of a
series of HR measures, showing the measure and progress toward meeting it.
c. Human Resource Management Online: E-HRM
- E-HRM provides HR-related info over the Internet
o Intranet for confidential infor; internet for research new developments, post job
openings, trade ideas with colleagues in other organizations, and obtain government
documents
- E-HRM has moved in form of social-media applications
o General, social media connect pp: collaborate on project, project updates, praise
accomplishments, deliver rewards, performance appraisals
o In job design, promote teamwork
o More ways to make employees fully engaged with the org and one another
- Benefits:
o Have the info when they need instead of contacting HR staff
o Training online, more frequent feedback

o Online recruiting: Candidates submit résumés online; employers retrieve applications

via job sites or company forms.
o Online selection tools: Services conduct, process, and report on candidate testing.
o Automated job design: Software like Kronos optimizes schedules, routes, and layouts,
now factoring in employee preferences.
o Performance and talent management: Online systems help identify high performers and
training needs.
o Online training: Various training types can be delivered digitally.
o Employee satisfaction surveys: Easy to complete online and useful for two-way
communication through intranets.
o Benefits enrollment tools: Advanced systems analyze personal data to recommend the
best insurance plans.
- Challenges:
o Cloud Computing: The practice of using a network of remote servers hosted on the
Internet to store, manage, and process data.
o In an effort to become more efficient, the company standardized its global recruitment
and personnel development processes into a single system via the cloud.  change the
work environment for employees: are expected to be highly committed but flexible, able
to move from job to job (24/24 connection with org)  HR dept alter training, career
development, performance management

5. Effectiveness of HRM
- Org respond to TQM by taking customer-oriented approach
o the organization and its divisions are HR's customers, relying on HR to supply skilled,
motivated employees.
o defines its customer groups, customer needs, and the activities required to meet those
needs (Table 9.2)
- The need for techniques to measure effectiveness: reviewing a set of key indicators, measuring
the outcomes of specific HRM activity, and measuring the economic value of HRM programs.
a. HRM audits

- HRM audit: A formal review of the outcomes of HRM functions, based on identifying key HRM
functions and measures of business performance.
- After identifying performance measures for the HRM audit, the staff carries out the audit by
gathering information
o The info for the key business indicator is in organization’s document; new document
when gathering specific types of data (conduct survey: VD attitude survey provide the
info about satisfaction of internal customers (c11))
- To benefit from the HR profession’s best practices, companies also may invite external auditing
teams to audit specific HR functions.
b. Analyzing the Effect of HRM programs
- HR analytics: Type of assessment of HRM effectiveness that involves determining the impact of,
or the financial cost and benefits of, a program or practice.
- The analysis can take an economic approach that measures the dollar value of the program’s
costs and benefits.
o Cost: employee compensation, cost for traini8ng, employee development and
satisfaction surveys
o Benefits: reduction of costs associated with employee absenteeism and turnover;
improved productivity associated with better selection and training programs
- In general, HR departments should be able to improve their performance through some
combination of greater efficiency and greater effectiveness.
o Greater efficiency: HR department uses fewer and less-costly resources to perform its
functions
o Greater effectiveness: selecting employees or setting up a performance management
system—has a more beneficial effect on employees’ and the organization’s performance.
Chapter 8: Managing Employees’ Performance (C10)
- Performance management is the process through which managers ensure that employees’
activities and outputs contribute to the organization’s goals.
- This process requires
o knowing what activities and outputs are desired
o observing whether they occur
o providing feedback to help employees meet expectations.
- Include
o Performance management is the process through which managers ensure that
employee activities and outputs are congruent with the organization's goals.
o Performance Appraisal is the process through which an organization gets information on
how well an employee is doing his or her job.
o Performance Feedback is the process of providing employees information regarding
their performance effectiveness.
1. The Process of Performance Management
- Effective performance management contributes to the company’s overall competitive advantage
and must be visible support by CEO and senior managers  consistent, appraisal on time, giving
and receiving ongoing performance feedback is recognized as a part of company’s culture
- Step 1,2:
o Identify what the company is trying to accomplish (goals and objectives) and developing
employee’s goals and actions
o Out comes benefit for customers, employee’s peers or team members, organization
itself
o The goals, behaviors and activities should be measurable and included in JD
- Step 3: Organizational support
o Provide employees training, resources and tools, ongoing feedback between the
employee and manager
o To have defective PM, both manager and employ have to value feedback and exchange
on the regular basis
o Managers need to make time to provide ongoing fb and learn how to give and receive it
- Step 4:
o Manager and employee discuss and compare target goals and supporting behavior with
actual results
o Includes annual formal performance review
 - Step 5,6

o Identifying actions the employee can take to build on strengths and improve
weaknesses. (step 5)
o Determining consequences for performance results, such as rewards or improvement
plans. (step 6)
o This may include recognizing training needs, adjusting feedback, refining performance
goals, and addressing areas for improvement.

