Reading summaries - week five, Fall 2017

Class themes this week were external and internal environmental assessments in SP and how to recruit, select, and promote the best people and volunteers in SHRM. The readings in the two classes were quite different this week, aside from an intersection where the Maidment article from SHRM mentioned the importance of having a performance management framework in place to help keep employees motivated, while the Kroll article provided an in-depth exploration of the use of performance information to create public value. This week’s SHRM articles built upon concepts from past weeks, moving from culture and leadership to issues of downsizing and employee retention. In SP this week’s readings took a turn toward the tactical, diving deep into assessment systems and models.

Strategic Planning (SP)

Creating Public Value Using Performance Information, Kroll and Moynihan (2015)

The structure of this article was a little different in that it ends with a conclusion section which effectively outlined and rehashed the rest of the article. As such this outline is going to start with that and then fill in details (as opposed to most of my outlines which just follow the article structure).

Noted that the section on Perverse use of performance management mirrors a theme which Prof. Jay has touched on in SHRM, in the context of why monetary performance bonuses don’t have a strong track record in the public sector

  • Performance systems have become a key way through which public value is represented.
    • Over time, public organizations became increasingly focused on rules at the expense of organizational goals, contributing to inefficiency and a growing loss of public trust- a loss of public value
    • reforms promise to redirect attention toward the mission and goals of organizations
    • the doctrine of performance management explicitly invokes certain values- most obviously efficiency and effectiveness but also transparency, accountability, and the legitimacy of the state.
    • mandates to implement performance management have boiled down to a few key processes
      • requiring public agencies to identify their mission
      • set strategic goals and performance targets
      • track measurable indicators of performance
      • broadly disseminate this data
  • Creating performance information is a political act
  • Performance management systems tend to privilege certain values and displace others
    • A critique of performance management processes is that they tend to privilege certain values over others
    • understandable that managers focus attention on goal achievement, notion is that = primary basis for public legitimacy, assumption is contestable, one study showed confidence in due process and equity of treatment as more important
  • The relationship between performance data and public value depends upon how the data is used
    • There is no automatic connection between measurement and improvements in agency performance or in outcomes
  • The key benefits of performance systems lie in encouraging purposeful use of performance data
    • Four ways that performance measures are used:
      1. Purposeful use of data
      2. Passive use of data
        • where public managers use data only to comply with the procedural requirements but for little else.
      3. Political use of data
        • using performance information is to create political legitimacy and support
        • can fulfill the function of “promoting” or “advocating”
        • The existing work on political performance information use does not suggest that it is inherently helpful or damaging to public value but simply a reflection of how performance systems are increasingly integrated
        • In some cases these processes place unrealistic and countervailing demands on public organizations; in other cases they can be used to protect and strengthen public organizations.
        • most positive terms, the political use of performance information may be seen as part of a pluralistic dialogue through which public value is actively negotiated
        • often serves an external purpose: it is used to meet the expectations of external stakeholders and to portray public organizations as modern and performance-driven even as internal management processes remain unaffected – “organizational hypocrisy”
      4. Perverse use
        • when agents use performance data in ways clearly at odds with public value, such as:
        • gaming - creatively interpreting numbers
        • cheating - making up numbers
        • effort substitution - focusing on easy or highly rewarded targets
        • cream skimming - excluding more difficult-to-serve populations
          • these responses become more likely under certain circumstances
          • High-stakes rewards to achieve measured performance create an incentive for perverse behavior
          • Qualitative accounts of employees working under these conditions reveal a sense of helplessness and frustration among frontline employees
          • critically important that the perversity of performance systems be addressed and minimized where possible
          • types of perverse behavior have been documented enough that they should be seen not as inherently unusual but as a systematic risk that elected officials need to consider in the design of performance systems
  • Establishing purposeful use is not easy
    • purposeful use of performance data in decision making is the element most closely linked to the improvement of outputs and outcomes
    • Understanding its dynamics and antecedents is critical to designing systems and creating a supportive environment that makes it easy for public managers to use performance data in a way that aligns with public value
    • Most important antecedents:
      1. Environmental factors
        • involvement of external stakeholders
        • political environment
        • general political support
      2. Organizational support
        • leadership support
        • support capacity - an investment in the know-how and technology needed to analyze data and produce usable reports
      3. Performance management system design
        • sophistication of the measurement system - variety, usefulness, and accessibility of data
        • quality of the data
        • involvement of line managers and employees in developing systems - fosters support and buy-in
        • creation of learning routines to encourage use of the data
      4. Generic organizational factors
        • organizational culture
        • innovative culture * existence of goal clarity
      5. Individual factors
        • managers matter
        • reforms are more likely to success when there is a convincing narrative
        • managers’ motivation
        • growing evidence that purposeful performance information use can be better achieved by appealing to the prosocial motivation of helping others and making a difference in society
  • Set realistic expectations for performance management
    • There is much practical work to be done to design performance systems to better relate performance indicators to the desire of employees to make a difference.
    • sociodemographic differences (age, gender, education, position, experience, etc.) appear to matter little to data use
    • Networking behavior can be positively associated with purposeful use, however
    • managers have a stronger incentive to use performance data if they are able to change processes autonomously and to determine how to achieve their goals

