HRM 1101 Lecture Notes - Lecture 10: Peter Drucker, Lost Experience, Management Consulting
5 May 2018
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• Engagement History
o Engagement was a non-issue until the 1920s
o Employee attitude surveys started in the 1930s
o Psychologists devised many, many theories of motivation – how workers became
productive and happy
o War for Talet as ipetus for oder egageent studies
• Why do companies care?
o The HUGE cost of employee turnover
o Turnover defined: employees who leave for any reason (another job, retirement,
leave the workforce to raise children, leave to start own business, injury/death,
etc.)
o Why so costly?
o Lost experience, knowledge, perhaps clients
o Lost productivity
o Overtime for remaining staff
o Recruiting costs
o Hiring costs
o Training costs
• How Much Does Turnover Cost?
o 5% of soeoe’s aual salary
o Imagine:
▪ Company with 1,000 employees
▪ Average salary is $50,000 per year
▪ Cost to replace is $75,000 per lost employee
▪ If turnover is 10%, it will cost the company $7.5 million per year!
• Performance Management
o Why Manage Performance?
▪ To align the organization behind established goals
▪ To drive desired behavior and ingrain that behavior in the culture
custoer serice, ethics, ioatio, etc.
▪ To motivate employees and reward their achievements
o Traditional Performance Management Programs
▪ Establish goals for the organization, the various departments and
subsidiaries in an organization, and for each individual employee
▪ Track progress against goals throughout the year
▪ Measure the end results of employee/department/organizational effort
▪ Reward those efforts
o Peter Drucker & Modern Management
▪ Born in Austria in 1909 – died in California in 2005
▪ Management consultant, author (41 books), educator
▪ Considered the father of modern management
▪ His big ideas:
• Management by objectives
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