2. Purposes of Performance Management

- Strategic purposes: Helps the org gain its business objectives
o Link employees’ behavior with prg goals
o Measure performance, take corrective actions (training, incentives or discipline)
- Administrative purposes: use the system to provide info for day-to-day decisions (salary,
benefits, recognition programs)
o support decision making related to employee retention, termination for poor behavior,
and hiring or layoffs.
o The information in a performance appraisal can have a great impact on the future of
individual employees.  manager might feel uncomfortable when conducting
performance appraisals (esp negative)
- Developmental purposes: serve a basis for developing employee’s knowledge and skills
o Feedback strengths and weaknesses

.
3. Criteria for Effective Performance Management
- Fit the strategy:
o PM system aim at achieving employee behavior and attitudes that support the
organization’s strategy, goals and culture.
 o Performance appraisal measure whether employee engage these bahaviour
o Feedback should help employees improved those area
o Strategy changes  PM system changes
- Validity
o Def: the extent to which a measurement tool measures what is intended to measure (c6)
o In the case of performance appraisal, refer to whether the appraisal measures all
relevant aspects of performance and omits irrelevant aspects of performance
o 2 sets of information
 Job performance measure: all information in a performance appraisal
 Actual/ “true” job performance: relevant measure of job performance
 validity: overlap of all information vs relevant information

 Contamination: gathered but irrelevant (VD: comparing salepp based on the

calls, but making a lot of calls doesn’t mean improving sales or customer
satisfaction
 Deficiency: relevant but is not gathered (VD: check the attendance record
instead of work efficiency)
- Reliability
o Def: consistency of the result that PM delivery
o Interrater reliability: Consistency of the results when more than one person measures
performance (VD: asking 1 supervisor rate an employee on a scale 1 to 5 have low
interrater reliability)
o Test-retest reliability: constancy of result over time
- Acceptability
o Def: practical acceptable or being acceptable to pp who use it
- Specific feedback
o Specifically tell employees what is expected of them and how they can meet those
expectations  meet goals and support strategy and develop employees
4. Methods for Measuring Performance
a. Making Comparisons (Comperative): involve some form of ranking
- Simple ranking
o Def: Method of performance measurement that requires managers to rank employees in
their group from the highest performer to the poorest performer.
o Alternation ranking: Alternation ranking is a method where a manager ranks employees
by alternating between selecting the best and worst performers from a list, continuing
with the second best, second worst, and so on until all are ranked. While simple, this
approach lacks clarity and validity because it doesn’t specify the criteria for what makes
an employee “best” or “worst,” raising concerns about fairness and objectivity.
- Forced distribution
o Def: Method of performance measurement that assigns a certain percentage of
employees to each category in a set of categories.
o Forced ranking helps prevent managers from rating everyone highly to avoid conflict and
can boost performance when paired with goals and rewards, especially early on by
removing poor performers. However, it can be problematic for managers with strong
teams, as ranking some high-performing employees in lower categories may be
inaccurate and harm morale.
- Paired Comparison
o Def: Method of performance measurement that compares each employee with each
other employee to establish rankings (ranks employees by comparing each one against
all others, awarding points to the higher performer in each pair)
 o Though useful for reducing rating bias and aiding decisions like raises or layoffs, it
becomes time-consuming with larger groups. Ranking systems can prevent overly
favorable evaluations and are easy to use, but they often lack connection to
organizational goals, provide unclear criteria, and may harm morale or lead to legal
issues.
b. Rating individuals (Behaviour)
Instead of ranking employees against each other, performance can be measured against a uniform set of
standards. This approach evaluates employees based on desired attributes or behaviors, such as traits or
task completion. Managers use rating scales—typically from 1 to 5—to assess each employee, using
standardized forms that define and measure these criteria.
- Rating Attributes:
o The most widely used method is the graphic rating scale:
 Def: Method of performance measurement that lists traits and provides a rating
scale for each trait; the employer uses the scale to indicate the extent to which
an employee displays each trait.
 Drawback: leaves to the particular manager the decisions about what is
“excellent knowledge” or “commendable judgment” or “poor interpersonal
skills.”; The result is low reliable because managers arrive at different
judgements

o Mixed-standard scales:
 Def: Method of performance measurement that uses several statements
describing each trait to produce a final score for that trait.
 A method to get around the previous problem
 Managers rate employees as above (+), at (0), or below (–) each statement,
which are then scored to give a final rating.

 This method is popular due to its simplicity and flexibility, but it often lacks
alignment with organizational strategy and may feel arbitrary to employees.
Without clear definitions or feedback, numerical ratings can seem vague and
unhelpful for improvement.
- Rating Behaviors
o Overcome the drawback of rating attributes
o Begin with define which behaviors are associated with the success on the job
o Critical-Incident Method:
 Def: Method of performance measurement based on managers’ records of
specific examples of the employee acting in ways that are either effective or
ineffective.
 Provides evidence about employee’s knowledge –> give feedback to help org
achieve goals
  Require significant effort in keeping regularly; but hard to compare among
employees
o Behaviorally anchored rating scale (BARS)
 Def: Method of performance measurement that rates behavior in terms of a
scale showing specific statements of behavior that describe different levels of
performance.
 Builds on critical-incidents approach
 Can improve interrater reliability, but can bias the manager’s memory (The
statements used as anchors can help managers remember similar behaviors, at
the expense of other critical incidents)

o Behavioral Observation Scale (BOS)