Mapping public value processes, Alford and Yates (2014)

I noted the nod to data visualization here, a topic I’ve long been interested in. The benefits of data viz listed in this paper do a fantastic job conveying the value of it.

  • This paper explores major frameworks for visualizing complex systems, and puts forward Public Value Process Mapping as a more comprehensive framework
  • PVPM keeps the focus on outcomes, can unearth a variety of processes and actors, identifies the “real” culprits behind negative outcomes, and highlights situations where multiple causes are at work
  • in the public sector there are notions such as “programme logic” or “intervention logic”
  • effort to develop accounts of the production process has been an important trend. Prominent private sector service systems: value-chain analysis, work-in-process inventory, “just in time” manufacturing, supply chain analysis, value-stream mapping, service blueprinting
  • important public value mapping precursor = causal mapping, closely related to backward mapping, related technique is intervention logic
  • These frameworks all entail the visualization of data. Benefits:
    • capitalizes on several features of human cognition
    • makes use of the human affinity for pattern finding
    • draw on both the visual and the spatial working memory system
    • can enhance our processing ability because users can abstract information “at a glance”
    • During problem-solving, can therefore help reduce “cognitive load”
    • assist an individual’s capacity for coping with complex task requirements
  • interaction type is simply the type of link between variables
  • frameworks need to acknowledge two other factors generic to many organizations
    1. they often produce services rather than goods
    2. value-creating processes can occur both inside and outside the organization
  • public value cannot be created unless the client actively contributes to it, public agency and the external party are interdependent
  • in the public sector, two other factors must be incorporated:
    1. organizations create public value in addition to private value
    2. The other factor is the public sector’s use of public power - gives the state a unique capacity
  • PVPM entails a series of steps, all of them requiring judgement and intuition as well as analytical technique:
    1. Distinguishing public from private value
    2. Identifying ultimate outcomes
    3. Delineating the core process
    4. Identifying other associated actions
    5. Identifying who might be involved in or perform those actions
  • Figure 2 shows a PVP map representing:
    • outcomes (dark grey ovals); core steps (white rectangles)
    • non-coercive influencing factors (light grey rectangles)
    • coercive influencing factors (dark grey rectangles)
    • factors that potentially involve a combination of coercion and persuasion (mixed shaded rectangles)
    • potential actors (hexagrams)
    • interaction links: solid arrows representing possible causation (including legal compulsion)
    • dotted arrows depicting flow
  • Several uses of the public value process map for policy analysts and public managers:
    1. calls on them to think more rigorously and persistently about outcome
    2. can be used to unearth a variety of processes and actors involved in producing the outcome
    3. can help to identify key processes and actors
    4. in unearthing unexpected actors the public value map can help to identify the “real” culprits behind negative outcomes
    5. highlights situations where multiple causes are at work
  • In summary, this method might encourage policy designers or program administrators to break out of process-focused and/or intra-organizational assumptions and routines, and think more broadly about both ends and means
  • PVPM is not without its potential problems:
    • causation is tricky to uncover
      • causation is not always one way; feedback loops can occur
      • causation might not be certain but drawing a common-sense link between elements points to a likely relationship
    • Important to consider when mapping that there will be important tradeoffs between accuracy, simplicity, and generality - essentially, pick two of these
    • Another question in PVPM is where, exactly, does one start and stop?
  • PVPM is not a “paint-by-numbers” routine, should be seen as an aid to analyzing public sector prograes and to developing policies.
  • major advantage is that facilitates the identification and comprehension of a broader range of causal factors and actors, which heightens the possibility of imagining new and innovative solutions

Public Agency External Analysis Using a Modified “Five Forces” Framework

I found this reading to be quite difficult to read, it’s dense and highly technical. The concept is interesting but not easy to wrap your head around.

