Essay About Employee Turnover And Significant Cost

Employee Turnover
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AThis paper investigates employee turnover, using data from a recent study of 352 NHS nurse leavers. We explore individual decisions to quit in a context characterised by change, and suggest a mechanism whereby organisational and contextual change can prompt individual leaving decisions. We develop and test hypotheses designed to shed light on the links between organisational change and individual decisions to quit. We then develop a theoretical, heuristic model describing the relationship between organisational change and turnover. The managerial implications of this model are outlined and the paper concludes with an agenda for future research. Introduction Employee turnover is a much studied phenomenon (Shaw, Delery, Jenkins and Gupta 1998: 511). Indeed, one recent meta-analysis (Hom and Griffeth: 1995) alone reviewed over 800 such studies (Iverson 1999). However, there is no universally accepted account for why people choose to leave organisations (Lee and Mitchell 1994), even though it is predominantly in instances where the employee makes the decision (rather than in cases of involuntary turnover) that organisations and organisational theorists have an interest. Voluntary turnover is of interest because in most cases, this represents the bulk of turnover within an organisation. Such instances of turnover also represent a significant cost, both in terms of direct costs (replacement, recruitment and selection, temporary staff, management time) but also, and perhaps more significantly, in terms of indirect costs (morale, pressure on remaining staff, costs of learning, product/service quality, organisational memory) and the loss of social capital (Dess and Shaw 2001). Although there is currently no accepted framework for understanding the turnover process as a whole, a wide range of factors have been found useful when it comes to interpreting employee turnover, and these have been employed to model turnover in a range of different organisational and occupational settings. These include: job satisfaction (Hom and Kinicki 2001); labour market variables (Kirschenbaum and Mano-Negrin 1999); various forms of commitment (see Meyer 2001 for a review); equity (Aquino, Griffeth, Allen and Hom 1997); 3 psychological contract (Morrison and Robinson 1997) and many others (see Morrell, LoanClarke and Wilkinson 2001 for a review). However, there is little research specifically exploring the link between organisational change and turnover and we suggest that this is a gap in the literature. No-one would seriously challenge the idea that mismanaging organisational change can result in people choosing to leave. Indeed, it may even result in the highest performing (and therefore the more employable) employees leaving (Jackofsky, Ferris and Breckenridge 1986). However, explaining the mechanisms underlying how and why such change can result in differential rates of turnover is more open to question.