 Def: A variation of a BARS which uses all behaviors necessary for effective
performance to rate performance at a task
 BARS discards many examples <> BOS define all behaviors necessary for
effective/ineffective performance.  15 behaviors to define level of
performance.
 Ask the manager to rate the frequency of the behavior
 Major drawback is the amount of info required (can have >=80 behaviors that
the manager need to remember and rating period)
 Even so, compared to BARS and graphic rating scales, managers and employees
have said they prefer BOS for ease of use, providing feedback, maintaining
objectivity, and suggesting training needs
 o Organizational Behavior Modification (OBM)
 Def: A plan for managing the behavior of employees through a formal system of
feedback and reinforcement.
 Build directly on a branch of psychology called behaviorism (individuals’ future
behavior is determined by their past experiences)
 4 components
 Key behaviors for job performance
 Measurement system to assess whether the employees exhibit the key
behaviors
 Inform employees of the key behaviors, goals for how often to exhibit
the behaviors
 Provide feedback and reinforcement based on the employees’ behavior
 Behavioral approaches like organizational behavior modification and rating scales effectively
align employee behavior with company goals, offering clear feedback and improvement
guidance. They are generally valid, reliable, and well-accepted, especially when employees help
design the measures and raters are well trained. However, these methods are less effective for
complex jobs with unclear behavior-outcome links. Additionally, feedback may reflect bias—for
example, women in high-tech roles often receive style-focused critiques, raising concerns about
fairness and the true source of communication issues.

c. Measuring Results (Results)

- 2 popular methods:
o Measurement of productivity: output per worker/ per dollar spent on production
 o Management by objectives/ results: sales, costs
- Productivity
o Important measures because getting more done with a smaller amount of resources
(money/ people) increases the company’s profits
o To do productivity measurement:
 identify the products (set of activities or objectives)
 define how to measure production of these products
 for each measure decides what level of performance is desired
 set up a system for tracking the measurement and giving feedback
o Can be time consuming to set up, but can improve productivity
- Management by objectives (MBO)
o Def: A system in which people at each level of the organization set goals in a process
that flows from top to bottom, so employees at all levels are contributing to the
organization’s overall goals; these goals become the standards for evaluating each
employee’s performance.
o 3 components
 Goals are specific, difficult and objective
 Manager and employees together set the goals
 Managers give objective feedback  monitor progress toward the goals

o Can have a positive effect on an org’s performance; productivity tends to be greatest

when top management was highly committed to MBO; effectively link individual
employees’ performance with the organization’s overall goals (because employee
involved in setting goals)
o Results-based performance measurement is objective and aligns well with organizational
goals, but it can overlook key behaviors, be influenced by external factors, and fail to
guide improvement. Focusing only on results may lead to unintended negative
outcomes.
- Model SMART (slide)
o Smart:
 ▪ Who: Who is involved?
 ▪ What: What do I want to accomplish?
 ▪ Where: Identify a location.
 ▪ When: Establish a time frame.
 ▪ Which: Identify requirements and constraints.
 ▪ Why: Specific reasons, purpose or benefits of accomplishing the goal.
 ▪ How: How to do it?
o Measurable:
 ▪ How much?
  ▪ How many?
 ▪ How will I know when it is accomplished?
o Attainable
 ▪ Develop the attitudes, abilities, skills, and financial capacity
 ▪ Begin seeing previously overlooked opportunities
 ▪ Plan your steps wisely and establish a time frame
o Timely
 ▪ A goal should be grounded within a time frame.
 ▪ "Someday” and "by May 1st”
o Realistic
 ▪ Willing
 ▪ Able
 ▪ Believable
 ▪ Similar
- 5W – 1H – 5M – 2C
o ▪ 5 W: Why, What, Where, When, Who
o ▪ 1H: How
o ▪ 5M: Money. material, man, methods, machine
o ▪ 2C: check & control
d. Measuring Quality (TQM)
- differs from traditional performance measurement by evaluating both individual performance
and the work system:
- involves collaboration between employees and their internal or external customers to set
standards and improve customer satisfaction.
- emphasizes continuous improvement and avoids judging employees solely on outcomes beyond
their control.
- combines (1) subjective feedback (from managers, peers, and customers) with objective, (2)
process-based feedback using statistical quality control methods (use charts to detail causes of
problems, measures of performance, or relationships between work-related variables.;
employees are responsible for tracking these measures to identify areas where they can avoid
and correct problems)
- helps identify and fix process issues rather than blaming individuals; but is less effective for
making decisions about assignments, training, or compensation.

5. Source of Performance management

- Traditional approach is for managers to gather information about the employees’ performances
and arrive at performance ratings  problems:
o Bias
o See an employee in a limited number of situations
- 360-Degree Performance Appraisal: Performance measurement that combines information
from the employee’s managers, peers, subordinates, self, and customers.
- 180-degree: Feedback only from manager and colleagues
a. Managers
- Advantages
o Most used; assume that supervisors have extensive knowledge of the job requirements
and have enough opportunity to observe their employees
 o Provide accurate and helpful feedback because their success depends on their
employee’s performance
o When managers try to observe employee behavior or discuss performance issues in the
feedback session, their feedback can improve performance, and employees tend to
perceive the appraisal as accurate.
- Disadvantages: Don’t have enough opportunities to observe the employee  inaccurate
assessment
b. Peers
- Advantages
o An excellent source when supervisors don’t have enough opportunities to observe
o Peers have expert knowledge of job requirement; different perspective  provide valid
assessment
- Disadvantages
o Friendships/ rivalries  bias (research show little evidence of this case)
o when the evaluations are done to support administrative decisions, peers are
uncomfortable with rating employees for decisions that may affect themselves.
more favorable in reviews used for employee development
c. Subordinates
- Advantages
o Subordinates, the people reporting to the manager—often have the best chance to see
how well a manager treats employees.
- Disadvantages:
o reluctant to say negative things about the person to whom they report; prefer to provide
fb anonymously
o Managers might prioritize employee satisfaction over performance to get better ratings.
(this issue arises primarily when the evaluations are used for administrative decisions)
Appropriate for employee developmental purposes; To protect employees, the
process should be anonymous and use at least three employees to rate each manager
d. Self
- Advantages: common approach is to have employees evaluate their own performance before
the feedback session.  think about their performance  reduce areas of disagreement
between the self-appraisal and other evaluations can be fruitful topics for the feedback session
- Disadvantages:
o Tendency to inflate assessments, esp ratings used for administrative decisions
o According to social psychologists: , people tend to blame outside circumstances for their
failures while taking a large part of the credit for their successes  soften this tendency
by providing frequent feedback
e. Customers
- Advantages:

o Services are often delivered and experienced simultaneously, making customers key
observers of service quality.  many service companies, like Marriott and Whirlpool,
collect customer feedback to assess employee performance.
o are especially appropriate when employees directly interact with customers or when
companies seek insights to enhance their offerings.
o not only help assess individual performance but also guide HR decisions like training and
compensation to improve customer service.
- Disadvantages: traditional customer surveys can be costly, so many organizations conduct them
only periodically.

6. Errors in Performance Measurement

a. Types of Rating Errors
- Similar-to-me error: give higher performance ratings to employees perceived to be like them in
terms of attitudes, preferences, personality, and demographic variables including race and
gender.
- Contrast errors: the rater compares an individual, not against an objective standard, but against
other employees.
- Distributional errors: the rater tends to use only one part of a rating scale.
o Leniency: the reviewer rates everyone near the top
o Strictness/Severity: the rater favors lower rankings
o Central tendency: the rater puts everyone near the middle of the scale
- Rater bias: raters often let their opinion of one quality color their opinion of others.
o Halo error: when the bias is favorable. This can mistakenly tell employees they don’t
need to improve in any area.
o Horns error: when the bias involves negative ratings. This can cause employees to feel
frustrated and defensive
- Primacy error: performance evaluation is influenced mainly by information collected during the
initial phases of the review period.
- Recency error: performance evaluation is influenced mainly by information gathered during the
last portion of the review period.
- First impression: raters make an initial favorable or unfavorable judgment and ignore subsequent
information not supporting the initial impression.
- Spillover: scores from previous review periods unjustly influence current ratings.
- Stereotype error: an oversimplified view of individuals based on group membership.
- Attribution error: attribute poor performance to an employee’s dispositional tendencies instead
of features of the situation.
b. Ways to reduce errors
- Rater Training – Raters watch videos designed to trigger specific rating errors, then discuss their
decisions and learn strategies to avoid such mistakes in the future.

- Performance Complexity Training – Raters study real performance examples to understand

various dimensions and standards, improving the accuracy and depth of evaluations.
- Data Analytics – Technology, including wearable devices and software like Perception, helps
track employee behaviors and analyze evaluation patterns to detect and correct biases or
inconsistencies in ratings.

c. Political Behavior in Performance Appraisals

- Intentional distortion of performance evaluations—known as appraisal politics—can harm
organizations by providing inaccurate feedback, frustrating high performers, and rewarding
underperformers. This behavior is more likely when:
o Raters are accountable to those they rate
o Conflicting goals exist
 o Ratings are tied to major rewards
o Leadership tolerates distorted ratings
o Company culture shares stories of past manipulation
- To reduce appraisal politics, organizations can:
o Ensure fairness in the appraisal system
o Hold calibration meetings, where managers discuss and justify ratings to align standards
and correct inconsistencies
o Train managers in proper appraisal techniques
o Promote openness, encouraging honest discussions of performance and recognition of
unacknowledged accomplishments
7. Giving Performance feedback
a. Scheduling Performance Feedback
- Performance feedback should be a regular, expected management activity.
- Annual feedback is not enough.
- Employees should receive feedback so often that they know what the manager will say during
their annual performance review.

b. Preparing for a feedback session

- Managers should be prepared for each formal feedback session
c. Conducting the feedback session
- During the feedback session, managers can take any of three approaches:
o 1.“Tell-and-Sell” – managers tell employees their ratings and then justify those ratings.
o 2.“Tell-and-Listen” – managers tell employees their ratings and then let the employees
explain their side of the story.
o 3.“Problem-Solving” –managers and employees work together to solve performance
problems.