  • Michael Porter’s “five competitive forces” (5 Forces) framework is widely used by private-sector firms to analyze the external environment and specific external forces. Can public agency managers use some version of this framework to analyze the external environments of their programs?
  • The case is made that a version of the 5 Forces framework can be useful when appropriately modified
  • considers public agency goals from three perspectives: descriptive, instrumental, and normative.
  • explicitly introduces political influence as an external force.
  • modified framework considers and integrates both political and economic external forces
  • illustrated both in terms of autonomy (descriptive level) and social efficiency (normative perspective).
  • A necessary precursor to managing the external environment is to understand it
  • five forces are:
    1. the intensity of rivalry among existing competitors
    2. the bargaining power of suppliers
    3. the bargaining power of customers
    4. the threat of entrants
    5. the threat of substitute products and services
  • analysis is essentially a structural map of the underlying economics of an industry
  • It is important to recognize that public-sector external environment analysis has to be conducted at the level of an individual program
  • what is equivalent to industry profit margin?
  • some level of autonomy is required for any strategy that embodies substantive (normative) goals determined by managers.
  • managers value policy autonomy and fiscal autonomy
  • combination of both is called strategic autonomy
  • it is fair to say that there is some evidence that autonomy improves performance and not much evidence that it worsens performance.
  • four distinct conceptions of public value:
    1. public value as the achievement of political mandates
    2. public value as the achievement of professional standards
    3. public value as revealed through the application of analytic techniques, such as revenue-cost analysis, cost-effectiveness analysis, or cost-benefit analysis (essentially a social efficiency perspective)
    4. public value as stakeholder and customer satisfaction
  • which aspects of the standard 5 Forces framework work reasonably well for public agencies, which aspects require relatively minor modification, and which require significant modification?
    • The force of supplier bargaining power is directly transferable to government programs
    • The threat of substitutes force is also relevant to most public agencies
    • not all public agencies have a mandated monopoly; if they do not, the threat of entry is a force relevant to public agencies
    • The concept of customer bargaining power is relevant to public sector program strategic analysis, but requires some modification
    • Porter’s central force––intensity of rivalry (or extent of competition)–– does not directly reflect much public agency and public sector reality
    • Porter 5 Forces also does not deal with the reality that public agencies are subject to various levels—”threats”––of political influence
  • For practical strategic analysis of political influence, focus here on two factors: the structure of institutional ownership and the permeability of these formal structures in practice
  • institutional ownership forms are divided into four broad categories:
    1. presidential (governor) or prime ministerial agencies
    2. traditional bureaus, departments, or ministries
    3. government corporations or variously labeled “corporatized” entities
    4. state-owned (SOE) or mixed enterprises (private corporations in which government has some shareholding position)
  • At one end of the institutional ownership continuum are agencies that are overtly subject to direct political control. Next on the continuum can be found a vast array of governmental “corporatized,” “autonomous,” “semi-autonomous,” or “independent” agencies. At the opposite end of the continuum from executive-office agencies are SOEs, usually with some share ownership structure.
  • In practice, structural insulation may be more or less permeable
  • Useful to consider the degree to which isolating institutional structures are circumvented. The bottom line question for the purpose of assessing agency autonomy is: How pervasive and intense is the political influence that the agency faces?
  • To reiterate, the major modification to the standard 5 Forces is that political influence is added as a separate force
  • determinants of rivalry and the determinants of entry threat are frequently essentially “mirror images” of each other
  • On its own, a 5 Forces external analysis does not constitute a comprehensive strategic analysis. Ideally, 5 Forces analysis should be used in conjunction with other components of strategic analysis—such as internal analysis—that are also suitably adapted for public agencies.
  • this form of external assessment is primarily useful for program strategy at the program level.

Bryson, chapter 5 - Assessing the Environment to Identify Strengths and Weaknesses, Opportunities and Challenges

I need to introduce this quote into the database implementation process at work: “While hard data may inform the intellect, it is largely soft data that generates wisdom.”

  • what well-done external and internal environmental assessments help organizations do: weave together their understandings and actions in a sensible way so that organizational performance is enhanced
  • The sheer pace of change in the world at large heightens the need for effective assessments.
  • change so often occurs where, when, how, and in a form that is least expected
  • Strengths and weaknesses are usually internal and refer to the present capacity of the organization, whereas opportunities and challenges are typically external and refer to future potentials for good or ill.
  • Every effective strategy will take advantage of strengths and opportunities at the same time it minimizes or overcomes weaknesses and challenges
  • a good strategy will link inside and outside in effective ways.
  • Strategic planning is concerned with finding the best or most advantageous fit between an organization and its larger environment based on an intimate understanding of both.
  • the team should be encouraged to clarify the organization’s distinctive competencies
    • distinctive competency is a competency that is very difficult for others to replicate,
    • core competency is really central to the success of the organization,
    • distinctive core competency is not only central to the success of the organization, but helps the organization add more public value than alternative providers.
  • livelihood scheme represents the core logic of a strategic plan; namely, mission, goals, key success factors or performance indicators, and the necessary competencies to do well
  • Each aspiration and key success factor must be supported by a competency, or else it is not achievable.
  • It is not only unnecessary, but probably also undesirable, to draw a sharp temporal distinction between planning and implementation.
  • Short, thoughtful deliberations among key decision makers and opinion leaders are one of the key outcomes
  • getting key stakeholders to engage in these sorts of analyses and deliberation is not necessarily easy.
  • several longer-term benefits to the organization. Among the most important is that it will produce information that is vital to the organization’s survival and prosperity.
  • allows the strategic planning team to develop the habit of seeing the organization as a whole in relation to its environment.
  • SWOC/T analysis clarifies the nature of organizational tensions by juxtaposing two fundamental dimensions of existence: good (strengths and opportunities) and bad (weaknesses and challenges or threats), as well as present (strengths and weaknesses) and future (opportunities and challenges).
  • A SWOC/T analysis in conjunction with an understanding of key success factors and distinctive competencies helps clarify the tensions that arise when trends and events juxtapose concerns for equity, productivity, preservation, and change.
  • Paying attention to purpose can help you engage in limited, rather than overwhelming and useless, information collection
  • The point is for people to keep their eyes open and to talk about what they see
  • “While hard data may inform the intellect, it is largely soft data that generates wisdom.”
  • The purpose of the first part of Step 4 is to explore the environment outside the organization in order to identify the opportunities and challenges the organization faces
  • three major categories representing basic foci for any effective environmental scanning system:
    1. forces and trends
    2. key resource controllers
    3. actual or potential competitors or collaborators
  • Forces and trends are often broken down into political, economic, social, technological, environmental, and legal categories
  • ten interconnected categories of forces or trends of particular importance to the public and nonprofit sectors:
    1. Social and organizational complexity.
    2. Reform and redirection of governments and increased interaction among public, private, and nonprofit sectors.
    3. Continuation of technological change.
    4. Diversity of workforce, clientele, and citizenry.
    5. Individualism, personal responsibility, and civic republicanism.
    6. Quality of life and environmentalism.
    7. Struggles for legitimacy and the changing American dream.
    8. Culture of fear.
    9. An emphasis on learning.
    10. Transitions with continuity, not revolution.
  • members of a public or nonprofit organization’s governing board, particularly if they are elected, are often better at identifying and assessing external threats and opportunities than are the organization’s employees.
  • Even though the board may be better than staff members at identifying external opportunities and threats, typically neither group does a systematic or effective job of external scanning.
  • most organizations have plenty of quantifiable information about inputs—salaries, supplies, physical plant, full-time equivalent (FTE) personnel, and so on—readily available. They typically have far less of a command of qualitative information about inputs, such as the nature of their culture—even though culture typically is crucial to their performance
  • One of the most important things a strategic planning team can do is simply to articulate clearly what the organization’s current strategies-in-practice are.
  • clarifying the current strategy helps people understand exactly what the value proposition is that the organization offers
  • Organizations also typically can say little, if anything, either historically or in the present about outputs,
  • The absence of performance information may also create, or harden, major organizational conflicts.
  • The managerialist push goes by different names—for example, strategic management, performance management, managing for results, results-oriented budgeting, and so on—but regardless, the push is in large part a response to stakeholders demanding demonstrably better performance and value for money
  • The snow card technique - very simple yet effective group technique. Combines brainstorming with a synthesizing step in which the answers are grouped into categories according to common themes.
    • Each of the individual answers is written on a white card (a snow card). The individual cards are then stuck to a wall and grouped by themes
  • Simply creating lists is not enough. Analysis must be performed.
  • In most SWOC/T analyses, strengths and weaknesses are often highly similar to one another. Opportunities and challenges are likewise similar.
  • The following process guidelines may be helpful as an organization looks at its external and internal environments:
    1. Make a point of regularly paying attention to what is going on inside and outside the organization.
    2. Keep in mind that simpler is likely to be better.
    3. The organization may wish to review its mission and mandates,
    4. Consider using the snow card technique with the strategic planning team
    5. Always try, if possible, to get a strategic planning team to consider what is going on outside the organization before it considers what is going on inside.
    6. As part of the discussion of its SWOC/T list, the strategic planning should look for patterns,
    7. A follow-up analysis of the SWOC/T analysis developed by the strategic planning team is almost always a good idea.
    8. The organization should take action as quickly as possible on those items for which it has enough information.
    9. The organization should consider institutionalizing periodic SWOC/T analyses.
    10. The organization may wish to construct various scenarios in order to help it identify SWOC/Ts.
  • When combined with a greater attention to mandates and mission, these steps provide the foundation for identifying strategic issues and developing effective strategies
  • By far the most important strategic planning techniques are individual thinking and group deliberation
  • Organizations should consider institutionalizing their capability to perform periodic SWOC/T analyses.
  • As with every step in the strategic planning process, simpler is usually better.