8. Finding solutions to performance problems

- Lack of ability: When a motivated employee lacks knowledge, skills, or abilities in some area, the
manager may offer coaching, training, and more detailed feedback. Sometimes it is appropriate
to restructure the job so the employee can handle it.
- Lack of motivation: Managers with an unmotivated employee can explore ways to demonstrate
that the employee is being treated fairly and rewarded adequately. The solution may be as
simple as more positive feedback (praise). Employees may need a referral for counseling or help
with stress management.
- Lack of both: Performance may improve if the manager directs the employee’s attention to the
significance of the problem by withholding rewards or providing specific feedback. If the
employee does not respond, the manager may have to demote or terminate the employee.
9. Legal and Ethical Issues in Performance Management
- ▪ Legal: Performance management processes are often scrutinized in cases of discrimination or
dismissal.
- Ethical: Employee monitoring via electronic devices and computers may raise concerns over
employee privacy.
- Lawsuits related to performance management usually involve charges of:
o Discrimination
o Unjust dismissal
- To protect against both kinds of lawsuits, it is important to have a legally defensible performance
management system.
- A legally defensible performance management system includes:
o Based on valid job analyses with requirements for job – Based on valid job analyses, with
requirements for job success clearly communicated to employees.
o Performance measurement should evaluate behaviors or results, rather than traits.
o Multiple raters (including self-appraisals) should be used.
o All performance ratings should be reviewed by upper-level managers.
o There should be an appeals mechanism for employees.
Chapter 9: Separating and Retaining Employees (C11)
1. Managing Voluntary and Involuntary Turnover
- Employee turnover: employees leaving the organization
o Involuntary turnover: Turnover initiated by an employer (often with employees who
would prefer to stay).
 Most organizations use the word termination to refer only to a discharge related
to a discipline problem, but some organizations call any involuntary turnover a
termination.
o Voluntary turnover: Turnover initiated by employees (often when the organization would
prefer to keep them).

- organizations try to avoid the need for involuntary turnover and to minimize voluntary turnover,
especially among top performers.
o Both kinds of turnover are costly: replacing workers is expensive, new employees need
time to learn their jobs and build teamwork skills
o voluntary departures—especially by frustrated top performers—can damage the
company’s reputation.
o Involuntary turnover may also lead to lawsuits or workplace violence
- Workplace violence rise the risk of discharging employees  Effective HR management reduces
turnover and handles it properly. Despite best efforts, some employees may underperform or
break rules, requiring disciplinary action and possible termination.
- discharging employees can be very difficult.
o the decision has legal aspects that can affect the organization:
 is the org and employees do not have a specific employment contract, the
relationship can end anytime (employment-at-will doctrine (c5)); employees can
sue their employers for wrongful discharge
o financial risk
 the former employee tries to establish that the discharge violated either an
implied agreement or public policy.
 Although Most employers settle these claims out of court, as well as few former
employees win wrongful discharge, employers who win can lose thousands of
dollars for cost of defending the lawsuit
o Personal safety

 Some terminated employees may respond with violence, not just legal action.
 Workplace violence is a growing concern for organizations.
 Termination can trigger a “nothing to lose” mentality, increasing danger.
 Certain job environments may heighten the risk of violent reactions.
- Retaining top performers is not always easy
o Psychological contract, in which workers feel responsibility for their own careers rather
than loyalty to a particular employer, make the voluntary turnover more likely
 o competing organizations are constantly looking at each other’s top performers (VD:
poaching talent for high-demand position like software engineers)

2. Employee Separation
a. Principles of Justice
- A fair disciplinary system is essential and judged by employees based on outcomes, procedures,
and managerial treatment. These are known as outcome fairness, procedural justice, and
interactional justice.
- Outcome fairness involves the ends of a discipline process, while procedural and interactional
justice focuses on the means to those ends
- Ethical behavior aligns with these principles, and procedural and interactional justice are linked
to higher employee satisfaction and productivity.
- However, individuals may react differently to perceived unfairness.

- Outcome fairness:
o Def: A judgement that the consequences given to employees are just (is based on
employees’ perception that disciplinary consequences are just)
o This requires:
 Consistent outcomes: Consistence in how similar cases are handled.
 Knowledge of outcomes: Clear communication of rules and consequences.
 Outcomes in proportion to behavior: Proportionate punishment relative to the
offense.
o Unfair or inconsistent outcomes can damage trust and perceptions of fairness.
- Procedural justice
o Def: A judgment that fair methods were used to determine the consequences an
employee receives (the perceived fairness of the methods used to determine
consequences.)
o Fair procedures should:
 Consistent procedures: Be applied consistently across individuals.
 Avoidance of bias: Be free from personal bias.
 Accurate information: Rely on accurate information.
  Way to correct mistakes: Allow correction through appeals or reviews.
 Representation of all interests: Consider input from all affected parties.
 Ethical standards: Align with ethical standards like honesty and privacy.
- Interactional justice:
o Def: A judgment that the organization carried out its actions in a way that took the
employee’s feelings into account. (perception that an organization treats employees with
respect and empathy during disciplinary actions.)
o It involves:
 Explanation of decision: Explaining decisions clearly and fairly.
 Consideration: Listening to the employee’s perspective.
 Respectful treatment: Treating the employee with dignity and respect.
 Empathy: Showing empathy, especially in difficult situations.
 These actions are crucial in reducing hostility and preventing negative
reactions.

b. Legal Requirements

- Wrongful discharge:

o Discipline practices must avoid the charge of wrongful discharge

 Discharge may not violate an implied agreement: a promise of job security or

inconsistency with company policies; firing an employee for a first unexcused
absence—despite a policy stating a warning should be given—could be
considered a violation.

 May not violate public policy: firing an employee for refusing to do something
illegal, unethical, or unsafe (e.g., dumping chemicals); ulfilling legal obligations,
like cooperating with investigations, reporting employer misconduct, or
attending jury duty.

o HR professionals play a key role by:

 Establishing clear disciplinary policies and communicating them.