Strategic Human Resources Management (SHRM)

Should Hiring Be Based on Gut - or Data?, Knowledge @ Wharton (2015)

In this article helpfulness and niceness are identified as traits which may be predictive of success in many jobs. It occurred to me that those are the core competencies for success working in customer service. I waited tables for about a decade and there’s a common trope in the industry that everyone should do that job at some point in their lives. Standard job-seeker advice says to leave service industry positions off your resume, but I know that I’ve long felt that the skills built up through that work have served me really well as I’ve developed my career. And I think that the reference in this article helps explain that.

  • How useful is data in human resources as opposed to “trusting your gut”?
  • Both helpfulness and niceness may be predictive of success in many jobs
  • Duckworth studies a different personality trait: grit
    • defined as “passion and perseverance, especially for long-term goals”
    • same concept was studied in the 80s by ETS, called “productive follow-through”
      • ETS study - essentially, sticking with a couple of activities through high school and achieving success in them was rated higher than doing a wider variety of different things
  • Motivating, meaningful work has been found to increase employees’ engagement, but exactly what is it that makes work meaningful?
    • Many people will have a combination of motivations
    • External motivations appear to have a dampening effect on internal motivations
    • “overjustification effect”

Key Challenges facing HR and Management in 2016, Maidment (2015)

  1. Attraction and retention of top talent
  2. Collaboration
    • 40% of employees do not feel they belong to a collaborative culture, whereas 80% of global organizations regard teamwork as one of their strengths
    • In order to create a high performing team, key areas for improvement need to be addressed in an open and honest way
  3. Learning and development
    • 50% of employees feel they are not receiving enough training
  4. Agility
    • 46% of employees are concerned about the time it takes for key decisions to be made
  5. recognition
    • Employees feel demotivated without regular positive feedback and a clear performance management framework in place
  6. Strategic thinking and planning
  7. Managing a diverse workforce, including Millennials
  8. Innovation
    • Should be included in workplace competencies and assessed from selection to promotion
  9. Managing the company reputation - both on and offline
    • organizations have reminded again and again of the need to adhere to vision and values and demonstrate authentic leadership
  10. Managing workload and promoting workplace well-being
    • Stress continues to account for at least 35% of actual work related ill health
    • Recent government study suggests that an overall improvement in well-being will result in improved productivity, profitability, and quality

Reasonable human resource practices for making employee downsizing decisions, Campion, Guerrero, Posthuma (2011)

This article deals with a somewhat uncomfortable topic. I found myself wincing at a few points where it coldly explains ways to approach employee firings that will shield the company from liability. Ultimately though, I know that layoffs are a part of business and the intent of the article is to provide advice on how to approach them fairly (while warning to not see downsizing as a panacea for business improvements).