 Defining unacceptable behavior and consistent consequences.
 Training managers to avoid implying job security.
 Ensuring employee handbooks don’t suggest employment contracts.
 Seeking legal advice when policy wording is uncertain.
- Discrimination:
o A formal discipline policy supports equal employment opportunity by ensuring
fair and consistent treatment regardless of age, sex, race, or other protected
status.
o Unequal punishment for similar offenses could lead to discrimination claims, but
consistent, well-documented discipline helps prevent this.
- Employee Privacy
 o The courts protect individuals’ privacy; employers have legitimate reasons for
learning about some personal matters  Employers therefore need to ensure
that the information they gather and use is relevant to these matter
o Workplace privacy issues arise when employers search or monitor employees.
o To minimize legal risks, employers should:
 Clearly communicate and consistently apply search policies.
 Request employee consent and conduct searches discreetly.
 Limit access to sensitive disciplinary information to those with a
legitimate business need.
 Avoid public disclosure to prevent defamation claims.

- Notification of Layoffs
o Organizations may need to terminate employees due to economic reasons, such
as closing a facility.
o In such cases, the Workers’ Adjustment Retraining and Notification (WARN) Act
requires employers with over 100 employees to provide 60 days’ notice before
closing or laying off 50 or more full-time workers.
o Failure to comply can result in penalties, including back pay and benefits.
o Since there are exceptions and similar state or local laws, legal counsel should
be consulted before proceeding with such actions.

c. Progressive Discipline

- Hot-stove rule: discipline should be like a hot stove: there is a clear warning, the consequences
are immediate, consistent, and impersonal; discipline should be predictable, apply equally to
everyone, and occur promptly after the offense.

- Progressive Discipline: A formal discipline process in which the consequences become more
serious if the employee repeats the offense.
- careful use of the procedure increases other employees’ belief that the organization is fair and
reduces the likelihood that the problem employee will sue

- recorded in writing, clear communication

- listen to the employee about reasons

- In meetings to announce disciplinary actions, it is wise to include two representatives of the

organization.

- Effective discipline programs have two central components:

o ▪ documentation
o ▪ progressive punitive measures

d. Alternative Dispute Resolution

- Alternative Dispute Resolution (ADR): Methods of solving a problem by bringing in an impartial

outsider but not using the court system

o Open-door policy: An organization’s policy of making managers available to hear

complaints

o Peer review: Process for resolving disputes by taking them to a panel composed of
representatives from the organization at the same levels as the people in the dispute.

o Mediation: Conflict resolution procedure in which a mediator hears the views of both
sides and facilitates the negotiation process but has no formal authority to dictate a
resolution

o Arbitration: Conflict resolution procedure in which an arbitrator or arbitration board

determines a binding settlement.

- Open-door policy (simplest, most direct and cheapest) > peer review > mediation > arbitration
(fastest, simpler and more private than a lawsuit)

e. Employee Assistance Program

- Employee Assistance Programs (EAP): A referral service that employees can use to seek
professional treatment for emotional problems or substance abuse.

- Basic elements: official employer documents, training for supervisors (and union reps, if
applicable) to refer employees with potential health issues, self-referral options for employees,
and annual evaluations of the program's costs and benefits.

f. Outplacement counseling

- Def: A service in which professionals try to help dismissed employees manage the transition
from one job to another

- By offering support like résumé help and job search guidance, organizations reduce the risk of
lawsuits or violence and preserve employee dignity.

- Can be performed in-house or through an outside source.

- It is aimed at helping people realize that losing a job is not the end of the world and that
other opportunities exist.

3. Employee Engagement

- Ideally, an organization does not merely want employees to come to work each day but
rather wants employees to be fully engaged.
- Employee engagement is the degree to which employees are fully involved in their work
and the strength of their commitment to their job and company.
- Employees who are engaged in their work and committed to the company they work for
provide a clear competitive advantage to that firm, including higher productivity, better
customer service, and lower turnover.
- Some common theme in the survey includes: pride and satisfaction with employer; opportunity
to perform challenging work; recognition and positive feedback from contributions; personal
support from supervisor; and understanding of the link between one’s job and the company’s
overall mission.
-

4. Job Withdrawal

- Def: A set of behaviors with which employees try to avoid the work situation physically, mentally,
or emotionally.

- Job withdrawal results when circumstances such as the nature of the job, supervisors
and coworkers, pay levels, or the employee’s own disposition cause the employee to
become dissatisfied with the job (job dissatisfaction).
- Behavior change > physical job withdrawal, psychological withdrawal: engage 3 form in orders/
select from these to address the particular job dissatisfaction
a. Job Dissatisfaction

- Personal dispositions:

o job turnover (and presumably dissatisfaction leading up to it) is higher among

employees who are low in emotional stability, conscientiousness, and agreeableness.

o two other personal qualities associated with job satisfaction are negative affectivity and
negative self-evaluations.

 Negatively affectivity:

 pervasive low levels of satisfaction with all aspects of life, compared

with other people’s feelings.

 People with negative affectivity experience feelings such as anger,

contempt, disgust, guilt, fear, and nervousness more than other people
do, at work and away.

 focus on the negative aspects of themselves and others

 tend to be dissatisfied with their jobs, even after changing employers or

occupations.

 Core self-evaluation

 bottom-line opinions individuals have of themselves and may be positive

or negative

 People with positive core self-evaluation have high self-esteem, believe

in their ability to accomplish their goals, and are emotionally stable;
actively seek fulfilling jobs and handle dissatisfaction constructively.

 Those with negative core self-evaluations often blame others for their
problems, including job dissatisfaction, and are less likely to pursue
positive change, sometimes responding with aggression or inaction.
- Tasks and roles

o Many aspects of a task have been linked to dissatisfaction: complexity of the task,
degree of physical strain and exertion required, the value the employee places on the
task

 Employee dissatisfied with simple, repetitive jobs

 more dissatisfied with jobs requiring a great deal of physical strain and exertion

 because of automation, physical strain is often overlooked

 dissatisfied if their work is not related to something they value

o Role: The set of behaviors (formally defined duties and much more) that people expect
of a person in a particular job. Several role-related sources of dissatisfaction:

 Role ambiguity: Uncertainty about what the organization expects from the
employee in terms of what to do or how to do it.

 Role conflict: An employee’s recognition that demands of the job are

incompatible or contradictory.

 Role overload: A state in which too many expectations or demands are placed
on a person. (opposite situation is role underload)

- Supervisors and co-workers

o Negative behavior by managers and peers produces dissatisfaction. Often much of the
responsibility for positive relationships is placed on direct supervisors:

 Employees want they to define expectations clearly, measure progress fairly and
accurately, and acknowledge their accomplishments

 see them as individuals and help create the conditions in which they can
succeed

 want some evidence that the company’s leaders respect and care about them

o Conflict undressed cause job dissatisfaction and lead to withdrawal or departure

o A person may be satisfied with his or her supervisor and coworkers for one of
three reasons:
 ▪ shared values, attitudes, and philosophies,
 ▪ strong social support,
 ▪ help in attaining some valued outcome.
- Pay and benefits

o While positive relationships and engaging work matter, employees deeply value their
earnings.

o Pay is not only a key source of income and financial security but also a reflection of
status and self-worth.  satisfaction with pay is crucial for retaining employees.
Employers often use higher pay to attract talent from other organizations.

o Although benefits like insurance and vacation also affect job satisfaction, their value is
harder to assess, so employees tend to prioritize pay more directly.

b. Behavior Change

- An employee's first response to dissatisfaction would be to try to change the conditions

that generate dissatisfaction  conflict with the supervisors
- Supervisor see conflicts as threatens but present an opportunity to identify and resolve
important issues. hen addressed in a supportive and constructive way, such feedback
can lead to increased employee engagement, reduced turnover, and improved
organizational performance.
- If manager can’t address, employees look for help from outside the organization 
whistle-blowing -making grievances public by going to the media.  harm org
- Another way if filing a lawsuit  both financially and image costly.

c. Physical Job withdrawal

- Options for physically leaving a job range from arriving late to calling in sick, requesting a
transfer, or leaving the organization altogether. (means they are on the job but not actually
working)

- Tardiness is costly because late employees are not contributing for part of the day. Absenteeism
makes overtime pay and replacement workers to cover for those absent

- Employees who are dissatisfied with the circumstances related to the specific job may choose
job transfer; dissatisfied with the organizational policies and practices, such as low pay scale,
employee choose to leave  cost of replacement

d. Psychological Withdrawal

- They are physically at work, but their minds are elsewhere.

o Job Involvement: The degree to which people identify themselves with their jobs.

 Happens when employees are dissatisfied with the job itself

  People with a high level of job involvement consider their work an important
part of their life. Doing well at work contributes to their sense of who they are
(their self-concept)

 For a dissatisfied employee with low job involvement, performing well or poorly
does not affect the person’s self-concept.

o Organizational Commitment: The degree to which an employee identifies with the

organization and is willing to put forth effort on its behalf.

 Happens when the person’s org commitment is low

 Employees with high organizational commitment will stretch themselves to help

the organization through difficult times.

 Employees with low organizational commitment are likely to leave at the first
opportunity for a better job. They have a strong intention to leave, so like
employees with low job involvement, they are hard to motivate

5. Job Satisfaction

- Def: A pleasant feeling resulting from the perception that one’s job fulfills or allows for the
fulfillment of one’s important job values.

- 3 components:

o Values: what a person consciously or unconsciously desire to obtain

o Importance of values: different employees have different view on which values are
important –> different levels of job satisfaction

o Perception: Not always on an objective and complete measurement of the situation

- organizations can contribute to job satisfaction by addressing the four sources of job
dissatisfaction we identified earlier: personal dispositions, job tasks and roles, supervisors and
co-workers, and pay and benefits.
a. Personal Dispositions

- During hiring, employers should assess candidates’ past job satisfaction to gauge their
predisposition toward workplace satisfaction.

- Psychologists have found that individuals with a positive work attitude tend to view their careers
from a broader perspective, remain resilient in the face of setbacks, stay committed to their
work’s purpose despite uncertainty, and actively engage in sharing knowledge and mentoring
others.

b. Tasks and Roles

- Job Complexity

o Not only can job design add to enriching complexity, but employees themselves
sometimes take measures to make their work more interesting.

o in simple jobs with minimal customer contact (like processing paperwork or entering
data into computers), research suggests that personal headsets can improve
performance.  increase the complexity

o A study at a large retail company found:

 Workers using headsets performed better in simple jobs (e.g., invoice
processing).
 Workers using headsets performed worse in complex jobs (e.g.,
accounting).
- Meaningful Work
 o the most important aspectof work is the degree to which it is meaningfully related to
workers’ core values.
- Clear and Appropriate Roles

o  Organizations can reduce role-related dissatisfaction by:

 Clearly defining roles, work methods, schedules, and performance

measures.