  • downsizing seems to be a common practice regardless of the economic situation
  • Recently, researchers and practitioners have begun to question the effectiveness of downsizing as a turnaround strategy
  • HR should aim to use practices that minimize negative effects on both terminated and surviving employees
  • we propose a set of eight reasonable HR practices that can benefit and protect both the employer and the employee
    1. Identify the business need for downsizing
      • decision to downsize shouldn’t be made lightly, does not always lead to improvements
      • there may be a business need, in particular if aligned with other strategic changes
      • decision to downsize should be made based on the long term health of the company
    2. Communicate with employees throughout the process
      • increased communication is one of the most important factors in reducing the negative consequences of downsizing
    3. Identify future work
      • Identify future jobs and tasks to be performed
      • Some downsizing experts recommend a formal skill needs analysis * Identify future knowledge, skills, and abilities (KSAs) and experience requirements
    4. Determine criteria to evaluate employees against future work
      • Emphasize job-related criteria
      • If job-related criteria are not explicitly used, decision makers are likely to use vague criteria
      • Emphasize objective (vs. subjective) criteria
      • Objective measures improve accuracy of measurement, and improve perceptions of fairness
      • Consider past job performance heavily
      • extensive evidence that past job performance predicts future job performance
      • Consider seniority
      • Avoid inherently age-related criteria
    5. Establish fair evaluation procedures
      • Use multiple independent evaluators
      • combinations of judgments of multiple independent evaluators of human attributes are more reliable than the judgment of a single evaluator
      • can provide a check against potential biases and help prevent discrimination
      • Provide clear instructions and train evaluators on the decision-making process and EEO considerations
      • evaluation materials should contain clear instructions so that managers understand what specific judgements they need to make
      • Base selections on accurate and complete information
      • Prevent exposure of demographic information to evaluators
      • evaluators should not be exposed to information on the protected group membership of the employees
      • Apply methodology in a consistent and fair manner
      • Allow employees to compete for remaining or new positions throughout the organization
      • Establish an appeal mechanism
      • may uncover additional information that could change the decision
      • Maintain adequate documentation
      • reduces the potential for discrimination by demonstrating that specific procedures were followed
    6. Analyze adverse impact
      • Conduct analyses in a timely fashion
      • Take action if adverse impact is shown
    7. Evaluate the process and outcomes
    8. Ensure an informed and independent Human Resources staff
      • If the HR staff is not empowered, they may be reluctant to question or resist senior management downsizing decisions, even if these decisions are viewed as unjust

Retaining Talent: Replacing Misconceptions With Evidence-Based Strategies, Allen, Bryant, Vardaman (2010)

This article bridges the gap between science and practice in the area of employee turnover, and replaces several misconceptions about turnover with guidelines for evidence-based retention management strategies