 Being realistic about the time needed to fulfill job requirements.

 Complying with overtime pay laws and supporting work–family balance.

o  Family-friendly policies help manage role conflict and may include:

 Child care and elder care support.

 Flexible work schedules.

 Job sharing.

 Telecommuting.

 Extended parental leaves.

o  Benefits of family-friendly policies:

 Increased employee satisfaction and organizational commitment.

 Improved performance, especially in companies with many female

employees.

o  Role-related dissatisfaction is second only to job-related dissatisfaction.

o  One intervention to address role problems is the Role Analysis Technique (A

process of formally identifying expectations associated with a role), which
involves:

 Role occupant and role set members writing down their expectations.

 Meetings to compare and resolve conflicting expectations.

 Creating a consensus-based list of duties and behaviors.

  Identifying and addressing role overload or underload to balance
responsibilities.

Steps in the Role Analysis Technique: Members of role set write expectations for role → Members of
role set discuss expectations → Preliminary list of role's duties and behaviors → Role occupant lists
expectations for others in role set → Members of role set discuss expectations and reach consensus on
occupant’s role → Modified list of role's duties and behaviors

c. Supervisors and Co-workers

- 2 primary set of pp in org affecting job satisfaction: co-workers and supervisors

- A person may be satisfied with these people for one of three reasons

o  Shared values, attitudes, and philosophies among employees, especially with

supervisors, enhance job satisfaction.
o  Social support from co-workers and supervisors (being sympathetic and
caring) significantly boosts job satisfaction and reduces employee turnover.
o  Co-workers or supervisors can help employees achieve valued outcomes, such
as guiding new employees on goal setting and achievement.
- Supportive environments help reduce dissatisfaction, so organizations encourage team building
through on- and off-the-job activities (e.g., sports leagues, social events).

- Organizations also promote support by developing mentoring relationships, pairing experienced

employees with newcomers.

- Co-workers’ job satisfaction influences individual behavior:

o Employees with decreasing satisfaction tend to stay if their co-workers’
satisfaction is rising.
o Employees with rising satisfaction are more likely to quit if their co-workers’
satisfaction is declining.
o Overall, misalignment with group satisfaction levels can increase turnover
likelihood.

d. Pay and Benefits

-  Pay is crucial in job candidate negotiations; organizations must monitor industry pay
levels regularly.

-  HR can enhance satisfaction by:

o Keeping pay competitive (matching or exceeding industry averages).

o Clearly communicating the value of employee benefits.

-  Two key aspects of pay satisfaction influence overall job satisfaction:

o Pay structure: Fairness in how pay is assigned across job levels and roles.

o Example: A manager may feel dissatisfied if subordinates earn more.

o Pay raises: Employees expect regular increases; unmet expectations lead to

dissatisfaction.

-  HR can support pay satisfaction by:

o Explaining the logic behind pay structures and raises.

o Communicating openly, especially during economic constraints, to reduce

dissatisfaction.

e. Monitoring job satisfaction

- Ongoing, systematic employee‐satisfaction surveys should be an integral part of any

organization’s HR strategy because they:
o Track trends and diagnose problems
 Reveal declining satisfaction in areas like promotion opportunities,
signaling a need for interventions (e.g., improved career management).
 Highlight the impact of major changes (mergers, reorganizations) on
morale.
o Evaluate the effectiveness of policies: Show whether newly adopted practices
(flexible schedules, enhanced benefits, etc.) actually boost satisfaction and
reduce turnover.
o Enable internal benchmarking: Compare results across departments to identify
and propagate “best practices.”
o Support external benchmarking: Many established scales allow you to see how
your scores stack up against industry peers.
o Give employees a voice: The act of soliciting feedback reinforces that their
opinions matter, which in itself can improve engagement.
- Choosing a survey instrument
o Established scales (with proven validity and reliability) are usually preferable,
unless you need to assess very organization-specific issues.
o Job Descriptive Index (JDI) – Measures five key facets: pay, the work itself,
supervision, co-workers, and promotion opportunities.
 o Global‐satisfaction scales – Use broad, overarching questions (e.g., “All in all,
how satisfied are you with your job?”).
o Faces scale – Employs pictorial icons to capture satisfaction without relying on
language.

o Pay Satisfaction Questionnaire (PSQ) – Focuses specifically on facets of

compensation (levels, structure, raises).
- HR data analysis is increasingly used alongside surveys to uncover patterns in employee
retention and turnover.
o Results can confirm assumptions or reveal unexpected insights.
o Helps identify which HR efforts yield the best return on investment.
o For help in interpreting their data, some companies are using “stay interviews,”
which ask employees why they have stayed, in order to uncover what the
company is doing right and therefore should reinforce.
- In case of leaving, conduct an exit interview:
o Def: A meeting of a departing employee with the employee’s supervisor and/or a
human resource specialist to discuss the employee’s reasons for leaving
o Conducted with departing employees to learn why they’re leaving.
o Should be done by HR staff in a neutral setting (not by the employee’s
supervisor).
o Use open-ended questions to invite candid responses.
o Can help recruiters re-attract former employees when conditions change.
o Trends in exit reasons can highlight areas in need of organizational change.