  • There is evidence that high unemployment rates have little impact on the turnover of high-performing employees or those with in-demand skill sets
  • large-scale layoffs in difficult times often lead to higher turnover among survivors
  • likelihood that many current employees may remain with their organizations only because there are fewer external opportunities leads to the possibility for substantial pent-up turnover to occur
  • misconceptions about turnover can be harmful to organizations, may lead to ineffective retention strategies
  • Five misconceptions:
    1. All Turnover Is the Same, and It Is All Bad
      • turnover is a complex phenomenon. Not always harmful, may even be beneficial
      • distinction between voluntary and involuntary turnover.
      • within voluntary turnover, important distinction between dysfunctional and functional turnover
      • dysfunctional is harmful to the organization, such as the exit of high performers or difficult-to-replace skill sets
      • functional may not be harmful, may even be beneficial
      • Retention management strategies focus more on dysfunctional turnover
      • while some turnover is avoidable, some turnover will always be unavoidable
      • two primary types of costs associated with voluntary turnover: separation costs and replacement costs
      • From a strategic perspective, organizations need a clear shared understanding of the costs and benefits associated with turnover
      • There is no single appropriate formulation
      • Important that there is internal consensus that metrics are appropriate
      • evidence links turnover rates to performance
      • impact of turnover rates on organizational performance may also be a function of who is exiting
      • turnover among employees with high social capital has a strong negative impact
      • emerging consensus that it may soon become more challenging for organizations to retain their key employees
      • shared understanding of turnover effects and trends may achieve a competitive advantage
    2. People Quit Because of Pay
      • pay level and pay satisfaction are relatively weak predictors of individual turnover decisions
      • organizational equilibrium = individuals will continue to participate in the organization as long as the inducements offered by the organization are equal to or greater than the contributions required by the organization
      • inducements can be specific, tangible rewards such as pay, there can also be other types of inducements such as working conditions, relationships, or future opportunities
      • actively manage individual turnover decisions by managing the inducements-contributions balance
      • withdrawal process typically involves thoughts of quitting, job search, evaluation and comparison of alternative opportunities, turnover intentions, and eventually turnover behavior. Organizations and managers can monitor and manage
      • plentiful opportunities become an especially difficult issue for retention: not only do employees have high ease of movement, but they may also be more difficult to keep satisfied.
      • The strongest turnover predictors tend to be related to the withdrawal process, such as turnover intentions and job search
      • commitment and job satisfaction are two of the most important turnover drivers
      • relationship an individual employee has with his/her immediate supervisor/manager plays a critical role
      • Role clarity and role conflict are important
      • Job design and the work environment matter: work satisfaction, job scope, promotion opportunities, communication, and participation in decision making are moderately related
      • workgroup cohesion and coworker satisfaction are moderately related
      • Demographics are relatively weak predictors: education, marital status, sex, and race are only weakly related to turnover
    3. People Quit Because They Are Dissatisfied With Their Jobs
      • true that job dissatisfaction is one of the most consistent attitudinal predictors, however might be the driving force in fewer than half of individual turnover decisions
      • unfolding model identifies four primary paths to turnover, often initiated by shock (an expected or unexpected event that leads someone to consider quitting):
      • leaving an unsatisfying job
      • leaving for a more attractive alternative
      • individuals who have scripts or plans in mind that involve considering quitting in response to certain events
      • individuals who quit despite being relatively satisfied, without having a script in place, and perhaps even without searching for an alternative. These are likely impulsive quits
      • Just as important as why people leave is why people stay - cocept of job embeddedness
      • three types of connections:
      • links - connections with other people, groups, or organizations
      • fit - extent to which an employee sees themselves as compatible with the job
      • sacrifice - what would be given up by leaving the job
    4. There is little managers can do to directly influence turnover decisions
      • true that some instances of turnover are unavoidable, however specific cause-effect relationships and HR practices can help organizations manage turnover
      • two phases: managing organization entry and the work environment
    5. A simple one-size-fits-all retention strategy is most effective
      • Effective retention management requires ongoing diagnosis of the nature and causes of turnover
      • Two primary types of retention strategies:
      • systemic strategies based on general principles
      • targeted strategies based on more organization-specific issues * not mutually exclusive, though it is strategically advantageous to focus on efforts that are most closely tied to organization’s competitive strategy * Major barrier to good decision making = tendency to use a narrow decision frames * managers should broaden their decision frames in three ways: * consider multiple objectives and issues * evaluate alternative expected outcomes * consider multiple alternatives * major steps in developing a strategic evidence-based approach to retention management: * conduct a thorough turnover analysis * interpret this analysis through the lens of a particular organizational context * collect data to diagnose and adapt cause-effect relationships in a particular organizational context
  • first step to developing ability to diagnose and adapt is to determine the extent to which turnover is a problem
  • Benchmarking and needs assessment are methods for assessing turnover data in relation to both internal and external circumstances
    • External benchmarking compares organization turnover rates against industry and competitor rates
    • Internal benchmarking considers organization turnover rates over time
  • There are some cases where stable or even decreasing turnover could be considered problematic, such as if the organization is retaining too many poor performers, or if organizational plans call for changing the makeup of the workforce
  • Needs assessment enables evaluation of turnover in context
  • Turnover data analysis viewed through the lens of organizational context enables the organization to develop data-based retention goals
  • an evidence-based approach to identifying the appropriate strategy requires collecting data on the systemic strategies that are most likely to be effective
  • One result of the data collection and diagnosis process may be finding that some groups or types of employees leave for different reasons than others
Written on October 1, 2017